Stocks, Euro Surge On Another Central Bank Intervention Announcement: ECB Ready To Buy Italian, Spanish Bonds

Tyler Durden's picture

More central bank intervention headlines, and the euro and stocks, which earlier were plunging without a floor, surge:

  • ECB ready to buy Italian and Spanish bonds if Berlusconi commits to bring forward specific reforms according to sources
  • ECB expects Italy to fast-track welfare reform, fiscal rule for bond purchases according to sources close to talks
  • EU leaders applying intensive pressure on Berlusconi to make an announcement according to sources

Said otherwse, open the QE floodgates. Globally. Central banks now control it all. Net result, a 100 pip surge in the EURUSD, and a halt to the market plunge. For at least a few more minutes...

Good luck to anyone trading this lunacy.

And from Reuters:

The euro jumped against the dollar on Friday, hitting session highs, after sources said the European Central Bank said it is ready to buy Italian bonds if Italy commits to accelerate economic reforms to bring down the country's debt.


On Thursday, traders were disappointed that the ECB were buying Portuguese and Irish bonds instead of Italian and Spanish debt. Investors are currently focused on Italy and Spain, as they feared these two countries would follow Greece's footsteps in seeking a bailout.


The euro rose as high as $1.42470 <EUR=EBS> and was last at $1.42137, up 0.8 percent.

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spartan117's picture

Ball's back in your court, Fed.

bigdumbnugly's picture

yep.  expect the overhand kill spike in return.

Highrev's picture

The Euro plunging without a floor?

Tyler, what chart are you looking at? What time frame would that be?

Time to breathe deep and relax a bit.

Highrev's picture

Anyone who gave me a negative tick have the courage to respond as to what chart the man was referring too? Because if you go beyond the 1 minute it's extremely hard to make the case for "plunging" (and that means that you need courage to respond, or you need to be a fool, or both).

But to hide behind an anonymous negative tick without saying anything simply leaves you in the coward category.

vote_libertarian_party's picture

Damn, and I thought my VIX call lottery tickets were going to pay off.



jus_lite_reading's picture

HAHA good one

BUT the question is, WHO wants to "invest" in a fake stock market run entirely by a notion of if more QE fake fucking monopoly money is injected or not? THAT is not investing and THAT is why the end I promise is so near we can all taste it. Those of us who have 20-30+ years in finance know what is coming...

Soooooo happy I am out of stocks and into tangible assets!!!!!!

Maniac Researcher's picture

Who here has actually been in Italy for any length of time recently? [working not tourist-ing] I'd like to compare experiences with those who aren't armchair asshats for a change..


The rest of you must whistle when you walk - talking out of your asses as much as you do.

camoes's picture

I lived in Northern Italy for six months as grad student. Perfect country to live if you have money and/or as a tourist. Everyone is friendly and nice, but everytime you try to do business they try to screw you over and find it normal to do it.

I have several italian friends, the sucessful ones left Italy to work in other EU countries like Germany, France, UK or they work for multinationals.

Serbice is crap there, can't find a restaurant open between 14:00 and 18:00, supermarkets and stores close at evening and weekends, which was plain stupid since it was a tourist town.

They all act like they are self-entitled and deserve the easy life without working hard, etc. Nepotism is legal and official, the postman's job passes from father to son (yes it's true). They're very racist as well, I'm caucasian so never had any trouble, but when I hanged out with my indian/pakistani/black friends/colleagues I could feel the racism overflowing.

I think with this crisis they will learn to treat foreigners much nicer cause they will depend on their goodwill to spend their money there and won't be able to live on goverment's paychecks...or all Italy will become like Naples and they're screwed

Once at the carbineri (police) we had to get some papers that the university requested (residency status) and they treated my indian colleague like garbage, only after I complained and gesticulated very angrily and threatened to go talk with the university directors (that's the only way they will respect you) they started to treat him nicely and get the papers.

My landlord tried to screw me over several times trying to overcharge (the same in restaurants).

