Commerzbank Pulling Greek Repos, Lehman Deja Vu As Greece Shifts To Full Blown Liquidity Crisis Mode

Tyler Durden's picture

And so the Greek funding crisis shifts to a liquidity crisis yet again. reports that Commerzbank, among many others, is now pulling its repos with Greek banks, essentially killing liquidity in the entire financial system. Cue Lehman Brothers and Sunday CDS trading. At least it's not Friday so OTC traders don't have to worry they will be pulled from their Hamptons retreat. The Greek website is reporting that according to sources, Commerzbank which is one of the biggest repo counterparties to Greek institutions, was dumping bonds in yesterday's sell off. Not only that, but it is now pulling repos, in essence starting a cascade of asset liquidation, in which banks, already experiencing a depositor run, will be forced to sell assets at any prices they can get just to fund their operations for one extra day.

A Google Translated version of the Bankingnews piece:

According to information Commerzbank was concerned about the Greek bonds accepted as guarantees of Greek bonds. Commerzbank has provided some liquidity to Greek banks are more concerned about the Greek bonds. Based on a reliable source in the recent past, foreign banks have applied to withdraw repo with Greek banks even offer powerful bonus.

The piece concludes:

Foreigners do not want to have in their portfolios Greek bonds. It is now clear.

We could not have said it any better.

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Bananamerican's picture

end hoo iss yoo calling ze NAZI biz-nitch gehunden flicke??

Ragnarok's picture

Somebody's rocking the boat.

vote_libertarian_party's picture

Everybody will be rioting and there will be banks runs...and everybody will have an IPad to watch movies while in line. AAPL is at all time highs again today.

HarryWanger's picture

And a they're calling for a pullback....after SPX hits 1300 in September.

CookieMonster's picture

Better have Israel nuke Iran, quick! We need a distraction......

Commander Cody's picture

This must, in some way, be good for equities.

HarryWanger's picture

Certainly won't hurt. Ben about to speak in a bit and markets will go green once again. Even after we hear the same thing we heard yesterday in the FOMC minutes, market will act like it's the greatest news ever and rally.

ZackAttack's picture

Of course... meltup by that tsunami of liquidity exiting bonds, and it simply has no alternative but to go into stocks.

ZackAttack's picture

Just have to get with the program...

If commodities are higher, it's a sign of a healthy economy and should be taken as a bullish green shoot.

If commodities are lower, it frees consumers from a stealth tax and allows them to spend more on cyclicals and discretionaries.


So, like I was saying...

Foreign sovereign debt failures push money into the US bond market. This drives down yields, pushing investors into risk assets as a safe haven. The resulting lower rates are passed through to consumers.

See, this is a fun game.



Village Idiot's picture

Hey, why all the cynicism?

sigmonster's picture

Why can't AAPL issue greek bonds. The company can solve all demand problems by throwing in a free ipad with all bond purchases. This can give a whole new meaning to ibond.

bugs_'s picture

This is a big f*ckin deal!

DoChenRollingBearing's picture

Well, yes.

So is California.  Illinois.  Florida.  New York.

So is the 100 x gold apparent fraud.

So is the $2 trillion deficit.

So is our huge (who's numbers do you use) debt.

So is the coming tax hike.

doggis's picture

what game are the oligarchs playing? the disconnect between these events and the equity markets has a bad peutrid smell to it.  me smells "buy the dips" financial engineering at work here -aka GS with an end goal to manufacture a financial equity market collapse.

rubearish10's picture

Looks like you're right sir! There's just no such thing as selling US Equities.

Al Huxley's picture

It would be, except that there are no longer even any dips to buy.

Squid-puppets a-go-go's picture

nup. this is the oligarchy's engineers petrified that the machine has stopped working, and beating each other with their monkey wrenches in blame

Al Huxley's picture

Looking forward to the RBS article pointing out the 'hysteria in the blogosphere'  surrounding the pending default.  Wonder if they've managed to liquidate any of their positions.

Village Idiot's picture

Asset sales at any price?  Put me down for a Gyro plate with rice.

docj's picture

And here... we... go!

"Some men just want to watch the world burn."

DoChenRollingBearing's picture

I'll join you watching the world burn down if you will join me in the cheap seats section.  In the bleachers is fine.

Seems like the cliff comes ever closer each day.

docj's picture

Swim out past the breakers, watch the world die.

Yeah, I'm with you.

Bonesetter Brown's picture

"Some men just want to watch the world burn."

Does this mean there is some "World CDS" I can get in on?

sweet ebony diamond's picture

i asked this question before. how does the greek government know what islands it owns.

truont's picture

Advice for Greeks--please close your gaping mouths before the SHTF.

