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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move to let Greece see just what kind of chaos this will create ahead of the big D-Day on Feb 25th when ELA could be withdrawn).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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Futures will pump green overnight ... EVEN ON THIS CATASTROPHE.
Back to the f**** Greece debacle, a carbon copy from 4 years ago, Deja Vu, again and the F Financial Time Headlines just before the cash close.
BRAVO ECB! About damn time.
Exactly. Time to play hardball!
http://trololololololololololo.com/
https://www.youtube.com/watch?v=njos57IJf-0
Just wait for it.
oopseydaisey!!
http://www.zerohedge.com/news/2015-02-03/chelsea-clintons-husband-suffer...
Long spanikopita here.
What is that flushing sound?
I was born in Flushing.
Must have been clogged at the moment
Are you Chinese?
Watching for the ripple or tidal wave that occurs when those CDS's get triggered.
WHEEEEEEEEEEE..................
Don't hold your breath. The people who benefit the most from the CDS market are the same ones that will have to "declare a CDS-event".
It wil be the same bullshit as last time and the defaults will not meet the definition of default which allows the CDS to trigger. Fucking banksters change the rules in the middle of the game for their own benefit....
Do I really need to repeat myself? ... Just Buy The errr.. nevermind.
Nice theater. Next, Yanis will appear outraged.
Your move goat ropers.
What they need now is a few gyros.....
Equity *markets* no likey.
Fucking Gartman can't catch a break.
Somebody should give him a Nestle's Toll House cookie. Or Nestle bonds.
Or a gag...for his own good. I would miss the comedy...but it is getting a little old.
RED ALERT Jeremy Seigal is bullish!
Fucking Gartman just got his 432nd margin call for 2015.
Serious equity collapse here, DJI down 130 in 7 minutes:
http://www.investing.com/indices/us-30-futures-advanced-chart
These folks wanna see what a real war looks like?
WELL HERE IT COMES!
Optimist.
Well if you still have your money in a Greek Bank..you deserve to run....long mattresses....
Preemptive action. Trying to pull the run out from under the new Greece government before they can negotiate alternative? Now let's see how Greece responds. This chess match is getting fun!!! Getting me some feta and a class of wine to watch the show!!
This is my take on it also. Trying to corner Greece before it has a strong alternative plan or develops the frame work for economic ties to Russia.
Yanis should be prepared for this and if he is not he is a great fool. Did Yanis set up the govt to issue it's own currency? Has he loaded up a couple of the banks with toxic paper and have them prepared to declare a default? Has he set up a plan for having Russian naval ships dock and occupy some port areas, along with welcoming Russian military planes into some airstrips?
As others point out the bankers will try to redefine these actions as not being a default. But when the leader of the country declares it a default and refuses to accept cash inflows to save the banks it will be difficult not to activate the provisions of default.
Yanis, also, just announce the Greece has agreed in principal to a long term lease of a Greek island for Russia to establish a naval base. That their action as a declaration of war by powers that wish to take Greece down and plunder all resources. React as such.
Greece must act as a sovereign if it desires any future not directly controlled by Brussels and/or Berlin. Your list is a good starting point. My hope is that the Greeks, cut off from the EU tit, will again discover the spark to become a producer economy.
Greece has resources and labor but not much capital. That can be fixed by leaving the EU, reinstating the Drachma (with our without PM backing), changing the tax code to be very friendly to foreign capital, and signing a couple of long-term development leases. For starters.
The February 28 deadline already forced a very rapid timeline. This development moves it up to warp speed. Now we find out how ready -- and how creative -- Tsipras really is.
Russia just got the all-clear to expand its sphere of influence.
"The next Bear Bomber you see you shoot."
Its that simple now folks.
SANCTIONS AND CONSEQUENCES.
Trying to make an example of Greece to Spain, Italy etc...we'll set you on fire like we did Greece...dont fuck with us...
Greece gets pimp-slapped. Highlights at 10.
Is that the boot that the Greeks are trying to get off've their face?
The Iron Heel, indeed. Even a young Jack London would have to admit that truth is stranger than fiction.
Very good sir
I hope someone gets an interview with the Marxist Finance guy in the boots and blue shirt.....this should get him going....good quotes a coming...hang close...this is going to be fun
EuroSystem Rules . . . .if you ain't bleedin'(the plebs ) you ain't feedin' at our trough no more.
