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ECB Pulls The Trigger: Blocks Funding To Greece Via Debt Collateral - Full Statement
Just what the market had hoped would not happen...
- *ECB SAYS IT LIFTS WAIVER ON GREEK GOVERNMENT DEBT AS COLLATERAL
- *ECB SAYS IT CAN'T ASSUME SUCCESSFUL CONCLUSION OF GREECE REVIEW
What this means simply is that since Greek banks are now unable to pledge Greek bonds as collateral and fund themselves, and liquidity is about to evaporate, the ECB has effectively just given a green light for Greek bank runs, as suddenly it has removed, both mathematically but worse politically, a key support pillar from underneath the already bailed out Greek banking system, (or merely a negotiating move to let Greece see just what kind of chaos this will create ahead of the big D-Day on Feb 25th when ELA could be withdrawn).
And now finally, after many years of investing in ECB repo collateral, pardon Greek debt, Greek banks finally will ask what the "fundamental" value of all that Greek government debt they bought really is. Judging by the Greek ETF's reaction, the answer is lower.
The only question now is whether the Greek Central Bank, which the ECB said is now sufficient to meet bank liquidity needs (via the ELA which the ECB has not yanked... yet: it has given Greece until February 28 before this final prop is yanked and Greece is left to drown), is allowed to print Euros. If not, the Greek experiment at trying to stick it to Europe is about to crash and burn spectacularly.
Joking aside, what is really at stake now, if only for Greece, is everything: Syriza either folds, and cedes by withdrawing all demands, thus effectively ending its mandate less than 2 weeks after coming to power, or it exits the Eurozone.
Press Release From ECB
PRESS RELEASE
4 February 2015 - Eligibility of Greek bonds used as collateral in Eurosystem monetary policy operations
ECB’s Governing Council lifts current waiver of minimum credit rating requirements for marketable instruments issued or guaranteed by the Hellenic Republic
Suspension is in line with existing Eurosystem rules, since it is currently not possible to assume a successful conclusion of the programme review
Suspension has no impact on counterparty status of Greek financial institutions
Liquidity needs of affected Eurosystem counterparties can be satisfied by the relevant national central bank, in line with Eurosystem rules
The Governing Council of the European Central Bank (ECB) today decided to lift the waiver affecting marketable debt instruments issued or fully guaranteed by the Hellenic Republic. The waiver allowed these instruments to be used in Eurosystem monetary policy operations despite the fact that they did not fulfil minimum credit rating requirements. The Governing Council decision is based on the fact that it is currently not possible to assume a successful conclusion of the programme review and is in line with existing Eurosystem rules.
This decision does not bear consequences for the counterparty status of Greek financial institutions in monetary policy operations. Liquidity needs of Eurosystem counterparties, for counterparties that do not have sufficient alternative collateral, can be satisfied by the relevant national central bank, by means of emergency liquidity assistance (ELA) within the existing Eurosystem rules.
The instruments in question will cease to be eligible as collateral as of the maturity of the current main refinancing operation (11 February 2015).
In short: there is about 1 week before a key liquidity support of the Greek financial system is yanked.
* * *
Here is The Greek Government's response...
This decision does not reflect any negative developments in the financial sector of the country and comes after two days of substantial stabilization . According to her the European Central Bank ( ECB ) , the Greek banking system remains adequately capitalized and fully protected through access to the EIA .
The European Central Bank ( ECB ) , taking and announcing this decision puts pressure on the Eurogroup to proceed rapidly to conclude a new mutually beneficial agreement between Greece and its partners.
The government daily widens the circle of consultation with partners and institutions to which they belong , remains at the target social salvation program approved by the vote of the Greek people , and consult with a view to drawing up European policy that will finally end the hitherto self-reinforcing crisis of Greek social economy .
* * *
Draghi tells Tsipras "don't worry, it's ok: you still have ELA... which we will pull on Feb 28 unless you agree to our terms"
— zerohedge (@zerohedge) February 5, 2015
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go long feta, quick!
Party on, Dudes.
I just handed out vomit bags on stocktwits to delusional SPY call owners.
