The ECB Has Opened Pandora’s Box

Tyler Durden's picture

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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Ahmeexnal's picture

They shall get what they deserve.

Time to wake up Victor Hugues.

macholatte's picture

The “Rule of Law” has been abrogated and tossed aside in the name of political contrivance.

Welcome to the Monkey House.

knukles's picture

Ah yes, the rule of law abrogated in the US (GM and Chrysler) and Europe (CAC's ECB).
I seem to recall that there's a neat passage in the Bible about Shitting on One's Self.  

Like the NYT's by-line, "All the news that fits."

Franz Kafka would be proud.
Eddie Bernays would have a bazillion job offers.
And all I get is another fucking by the gubamints.

LowProfile's picture

Looks like I'm getting an answer to the question I posed here

The ECB will either:

1. Print to cover the HF's bets.

2. Abrogate the contracts that underly the bets.


spiral_eyes's picture

Sorry to bring this up, but look at Germany's record. That should tell you which it will be.

LowProfile's picture

Sorry, I don't even know where to look to try and see what you are getting at.  A few search terms would have been helpful.


The ECB will either:

1. Print to cover the HF's bets.  (EUR bearish, USD bullish (until Benny and the Inkjets get busy)).

2. Abrogate the contracts that underly the bets. (EUR bullish (This would AFAIKT be very EUR deflationary)).


If history is any guide at all (and it's been a PERFECT guide so far) I'm betting they do #1 (I think they have to, otherwise all the debt deflates and the whole Eurosystem implodes).  Anyone care to poke holes in this thesis?

JW n FL's picture

Keiser Report: Scam On Epic Scale (E238)

Uploaded by on Jan 19, 2012

In this episode, Max Keiser and co-host, Stacy Herbert, discuss 419 scams and Tim Geithner's gimp. In the second half of the show, Max talks to financial blogger and semi-retired Wall Street executive Warren E. Pollock about MF Global, wealth confiscation and bank holidays.

KR on FB:

JW n FL's picture




Change the Law(s)!

Grab Customer Accounts!

1st Position for Counter Party Banks! 2nd Position for the Customers who Deposited the Cash!


Ahmeexnal's picture

Norway's super oil fund was heavily intested in greek bonds.

Seems like the norwegians are going to get fuxored by the ECB.

Paging Mr. Breivik, paging Mr. Breivik.

AldousHuxley's picture

Euro and ECB and EU is Europe's elite performing M&A with rest of the poorer cousins to boost their own status

Europeans at the top of the pyramid will stand taller while the base gets larger. Sucks for productive european middle class as their standard of living decreases.


Greeks just partied hard so they don't deserve much anyway.

German elites and Greek elites still have enough money in the bank not to have their wives and children ever work in their lives.

German workers who worked hard and saved money are screwed as they are asked to pay for Greek party of Olympic size.


What is happening is that labor is realizing how much they got sold out by their own masters.


YuropeanImbecille's picture

Why do you use the codeword elites?

Careless Whisper's picture

The EU was just one more step towards the New World Order (one world gov) and its about to SELF-DESTRUCT.  woooohoooo

Tyranny is Love's picture

Short term linear thinking like that will get us all in trouble.

The collapse of the EU was intended from the beginning.

If the intent of the NWO was to create a one world government/currency etc, then ALL Nation States must be destroyed (or subordinated to administrative districts without sovereign powers). This includes the US and EU, China, Russia. All must go.

Step back and view the master craftsmen at work. Geometric, nonlinear thought at work over centuries.


redpill's picture

I like Max Keiser a lot.  But do not for a second believe RT (yes that stands for Russia Today) is a biasless source of information.  The press is not free in Russia.  As I said, I like Max Keiser, I believe much of what he says is completely valid.  But don't forget who he works for, please.


The Big Ching-aso's picture



Man who open ECB Pandora's Box smell fishy.


AldousHuxley's picture

RT stands for Russia Today.....they are mostly true and competition is good to challenge US media brainwashing, but Russians will throw in propaganda like putin hunting tigers half naked once in a while.


