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ECB Suspends Rating Requirement For Portuguese Collateral

Tyler Durden's picture


A stunner in the JCT press conference, who just announced that the ECB is willing to accept any junk that comes its way. Specifically he said that the ECB has decided to suspend a rating requirement for Portuguese collateral, and that the ECB will shortly issue a press release on the matter. Obviously the bank is now making stuff up as it comes alone. He also added that the suspension will be maintained until further notice. Expect this move to affect Italian, SPanish and all other insolvent country debt shortly as it becomes all too clear that the ECB will do everything in its power to give out cash against insolvent paper. And now you know what Europe's QE looks like.


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Thu, 07/07/2011 - 08:57 | 1432063 Mongo
Mongo's picture

The F-A-R-C-E is strong with the ECB

Thu, 07/07/2011 - 09:05 | 1432091 LetThemEatRand
LetThemEatRand's picture

ECB:  "You want us to give more money to the banksters.  You think that QE is good for the economy."

Public:  "We want you to give more money to the banksters.  We thinkt that QE is good for the economy.  Move along."

Thu, 07/07/2011 - 13:24 | 1433138 phungus_mungus
phungus_mungus's picture

Man this is beautiful!

I've got some old McDonalds napkins and a pile of used paper bird cage liners I could cash in!

Thu, 07/07/2011 - 08:58 | 1432065 qussl3
qussl3's picture

What better way to say that Portugal is bankrupt too.

Fucking stupid.


Thu, 07/07/2011 - 09:41 | 1432200 MarketTruth
MarketTruth's picture

NINJA loans, once the domain of people, has now gone to countires as they can sell NINJA junk to the ECB.

Thu, 07/07/2011 - 11:45 | 1432700 carbonmutant
carbonmutant's picture

Our paper is so good we don't need a rating...

Thu, 07/07/2011 - 08:59 | 1432070 hedgeless_horseman
hedgeless_horseman's picture

Cash for Junk(ers)!

Thu, 07/07/2011 - 09:15 | 1432134 Paralympic Equity
Paralympic Equity's picture


Thu, 07/07/2011 - 08:59 | 1432071 Xibalba
Xibalba's picture

should be good for another 90 SP500 points next week. 

Thu, 07/07/2011 - 09:00 | 1432072 dcb
dcb's picture

there is but one rule, and that is to maintain the status quo. all other rules are meaningless.

Thu, 07/07/2011 - 09:00 | 1432074 alien-IQ
alien-IQ's picture

and this is why the E/U just popped? really?


Thu, 07/07/2011 - 09:00 | 1432075 lizzy36
lizzy36's picture

Ahhhhh, the status quo are threatened. So, change the rules of the game.

Must prevent consequences accruing to anyone in the top 2%.

Game to Trichet, set and match TBD.

Thu, 07/07/2011 - 09:06 | 1432097 Josh Randall
Josh Randall's picture

Exactly - these One Worlders are running scared because their poster child of soverign control (i.e. the EuroZone) is crumbling like a cracker into Liesman's 14th bowl of chili

Thu, 07/07/2011 - 09:14 | 1432129 SheepDog-One
SheepDog-One's picture

Exactly, the Euro was supposed to be the shining model for the oncoming total 1 world currency, cant have it all collapse NOW can we? Not on the cusp of the big rug pull out!

Thu, 07/07/2011 - 09:54 | 1432239 TheTmfreak
TheTmfreak's picture

There is already a one world currency. Been around for years. Called Gold.

Thu, 07/07/2011 - 11:47 | 1432718 carbonmutant
carbonmutant's picture

Any bondholder that buys this paper deserves what he gets...

Thu, 07/07/2011 - 09:03 | 1432079 TheTmfreak
TheTmfreak's picture

So in other words, their answer is close their eyes, plug their ears, and pretend everything is ok?



Thu, 07/07/2011 - 10:06 | 1432273 Raymond Reason
Raymond Reason's picture

Yes, because everything in the world is now perception, PR campaigns, full faith and credit, image is everything.   The economy is healthy if people believe it is healthy. 