BOOOM!!!
THE SHOT HEARD ROUND THE WORLD 2015 BABY!
Whow, ECB playing chicken with the new Greek government... who has the most to loose and the most to gain I wonder?
Que Greexit
Question for the day:
"What shall we call the new river of tears about to form in Brussels?"
C'mon Greece! Grow a pair!! Tell those CBer's to go f**k themselves!!! Let's get the ball rolling!!
< Apocalypse now
< Apocalypse later
I think they already kinda did...
Greek bank holiday / bail in tomorrow starting @ 8 am eastern.
Cyprus template back in action...
Drop the other shoe Alexis: Pull out and show Eeee Uuuuu your 40 caliber platform.
I worry that younger people in Europe are starting to emigrate and find work elsewhere, leaving the older generations that raised them to fend for themselves. It is simply unacceptable and selfish that young adults refuse to contribute to the economy and pay their fair share of taxes, when Europe has given them top quality education and invested millions of Euros in their futures. Younger generations owe it to their elders to pay their fair share.
^ kek
ffs, announce greece will no longer repay any part of its debt and a return to the drachma. The pain is on whether they stick with europe or not..
did chelsea's hubby at least cash out his remaining 48% today, or is he riding it into the dust?
Wait till they replace "Greek" with "Italian" or "Spanish."
THAT will be when things go boom.
pods
This is turning out exactly the way we knew it would, said no banker publicly.
In the coming hours well see if the new Greek finmin has war games this out previously and will act -- or if this took him off guard and will be forced to react.
I bet we start seeing atm lines in Greece before last call at whatever bar you guys are sitting in on the east coast.
What ammunition does he have left? He already said he doesn't want more debt. Seems like the ECB is actually giving Greece what it asked for.
It's too bad too, that was such a nice little patch of socialism they had there, would be a shame to see anything happen to it.
.. pledge Greek bonds as collateral..
is that something like offering Paris Hilton as a virgin?
She does have some new nice titties!
MDB, I usually upvote you. This one is just a little too possible, and I worry that giving you an upvote could be used against me in the future... as indicative of my acceptance of your position. Sorry, red on this one.
Greek should just print Euro.
Hey! Tyler! Why aren't you covering this?:
http://www.ft.com/cms/s/0/df543330-aacd-11e4-81bc-00144feab7de.html?site...
Maybe we will finally get the long overdue Grexit. Eventually, all the other EU nations will be Greece, save one. The Euro is just a Deutsche Mark in drag.
I agree with your comment, save the "save one" part.
Germany could easily share the DM with;
- the Netherlands
- Austria
- Denmark
- Sweden
- Finland
- Estonia
- Latvia
- Lithuania
- Flanders (if it ever comes into existance (crosses-fingers))
- Luxembourg
- Switzerland, Norway & Lichtenstein (yeah right)
and perhaps, depending on the governments and the respective populations;
- Czech Republic
- Poland
- Slovakia
While the DM could hold its own in international markets -- the shilling and the Gilder would have a hard time not getting steamrolled over. It would be wise for similarly situated nations to share a currency. This was and still is the EUR's flaw. It grouped extremely dissimilar nations under one umbrella.
You think the NSA is logging zh junk-button presses? Really?
You're kidding, right? Of course they are.
I know you're kidding!
OPA!
Thanks for the prompt to confirm the definition:
http://gogreece.about.com/od/Glossary-of-Greek-Terms/g/Opa-what-does-opa...
Fuckin A, I'd be shocked if ZH, Inc. were not selling their click database themselves. Value is nothing if not developed for private gain on a "free market," as I understand the neo-liberal doctrine.
CLICKS AND DICKS!
Wouldn't come any other way now would it...
"The Internet is for Porn!"
Wank off by all means, just don't press any bottons or expess any views. I'm probably in deep shit for saying this much.
.. you know what they say about more than a mouthfull...
but the discreet gentleman would not touch what's down below even with Bill Clinton's soiled thing.
Oh and herpes yeah she's got that too, the itchy, weepy, blisters on your nads kind...
omigosh.. this must mean that is where Jamie Dimon's mouth is.
stuff tha,t JPM..
