Confirming that the ECB soap opera must go on, German Bild reports overnight that Bundesbank head, and most vocal critic of Goldman's pro-inflationary European policy, conducted by the firm's Italian alum Mario Draghi, last week considered joining other such German luminaires as Axel Weber and Jurgen Stark in following the red Egress signs at the Bundesbank headquarters, ironically located in downtown Frankfurt. From Bild: "In recent weeks, Bundesbank President Jens Weidmann has repeatedly seriously considered his resignation." Citing unnamed sources, which is merely a polite way of denying the other side's just as credible "unnamed sources", Bild says Weidmann discussed the possible resignation with the Bundesbank's board. Bild condludes that Weidmann has decided against resignation for now because hwants to fight against the ECB’s bond-purchasing program at next week’s meeting, and that the German government has urged Weidmann to remain in post. In other words, just as has been expected all along Merkel may say this, or that, but in the end she will adamantly fight Goldman and its inflation spreading tentacles in Europe as long as she has to (with recent German data of accelerating inflation and unemployment merely helping her cause).
And confirming that this report is not merely typical Bild yellow journalism, is the Buba's "no comment" response. From Reuters:
A Bundesbank spokesman declined comment on Friday on a report in German mass circulation Bild newspaper that Bundesbank President Jens Weidmann had considered resigning several times in recent weeks.
Bild cited financial sources as saying Weidmann had discussed his possible resignation with other top members of the central bank's leadership.
Weidmann opposes plans being promoted by European Central Bank President Mario Draghi to embark on a new programme to buy government bonds of debt-ridden southern European countries to help quell the euro zone debt crisis.
However, Weidmann indicated to Der Spiegel magazine this week that he planned to stay at his post.
"I can do my task best if I stay in office. I want to work to ensure that the euro is just as hard as the mark was," Weidmann told Der Spiegel magazine in an interview released on Sunday.
Commerzbank was quick to chime in with a 100% incorrect interpretation, via Bloomberg:
- Markets would interpret a resignation from Weidmann as a “positive sign for euro periphery and negative for bunds,” says Commerzbank rates strategist Alexander Aldinger in an interview.
- Says Weidmann represents “the strongest voice against bond buying’’
- Would be better for Weidmann to stay at the Bundesbank and actively represent Germany’s stance within the ECB
- Sees lack of change in stance from Bundesbank in the event of Weidmann resigning
Actually no. If the third time is indeed the charm for Buba execs who have given up hope on Europe, and let's not forget that in Europe everyone else's asset is now a German contingent liability via the Bundesbank, this would be the first step to the realization that it is not Greece, or Spain, or even Italy that has the right of first refusal to the euro with threats of departure, but Germany, and that an exit from the theater is now being actively planned. Because we are sorry to disappoint Commerzbank: if everyone at the German central bank says "9", it is game over... unless of course the US' long-term ambassador to Germany, Philip Murphy, who as it so happens worked at Goldman for 23 years prior to his current post, is now in play (using the diplomatic parlance of our times) and already has the wheels in motion to replace Weidmann with another Goldman puppet (as a reminder, the United States diplomatic cables published by Wiki Leaks contained negative statements signed by the ambassador about senior German politicians, including Chancellor Angela Merkel and Guido Westerwelle, the German foreign minister). Which certainly would not surprise us: how could one possibly not trust this face?
All that aside, in the immediate future, all of the above means that while the market is slowly accepting the reality that Bernanke will almost certainly disappoint in just over 6 hours when he delivers his J-Hole statement, it will soon have to turn its attention to the ECB, where Draghi's credibility, already shaken to the core, is about to be destroyed all over again, and that, just as Zero Hedge said, the market's initial reaction to the last ECB press conference, in which Draghi disappointed everyone, sending risk plunging, was indeed the right one.