The IMF Just Confirmed The Nightmare Scenario For Central Banks Is Now In Play

Tyler Durden's picture

The most important piece of news announced today was also, as usually happens, the most underreported: it had nothing to do with US jobs, with the Fed's hiking intentions, with China, or even the ongoing "1998-style" carnage in emerging markets. Instead, it was the admission by ECB governing council member Ewald Nowotny that what we said about the ECB hitting a supply brick wall, was right. Specifically, earlier today Bloomberg quoted the Austrian central banker that the ECB asset-backed securities purchasing program "hasn’t been as successful as we’d hoped."

Why? "It’s simply because they are running out. There are simply too few of these structured products out there."

So six months later, the ECB begrudgingly admitted what we said in March 2015, in "A Complete Preview Of Q€ — And Why It Will Fail", was correct. Namely this:

... the ECB is monetizing over half of gross issuance (and more than twice net issuance) and a cool 12% of eurozone GDP. The latter figure there could easily rise if GDP contracts and Q€ is expanded, a scenario which should certainly not be ruled out given Europe’s fragile economic situation and expectations for the ECB to remain accommodative for the foreseeable future. In fact, the market is already talking about the likelihood that the program will be expanded/extended.

 

... while we hate to beat a dead horse, the sheer lunacy of a bond buying program that is only constrained by the fact that there simply aren’t enough bonds to buy, cannot possibly be overstated.

 

Among the program’s many inherent absurdities are the glaring disparity between the size of the program and the amount of net euro fixed income issuance and the more nuanced fact that the effects of previous ECB easing efforts virtually ensure that Q€ cannot succeed.

(Actually, we said all of the above first all the way back in 2012, but that's irrelevant.)

So aside from the ECB officially admitting that it has become supply*constrained even with security prices at near all time highs, why is this so critical?

Readers will recall that just yesterday we explained why "Suddenly The Bank Of Japan Has An Unexpected Problem On Its Hands" in which we quoted BofA a rates strategist who said that "now that GPIF’s selling has finished, the focus will be on who else is going to sell. Unless Japan Post Bank sells JGBs, the BOJ won’t be able to continue its monetary stimulus operations."

We also said this:

"in 6-9 months, following the next major market swoon when everyone is demanding more action from the BOJ, "suddenly" pundits will have discovered the biggest glitch in the ongoing QE monetization regime, namely that the BOJ simply can not continue its current QE program, let along boost QE as many are increasingly demanding, unless it finds willing sellers, and having already bought everything the single biggest holder of JGBs, the GPIF, had to sell, the BOJ will next shakedown the Post Bank, whose sales of JPY45 trillion in JGBs are critical to keep Japan's QQE going.

 

The sale of that amount, however, by the second largest holder of JGBs, will only last the BOJ for the next 3 months. What next? Which other pension fund will have the massive holdings required to keep the BOJ's going not only in 2016 but also 2017 and onward. The answer: less and less.

Once again to be accurate, the first time we warned about the biggest nightmare on deck for the BOJ (and ECB, and Fed, and every other monetizing central bank) was back in October 2014, when we cautioned that the biggest rish was a lack of monetizable supply.

We cited Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo, who said that at the scale of its current debt monetization, the BOJ could end up owning half of the JGB market by as early as in 2018. He added that "The BOJ is basically declaring that Japan will need to fix its long-term problems by 2018, or risk becoming a failed nation."

This was our summary:

The BOJ will not boost QE, and if anything will have no choice but to start tapering it down - just like the Fed did when its interventions created the current illiquidity in the US govt market - especially since liquidity in the Japanese government market is now non-existant and getting worse by the day. All that would take for a massive VaR shock scenario to play out in Japan is one exogenous JGB event for the market to realize just how little actual natural buyers and sellers exist.

That said, our conclusion, which was not to "expect the media to grasp the profound implications of this analysis not only for the BOJ but for all other central banks: we expect this to be summer of 2016's business" may have been a tad premature.

