Deutsche Bank And Unicredit Pull Out Of Greek Repo Market, Cease Lending Against Greek Collateral
Bailout rumor refusal - check, bank/country run - check, collateral pulls - check. If anybody tells you there is everything in common between Greece and Lehman/AIG, believe them. The latest escalation in the Greek crisis comes courtesy of Greek daily Banking News which notes that the latest nail in the Greek coffin comes from formerly major Greek players, Deutsche Bank and Unicredit, which over the past 2-3 weeks have ceased accepting Greek collateral and have pulled out of the Greek repo market altogether.
We came to where big banks like Deutsche Bank German and Italian Unicredit Group does not accept bonds as collateral Greek and refuse to lend in the repo market for Greek banks.
It should be noted that Greek banks say when we mean big banks too big. In the last 2 to 3 weeks 3 -4 Greek banks have been requested by Deutsche Bank and Unicredit Group to lend in the repo market, but refused on the grounds that they do not want to risk having to Greek bonds.
We hope our Greek-speaking readers can provide a more astute translation. Yet even as Greece is concerned about collateral eligibility with the ECB in 2011, the sad truth about its precarious and increasingly non-existent collateral exposure will come much earlier than that. Gradually, the country is becoming financially isolated: if the repo market collapses it is certainly game over as no semi-developed country can continue to exist without this core pillar of the shadow economy. In the meantime the vultures keep on circling.
h/t Jason
(5 votes)
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on Mon, 02/08/2010 - 08:32
#222007
Wow imagine that. I guess all you have to do is lie to stupid people and then do the exact opposite. Why is congress not clamping the fed in irons and putting together a massive changeover of legal tender issued by CONGRESS. Because you know "America will NEVER have to worry about a credit downgrade" Timothy Geihtner wouldn't lie to us would he?
on Mon, 02/08/2010 - 09:09
#222039
This is indeed a huge problem to be wrestling with. And there is a reason naked men jostling Greco-Roman style is no longer popular, not that there's anything wrong with that.
But having Greek's play hide the sausage, whether literally or finacially figuratively, is not too many peoples idea of fun.
on Mon, 02/08/2010 - 09:33
#222064
I still want to know why Deutsche got burned in 2007. I didn't even know about it but sort of stumbled on it a few days ago. I think they are the old german arm of the rothchilds but not quite sure.
http://www.youtube.com/watch?v=rNf0jkgwZ90&feature=related
I'm still kind of trying to put in in the timeline. I need to make a chart of the corruption spread as it progresses.
on Mon, 02/08/2010 - 09:58
#222090
If you are going to mention the family, at least get the name correct please. The name is the "Rothschild" Family.
on Mon, 02/08/2010 - 10:32
#222119
The Wraithschilde's!
HEIL MAYER AMSCHEL!!
Leiderhosen.
-MobBarley
on Mon, 02/08/2010 - 10:54
#222140
I don't allow people to correct my irreverance towards "those" kind of people. By them, thier thugs, or thier servants. So whichever class you fit in. Fuck Off.
on Mon, 02/08/2010 - 11:43
#222198
Why don't you practice your spelling skills first until they at least match your arrogance, before you run around insulting people groundlessly (he even said "please"). Begin with "irreverence", "their", and "Hephaestus" (according to Wiktionary, there are EIGHT acceptable alternative spellings for his name, but you missed ALL of them). Pretty pathetic.
on Mon, 02/08/2010 - 14:13
#222355
You're uptight. I understand.
Either get a job:
http://verydemotivational.com/wp-content/uploads/2009/12/129059795526541...
Dress up and go party:
http://izismile.com/img/img2/20090429/selection_144_19.jpg
Or make yourself otherwise yoosful:
http://verydemotivational.com/wp-content/uploads/2010/01/129089353713164...
on Mon, 02/08/2010 - 11:54
#222209
"thier" thugs and "thier" servants - followed by a lowest common denominator insult
nice going
on Mon, 02/08/2010 - 11:54
#222210
Why don't you practice your spelling skills first until they at least match your arrogance, before you run around insulting people groundlessly (he even said "please"). Begin with "irreverence", "their", and "Hephaestus" (according to Wiktionary, there are EIGHT acceptable alternative spellings for his name, but you missed ALL of them). Pretty pathetic.
on Mon, 02/08/2010 - 13:27
#222306
Awe is ewe's twying to make me feel bad about myself? Do you have a wicktionary? Yes you do. You have a big wicktionary. You are so smart with your wicktionary. Yes you are!!!! Who can spell superficial. You can. Cause there's nothing wrong with it if it's got super in the word. Too bad you can't put the right spelling in the wicktionary and try to discern some aspect of my personality.