HAHAHAHAHAHA......lol. lol....LOL
Sorry can't stop laughing ..... hahahahah
If you were referring to my post.. thank you.. I like to think that my sarcasm can bring some jollies to some folks..
..allow me put this by you too,
if you think there is any honesty in the soveriegn CDS swindle.. I have a huge phallic intrument with ISDA engraved on its well-lubed tip ready for you.
Socialism is fun till the loans run out.
That and "until your daughter gets violated."
Once Spain, Italy and Greece are forced to reset to their local currencies (peso, lira, drachma) then I think "the muzzies" will make their move.
The Turkish Lira getting annihilated is I think "the tell."
Only time will tell if all euro denominated debt gets repudiated.
This all could happen quite suddenly as well.
Correction, socialism is fun until they run out of other people's money to spend... Calling Janet Yellen, calling Janet Yellen....
Anyone who didnt already do this before today , must have been sitting in a dark, powerless cellar with a bag over their head
Time to consult the WOPR?
Plus 10 for War Games ref.
Would you like to play a game of tic-tac-toe ?
It's much more emjoyable than Global Thermonuclear Warfare.
WOPR would have nuked the lot of them by now... Can you say, dead man walking?
But why isn't Greece enough to bring down the whole global ponzi?
Isn't this enough to screw anyone with Greek debt instruments on their books? I thought there was this whole 'dominos falling' contagion thing if anyone got stuck with worthless Greek debt?
Anyone holding CDS on Greek debt will be looking for their sacks of gold. The bond guys surely can't claim this is anything but a default event, can they?
Gee Whiz.. how could you ever expect Charles to call his scheme a Ponzi?
oh.. and just look back to 2011 for how the Ponzi is handled regarding soveriegn debt.
Replace Greek with California and EU with USA.
Yeah, but the numpties in Mexifornia have all those illegals flowing into the state to save their economy... Bwahahahahaha....
Who has the stronger navy? Greece should invade Belgium and sack Brussels.
Yes.. yes.. yes.. Where is Themistocles when you really need him?
I think when you are already down 50% you have to double down on stupid and hope for the best. Especially if you want to get all of Bill and Hillary's cash back.
If he has the same broker Hillarity had, he'll make money!!! Regardless!!!!!
That broker died after making her $100K.
All I can say is it's a good thing Chesley doesn't care about money...
Ha! ZH! LOL when I read your comment!!!
Every family should have 8 kids, then each kid could give 25% to their parents, ensuring them a life twice as good as they could give themselves! Yeah, that's the ticket, yeah.
Cough, cough, PONZI, cough....
Kick those fargin iceholes right in the bells
+1 for Johnny Dangerously
I loved that movie (Johnny Dangerously)
+1 (Don't Fear) The Reaper
Wait, PSST, Come here, ETI . Awesome song....
"Every Family..." is going to need to stick together, like the olden days, once the storm arrives. Power in numbers.
Well Ellis island is closed . If they come here its thru brownsville
Children are not obligated to take care of their elders unless they choose too. If they are treated properly they may reciprocate however in most cases you get what you give.
Of course they are.
Have you never looked at the US debt and how it is structured?
Future generations are more than obligated....
Ah, the magic of government. Why go to all the trouble and expense of raising your own children, when govt will force other people's children to support you?
(oops, dbl post)
The young will be lining up to put that needle to utopia in yr big fat white arse.
Big 'n Fat =
early death anyway.
It's the Old Spry Ones ya got to watch out fer.
Top Quality education that was obtained at no cost is worthless. It's what is given up for a thing that gives that thing value. Give nothing up - gain nothin in return.
It's all fair.
Fair share is such a quasi-BS term. Define for me exactly what is a "fair share". Give me a percentage tax rate or something.
Too many politicians/economists hide behind that term.
A Fair Share is quite a bit more than the politician pays.
I feel like this is an imposter MDB. His trolling has gotten significantly weaker and the avatar changed, if I remember. Plus, why the underscore after his ZH name... just not up to standards. His down to up arrow ratio is a lackluster 2 to 1.
