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The ECB's Press Corps Realize They Have No Idea What OMT Is: "The Rules Are What They Are" Explains Draghi
It took six months of humiliatingly empty rhetoric and bluster, before Europe's press corps, or rather just the FT's Michael Steen, finally asked perhaps the one most important question regarding the OMT, which does not stand for On Merkel's Tab, but rather "Outright Monetary Transactions" (full Draghi definition here) and is the magic "open-ended" bond-buying bullet and SMP replacement that has stabilized Europe: namely "what is it?" That it took so long for reporters, and by implication, the markets to actually point out that the emperor is indeed naked and inquire into the legal working of the ECB's deus ex machina is a testament to just what lengths the broader public has been zombified into believing that "the less you know, the better" historically, one of the KGB's better known slogans.
The exchange which begins at 46'50" in the clip below has to be seen to be believed because it confirms what we have said all along: the ECB is hoping and praying it never has to use the EMT, because at that point Draghi's excuse that the OMT is like porn and one just needs to see it to recognize it, will be woefully insufficient to preserve the insolvent Eurozone.
The exchange follows this earlier statement by Bernanke:
Draghi: On OMT, I mean the rules of OMT are what they are. So we will see, and it is not in our capacity. The ball is entirely with the governments; I have seen this on and on and on. OMT remains, is in place. It is a very effective backstop, and it is there. But you know the rules."
Which leads into this:
Steen: Mr. Draghi, you just said that we know the rules on OMT. I don't think I am alone in saying actually that I don't think we do. The only thing I am aware of that you published a 440-ish word statement that you sent out to us in September, and other than that it feels like we've pieced it together. So would you consider giving us at some point a written point by point this is how it works, this is what a country must do, or is this a deliberate policy to keep it a little bit vague.
Draghi: I am not sure I understand your question. I think by now, and in fact you stopped asking questions about how the OMT works because you understood how it works. I mean we've gone through all the conditions that would make a country eligible for OMT, and we said that this would be a necessary but not sufficient condition for the ECB to step in, and we listed the conditions. If you are referring to the legal documentation, that's another thing, we are still working on it, and it's coming out but that's it.. The OMT had never been created to support countries in their access to market; OMT was meant as an effective backstop to remove the tailrisk from the Euroarea.
And there you have it: Mario Draghi just described Europe's naked Atlas, who is supposed to backstop trillions of sovereign debt on his imaginary shoulders without even one legal term sheet in existence, and without any formalized set of rules in place. Just the mere promise that no matter what happens, the ECB will step in and bail anyone out, no questions asked, and with absolutely no actual framework for implementation.
Remember: the rules are what they are. And according to the surgeon general questioning the rules in insolvent Europe is hazardous for your health.
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Drop dead assholes
"Outright Monetary Transactions"
Really
They should call it OMC -- "Outright Monetary Circus" Just hearing the voice of that POS sends chills down my spine. He scares me more than the redneck with a shotgun and a gimp.
Mark Twain once said that “A lie is half way around the world before truth puts its shoes on.”
It is easier to tell a lie, and to believe a lie, than to state the truth and to look for the truth.
"The rules are what they are."
What are they? Nonexistent!
Too funnay!
If you have to ask, you can't afford it.
"It takes less time to do the job right than to explain why you did it wrong."
Well, that's what my fortune cookie said yesterday at lunch anyhoo.
Substitute Circus with Charade
ECB = the ostrich which stuck his head into the sand.
http://www.youtube.com/watch?v=8IGbjPqFFvA
ECB = the ostrich which stuck his head into its own ass
It starts to become funny. The bankers become more and more intellectually bankrupt.
You mean appear more and more intellectually bankrupt. It's blatantly obvious that they start out that way, due to the process known as "vetting."
you forgot to include morally bankrupt and ethically bankrupt...
of course everybody here should have understood what the "Big OMT Scenario" really means: that the shit has hit the fan and that one (or more) member government has to go on it's knees an beg the others to help, with the ECB buying every single bond that is sold from the market (and in certain scenarios even force banks to sell more of it to the ECB)
afterwards, though, you can expect full nationalization of any european bank involved in such a sell-off and probably some ad-hoc charges against bankers, and immediate prison time, if only for questioning - and the countries involved have to face the "conditionality" of the OMT, i.e. no leeway anymore in budgetary matters
and interestingly this could even have a stabilizing effect in certain areas and get several US megabanks in trouble because of their derivative positions on the side if they sell too much of that stuff - because the Big OMT Scenario does not involve a bazooka, it's more like blowing up a landmine
the ECB council (with exception of it's German vote) is only getting on with this because it would be "justified by the event" - and it's within hallowed continental national bank traditions, which I can't help but restate are different than those of the BoE and the FED
Re nationalizations, I thought what we were looking at here is a systematic repatriation of each nations bad debt into that same nations bank balance sheets. That will help a lot when, from one morning to the next, the euro is redefined and some nations fnd themselves with floating currencies instead of euros in their accounts. Something like that must happen, and so tptb are prepping that.
