• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Rumor Time: Stocks, EUR Surge On Renewed LTRO 3 Speculation

Tyler Durden's picture


Now that we have entered the summer phase of 2012 it is time to recall how the summer of 2011 ran: in a nutshell - unsubstantiated rumor emerges usually one involving central banks being "generous", sending stocks higher, rumor is then denied a few hours later, but the ramp persists. Sure enough, it has begun anew (because 2012 is 2011). Minutes ago we got the first such instance, where a European "think tank" came up with the brilliant conclusion that any minute now the ECB will be dragged back into the fray, announcing either LTRO 3 (because it will be different this time), or after 9 weeks of inactivity, the ECB's SMP program will resume buying plunging peripheral bonds. Any factual basis to this? Of course not. But once the algos pick up the headline and create buying momentum for the sake of buying momentum, it is all uphill from there. So just as the market was on the verge of turning red for the day, the "think tank" appeared. Prepare for many more such short covering instances, because there really is nothing else left in the status quo arsenal.

What follows next? Why summits of course... And lots and lots of hope that the Eurocrats are in control of a sinking ship. As a reminder from David Einhorn:

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Wed, 05/16/2012 - 10:08 | 2431261 fuu
fuu's picture

Europe is about ready for some sugar daddy dating.

Wed, 05/16/2012 - 10:33 | 2431360 CvlDobd
CvlDobd's picture

I've been saving used condoms for LTRO 3!

Wed, 05/16/2012 - 10:08 | 2431265 transaccountin
transaccountin's picture

and this makes the euro go up why??

Wed, 05/16/2012 - 10:12 | 2431282 Village Smithy
Village Smithy's picture

Because even a more diluted Euro is better than a blown up Euro.

Wed, 05/16/2012 - 10:09 | 2431267 Alejandrito
Alejandrito's picture

LTRO, ESM...much money for europe stocks

Comparison between European stock exchanges


Wed, 05/16/2012 - 10:08 | 2431269 falak pema
falak pema's picture

a roller coaster is a device used to make money and give you a thrill like it was the real thing; Disney sells that very well as it brings the child out in all of us; what works for Disney must work for WS! 

Wed, 05/16/2012 - 10:09 | 2431272 fonzannoon
fonzannoon's picture

breaking news there is something amiss in the paper pm market.

Wed, 05/16/2012 - 10:09 | 2431274 Cdad
Cdad's picture

Persistent selling in leadership groups...retail and big cap tech...in size.  I'm sure it is bullish...or not.

Wed, 05/16/2012 - 10:09 | 2431275 Cassandra Syndrome
Cassandra Syndrome's picture

So the prospect of a further dramatic increase in the narrower bands of money supply of Euros causes the price of Euro increase. 

Makes sense I suppose..... 

Wed, 05/16/2012 - 10:15 | 2431279 DaveyJones
DaveyJones's picture

 "any minute now the ECB will be dragged back into the fray"

dragging central bankers around is not a bad idea

Wed, 05/16/2012 - 10:13 | 2431281 Cognitive Dissonance
Cognitive Dissonance's picture

There is nothing quite like the glorious relief high when the strung out fiat crack addict finally scores.

Was it as good for you as it was for me?

Wed, 05/16/2012 - 10:15 | 2431296 Cdad
Cdad's picture

Indeed.  Once again, the retards at the control switches for the HFT terminators have thwarted the market's logical near term market bottoming process.  Great...as now all you have is sellers selling into chop.

One of these days, someone is going to tap Duncan Niederauer on the shoulder and explain to him that his computer room is killing his own business.  Wise up Duncan!  But hey...who cares?  It's only the most important capital market in the entire world.  Go ahead and pervert it, day after day, for a "quick trade."  Brilliant!

Wed, 05/16/2012 - 10:25 | 2431332 Cognitive Dissonance
Cognitive Dissonance's picture

In the dog eat dog (what can I kill and eat today) world of Wall Street, the thinking is simple. I cannot stop dancing when everyone else still rocks on. This is why they all eventually go over the cliff. To stop for even a minute is seen as weakness and you are set upon by the rest of the pack.

Pack mentality feeds the herd mentality.

Wed, 05/16/2012 - 10:27 | 2431340 Cdad
Cdad's picture

Agreed.  Just another reason JP Morgan and the like should be set upon with hammers and wrenches until it is gone, and a fire hose should be turned on the floor of the NYSE until that layer of grime is gone.

Just disgusting...the plague that is modern America's financial services industry.  More pink slips for bankers, please.

Wed, 05/16/2012 - 10:12 | 2431283 the not so migh...
the not so mighty maximiza's picture

This is all the western economic model got left.

Wed, 05/16/2012 - 10:14 | 2431284 Boilermaker
Boilermaker's picture


Wed, 05/16/2012 - 10:15 | 2431297 GetZeeGold
GetZeeGold's picture



....where did I put my shocked face again?


Wed, 05/16/2012 - 10:19 | 2431308 BlueCollaredOne
Wed, 05/16/2012 - 10:24 | 2431325 GetZeeGold
GetZeeGold's picture



That's the one.