The reason: overnight the IMF released a working paper written by Serkan Arslanalp and Dennis Botman (which was originally authored in August), which confirmed everything we said yesterday... and then some.

Here is Bloomberg's summary of the paper:

The Bank of Japan may need to reduce the pace of its bond purchases in a few years due to a shortage of sellers, said economists at the International Monetary Fund.

 

There is likely to be a “minimum” level of demand for Japanese government bonds from banks, pension funds, and insurance companies due to collateral needs, asset allocation targets, and asset-liability management requirements, said IMF economists Serkan Arslanalp and Dennis Botman.

Here are the excerpts from the paper:

We construct a realistic rebalancing scenario, which suggests that the BoJ may need to taper its JGB purchases in 2017 or 2018, given collateral needs of banks, asset-liability management constraints of insurers, and announced asset allocation targets of major pension funds.

 

... there is likely to be a “minimum” level of demand for JGBs from banks, pension funds, and insurance companies due to collateral needs, asset allocation targets, and asset-liability management (ALM) requirements. As such, the sustainability of the BoJ's current pace of JGB purchases may become an issue.

Back to Bloomberg:

While Governor Haruhiko Kuroda said in May that he expects no obstacles in buying government bonds, the IMF analysts join Nomura Securities Co. and BNP Paribas SA in questioning the sustainability of the unprecedented debt purchases.

Who in turn merely joined Zero Hedge who warned about precisely this in October of last year.

Back to the IMF paper, which notes that in Japan, where there is a limited securitization market, the only "high quality collateral" assets are JGBs, and as a result of the large scale JGB purchases by the JGB, "a supply-demand imbalance can emerge, which could limit the central bank’s ability to achieve its monetary base targets. Such limits may already be reflected in exceptionally low (and sometimes negative) yields on JGBs, amid a large negative term premium, and signs of reduced JGB market liquidity."

To the extent markets anticipate limits, the rise in inflation expectations could be contained, which may mitigate incentives for portfolio rebalancing and create a self-fulfilling cycle that undermines the BoJ’s objectives.

For those surprised by the IMF's stark warning and curious how it is possible that the BOJ could have put itself in such a position, here is the explanation:

So far, the BoJ’s share of the government bond market is similar to those of the Federal Reserve and still below the Bank of England (BOE) at the height of their QE programs. Indeed, the BoE held close to 40 percent of the conventional gilt market at one point without causing significant market impairment. Japan is not there yet, as the BoJ held about a quarter of the market at end-2014. But, at the current pace, it will hold about 40 percent of the market by end-2016 and close to 60 percent by end-2018. In other words, beyond 2016, the BoJ’s dominant position in the government bond market will be unprecedented among major advanced economies.

As we expanded yesterday, the biggest issue for the BOJ is not that it has problems buying paper, but that there are simply not enough sellers: "under QQE1, only around 5 percent of BoJ’s net JGB purchases from the market came from institutional investors. In contrast, under QQE2, close to 40 percent of net purchases have come from institutional investors between October 2014 and March 2015."

 

This is where things get back for the BOJ, because now that the BOJ is buying everything official institutions have to sell, the countdown has begun:

given the pace of BoJ purchases under QQE2 and projected debt issuance by the government (based on April 2015 IMF WEO projections of the fiscal deficit), we estimate that Japanese investors could shed some ¥220 trillion of JGBs until end-2018 (Table 2, Figure 4). In particular, Japanese insurance companies and pension funds could reduce their government bond holdings by ¥44 trillion, while banks could sell another ¥176 trillion by end-2018, which would bring their JGB holdings down to 5 percent of total assets. At that point, the BoJ may have to taper its JGB purchases.

 

Then there are the liquidity issues:

As the BoJ ascends to being a dominant player in the JGB market, liquidity is likely to be affected, implying that economic surprises may trigger larger volatility in JGB yields with potential financial stability implications. As noted in IMF (2012), demand-supply imbalances in safe assets could lead to deteriorating collateral quality in funding markets, more short-term volatility jumps, herding, and cliff effects. In an environment of persistent low interest rates and heightened financial market uncertainty, these imbalances can raise the frequency of volatility spikes and potentially lead to large swings in asset prices.

