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The ECB Has Opened Pandora’s Box
Submitted by Mark Grant, author of "Out of the Box and onto Wall Street"
The ECB has Opened Pandora’s Box
“I believe that banking institutions are more dangerous to our liberties than standing armies. “
-Thomas Jefferson
I am not going to speculate about anything this morning. No guesses about what the Finance Ministers might do on Monday, no simple addition or subtraction that the data used to forecast Greece’s return to a 120% debt to GDP ratio is a falsification of the numbers, no mention that only nineteen cents of any bailout for Greece would actually go to the country; I am not going to discuss anything except what the European Central Bank has actually done and what we now know with a one hundred percent (100%) certainty and the horrifying implications of their actions.
“There are no necessary evils in government. Its evils exist only in its abuses.”
-Andrew Jackson
The ECB, on its own and without judicial or parliamentary review, has swapped their Greek debt for new Greek debt that is not subject to any “collective action clause.” They did this unilaterally and without the consent of any other sovereign debt bond owners of Greek debt. They did this without objection of any nation in Europe. They have retroactively changed the indenture, the contract made by Greece with all of the buyers of their bonds, when the debt was issued. There is no speculation involved in these statements, there is no longer any guesswork on what might be; the ECB swapped their bonds for new Greek bonds with the assent of the Greek government and it is now a done deal.
Having then done this; the implications must now be considered utilizing the clear light of unadulterated reason. The issue now is no longer a one-off Greek issue but a full on ECB issue. We know now that the ECB can retroactively change the rules, change an indenture, so that if the ECB can do this with Greece then it can certainly do it with any sovereign debt in Europe. If they can exempt themselves from a “collective action clause” then they can exempt themselves from any clause, in any sovereign indenture, for any European country. The fact that they are now clearly senior to any other bond holder, or more aptly put, that any private bond owner is now subordinated to the ECB is one consideration but hardly the most important one. The incredibly grim reality now is that any European and all European sovereign debt can have their indentures changed by the ECB when it is to their advantage. It is the “collective action clause” today but tomorrow it could be the maturity or the coupon or any other terms and conditions in an indenture. It is Greece today but tomorrow it could be France or Portugal or Italy. The “Rule of Law” has been abrogated and tossed aside in the name of political contrivance.
“Necessity; the tyrant’s plea.”
-John Milton
Since the ECB can now retroactively change any bond contract to whatever it likes and with any nation in its dominion then the valuation of European sovereign debt must be re-examined for what it really is which is no longer what anyone previously thought. Starkly put; the bonds issued by the sovereign nations in Europe are no longer pari passu, on equal footing, with the bonds issued in the United States. We have just passed a clearly defined “break point” where the legal rules were changed to the great disadvantage of all the private debt holders. The risk of ownership of European sovereign debt is now infinitely more dangerous in my estimation than it was last week. We still do not know if the IMF will demand and receive the same special treatment but I assert that it no longer matters. The actions of the European Central Bank are all that was necessary to radically alter the value of European sovereign debt and it is just not me but any number of large financial institutions that are in shock given what has happened with one of the largest and most respected bond investors in the world telling me that “financial repression is the softer word for it.”
Leaving anger and hostility aside; European sovereign debt must now be examined with a new set of metrics. How much yield would investors demand if an IBM indenture, as an example, had language that stated “This indenture is subject, at any time during the life of the bond, to any changes mandated by the Federal Reserve Bank.” Stated another way, what yields would be acceptable to bond investors if there was a Federal statute that said “All indentures in the United States may be changed at will by the Federal Reserve Bank upon their sole discretion.” No “Rule of Law,” no judicial appeal and a fait accompli whenever desired. This is, in terrifying fact, exactly what the European Central Bank has done and if we no longer know what we are buying and if the terms and conditions of an investment can be altered retroactively at will without the consent of bond holders and to the advantage of the ECB then either we should not buy these credits, as in Atlas shrugged, or yields should be in the mid-range of junk bonds because European sovereign bond indentures now are worth no more than the paper on which they are printed.
The European Central Bank, in a very misguided attempt to protect itself, has now opened Pandora’s Box. I doubt if they even realize what they have done; but they will, most assuredly they will. The consequences of their horrendous mistake will soon be upon them as institutions not coerced or forced into buying European sovereign debt will be leaving the playing field en masse as the realization dawns upon investors of just what has taken place. You cannot fool all of the people all of the time and the people that manage money for a living are not a forgiving group when governments try to supersede their lawful rights.
“Unlimited power is apt to corrupt the minds of those who possess it; and this I know, my lords: that where law ends, tyranny begins.”
-William Pitt
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Conservative "strict constructionalists" on the bench have given us such gifts as Citizens United which increased the power of the oligarchs immeasurably, and the same pubic hair finding tools have upheld the validity of arbitration provisions that eliminate an individual right to seek justice against mega-corporations through the jury system which at one time was sacrosanct. But keep seeing things in black and white and keep focusing on simple answers and blaming the "commies." I know it is comforting.
...Straight from the Ministry of Truth.
Go fuck yourself.
LTER is really trying to help you. You are causing your own suffering. It is a choice.
You have fallen into a dichotomy and can't get out.
I'm not convinced he's trying to be helpful, and if he was, I can do without that kind of help.
The dichotomy is a true one. Time to pick a side.
Tune in, turn on, shrug out. CYA!
I'll give you this, the whole fuck yourself thing he has now picked up has put him on the kind of footing I assumed you were in.
I adore fight club. Some of the topics we fight about don't have answers and are a distraction. That is all I really wanted to say, now, to you both. Folks who are on the same side go at each other and miss an even bigger picture.