RT = Russian oligarchy

PressTV = Iranian theocracy

Al Jazeera = Qatar Arabian kingdom

CCTV = Chinese empire

BBC = British empire


Max Kaiser speaks through RT or France24 (Eiffel Tower in the background), because he was banned in US for insider trading. Ex-wallstreeters are the best though to learn about the dirty secrets since they have nothing to lose.

ZeroHedge founder himself is ex-wall st.

So is businessinsider...


That's one of the reasons why wall st. doesn't do much layoffs despite they should be the ones hurting the most.....their employees will go on a tell all.


USA propaganda

"Iran’s rich eat ice cream flecked with gold as poor struggle to survive. The new wealthy are buying Porsches, getting caviar delivered to late-night parties, and eating $250 ice cream covered in edible gold "


As if Wall Street elites is any better as wall street's elites are buying their 10th Ferrari, getting cocane and hookers delivered to their late-night parties, and paying $250 in tips for $2000 sushi at Masa.

QuantumCat's picture

Truth can be a powerful weapon in the war of national interests, especially when the enemy has corrupted his own center of gravity... the belief among the people that they are free.  RT pursues the truth on many levels for desired effect, but as you point out, their agenda serves a maligned interest. 

redpill's picture

If there's one thing John McCain got right it is that Putin = KGB.  And they are far better at media and subversion than anyone in the western world.  If you don't know what subversion is, please just watch, it's worth every second.

As I said before, it doesn't necessarily invalidate everything Max Keiser or RT presents, but in the world today, never assume any media source is unbiased, not that I actually need to tell ZHers that.

Element's picture

USA propaganda

"Iran’s rich eat ice cream flecked with gold as poor struggle to survive. The new wealthy are buying Porsches, getting caviar delivered to late-night parties, and eating $250 ice cream covered in edible gold "


MANDY :  Well, I suppose I should have told you a long time ago, but... Well Brian... your father isn't Mr. Cohen.

BRIAN :  I never thought he was mum!


MANDY :  Now none of your cheek!! ... he was a Roman, Brian, he was a centurion in the Jerusalem Garrison.

BRIAN :  You mean... you ... you were RAPED?!!!

MANDY :  aww ... well, ... at first, yes ...

BRIAN :  Who was he?!!

MANDY :  ah!  Naughtius Maximus was his name ... mmm.  He promised me the known world he did.  I was to be taken to Rome, a house by the Forum, slaves, asses' milk, as much gold as I could eat ... and then, he, ... having his way with me ... vroom! ... like a rat out of an aqueduct!


MANDY :  Yeah, so next time you go on about the bloody Romans, don't forget--you're one of them!

BRIAN :  <In a fit of rage> I'm not a Roman mum, and I never will be! I'm a kike, a yid, a hebe, a hook-nose; I'm kosher mum!  I'm a Red Sea pedestrian, and I'm proud of it!


- The Life of Brian



That's where the idea comes from.

tabasco71's picture

Anybody else feel like a little... giggle... when I mention my fwiend... Biggus... Dickus ??

djudy003's picture

Any world government process would have the interests vested in the US at its pillar. The EU structure was greatly influenced by America. But something tells me, that the US would never put the EU in a position to succeed and be one step closer to become a success model for an eventual world government.

I would never underestimate the power of those who have vested interests in the US. Until they decide to leave (like they left Europe before) the US will always be number 1.


ChacoFunFact's picture

“We are grateful to the Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected the promises of discretion for almost forty years.  It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years.  But the world is now more sophisticated and prepared to march towards a world-government.  The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.” – David Rockefeller, Address to Trilateral Commission, 1991.

economics1996's picture

"You got fifty ways you're gonna fuck up. If you think of twenty-five of them, then you're a genius... and you ain't no genius. You remember who told me that?"

jeff montanye's picture

"they're going to know it's arson."

yes, many, many know a crime has been committed.  many crimes in fact.  even a good number of the soldiers and police know it.  but the ancien regime persists (still digging the victor hugues reference).  

when will the slaves revolt?

Sockeye's picture

Excellent quote, bears repeating:
“Necessity; the tyrant’s plea.” - John Milton

Michael's picture

New World Order Power grab.