This, too, is precisely what we warned yesterday would be the outcome: "the BOJ will not boost QE, and if anything will have no choice but to start tapering it down - just like the Fed did when its interventions created the current illiquidity in the US govt market - especially since liquidity in the Japanese government market is now non-existant and getting worse by the day."

The IMF paper conveniently provides some useful trackers to observe just how bad JGB liquidity is in real-time.

The IMF is quick to note that the BOJ does have a way out: it can simply shift its monetization to longer-dated paper, expand collateral availability using tthe BOJ's Securited Lending Facility (which basically is a circular check kiting scheme, where the BOJ lends banks the securities it will then repurchase from them), or simply shift from bonds to other assets: "the authorities could expand the purchase of private assets. At the moment, Japan has a relatively limited corporate bond market (text chart). Hence, this would require jumpstarting the securitization market for mortgages and bank loans to small and medium-sized enterprises which could generate more private assets for BoJ purchases."

But the biggest risk is not what else the BOJ could monetize - surely the Japanese government can always create "monetizable" kitchen sinks... but what happens when the regime shifts from the current buying phase to its inverse:

As this limit approaches and once the BoJ starts to exit, the market could move from a situation of shortage to one with excess supply. The term premium could jump depending on whether the BoJ shrinks its balance sheet and on the fiscal deficit over the medium term.

When considering that by 2018 the BOJ market will have become the world's most illiquid (as the BOJ will hold 60% or more of all issues), the IMF's final warning is that "such a change in market conditions could trigger the potential for abrupt jumps in yields."

At that moment the BOJ will finally lose control. In other words, the long-overdue Kyle Bass scenario will finally take place in about 2-3 years, tops.

But ignoring the endgame for Japan, and recall that BofA triangulated just this when it said that "the BOJ is basically declaring that Japan will need to fix its long-term problems by 2018, or risk becoming a failed nation", what's worse for Abe is that the countdown until his program loses all credibility has begun.

What happens then? As BNP wrote in an August 28-dated report, "Once foreign investors lose faith in Abenomics, foreign outflows are likely to trigger a Japanese equities meltdown similar to the one observed during 2007-09."

And from there, the contagion will spread to the entire world, whose central banks incidentally, will be faced with precisely the same question: who will be responsible for the next round of monetization and desperately kicking the can one more time.

But before we get to the QE endgame, we first need to get the interim point: the one where first the markets and then the media realizes that the BOJ - the one central banks whose bank monetization is keeping the world's asset levels afloat now that the ECB has admitted it is having "problems" finding sellers - will have no choice but to taper, with all the associated downstream effects on domestic and global asset prices.

It's all downhill from there, and not just for Japan but all other "safe collateral" monetizing central banks, which explains the real reason the Fed is in a rush to hike: so it can at least engage in some more QE when every other central bank fails.

But there's no rush: remember to give the market and the media the usual 6-9 month head start to grasp the significance of all of the above.

Source: IMF

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Two Theives and a Liar's picture

When markets are no longer reality based, neither is CON-fidence...thus..it doesnt erode, but evaporates!

nope-1004's picture

You mean debasing currencies doesn't work?  Huh.  Who knew?

 

CB IDIOTS

Manthong's picture

Print free or die.

Dutti's picture

I had publicly stuck my neck out  during the last two weeks expecting a counter up-move in the S&P from the recent yearly lows. Unfotunately the "market" continues with a weak performance so far - I give up and liquidate my short term long e-mini trading positions with a small profit.

Soul Glow's picture

The IMF just confirmed the system they implemented by their crooked Keynesian policy will now fail as if we are surprised.  