in the OMT case/scenario those bonds would not go first to the national banking systems, they would go to the ECB - while nationalizations would happen in the "target" country in order to repatriate them later
"euro redifined" is a fantasy, btw - and "something like this must happen" just wishful thinking, imho
the OMT scenario is meant for a case of megabank collusion - where they think they can fight a major speculative raid on the ECB
we are talking about "hot financial war" of the kind where secret services do more than just collect information
Ok so the euro can't end then. More central planning atop the existing failed central planning can keep it together, and when that worsens things, more central planning can address that, feeding more economic and personal stress, in a infinite loop. The people will just ride this down and down to north Korean grass eating levels as everyone realizes how critical is that Europe persist. It just needs more Europe, ever more.
LOL - it sounds so sad when you say that "Ok so the euro can't end then"
and that is just "eu super-state" propaganda, this "It just needs more Europe, ever more" - in which many megabanks have joined in because they want eurobonds
hello? what is the global reserve currency and what is it doing? context, please. the EUR is a response, a reaction to the action
this wish that it has to end before the very reason it exists is just... I don't even have a word for it
Duplicate
No, it should be called "OMFG" due to the bankster crowd loud cries preceding its activation.
very accurate
Our Mystery Tranche
Outstanding work HH. +1
That's not just fucking outstanding,that's the fucking best.That was so good I had to use fuck 2x bitchezs
Deus ex machina. +1. Seems Tyler is classically educated ;)
deus ex inferis more like.
"Blinded by the light, revved up like a deus, another runner in the night."
That deus?
I always wondered what that song was about!
/sarc
Funny, I always heard it as 'revved up like a douche' ...
And little early burly gave my anus curly whirley, and asked me if I needed a riiiide.
Forgive me lord, for knowing what that was about.
Also a proof that no one listens to lyrics.
Revved up like a Deuce:
http://forum.wordreference.com/showthread.php?t=974634&s=bf78ae1ccae5413...
Disinfecting sunshine and genuine inquiry is the death knell to the central bank con.
<Which is why it will soon be outlawed.>
That's what a fleet of drones is for.
First rule of OMT: don't talk about how OMT works.
Looking around, trying to figure out who the fool is at the table. Finding none, I know it's me.
“ I know you think you understand what you thought I said, but I'm not sure you realize that what you heard is not what I meant.”
-- the stupidest f*ck of a central bankster in human historySuper Mario:
"Got Angst ?"
1 Peter 2:22
, He committed no sin, neither was deceit found in his mouth.'What does 'OMT rules' mean? I don't understand, I already explained that somewhere or other....assphincter says what?'
Reporter- 'What'?
'Right...you got it.'
I just thought I'd offset this insanity with a little article I read this morning about something that ISN'T easy to fake: traffic, and how it relates to the real economy. Yeah, somebody's got a company that tracks and analyzes that now. While the conclusion of the article will make you scratch your head, look at the data they cite throughout. Big clumps down, little bumps back up. THAT tracks a lot closer to what I see in the real world than anything these douchebag MOTUs have to say in from of a camera.
http://www.cnbc.com/id/100529448
The rules of OMT are as follows:
1) We are allowed to threaten purchase of sovereign bonds in order to interfere with the marketplace and affect their yields.
2) We are not allowed to actually purchase any without the approval of the German government.
3) We are not allowed to talk about this 2nd item above.
I am surprised that "no one" has figured it out yet. Bernake's monthly purcahse of 85B gets recirculated into Euro area government bonds. It is a long circuitous route but that is where a major portion of the funds end up. The ruse is supported by the OMT "promise." The latter is what you hear in Europe, from Europeans, i.e., governments whose market driven borowing costs are ridiculously low. Who is keeping them low - what is the source of "new" money to support that story. So you cannot believe that austerity in Europe - i.e., less governmental spending, is driving their bond markets lower; because the austerity story is mostly fake. They are all missing their targets. Consider Greece - have they laid off any goverment employees yet; jailed any tax dodgers, shot or hung any dishonest politicians? No. Never will either. And France - more unemployment equals greater welfare payments - they have to eat. And on and on. No new sources of European funds to support their government bond markets. So guess who dreamed this up? Your friends at GS, look at their bonus numbers when they come out. How is it the Euro stock markets are near all time highs - when the structural problems of their socialist cultures (which we encouraged for 6 decades to stop their endless wars) will take generations to fix. Think the new elections in Italy tell you anything? Yeah the Euro area bonds should be falling - but Uncle Ben will never stop the QE here BECAUSE that is what is keeping europe alive. If Ben stops, Euro government bonds go to double digits.
