In spite of all the headlines and chatter the real winner in the latest of 19 EU summits was none other than German Chancellor Angela Merkel. First lets take a look at numerous headlines that got the story wrong.
Merkel Big Loser
The bickering over a half percentage point reduction on the discount rate continued over the weekend as Greek Bondholders Draw Line in the Sand
Private owners of Greek debt have made their “maximum” offer for the losses they are willing to accept, the bondholders’ lead negotiator has said, implying that any further demands could kill off a “voluntary” deal and trigger a default.
BRUSSELS – European Union leaders reached agreement on the first ever cut in their common budget on Friday after 24 hours of talks, seeking to placate millions at home struggling through government cutbacks and recession.
The expected deal met the demands of northern European countries such as Britain and the Netherlands that wanted belt-tightening, while maintaining spending on farm subsidies and infrastructure to satisfy the likes of France and Poland.
With the new and revised (until it is re-revised again to some future date), Greek D-Day set for today's third in the past 2 weeks Eurogroup meeting, every favorable headline serves as a springboard for ES-buying algos, while every negative headline is promptly ignored. And since this is Europe's style trial ballooning, there have been many of both with just these two hitting in the last hour:
Merkel Hardens Position
The EU summit is a day away and pre-summit bickering is so intense that it will be difficult if not impossible to get any major agreements.
Two days ago, in a speech in German parliament, Bloomberg reported Merkel Hardens Resistance to Euro-Area Debt Sharing
The ECB stepped into the fray once again today but the the results of the Spanish debt auction today speak for themselves. The rate on 10-year bonds is close to touching the 7% mark.
The BBC reports on the "Dreadful Result"
The Spanish government sold 3.56bn euros (£3.04bn; $4.79bn) worth of bonds out of a maximum target of 4bn euros.
The auction attracted bids worth 1.5 times the securities offered. The so-called bid-to-cover ratio was down from 1.8 in October.