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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move to let Greece see just what kind of chaos this will create ahead of the big D-Day on Feb 25th when ELA could be withdrawn).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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What about the derivative obligations on the debt......that are probably 50/1 the total value of the EU bonds.......????
Only the Shadow knows!
that's a good point, but i think if it was/is much of a threat we would have already heard about that.
This was never about the money.
this is all about BTFD :) i'm trying to estimate, what would be considered as an overreaction of the "markets". i'm short DAX and looking for a good point to flip.
now add Spain, Portugal, Italy, and Ireland .... what are ya getting now for % of GDP ?
NBC's Brian Williams admits falsely claiming to have been shot down during war coverage.
http://www.stripes.com/news/us/nbc-s-brian-williams-recants-iraq-story-a...
IF ZH doesn't have this, I'm done with ZH.
Nice bardot, really fucking nice.
Hitlery: I got shot at in Bosnia or someplace....
Huma was there to kiss my ass.
Greece should just sell EU passports to all Turks with proof of purchase of a one way ticket to Germany; that's how they pay back their debt.
Yeh some of them do look the same. Y'know with both male amd female moustaches....
Nothing is going to happen. The girls I screw want to get preggos, my ex wants to get back with me, girls I meet in gameland want to hook up. It must be bad out there. Really fucking bad.
If you are Greece, may as well mobilize all those unemployed youths and invade Turkey. Hit those fucking European shits right in the trousers. . .
??
Turkey is not Europe.
here you go ZH trying to scare people again with misleading headlines, we all know what greeks want, more money for pork barrel spending spending spending....greekexit? no, greece is an irresponsible spendthrift cocaine addict, and no addict wants to leave his drug dealer...EU is Greece's cash machne and EVERYONE knows this.
http://business.financialpost.com/2015/01/26/terence-corcoran-stop-the-handwringing-greece-is-going-nowhere/
I don't agree with your comment about ZH trying to scare people, but the scenario described in your Link remains the most likely gameplan in my view.
At some point during this latest episode of the Greek Drama a deal will be struck between the EU/ECB/IMF and Syriza whereby Greece gets its debt repayments linked to GDP, pushed back or written down (EU/German voters will be deceived on this) and some new loans to bail it out at ultra-low rates using worthless collateral. The deal will be so complex - with crucial parts of it not publicly revealed - that Greek voters, the IMF and the EU will all be able to claim victory.
Let's call this Greek Drama: "Kicking The Can Down The Road Part 7".
It's the Greek equivalent of poker.
Gartman was spot on.....Hope you got your puts.........hope you get to liquidate before all the big boys jump out. Derivatives on Greek "junk" bonds are going to cause a significant shadow to liquidate.
Pray it doesn't avalanche with Spain and Italy....
As Jim "The Doors" Morrison said..........you cannot petition the Lord with prayer!!!!
Gartman was spot on.....Hope you got your puts.........hope you get to liquidate before all the big boys jump out. Derivatives on Greek "junk" bonds are going to cause a significant shadow to liquidate.
Pray it doesn't avalanche with Spain and Italy....
As Jim "The Doors" Morrison said..........you cannot petition the Lord with prayer!!!!
Austerity? what austerity??? IN cash terms, greek gov spending in 2014 of 90B euros is about same as in 2006 with little inflation over the period. big greek deficits and continued spending is hardly austerity...
What's more evil? Borrow with no intention of paying, or lend with no intention of being repaid?
EASY. If what you lend is created a zero cost out of nothing (and skim endless millions and billions for yourself, family, friends, cronies and co-conspirators), then YOU ARE TOTALLY and KNOWINGLY EVIL.
In contrast, if you know someone is doing something even close to that diabolical, outrageous and unjust, the virtuous thing to do is to shoot that evil cretin right between the eyes.
Does that answer your question?
DISCLAIMER: I've never borrowed money. Ever. Also, if any individual borrows anything REAL, and of REAL intrinsic value from another individual (who had to produce something of real value to earn what he lent), then you betcha that individual must do everything within their power to return what they borrowed, plus any consideration (interest) they agreed to. You betcha. But that scenario is as different as night and day from you're talking about, as well as almost unheard of today.