This kabuki theater is getting stale. Wake us when the bankers and financiers are not getting paid. Please, the Greeks have been pretending to work and the ECB has been pretending to pay them all along.
Can somebody translate that in understandable language please? As a EU citizen, my English is not good enough to understand. Thank you.
Sure thing Ludwig........it translates like so:
'Bend over, grab your ankles, and brace yourself..........'
https://www.youtube.com/watch?v=-RrEQ8Ovw-Q
In German I understand, the English translation, wow, I hope nobody takes that to serious !
German? French? Italian?
Plain English, or French, or Dutch, or German, or Italian will do. I am Belgian. But I meant, what does this mean ?
Nicht viel. Etwas unangenehm für die griechischen Banken, ansonsten ein bedeutungsloses Ereignis. Politisches Geplänkel. Aber wie Sie sehen sind die Futures bereits wieder im Plus und haben sich bereits erholt. Sell the news, buy the facts!
Stay Calm and Eat More Baklava!
Could be wrong but the two Greek leaders don't really look like they want to be toyed with and were given a mandate to fix this mess even with some pain...bring it on.
Ouzo..Ouzo...no its mine
3.30 ramp fail
They tried
OK, let's print the new Zimbabwean Drachma
Tschirpy and Vasouflakis need to declare a bank holiday and limit all Euro cash withdrawals.
Yesterday when they had the chance.
If you are saying they had to know this was coming, so why did they not implement capital controls... then let's hope there's a Plan B. Like, possibly, running the printing presses to whip up a new batch of Greek Euros for the Greek banks. Let people withdraw all they want. And hopefully they immediately use those notes to purchase a bunch of gold and whatnot.
I would love to see an updated example of Gresham's Law in action.
Why before market close?
News leaked early and they decided to run with it....?
Because any news is now good news to algobots?
to let Greece see just what kind of chaos this will create
And let GS see what a taste of their own Greek financing medicine tastes like.
GS is on the other side of the trade. Always winning and no trading losses.
Talk to mister hand.
Grease is Word!
What Ever it take to get Mezvinsky breaking even.
Slick Willie positively HATES that kid.
Agreed, sounds like the name for a barbed Anal Dildo. Mezvinsky
:)
Would be funny if he had a sister named Monica.
Funnier if he had a black half-sister named Lewonica.
Everyone got screwed except for the banks and the brussels cleptocrats as usual?
Oh well ...........back to the olive press!
we will likely have the 180 conflicting Reuters statement by about 5 minutes after market close, as usual.
well this could be interesting.
How is Chelsey Clintons husband doing....better today
He married for love. Um hm
At least she can't bring herself to care about money, so there's that bit of good news for him.
Ms. Merkel, Mr. Draghi, I'm afraid I must refer you to Mr. Panos:
https://www.youtube.com/watch?v=Zvl9N9GdraQ
I discovered Mr. Panos over the weekend.
Funny shit.
ETM's distributing Drachmas only now!
Freed from Bondage
The trouble my friends is that the elite make you want exactly what THEY want you to want.
But I don't want to drink human baby blood!
speak for yourself
In regards to entertainment and wastful pursuits yes.
Otherwise, they make you need exactly what they have to sell. And the price is not always money.
That is - EU ( or who else other than Germany) declared just (another) war on Greece.
Nuland: Fuck EU.
EU (or who else other than Germany): Fuck Greece.
Either comply or get shot in your head.
Switching from Euros to Rubles is a bitch...
So, what about this:
The Governing Council of the European Central Bank is set to back further emergency liquidity assistance for Greek banks, according to German newspaper Die Welt.
http://www.thetoc.gr/eng/economy/article/die-welt-ecb-to-back-further-li...
They won't, this is a ruse to keep Greeks stupid and not run to the bank. It's propaganda.
A full blown bank run could escalate and expand beyond the Greek borders quickly.
So they need to play into Tsirpas hands and force him to close the banks FIRST before they have to declare they're not supplying the liquidity.
Next Greece could say "please don't do this to us and your own citizens . . . because we all know it will bring your own banks down."
Contagion is hard to contain once it starts.
And social media can be a real bitch with an itch. "Left Shark" from the Superbowl Halftime Show is just a hint.
And the Dow closes...green.
I love this shit.
You gotta admit... it's the greatest show on earth.