I AM JACK's COMPLETE LACK OF IT

:)

remain calm's picture

Japan has a few more options

1) Negative interest rates

2) More QE, buy everyting, they are not at 100% yet

3) Helicopter money. Just print it and give it away

 

Grant it they are fucked. But Karoda only has a dick in the ass, he can still take one in the mouth, and he has two hands he can still jerk off with. Not a pretty picture, but I think you get the point. 

knukles's picture

Told a lot of people a long time ago we'd be running out of bonds.  That they were gonna become more scarce that clean air and water, oil or uninfected women.
Nobody beleieved me.
Another Nut Job Idea becomes Reality.

SWRichmond's picture

(some government will need to) need to fix its long-term problems (by some date certain) or risk becoming a failed nation...

I see dead people.

Leopold B. Scotch's picture

Crass inflationism once again exposed for the umpteenth time.   Keynes' grand obfuscation, i mean "theory", pretending to be a physical science merely gave governments and meddlers a scientific excuse to raise it from the dead.

And by inflationism, I don't mean rising prices.  I mean debasement of money and credit, in a sense that Mises et al eviscerated the very concept 100 years ago.

Get ready for full retard Keynesian government spending in 3... 2.... 1.....

Pairadimes's picture

I'm waiting to run into people at the table next to mine in a restaurant that tell me they have been hired by the government to go eat something.

daveO's picture

Half the people I see in restaurants are social security age, depending on the time of day. Weekday evenings are nearly all SS folks. Most are overweight, too. Tax slaves are resting at home.

SWRichmond's picture

Tax slaves are resting at home.

+1.  I mentioned to Mrs. SWR that "they are printing so much money they are running out of things to buy" and she said immediately "Why don't they just give it to you and I?"  My answer was "because that would free us from our servitude to them".

coinhead's picture

Some people have been on here saying this is another false ending and teh system will carry on for more years?  No, no, no... this really is it... teh end.  Right now and no more waiting, who cares if teh Mayans were off by 3 yrs?  Still pretty damn good from their vantage point half a millennium ago.  Teh entire world and its governments have gone "all in" on a mathematical absurdity and it is ending.  Now.

LawsofPhysics's picture

Nothing new under the sun my friend.  This bullshit will continue right up until the supply lines for essential goods and services breaks (as it already has in many places) in the "modern world"...

Then we start killing each other in earnest.

Same as it ever was...

johngaltfla's picture

Bullcrap. It's totally succesful. They all got to take their whores to the French Riviera AND the Hamptons this weekend. I'd call that a sucess having 4 hookers and a Ferrari at your other home while your wife waits for you in Manhattan.

Of course in reality they just put a 1/2 stick of dynamite under the house of cards and the fuse is lit. September 21st, watchout.

MontgomeryScott's picture

Actually, Mr. Galt, I'd heard that the 23rd is the day to watch.

 

Here's an article from TASS that is disturbing in the whole take of 'Japanese QE' theorizing (as far as it relates to this ZH article that quotes Mayor Bloomberg's mouthpiece):

http://tass.ru/en/economy/818479

"VLADIVOSTOK, September 3. /TASS/. Japanese businesses operating in the United States have become "hostages" of US sanctions against Russia, Tadashi Maeda, senior managing director of the Japan Bank for International Cooperation (JBIC), told TASS on the sidelines of the first Eastern Economic Forum. "The newly-emerged threat is the negative effect of sanctions, in particular, those by the United States," he said. "We are unable to use the dollar in granting credit lines. We can use only the yen, and this entails technical problems," he said."

Scenario 1 (least likely): The Japanese dump the USD. The U.S. withdraws military support. The Chinese invade/ smart-bomb/nuke Japan. The U.S. rushes in to aid it's former trading partner. WWIII ensues.

Scenario 2 (most likely): Japan and Russia come to an agreement to settle trade with their own currencies, thus bypassing the USD. The U.S. economy goes in to a tailspin as nations across the world using HFT models dump UST's within hours (or minutes). Since the U.S. has already used the doctrine of 'first strike' in the recent past, and they are in desperate straights, the rest of the world decides within hours to combine forces and wipe the United States off the map with EXTREME PREJUDICE (just in case). WWIII ensues.