Yup. The bad paper of this world is European. It is the demographics over there. Central banks are trying to orchestrate the continuation of the music by bidding up stuff that is on zombie bank and zombie insurance and zombie pension fund balance sheets. In Europe decline is baked in though, and this way is tough on people. Nationalism will take the forefront again under these worsening conditions. Europe is still Europe, not some united states of Europe.
So if I put 2 and 2 together, was the quid pro quo between US & Deutchland, you pour money into the Euro so we don't have to, and we'll not ask for our gold back on the first flight out.
But Euorozone must have promised not to compete ever again with the dollar though, cos if $ ever loses reserve-status, the game is over for the West.
This confession, combined with Bernanke's confessions during last week's Humphrey Hawkins testimony, should finally pop the biggest bubble currently in markets...that of Central Bank omnipotence. So...I guess that leaves us with actual global economies...LOL! Ask the iron ore, copper and gold miners how that's going.
You simply cannot make this stuff up...this stuff being the global Ponzi scheme "explainers in chief." Seriously now...how bad does it all have to get?
I don't know....seems now they're not going to stop the insane pumping and have a market drop until everyone is dead.
Well, I think I'll turn on the BlowHorn [CNBC]. Surely, they will provide informative commentary on the nature of Draghi's Q&A session today.
Just when you thought everything out of Europe was absurd...
Currency traders apparently are blinded by the prospects of immediate profit. Draghi's empty words moved the EUR/USD over 100 pips and as it continues to melt upwards, I find myself wondering if I am the one insane trader in a sea of sanity, or if all other traders are insane and I am the sand castle of reality facing the tidal waves of lies and gibberish. Nevertheless, my P/L will be in the green after crap reports from France and Germany tomorrow. Truth and justice require patience.
I think in the FX market today the safest stance is to have no opinion at all. This is not a conclusion I came to intellectually, but more out of capitulation of spirit from too many moments screaming 'How can you be buying that worthless overvalued shit?!!!' Thing is, it's all worthless overvalued shit.
There's often little rhyme or reason to it, especially since risk trends broke last year. Best to just dance the dance and switch off your brain, you're much more likely to be on the same level as the Institutional money then. And less likely to be wrong.
Good view.
The currency trader who trained me said that there are many ways to make money trading. If you have millions or billions, like DB or JPM, you can sit on positions for years until they become profitable. I don't have the leverage they do, and I make my piece 5 pips at a time. He also told me never trade 15 minutes before or after critical news. I surmise blowhards professing nothing constitutes news. Therein lies my folly.
That's the thing about 'news'. Sometimes some talking head will say something profoundly important in the middle of both Eur Us sessions and you'll get zero response. The next day you might hear some unlikely rumour that will punch the Euro for 100 pips. To me the charts are just presenting data and I find treating it as such gives me the best outcome, it could be data on upper atmospheric regional temperature variance, number of Big Macs being sold per second across the world, whatever. Edwards & Magee style basic support resistance and trendlines are worth keeping in mind as everyone is looking at those, but they're not as important if I'm using statistical analysis. It's all about standard deviations and volatility, and bollocks to the rest of the circus. I just don't have the patience or skill for Fibos etc, and I can't be bothered with all of the bullshit indicators that are sold to the unsuspecting retail crowd. That said I'm not making gazillions but I do ok.
I agree the majority of indicators are useless, as they are most times lagging indicators anyway. As with everything in life, simplicity is preferrable, so I employ the 5 and 50 emas and a 14 3 3 stochastic. Along with some instinct, the formula appears to be working.
We definitely know it's different this time! For the worse<
Thing I got out of that exchange is the fact that anyone asking a question looks to be sh!tt!ng a brick....like you did when you were 5 at school and thought you may make yourself look an idiot.
And the answer Draghi gave is exactly what a five year old could expect from an intelligent question that doesn't suit.
These 'journalists' are meant to be the Fourth Estate. Draghi should be afraid of them, not the other way round.
When the Central Bank is afraid of the reporters, we have freedom
When the reporters are afraid of the Central Bank, we have tyranny.
Or something like that.
The european press is very beholden to the state, to central planning, to the socialist world view. Note the history of tv and radio being directly owned by govt. many Europeans must pay an annuall tax to operate a tv or radio, and this money nominally funds the government supplied Infotainment mixture.