All cheating, all the time. If you can think of it, they are doing it. I have focused on my private life, though I come here daily for news. It's coming and every day they prop up this sad sack reality they are selling, is one more day I have to get things squared away. I will not go after nickels and dimes in front of steam rollers any more. I have done it, and profited. The sound of things getting crushed is getting closer and closer to me. I don't have the ability to have the attention it will take to escape a flattening. I can't do it. If everyone stopped and knew everyone else had stopped, the likes of the Central Bankers would all be standing there, looking blatantly silly, holding their dicks. Our activity gives them cover for their nefarious antics.
If you don't need the cash for other stuff, get your PMs now. Possible you could wait and buy more, but is it worth it to be caught without it at all? If there is a small drop in price, will you really be able to afford a whole lot more? Is it worth it to have all the worry and your attention on this stuff? I decided to stop worrying and get on with it.
Good luck.
Very well put. The panic in the financial system will result in ever-increasing monkeyshines like what the ECB did here. I just bought a lot of gold at juuuust about an all-time high. But somehow I'm glad I did.
But it wasn't $1900, now was it! ;-)
Just wait at least three years to sell it. You'll be very happy.
I am in total agreement with you.
Be aware though, IMO, LTER seems to occasionally pose to be on "our" side in order to advance the statist, collectivist, globalist agenda.
The one good thing about how long this is taking though is that the longer the hamsters stay on their wheels, the longer it gives us time to prepare.
Good luck to you and yours, as well. Hopefully after all this is done we can meet in meatspace, and have a good laugh over it all.
"Go fuck yourself."
At least we agree on that, asshole.
Glad we both agree you should fuck yourself.
Ladies, why don't you go outside
We ARE outside.
Pick a side motherfucker!
Seems like picking sides has been the problem since man was able to speak.
What part of this is confusing and needs interpretation?
"...the right of the people to keep and bear Arms, shall not be infringed."
I am a strong believer in personal freedoms including the right to bear arms, but the right is anything but unambiguous. Does the right to bear arms include the right to have nuclear armed missles and missle launching systems in one's home? If you answer is that nuclear weapons etc did not exist when the Constitution was written, neither did most modern firearms so should all weapons other than the flint lock musket variety be confiscated? If your answer is that the right to bear arms includes all weapons, then how do you intend to prevent a single nutcase from going to the nuke store and acquiring such weapons, then blowing up an entire town without even leaving his home? If your answer is that the 2nd amendment only includes gun-type weapons, where does it say that? What about people who have been declared insane. Do they have the same right to arms that the rest of us do? If the answer is no, where is that in the 2nd amendment?
The world is not a simple place. The problems we face are complex. Trying to boil everything down to platitudes or ideology does not help anything.
LOL, the level of logical fallacy you have to engage in to try and support your positions makes Bill O'Reilly look the very model of Socratic Dialog.
You want full-auto weapons, flamethrowers, grenades, tanks, drones, etc. SURE, why not. You're only one person, you can only shoot one of them at a time. If the neighborhood you live in is uncomfortable, they can goddamn well strap up, or they can fucking move.
And if you can afford nukes, SURE, why not. ...But you can't, and never will be able to, so that's a totally spurious argument.
Again, go fuck yourself.
So your answer is that arms are arms. How very simple.
Bill Gates could afford a nuke if they were available to individuals, fucko. So could John Corzine. And the Wallmart heirs. And George Soros. And Larry Ellison. And facebook guy. And some of the more successful drug kingpins. So once again, you want to enable the unelected oligarchs to have complete power and control. Again, go fuck yourself.
They can also afford to raise armies and conquer large swaths of land in Africa and South America.
But they don't.
I wonder why?
Nice!
I think in logic they call this "identity."
Now you see LTER exposed in all his sordid, festering corruption.
Clive Barker should take notes.
It is very simple. It was written that way so jerk offs couldn't screw with it. Read it the way it was written and STOP INTERPRETING and twisting until it becomes blather!
shall NOT be infringed
SHALL NOT BE INFRINGED
SHALL NOT BE INFRINGED
Just so we are clear ... private ownership of all arms not banned by international treaties should be legal for private citizens?
International teaties sound like an infringement.
An international treaty that legalizes slavery won't make slavery legal in the US. Nor will one that bans private ownership of weapons
I see what you did there.
+1
Like someone who would use such a weapon would care about legality. And i don't want elected oligarchs to have complete power and control either.
Don't you know that the oligarchs will do what's best for you? LTER said so. In Washington DC we trust.
LetThemEatRand said:
Well, yes, simple minds would see it as simple. Let me try to explain a different perspective. I see at least three unaddressed points in this discussion that must be considered if this question is to be resolved in a rational manner.
First, a definition of arms would be helpful, since the case can be made that it's not a binary choice of all or nothing. My opinion is that the category of arms consists of any device or item which can be employed in defense against an attacker. Self defense is an inherent right, from an individual level to a national level. Consequently, the category of arms is broad by necessity, encompassing shillelaghs to Sunburns and more.
The only thing that I would exclude would be those devices or items which cannot be used without their effects getting out of control and becoming a tool of mass murder. This would of course rule out biological and chemical weapons, because plague bombs and and nerve gas are just fucked. I would also rule out nuclear weapons, because even if used against an isolated military target, they throw a lot of radioactive debris into the atmosphere which is then carried by the weather to fuck things up downwind.
The second point to be considered is the question of military arms in the hands of private citizens. The US Constitution lists issuing letters of marque as one of the enumerated powers of Congress. This alone indicates the expectation that fast, heavily crewed, and heavily armed ships would exist in private hands. That kind of says it all right there.