The only OTHER possibility is that the CONUS come up with the 19 TRILLION FEDRES NOTES that it owes to everyone calling the notes by the end of the business day's trading (I'm sure that Ft. Knox has that much GOLD just lying around, waiting to be stored in the vaults!).

SHIT. There will be NO PLACE ON EARTH that is 'safe'. This one's actually Revelations-type Biblical stuff. NEXT STOP: GLOBAL GOVERNMENT, and the rise of the ANTICHRIST.

The fun might start on the 21st (Monday), but I'm seeing various, diverse, and unconnected people stating that it will be Wednesday the 23rd.

The EU is forcing Hungary to take on all those Muslim 'refugees' from Syria right NOW. THAT shit ain't gonna last... and WHOSE FAULT is it that Syria is being torn apart? The CIA-trained Israeli State Intelligence Service operators and willing sheep-dipped radicalized patsies whose weapons seem to accidentally fall out of the sky (or were 'left behind' in Afghanistan and Iraq)from C-117's and C-130's, perhaps?

FUCK. This is DEPRESSING.

 

HardlyZero's picture

Just a comment and follow-up...do you think George Soros reads ZH ?  

If so, then some leverage in the right direction could become very effective at some time this or next year.

Just time it right.

Keyser's picture

All economic figures for the EU will soon be moot, considering the influx of muslim refugees from ME/NA...  Watch for all EU economies to grind to a halt under the weight of the new EU citizens... 

Handful of Dust's picture

Japan has been 'Abenomicked."

smartmil's picture

Iam not agree with you... Very very sad.

johngaltfla's picture

MS, I think the Fed lights the Fuse. After the 17th all kinds of bad shit will happen as they increase rates including the one thing that ZH has been warning about; the liquidity trap snaps shut. What this will do is a nightmare, IMHO as the ETF trap did to equities last Monday. Once this begins, I think we will see the circruit breakers on the NYSE hit and used not just once but twice or more in one day because of the morons in charge. Do not act shocked if we see the markets close at 1:45 pm one day and fail to re-open.

overmedicatedundersexed's picture

johnny g, you know better, what stops all this is scarcity. right now we have excess energy, goods and commodities, debt and equities, this goes on until the basic goods needed for modern economies cannot be bought at any price.

johngaltfla's picture

You left the most dangerous scarcities off the list:

Liquidity

and

Hard cash

When markets experience the full depth of the liquidity drought, Main Street will have no cash to fall back on. Everything goes to shit then.

StandardDeviant's picture

TASS?  Oh please.  Consider the source.

johngaltfla's picture

TASS is as about as accurate as ABC News or CNN.

Gene Watson's picture

Or the Iran deal doesn't pan out, Iran gets bombed, the straits of hormuz get shutdown by the Iranians blocking 65% of China's oil supply ... China runs out of oil within 90 days .... how else to retailiate for the Spratley Isles, that recent hacking incident, dumping $0.2 trillion in Treasury bonds, Q tightening etc etc. 

wizteknet's picture

I call that first in line burn!

buzzardsluck's picture

Anyone else tired of dipshits using 'teh'?

Sedaeng's picture

so it is purposeful! Then yes to your question.

 

Is this some kind of new fad? I understood 'moar' and other idiosyncrasies but not 'teh'?  I'm not getting it.

MontgomeryScott's picture

On the 'QWERTY' keyboard, the letter 'T' is the fifth one over. The average human uses two hands to type, and focuses on the LH side with his/her right eye. The brain stem fires the left hand into action, and the human, trying to spell the worh 'THE'; in a rapid response, hits the 'T' and the 'E' ('I shall call him NUMBER THREE over', top row) before the OTHER hand (the right hand) can hit the 'H' (located in the no-man's land, second row, center). The THUMB on the right hand is usually responsible for this particular keystrike, and the nerve signals seem to be a little slower (not to mention the fact that the fingers are far more 'nimble' than the thumb; for reasons already given). THUS, the word 'THE' comes out as 'TEH' (and ALMOST NO ONE [LITERALLY], 'proofreads' their internet diatribes).