Wasting away in Pollyannaville. 

Thu, 07/07/2011 - 09:02 | 1432082 firstdivision
firstdivision's picture

Hey, why not?  They are just following the Fed.  Next step they will buy those directly from banks ala MBS buying spree the Fed went on.

Thu, 07/07/2011 - 09:05 | 1432090 alien-IQ
alien-IQ's picture

yep. each bank will start dumping to it's host government until all the liabilities are squarely on the back of the people. then comes the default.

Thu, 07/07/2011 - 09:02 | 1432083 alexwest
alexwest's picture

no wonder
look at rates : 2- 5 yy rate is over 15%

Thu, 07/07/2011 - 09:19 | 1432152 Lord Welligton
Lord Welligton's picture

And Ireland is next. 15.9% 2 Year.


Thu, 07/07/2011 - 09:08 | 1432089 Cult_of_Reason
Cult_of_Reason's picture

Money printing QE by the ECB should weaken the EUR/USD to at least 1.35

Thu, 07/07/2011 - 09:13 | 1432108 hedgeless_horseman
hedgeless_horseman's picture

Stop it with the market fundamentals.

The EMU can't possibly win the race to the bottom (our printers are far more insane than their printers), but that probably won't stop them from trying.

Thu, 07/07/2011 - 09:33 | 1432177 youngman
youngman's picture

" stop it with the market fundamentals" do you invest when the rules change..and they ...TPTB...just do things that when we find out two years later...makes us puke...

Thu, 07/07/2011 - 09:05 | 1432092 Dick Darlington
Dick Darlington's picture

Hahahaa, the eurofanatics are building the biggest bubble ever!

Thu, 07/07/2011 - 09:05 | 1432095 aviat72
aviat72's picture

Sold some ES here. This news should spark a rally from the lows, not a break away gap on a market trading above its traditional bands. Things are becoming desperate but so far there is no apparent reduction in risk appetite.

Thu, 07/07/2011 - 09:10 | 1432116 SheepDog-One
SheepDog-One's picture

The sheeple are now so placated you couldnt wake them out of their slumber with a tazer. Just how they want everyone, totaly expecting markets up 1% daily from here on out.

Thu, 07/07/2011 - 09:07 | 1432104 hugovanderbubble
hugovanderbubble's picture

Ive never seen such crappy manipulation statements...


Trichet is a liar.

Thu, 07/07/2011 - 09:08 | 1432105 scratch_and_sniff
scratch_and_sniff's picture

just when you think you can relax, out pops another screaming baby.

Thu, 07/07/2011 - 09:21 | 1432156 Lord Welligton
Lord Welligton's picture


And each one uglier than the last.

Thu, 07/07/2011 - 09:25 | 1432165 scratch_and_sniff
scratch_and_sniff's picture

yip, this one was ginger.

Thu, 07/07/2011 - 09:08 | 1432106 JJ McApe
JJ McApe's picture

welcome european toxic bank :D

Thu, 07/07/2011 - 09:09 | 1432109 fuu
fuu's picture

Good for a $0.40 pop in silver.

Thu, 07/07/2011 - 09:09 | 1432110 Mike2756
Mike2756's picture

Are they trying a new approach? Raise rates and run the presses at the same time?

Thu, 07/07/2011 - 09:09 | 1432113 Racer
Racer's picture

Smacks of complete and utter desperation to keep the falling plates from falling

Thu, 07/07/2011 - 09:10 | 1432115 Clark80
Clark80's picture


Just like the Titanic! That wasn't supposed to sink either.

Thu, 07/07/2011 - 09:10 | 1432117 CreditcalMass
CreditcalMass's picture

ECB to the world: PIIGS are bankrupt, but that doesn't matter, ratings mean nothing bitchez.

Thu, 07/07/2011 - 09:11 | 1432121 SheepDog-One
SheepDog-One's picture

By tomorrow the ECB will just say Portugal and the other PIGS can not be found on their maps, they just dont exist.

