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ECB Again Accepting Greek Bonds As Eligible Collateral

Tyler Durden's picture




 

Those curious why the EUR is back to highs not seen since April, it appears the reason is because Europe's currency is once again directly collateralized by such money good assets as Greek Sovereign bonds. At least the farce that is the "temporary" indirect bailout of Greece via the ELA can finally end.

From the ECB:

19 December 2012 - ECB announces change in eligibility of debt instruments issued or guaranteed by the Greek government

Marketable debt instruments issued or fully guaranteed by the Hellenic Republic and fulfilling all other eligibility criteria shall again constitute eligible collateral for the purposes of Eurosystem credit operations, subject to special haircuts. This is the consequence of the decision of the Governing Council of the European Central Bank (ECB) to suspend the application of the minimum credit rating threshold in the collateral eligibility requirements for the purposes of the Eurosystem’s credit operations in the case of marketable debt instruments issued or guaranteed by the Greek government. This suspension will be maintained until further notice.

In this decision the Governing Council has taken into consideration the positive assessment by the European Commission, the ECB and the International Monetary Fund of the policy package for the first review under the Second Economic Adjustment Programme for Greece and the wide range of measures already implemented by the Greek government in the areas of fiscal consolidation, structural reforms, privatisation and financial sector stabilisation.

The suspension applies to all outstanding and new marketable debt instruments issued or guaranteed by the Greek government and will come into force with the relevant legal act on ?21 December 2012. The haircuts applied to these assets will be specified in the legal act.

 

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Wed, 12/19/2012 - 08:17 | 3077940 GetZeeGold
GetZeeGold's picture

 

 

Hell yeah......I'll take some!

Wed, 12/19/2012 - 08:38 | 3077979 Sheeple Shepard
Sheeple Shepard's picture

SHIT SANDWICHS! ROLL UP, ROLL UP. GET YOUR SHIT SANDWICHS!

Wed, 12/19/2012 - 08:20 | 3077946 DCon
DCon's picture

This now makes sense. From earlier today

 

@Kelly_Evans: Greek banks: Piraeus +8%, Alpha bank +8.5% Eurobank ergasias +8.3% Nat'l Bank of Greece +8%, per DJN

Wed, 12/19/2012 - 08:23 | 3077948 malikai
malikai's picture

I'm thinking about issuing $100MM bonds. I figure in a few years I'll be able to flip them to the fed/ecb/whoever.

If anyone wants in, let me know. I'm pretty sure we can prove it will be stimulous because we'll just use it to buy cocaine.

Any accountants/auditors out there interested, just let me know. Friends of banks particularly welcomed.

Wed, 12/19/2012 - 08:35 | 3077974 agent default
agent default's picture

I have a better proposition for you.  I will issue 100Bn worth of perpetual bonds to you in exchange for 100Bn for your perpetual bonds.  Then we both go to the Ben Bernank or any other central banker and say, look we are too big too fail, we may be stupid, but hey, too big to fail.  Pay up.

Wed, 12/19/2012 - 08:39 | 3077982 malikai
malikai's picture

"Look Ben, if we go down, the entire narcotics industry goes down and the dominoes fall. There will be tanks on the street by next thursday. You got it?"

Wed, 12/19/2012 - 08:41 | 3077991 agent default
agent default's picture

Even better.  We float something like 30% of our crap in the market making sure everybody is exposed to us one way or another, then we might even demand a premium for the bailout.

Wed, 12/19/2012 - 08:58 | 3078011 malikai
malikai's picture

Lloyd, is that you? Call me. Let's get this thing going. We need to prepare for next year's bonus season.

Wed, 12/19/2012 - 08:28 | 3077955 Yen Cross
Yen Cross's picture

 That is some funny shit! Scum bags cross collateralizing ECB "Greek Bailout" money!

Wed, 12/19/2012 - 08:30 | 3077960 AUD
AUD's picture

'Tis a long pudding that has not an end

Wed, 12/19/2012 - 08:35 | 3077964 Ghordius
Ghordius's picture

there is a background to that http://www.rte.ie/news/2012/1219/standard-poors-hikes-greek-rating-busin...

