... the German government has set up a special purpose vehicle to buy its own bonds. This allows it to sell the bonds gradually over time rather than in one big auction. Which makes sense. These big, lumpy bond auctions always were insane.

The accounting legerdemain enters into it if this SPV has access to the ECB's rediscount or market maker facilities. If it does, the German government issues bonds to... the German government, which then goes to the ECB to trade them for cash.

If it doesn't, then it's just stupid journalists being stupid.

- Jake

Friends come and go. Enemies accumulate.