Thu, 07/07/2011 - 09:14 | 1432131 qussl3
qussl3's picture

So its kinda like farting in a lift?

Thu, 07/07/2011 - 09:24 | 1432160 LetThemEatRand
LetThemEatRand's picture

Or worse, sharting in a lift.

Thu, 07/07/2011 - 09:30 | 1432174 NotApplicable
NotApplicable's picture

These are not the PIIGS you're looking for.

Move along.

Thu, 07/07/2011 - 09:12 | 1432122 buzzsaw99
buzzsaw99's picture

I'll bet the ecb pays face value too.

Thu, 07/07/2011 - 09:12 | 1432124 MiningJunkie
MiningJunkie's picture

Who cares? Buffett just told the world that everything is gotta luv CNBS. Long and strong looking for Dow 40,000!

Thu, 07/07/2011 - 09:12 | 1432125 Everybodys All ...
Everybodys All American's picture

WOW ... First they complained the ratings agencies didn't do their job and now they complain that they are doing their job too well.

Thu, 07/07/2011 - 09:14 | 1432128 qussl3
qussl3's picture

"We are concerned about price stability."

"We take any crap as collateral and give you cash."


Thu, 07/07/2011 - 09:15 | 1432133 Johnny Lawrence
Johnny Lawrence's picture

So if the Portuguese gave them that smelly soup they make, they would accept that?

Thu, 07/07/2011 - 09:16 | 1432136 Archimedes
Archimedes's picture

I love the smell of desperation in the morning!

Thu, 07/07/2011 - 09:16 | 1432138 Everybodys All ...
Everybodys All American's picture

So who in their right mind would buy Portuguese debt. Oh I know Bernanke. What an f'ng joke.

Thu, 07/07/2011 - 09:17 | 1432144 firstdivision
firstdivision's picture

ECB and PBoC

Thu, 07/07/2011 - 09:17 | 1432139 firstdivision
firstdivision's picture

Setting sail for a European tour?  Come do it with the Maiden Lane Group LLC as we set off for Europe.  Between our two ships, we can transport over $3 Trillion in toxic bonds to and fro from each continent. 

Thu, 07/07/2011 - 09:18 | 1432147 AccreditedEYE
AccreditedEYE's picture

Is this what pushes us through the highs from late April early May? I guess the destruction of the Middle Class will continue unabated at this point... oil is going to surge higher with risk. So much for the brief recovery in consumer spending. LMAO!

Thu, 07/07/2011 - 09:20 | 1432148 THE DORK OF CORK
THE DORK OF CORK's picture

Look Tyler

Goverment defecits is the only smooth mechanism to reduce the leverage withen the monetory system (outside of the ECB increasing its base by printing non govermental euro cash)

I would have prefered to see a default on everything but consumer deposits and sovergin bonds but this is unlikely when the fox is guarding the hen house.

Thu, 07/07/2011 - 09:20 | 1432153 Tense INDIAN
Thu, 07/07/2011 - 09:20 | 1432154 monopoly
monopoly's picture

Is this even legal. Are they just allowed to make this stuff up as they please. What investor would ever put money in these toxic assets with no recourse or rating.

Thu, 07/07/2011 - 09:23 | 1432159 SheepDog-One
SheepDog-One's picture

Legal? We dont need no stinkin 'legal' in the Brave New World!

Thu, 07/07/2011 - 10:14 | 1432294 MadeOfQuarks
MadeOfQuarks's picture

Nope, but what do they care:

Institutional arrangements

A number of institutional arrangements for sound fiscal policies have been agreed at the EU level, also with a view to limiting risks to price stability.