To Greece: DEFAULT. Then learn to live without debt. Oh, and if you have any brains at all, learn to live without fiat.
Annie ! You betcha.
Always brings clarity she does.
Annie for President!
We have a winner!
CONTRADICTION OF THE YEAR
Hahahaha... what a revolting concept (for me).
PS: I'm told privately the term is "betchya". Really? Sounds too much like somewhere in eastern Europe.
You are completely missing the point.
This is not about the old debt. This is about NEW money that Greece needs.
And if it wants new money than it needs to get its house in order and NOT vote communists into power.
!!!!! NO MORE DEBT !!!!!
Is that clear enough for you?
WHATEVER your situation, live within your earnings. PERIOD.
Otherwise, in a world of fiat, YOU BECOME SLAVES. The end.
Sometimes you simply MUST make certain decisions that go against "the easy way" to end up with a viable solution.
This is one of them.
NO MORE DEBT.
NO MORE DEBT.
NO MORE DEBT.
Stop looking for handouts, damn it. Spend your time looking for ways to produce something that others will buy, or trade you for.
The Greeks earn plenty of money to bootstrap their way to absolute riches in a couple decades. And all the have to do is STOP shooting themselves in the foot.
BY GETTING INTO DEBT.
The solution of "more debt" has been tried 1000 times.
NEVER WORKS. The predators get rich, the people suffer.
Why not learn for a change?
PS: Yellen doesn't manage the derivative losses in the shadow banking system. Christ with Ireland and England writing derivatives like crazy, the liquidation frenzy ought to be quite a spectacle.
Come on Tyler !!! Find out the derivative exposure...just to Greece!!!
Marxist and economy are contradictory terms.
Apple has enough money to bail out Greece. Plus their money's already overseas. Plus Tim Cook likes it up the ass.
The Greeks should peg the New Drachma to the Ruble and Yuan, and also the price of olives.
Start the first commodity backed currency. You want olive oil out of the olives?
That's gonna cost some extra Deutschemarks, or some nice blonde fraulein pussy. Either way, the Greeks will get theirs.
Frau Merkel is gonna learn that one the hard way.
Liking this.
I have 400 olive trees here.
Will Spanish olives be worth the same as Greek olives?
Whipsaw moves.
Something Huge is coming.
"Sir, those black swans..."
"Yes?"
"They speak Russian."
I'll donate $1 to Greece if they default and I don't have to read any more about it.
well I think the last piece in the puzzle is on the table.
the ecb's $1trillion + qe..
the same people who have backed both sides of every world war, regional, and civil wars, have got the citizens of japan, the us, uk., now the eu. to back both sides in the financial war for them.
we've been played, the keynesian theory is not a theory to make economies stronger, it's been a well planned, and executed scheme to put us exactly where we are now, put the citizens, and their future generations into debt servitude.
being from the us., I don't see much difference between Greeks voting for the politicians offering more free-shit, Americans have sealed their fate the same way for many decades.
all I can say is, no matter what the Greek's do, it will pale in comparison to what will happen in america when simultaneously workers find out there are no pension benefits, and the ebt cards don't get filled.
soon it will end, the people will finally insist to get a look behind the curtain, and will refuse to die, or hand over their assets, to a machine printing money, and gruber feeding it paper-stock.
Bankster War of Zion.
Stop blaming the Jews - people are so stupid and easily manipulated - the muslim brotherhood, Bush's. Clintons. Soros et al.
yes and they have built a standing domestic army and fema camps to deal with just such a time....
Basically what the ECB just did was to open a Russian naval base on Greek soil.
If the US enters into the Ukraine it's a counter chess move.
Each move gets more dangerous.
DC won't realize it until the escalation has gone out of control.
TASS: "The running dogs of dollar imperialism will see our Might!"
"Chinese Gold, Russian Weapons Wow Greeks in New Treaty"
Can't hel[ but think that was the plan.....
Well, Russia buys the Greek debt for pennies on open market. Swaps Greek debt for access to Greek ports, assists new Greek Gov't in establishing a Drachma backed by..... GOLD and SILVER at a ratio of 1500 D to 1 oz.