Ahh, the time-honored "it's not the real MDB cuz of the trailing underscore" troll. Well-played, sir.
People respond to incentives. The incentives are perverse. Our older generation 'leadership' has taught us hard work doesn't pay, to lie and cheat to get what you want, savings are not important......lazy can be cured with the proper incentives.
You mean that is wrong.... Only the foolish let opportunities go by due to morality. Fuck society fuck the JSA fu k it all
Youth unemployment in Greece is WAY over 50%....and has been for 5 years. HOW long should 'youts' have to wait to find a job and start paying their 'fair share'? I don't see that "Europe" has given them much except a bankrupt country with little to look forward to except more of the same.
(Yes, I meant 'youts'.....My Cuz Vinny ref...)
The famed "generation war" which populist parties feed on.
So....you feel that you brought a human being into the world to support your bad habits when you get old. I'm 71 and wish mine would get off my teat. I have a suggestion, let's all pull our own wagon and starve out the govt parasites that confiscate a rake off of every $ they can grab.
Govt debt is your obstacle to realizing your utopian dream, not the solution.
Bail In, perhaps, but this time Minus billions of foreign capital sitting in the baning sector. Nobody, especially Russians and rich East Europeans have sent their capital to Greek banks, like was the Cyprus case.
Bank runs tomorrow, it should be a sight to see. Though how about cash machines for withdrawl, these must already be shutting down. Anyone over there know how this is playing out already>
I think that several military bases of Russia and China in Greece, could significantly improve the financial position of the Greeks.
In addition, Greece may have trade with Russia without any restrictions. Plus gas transit to Europe through Greece on the double tariff.
Checkmate.
Drachma will make Greek products and tourism the price performer. Exporting to fellow Orthodox Christian Russia will again be possible. People will have work again and live happily ever after. Freedom will flourish as the EU monstrosity comes crashing down.
The US isn't worried about a Grexit for fiscal reasons, as their debt can be and has been discounted.
They worry that a NATO exit would follow suit, and that would be quite serious.
Varoufakis is going to have to play George Bailey (Its a Wonderful Life) and cajole the Greek people into keeping their money in the banks. A bank holiday would simply postpone the inevitable. The Greek central bank can still accept Greek debt as collateral and keep the banks liquid - but only within limits set by the ECB and if indeed there is a bank run, that buffer won't last long.
While Varoufakis has stated he does not wish to leave the eurozone, the ECB has made it impossible for Syriza to both keep Greece in the union and to rollback austerity. Something has to give. No doubt Draghi is expecting Varoufakis to be his poodle. Something tells me he may get a surprise.
I agree, especially if Putin has sent businessmen over to meet with him. It's looking like Russia will get a major warm water port and a great vacation spot during winter.
Been waiting 5 years for this!
You may have to wait a little longer...
"The only question now is whether the Greek Central Bank, which the ECB said is now sufficient to meet bank liquidity needs, is allowed to print Euros. If not, the Greek experiment at trying to stick it to Europe is about to crash and burn specuatcularly."
The obvious can kicking answer may be YES. Unfortunately however the Greeks can read the Cypriot bail-in writing on the stella...
Dude...that Greek paper is worth ZERO now.
Turned out not paying your taxes and fleeing the country "after a terrible boating accident" was the right thing to do!
It's not quite dead yet...
prediction; greek debt has a pledged value before this is over. the value will be determined by bending over with the drag queen running his dick up the greexit...
"They're getting better!"
greece folds in 4....3.....2.....
Sure. In reality, Draghi just pulled the plug.
They won't accept any more bonds than THEY ALREADY HAVE! They are loaded to the gills! Who's fooling who here? Go Greece!
Dunno. Greeks are withdrawing Euros en masse. The banks are bleeding and Draghi just removed the butt plug. No more funding into the banks. The looting stops. The kleptocrats and oligarchs are riding into the sunset and the ordinary Greek gets fucked. When was it ever any different?
It never ended before.
Nice.
And it will be about time. The Swiss couldn't manage it.
