After receiving 530b euros of fresh funds from the ECB, European banks immediately redeposited 300b of it right back at the ECB. Total overnight deposits at the ECB now total 777b euros up from 475b yesterday .
Spain’s PM said their budget deficit target is 5.8% of GDP, above the agreed level with the EU of 4.4%. He says the 4.4% deficit goal is unattainable and that GDP will contract 1.7% along with 24.3% unemployment. Does this factor in $125 Brent Sea oil prices. What kind of carry trade is there with an inflated, ridiculous Spanish 2-year 2.24% yield? Italy is at 1.73%. Borrow at 1% and buy a quasi-insolvent sovereign with a collapsing economy at 2%. Is that what they teach nowadays in the fuck- over- everybody- -school -of risk- management? Was this what the Wizards of Oz had in mind. Encourage insolvent banks to borrow and run out to create an immediate and absurd bubble completely divorced from fundamentals?
Classic gambling scene in Lost in America, “Come on back to me 22, 22, 22.”
Bloomberg : Spain 2-year