It's all pointless, until it's not...
"And the Dow closes...green."
Barely. The well timed announcements didn't have time to sink in. Tomorrow might be much more interesting.
Zorba says, "The more you owe, the more you own"
Black Swans just flocking out of the woodwork lately. ****ing up everyones hedges and algos. awwwww
I still think he should have called them white crows instead of black swans. That way we could be talking about a murder of white crows descending.
that's not a black swan
It's a Giant Greek Elephant!
Article printed from PaulCraigRoberts.org: http://www.paulcraigroberts.org
Greece Under Attack — Pray For Yanis Varoufakis
Posted By pcr3 On February 1, 2015 @ 2:23 pm In Articles & Columns
Pray For Yanis Varoufakis
Greece’s new Finance Minister is a highly intelligent person. His likes are not to be found in any Western government. As he stands in the way of those who are determined to complete their looting of Greece, the Western looters are out to get him.
The BBC, as the interview in the link below demonstrates, was sicced on him. Much more is to come. Moreover, if the new Greek government is able to stand its ground and to prevent the continuation of the horrific looting of the Greek people, assassination of its leading members is not unlikely. Washington will not permit any independent governments to arise in Europe. If a Greek government succeeds in standing up for the Greek people and actually representing them, the idea might spread to Italy, Spain, Portugal, and Ireland, and then into Eastern Europe. Washington’s control over Europe would unravel.
The BBC presstitute substituted a deposition for an interview. She reeked with hostility toward the minister, an indication of the fury that foreign financial institutions and their vassal governments feel toward the new Greek government. As I wrote the other day, if western elites hate something more than they hate democracy and truth, it is accountability for themselves. You can bet your life that presstitutes like the BBC will do the elite’s hatchet work on the new Greek government just as they do on the Russian government, the Chinese government, and the Iranian government, and just as they did on the Serbian, Iraqi, Libyan, and Syrian governments and on the Taliban.
http://www.informationclearinghouse.info/article40858.htm [1]
I still can't believe Tsipras was elected. There must be someone's head on a block over that. I wonder whose (State Dept, CIA, etc.)?
Alternatively, this has been the plan all along. Washington showing what Nuland's "FU to the EU" really means.
She was a stridently rude little bitch, wasn't she? Interrupting, stabbing, poking and prodding like she was a Dominatrix in a BDSM fantasy. And she's ugly to boot!!!
Ukrainians are leaving for Russia and Poland in droves-no work and the threat of forced military conscription
the Nazis attacked GREECE IN 1941. THEN WAS HITLER IS NOW Merkel .
THEN WITH TANKS NOW WITH BANKS . OUTSIDE the Nazis FROM GREECE .
I feel sorry for you, I really do. Why aren't your kleptocrats and oligarchs swinging from lamp posts yet?
CLEAN UP YOUR OWN SHIT AND TAKE OUT YOUR OWN TRASH
Germany is not repsonsible for Greece being bancrupt.
Greece brought this unto themselves.
Besides, Syriza is as patriotic as the fleas on my dog.
Sorry but they will never support bloody communists.
1000 times better the NAZIs.
They will not end up as prostitutes like any other leftist in history!
Time for a glass of Port me thinks.
Any Port in a storm and this one is just beginning!
Oooooo, the markets have swooned by nearly 100 pts, let's all crack one off whilst standing.
Where's the volatility?
Can the Greek shut up for one part of one day?
Go zikos :)
This has to be... BULLISH ! I mean what could go wrong. All the smart people like Yellen are in charge.
Russia in 3 2 1
Pipeline to EU will be built through Greece.
It wouldnt suprise me if a new currency and super power beings to form. THE GRIC - Greece, Russia, Iran, China
I wonder how the neocons would feel about a russian military base and missiles on a greek island? Kind of turns around the containment strategy.
It's just a missile shield against Chechnya.
Even better than a naval base in Syria...
Greeks are known for their shipping!
I think Russia would be insane to help them out financially. Think about it. I mean, I wish it were possible for the sake of the Greek people but let's be honest here, their currency (means of doing business) is on really shakey ground. But so is Russia's -depending who you ask. Actually, you might be on to something.
Would make some sense -
Russia said earlier it would build a pipeline to Turkish-Greek border and cut off Ukraine. Bulgaria route appears to be decided against already.
