The post I've been putting off

I've been meaning to write this post for over two hours now, I haven't done so because I didn't want to come off in an immature light, but it's a topic that really bothers me.

I started Wolf on Wall Street to help traders who wanted to help themselves to better understand how upside down and corrupt this market is. I taught Technical Analysis at the County Public school system for 3.5 years, only being paid for the 2 hours a night that I taught, but each class I customized to the current market conditions, so I had an extra 6 hours of prep work, again it wasn't for the money, but because I have a terrible dichotomy, I hate unfairness and I love the market. So I suppose the things I've done have been my way of coming to terms with that dichotomy.

Yesterday an Italian bond sale was scheduled for today at 3 a.m. EDT, which I believe is about 8 a.m. local.  With the Italian bond market upended yesterday, I figured, "They'll probably cancel the sale, just as the ECB and Germany recently did due to "unfavorable market conditions", but they didn't; they went on with the sale of debt as planned.

Here's what has had me stewing for the last few hours.

The Italian government auctioned off $5 billion Eur. of 1 year bills at a yield of 6.087% which is high, it's the highest they have been in about 14 years and nearly double what they auctioned off for just a month ago. The disgusting part is that just minutes before the sale, in the secondary market the same bills were trading at  much worse yield of 7.75% which is about 175 basis points higher then the auctioned bills.

Why in the world would anyone buy a new issuance that is no different then the secondary but in effect, pay a higher price and take on more risk for the same thing they could buy in the secondary? The yield in the secondary is so high because it reflects the risks in Italy, so why?

It is known that the ECB went in and bought in the secondary market minutes after the auction to bring the yield down to 7%, which has since risen again, which looks like a very sloppy and very illegal event transpired. Just like in the US (F_ED), the ECB is prohibited by law from participating in the bond auction, they can participate in the secondary, but why any bank would take such a wide risk I think can only be answered by a deal the ECB cut and monies transferred to the bidding banks to keep this auction from becoming the next event to send shock waves through Europe.

While we are on the subject, what about Democracy? We have seen G-Pap forced from his post in Greece and whether he deserved it or not (which most would agree he did) Berlusconi was forced out in similar fashion as it was just this weekend that the ECB, not so subtlety said they would stop buying/supporting Italian debt if "major changes didn't take place", as soon as Berlusconi is gone, the ECB is there buying up bonds illegally somehow in the primary market and cleaning up the secondary market, a far cry from their weekend stance, the only thing having happened was a non-democratic transfer of power or at least Berlusconi swearing to step down.

Furthermore, from the information I have, likely the same banks that participated in this illegal or VERY GREY event, likely front run the market, here's what I mean.

 This is ES overnight, there's a strong positive divergence right up until about 2:15 a.m. at 3 a.m. at the blue arrow, the "successful bond auction" was conducted, so the banks had hours to front run the event that they knew would push ES higher and ES moved higher exactly at 3 a.m. (blue arrow).

Here's the Euro/USD and it taking off at 3 a.m. EDT at the red arrow, exactly when the bond auction took place.

The only thing that gives me any satisfaction at all is seeing the market collapse from the opening gap as it would seem investors were hip to the shenanigans going on with the ECB, now led by a former F-E-D official.

I feel disgusted by this all.