It is very hard not to see the finger of Mario Draghi on the pulse of today’s eurobond market

“You see dissa finger? You messa wid me, I takea dis finger and ram it up your ass”

Now here’s a funny thing, missus. (All timings are GMT)

At 9:27 AM Spanish industrial production figures for February released, showing the appalling state of its economy, falling a monthly 3% vs. -2.5% in January.

At 9:48 AM in an €11B auction of Italian 12- and 3-month debt, bond yields leap upwards. The 1-year doubles to 2.84% from 1.405% in a previous sale in March, and 3-month paper zooms to 1.25% from 0.49%.
It’s looking pretty bloody out there. But there will be no help forthcoming from Mario Draghi’s ECB, right, because the bond-buying programme is at an end.
10:03 AM  Yields on 10-year Italian and Spanish bonds suddenly plummet….by (respectively) 18 basis points and 14 basis points.
Apart from 15 minutes, nothing has happened, nothing has changed. No ClubMed miracle discovery of gold-plated uranium has come to light. And yet, in that same 15 minutes – when equally, no news of a nuclear attack on Berlin has broken – German yields, which had been dropping, suddenly zap up 15 points. (Which, on a total level of 1.79%, is some going).
Now you know why Merkel and Schauble were so bitterly pissed off when they realised how the politically adept Mario Draghi had turned their central bank into his ECB. You buy a little here, you sell a little there….and hey presto, eurozone bond spreads fall. On to the next stage….
12:00 noon, Germany sees very weak demand at an auction of 10-year Bunds, undersold by  € 1.13 bn.  The debt needed a yield of 1.77% to achieve even that – much higher than the 1.64% DeutscheBunds were yielding yesterday
The sequel: Paul Donovan, deputy head of global economics at UBS AG, talked  to Bloomberg soon afterwards about the prospect of further European Central Bank intervention in the Spanish bond market.
This is just a little bit of empirical observation to back up the more sweeping global observations I made in today’s earlier post.  The moral of the story is – as I keep saying over and over again: the minute you are deep in debt (whoever you are) the banks have the upper hand. When the key bank is run by a former Goldman Sachs whizz-kid, they have that upper hand round your balls. Anna da big finger up your ass.
Thanks duly offered to Forex Seeking Alpha for the data stream re this one.


  1. This is why this will run and run. There are no rules, no laws to be broken that are of any consequence to any court, just dodgy deals done on a grand scale.
    Bachman Turner Overdrive – You Ain’t Seen Nothing Yet….
    Believe me, you ain’t….


  2. Printing money will only result in inflation and higher bond yields in the future. Does anybody think differently??

    Let us all celebrate Super Mario’s Magic Money Machine as it pumps up gold prices.


  3. In the DT:
    Spanish leader Mariano Rajoy insists the nation will not need to go to Brussels with a begging bowl despite accumulating a debt pile that had created a “vicious circle that strangles Spain”.
    See? they don’t need to go to Brussels, Brussels came to them….
    It’s all in the way you pitch the issue.


  4. I haven’t got a clue as to what’s going to happen Jwoo, that’s why there isn’t a part 2….
    This could lumber on for years, I’ll be on Boot Hill by the time this comes to an end, let’s face it, there’s nothing now they won’t do to avoid a collapse, and I do mean NOTHING so, the Monster just grinds on. Every time a “tipping” point arises, it just passes until the next one rolls in, nothing has really changed in the last year apart from the fact that they now blatantly ignore the law and all the rules of the game.
    It’s all a nonsense, we will still be here next year talking the same way.


  5. Draghi seems a great waste of talent. Why is he on the wrong side?
    Looks he could work for us and bring the whole rotten tower down in a jiffy-bag.
    Can’t someone make him an offer, is he in Yellow Pages?


  6. No probs KFC wasn’t trying to hassle you. Might be worth putting a posting on your blog to that effect though, as it is a live link from your comments here.

    None of my business though, just trying to help.


  7. Welcome to the world of the Gangstas, everyday able to mimmick the product of the MSM…

    All is well, it’s getting better every day…

    Whereas the markets are raping widows and orphans everday and that’s just fine when the public’s attention is kept focussed on the inept politicians weaving their crooked webs.

    Wake up World to the Bankstas


  8. Gangsta Draghi is a fully initiated member of the Bankstas Brigade…

    Brought up in Goldman Sachs and weaned onto deception as is the par…


  9. Pingback: Revealed: Blatant Manipulation of Spanish, Italian, and German Bond Yields Today

  10. A problem that I see for an illusionist like Draghi is this. Smoke and mirrors only works when the wind is not blowing. The wind I see in Europe is a electoral rebellion he can’t control. At some point you need Tanks how many does he have?


  11. Seems to me that the market reflects the lifeboats that the elites are busy filling with loot, rather than the sinking liner that is the real economy. I simply hope that their hubris eventually catches up with them & they also sink, with people like Draghi being forced to: ” Sleep with the fishes “. Hopelessly optimistic on my part to think there might eventually be some justice, but you never know.