These include:

  • the prohibition of monetary financing (Article 123 of the Treaty on the Functioning of the European Union),
  • the prohibition of privileged access to financial institutions (Article 124 of the Treaty on the Functioning of the European Union),
  • the no-bail-out clause (Article 125 of the Treaty on the Functioning of the European Union),
  • the fiscal provisions to avoid excessive government deficits (Article 126 of the Treaty on the Functioning of the European Union, including the excessive deficit procedure), and
  • the Stability and Growth Pact (secondary legislation based on Articles 121 and 126 of the Treaty on the Functioning of the European Union).
Thu, 07/07/2011 - 09:21 | 1432155 BinAround
BinAround's picture

All the power people: IMF, ECB, politicians of Germany and France, will do everything to prevent big bank failure.  Will it have the same effect on equity markets as TARP and QE?  Maybe not.  The US programs were a sea of liquidity pumped into Wall St.  The Euro response seems to be more targeted.  After all, the ECB just raised rates today.  That the ECB will accept weak credits doesn't hurt equities, but maybe it won't be as stimulative as the US response.

Thu, 07/07/2011 - 09:26 | 1432167 SheepDog-One
SheepDog-One's picture

-Maybe it wont be as stimulative as the US response-
Which wasnt stimulative at all to anything real, just bubble paper stock markets.

Thu, 07/07/2011 - 10:43 | 1432401 Urban Redneck
Urban Redneck's picture

Maintaining collateral requirements would have hurt equities through reduction in leverage.  I think the big question is whether Moody's is acting in line with the desires of Bernanke & Geithner or against them.

Fri, 07/08/2011 - 16:11 | 1438129 Urban Redneck
Urban Redneck's picture


Putting the Moody's question another way- What is the dominant trade by TBTB?

Big Money (Treasury) wants a fear trade/dollar bounce/deep treasury refunding and purchase market

Big Money (OPEC & China) want to reduce dollar exposure/exit dollars

Both sides (which are opposed over the intermediate to long term) benefit in the short term by a strengthening dollar.


The actual identity of 800lb feces flipping hominid would indicate two very different points in the current circle.

Thu, 07/07/2011 - 09:22 | 1432158 SheepDog-One
SheepDog-One's picture

WOW look at oil go! Up another $2.50 on open.

Thu, 07/07/2011 - 09:24 | 1432161 hugovanderbubble
hugovanderbubble's picture

Dagong Rating Agency rates as JUNK " ECB Portfolio"

Fuk all ECB members.


Thu, 07/07/2011 - 09:28 | 1432169 SheepDog-One
SheepDog-One's picture

'Its all junk rated garbage'....HEY I know! Lets run up bubble stocks some more!
Got to do something to keep these sheeple in their trance after all.
Nevermind Obama just offered up Socialist Security and Mediscare to be carved to pieces for a 'budget deal', the sheeple know nothing.

Thu, 07/07/2011 - 09:34 | 1432183 hugovanderbubble
hugovanderbubble's picture

good morning SHeep,


Trichet and Draghi should be lies.


Please dont buy this farce...the ECB is a junk entity.

Thu, 07/07/2011 - 09:24 | 1432162 eckart
eckart's picture

austerity rewarded by the ECB v profligacy rewarded the FED...i'll go with the Europeans on this one!

Thu, 07/07/2011 - 09:25 | 1432163 NotApplicable
NotApplicable's picture

So, any Portugal in a storm?

Thu, 07/07/2011 - 09:26 | 1432166 rsnoble
rsnoble's picture

Pretty obvious with moves like this of exactly how dire the situation is.  I've been expecting rule changes all the way to complete collapse.  Along with a lot of fingerpointing.

Thu, 07/07/2011 - 09:29 | 1432173 SheepDog-One
SheepDog-One's picture

Things collapsing no matter what trick they pull? Just change the 'rules'...LOL as if any existed in the first place.

Thu, 07/07/2011 - 09:34 | 1432184 youngman
youngman's picture

Well I see the 3% of us that own PM´s going to 5% pretty fast....

Thu, 07/07/2011 - 09:35 | 1432188 misterc
misterc's picture

Thank god I did my monthly cost averaging operation (becoming my own central bank, swapping €-currency for real money) yesterday.