Besides this, it's a lovely place, food, people, the women are very nice and friendly, easy to get laid if you can speak the language. But I would never live there if I had to work for an Italian company unless they had a multinational culture.

camoes's picture

BTW, when I first went to Italy, the atmosphere reminded me when I visited Buenos Aires, when I was a kid, BEFORE THEY WENT BANKRUPT and thought of themselves developed world and european. Now Argentina is plain cheap, but again, would not work there for an argentinian company, only would live there if I don't have to work or work for a multinational (even then, would not enjoy to have to deal with local business).

Spainish seem more hardworking and humble, I'd think they have more chance recovering than Italy, public service there like public transportation, schools seemed more efficient and better than Italy. Tip: don't get sick in Italy, their hospitals are opinion

JW n FL's picture

Jim Grant on Bloomberg - 20th June 2011

On Money Market Funds and why looking for yield in Europe is a BAD BET FOR ALL!

Cleanclog's picture

Precisely.  Also why the whoosh after Europe closed.  Europe wants cash so selling in our markets where liquidity greater.  Counterparty risk fears greatly heightened in Europe and constricting trading volumes there.  Want cash through weekend and through next week.

JW n FL's picture

Cyber Threat Resembles Pre-9/11 Terror Threat, Says Former CIA Counterterrorism Chief

Government leaders don't understand the gravity of the threat of cyber attacks or the implications, ex-CIA official tells Black Hat attendees.


On Aug. 4, BIDS saw volume hit 136 million shares, its fifth day with more than 100 million shares traded since the dark pool first passed that milestone on July 21. BIDS' average daily volume in July was 72 million shares, up from about 65 million shares in June. (BIDS double counts its volume, a standard practice for dark pools.)



rokakoma's picture

Seriously, these guys never learn? The US is doing this QE stuff for years now, with NO real results. Why the heck do they still think this is a solution to anything?


EscapeKey's picture

Because it IS a solution as far as the big banks are concerned.

Deepskyy's picture

Who cares about those working (or not working) serfs.  As long as the stock market is rising and coked up day traders can pretend to be rich and powerful the bankster cartel (who are rich and powerful) is happy. 

jus_lite_reading's picture

They dont give a fuck if you or I have to pay $40 for a gallon of gas so long as Xmas bonuses are flowing this year.... they KEEP pushing the buttons you know and soon very soon it will be.... lights out


SheepDog-One's picture

Theyre going to blow a main breaker soon.

Cdad's picture


Imagine the level of stupidity involved in ramping up th Euro on this news?

Like everything else in this market, it defies "all things that actually make sense."  The eurodollar should be collapsing.  I suspect that will be the trade by the close.

Thanks criminal syndicate known as Wall Street for perverting every single thing you touch.

jus_lite_reading's picture

Is it just me or does it feel like the markets are ready to implode?? WTH VIX IS INSANE!

Cdad's picture

Sell the VIX.  Now...but again, and maybe in 10 minutes and 12% lower...screaming buy.

And yes...the market is about even on the odds...up or down by an absurd amount...and that is because this is no longer a market of anything.

SheepDog-One's picture

Just wild brainless kneejerk swings based upon whatever news no matter how ridiculous.

Ghordius's picture

"Because it IS a solution as far as the big banks are concerned."

Exactly. The Squid and the other TBTF will now go to party for the weekend and on Monday they will re-start their campaign: "the death-zone can't work this way!!" GIVE US THE EUROBOND, we are the TBTF and need fresh underlying for our BETS. We have to churn and generate fees and make more CDS bets". And don't forget the EuroTax...

Hail the Squid, may he eat up all the TBTF banks and die of indigestion...

Caviar Emptor's picture

Not just banks: corporate welfare is huge. All that "cash on the balance sheet" was a freebie. The can issue stocks and bonds whenver they want. Then they build their golden parachutes

Papasmurf's picture

What do you mean no real reasults?  They've reduced my savings purchasing power, swept <my> wealth into the banking elite even though I'm not a borrower, taken ownership of millions of state owned homes and doubled the price of food. 