That brings me to the third point. Unelected oligarchs already have complete power and control. Governments around the globe are sold to the highest bidder. The oligarchs already have nukes and more. For the super wealthy, it is simply more cost effective to purchase entire governments. Why would they spend their own money on an elaborate delivery, maintenance, and support infrastructure for nuclear weapons? It would be a waste of money on something which could never be used and is only valuable as a threat. In the current system, the super wealthy actually make money from absurd military expenditures. Why would they ever want to change things?
"The world is not a simple place. The problems we face are complex. Trying to boil everything down to platitudes or ideology does not help anything."
Well then, by your OWN words, this would certainly argue against any sort of central planning.
I'll insure my own survival, thanks.
The options are not 1) anarchy, or 2) police state. That is the false choice that has been foisted upon us by the oligrachs. The founders of this country had it right, and they anticipated both a federal government and state governments. If your issue is merely a matter of how much power has been taken, then we're merely disagreeing on the details.
Then why do you keep arguing for #2?
Go fuck yourself.
Read this, douchewaffle...
The Declaration of Independence 1776: All men are created equal and there are certain unalienable rights that governments should never violate. These rights include the right to life, liberty and the pursuit of happiness. When a government fails to protect those rights, it is not only the right, but also the duty of the people to overthrow that government. In its place, the people should establish a government that is designed to protect those rights.
Surely, you aren't talking to me.
If you are, please clarify.
Limited government is not anarchy as you statist idiots would have everyone believe
Actually, it does. At the time that the Constitution was written, "arms" included all forms of weaponry, including heavy artillary and BOMBS. If they had meant it to mean pistols, rifles, and such, they would have said "small arms".
Nuclear weapons are too expensive and require too many skilled people to operate for a single nutcase to use one. Hell, that one guy even stole a tank, but all he could do was drive it. It wasn't possible for him to fire the thing.
Now, what might ACTUALLY happen is you have some private military organization like Blackwater obtaining nukes, which they can then use to immediately end international conflicts by entering on one side or another, something which brings the nuclear deterrent to the entire world without the danger of some "crazy" regime getting a hold of them (as they can simply hire them to initiate a counterstrike if they are invaded). This would go a long way to ensuring world peace, though the way they do it might be quite corrupt, propping up the regime that was the highest bidder, but that is certainly no worse than what we do now, which is to intervene with the CIA and military whenever the Feds feel like it.
Further, I would add that it would likely decrease support for extremist organizations, as the supporters of those organizations would realize that the consequences of their support could be extraordinarily deadly, both for them and for their enemies.
I might also note that it is certainly within the rights of the states to regulate the posession of poisons, and all forms of nuclear devices require the use of highly poisonous fuels, so there is you out if you absolutely must have a prohibition against private possession of nukes. But as an anarcho-capitalist, I would argue that private possession of such devices would in fact be for the greater good, just as private possession of rifles has been for the greater good (nations with extensive private armaments are rarely victims of genocide just like nuclear armed nations are rarely victims of foreign destabilization efforts and are never invaded).
The constitution makes no such exception ... and where does it end? A lot of explosives require pretty poisonous chemistry to make as well.
Where is the line in the sand?
That is a paradox, because protections provided by the constitution were orignally meant to apply only at the Federal level, as I recall. They were only later applied at the state level with the 14th amendment.
Also note that black powder and cordite do NOT conatain poisons. And there is no explosive that contains components that are within two orders of magnitude of fissile fuel.
So the question is, does the second amendment over-rule the right of the states to regulate possession of poisons?
My guess from the wording of the Constitution is probably "yes", as disgusting as that is from a state's rights perspective. But then, my reading of that amendment would also prohibit the states from regulating a very large number of things which they currently regulate (ie "No state shall make or enforce any law which shall abridge the privileges or immunities of the citizens of the United States"). This seems to have very far reaching implications, and I wonder just how many of them have been ignored by our rulers.
The Constitution recognizes our right to form militias and to keep and bear arms. The government can offer training and supplies to help standardize the militias.
The Constitution also recognizes our right to own warships, the most powerful weapons system in existance at the time, and which is not just an individual weapon. How else could the Congress grant Letters or Marque? Therefore, we have the right to own the most powerful weapons systems available, as well as weapons systems that require many individuals to operate them.
www.endofinnocence.com/2010/03/us-constitution.html
www.endofinnocence.com/2010/06/obama-wants-your-guns.html
The ability and will to use them is what needs to be refined.
@LTERand, you wouldn't be one of Vladimir Illich's "useful idiots" would you? Now back to the DU you go.
Ignore this humorless, statist, central planning troll (LTER). I gave him the URL many moons ago for the Huffington post where he'd get much more confirmational bias feedback from fellow fabian socialists. Its clear he would love to restrict gun owership from his idiotic nuke ownership "analogy". He has no regard for freedom nor the prmacy of individual as the driving force for human progresss.
Historically and it will likely be no different here this time it is the left who takes your freedom. Give me an example of the right moving to totalitarian regimes and I'll be all ears.
Who is it that keeps telling us that the US Constitution is outdated and was written by a bunch of dead white guys?
Who is it that keeps creating new rights that are not in the Consitution, such as the right to free healthcare and housing?
I think Tyler has his panties up in a bunch over nothing. Is anyone shocked? What? Governments can change the rules of the game when and how they see fit?
Of course they can! And it has been done countless times here in the US. Individual Investor rights are not superior to government rights. Just accept it. Bitch all you want, but at the end of the day you knew this. Youve seen it so many times recently and if you did a little reading you have seen it so many times in the past.
So. Man up. Dont like it, go take your toys and play in the cellar, cause there's no room upstairs for cry babies.
Crises bring out the worst of any system.