Wed, 05/16/2012 - 10:15 | 2431294 tocointhephrase
tocointhephrase's picture

Running on fumes, boy is this shit gonna blow!

Wed, 05/16/2012 - 10:17 | 2431298 kaiten
kaiten's picture

Preparation for greek exit?

Wed, 05/16/2012 - 10:39 | 2431390 tekhneek
tekhneek's picture

Greece exits, then LTRO3 is officially announced to boost EUR/USD

Wed, 05/16/2012 - 10:19 | 2431301 j0nx
j0nx's picture

When oh when are people going to learn not to bet against the house. There will always be one more can to kick.

Wed, 05/16/2012 - 10:19 | 2431302 Aductor
Aductor's picture

The stress should be on "tank".

Wed, 05/16/2012 - 10:20 | 2431310 ebworthen
ebworthen's picture

"Bailout QE Rescue Pakage ECB FED LTRO Deficit Increase Greece" ought to be good for DOW 14,000.

Wed, 05/16/2012 - 10:23 | 2431322 Vince Clortho
Vince Clortho's picture

If you say that really fast three times in a row, You might get Dow 14,500.

Wed, 05/16/2012 - 10:21 | 2431316 navy62802
navy62802's picture

Air drops of cash. That's still in the arsenal.

Wed, 05/16/2012 - 11:00 | 2431469 tekhneek
tekhneek's picture

Thanks for the share Davey

Wed, 05/16/2012 - 10:23 | 2431324 adr
adr's picture

In honor of last year, just about at this same time, I bring back my previous post:

You spin me right round, baby
right round like a record, baby
Right round round round
You spin me right round, baby
Right round like a record, baby
Right round round round

Make it all end, PLEASE.

Wed, 05/16/2012 - 10:31 | 2431347 The trend is yo...
The trend is your friend's picture

let me finesh the new version for you

 All i know is that to me

you look like a lot of fun

open up your loving "purse"

Watch out here is come

Wed, 05/16/2012 - 10:26 | 2431339 Vince Clortho
Vince Clortho's picture

The follies will continue until the carnival leaves town.

Wed, 05/16/2012 - 10:30 | 2431350 SAME AS IT EVER WAS

Home Depot must be sore and walking funny. Today, some horseshit headlines about GE are being used to pump(no pun intended) the DOW.

Wed, 05/16/2012 - 10:30 | 2431351 Village Smithy
Village Smithy's picture

When the market has become so sensitive to the smallest, most unimportant rumour you can't help but think that anyone with even the slightest access to a Rueters reporter and an e-trade account is able to place a trade and then place a call. The capital markets are so broken.

Wed, 05/16/2012 - 10:37 | 2431376 navy62802
navy62802's picture

They better pump some more positive rumors for the algos because the IBEX is still red!!

Wed, 05/16/2012 - 10:37 | 2431377 vegas
vegas's picture

Well, it can't get gobsmacked every day can it? Anyway, it's just the rock geting rolled back up the hill so it can freefall again probably sooner rather than later. Besides, not every dog can ride on the fire truck, just like not every short has strong hands.



Wed, 05/16/2012 - 10:40 | 2431393 jmac2013
jmac2013's picture

If it weren't for rumor-mungering ZH would have no material.  What do you call posting a few pictures of people at ATMs and calling it a "bank run"? 

Wed, 05/16/2012 - 10:46 | 2431424 fuu
fuu's picture

Is that the Waaaaaaaaaaaaambulance I hear?

Wed, 05/16/2012 - 11:36 | 2431624 DaveyJones
DaveyJones's picture

yes, tell us the truth - just how healthy is everything

Wed, 05/16/2012 - 11:43 | 2431646 prains
prains's picture

a few pictures of people at ATMs and calling it a "bank run"? 


actually i thought it was a line up for schwarma's

Wed, 05/16/2012 - 10:45 | 2431414 sumo
sumo's picture

I'm glad that markets are so efficient. Aren't you?


Wed, 05/16/2012 - 10:54 | 2431451 Waterfallsparkles
Waterfallsparkles's picture

That is the only thing they have left is for anyone who bet right and was short to casuse a short squeeze and force them to buy them out at the top.

Seems like they are doing random short squeezes in some of the Nasdaq stocks.  Yesterday it was amzn.  Today it is Goog and sina.

If they can keep Nasdaq up it pulls the whole market up with it.

Wed, 05/16/2012 - 12:43 | 2431878 SAME AS IT EVER WAS

It seems like short squeezes have picked up a reputation equivalent to an upperclassman giving a freshman a wedgie, what about a long squeeze?

Wed, 05/16/2012 - 11:42 | 2431648 AustrianEconomist
AustrianEconomist's picture

Check out the latest from the Capital Research Institute (CRI)

The Greek Dilemma

Wed, 05/16/2012 - 11:49 | 2431662 Non Passaran
Non Passaran's picture


Do NOT follow this link or you will be banned from the site!