 

Standard & Poor's hiked Greek bond's rating by six notches


"S&P said the upgrade to B- - the highest grade it has given Greece since June 2011 - reflected its view that the other euro zone countries are determined to keep Greece inside the currency union.

It also gave Greece a stable outlook, meaning it is less likely to change its rating again soon.

"The stable outlook balances our view of euro zone member states' determination to support Greece's euro zone membership and the Greek government's commitment to a fiscal and structural adjustment against the economic and political challenges of doing so," the agency said in a statement.

Greece's finance minister welcomed the upgrade, but pledged to forge on with promised reforms and savings measures."

 

Wed, 12/19/2012 - 08:37 | 3077976 GetZeeGold
GetZeeGold's picture

 

 

Standard & Poor's hiked Greek bond's rating by six notches

 

Someone switched out crack in their bong.....they didn't notice until it was too late.

Wed, 12/19/2012 - 08:39 | 3077984 Ghordius
Ghordius's picture

ARE YOU IMPINGING THE SACRED HONESTY OF THE RATING AGENCIES?

that was my role in ZH for a while, so now you are very welcome :-)

Wed, 12/19/2012 - 08:42 | 3077992 GetZeeGold
GetZeeGold's picture

 

 

Heh heh.

Wed, 12/19/2012 - 08:42 | 3077993 negative rates
negative rates's picture

I simply love the options given those who feel they must make that choice. Hypocrisy and arrogance rule the day, but they will rue the day soon too. 

Wed, 12/19/2012 - 10:15 | 3078244 astoriajoe
Wed, 12/19/2012 - 14:55 | 3079658 Hapa
Hapa's picture

this smells like the FED's current posture - buy any old crap debt and push new money into the system to further indebt the borrowers.  It doesn't matter anymore, it's a total house of cards playing with fake money.   When it all falls apart it will be swift and chaotic.

Wed, 12/19/2012 - 14:55 | 3079659 Hapa
Hapa's picture

this smells like the FED's current posture - buy any old crap debt and push new money into the system to further indebt the borrowers.  It doesn't matter anymore, it's a total house of cards playing with fake money.   When it all falls apart it will be swift and chaotic.

Wed, 12/19/2012 - 10:20 | 3078272 astoriajoe
astoriajoe's picture

So basically S&P is treating Greek debt as a subset of German debt now?

Wed, 12/19/2012 - 08:33 | 3077966 LongSoupLine
LongSoupLine's picture

This smells just like Goldman's shit eating fucking work.

Fucking wealth destroying shitheads have their entire fucking arm up Draghi's ass.

fuck you Blankfein. shit eating fuck.

Wed, 12/19/2012 - 09:02 | 3078016 GetZeeGold
GetZeeGold's picture

 

 

.....and your little dog too.

Wed, 12/19/2012 - 08:33 | 3077967 Sheeple Shepard
Sheeple Shepard's picture

"This is the consequence of the decision of the Governing Council of the European Central Bank (ECB) to suspend the application of the minimum credit rating threshold in the collateral eligibility requirements for the purposes of the Eurosystem’s credit operations in the case of marketable debt instruments issued or guaranteed by the Greek government. This suspension will be maintained until further notice."

 

"If da boss says its okay, den its okay. CAPISCE?

Wed, 12/19/2012 - 08:38 | 3077977 Ghordius
Ghordius's picture

of course. Draghi is after all an Italian first, an European second, a central banker third. too bad he was a squiddie, too

Wed, 12/19/2012 - 08:41 | 3077989 DCon
DCon's picture

His squidness is far more important than his Italianness.

 

Wed, 12/19/2012 - 08:43 | 3077994 Sheeple Shepard
Sheeple Shepard's picture

And his humanness isnt important at all.