Individual investor rights are superior to government rights. The government though, has the guns, the cages, and an illusion of legitimacy. They're going to take what they want, but it has nothing to do with rights.
Go Check the Bill of Rights. Its hard enough for goverments to respect those Rights, let alone some distorted sense you have of Investor superiority.
We even have it in our constitution the concept of Eminent Domain. Granted it is supposed to be met with fair compensation, but you can bet that has not been the case in its historical usage.
As has been said before, the ECB can ignore reality but it can not ignore the consequences of ignoring reality. Will you be buying EU soverign debt now? I thought not. No credit event...no investor pari passu...no buy your debt.
Go check Bunds...they trade as well as US bonds. Oh wait, but we shouldnt buy that either, cause well, you know, the money printing and all. How about corporate debt? Hell no, better to buy bank debt cause we know the govt will pay that out at least, plus yields too low cause of US treasuries. So lets buy stocks...no wait, thats even worse. Fed is keeping that sucker alive by plunge protection team.
So let me think...housing? No no no, that is also artificially sustained. Prices will go lower. Plus all that Robosigning crap..who wants a mortgage...there a contract you cant count on!
So wait...i know...GOLD! Its the only thing to buy! But wait, buy old physical gold, cause you know, one day all that printed paper gold is going bust.
But wait, is physical gold really safe? Sure it is! Well, at least it is for now, till the US government decides to outlaw its possesion and trade as they did in the 1930s. Hey In fact read the Gold Reserve Act of 1934! Talk about contract rewrites!!
Folks....dont be sheeple..but dont be Bitchez either. You want to survive this mess...learn to read the writing on the wall and move with the flow...or you will be left in the dust...bitching on webblogs.
What a bunch of useless crap you spew!
Hardly anybody gave up their gold in 1934. It also has this funny quality of being accepted anywhere.
Really?...you will do anything to support your crap nonsense...
1) Contracts which were once made in terms of gold amounts were banned. So whatever gold you have in your backyard you can keep because its use in any significant way till 1970s (when the Act was repealed) was USELESS!
2) Even the massive physical gold that stays in the the coffers of central banks can be confiscated at will. Just look at Mubarak and Qaddaffi. Thats why Chavez decided to move his gold back home.
The government HAS and CAN make transactions in gold illegal. And unless you plan on sitting on a pile of gold in your backyard for the next 50 years...you may want to reconsider that very Ignorant montra that Gold is some how special.
Governemtns can do anything....they can ban any assets. Look at Italy! They banned cash transactions more the 1000 Euros! So all that pile of cash at home can only be used for small purchases...just like gold was effectively rendered useless after 1934 for any significant legal transaction. I guess you will buy your milk with gold...or maybe you think you are a third world operator who can make use of it outside the system.
Fool!
You're one dumb inbred jackass. Nobody claimed the government can't do those things. The point is there are consequences. The more a government cracks down, the worse the consequences. In a nation with 100 million guns, they should be careful how hard they push. Now go away, you inbred little troll.
Your eyes are pretty close together then...kinlover
I am only stating that the concept that you can only buy GOLD because evey other asset is manipulated by the governemnt is stupid. And if 100 Milllion guns are gonna come on to the street its not because the government controls the Bitchez here that own gold...Gold as a concept of the ultimate safe haven is ignorant. Buy it cause the price is going up...not because you think it is an ultimate safe heaven...
Fools!
Per 1934?
It's all right here http://en.wikipedia.org/wiki/Executive_Order_6102 ON WIKIPEDIA...
Here's the relevant bits:
"Invalidation and reissue
There was only one prosecution under the order, and in that case the order was ruled invalid by federal judge John M. Woolsey, on the grounds that the order was signed by the President, not the Secretary of the Treasury as required.[5]"
and
"The myth of a safe deposit box seizures orderAccording to a folk rumor on the internet, President Roosevelt ordered all the safe deposit boxes in the country seized and searched for gold by an I.R.S. official. A typical example reads:
Most of this text does not appear in the actual Executive Order.[12] In fact, safe deposit boxes held by individuals were not forcibly searched or seized under the order and the few prosecutions that occurred in the 1930s for gold hoarding were executed under different statutes. One of the few such cases occurred in 1936, when a safe deposit box containing over 10,000 troy ounces (310 kg) of gold belonging to Zelik Josefowitz, who was not a U.S. citizen, was seized with a search warrant as part of a tax evasion prosecution.[13] Approximately 500 tonnes of gold were sold to the U.S. Treasury in 1933 at the rate of $20.67 per troy ounce.[14] although other sources refute this amount stating that 56 tonnes (1.8 million ounces) as a more accurate amount [15], based on calculations using US Treasury data as well as from Milton Friedman’s book, "The Monetary History of the United States".
The U.S. Treasury came into possession of a large number of safe deposit boxes due to bank failures. During the 1930s, over 3,000 banks failed and the contents of their safe deposit boxes were remanded to the custody of the Treasury. If no one claimed the box, it remained in the possession of the Treasury. As of October 1981, there were 1,605 cardboard cartons in the basement of the Treasury, each carton containing the contents of one unclaimed safe deposit box.[16]"
You are an inbred, collosally dumb fuck, and likely a banker troll. GO FUCK YOURSELF.
Yeah PhilB you got it right. It's a rigged casino and there's not a fair game in the house. Only thing to do is watch and bet with the house when they switch in the loaded dice to fleece the sheep who bet on truth, justice, and the American way and believe in bond vigilanties, buy and hold, tooth fairies, and Santa.
This should be framed: As has been said before, the ECB can ignore reality but it can not ignore the consequences of ignoring reality
+10^10!