Greece gets transit fees from Europe for NatGas
Greece has its hand on a pipeline valve giving it some energy clout over the EU.
Greece leases a couple of warm water ports to Russia
Russia moves Greece closer into its fold, chips away at the EU - (a Russian proxy in the EU? LOL.)
Greece gets economic assistance and ties into BRICS and immediate access to an export market for its Ag products
All-in-all, not a bad deal.
Don't forget that Russia/Putin secures a nice vacation spot for it's Oligarch's.
Greece has over 50% unemployment...that's a lot of workers who could construct a pipeline on the cheap.
Good points. Speaking of "shovel ready projects" utilizing foreign capital investment it would be a huge windfall. And knowing Greeks, they'd probably figure a way to pay three or four times as many workers as they actually need. An employment bonanza!
Well that's it then. Game theory is telling Greece that there's no remaining benefit to remaining in the EU. There's nothing to be extracted from their EU "partners" but everything to lose to them.
Dear Greece,
I'm sorry for calling you Turks who can't win a war.
It's called playing chicken and there's a strategy called "disabling the wheel" or pre-commitment.
http://en.m.wikipedia.org/wiki/Chicken_(game)#Pre-commitment
Whoever calls it first and convincingly gets the advantage. Only works if REALLY disable the wheel and the opponent has more to lose than you do.
Greek banks will still have access to funds through the ECB’s emergency lending program. Under that facility, the credit risk of the loans stays on the books of the Greek central bank, and the loans carry a higher interest rate.
Mr. Rock Star Greek finmin not so rocky now eh? they had better crawl back to brussels fast.
Or call Mr. Putin.
It's a 'punish the government but protect the banks' decision for not bowing down to the masters of ECB.
Maybe it's time for sympathisants outside of Greece to start rallying against this 'non-political'-ECB for rejecting a democratic government.
By the way: The rules of Troika and ECB were accepted by a previous government; was it an elected government back then or was it put into office by technocrats?
the point is that ECB doesn't want to fund Greece anymore...
The new global currency must be ready
Greek FimMin, "Get Moscow on the phone........"
Obama was full of praises for Greek's new government the other day....
Do I hear Yellen's chopper being started up? Maybe US will drop cash into Athens?
"We don't have a clear signal about Greece" said Art Hogan, chief market strategist at Wunderlich Securities.
Plucked from CNBC.
How fuckin clear does the signal need to be you muppet?
Hogan called the bottom in 2009 ar 9000 then at 8000 then at 7000
Then he finally shut the hell up
I repeat yet again...why does anybody listen to those useless and corrupt charlatans?
Coz they're on T.V., Monty.
THEYRE FORCING THEM TO ISSUE DRACHMAS
This what I'm thinking. Greece has a bit offer as a tourist destination. For a little give in exchange rates, Greece can have all the Drachmas and Euros they could ever need. At the same time cutting off the chains of the money changers.
Sure, because things were so peachy back when Greece was outside the Euro. That's why they had to be dragged into EMU, cuz they were clinging to their beloved Drachma.
Things were not bad at all before the joined the euro. They were much, much better than now. They did want to join the euro. I guess people always want more, it was sold to them as the next best thing, and they mistakenly thought Europe was a paragon of democracy.
JUST PRINT GREEK IOU'S - OTHERWISE FORMALLY KNOWN AS GREEK DRACHMA'S.
One question that is raised but unanswered :
"The only question now is whether the Greek Central Bank ............is allowed to print Euros"?
577.00
Frightening
Surely the new Govt. had a plan in this event.
Draghi had 'constructive' meeting with Youfakis...then when fakis turns around....BAM ICEPICK IN THE BACK...dont mess with the Draghi!
Lol.
Now to give Draghi a dose of Iceland in return.
this can only mean there is a new deal and debt re-negotiation package that will be released first thing tomorrow AM - again turning a sure-fire deflationary collapse into a stock market rally -
j
You can practically bank on it. might not be tomorrow but it's coming
Looks like the ECB have brought the deadline forward to 11/2/2015.
Bastards.
Greece is pretty nice this time of year or will be in a couple months. If you want to buy some nice property out of Athens a ways toward Sounion, shortly it will be the time. A villa overlooking the Agean Sea for $30K will probably get it and the boat too. Damn, I was 82 last Monday. I wish I were thirty years younger.
Typed that quick for an 82 year old :)