Did Draghi Just Give Greece The All-Clear To Leave?

Tyler Durden's picture


ECB President Draghi just admitted that while the ECB Governing Council would like Greece to stay, they will not take any further extraordinary measures to save it and will do everything they can to preserve their 'pristine' balance sheet - which sounds a lot to us like - 'we are not lending/printing/supporting your financial system anymore as you are far too big a risk (and are asset-stripped) and to be honest, it might be better if you just left - since we have encumbered all your assets anyway'.

Bloomberg: Draghi Signals ECB Won’t Keep Greece in Euro Area at Any Cost

European Central Bank President Mario Draghi indicated that while his “strong preference” is that Greece stays in the euro area, the bank won’t compromise on its principles to prevent an exit.


The ECB will continue to comply with the mandate of keeping price stability over the medium term in line with treaty provisions and preserving the integrity of our balance sheet,” Draghi said in a speech in Frankfurt today. Since the euro’s founding treaty does not envisage a member state leaving the monetary union, “this is not a matter for the Governing Council to decide,” Draghi said.


The comments are the closest Draghi has come to conceding Greece could leave the euro region. Greece faces a fresh election on June 17 that may boost parties opposed to the conditions of its international bailouts, raising the specter of its exit.


“The Governing Council’s strong preference is that Greece will continue to stay in the euro area,” Draghi said.

As a reminder, when thinking of Europe, the shorthand rule is: assets. And specifically, the lack thereof. Why is the ECB scrambling to collateralize every imaginable piece of trash that European banks can procure at only some valuation it knows about? Simple - quality, encumbrance and scarcity. When one understands that the heart of Europe's problem is the rapid "vaporization" of all money good assets, everything falls into place: from the ECB's response, to Europe's propensity for infinite rehypothecation, to the rapidly deteriorating financial system. It also explains why America will be increasingly on the hook, either via the Fed indirectly (via FX swaps <http://www.zerohedge.com/news/european-fx-swap-line-usage-ny-fed-rises-f...), or indirectly via the IMF (such as two days ago when US taxpayers for the first time funded the first bailout check <http://www.zerohedge.com/news/us-taxpayers-commence-bailing-out-ecb-gree... the ECB using Greece as an intermediary).

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Wed, 05/16/2012 - 10:38 | 2431379 Mr Lennon Hendrix
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Gone, baby, gone......

Wed, 05/16/2012 - 10:42 | 2431407 Rainman
Rainman's picture

yup...only a delusional mad man would prepare a shit sandwich then eat it

Wed, 05/16/2012 - 10:49 | 2431427 Sudden Debt
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it all depends on the dressing

Wed, 05/16/2012 - 10:50 | 2431436 malikai
malikai's picture

It's ok guys. Snooki isn't pregnant after all!!

Wed, 05/16/2012 - 10:58 | 2431461 smlbizman
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finally, my federal taxes went to something worthy...is that wrong?

Wed, 05/16/2012 - 12:02 | 2431706 NotApplicable
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Well, we've progressed from PIIGS to PIIS, for what that's worth.

Wed, 05/16/2012 - 20:49 | 2433643 earleflorida
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the "g" in "PIIGS'  grew-up -- it became a domineering HOG!

*{"the bears get fed - the pigs get fed - the HOGs get Slaughtered!"}

Wed, 05/16/2012 - 11:17 | 2431540 WillyGroper
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Newt must be crushed!

Wed, 05/16/2012 - 11:30 | 2431592 malikai
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At least I know it isn't mine. Now I just have to figure out what to do with that burning rash.

Wed, 05/16/2012 - 10:50 | 2431441 Fish Gone Bad
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The more bread one has, the less shit one has to eat.

Wed, 05/16/2012 - 12:00 | 2431694 vast-dom
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drizzle for the shizzle.

Wed, 05/16/2012 - 16:36 | 2432980 LongBalls
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So if the US funds part of the EU bailout via the IMF. Then is it fair to say that the IMF's announcment of $2B in gold purchases is admission that the US is also indirectly buying gold?

Wed, 05/16/2012 - 10:50 | 2431440 CvlDobd
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"Remember the time when you said you'd kiss him if he ate a horse turd? He ate the whole thing! Then, she doesn't kiss him 'cause his breath smelled like shit."

Charlie Kelly to Dee on taking advantage of Rickety Cricket.

I'm telling you. Always Sunny has its finger on the pulse of the modern world's stupidity. It's great!

Wed, 05/16/2012 - 12:36 | 2431841 davepowers
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having just waded thru the comments to the obesity article, I must ask if a shit sandwich is low carb? Does it matter if you buy the shit processed from a Safeway or ah grow your own? And does anyone certify organic sandwich shit?

Wed, 05/16/2012 - 10:38 | 2431381 Rubicon
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All they need to do now is hash up some "exit law" and Bob's your uncle!

Wed, 05/16/2012 - 10:45 | 2431410 ArrestBobRubin
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No I'm not :-)

Wed, 05/16/2012 - 10:49 | 2431432 fuu
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Can't....resist...Happy Mondays...http://www.youtube.com/watch?v=m79WvFAWOqw

Wed, 05/16/2012 - 11:08 | 2431489 Global Hunter
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yes thumbs up thank you!!!

Wed, 05/16/2012 - 11:22 | 2431557 ThirdWorldDude
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Thanks for the reminder   :)


The markets need Bez to hand out some "happy pills" now.

Wed, 05/16/2012 - 11:27 | 2431587 fuu
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It would help a bit.

Wed, 05/16/2012 - 10:44 | 2431382 BKbroiler
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check out pics of Greece's newest Parliament member: 



Giorgos Germenis, who plays bass in Greek black metal band NAER MATARON, has been elected to the country's parliament. 