Book of Revelations' Financial End of Days; "And so the Greeks who borrowed and became the pain in the arse of the Empire, borrowed enough to Own the Empire in the Days of Negative Interest Rates."
Listen Up and Listen Good, Greeks: Renegotiate the Loans to Negative Interest Rates, you guys get paid by the bankers so the bankers don't have to write off the bad debt.
Solved!
You may be on to something there.......
Do you know what this means??? You KNOW what this means, don't you??? DON'T YOU???!!!!!
It means it's time for a Toga party, bitchez...
https://www.youtube.com/watch?v=y1Mk7idVfcA
It's not over...was it over when the German's bombed Pearl Harbor???
https://www.youtube.com/watch?v=ep-xgd_eETE
Excellent observation Knuckles. Indeed, that might just happen.
LOL Knucks!!!!!
Could you imagine the ECB agreeing to that renegotiation. I would likely masturbate in public.
Just "likely"?
Well, when you don't see me for a while you will know I have been either:
A. arrested for having a bigger penis than most
or
B. Killed by the little penis coward thug cops for having a bigger penis.
Brilliant!
Interesting idea, Knuks.
If this is possible, then the question is: can this sneak by the interests of the bagholders paying the negative interest rates? Namely: EU citizens via the ECB (who will buy the bonds down to negative interest rates). Do I have this correct?
Or perhaps you're suggesting that the banks themselves - the ones holding Greek debt - could take a big hit on future interest income? If this is what you meant, then the question is: can those banks holding substantial Greek debt take such a hit on their interest income (and actually: have to essentially PAY Greece to not default - that's a weird setup; kinda like having a mortgage on a house, and saying to your bank: "hey, I'm going to stop making payments, unless you start making payments to ME").
If the banks CAN'T handle that dramatic change in interest income, then the ECB would have to print to backstop them (basically let the banks sell the Greek bonds to the ECB at high prices, letting the banks "cash out" of their losing bonds at negative interest rates). Is this politically possible?
If I correctly understand even half of what I just said, this seems unlikely to me. But I'm not very up-to-date on EU politics (disclaimer).
Perhaps another palatable possibility is to suspend interest payments (not NIRP, but ZIRP, on those Greek loans). Banks don't get hurt as much as NIRP, but they also don't lose as much as they would under an exit/default/Drachma scenario. But this will only be acceptable by banks if confidence is high that Greeks will pay back even the principal (without interest). Hmm...
Negative nominal rates. They're busy debasing the currency anyway.
"kinda like having a mortgage on a house, and saying to your bank: "hey, I'm going to stop making payments, unless you start making payments to ME")."
I'm making THAT phone call tomorrow morning!!
Holy shit. Not only would this encourage people to borrow and spend again, but the IRS could tax you on the income and help plug the deficit here in the US. Non performing loans now become performing. This is so dumb, epic epic dumbness, that I can see it proposed. Is this the solution to debt based exponential money?
I think I've been looking into the abyss so long that it really IS starting to look back into me.
The best part is why the fuck not? If it kicks the can six months, well, that's six months before you have to deal with the can!
"Manneke pis"
it's not "chicken" - it is a form of waterboarding - they want to make an example of Greece destuction for Portugal / Spain / Italy to see how fucked up it can be - they want total chaos - just fucking mayhem
this is same tactics with Russia - anniliate and level East Ukraine - no one lives no one gets anything
As in the highlander -> the quickening has begun. Greek turn east and develops deals with BRICS, then Turkey which also US dents US narco traffic. Three, Hong Kong or China drop their dollar peg.
I just handed out vomit bags on stocktwits to delusional SPY call owners.
LOL. +100
All happy here, Werner has SPXU. I knew it would pay off, but I was uncertain when.
So, do you know yer position or yer momentum? :>D
Stycho - you and Werner probably know this, but the 2-slit experiment is a profound demonstration of the observer, aka consciousness, changing the physical outcome of an event, ie. where the photon can impact the wall. Find a good description because some quick descriptions of the experiment stop before the point where a photon detector is placed to tell which slit the photon passes through, ending the wave interference pattern, which to me is the most interesting part.
