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German 10-year bond auction a "disaster"
Reuters via Yahoo Finance ^ | 11/23/2011 | William James, Reuters

Posted on 11/23/2011 8:45:40 AM PST by Qbert

LONDON (Reuters) - A "disastrous" sale of German benchmark bonds sparked fears on Wednesday the debt crisis was beginning to threaten even Berlin, with the Bundesbank forced to dig deep into its pockets to ensure the auction did not fail.

In one of the least successful debt sales by Europe's powerhouse economy since the launch of the single currency, the low returns offered -- just 2 percent annually over 10 years -- deterred investors made uneasy by the escalating cost of the crisis to Germany. That meant the central bank had to pick up 39 percent of the 6 billion euros ($8 billion) of debt Germany had hoped to sell after commercial banks bought just 3.644 billion euros of the issue.

"It is a complete and utter disaster," said Marc Ostwald, strategist at Monument Securities in London.

"This does not bode well, it is the worst of uncovered auctions that we've had this year and little wonder that the Bund sold off on the back of it."

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Business/Economy; Foreign Affairs; Germany
KEYWORDS: euro; eurozone

1 posted on 11/23/2011 8:45:44 AM PST by Qbert
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To: Qbert

Coming soon to a Treasury near you.................


2 posted on 11/23/2011 8:47:19 AM PST by Red Badger (Every child should have a meadow to play in..............)
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To: Qbert
..and where, or where, does the German central bank get the funds to buy the German bonds?....

Daisy chain, anyone??

3 posted on 11/23/2011 8:49:28 AM PST by ken5050 (Support Admin Mods: Doing the tough, hard, dirty jobs that Americans won't do...)
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To: Red Badger

My thought exactly. Safe havens are becoming places where your assets are beyond the grasp of government. Which means loans will not be available to governments.


4 posted on 11/23/2011 8:50:54 AM PST by dirtboy
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To: Qbert
DJIA
11,311.33
-182.39 (-1.59%)
Real-time: 11:41AM EST
Not down to where it was back on October 1st, but could get there in a hurry if some good news doesn't come out of Euro. And by good I mean letting the PIGS out of the Euro. Not "good" news as a whole lot of debt will be monetized. However like an amputation, at least it stops the bleeding.
5 posted on 11/23/2011 8:51:56 AM PST by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
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To: Qbert

Amateurs. They should have done what we do here. Have some private bank or investment house buy up the unwanted bonds, then, have your central bank quietly buy the bonds from them a couple weeks later at a steep premium.


6 posted on 11/23/2011 8:53:08 AM PST by fhayek
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To: Qbert

Look at German/Belgian bond yields and CDS prices. Coming to the USA soon!

From ZeroHedge:

Belgium Dexia Debt Woes, Germany’s Debt Issuance Debacle - Obama Spares Two Turkeys (NOT Belgium and Germany)

http://confoundedinterest.wordpress.com


7 posted on 11/23/2011 8:54:12 AM PST by whitedog57
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To: Red Badger
Coming soon to a Treasury near you.................

Been there, done that, got the t-shirt. What do you think "quantative easing" is? The whole trillion dollars worth? Willkommen in Weimar Amerika. Basically, the central bank gives the government money to spend that was not raised by taxation or borrowing, unless you count borrowing from the central bank. The only difference between this and just printing money is that the government promises to pay itself back, to take the phony money out of the economy at some unspecifed point in the future.

8 posted on 11/23/2011 8:54:40 AM PST by Lonesome in Massachussets (Ceterum autem censeo, Obama delenda est.)
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To: whitedog57
Durden at Zero Hedge now reporting that the word going out is that liquidity is Europe is now basically frozen.

I have this funny feeling that we're right on the edge of another Lehman Brothers - sized event.

9 posted on 11/23/2011 8:57:22 AM PST by jpl (The government spent another half a million bucks in the time it just took you to read this tagline.)
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To: Qbert

Wonder if all those Germans are still cheering for Obama.

Heinz Scheisskopf, noted German Liberal, was quoted as saying, “Gosh, I wish we had that cowboy back instead of this cow turd.”


10 posted on 11/23/2011 8:58:22 AM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: jpl

I have believed for some time that the situation has to reach a level of stress sufficient to force stronger action. The EU has insufficiently motivating leadership (like a Churchill) and the general population doesn’t yet feel sufficient stress to enable existing leadership to take strong action.
Double the interest rates, double the unemployment, increase prices on basic necessities, fail to make pension payments or govt employee salaries and you will be getting there. Of course, the general population will scream and protest any cuts but the money isn’t there. Then again, neither is the will or leadership needed to fix the situation.
Europe is hopelessly wedded to centralized control—they will never think to allow free individuals to find the way out from this situation. Centralization led them to this point and is the only approach they know. This is a trainwreck that will be allowed to continue because there is no European vision of how to stop it.
Unfortunately, the US is tied to this mess and is on the a similar track.


11 posted on 11/23/2011 9:11:45 AM PST by iacovatx (If you must lie to recruit to your cause, you are fighting for the wrong side.)
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To: Qbert

Bonds backed by nothing but the ability to devalue the currency they are repaid in—what a deal!


12 posted on 11/23/2011 9:25:18 AM PST by Trod Upon (Obama: Making the Carter malaise look good. Misery Index in 3...2...1)
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To: Qbert

The S&P is down 180.65 right now and it probably has a lot to do with this news.


13 posted on 11/23/2011 9:25:37 AM PST by MeganC (Are you better off than you were four years ago?)
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To: jpl

"Durden at Zero Hedge now reporting that the word going out is that liquidity is Europe is now basically frozen. I have this funny feeling that we're right on the edge of another Lehman Brothers - sized event."

Yep- that along with China slowing down substantially, the Eurozone heading towards a contraction in Q4, Obama driving us headlong towards another likely recession...

14 posted on 11/23/2011 9:27:47 AM PST by Qbert ("The best defense against usurpatory government is an assertive citizenry" - William F. Buckley, Jr.)
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To: MeganC

That’s the DJIA. An S&P day like that would be an unmitigated disaster. May yet happen.


15 posted on 11/23/2011 9:34:37 AM PST by John W (Natural-born US citizen since 1955)
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To: iacovatx
The EU has insufficiently motivating leadership (like a Churchill) and the general population doesn’t yet feel sufficient stress to enable existing leadership to take strong action.

Well...we got a Churchill wannabe in the White hut......

Trouble is ...he is making war on the American people.

16 posted on 11/23/2011 9:47:10 AM PST by spokeshave (Cain....100% American, 100% Black and 100% for the Constitution...999 an added benefit.)
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To: Qbert

Dow unlikely to hold 11k today or Friday. Could lose 1,000 if German situation not resolved.


17 posted on 11/23/2011 10:06:51 AM PST by montag813
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To: Qbert

Germany needs to work out a deal with the European Central Bank to support their bond sales like the Fed does here for US bond sales. /sarcasm


18 posted on 11/23/2011 12:45:07 PM PST by Rockitz (This isn't rocket science- follow the money and you'll find truth.)
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To: jpl
I have this funny feeling that we're right on the edge of another Lehman Brothers - sized event.

Oh it's going to be much, much bigger than that.

19 posted on 11/23/2011 12:47:32 PM PST by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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To: jpl

And US markets are basically frozen for the next 4 days, the timing is terrible....


20 posted on 11/23/2011 3:30:12 PM PST by Kozak ("It's not an Election it's a Restraining Order" .....PJ O'Rourke)
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