Super Broke Mario Brothers Kindly Request The ESM Be Doubled To €1 Trillion

Tyler Durden's picture

With less than three months left until the Greek D-Day, and just over one month until the next 3-year LTRO, which will be the ECB's final chance to firewall off its banks with sufficient liquidity and brace for the worst if Greece fails to reach a consensual debt reducing exchange offer (which our colleagues in the German press don't think will be nearly enough), we finally get a glimpse of how the super broke Mario brothers really feel. According to a report in the German Spiegel, the ink is not even yet dry on the latest completely toothless EU Fiscal Draft (which will allow the €500 billion European Stability Mechanism to be enacted) and already we get the world's most insolvent hedge fund, pardon central bank, and Europe's biggest debtor demanding for more. "Italian Prime Minister Mario Monti and European Central Bank President Mario Draghi both support enlarging the capacity of Europe’s permanent financial rescue mechanism, Der Spiegel reported, without saying where it got the information. The news magazine said Monti is pushing for the European Stability Mechanism’s capacity to be doubled to 1 trillion euros ($1.29 trillion), and had made the suggestion to the German government. Der Spiegel added that Draghi supports the view that unused funds from Europe’s temporary rescue fund should be added to the ESM’s firepower when it comes into force." Well good thing the ECB is not printing money or else one would get the impression that the system is getting flooded with trillions of excess cash. It also also great that the next LTRO will not be up to €10 trillion, as first reported here, and as was finally noted by the German press.

As for the reason why the Super Insolvent Mario Bros need the extra cash...

Such a measure would create trust in the monetary union, which leaves the lower interest rates on government bonds, argues Monti. This suggestion is supported by Spain and Portugal. France also argues that Germany is throwing its economic and financial power in favor of the euro in the pan. The federal government has set by his wishes Monti already aware.

Needless to say, Germany will not hear of it: after all it is its money that goes down the rabbit chute to fund Italy's deficits. But that will not stop Monti who has just conceived the most persuasive of arguments:

The Italian Prime Minister had urged that Germany should contribute so that Italy would continue to pay lower interest rates.

Poor Mario apparently fails to grasp that for Germany a plunging Euro, and thus a surging export market to offshore trading parterns, is the only thing that matters now that its endogenous mercantilist import, pardon, trading partners of the past decade, the PIIGS, have no more debt capacity to buy German exports. Although even a technocrat probably understands that one does not get a weak currency by bailing out the weakest links over and over.

Expect the European crisis to be with us for a long time. After all, that's precisely what Germany wants (of course, the Chairsatan may have other views on the matter).

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Fips_OnTheSpot's picture

DOUBLE ANYTHING (including the next shot!)

Fips_OnTheSpot's picture

Credit Default Schnaps-ation =)


(think I had too much of 'em while "digesting" the Subordination article)

Manthong's picture

The good news is that they only want less than half of what Obama wants..

-for this round. 

jaffa's picture

The European Stability Mechanism will be an intergovernmental organisation under public international law and will be located in Luxembourg. It would be open to other members to join and would be led by a Board of Governors. Each state would appoint a governor and the board would either be chaired by the President of the Euro Group or by a separate elected chair from amongst the governors themselves. Thanks.
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AC_Doctor's picture

Hahahaha, Super Mario would have better luck getting a trillion cannolis!  The next limp dick award goes to-------Italy.  I am sure that the man/woman beast Merkel will have none of this nonesense.  Germany just needs to GTF out of the EU and go back to the Deutsche Mark!!!

It is a bargin my friend's picture


"We can't agree any proper deals with other firms because within an hour or two, the prices of everything may have changed. The government has limited the amount of other currencies we can use, so everyone is using gold instead."


Coming to a town near you



Ahmeexnal's picture

GS and JPM are making millions trading the USD/Riyal.

blindfaith's picture

it is all still relative..... gold is no more stable a reference for trade  than all the fiat currencies.  The fiat goes up, gold goes up, so how do you cope with 6.99999999 billion people who are not on this 'reference' and see their buying power maintained, and their pitchforks under lock and key?