More stupidity from the EU...
http://www.neurope.eu/article/parliament-voting-complete-ban-pornography
Parliament voting for a complete ban on pornography
'Eliminating Gender Stereotypes in the EU' is the innocuous title of a report that sounds like the sort of thing few would object to, but as Swedish Pirate MEP, Christian Engstrom notes, the devil is in the details.
There is a lot of concern over how women are portrayed, especially in advertising and the 'size zero' models favoured by many leading names, but deep in the report is Article 17, which reads:
17. Calls on the EU and its Member States to take concrete action on its resolution of 16 September 1997 on discrimination against women in advertising, which called for a ban on all forms of pornography in the media and on the advertising of sex tourism;
The resolution referred to says: "Calls for statutory measures to prevent any form of pornography in the media and in advertising and for a ban on advertising for pornographic products and sex tourism;"
But that's not all. Article 14 attracted the attention of the internet activists:
14. Points out that a policy to eliminate stereotypes in the media will of necessity involve action in the digital field; considers that this requires the launching of initiatives coordinated at EU level with a view to developing a genuine culture of equality on the internet; calls on the Commission to draw up in partnership with the parties concerned a charter to which all internet operators will be invited to adhere;
Article 19 should worry everyone in the media:
19. Calls on the Member States to establish independent regulation bodies with the aim of controlling the media and advertising industry and a mandate to impose effective sanctions on companies and individuals promoting the sexualisation of girls;
Then there's the issue of how to achieve these noble aims? Turning Internet Service Providers into, not only patrollers of illegal downloads, but also into the porn police would be controversial enough, but to also add equality enforcers to their role would add such costs to their business it would be hard to see how they could survive this business model.
The digital rights organisation EDRI say, " increasing coercion of internet intermediaries to police and punish their own consumers is being implemented under the flag of “self-regulation” even though it is not regulation – it is policing – and it is not “self-” because it is their consumers and not themselves that are being policed."
Constituents emails marked as spam
There has already been one casualty, the right to protest to your elected representative. The pirates say that while they have received many emails protesting the decision, since Thursday midday, the emails suddenly stopped as the parliament's email system began marking them as spam, preventing them from reaching deputies.
"Article 19 should worry everyone in the media:
19. Calls on the Member States to establish independent regulation bodies with the aim of controlling the media and advertising industry and a mandate to impose effective sanctions on companies and individuals promoting the sexualisation of girls;"
So, not that I'm into it, but the "sexualisation" of "boys" is OK? Who the fuck write this shit, the Catholic Church?
Is it really a case for concern by the media when they're already joined at the hip with TPTB? They are, after all, paid to promote what TPTB sells (which tells me that Steen is soon to be looking for work).
Like there aren't enough of them already (or they aren't ineffective enough, as it is):
http://www.erc.pt/ - supervises media outlets;
http://www.aacs.pt/ - supervises media, as well;
http://www.igac.pt/ - supervises cultural events;
http://www.icap.pt/ - self regulatory body for advertisement;
LOL...reminds of the Star Trek episode in which Kirk and Spock have landed on a planet whose inhabitants worship a volcano named (not surprisingly) "Vol." Kirk tries to get more information about Vol, but the aliens (like Draghi, and like the billions of deity-worshipping humans out there) are dumbfounded:
Kirk: But who *is* "Vol"?
Aliens (shrugging): Vol is...Vol!
2nd half recovery, bitchezzzzz.
Hey, the Alien is back on TV!
Welcome back Alien, I've missed you.
It's better to look good than to feel good!
http://www.youtube.com/watch?v=_2vAzE8FJKk
It's not how the game is played but that the game IS played.
If we don't go along with all of this then TPTB won't LOOK good, and we can't have That now, can we?
OMT is just another part of the alphabet soup dictionary designed to deaden your curiosity and enslave your mind.
The intention of the ECB is quite clear, they want to control and print up more money for the Euro Govts to borrow at artificially low rates, and they want to do it without any oversight just like the FED does.
To do this they need more spineless and worshipful reporters than the current crop of only two thirds asleep shills.
They also need somthing more distracting for the German people to focus on than the current crop of bullshit TV.
It makes things quite difficult for the ECB and the high priests of finance when folks get all confused an start asking awkward questions.
maybe i'm jumpting to conclusions here...but this could be the first crack in the big lie. when MSM starts asking the questions, the truth is getting momentum.
My shortest post ever:
OMT = FED'S EXIST STRATEGY
If you're sitting at an OMT table for more than 10 minutes and can't spot the sucker....
The coming recession like the outgoing tide will expose who is naked once and for all. So far the Market has tolerated it all but when it turns it will be swift.
Fuck you Draghi