Italy spreads over bunds breaks 450 bp, Draghi's ECB buying Italian Bonds!

The following quote from Gary Jenkins in the FT ,here, has its amusing side when one reflects Jean-Claude Trichet, named by this blog "The turd in the punch bowl" has finally departed, leaving Europe, not just the EU, in the complete and utter chaos that this blog always predicted over many, many years.

“They have created a situation where the only people buying Italian debt are themselves.”

Of course, when one of the Italians being so obliging, is the new head of the European Central Bank, on his first day at work, it probably has its brighter side, other than just the relief at the departure of the one man walking disaster that was Jean-Claude Trichet.

Unhappily the other Jean-Claude, this time the Luxembourger, Juncker , head of the Euro Group of Finance Ministers, is still on the scene, thus other matters are still going haywire! Even those beyond the chaos in Greece? Italian interest rates have smashed above 6.3% this afternoon, read here.

Merkel and Sarkozy have spoken on the phone and may meet tomorrow. Sarkozy has called an emergency meeting for late this afternoon and more importantly the Greek Cabinet is scheduled to meet at 1600 GMT today!

Trichet warns EU Parliament of "systemic risk" in EU and beyond.

When the video of Trichet's dire warning to MEPs is available it will be linked from this posting.

Update 0943 GMT Reuters report on the speech and the quote:

"The high interconnectedness in the EU financial system has led to a rapidly rising risk of significant contagion. It threatens financial stability in the EU as a whole and adversely impacts the real economy in Europe and beyond."

Prof. Kerber lashes out at ECB and Trichet

Open Europe in its daily press update reports an attack by Professor Markus Kerber on the spendthrift activities of the ECB under the leadership of Jean-Claude Trichet:

Speaking at a New Direction Debate in Brussels, German Professor Markus Kerber, who challenged the eurozone bailouts at the German Constitutional Court said, "it is crystal clear that with his daily buying of government bonds, [ECB President] Jean-Claude Trichet is overstepping his powers,” adding, "the fact that the European Parliament has applauded Trichet shows that it is completely disoriented from its voters, who are weary of the ECB's actions."

Elsewhere in the same report comes the mind-blowing news that from next year banks will be able to unload yet more worthless assets on the already overburdened EU citizenry:

The ECB announced yesterday that it would be easing its collateral requirements by accepting assets, as collateral in exchange for loans, that are not listed on regulated public markets from the start of 2012. This could pave the way for banks to use billions in asset-backed-securities that were previously unsellable, according to CityAM.

Trichet threatens Italy from the shores of Lake Como

Strolling by Lake Como this lunchtime, a Texas report informs us that Trichet is demanding full austerity from the Italians, how else may he be assured that his huge pension and perks from years of destroying the economies of Europe be paid throughout his long and luxurious retirement due to start this Autumn. Read more in the Galveston County Daily News, linked here.

ECB may gain one good asset from Bankia - Christiano Ronaldo!

A report from Insider Business Europe that appeared last evening, may be one piece of good news for Jean-Claude Trichet before he departs on holidays, probably in St Malo again!

The troubled Spanish Caja, Bankia, it seems, may run into further difficulties and  thereby offer the ECB some proper collateral in the form of a contract with the footballer Ronaldo!