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Cash For Clunkers - ECB Style

Submitted by Tyler Durden on 02/15/2012 10:04 -0400

Overnight, Peugeot, the struggling European car-maker, announced dismal results and significant over-capacity in Europe pushing its stocks down 6% ( down almost 13% since last week). The somewhat unsurprising twist was that the CFO said they were approaching the ECB about collateralized loans. As Bloomberg notes:

*PEUGEOT DISCUSSING WITH ECB, PRESENTING COLLATERAL, CFO SAYS
*PEUGEOT PRESENTING COLLATERAL ABOVE EU1 BLN TO ECB

So the ECB has now managed its other unintended consequence - to replace the entire bank intermediation credit creation channel (ring any bells?) as Europe embarks on its own 'Cash-for-Clunkers', ECB-Style.

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Wed, 02/15/2012 - 10:06 | 2161421 Cdad

There is nothing more bullish than the complete collapse of central bank credibility world wide.

/sarc

Wed, 02/15/2012 - 10:08 | 2161429 SheepDog-One

Great for stawks!

Wed, 02/15/2012 - 10:10 | 2161435 Cdad

Stawks have entered a period of unending economic joy, and people of all nations should by 100% of them from Larry Fink.

Wed, 02/15/2012 - 11:23 | 2161776 sqz

Wait, what?... Does Peugeot have an EU banking license or is this just any old random company trying to bypass bank intermediation? Has it really come to this?!

Wed, 02/15/2012 - 11:24 | 2161786 Nussi34

Never heard of this company, Peugeot. What do they make?

Wed, 02/15/2012 - 11:42 | 2161911 Urban Roman

Citroens

Wed, 02/15/2012 - 14:41 | 2162779 steve from virginia

Engines for Minis among other things.

This goes into Auto-industry death watch ...

Wed, 02/15/2012 - 15:02 | 2162869 Maxwell Smart

Transportation for TV detectives wearing raincoats.

Wed, 02/15/2012 - 10:26 | 2161482 bigdumbnugly

along the same vein, renault and ford have combined to introduce a new car to the market. they have combined the properties of the renault clio with the ford taurus to come up with a cute little thing called the clitaurus.

review:

color comes in pink only, and it's rumored that it leaks transmission oil once a month. on cold mornings, when you really need it, it won't turn over. new models are initially fun to own, but very costly to maintain, and even more expensive to get rid of. curb weight mysteriously increases with age.

summary: best just to lease one, and replace it each year.

Wed, 02/15/2012 - 10:39 | 2161551 Strut

brilliant!

Wed, 02/15/2012 - 13:10 | 2162317 Problem Is

Nice dog Michele...

So whatcha doin' later?

Wed, 02/15/2012 - 15:26 | 2162973 tamboo

try the gif:

http://i.imgur.com/rgcXm.gif

Wed, 02/15/2012 - 13:12 | 2162348 Problem Is

+1...

BTW: bigdumbugly... That car ain't new... I've been sold more than one of those models and by all means go the easy-sleezy lease route...

And for your own sanity...disconnect that horn...

Wed, 02/15/2012 - 10:35 | 2161526 MillionDollarBonus_

This is a bold and controversial move by the ECB. The ECB will come under great public scrutiny for bypassing the member banks and lending directly to Peugeot. However, this is exactly the kind of revolutionary monetary policy that is going to boost aggregate demand and spur on the global recovery. We are watching history in the making.

Wed, 02/15/2012 - 10:06 | 2161422 lolmao500

Should do a cash-for-clunkers but for countries.

Wed, 02/15/2012 - 10:38 | 2161544 JPM Hater001

Junk yards couldnt handle the volume. There would be so much fiat it would stack from 100 ft deep hole to saturn...and back...233 times.

Wed, 02/15/2012 - 10:07 | 2161424 SheepDog-One

Said 'collateral' is 2 stale croissants. Good enough for +20 on E/S! Nevermind the market miracle 'letter' from Greece now, thats old news, its a brand new day for whatever ridiculous rumor excuse to pump higher.

Wed, 02/15/2012 - 10:07 | 2161425 slaughterer

Peripheral auto industries: ask Mario, he is good for it.

Wed, 02/15/2012 - 10:12 | 2161430 Cognitive Dissonance

Cash For Clunkers - ECB Style

I have dibs on Ferrari. Just sayin'

Wed, 02/15/2012 - 10:13 | 2161442 GeneMarchbanks

Maserati is mine.

Wed, 02/15/2012 - 10:30 | 2161497 Cognitive Dissonance

I'll race ya to the poor house. Wanna bet Pink slips or debased Greenbacks.

Wed, 02/15/2012 - 13:04 | 2162303 Problem Is

Funny money.

My Euros against your Bernanke Bucks...

Wed, 02/15/2012 - 10:57 | 2161647 williambanzai7

Wed, 02/15/2012 - 12:13 | 2162054 Nobody For President

The gold neckchain with the Euro symbol was the crowning, coffee-spew touch...

Wed, 02/15/2012 - 13:02 | 2162293 Problem Is

Hey! That guy tried to sell me a condo in Miami in 2007...

Same fuckin' leisure suit. He told me:

"Hurry! Act today! Prices and models won't last! You'll be priced out of the market, kid..."