Now that I have given you a logical and rational answer to your stupid, misdirecting question about the rise of the meme 'teh', will you please shut the fuck up and PAY ATTENTION? GROWN ADULTS are trying to converse here, sonny-BOI.

38BWD22's picture

 

 

Thanks for the explanation, I often mis-type "teh" while meaning to write "the".

Stainless Steel Rat's picture

EACH LANGUAGE REFLECTS UNIQUE WURLD-VIEW AN CULCHUR COMPLEX, MIRRORIN TEH MANNR IN WHICH SPEECH COMMUNITY HAS RESOLVD ITZ PROBLEMS IN DEALIN WIF TEH WURLD, AN HAS FORMULATD ITZ THINKIN, ITZ SISTEM OV FILOSOFY AN UNDERSTANDIN OV TEH WURLD AROUND IT. IN DIS, EACH LANGUAGE IZ TEH MEANZ OV EXPRESHUN OV TEH INTANGIBLE CULTURAL HERITAGE OV PEEPS, AN IT REMAINS REFLECSHUN OV DIS CULCHUR 4 SUM TIEM EVEN AFTR TEH CULCHUR WHICH UNDERLIEZ IT DECAYS AN CRUMBLEZ, OFTEN UNDR TEH IMPACT OV AN INTRUSIV, POWERFUL, USUALLY METROPOLITAN, DIFFERENT CULCHUR.

fnord's picture

Who the fuck hits the H key with their thumb? It's just intentional from this dipshit, not sure if he's the same troll I've seen in other threads constantly typing "teh" instead of "the"

coinhead's picture

Teh has taken up a life of its own as so many other memes we have all come to love on teh interwebs (like teh fonestar meme for example).  Look it up and brush up on you 7337speak dipshit.

MontgomeryScott's picture

OH, the SHITZKION guy! Didn't Satoshi take him up in the 'mothership' when the LAST comet flew by?

 

In hushed rooms, in the still of the night, whispered in the secret places, ONE avatar name is still revered and cherished on the interwebs everywhere (but only as a distant memory of the ONE who will soon come and save all the ZH Contrarians):

'FRANCIS MARION"

Fucking guy (YOU) doesn't even know the definition of a 'meme'. 

"Comparing Hitler and Obama, as Cooperman did last year at the CNBC conference, is something of a meme."

"A meme is an idea that is passed on from one human generation to another. It's the cultural equivalent of a gene, the basic element of biological inheritance."

The mis-typing of the word 'the' is NOT a MEME, you fatheaded little child. It is what used to be called 'a grammatical error' (kindly).

'FONESTAR' and 'FRANCIS MARION' are actually 'AVATAR' NAMES.

'DIPSHIT' is a vulgar and derogatory descriptor, given to one who doesn't know a pissing head from his sister's tittie ( a DOLT, an IGNORAMUS, a 'MIS-EDUCATED IDIOT', a 'MORON').

Can you feel me, 'coinhead'?

7/11, Circle-K, and Walmart all have a concurrent sale on Doritos (tm).

The basement is almost out of 'food-like corn chip product'.

Don't forget to wipe your ass and put on a pair of clean pants before exiting the basement.

coinhead's picture

A whole n3w we!  A brand new cryptosy feeling... nothing to hold us down or for Satoshi to say we're only dreaming!  A whole new we!  A brand new ZH fucknut annoying teh Francis Bacons!  A meme is inside you, you feel we bruh?  Nice and hardly you bearly feel we.  Fonestar LLC should know a ting or two about teh meme.  We support our ~LOCAL CRYPTOANARCHIST 201~.  United under one nation invisible!  Now you want to talk about teh comet and how we get sucked up?  We all live in teh gleam of Satoshi's unsheathed sw0rd!