It is all a time bomb and no one know how long the fuse really is, but when it goes there will be no place to hid and you may well have more value in a can of soup than an ounce of gold.

We all know this is the truth, everything other than your daily bread is just another imaginary value created by man for man.

What will be the trigger? That is the most valuable commodity known to man right now.

GeneMarchbanks's picture

I'll believe that when the story:

"Can couples fall in love a second time?"

isn't in the immediate column to the right. Something about credibility and stuff.

Telegraphing bullshit...

GeneMarchbanks's picture

'Expect the European crisis to be with us for a long time. After all, that's precisely what Germany wants (of course, the Chairsatan may have other views on the matter).'

Durden you're catching on to the little fumbling act by the Krauts?

ChairSatan should try to frontrun the ECB and just backstop PIIGS debt his-self.

Sadly that move would probably send the € to parity and the DXY to triple digits by the summer Olympics.

roy10's picture

LOL. The ESM is a joke. Don't Italy and Spain 25% of the commitments? ESM will simply replace the EFSF and there is no way Germany will add another 500B to it.

Why does Draghi even care about the ESM? He has the infinite printing resources of the ECB and is not afraid to use them. How would 500B matter to him? He prints that much in a good month.

And Monti is complaining about interest rates? Italy is paying 3% for three year bonds? How much lower is he asking for? 2%? 1%? 0%?

Fips_OnTheSpot's picture

No wait. The ESM is completly different - if you change angle from finance to legal. This treaty will empower some new institution which can just DEMAND more money from the signatories and they HAVE to deliver within 7 days. NO LIMITS.

navy62802's picture

I bet Germany is secretly printing deutsche marks.

frosty zoom's picture

i bet THE FED is secretly printing deutsche marks.

Scalaris's picture

Well shit if you can't buy trust with a € trillion, I don't know how else you can.

Azannoth's picture

You have to remember that Germany being the only solvent guarantee giver for the whole EU has a yearly budget in the range of 320B euros, so 1T would effectively be 3x what the German government has to offer per year if it spent the last taxed cent of the German people.

AC_Doctor's picture

Look at the EU balance shit (sheet).  OMG, let's print $1T Euro's and double our balance sheet within a year.  This fucker is listing heavily to starboard!

roy10's picture

If you follow German politics even slightly, it is completely clear that the Germans have gone to their limit. They are unwilling to increase sovereign exposure to PIIGS even by one cent. That is – no Eurobonds and no increase to the ESM.

The ball is solely in Draghi’s hands now and it looks like he’s game. That’s why we should move on from talking about the EFSF and ESM (which are now obsolete) to talking about how much the ECB can print without completely destabilizing the Euro. It’s a new game at this point.

Fips_OnTheSpot's picture

are you nuts? We are "solvent"? Tell me the last year GER did not add monies on the debt-tower. Lazy, I tell you. Mid-1960. And there's a shitload of so nicely put "unfunded liablities" I am not getting into.

We might be the strongest part in the chain, but we are not strong in financial terms.

ucsbcanuck's picture

Fips - compared to the US you're solvent. But yes, that is a crappy record. Also, when did Germany last balance its budget?

Ahmeexnal's picture

when did Germany last balance its budget?


When it was still part of the Roman Empire.

Hell, Italy should claim that territory back!

Dick Darlington's picture

Official confirmation from ALL of the countries mentioned in this post that they're insolvent and want Germany to pay. Not news, we of course knew it already despite the continuous denial, just an official confirmation. I say let it burn!

Scalaris's picture



Plus I thought the deal was to turn Greece into a low-wage low-cost labour pool, gross manufacturer, owned by German capital, so that it could outsource the pumping of Daimler, VW and Audi, in order order to compete with Chinese lower-margin industries.