Wed, 02/15/2012 - 10:12 | 2161438 machineh

Paging Banzai7:

Cartoon of ECB with flaming euro logo and a hundred acres of unsellable Peugeots piled three-deep in front of it.

Oh, don't we miss the European 'wine lakes' and 'butter mountains' of the glorious Deutschmark days!

Wed, 02/15/2012 - 10:14 | 2161444 lolmao500

Next : cash for banksters heads.

Wed, 02/15/2012 - 10:15 | 2161450 boogerbently

Now, EU needs to "bailout" failing carmakers......

Why does that sound so familiar?

Wed, 02/15/2012 - 10:18 | 2161452 Manthong

In Utopia, you go the Federal Reserve Bank branch bank located next to the State Liquor Store to pay your mortgage and then get your loan to buy a Government Motors Surburban to go use your food stamps to buy groceries.

Wed, 02/15/2012 - 10:32 | 2161515 Red Raspberry

Don't forget the rebate on the sururban with 0% finacing for 7 years.

Wed, 02/15/2012 - 12:59 | 2162274 Problem Is

+1... And while at your Federal Reserve Bank branch...

You extend your HELCO to 180% of home value to buy gas for your giant GM SUV....

to get home...

Wed, 02/15/2012 - 10:18 | 2161457 NotApplicable

In the end, there will be but one car company. They will produce two cars, a luxury SUV, and a tiny death trap.

Wed, 02/15/2012 - 10:23 | 2161470 lizzy36

A Gremlin of an El Camino Hybrid.

Dreamin big time here.

Wed, 02/15/2012 - 10:19 | 2161459 Piranha

Hey, don't ridicule ECB here, they are obviously trying to take in more valuable collateral to their book.

Wed, 02/15/2012 - 10:28 | 2161496 swissaustrian

Yes.

And look at what the national central banks are doing:

ECB Moves From One Set of Collateral Rules to Many
As struggling European banks seek financial lifelines by borrowing from the European Central Bank, individual central banks in the euro zone are expanding the type of assets banks can pledge to tap the loans. But not all collateral is created equal.
Seven of the 17 euro-zone central banks are crafting rules that will increase the diversity of assets that banks are permitted to pledge, allowing firms to borrow as much as €200 billion ($264 billion) more cash. In an aspect of the plan that is drawing scrutiny, each central bank is tailoring its collateral requirements to the needs of the banks it oversees.

http://online.wsj.com/article/SB10001424052970204883304577221301377525014.html?mod=googlenews_wsj

Wed, 02/15/2012 - 11:01 | 2161663 machineh

'each central bank is tailoring its collateral requirements to the needs of the banks it oversees'

... a euphemism for 'the inmates are running the asylum.'

By next year, they'll be accepting IOUs scrawled in red lipstick on cocktail napkins ...

Wed, 02/15/2012 - 12:49 | 2162230 Nobody For President

IOUs scrawled in red lipstick on cocktail napkins ...

I'll take that over Greek bonds ANY damn day

Wed, 02/15/2012 - 10:19 | 2161461 NEOSERF

But the mere fact that they are following in the US footsteps albeit 2 years later and the fact that the US has emerged from recession stronger than ever means that this is a buying opportunity of a lifetime in Europe which is why everything is going up....[note a trace sarcasm]

Wed, 02/15/2012 - 10:26 | 2161483 swissaustrian

Several German industrial giants (Siemens, BMW, Daimler, Volkswagen) have already acquired banking licences to be somewhat independent of the tbtfb.

Wed, 02/15/2012 - 10:31 | 2161513 GeneMarchbanks

Totally understandable. The collapse of the neo-liberal 'globalization' model will do that and I assume they want to remain credible as an industry that is competitive.

Wed, 02/15/2012 - 10:34 | 2161528 savagegoose

ill trade my shit box ford for a porsche, panamera or even caymen, but id want a v8 panamera.

ill even take a loan out at 1/2% rates ta,.

Wed, 02/15/2012 - 10:50 | 2161607 Peter K

But, but ,but FrAAnce grew at 1.7% annualized in Q4. Someone tell the Peugeot CEO to get on message:)

Wed, 02/15/2012 - 11:08 | 2161654 Atomizer

Privatize profits and socialize losses..

Tyler: Modifying your title, Pimp my PEUGEOT - ECB Style

Wed, 02/15/2012 - 12:26 | 2162128 Spastica Rex

I learned to dirve in a 1979 diesel Peugeot 504. Great car.

Wed, 02/15/2012 - 12:53 | 2162247 Problem Is

That's got to be the all time black-diesel-cloud POS of cars...

Wed, 02/15/2012 - 12:33 | 2162164 EmileLargo

For the life of me I've never understood why anyone would want to buy a Renault, Citroen or a Peugeuot if you can buy a Volkswagen or a Skoda (an Audi engine with a cheaper name - but even more reliable). The Germans have (quite rightly) wiped the floor with the competiition in Europe. VW posted gains in sales in a SHRINKING European car market last year. What else does one need to know about consumer preferences?

Also, why would anyone in his right mind put money in manufacturing in France given the record of French labour unions when you can invest right across the border in Germany? It's not like Germany is on the other end of the world.

Wed, 02/15/2012 - 12:52 | 2162238 Problem Is