Antipasto

The European Central Bank has revealed that it spent Euro22 billion buying bonds in the first two days of last week, almost all of which would have been Italian and Spanish paper. Italian and Spanish bond purchases were only authorised from last Monday. I gave a detailed view on the structural story here, on Italy’s unconvincing promises to sort itself out here, and my take on the reality behind last week’s equity panic here.

So: in its first two days the ECB spent almost one-third as much as it did in its (wholly unsuccessful) multi-month bond buying programme for Greece, Ireland and Portugal (Euro74bn). It is nice that the admission comes on the same day that Merkel and Sarko reiterated there will never be any Eurobonds, not ever, ever, ever, ever, ever, jamais, niemals…  (FT sub needed).

Meanwhile sellers of Italian (and Spanish) debt have had their starter and are looking towards the kitchen door. But as they savour the flavour on their palates, what is that rather unusual smell coming from within? I know! It is the aroma of German taxpayer money burning…

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