Yesterdays Fluff .. called by German Central bank

Germany's central bank says ECB bond buying would "blur the line between monetary and fiscal policy," as it pours cold water over hopes of fresh action by Mario Draghi.

Germany's central bank says ECB bond buying would "blur the line between monetary and fiscal policy," as it pours cold water over hopes of fresh action by Mario Draghi.

Its starting to look like Germany may have to succumb to the pressure, but they will try to do it while trying to save face at the same time. Going to be tricky.

The damage that their own economy is starting to take may not be worth it for them to resist any further. And a lot of German banks are sitting on that same garbage Spanish/Italian paper, and are bleeding badly. They will provide the additional pressure on Merkel, etc.

Edited by ogm, 27 July 2012 - 05:22 AM.

It is a charade to get people to load up to pull the markets down and then get them short to push the markets higher, rinse and repeat. What you didn't know was Fed had already committed $80-90B for July to support the markets and only the primary dealers knew about its schedule. So they had the timing advantage, you only had the statistical and momentum tools to guess their deception, well more or less... I think the way the value was extracted so far, there is no more juice left, but hey it didn't prevent them from pulling one last even bigger con this week. I see these markets so manipulated that it has become an horror story for ordinary investors. The bill of all these (80-90B injection by Fed) though will be nicely handed off to the next generation. In the mean time all longs and shorts should be statistically robbed...

Edited by arbman, 27 July 2012 - 06:29 AM.

What would stop them from doing another 80 bil this month ? For some reason I'm getting a feeling that the market is about to explode upwards.

Some people get real defensive when anyone mentions manipulation but IMO it is going on an on a massive scale and yer right its harder to be the winning side w/o knowledge of the "schedule".

So far the schedule has been to lighten up ahead of weekends and load up around mid-weeks... Just statistically, next week also fits the bill, probably jobs report will be an exception, a flat close if we get a Thursday rally again on 1st after dump on Fed's Wednesday... I expect Fed to say nothing and do exactly what they did for another month, that's hand off $80-90B to primary dealers to push the markets as high as they can before they "admit" they are doing QE3. Monday and Tuesday will be probably flat or down. The end of the month is coming up so it will be a bit tricky, but I still expect a dump either on Monday or Tuesday, it only takes them 15 minutes to pump the stocks back up overnight anyway.

Germany's central bank says ECB bond buying would "blur the line between monetary and fiscal policy," as it pours cold water over hopes of fresh action by Mario Draghi.

The damage that their own economy is starting to take may not be worth it for them to resist any further. And a lot of German banks are sitting on that same garbage Spanish/Italian paper................

Well, I think it is needed some clarification here. Despite the south of italy that is the key of the italian problems, I wouldn' say that italian bonds are garbage paper. Let's take a look at the problem. Japan has got a public debt that is flying around 230% of its GDP while Italian public debt is 125% of italian GDP. So that here it is all a matter of financial speculation against italy. Why is italy under attack and Japan isn' t ? Both countries (a real one and one that is supposed to be, but it's not) have an incredible amount of private savings that could pay their public debt more than one time, but it's just italy under attack : it's due to the fact that Japan can print money, italy can' t. We are hung up by the european union. The funny thing is that if we subtract the interests we pay upon our public debt, each year we would save money, in other words our hole is due just to the monstruos interests we pay upon our public debt. International speculation driven for sure by some well known large bank (the usual guys we can bet) is making this nonsense get harder and harder every day because an increasing spread between the interests we pay for our bonds and the interests the germans pay for their own bonds, means additional billions of euros we must pay in interests if we want to sell our bonds. The case are just two : the european government decide to break the legs to the international speculation or we can just exit the euro. We can' t stay hung up ad infinitum. And in any case, whatever the eventual outcome is, the germans will soon realize that their politics of financial discipline will soon drive europe to economic depression i.e. an infection which their own economy is going to enter as well , because all of the world's economies are linked together. You can' t put your counts in order in two years, the germans will realize it soon. Time is needed to do that and you can' t strangle countries to save them.

Edited by andr99, 27 July 2012 - 08:42 AM.