Can they just amend a provision which would require the purchase of X amount of German production by the PIIGS for every X amount of € bailout paid to the PIIGS, and maintain some kind of continuous income flow that would balance any inflationary effects from the perpetual paper pump?

Isn't Greece spending whatever part of its nth bailout stipend straight back to ThyssenKrupp, in order to acquire its military toys anyway?




Jack Sheet's picture

So you think BMW will open a plant on Lesbos?

Scalaris's picture

Yes I think that BMW will choose one of the farthermost, from the mainland, islands possible, in order to build its new plant.

Because the rest of my proposition wasn't mired in enough absurdity.

ndrewoods's picture

Yeah, that is what I thought as well. BMW parts might choose a place that is farther. They may need such place to build their new plantation.

falak pema's picture

if its on lesbos its aimed at the she market; are we reversing Patriarchal Euro to Matriarchal? IS BMW the new messiah of paradigm change that announces the next Pope will be beardless and with butifooool tits?

good material for WB7!

Bam_Man's picture

So you think BMW will open a plant on Lesbos?

No, but Birkenstock definitely will.

Poor Grogman's picture

Financial engineering is being held up as the answer to the worldwide debt problems.
Somehow we can just keep spending if only we can create enough complexity and alphabet soup acronyms.

What we are observing is utterly astounding.....

What next? A Nobel prize in financial engineering?

frosty zoom's picture

it's time for a NO BULL prize.

this whole thing is like eating your leg so you can grow up to be big and strong.

falak pema's picture

Credit default warps, morphing into sweet harmless dwarfs of Snow white... printing pasta paper to plaster the debt mountain melt down cracks, like magic cement; using it to fluidify the money machine like it were Olive oil defreeze; making it to grow green sprouts like  it were sheets of plastic greenhouse cover; thats the miracle of the Mario brothers!

Thanks to the Super Mario act, Global warming hits frozen tundra of German Nein wald; the Teutoburg wall forbidding Eurozone printing dissemination. The Mario brothers, super plumbers, will repair the frozen faucets of German money lines. Nein will become Ya-ya-rhinewine. It will free flow from Frankfurt to Greece and Sicily like in Hohenstaufen days. We will all sing Waiblingen...Waiblingen, from Palermo to Athens. Auf Waiblingen will replace auf Wiedersehen! May the Welfers of old now swallow their own bearish growls drowned in Waiblingen bull cries. Ein grosse bull frog named Merkozy, will now metamorphose into sweet play-thing in hands of the Super Mario dream team!

The Vatican will declare it the Euro Miracle. Who cares about peak oil ! With miracles like that Super Mario will declare Cyprus land of Abiotics!

Jack Sheet's picture

Looks like the 1000 EUR limit on cash transactions didn't work so well.

Pretorian's picture

Tyler your heart is at right place, no 1 has  managed cheaper currency all failed CHF, JPY ... . Cheaper Euro is target for Germany to do it without single bullet fired. They have only to keep pigs IN  on breathing machine.

frosty zoom's picture

the price of brie is going to quintuple!


the germans said, "either eurin or eurout".  looks like the italians are asking for eurin.



Treason Season's picture

Gives a new meaning to a golden shower.

game theory's picture

Euro: devalued.  US Dollar: devalued.  Riyal: devalued.  Yen: devalued.  Pound: devalued.


Next stop..."skin peeling inflation"...then comes major civil unrest. At least in the US, the returning military will have jobs guarding the political and financial elite from the mongering hordes. 

BlackholeDivestment's picture

Game Theory, lol, all part of Chairsatan's ''Blue Team Larry Summers''. Gotta ask what dumbshit would be proud to send their kids off to defend the Great Wal Mart of China under the command of Rosemary's Baby, lol, much less think it's a good time to to have children ...or buy a home in darkness? 

Lord of Darkness: ''sunshine is my destroyer''

Georgesblog's picture

I describe the debt crisis as panhandlers, sitting at the highway exits, holding signs that say "Will work for cocaine."

fxrxexexdxoxmx's picture

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prudent's picture

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