Any ZHer not familiar with this, religeous or not, ought to take a look.
LaPoint covers this in The Primer Fields.
Try Lanza's Biocentrism or Zukav's Dancing Wu Li Masters.
Lanza builds on that precise event with some profound implications.
Which as you suggest in your last sentence .... oh well, best left to read and discover without my "earnings guidance"
As a SPY (and XLF) put owner, I'd also like one of the bags. I need something to cover my perma-boner these days as the markets get more and more wobbly.
Short Audi and Mercedes. Apparently Greek busboys and clerks can no longer afford to buy luxury cars?
Next Spanish and Portugese and soon French waiters....
delusional? I see your point, but this market has been going up for 6 or so years now, without much of a break.
Delusinal is not the workd, have a look at this chart ==> http://bit.ly/1fMcakI the market has spent the last few months, doing nothing, so there is no reason to be delusinal here.
Plus we have non farm payrolls on friday, and that should be good to watch.
I think the market is doing it job here, to FUCK both the BULLS and the BEARS [i.e. sideways, and confusing] once confusion sets in, the market makers go to town, as bears lose moeny on the way up, and bulls on the way day.
Take a goat to dinner
buy USD sell everything else.
the US dollar will be the only thing left standing after the next crisis.
That's the stupidest thing I've read all day.,
Then you need to go to the CNBC article on the Greece no-collateral event:
"This is a developing story. Check back for updates."
Snicker!
the US dollar will be the only thing left standing after the next crisis.
Stupidist thing I've read today too. The swiss franc and chinese yuan will be left standing also.
Rubel might even start to look good. It's exposure is to Oil prices, not the dying EU experiment and the insolvent banks of western Europe.
That's the stupidest thing I've read all day.,
USD is up .79% EUR/USD is down 1.18%. In currency markets that's huge. Dollar haters are really gonna hate things for a while. UDS has no place to go but up. It's the nature of being the Reserve Currency, it'll go up until it kills every competing currency.....then explodes.
Ya well market lovers are gonna hate the dollar as well. Might even hit some new lows.
Fiat has value because people think it does. The sheeple globally have the most faith and confidence in the USD so it will probably be the last man standing.
Well maybe, but that will just be the prelude then. This is all ultimately heading to USD collapse. Not versus Euro or any other bullshit paper, but a collapse of trust and value in virtual currencies and assets everywhere. That is obviously the only possible endgame to decades of debasement and debauchery.
This guy gets it. cleanest dirty shirt and all.
Like Stalingrad in 1945
this will be a trigger for Greece to looks else where
dominos are moving bitchez
Crowd Funding is like, trending now,
or maybe they could raffle off a few islands.
They already doing nthat. No joke,
I think Ellison is trying to add to his collection...
Fuck him
The Greeks own that? I thought Domino's was a franchise operation?
+1
point taken "e" did me
I hope you are not a member of the SPELL CHECKER Police dept
no, just a smartass.
boy they still make that type of sheeple
oh well enjoy your moment
CNBC is calling it "breathtaking volatility" on the markets. They're telling the truth. ECB won't be accepting greece bonds...did the financial world see this coming. Quite likely.
The market is behaving quite erratically naturally, however it does not look like gold has reacted quite yet. It seems people have been anticipating this in the skeptic's market, where gold and silver is a hedge against the financial turmoil of the day.
Greece's new leader is being quite brave as well, betting that the ECB and Germany will back down.
THEYRE FORCING THEM TO ISSUE DRACHMAS.
Methinks the same will happen in Spain too.
Obviously at a SERIOUS discount. Back of the napkin says twenty cents drachma to euro.
Spain should start issuing pieces of eight once again.
If they had any that would be good idea. But they are as broke as Greece.
Spain issuing drachmas would really cause chaos ;)
Setup huge Club Meds all over the region and use those plastic beads...or something.
Or maybe Hedonism Xs on the many islands.
Tourism is the easy way to get some money flowing back to the PIIGS.
Concur. Drachma here were come.
I think this is the best option. Iceland redux.
F*** the bankers.