It's Hephasteus not "Hephaestus". Come on man embrace dyslexia. I'll come out of the closet with you and we can have dinner with the 3rd grade english teacher that abused you and made you afraid to misspell.
BTW I got put in the highest track english class ALL through school simply because I got nearly 100 percent reading and comprehension scores on the placement tests. I failed high school english and had to go to summer school because I back talked the teacher. Come on man. Stand up and yell. I'm anonimuss and I"M NOT AFRAID TO MISPELL STUPH!!! Do you here me!!!! I'm NOT AFRAID OF YOU!!
on Mon, 02/08/2010 - 13:46
#222324
you tell em, hephastickus.
on Mon, 02/08/2010 - 09:55
#222088
Your question in fine (re T.G.) made me laugh laudly...
on Mon, 02/08/2010 - 08:40
#222010
"meantime the vultures keep on circling"
man this a rough way to put it but prob the most fitting subscription. a lot peoples lives are gonna be destroyed while the economy "readjusts". i say the final nail comes when they are downgraded yet again by the rating agencies but being locked out of a piece of the credit markets is a great start down that path.
on Mon, 02/08/2010 - 09:13
#222044
a lot peoples lives are gonna be destroyed while the economy "readjusts".
Yes; this is the theme that needs to be hammered home. Those who blew the bubble caused misallocation of capital, caused people to take doomed jobs, make doomed investments, start doomed businesses, believe in the 28 year easy money economy and plan their lives accordingly. Who are the real goddamned terrorists here? Who is responsible for destroying hundreds of millions of lives globally? Who are the ones who "manage" the economies of the world and mismanaged them into the shitter? What do we have to do to make them stop?
on Mon, 02/08/2010 - 08:43
#222014
Greece will be the new subprime
on Mon, 02/08/2010 - 09:01
#222031
Subprime is sooo 09! How bout alt-a?
on Mon, 02/08/2010 - 09:11
#222042
Same junk, different name.
Like Subprime kickstarted the bank collapse, so Greece starts the sovereign collapse (errr, if its ok to forget Dubai :) )
Just my 2c.
on Mon, 02/08/2010 - 09:59
#222092
Greek Sovereign Debt is the new subprime.
We need a good, all encompassing term for high-CDS sovereigns. I'm open to ideas...
It's too bad the STUPIDs index doesn't capture Greece, which admittedly is in a league of its own.
on Mon, 02/08/2010 - 11:56
#222212
Asset man, i have got
'U PIGSHIT' nailed. (UK, Port, Italy, Gre, Spa, Hungary, Ire,Turk)
Am worried that the Acronym is going to have more letters soon.
Working on one for zombie banks as well.
on Mon, 02/08/2010 - 10:34
#222121
No need to forget Bear Stearns.. oops, typo, I meant Dubai..
on Mon, 02/08/2010 - 09:56
#222089
Is Gold Bitches!!! '09 too or ??? since gold is still very acceptable worldwide as a means of wealth and value storage.
---------------------------------
"In the absence of a gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good and thereafter decline to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as claims on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to be able to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." --- Alan Greenspan, 'Gold and Economic Freedom' (1966).
on Mon, 02/08/2010 - 08:49
#222017
I liked the old Grecian Formula better.
on Mon, 02/08/2010 - 08:56
#222025
poor greece. just another distraction eh timmy...
on Mon, 02/08/2010 - 09:00
#222029
poor greece. another distraction eh timmy...
on Mon, 02/08/2010 - 09:33
#222066
After this, I wonder what will a Grecian Urn?
on Mon, 02/08/2010 - 10:11
#222101
Dunno, but it'll be Ode on
on Mon, 02/08/2010 - 13:50
#222334
O, so much will be Ode on a Grecian Urn.
on Mon, 02/08/2010 - 08:50
#222018
If not for the ability to print fiat money, numerous large governments would be in the same situation. For now, creditors are content to pretend that their debtors are solvent, in hopes that no one else will notice as they offload. Ben Bernanke's printing sustains our personal facade of solvency, while foreign creditors and the financial elites hurriedly transfer their bad paper to the US taxpayer.
on Mon, 02/08/2010 - 08:52
#222020
In the meantime the big financials "banks" or super hedge funds will continue to play "Pass the shell around" until chaos ensues.
on Mon, 02/08/2010 - 08:59
#222028
We are probably about 5 years away (in the US) from being unable to service our debt (baring significant economic growth or significant inflation--#2 more likely than #1).