The stupid troll missed the whole point of the article...it was about the consequences of their actions. The Cuban government confiscated all private property when Fidel Castro took over. The result was no more investments.
Where, exactly, is this "upstairs" of which you speak? Are you writing from said location?
Perched high looking out over the mass hysteria. The fact the ECB swap screws current bondholders is valid and significant. But to act like it is some great violations of the ten commmandments of Investor Rights...is just delusional. As smart followers of ZH you shouldnt be shocked by this. It is no big deal in terms of contract laws. It will have a material impact, but its not the first and wont be the last. We are in crises folks. Get ready for the very unconventional. This isnt your daddys stock market...Its your granddaddy's.
Who is shocked? Nobody but a dumbass like you. TD is just pointing out the ramifications of government actions. If you think there are no consequences to stealing from investors, you are a dumbass. Look at what happened to Cuba and and what is happening to Venezuela.
The US government can choose to default on all debt if it wants. What are the consequences? Being a dumbass, you missed the point of the article
Please read up on the 1750-1775 era and anglo/colonial relations and the monetary policy invoked to control the unwashed.
My background is bit light in the sovereign debt indentures department... Will someone explain why Greece redeeming one entity's holdings and then issuing a new class of securities abrogates the rule of law? Was Greece not allowed to effect a partial redemption? Or was Greece not allowed to issue more senior securities without the consent of the existing, senior-most debt holders? Perhaps some combination of the two? Or is this article just a shrill attention grab?
Separately, my gut tells me the ripples from this 'screwing of a lifetime' will be de minimis. Banks, beholden to their sovereign sponsors, will continue to take inventory. Pension, other retirement programs, etc., also beholden, will continue to take inventory. Insurers, for diversification reasons, will continue to buy EU's paper. My guesstimate is bond prices will tick down by only a portion of the amount it would cost these big fish to hedge FX and interest rate risks associated with being 100% in, say, U.S. paper.
Man up. Dont like it, go take your toys and play in the cellar, cause there's no room upstairs for cry babies.
Translation: Shut up. Be a quiet sheep. Don't make trouble.
http://www.guildportal.com/Guild.aspx?GuildID=331102&TabID=2772249
Cellar dwellers, indeed.
The banksters have captured the govt, Phil.
Policy is set by banks for banks.
That would be the slight objection to these developments.
Unless you enjoy life in a fascist dictatorship.
are you paid to write this?
More likely, he's just an idiot.
'I think Tyler has his panties up in a bunch over nothing.'
Mark Grant is the author of the post, not Tyler. But it's true that while official contempt for the rule of law is dismaying, it's nothing new or surprising. Insisting on seniority for official bailout lending is standard procedure for the IMF, Paris Club, etc.
I wish Mark had explored the next step in the chess game: is the purpose of the ECB's swap really to facilitate a subsequent debt-swap-with-haircut for the remaining bondholders? Or, having insulated itself from loss, is the ECB ready to pull the plug on Greece and let the now-subordinated bondholders fend for themselves?
PSI (private sector debt swap) is still the ostensible plan. But having no skin in the game anymore, the ECB can refuse to print if EFSF is unable to raise enough bailout cash on its own ... and the 'Greek bailout' Chinese fire drill / bankster goat rodeo gets laughed off the global stage.
EFSF, one suspects, is a sad European example of 'big hat, no cattle.' Git along, little PIIGies ...
'...'Greek bailout' Chinese fire drill / bankster goat rodeo...'
LOL. Nice concatenation recapitulation!
Thanks for being a thinker and not bashing cause I dont agree with the premise of Pandora's Box being opened here based on Official sector seniority.
I think what is confusing everyone is that the ECB and EU need to be prepared for a Greek default in case Greece does it on its own. So ECB swap is a necessary step in either path...bailout/debt swap or sudden default.
Seems to me every move EZ members make are to inch closer stated (but increasingly stringent) objectives, but to be prepared for the worst. ECB did what it needed to do in either case. It signals nothing. They are hedged.
http://www.constitution.org/lrev/kmiec/judicial_activism.htm ___ c.2004
this activism is why the Supreme's are always going back to past decisions every decade - judgement, on constitutional law is straight forward and unambiguous
jmo
"constitutional law is straight forward and unambiguous."
You really need to get over your Red Team/Blue Team paradigm. Political affiliation and "activism" is only part of the problem. Let me give you a single example -- does the right to bear arms include the right to have nuclear armed missles and missle launching systems in one's home? If you answer is that nuclear weapons etc did not exist when the Constitution was written, neither did most modern firearms so should all weapons other than the flint firing musket variety be confiscated? If your answer is that the right to bear arms includes all weapons, then how do you intend to prevent a single nutcase from going to the nuke store and acquiring such weapons, then blowing up an entire town without even leaving his home? If your answer is that some moderns weapons should be included and others not, where exactly is that straight forward and unambiguous part of the Constitution again?
Where in his post is the red team/blue team paradigm? Maybe you should get over yours
LetThemEatRand your logic is faulty and your argument totally specious.
I recommend (re-) reading Vonnegut's "Mother Night" (and other works) as well.
Harrison Bergeron
Best thing the man ever wrote, and for me that gives him a pass on the other stuff.
Guess you didn't appreciate Breakfast of Champions, Slaughterhouse-Five, or Cat's Cradle.
Hit and miss, don't like the lefty leaning.
Venus on the Half Shell was pure brilliance though.
.
We now know what Jon Corzine is doing!
No, no... that's The Honorable Jon Corzine!
Get it right!
/s
"There is something behind the throne greater than the King himself.”