Itally and Spain agreeing to structural reforms. 

IMF making more Shylock deals. 

This has been a huge success for some. 

Intention seems very plain.  Like a rolling blackout, this will sweep through the globe, finally landing on US shores unless resistance is met elsewhere that can't be overcome.

Forward History's picture

People think it is a war on the poor or middle class. It is deeper than that. This is a war on the thrifty, the responsible, the savers. We are rogue elements impossible to ever have full control over, so the best way to deal with us is to whittle us down to nothing.

The price of redemption and acceptance back into the system is easily met...simply kiss the King's ring and accept your gummit check.

Do you confess?

earnulf's picture

You acknowledge that it is a war.   Like every war this government has fought since WW II, they don't understand their enemy.    Fighting a "conventional" war against Unconventional forces hasn't worked since Vietnam.    The target is changing it's MO, it's face if you will and going off-grid.   Sure is hard to tell who the enemy is when they don't wear a uniform annoucing themselves.    

William Wallace understood.    Freedom!

TruthInSunshine's picture

Forward History

People think it is a war on the poor or middle class. It is deeper than that. This is a war on the thrifty, the responsible, the savers. We are rogue elements impossible to ever have full control over, so the best way to deal with us is to whittle us down to nothing.

The price of redemption and acceptance back into the system is easily met...simply kiss the King's ring and accept your gummit check.

Do you confess?




Outstanding comment.

However, I may just add that:

Blessed be the savers in PMs, for they shall inherit thy earth.

Baby Jesus could have said that; that's how genuine it is.

Fox-Scully's picture

Did we just have a flash surge in the Dow?

Tortfeasor's picture

Flash smash in ZH daily traffic!

Frank N. Beans's picture

they had to say anything to stop the stock plunge.


buzzsaw99's picture

the politicos always comply with the bankstas extortion demands.

SheepDog-One's picture

Do anything to create panic for QE, as long as they rescue all stock plunges? Where are they showing need for QE then?

Frank N. Beans's picture

that's what I was wondering, too.  Bernanke wanted to wait for our markets to crash deeper, but I guess Europe could not wait any longer.  That may present a problem for Bernanke. Maybe Bernanke will announce there will be no QE3 -- now THAT would hurt our markets.   THEN, later, he can announce QE3.


Gubbmint Cheese's picture

Spanish bonds in Andalucia... the shooting sites in the days of '39...

JOYFUL's picture

Viva Lorca, y los bodas de sangre que llegan pronto! 

Archimedes's picture

Does not matter. Knee jerk reaction by mindless bots. EU is broke and everyone knows it. Commence selling in 3, 2, 1...

Kina's picture

Central banks are now just masturbating. They think there is anybody else there except themselves. There is nothing left, they are playing with themselves fantasising that they have a market.

Tic tock's picture

So who was buying Europe before?

slaughterer's picture

Now back to your regularly scheduled market decline...

LookingWithAmazement's picture

QE and a surging euro - ???

KickIce's picture

Hey, we had to acquire more debt to keep our AAA rating.

LookingWithAmazement's picture

Yeah, and austerity leads to a crisis :)

Desperate people grabbing watered down euros. What a world we live in.

machineh's picture

' if Berlusconi commits to bring forward specific reforms according to sources '

Such as sticking to adult-age call girls and soft drugs only at bunga-bunga parties?

The good old days are gone for good ...

Ghordius's picture

No, nothing impossible! You can't take his girls and parties away, this would be even stupid to ask...


What they want is what he can deliver: Austerity, a balanced budget, cost cutting, improvements in the tax collection system, etc.

earnulf's picture

How long before the banksta's ask the same of the Good Ol' US of A?

Ghordius's picture

Well, it looks like never... your leadership seems to want a good 'ol inflation. I'd say 15% next year, for six or seven years.

It will be fun to see what hurts more...   8-(