Difficult to be sure because deficit estimates are unreliable and future interest rates are unknowable.
May not happen, but that this is even conceivable in the US is incredible and a sign that our political class (perhaps our political system) has totally failed.
We must (and will) change. Either we change our national behavior willingly or outside forces will change it for us.
Our choice, for now!
on Mon, 02/08/2010 - 09:20
#222049
5 Years? Your optimism is misguided. The only reason the US still has its AAA rating is because its debt is denominated in a currency it can freely print. Absent that fact, what you have is a country in a worse fiscal position, on a Debt/GDP basis than 2 of the 5 PIIGS.
Printing has its limits though. The only way out for the Dollar is to inflate away the debt, i.e. a stealth default.
on Mon, 02/08/2010 - 09:57
#222087
Quintus:
Inflation doesn't bail out the U.S.---almost all its debt floats and/or rolls relatively short-term, so the rising intrest rates would crush the budget quickly and counterproductively--
only surprise hyperinflation, say 40-100% would do it.
on Mon, 02/08/2010 - 10:29
#222113
Pros - I've heard that argument too, and I'm not sure I buy it. Your assumption is that interest rates would rise in an inflationary situation.
I don't think that is necessary so. Yield on US debt should even today, be much higher than it is by any rational measure. So why isn't it? Probably because the Feds are sucking up a large percentage of the issuance with freshly printed money. They can, presumably do this ad infinitum, printing cash and using it to buy the US's own debt. Interest rates will stay low and the flood of dollars will render foreign holders of existing debt very much poorer in real terms.
Also, I was of the belief that most mortgages in the US are fixed for extended periods and would therefore be seriously eroded by inflation?
on Mon, 02/08/2010 - 10:55
#222144
People, you are way overthinking the whole thing. I know there are gold bugs around desperate to have the decline in gold stop, but you have to wrap your minds around the concept of consistency.
You Cannot Raise The Prices Of Things No One Wants.
Period. Full stop. It doesn't matter how much money is printed when you face that simple sentence.
If ZH believes the economy remains weak with surging unemployment and riots, then people will not demand things like HOUSES and CARS, and their price declines will undo any increases in food or gas prices. You have to have a consistent mindset. If you think the economy will be weak then prices cannot rise because there will be no demand for *stuff*.
on Mon, 02/08/2010 - 11:18
#222165
Who's talking about raising the prices of things nobody wants? On the other hand if you write a cheque for $1bn to every person in the world, I'd be willing to wager that the prices of things that everyone needs to live, eat, travel, etc. will all go up.
This 'Capacity Gap' argument is frequently referred to by people who simply don't understand what inflation is.
on Mon, 02/08/2010 - 13:52
#222335
+1
on Mon, 02/08/2010 - 10:14
#222102
Another reason why US and UK still got their triple "A" ratings is the hopeless political nature of the pathetic rating agencies, all three of them belonging to the anglosphere.
UK should keep good company to Greece.
on Mon, 02/08/2010 - 09:01
#222032
This says that DB and Unicredit have ceased doing Greek bond repo with Greek banks.
on Mon, 02/08/2010 - 09:09
#222040
Short EWP
on Mon, 02/08/2010 - 09:33
#222065
when are they pulling out of the US ?
on Mon, 02/08/2010 - 09:41
#222069
I get the feeling that Greece may be the first domino and it seems like the powers that be are getting ready to push it over.
on Mon, 02/08/2010 - 10:55
#222145
Looks like the molester crowd is on the move.
Greece is just the first one in the trunk.
http://verydemotivational.com/2010/02/08/demotivational-posters-just-kid...
on Mon, 02/08/2010 - 10:17
#222106
Uncomplete translation,
the text says furthemore: other banks accept them but only for 2- 3 weeks
"?????? ????? ???????? ?????????? ?? ????????? ??? ????????? ???????? ???? ???? ??? 2 ?? 3 ?????????."
on Mon, 02/08/2010 - 11:23
#222162
Weak Dollar Illusory as Correlated Trade Shows Gains
Feb. 8 (Bloomberg) -- For all the concern over the $1.6 trillion U.S. budget deficit and record debt load, the dollar is as valuable now as 35 years ago.