Drachma has immediate credibility, has trade agreements with Russia (energy for soft commodities), and shipping. Greece becomes part of the greater RussoIndoChino trade alliance.
Best solution I have see so far.
I'm afraid you grant them too much sense. That'l be a way out, but they will not use a PM backed currency. Thas would them bound - according to them - too tightly.
A tad moar:
http://govtslaves.info/ecb-shuts-off-direct-funds-greece-world-stocks-pl...
Germany the menace of Europe:
Last Time they came to Greece with weapons and devasted hundreads of villages. They showed us their high civilization. This time they came with their bank cartels.
Here is how much they owe to Greeks and others in Europe :
http://www.truth-out.org/news/item/27261-germany-s-unpaid-debt-to-greece...
Here is what their best and brighetest have done to Greeks and Jews living in Ioannina(2000 round up only 135 returned).
https://www.youtube.com/watch?v=38ItDel81fU&feature=share&fb_ref=share
Greece has to come down to a living standard it can afford (like Romania, Bulgaria or Turkey). Spending too much and letting others bear the costs doesn't work forever. So Greece needs absolutely the drachma to live within it means, no more Porsche but Dacia or Lada.
Unfortunetely, most greeks only see themselve as victims but forget they chose corrupt governments for decades and cashed in from it. Blame them, not people that lent you money.
I had to ride a BMW bike when I was poor. It won't hurt too bad. You'll be free of the Termites!
Germany is NOT responsible for Greece being bancrupt.
You Greeks need to get your house in order and not expect an endless flow of easy money from german taxpayers.
If Greece exits the Euro, it may also have to de-industrialize. But then again, eventually everyone will.
You can bet that the Predators are now furiously containing the contagion. You can also bet that poison gas will spread to terrains that the Predators have already fled or fleeing.
It does not matter whether it the Greek preys or other preys, they are collectively the collateral damages or in the Predators' vocabulary write-offs/human wastes.
ECB pulls the trigger,,,,, to what starts what Greeks wanted all along and couldn't say.
Greek exit from the pointless worthless ponzi euro voucher scam of all time, the fuck wit demented idea that you could actually make a fake currency and expect it to last, and get back to a sovereign currency.
Brilliant strategy by Syriza, make them think they are flip flopping all over the place whilst denying endlessly and (meaning it) but making every half wit think they will collapse.
They will not collapse.
They know they will pull the plug and exit, they even have the mountains of freshly printed drachma siting in bank vaults ready as incidentally does Germany with fresh Deutschmarks, and its gonna happen.
He wanted to back the corrupt crony thieving shit for brains draggy the cunt and his minions into a corner, and they just just did that, walked right into the trap and its game set and match.
Greece exits and so does Germany in a month or maybe even less.
Now France Spain, Portugal, Italy either have to back Greece and fuck Brussels and the ECB or they know the shit storm will be on their heads.
Greece knows it has a shit storm coming, no matter what, and now the rest of the PIIGS and France know that shit storm is coming down on them too.
I love great comedy shows.
Greece needs the strong hand of Vlad to discipline their spending.
Russian Oil and Vodka for all!
"We have placed a sharpened blade at the underbelly of Europe with our new naval and air bases. Greece and Turkey have abandoned ZATO!"
The Greeks have won... in a Charlie Sheen sort of way!
Heads Russia wins (Greek EU veto)
Tails the EU loses (Grexit door ajar)
Greek EU Veto is no prize for the Kremlin. Oh, it might serve as a short term propaganda victory, but it will be every bit the millstone it has been for the EU. Russia already cut its umbiliical to Cuba.
Israeli-American vampires sucked dry blood of another victim.
Beware of western freindliness (vampires in disguise)
They can turn from the fading start of the West to the rising star of the East.
Don't mess with Hellas, killing empires is our oldest craft.