Thu, 07/07/2011 - 09:40 | 1432197 wandstrasse
wandstrasse's picture

Thank god...

while thanking, do not forget to pray that you will not be forced to exchange your real money on the black market in an unworthy way when things get 'interesting'. 6102. I pray hourly.

Thu, 07/07/2011 - 09:35 | 1432189 earnulf
earnulf's picture

I have some questionable titles to prime swampland in florida on which a bridge was built sometime back.   I think the bridge is still there, just a few feet underwater due to global warming or soft soil, one of the two.   Can I get a few million euros for that collateral so that I can go buy some physical silver?

Thu, 07/07/2011 - 09:37 | 1432190 eurusdog
eurusdog's picture

EURUSD Support seen in the 1.4170 area.

Thu, 07/07/2011 - 09:37 | 1432191 equity_momo
equity_momo's picture

Ok so we have :

manipulated data

money printing

mark to fantasy

no rule of law for banks/elites

principle writedowns

PM supression

SPR oil sales

debt monetization

quasi govn Dow pumping

negative real rates

ratings agency bypass



What else?

Whats next?

Who in their right mind is investing in this?

Capitalism looking pretty good right now eh? LOL.

Thu, 07/07/2011 - 09:44 | 1432208 DOT
DOT's picture

It is not capitalism, it's "financialism".

Thu, 07/07/2011 - 10:09 | 1432276 magis00
magis00's picture

Hear! Hear!

Thu, 07/07/2011 - 11:38 | 1432672 Ghordius
Ghordius's picture

"Financialism" !!! I like this word !

Thu, 07/07/2011 - 10:14 | 1432292 Raymond Reason
Raymond Reason's picture

-What's next?-  WWIII

Thu, 07/07/2011 - 09:38 | 1432194 Everybodys All ...
Everybodys All American's picture

The ECB ignoring the ratings of Portugual will only lead to the rest of the world ignoring the ECB. It will take more time but it will become ever more toxic for the EU as a whole.

Thu, 07/07/2011 - 09:39 | 1432196 Bleeping Fed
Bleeping Fed's picture

It seems JCT is now willing to burn taxpayers money to light his bankster buddies' cigars.  How generous of him.

Thu, 07/07/2011 - 09:47 | 1432216 crash_davis
crash_davis's picture

I wonder how long it will be before vegas will post odds on who blows up first.

1. U.S.A. :with their debt ceiling and the 14.3 trillion in debt and the 75 or so trillion in un-funded liabilities and their commie obama

2. Europe: with the wee little PIIGS saying weeeeee all the way to the ECB.

3. Japan: with their 240% debt to G.D.P. ratio and their radioactive isotopes and monster natural disasters and their monster infatuation (godzilla, mothra, ect.)

4. China: with their 10% of G.D.P. is actually shitty loans that will never be paid back, their ghost cities and their massive inflation/property bubble


wait you don't need vegas. There's a credit default swap that. (apple can go ahead and give me credit for the credit default swap app.)

Thu, 07/07/2011 - 09:51 | 1432226 anyways
anyways's picture

well, i know the $ bulls hate it, but thats clearly bullsih for stocks and the euro. It means: under ALL circumstances, the ecb will continue to hand out fresh money to the PIIGS. Full Stop Period! They can do this not forever, but very very long. Too long for the equity bears, respective the $ bulls.

Thu, 07/07/2011 - 10:12 | 1432286 magis00
magis00's picture

I'm starting to come around to your view -- of course my beliefs and emotions cloud my view of it, but someone mentioned Japan and 20+ years of this.  If the world ends up in the shitter via slow gradual shittiness, rather than shockingly-swift and violent shittiness, I think this is how it goes - - more handouts, all the time, never-ending.

They can do this not forever, but very very long.

. . . could be years+. Fuckin' A.

Thu, 07/07/2011 - 12:01 | 1432706 Ghordius
Ghordius's picture

You get it! When your plane is burning, you want a SOFT crash landing. And who knows, perhaps the horse learns to sing.