Wed, 12/19/2012 - 08:52 | 3078006 Ghordius
Ghordius's picture

come on, you can find a lot at fault on him, but it's human faults. I seriously doubt that all this "tribal" de-humanizing of "perceived enemies" is really necessary

you have probably an issue with the FED. and you buy in the propaganda about the ECB being "the european FED"

lots of people here don't agree and we would just point to Nixon in August 1971 and the NY-FED's basements

Wed, 12/19/2012 - 09:06 | 3078023 Sheeple Shepard
Sheeple Shepard's picture

" ...de-humanizing of "perceived enemies"...."

 

 

You cant be serious? Crash the world economy through greed then hold a gun to the populations head and demand "bailouts" and "austerity". These people ARE my enemies and they lost there humanity a long time ago. Scoundrels and charlatans,the lot of them.

Wed, 12/19/2012 - 08:38 | 3077980 timbo_em
timbo_em's picture

One funny observation: while none of the German public tv or radio stations or their websites reported that Greece once again was officially in default over the course of the last several weeks because of its debt buy back, last night the news were full of that headline that S&P upgraded Greece to B- stable.

btw: Since almost all the Greek long-term debt is owned by the official sector and c. p. the country will never be able to return to the bond market, why do they need a rating at all? All I can say is BTFD and brace for impact!

Wed, 12/19/2012 - 10:04 | 3078177 1eyedman
1eyedman's picture

the B- is purely based, now, on the ecb willingness ability to print, send it to DB, and tell greece they owe more....

Wed, 12/19/2012 - 08:40 | 3077987 Yen Cross
Yen Cross's picture

Of course S&P upgraded Greece... They got their bailout money, to pay the interest on their debt.

Wed, 12/19/2012 - 08:42 | 3077990 ncdirtdigger
ncdirtdigger's picture

Do you suppose they would accept my Confederate War Bonds too?

Wed, 12/19/2012 - 08:45 | 3077997 dirtyfiles
dirtyfiles's picture

systemic risk by not doing so but no systemic risk by doing so

to big to go to jail

Wed, 12/19/2012 - 08:53 | 3078007 The Reich
Wed, 12/19/2012 - 08:55 | 3078008 AUD
AUD's picture

Alexander Pope declared:

How goes the Stock, becomes the gen'ral Cry.
Rather than fail we'll at Nine Hundred Buy.
Instead of Scandal, how goes Stock's the Tone,
Ev'n Wit and Beauty are quite useless grown:
No Ships unload, no Looms at Work we see,
But all are swallow'd by the damn'd South Sea.

Wed, 12/19/2012 - 09:09 | 3078030 Yen Cross
Yen Cross's picture

 The flip flopping and blatant lying, are beyond reproach. Greece still not meeting tax targets

  This as of 12-17-2012. If I cheat on my taxes, can I go get a loan from the ECB?

Wed, 12/19/2012 - 09:38 | 3078109 Calmyourself
Calmyourself's picture

Well of course, S&P upgraded Greece six notches yesterday they should be able to trade those bonds for Gold bars at par.  There is nothing but lies and more lies in these "markets" but everyone involved has a large stake i n continuing, until a large entity breaks for the exit it can go on forever.

Wed, 12/19/2012 - 10:01 | 3078174 1eyedman
1eyedman's picture

this turn should be very exciting.    last time the eur/usd shot like this was 9/6 to 9/14, which was 'the' high.     like i said before...swap roll time....

"heres some $ euro cuz, sell it and buy your fiat....algos love it and no one really knows what anythign is truly worth.    

looks like they are selling gold to buy paper too.

Wed, 12/19/2012 - 11:55 | 3078760 Paracelsus
Paracelsus's picture

  I remember some months back LMAO when Finland said they wanted collatoral for any subseguent Bailout operations.

Immediately three or four others in the Euro block said "We want some physical too!"  I agree with the bloggers who see this as a shortage of blue chip assets to pledge as security.

I find this particularly worrying.

Greshams Law works. Bad money drives out the good.

I lived and worked in Australia for a while.They call this "moving the goalposts".   The military calls it "mission creep"......

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