So how long until someone finds WMD's and a hotbed of terrorism in Greece along with some Greek passports on top of the smoldering ruin of an imploded skyscraper?
great video that lays all THAT out -
911-Conspiracy Finally Solved!: Names, Connections, Motives, 911Matrix of Details Exposed!https://www.youtube.com/watch?v=CdE1Cwnymzc&feature=youtu.be&app=desktop
Disconnecting the first plug means just a little bit pressure when today it comes to the meeting between Janis Varoufakis with his "very best friend" Wolfgang Schäuble awaiting him in the former Göring-Ministry in Berlin.
The Greek finance-minister on his propaganda-trip might have some serious difficulties to spend new wealth to pensioners and recall 7.000 officials which were axed by his successor.
Or does it mean the first demand to Tsirpas to leave the Euro? We will see - a multi-billion present to Varoufakis is unrealistic because it's against German constitution. Maximum would be an extended repayment period until the year 2350 in order not to write of this positions (this job will manage Draghi by printing...)ll
I keep reading that Greece would be forced to leave the Euro, but no one has really made the mechanism clear. First, there is no mechanism in the Euro to kick out a member, so it would have to be Greece who decides to leave the Euro. Now if the ECB pulls the liquidity, then Greece can nationalize the banks, temporarily limit bank withdrawals, and default on its debt. Greece is runing a primary surplus, so it could pay the debt held by Greek banks ONLY. Banks are solvent and the panic would subside. Remember, that Panama uses the dollar, with no agreement from the USA, and zimbagwee uses multiple currencies. Please, where am i wrong?
Soon, they will fall into our hands, Medvedev. Like a ripe olive. Dachas on the Med for all!!
Go, Vlad!
NieuweBoer: "Overigens zijn wij van mening dat het huishoudboekje van de staat op orde moet worden gebracht".
http://www.ftm.nl/column/en-het-journaille-zag-dat-het-goed-was/
NieuweBoer: "Banken dienen weer dienstbaar te zijn aan maatschappij en samenleving. Eenzijdige renteverhogingen moeten daarom aan banden worden gelegd."
http://www.volkskrant.nl/economie/ecb-snijdt-kredietlijn-griekse-banken-...
NieuweBoer volgt natuurlijk de Nederlandse Media en heeft al gelezen dat de @ECB weigert om haar leningen (ter hoogte van 27 miljard euro) aan Griekenland aflossingsvrij te maken. Griekenland wil niet meer fucntioneren volgens de normen van de EU en het IMF en willen extra schatkistpapier uitgeven, om de ParadigmaCHANGE te financieren. Dat zijn leningen met een korte looptijd van drie tot zes maanden. Draghi heeft gezegd dat hij maar naar Nederland of Duitsland moet gaan met de vraag of zij niet garant kunnen staan. Immers Duitsland en Nederland kunnen lenen voor een negatieve rente. Behalve het rente-verschil kan Varoufakis ook nog schermen met voorkennis over de volgende fase van de 3e SpinozaGolf.
http://www.nrc.nl/nieuws/2015/02/05/ecb-voert-druk-op-griekenland-verder...
De Griekse minister van Financiën Varoufakis en de Griekse premier Alex Tsipras zijn steeds optimistischer geworden, omdat ze erachter zijn gekomen dat het gedachtegoed van netwerk Juncker gigantisch achterloopt op die van het personeel in hotel GradjA. Varoufakis reageerde laconiek op het ECB-besluit en zei dat het “geen negatief effect” op de financiële sector zal hebben, maar dat de sanering gewoon in een hogere versnelling gaat. De Duitse Minister Wolfgang Schäuble zal vandaag worden ingelicht hoe Griekenland de inzichten van het GELD=ZUURSTOF-paradigma gaat gebruiken om de Griekse rechtstaat te onderwerpen aan de 'Logica van de 1'.
The bankrupt ECB will only bail out bankrupt Greece as long as Greece keeps pretending that neither are really bankrupt. Sure that makes sense.......on planet Claire.
You assholes, we are cutting off the dough if you keep making people aware we are all broke.
Get with the Program, Greeks!
-Angela.
the EU has gotten used to falling on its a**.
this may help push GR in the direction of RU and CN.
the GRs have been out shopping and are finding the EU not very accomodating.
let's see what happens next.