Measured against a basket of currencies from the Group of 10 nations proportioned by how they trade against each other, the greenback is up about 3 percent since 1975, according to Bloomberg Correlation-Weighted Currency Indexes. That was four years after the Bretton Woods agreement, set up in 1944 to link currencies to the price of gold, collapsed. The U.K. pound has dropped 34 percent and the Canadian dollar has fallen 6 percent.
The U.S. dollar gained 6 percent since November after losing 12 percent in the first 11 months of 2009 as measured by the Bloomberg index. Barclays Capital and Morgan Stanley say the U.S. will grow faster than the rest of the developed world this year and 2011. At the same time, Europe faces worsening finances in Greece, Spain and Portugal, Japan’s economy is struggling and concerns about valuations in emerging markets are increasing.
“To quote Mark Twain, the reports of the dollar’s demise have been greatly exaggerated,” said Win Thin, a senior currency strategist in New York at Brown Brothers Harriman & Co., which manages about $40 billion in assets.
Rising Demand
Nowhere is that more evident than in the market for U.S. Treasuries. The amount of America’s government debt held by investors outside the U.S. rose 17 percent to $3.6 trillion in 2009 through November, according to the Treasury Department.
Purchases may continue to rise as investors seek refuge from growing sovereign credit risk in the euro area. The dollar “will benefit from relative liquidity of the U.S. Treasury markets,” Barclays Capital currency strategists led by David Woo in London said in a Feb. 5 report.
Barclays Capital economists said in a report the same day that U.S. gross domestic product may grow 3.6 percent this year, versus 2.5 percent for the developed world, and 3.1 percent in 2011, compared with 2.6 percent elsewhere. Japan’s GDP may expand 1.9 percent this year, and the euro zone 1.3 percent, they said.
A day earlier, strategists at New York-based Morgan Stanley boosted their dollar forecast, saying it will strengthen to $1.24 per euro by year-end from its previous estimate of $1.32. It traded at $1.3676 as of 6:46 a.m. in New York today. The firm sees the U.S. currency gaining to 109 yen from 89.42 today, and rallying to $1.49 to the pound from $1.5578
Reserve Currency
Investors and traders predicted last year the dollar would lose its position as the world’s reserve currency, which means it’s the first place central banks look to park their cash.
“With all the concerns about the problems with the U.S. financial system last year, the banking sector in the euro zone looked a bit more stable,” saidRobert Sinche, chief strategist at Lily Pond Capital Management LLC in New York. “That created a sense of the euro as an alternative to the dollar.”
Central banks that disclose breakdowns of their reserves bought a record $60 billion worth of euros in 2009’s second quarter, more than half of their new cash in the period, based on International Monetary Fund data adjusted for exchange-rate changes using methodology developed by Barclays Capital.
They then reversed course, putting 15 percent of new reserves, or $17.8 billion, into euros in the third quarter, the smallest share of any period in which their reserves grew since early 2008. Central banks put 45 percent, or $52 billion, into dollars, up from 36 percent.
http://www.bloomberg.com/apps/news?pid=20601083&sid=aVbhDaStbA1Q
on Mon, 02/08/2010 - 13:55
#222341
ah, well it's good to know we haven't lost any purchasing power.
on Mon, 02/08/2010 - 11:22
#222174
As if life wasn't complicated enough. One will have to clarify now when one asks 'How about doing it Greek style'?
on Mon, 02/08/2010 - 12:21
#222237
Its crunch time!
on Mon, 02/08/2010 - 12:44
#222273
The beginning of the end indeed ... thanks for mentioning the pull-outs, wasn't aware, will incorporate in my recent article on Greece and the aftermath. In and of itself a Greek bankruptcy or bond default should -in theory- not affect the Euro as such very much, Greece being maybe 3% of the total (http://crisismaven.wordpress.com/2010/01/24/will-greeces-default-bring-down-the-euro/). However, just as a Californian bankruptcy (probably inevitable, large US cities at least are already contemplating insolvency, ten idividual states may well follow- http://crisismaven.wordpress.com/2010/02/01/bloom-of-doom-iii-cities-going-bankrupt/) would reflect badly on the "state of the Union" as a whole so would the default of on EU country, coupled with the rising interest rates and thus further destabilisation of the remaining over-leveraged member states, make investors wonder when sovereign default across the board (http://crisismaven.wordpress.com/2010/02/08/bloom-of-doom-v-we-have-control-of-the-ship-we-have-a-plan/) is likely. Thus they wouldn't commit themseves to bonds of longer maturity and that's the beginning of the end.