W. Pitt
"The world today is a cross between an Orwell novel and a Kafka novel." - Tom Woods
Just like the US threw out over 80 years of bankruptcy law in regard to GM and that "controlled" bankruptcy. It's finally hitting people that when put in the corner the govt. here and in other countries will do what it want, be damned what the stated law says. Where the law end, tyranny begins, they where truly right. Tyranny is rearing it's head and it can't be controlled.
It's one thing to counterfeit money to pay back debt... it's quite another to effectively enforce a change to the terms of private contracts by curtailing pari passu.
An exodus from European debt might start a default cascade that ends everything...
Hold onto your pants, bitchez!
It took them two years and all the "greatest minds" in Europe to come up with this shit??
Steal all the private money, and split the "profits" of the looting with the bankers??
OK. I'm in and ready to invest. Who makes the best guillotines these days?
These guys: Double Bull Matrix, Mathews Drenalin, Arrow Dynamic Solutions Diamond Edition Guillotine, Primos Jake Mobile.
http://www.youtube.com/watch?v=zKEHldxaCVk&feature=related
"Who makes the best guillotines these days?"
Depends on what Turkeys your after...The "gobbler guillotine" is a pretty effective tool!
http://www.youtube.com/verify_age?next_url=/watch%3Fv%3DrkMabADoA1s
You speak of Pari Passu as if its a god given right. How many contracts and laws were violated in the US financial ciris bailouts? What about investor equity rights when banks are forced to merge and material details of their financial statusis withheld?
Pari Passu in Greek law, good luck! They are going to retroactively instate Collective Action Clauses. Go call your lawyer! and good luck
I have nothing to lose on this. I'm not even a trader other than some physical metals — let alone a hedge fund specialising in distressed assets — so that's not the point.
The point is that if the ECB can do this it means that all debt denominated in Euros is subordinated. This will (eventually, once the market gets the message) cause a collapse of demand in European sovereign debt.
Either rates will massively spike, crashing the system, or the ECB will go on a money printing binge. These two options have been discussed above. German attitudes to printing money are frosty to say the least.
http://azizonomics.com/2012/01/17/sinking-beneath-the-waves/
Let them eat cake.
from the trunk of thy neck, is where we shall dine
It just gets worse.
Organized crime. Global dictatorship of debt slavery. Variant Perception shows it is better to default than to suffer austerity.
http://www.acting-man.com/blog/media/2012/02/February-2012-Eurozone-Brea...
Habeus corpus, contract law. What's next?
What does our friend Mish note on the Greek default? "There are only $3.2 billion or so Net CDS Contracts still floating around, a trivial number these days."
A lousy 3.2 billion. Indeed, Total Collapse. Whoohahaha! Greek default will be the greatest non-event ever. Told you sooooooooo!
http://globaleconomicanalysis.blogspot.com/2012/02/greek-cds-to-trigger-in-march.html
And please check out the included link. It states: "What does all of this mean? Simply that Greek sovereign CDS exposure is too small to be much of a factor in the Greek drama that is currently being played out." --- Bring it on, that "Armageddon". Whoohahaha!
And please check out Mish' included link (below). It states: "What does all of this mean? Simply that Greek sovereign CDS exposure is too small to be much of a factor in the Greek drama that is currently being played out."
Bring it on, that "Armageddon". Whoohahaha!
http://thedollargame.wordpress.com/2012/02/18/what-isda-got-right-and-wrong-about-greek-cds/
Boring world we live in.
I'll bite Mr. Troll sir, kind sir.
What Greece gets, the other little piggys will get and want too. It never was about Greece, only. Those billions, plus all the others who need to default, plus all of those who made bets on this who have no stakes in the game, but did pay for their ticket. Whoosh.
Not only that, but all the banks and investment houses that are leveraged to the hilt, how much of a haircut can they take before they go raiding customer accounts ala MFG?
Never underestimate the adversary. These fellows have been in charge for the last few hundred years, playing an intricate and interweaving game on many levels. They still have a few tricks up their sleeve.
Increasingly unmasked, it's becoming obvious, even to them, that they've been rumbled. But the fat lady hasn't yet sung.
For the small but growing percentage of the '99%' that look beyond our own immediate lives, it's something akin to being unplugged from the Matrix, literally. Disorientating.
Shit will get weird, progressively. Greece to be thrown to the wolves ...and the crumbling society will be beamed into your TV room to make you shudder and bow to their demands. Resist the fear and know it for the tool it is.
We may not hold any of the cards, but there are a fuck of a lot us.
"there are a fuck of a lot us"
Looks to me like a hell of a card.
Good observations.
The Matrix metaphor is right on.
You make me think of the frog metaphor, you know, the one weird Al Gore used to talk about how a frog in water, gradually warmed up, will boil? Only it applies to the "weird" you speak of. We are becoming inured to the weird because it is getting weirder and weirder gradually. That is how this works. Has to be. Either it is deliberate, or it is working out nicely, by accident, for them.
Thanks for the support up thread.
You may be interested in this site - http://snipurl.com/22al0g9 - the link points to a thread started in late '07 about the Fed. The rest of the site has some fascinating/disturbing insights into the world we find ourselves innocently part of. Take care though, you can't unthink an idea that's been implanted.
This scam will never fly. May the lawsuits begin.
The article says:
'the ECB swapped their bonds for new Greek bonds with the assent of the Greek government and it is now a done deal.'
So they had the consent of the Greek government for the deal. The article seems to imply there was something 'dodgy'about this! Not at all. The Greek government agreed, deal done.
Sadly the author, and indeed most of the world, and certainly the ZH part of the world, just do not grasp that the ECB knows precisely what it is doing. It knows.