Greece becomes Iceland and Urupp frees itself finally from a stable of NSA pedophiles in the BrUSsel$ politburo.
BRICS bank enters stage from left.
Game of Chicken....however EU/ECB global risk has a million times more to lose than Greece.....
Greece...OK we will default and go Drachmae...... here the sound of shitted pants world wide..
China & Russia et al.. fund Greece operating cost in exchange for... Greece is a bigger prize for these two than Urkraine...
Today's Brain Teaser -
Re-arrange the following 3 words, to form a well know phrase or saying:
EU FCUK ! THE
(Bonus Point for correcting any spelling mistakes)Greeks have +300 billion hidden in tax havens, most of it "stolen" from government. They don't plan to use that money to pay Greece's debts.
http://business.financialpost.com/2015/01/26/terence-corcoran-stop-the-handwringing-greece-is-going-nowhere/
Pre-game coverage has been started for this SuperBowl finance game:
in the FT:
Bild, the country’s biggest-selling tabloid, has no doubt contributed to the mood with extensive reports this week documenting the tax breaks enjoyed by wealthy Greek shipowners. A big photo story showing billionaires enjoying the high life bore the headline: “Why don’t you rich super-rich Greeks pay any taxes?”
http://www.ft.com/intl/cms/s/0/9b93c774-ac8e-11e4-9d32-00144feab7de.html
And here is the referenced bild.de article showing the tax-free Greek Billionaires:
http://www.bild.de/politik/ausland/griechenland/warum-zahlen-reiche-kein...
and my favorite Hendry discussion (starting with Stiglitz at 1:30)
https://www.youtube.com/watch?v=-DN_eZHxa8Q
Greece (per Hendry) is a "Cheat's Charter".
Oh yes one more thing. This is just the pre-season game in the SuperBowl finance competition:
If you look at the TARGET2 balances (who owes what to whom in the Eurozone) you can see that Greece is only "on" for a bar tab of -50B Euros. The *real* party animals are Spain (-190B) and Italy (-209B) - if *they* duck out the back door and don't pay their bills, then Germany (+460B), Finland (+12.5B) and Belgium (+12.4B) are stuck with the Eurozone transfer tab.
www.yardeni.com/Pub/target2.pdf
If you want a real laugh - check out the line "D" (for Draghi I suppose). Notice the change in the balances after line "D"!! (Note link is for a report dated 4 Feb 2015)
"D = On July 26, 2012, ECB President Mario Draghi pledged to do "whatever it takes" to defend the euro."
Hello Putin.....
The entire purpose of allowing Spain and Greece etc into the Euro was to ensure the future role as poor agrarian servants to Germany and France.
How can it be possible for the smaller less sophisticated countries like Spain, Portugal, Greece etc to use the same currency as Germany and France.
Germany gains a massive advantage in using a currency that would be effectively 20-40% undervalued compared to the Deustchmark, whilst Greece has to trade with the same currency that has 40% overvalued against a Drachma.
We can sit an moan about how Greece cheats and should be pulling its weight...BUT even if it absolutely perfected everything in its economy...the currency they have to use ensures they cannot grow against the big boys.
Germany and France have gotten away with a massive con/scam with the Euro... and will do anything to keep it going.
This is a game of Chicken between Euro-Greece ...... and the big boys of EU have a lot to lose, and will keep it at all costs. If Greece is smart and can avoid assasination....they will not lose by sitting pat and threatening to go all the way. They are in a no lose situation really....they are totally fucked now.....they can pull back the curtain now..or keep the game going to later...with an even bigger disaster.
Greece, game over, reset boys.
A squeaking Greece gets the weal.
The jackboot Nazis march again out of Berlin, this time toward Greece. Start up those gas chambers again, you'll be needing them. Merkel has already grown a set of balls; now all she needs is to grow a mustache.
Avoid EURO bank notes that start with Y
If he holds fast fellow commies in Beijing will buy up the place with Mother Russia helping bus the tables, get some ports and warm weather recreation and give Obama another evil country to threaten with his Middle East gangsters. All wars are bankers wars for the CIA and muitions makers.