Yesterday, a bund auction flopped for the first time in living memory - as a result of which the entire eurozone no longer has a viable bond market. The flop was a major global event. It sent share price tumbling. Financial investors are now heavily betting on the break-up of the eurozone. Having held up well during most of the crisis, the euro declined to $1.33. Despite the 200bp jump in German yields, Italy's 10-year spreads rose back above 500bp, and Belgium's are now at 350bp.With every day of complacent and ignorant political announcement, especially from Berlin, the crisis deteriorates, and the cost of crisis resolution increases.

http://www.deutsche-finanzagentur.de/en/institutional/primary-market/auction-procedure/

"The German Federal Government usually places single issues by auction. Only members of the "Auction Group Bund Issues" can participate directly in these auctions (see the section entitled Auction Group Bund Issues).
The auctions are carried out via the Deutsche Bundesbank Bund Bidding System (BBS). "

So the use the Bundesbank or rather its bidding system.

Regarding the secondary market, they say:

http://www.deutsche-finanzagentur.de/en/institutional/secondary-market/secondary-market-activities-f inance-agency/

"The level of how much own securities can be held is regulated in § 2 (5) of the Budget Law for credit authorizations. This dictates that currently, credit can be raised for financing purchases "within the framework of market support operations in the secondary market". The volume of credit should not exceed 5% of the nominal volume of the Federal bonds, five-year Federal notes, Federal Treasury notes and Treasury discount paper in circulation annually.

At each auction the German Federal Government can retain a portion of securities for secondary market operations which is then sold successively in the market afterwards. The volume of securities retained for market operations varies widely from auction to auction. Since 2005, the amount retained has averaged about 20% of the issuance volume (which also included money market paper and inflation-linked German Government securities)."

and:

"For its secondary market operations the Federal Government uses electronic trading platforms and the German stock exchanges. The agency's stock of bonds can be sold or purchased in the spot market within the framework of the German Federal Government's liquidity planning. The focus is on interbank trading and on supporting the activities of the market makers. This service provided by the issuer also enables members of the Auction Group to conduct transactions directly with the issuer as counterparty if necessary. The spot transactions are supplemented by repurchase agreements ("repos") and securities lending. The German Finance Agency executes its transactions with a minimum impact on the market and in line with market prices."

So contrary to my assumption, the Bundesbank, apart from the bidding system is not involved at all. That also means the speculation of Alphaville is without merit.