    Here’s a nice chart from the Weimar Republic that us suckers might well find useful to compare with, as we are QE’d to death.


  12. When it comes to rape, pillage and plunder there is nothing more adept than a Banksta.

    Draghi is the Alter Ego of Benny Shalom and should matters appear they may breakout then the Masked Raider Benny Shalom rides to the rescure with his Gang to ‘smooth’ things over whilst MSM concots the Spin.

    Hey Presto, Rabbits abound and the Magicians get to wear their empty hats again.

    Reading- Federal Reserve Shareholders, Fractional Reserve Banking, Bretton Woods Agreement.

    How can they fail when 70% of the Markets are theirs to steer according to whims motivated by theft borne of entitlement. Public or National interest? Well whoever heard of those?


  13. What is not discussed is that these “bonds” have no value in material terms. When the money has to be found to buy goods and finance investment in wages and production it just won’t be there. Ergo economic collapse of the whole EU, or at least the euro zone and the biggest casualty will be the German economy.


  14. Aha OR you missed the article about the vulture economists. The ECB has joined the vultures as well now. These Bonds will be dusted down and pulled out of the safe when any euro country gets a bit lippy and will be used to threaten them with bankruptcy if they try to rejoin the world without permission.
    Now I wonder who owns Iceland’s defaulted Bonds ? Iceland is doing ok as long as it doesn’t try and go any further than fishing and drinking.
    The minute it deposits money in the international markets it’s assets will be seized by people who bought it’s defaulted Bonds for pennies in the pound and are now looking for 100% payback with interest.


  15. Pingback: Italy – Spain rift over contagion risk [Sober risk + The Slog] « Mktgeist blog

  16. Their hubris has caught up with them and with everyday the pond empties a little more and more of the mucky deeds from the murky depths are revealed. If Bernanke truly does have $600 trillion at his disposal as Ben Fulford claims there is only one solution, shut down the Fed !


  17. @Jwoo;
    Thanks, I should do that! I know you weren’t hassling me, I never realised there was a live link from here!
    You have any thoughts on the prognosis?


  18. @Kfc
    None that are wroth much except to say that I tend to your thoughts that reports of the EU’s death are premature. Although imminent collapse of it’s economy seems inevitable. I know that the two don’t mix but now that politics controls economics, perhaps they are about to mix for the first time.


  19. It is indeed an unsual set of circumstances.
    I just found this on ZH:
    “The US government is funding well more than half of its cash needs with debt rather than with tax revenue”.
    And this seems to bother no one, the debt ceiling will again be raised with no obvious hope of redressing the balance.
    Everyday it seems we are all deeper in debt, and yet it all carries on, business as normal….to me, it’s either war or inflation…


  20. Stevie baby, there will eventually be some justice. God will judge, Veneance is mine, says the Lord.
    Otherwise, what hope is there left?
    I really do believe that God will judge, but in the meantime things look pretty hopeless. My old mother used to say: “we dont know what the future holds….. but we know WHO holds the future”
    God will make all things right in the end. But we might all have to suffer for our disobedinace in the meantime….


  21. Old stock market adage,’the market is always right’.Or,you can have a single currency,without a lender of last resort,and then you will see why Cornwall faces the same financing cost as West Sussex(come in,Spain,you have the ECB,we have the dear old Lady).So it will go on,slowly,taking down a couple of continental banks( my souces say the Germans included).Since you ask,goodbye Socgen and BNParibas,you are bust,before the serious unwinding starts( the Lloyds TSB mortgage book).Oh ,happy days! There will be bargains galore….


  22. “There are two ways to conquer and enslave a nation.
    One is by the sword. The other is by debt.” – John Adams


  23. I’m going to borrow the money to buy a sword for something to fall back on (seem to have mislaid my old service revolver..)


  24. In the (rapidly approaching) end, fiat currency fails when the fiat runs out of gas and the whole smoke-and-mirrors faith industry carefully maintained to prop it up collapses. Money is in the end a community-shared belief system, with nothing else behind it, much like the self-delusion sports fans willingly indulge about “their” local teams, even though comprised of pros from all over the world who care about the locals about as much as they do crabgrass. Burst the belief system behind phony paper money like the euro, and catastrophe swiftly follows. If the butcher in Munich suddenly says the wurst will only come your way if you have eggs or beer to swap for it, forget that barrel of euros you carted in, then within 40 minutes the whole thing all over Europe comes crashing down, Naked Emperors and all, soon followed by spectacular Armageddon in the U. S. The sight of so many sinking ships of fools may be worth it all. A Bollocks-Götterdämmerung of supernova proportions!


  25. let’s face it, there’s nothing now they won’t do to avoid a collapse, and I do mean NOTHING so, the Monster just grinds on. Every time a “tipping” point arises, it just passes until the next one rolls in, nothing has really changed in the last year apart from the fact that they now blatantly ignore the law and all the rules of the game.

    You are right there. It will take a black swan event to stop the Monster.
    Fukashima disaster
    Tokyo earthquake
    or Mass civil unrest – read : assasinations or armed revolt in Europe.


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