OldPhart's picture

"The mis-typing of the word 'the' is NOT a MEME, you fatheaded little child. It is what used to be called 'a grammatical error' (kindly)."

I usually type it that way due to faulty fingers and a 'don't give a shit' attitude.

jvetter713's picture

'teh' is annoying but the one that really pisses me off is the use of owned spelled as 'pwned'

coinhead's picture

No no n0... loves we teh pwned!

StychoKiller's picture

Whenever I feel that way, I go look at some Pr0n!

McCormick No. 9's picture

I'm hijacking your hijack  of the thread to get back to the (THE) point here. I said this before- if the Fed/ECB/BOJ are buying bonds, thus driving up the price, then when someone (PBOC), sells said bonds, having their prices driven up through QE, what does that do? Seling pressure drives up yields, and prices down. Does the whole thing stay in some kind of sick equilibrium, where PBOC sells, and FED/etal buys as fast as PBOC can sell? It can't work like that. There has to be a destabilizing vicious cycle in there somewhere. 

OK, how's about this scenario? PBOC sells because China is fucking broke and leveraged out their Chinese assholes on ghost cities and Foxconn, what have you. PBOC sits on a huge pile of cash ie T-bills, some 1.3 trillion, if I'm not mistaken. Well, if you have to dump money into a stock market, then you gotta get some cash.

Somewhere on ZH it was mentioned that China's bond selling was "QT" ie quantitative tightening. But wait! Tightening is supposed to be the FED's prerogative! They have cryptic FOMC meetings and delphic pronouncements from Jackson Hole, etc, it's all about manipulating the market with words, which is way cheaper than actually printing debt to buy debt, which is how the FED buys Treasuries (ie QE). Fuck, no, What The Fuck?!?! China can't fucking do this! But now there aren't enough bonds to buy in Europe? Hold the phone! Are we supposed to believe that the Eurozone doesn't want to go even deeper into debt, and that governments aren't selling bonds? Is this some kind of weird liquidity crisis where the ECB is saying, "Look, we'd love to loan you some more fake money that we just dreamed up out of thin air in order to keep the whole fucking economy from collapsing, but you have to fucking borrow the money first! We can't just give it to you!"

No, I can't believe it. Didn't the directors of the various financial ministries and all the Brussels Bureaucrats AND the central bankers all bugger each other at the same private boarding schools? I mean, this is a pretty small club. At the very least these guys all fuck the same prostitutes and snort the same coke. I can't believe they can't find a way to exchange non-redeemable IOUs for money that was ginned up out of thin air, all on a promise to repay that money with more fake money with fake money interest.

No, I believe the game is rigged. Slowly, this possibility is seeping into my brain. Could it all be a vast conspiracy? Is the whole thing about to be purposefully destroyed, or as Silverman said,

PULL IT!

robobbob's picture

mayans weren't off, only the 2 bit hustlers selling doomsday bunkers.

what the mayans said was apocalypse- a great change. the end of the old system and the beginning of a new. it wouldn't come in an instant, but would slowly arise like the dawn sun at the beginning of a new day. considering a galactic day is 25,000 years long, humanity isn't even aware the alarm clock is ringing, let alone notice TPTB are frantically banging on the snooze button like their lives depend on it, which they increasingly do.

StychoKiller's picture

December 21, 2012 was just the end of the 'long count.'  Another long count began.

wizteknet's picture

Greedy bastards get what they wished for...

de3de8's picture

It all works till it doesn't. It's all good until it's you. Close to doesn't and you.

El Vaquero's picture

"I'm waiting to run into people at the table next to mine in a restaurant that tell me they have been hired by the government to go eat something."

 

What do you think that EBT is?

Abbie Normal's picture

EBT won't get you a roast chicken dinner at a restaurant but it will pay for a roast chicken and all the fixings at Costco...go figure.

nc551's picture

Every major fast food chain accepts EBT somewhere.