It knows:
Yes, the ECB knows all of this, and it acts every day to maintain the Eurosystem's banking liquidity, to preserve the currency, and to force economic reality on the Eurozone countries, as painful as that may be.
I rejoice, and so should we all, that a reserve currency is ready for freegold, when the US's exorbitant privilege comes to an end.
The article says:
'the ECB swapped their bonds for new Greek bonds with the assent of the Greek government and it is now a done deal.'
So they had the consent of the Greek government for the deal. The article seems to imply there was something 'dodgy'about this! Not at all. The Greek government agreed, deal done.
Sadly the author, and indeed most of the world, and certainly the ZH part of the world, just do not grasp that the ECB knows precisely what it is doing. It knows.
It knows:
Yes, the ECB knows all of this, and it acts every day to maintain the Eurosystem's banking liquidity, to preserve the currency, and to force economic reality on the Eurozone countries, as painful as that may be.
I rejoice, and so should we all, that a reserve currency is ready for freegold, when the US's exorbitant privilege comes to an end.
"They had the choice between bankruptcy and dishonor; they chose dishonor. They will get bankruptcy later."
The ECB WILL realize what they have done once the whole system comes crashing down on their heads. They have gone so far down the rabbit hole, that there is no light left.
http://ericsprott.blogspot.com/
I expect the banksters and thier pupet politicians will blame "capitalism"
Which means there will be calls to raise taxes and fees to fund the bailouts.
The ECB WILL realize what they have done once the whole system comes crashing down on their heads.
They don't care. They'll scramble to put together a "new, improved" system. The newspapers will proclaim it a work of genius. The corps. will hail it as salvation. The politicians will endorse it immediately.
So long as the scared little sheep listen to them, they'll just continue on with Plan B, C, D, E or however many it takes.
So long as they have compliance, they'll never, ever stop.
no bid = no market
I think the printing presses have been doing the bidding with the assistance of the HFT Computers.
No market now = Know market "then"
I formed a new word "Shadowbid"
From wikipedia: Shadowbid or "shad-ow-bidz" "A shadowbid gives the fairytale appearance of a market, when in reality there isn't one"
??????? ??????????? ???? - Pushkin, I think. But I like your portmanteau better, it makes me chortle. <sorry, Cyrillic does not come through>
Submitted by Tyler Durden on 02/17/2012 16:32 -0500
http://www.zerohedge.com/news/latest-market-craze-stock-trading-robots-reacting-stories-written-robots
Markets / Algo’s need information to be able to operate..
When the Machines are producing the information...
that other Machines use to Trade...
There will be No! Need! for People… and their errors in judgment..
The entire system is a LIE! That will turn itself into a never ending self perpetuating Lie!
Used to lift a very few up… and to keep a Great! Many!! Down!!!
will they have this installed in time? before the Market finds a reason to stop working?
NAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA!
As long as the FED continues to Pour! Monies into the Market thru Open Market Operations!
there will be bottom feeders willing to trade for pennies! Or sub pennies! In sum cases! Or is it racks?
their will be traders trading until the last second! Or until one second past the last second given the ability to trade into the future!
http://www.zerohedge.com/news/its-official-hft-breaks-speed-light-barrier-sets-trading-speed-world-record
http://www.zerohedge.com/contributed/you-can%E2%80%99t-go-faster-speed-light-%E2%80%93-and-other-lies
GREED knows Nothing of Common Sense or Right or Wrong.. or even self preservation! Greed ignores ALL THINGS!
http://articles.mercola.com/sites/articles/archive/2012/02/19/drug-company-lies-and-uses-human-as-guinea-pigs.aspx
Preying on the Poor and Illiterate
This certainly is not the first time children have died during drug company trials. It's also not the first time a pharmaceutical company has been accused of being less than completely honest about experimental vaccine or drug risks, when they want to persuade poor, under-educated people into signing up for clinical trials.
For example, according to Nigerian authorities, Pfizer illegally tested an unapproved drug on children with brain infections at a field hospital in 1996. Eleven of the children died and dozens were disabled before the illegal activity was exposed.
Similarly, two years ago, the Indian government suspended Merck's Gardasil study after they discovered that four of the young clinical trial participants had died after receiving Gardasil, and more than 120 girls suffered severe adverse reactions. A civil society-led investigation into the vaccine trial highlighted serious violations of ethical guidelines for clinical research and informed consent rights of study participants or their legal guardians.
Again and again we see how major drug companies scheme to enlist people, who do not have full information about experimental vaccine or drug risks and are effectively turned into human guinea pigs in scientific experiments. In fact, this almost seems to be more the rule than the exception.
Likewise, we see how conventional medicine, in general, downplays the inherent risks of drugs and vaccines. Fourteen children died in GSK's pneumonia vaccine trial and, yet, we're supposed to believe that every single one of those deaths was completely unrelated to the vaccine. Another case in point is the shocking lack of respect for individual human life in the approval of a pediatric anthrax vaccine trial by the National Biodefense Science Board!
I could go on and on.. but people now need to go short some stocks and I would not want to stop progress!
Greed is Good! it is the engine that drives progress! LULZ! more like it motivates the slaves to lift up the few.. so that the few, themselves do not have to do the work themselves!
But the Greedy dont care! they are improving thier quality of life thru participating in the Lie!
The Greedy will be the ones jumping from windows! when the market is 4,000 - 5,000 (if not worse).
Enough of my Bad News!
go! enjoy your Sunday! Dancing with the Starz is on TIVO!
I am repeating myself but (posted on "skating" thread):
What a farce this all is. Anybody who is paying attention knows it's all bullshit. How much over can it be when CDS's won't pay out til you define at what percent a default is a default and whether one participates willfully or not? That is, if Goldmanites "appointed" to run Italy and Greece, MFG , or for fuck's sake, when Hankie Pankie held a gun to Congress' head and made them "revote" to get the spigots turned on weren't clues enough.
