GERMAN BOND AUCTION FAILS
November 23rd, 2011Via: 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 of debt Germany had hoped to sell after commercial banks bought just 3.644 billion euros of the issue.
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Great timing. The Fed conveniently just had two $8.5 billion US sales on Monday. It almost looks set up to fail. (Of course both the euro and the dollar will fail eventually).
I’m not really sure why they would expect any European banks to have the funds right now. They should all be scrambling for cover.