KidHorn's picture

Isn't this the same thing that happened to Bear Stearns right before they went for $2?

deadparrot's picture

Don't you get it. Equities are going up in order to entice some more dumb money into equities. Pros need to cooperate and create a perception of a risk-free, ever-rising equity market to get the suckers to buy. Who do you expect them to sell their over-valued shares to, each other? That only works for so long.

Leo Kolivakis's picture

I can't read this anti-Greek propaganda. You guys have no idea about what is going on in Greece. It's actually disconcerting reading this nonsense. Even Greek television hit it on the head this morning: the crisis right now is mostly psychological. Get over Greece, and keep your eye on the real debt woes developing in the United States.

Stranger's picture

The crisis may be psychological, it's still going to axe-murder Greece.

hedgeless_horseman's picture


All crises are mostly psychological.

Love ya, little Buddy!

CookieMonster's picture

Interesting point but I would think that the squids are using this as a TEST CASE for what you are saying. No need to waste a good liquidity crises, eh???

Ripped Chunk's picture

All economic crisis is psychological.

Not sure what you are trying to point out? 

Internet Tough Guy's picture

A crisis of confidence, kind of like 2008? Won't a liqudity tsunami fix that?

ZackAttack's picture

I'm reading carefully over this and I don't really see anything that would constitute anti-Greek propaganda, so I'm not sure what you mean by that.


I think the significance of Greece is as a template for what happens to other insolvent states. So far, it has resembled Argentina, where it was very important to be the first to panic.

zero intelligence's picture

Greece by itself is relatively small (if you can call $364B+ of debt outstanding "relatively small").

However, it isn't "psychological."

Nothing psychological about either their immense budget deficit or their immense debt/gdp, or their immense inability to correct either problem without the shock of a default.

We're watching Greece because of the timing. It's like Bear Stearns, or the RMBS CDOs breaking down. At which point do the problems that everyone knows about become a market event?

ZackAttack's picture

The 'psychology' part of it is the extent to which one is able to suppress concern over the reality of insolvency.

BS Inc.'s picture

I can't read this anti-Greek propaganda. You guys have no idea about what is going on in Greece. It's actually disconcerting reading this nonsense.

Now you know how I feel reading your "solars" crap.

chet's picture

Banking is psychological, Leo.

MacedonianGlory's picture

Λ?ο, λες βλακε?ες.

Leo, put your foot in your mouth and stop all these crap about brave Greeks. Greek people are in agony bacause of a totally incompetent government. Rumors about bankruptcy reminds to the oldest the years of 1946 and 1953. Government only speculates and media propaganda says that IMF is the only sollution since the EU dosn't lend more money to the corrupt system that governs. 

Something teribly wrong is happening to Greece and there is no hope anymore.

Postal's picture

July my ass. They're going to be lucky to make it to Monday.

moldygoat's picture

how was I just watching live video from a building with a power failure. I guess they needed some people to go and look at this shitstorm. The USA is a banana republic.

Pull the "power outage trick", why not the fire alarm.

Rainman's picture

This Greek debt crisis is like the story of Lazarus rising from the dead over and over. But sooner or later even Lazarus had to end up in the hole.

I think I'll dust off my Dow 10,000 hat. It's been sitting idle a while.

hedgeless_horseman's picture

GS up 3.80 as their Hellenic CDS portfolio blossoms.

Leo Kolivakis's picture

From Athens News (Buy when there is fear! That's what smart money is doing):

NBG gets Danish thumbs-up Issue No. 13384   Copenhagen    Danske Invest recently bought shares in National Bank of Greece (NBG), fund adviser Anders Hornbak said in a Danske Invest newsletter received on March 30.   NBG shares fell 55 percent between October 15 and February 9, while the Stoxx 600 European bank index  lost 22 percent in the same period. Greece stunned markets in October when it revealed that its 2009 budget deficit for 2009 would be 12.7 percent of gross domestic product (GDP) - over twice the previous estimate and more than four times the 3 percent ceiling imposed by the European Union. In the latest stock market upward leg, which set in on February 9, NBG has narrowly outperformed European peers . The bank is running a healthy business. Loans are fully covered by deposits and a big part of revenue is coming from Turkey where the economy is growing strongly,” Hornbak said.   The NBG Group’s loan-to-deposit ratio was 97 percent at end-2009, according to the bank’s 2009 results statement.   “Even though the Greek state is heavily indebted, Greek households have not taken on as much debt as is the case in countries such as Spain, Portugal and Ireland,” Hornbak added. Danske Invest, with nearly $60 billion worth of assets under management in over 200 funds, is part of Denmark’s biggest lender, Danske Bank.
Internet Tough Guy's picture

Buy some bonds, Leo. Buy that yield. Call Bill Miller, he will probably want some too.