Thu, 07/07/2011 - 11:48 | 1432721 Ghordius
Ghordius's picture


Thu, 07/07/2011 - 09:51 | 1432227 qussl3
qussl3's picture

JCT: I need a bigger shovel.

PBOC: Right away..... use excavator, we have many extra...

Draghi: WTF......

Thu, 07/07/2011 - 10:00 | 1432260 Caravaggio
Caravaggio's picture

"..give out cash against insolvent paper.."

Exactly what FED is doing.. only "..give out paper against insolvent paper..". Triple A, of coarse.

Thu, 07/07/2011 - 10:22 | 1432320 MadeOfQuarks
MadeOfQuarks's picture

Well there go my puts. Why I ever thought they were going to play by the rules is beyond me. Live and learn. At least my PMs will thrive from this.

Thu, 07/07/2011 - 12:03 | 1432808 SeverinSlade
SeverinSlade's picture

In the long run yes, but what are your thoughts about the short term?  Recent bump in PMs was primarily due to fears of the rating agencies saying Greek rollover would be a default, yes?  So the ECB says they'll shove the bailouts down our throats no matter what.  With a debt ceiling deal near, does that lead to a brief (VERY brief) strengthening of the USD and a slide in equity/commodity/metal markets (like ZH and many others have pointed to HAVING to happen if QE3 is to be implemented)?

Thu, 07/07/2011 - 11:24 | 1432598 aribabak
aribabak's picture

WELL, what is next?

Since ECB has dispensed with the rating agencies, why not CHANGE THE ACCOUNTING RULES to MARK-TO-MODEL standard.

This is sure to help improve unemployment in EU as more investigative accountants will have to be engaged to perform more forensic accounting analysis.

Thu, 07/07/2011 - 18:13 | 1434336 anyways
anyways's picture

exactly: 'MARK-TO-MODEL' is the keyterm. The US mark-to-model CPI with 'Chain CPI' and the EU mark-to-model junk to ecb-grade.

so is life :-)

Thu, 07/07/2011 - 11:38 | 1432674 SeverinSlade
SeverinSlade's picture

Anyone have any insight as to what this means for Greek rollover (specifically regarding ECB's comments on the rating agencies potentially unanimously rating it as a form of default)? 

Seems obvious to me but maybe I'm just being stupid.  I'm understanding Trichet's comments as basically saying they're going to push through all bailouts (including Greece) regardless of what S&P, Moody's, and Fitch say.

Reason why I ask is the recent bump up in gold and silver prices seems tied to fears that Moody's would side with S&P.


Thu, 07/07/2011 - 12:26 | 1432916 Caravaggio
Caravaggio's picture

"..regardless of what S&P, Moody's, and Fitch say.."

Exactly. Of coarse, you can go on trusting the meaningless triple A's, who cares.

Thu, 07/07/2011 - 14:07 | 1433305 Bansters-in-my-...
Bansters-in-my- feces's picture

Hey...Could you hold these two cheese burgers and a large fries for me,until I give back the 85 billion dollars you loaned me...

Thanks in advance and have a nice day... Sincerely yours...Greece.

Thu, 07/07/2011 - 14:10 | 1433322 Bansters-in-my-...
Bansters-in-my- feces's picture

OOOPS...,I meant sincerely yours...Portugal. .

Thu, 07/07/2011 - 14:28 | 1433381 Bansters-in-my-...
Bansters-in-my- feces's picture

I see some Fuck-tard don't like SheepDog-One.


Thu, 07/07/2011 - 15:33 | 1433682 dollarcoaster
dollarcoaster's picture

Question #1:

Who wants to destroy the euro and the UE?

Fri, 07/08/2011 - 07:33 | 1435449 midnight
midnight's picture

So, according to ZH retards, the EUROPEAN CB should bend over to AMERICAN Moody's?

Rednecks bring the LOLs yet again

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