Hey, if they can learn black metal from the Norwegians, maybe they can learn how to manage their finances from them also.

Wed, 05/16/2012 - 10:53 | 2431449 Global Hunter
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that music is terrible wish him the best in parliament though.

Wed, 05/16/2012 - 10:57 | 2431466 BKbroiler
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Norwegian black metal is way better, and they don't screw around.  Burning churches down and killing bandmates is way more metal than joining parliament.

Wed, 05/16/2012 - 10:39 | 2431385 LetThemEatRand
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"the bank won’t compromise on its principles to prevent an exit"

I just puked in my mouth.  Then laughed.  Then cried.   Principles?

Wed, 05/16/2012 - 10:45 | 2431411 Cdad
Cdad's picture

I've puked in my mouth several times this morning, beginning this morning with the BlowHorn's description of Ken Longone as the "consummate capitalist."

Uh huh.  No one harboring anyone involved in this putrefied market can be described in that fashion...without inducing puke.

Wed, 05/16/2012 - 10:55 | 2431459 BeetleBailey
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I too, mistakenly had the sound slightly up on CNBC this morning. I wondered "what was that shit sound ringing in my ears" - then I realized.....

I reached to mute the damn thing (usually have on mute but for the data flow) and just caught one the their "financial intelligence" promo ads.....and erped up a little breakfast.

I don't know who the hell they think they are fooling with that self-promotion ka ka.......certainly not anyone that has any intelligence.

Wed, 05/16/2012 - 11:24 | 2431549 WonderDawg
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People get dumber just listening to their shit, and that's what they count on. But evidently, from the ratings I've heard bantered about, their viewership is down to three unwashed democrats, two holier-than-thou republicans, and a mildly retarded parrott that sounds just like Jim Cramer.

Wed, 05/16/2012 - 11:39 | 2431629 Nobody For President
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If you compromise principle, you lose interest.

Oh, wait...

Wed, 05/16/2012 - 10:40 | 2431386 Hugh_Jorgan
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Wed, 05/16/2012 - 10:41 | 2431394 Cdad
Cdad's picture

Duetche Bank already rolling back over...but never mind.  According to Simon Hobbs, I should simply listen to what Euro politicians say.

All is well.


Wed, 05/16/2012 - 10:42 | 2431406 Motorhead
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Typical.  Another royalist mouthpiece and etatist (S.H.).

Wed, 05/16/2012 - 10:54 | 2431455 Global Hunter
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typical southerner 

Wed, 05/16/2012 - 12:00 | 2431691 NotApplicable
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typical yank

Wed, 05/16/2012 - 12:22 | 2431779 Biosci
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typical people who stereotype

Wed, 05/16/2012 - 10:40 | 2431395 tocointhephrase
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Wed, 05/16/2012 - 10:40 | 2431396 BlueStreet
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Say it ain't so.  I was hoping for a '2013 is 2012 is 2011'.  

Wed, 05/16/2012 - 10:42 | 2431398 TheInfoman
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Women and children in the lifeboats first please!

Wed, 05/16/2012 - 10:54 | 2431452 Sudden Debt
Sudden Debt's picture

They're all welcome! We except visa, mastercard and maistro.

It's 50k for a child, 75K for a adult and if the woman are cute they can work of their passage.

For the kids we also offer a discount if the can assemble sportshoes for the next 20 years.


Wed, 05/16/2012 - 10:41 | 2431400 Cognitive Dissonance
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"Thanks for stopping by. Don't let the door hit you in the ass on the way out." - Draghi

Wed, 05/16/2012 - 11:02 | 2431477 jus_lite_reading
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Wow... if this is truly his intention then... the bank runs yesterday will look like breadcrumbs compared to what will happen if Greece leaves... 

Now, where did I put those Drachmas and 'ancient relic' gold coins?

Wed, 05/16/2012 - 12:05 | 2431714 NotApplicable
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Remember, the true action is the reaction. They're just breaking the eggs good before they finish the Euro-omelette.

Can you smell what Mario's cookin'?

Wed, 05/16/2012 - 10:43 | 2431403 midgetrannyporn
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The great and powerful draghi has spoken.

Wed, 05/16/2012 - 10:41 | 2431404 ArrestBobRubin
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Fiction writers have absolutely no chance these days.... Draghi From Wikipedia, the free encyclopedia

Draghi is Italian for dragon

Wed, 05/16/2012 - 10:49 | 2431418 hedgeless_horseman
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One-eyed dragon is Mandarin for penis. 

Odds Mario has a glass eye?

Wed, 05/16/2012 - 11:50 | 2431667 Sweet Chicken
Sweet Chicken's picture

+1 Funny shit

Wed, 05/16/2012 - 10:44 | 2431408 JJSF
JJSF's picture

Mission accomplished. Now that all assets have been handed to the banks  they can leave and continue to pay interest, road tolls, airport fees, utilities etc to their foriegn owners. Now on to the rest of europe.

Wed, 05/16/2012 - 10:48 | 2431412 slackrabbit
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run greece run, and don't look back...


better free in hell, than a slave in the EU

Wed, 05/16/2012 - 10:45 | 2431413 sschu
sschu's picture

Simple - quality, encumbrance and scarcity. When one understands that the heart of Europe's problem is the rapid "vaporization" of all money good assets, everything falls into place: 

Bad money drives out good.  Didn't I read that somewhere?


Wed, 05/16/2012 - 10:45 | 2431416 carbonmutant
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Greece needs Draghi's permission...??

Wed, 05/16/2012 - 10:46 | 2431417 BlueCollaredOne
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I can't wait to hear Nigel Farage's take on this. 

Long "I told you so's"

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