I am sick of observing/discussing all the finer little turds that are part of the toilet bowl filling shit fest we are all standing up to our necks in. Let the Grand Clusterfuck begin already! My sanity and good humor wear very thin.
I want to Believe in God.
I want to Believe that Good Guys Win in the End!
I want to Believe that this shit storm coming is part of some Grande' Plan to Flush the System Out!
But I am having a hard time seeing the logic to it all, if this is a Grande' Plan for the benefit of all.
It looks like the creation of serious World Wide Drama.. in which a Great Many will Suffer! and even more will Die!
All so The Powers that Be can Save Us from Ourselves! once again after enough of us have been removed from the equation.
I am sure the PTB consider themselves "the Good Guys". We are the evil, lumpen vermin, you see.
by the time the masses catch wind of what is going on.. all the mis-leading facts will be used to confuse the masses even more.
it is the JOO's fault.. they by ad large ran wall street! LULZ!
New Reports PLUS PLUS PLUS from 9-11 about the Jews Dancing with tons of explosives in their truck..
http://www.youtube.com/watch?v=I907IJH7_4w
NYPD Radio of Mossad on 9-11
http://www.youtube.com/watch?v=Huf2Kz7bV2k
Mean while the lil Blue Bloods get away with Murder..
and they will be the ones coming in to save us.. out of the fire and into the flames.
so, jumping ahead..
after Greed Crushes us all.. and after we use the scape goats provided.. what is left?
Agenda 21 For Dummies
http://www.youtube.com/watch?v=TzEEgtOFFlM
http://agendadocumentary.com/trailer/
http://www.youtube.com/watch?v=xQf_QfitmKE&feature=player_embedded
if you would like me to source and site how America has exported its Wealth to China? over the last decade? I can..
Sustainable De-Population! LULZ!
No Turd.
No bid= one sided market.
Which is not a market, because there would be no trades executed.
More like masturbation, really. Play in public long enough, hope someone joins you...
If we got really lucky, maybe they will get arrested for lewd and lascivious or something...
Masturbation means you are playing both sides of the market, meaning there is a bid, even if it is illegitimate. That is a seperate, but related issue.
I guess we are really talking about "legitimate" bid vs. what the shell game operator does to make it look like there are bids when there are not (HFT, Primary Dealers, etc.). Hmmm... They really put the "Mark" in market.
Your comments are thought provoking.
Funny, too, when you consider the implications among the medai, IE they can't tell the differnce between sex and masturbation.
Don't knock masturbation, it's sex with someone you love. And BTW, swinging both ways doubles your chance for a date on Friday night. Apologies to W. Allen.
Oh there will be a market. Crazy Coyote just looked down.
Dead cat bounce in 4,3,2...
Say who is GM selling al lthose cars too and where do they get operating capitol from??
"Say who is GM selling al lthose cars too and where do they get operating capitol from??"
My guess is HLS/TSA as their black 'copters don't have sufficient capacity to relocate all of us to their resort camps.
Yep.
Pretty soon the players will tire of the rigged rules and simply quit the game.
Yeah, we saw that effect during the flash crash. When trust is borken (hence the need for rule of law), financial systems collapse and fear is always stronger than greed for survival reasons. That's all anyone needs to keep in mind. This cannot end well for future debt issuance.
Haven't they already opened a large warehouse full of them already?
I'm surprised they haven't recruited the help of the Mafia. I'm sure 6 trillion in US bonds would be helpful right now.
"I'm surprised they haven't recruited the help of the Mafia."
Let's see:
The mob runs numbers, so does the govt.
The mob runs a protection racket, so does the govt.
The mob runs prostitution, so does the govt.
The mob runs extortion rackets, so does the govt.
Ad infinitum.
The only difference between the mob and govt. is size, and I'm not really sure which is which.
The ECB has solved the problem. Equities up big tomorrow!
I guess they never heard of The Law Of Unintended Consequences.
Exactly, and the retards don't understand that nothing happens in isolation. To buy Greece a few more weeks (or maybe minutes), they are willing to throw Italy, Spain, Portugal, and the rest under the bus. Brilliant.
It is all going according to the plan.
Its the US and FED that opened the real Pandora's box in 2008. This is all ripple effect in Pax Americana world.
I don't disagree with you in whole, but let's not forget that the powers care about America the state about as much as Nero cared about Rome the city.
They care about their own wealth, and so they care about CB construct, that's the wall around palace. Whats outside the palace...is secondary concern, but remember, even DC is capital of an elected government, and the people can hit them in the gut. Nero did get hit in the gut, coming to think of it...after the fire.
+1
Or then se could say 1971 when Nixon broke Bretton Woods, or we could go back to 1913. It comes down to deceit. When we lie and cheat then with the intent to take more than we intend to deliver, be it personally, or as a society, that is when we open pandoras box.
Whats the difference between a crate of real sovereign bonds and a crate of fake sovereign bonds?
The fake ones have more value than the real ones.
(BTW, Xe is now Academi)
Xe was kinda dumb, Academi sure is dumb, I thought USTC was tolerable - wish they would have just gone with that. Oh well...new name coming soon! LOL.
I just call them "the company formerly known as Blackwater." Skirts the issue of an ever-changing name.
The whim of the Tribal dictator tasked with determining the validity.
Whether the sovereign wants to give up the gold or not?
First, consider the possibility that the "fake" ones are actually real, and the "real" ones are being exposed as the valueless fakes.
Your question sounds like a joke without a punch line...