Alex Jones is right about everything.

“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

Michael's picture

The Public/Private partnership between the ECB and the European nation states have failed miserably.

The Public/Private partnership between the Federal Reserve and the Unites States of America has failed miserably.

Element's picture

Alex Jones is right about everything.


I strongly disagree. ... why do you insist on accepting authorities and experts? 

It's a mental-ponzi mate.

Michael's picture

Not everything but almost everything. Is that better?

Element's picture

No, I don't believe a word he says.

I simply have no reason to, and also have no need to.

I can evaluate stuff myself but I can not determine if another has done so, or if they are any good at it.  

In the end only my own work, in that regard, matters to my understanding.

So I don't accept and don't need to accept that anyone may be almost always right about anything.

And I certainly don't accept that's remotely likely, in any case.

I especially won't trust someone who exhibits classic traits of a potential political demagogue and definitely is a sophisticated propagandist who is professionally (i.e. how he pays bills) shaping debate and perception.
Why do you want to embrace what he says? This is rhetorical, but it's also a serious private question.

Doesn't Alex Jones implicitly constantly lobby for your belief to be given to him?  Why do you want to be mentally subordinate to him?

Doesn't Tyler take the (I think valid and proper) approach, that you should believe and accept absolutely nothing he or anyone else at zh says, as a wise and necessary precaution?

I don't accept Tyler either.

I don't even accept my own positions, and reserve the right to contradict them.  I have no commitment to consistency because there is always more to learn.

What I do know is that it is impossible to express or convey actual Truth, verbally.

(Oops! ...)

TarzanNe1's picture

And now the same one who wanted the 1st spot are bitching about that the ECB is doning it to them!!

chipshot's picture








Zymurguy's picture

Time to load up the mag's, don the vest and make ready.

LowProfile's picture

Hey JW you douchebag - I asked a question in line with the topic at hand.  Why don't you try answering it next time instead of trying to hijack the fucking subject, you cocksucking asshole?!

Manthong's picture

It’s different this time.


“As when a conjurer takes a lease
From Satan for a term of years,
The tenant's in a dismal case,
Whene'er the bloody bond appears…

A baited banker thus desponds,
From his own hand foresees his fall,
They have his soul, who have his bonds;
'Tis like the writing on the wall.”


-Jonathon Swift, (1667-1745), “The Run Upon the Bankers”

WmMcK's picture

There are three things that are never satisfied, yea, four things say not, It is enough:
The grave; and the barren womb; the earth that is not filled with water; and the fire that saith not, It is enough.

- Solomon (just a little earlier)

Yeah, we haven't ever been here before.

Richard Chesler's picture

"Political contrivance"

Banksters prefer the term "God's work".


TruthInSunshine's picture

The law of contract?


Do you mean to tell us there was once upon a time whereby two parties could enter into a clear, unambiguous agreement, whereby each provided consideration (something of value) to the other, and that there were terms & conditions spelled out that defined the rights and obligations of both parties that couldn't be changed by one of the parties after the time that each signed the agreement?


How quaint.

bankonzhongguo's picture

Everyone should remember going forward that if they can do "ALL OF THIS," then they can easily cancel the debt. Period.  that even means YOUR DEBT.  Not just Greece.

Debt is bondage and the fact that they have the power to move in either direction, but in fact simply tighten the noose around their debt-slaves' neck means they, in time whether on purpose or accident, will strangle their victim/target/client/debtor.

There is no law anymore, no justice.

And that means your currency is losing value.

I would suggest every person everywhere as a sign of protest burn a note of their local currency on YouTube as a sign of silent solidarity that what these central banks and their shadow shareholders are intentionally doing to destroying the global financial system - only to remake a new order for their own designs.

Somehow I don't think you are asked to vote on this move.

The war is on.  Corporations and their billionaire controllers verses all other human beings, whether they be huddled in a rainforest, throwing rocks in a city square, silently studying for exams at university or just grunting out the day to feed their families or visit their aged parents.

I keep looks for signs of; "What is getting better?"

So far it only getting darker on the horizon. 

And its being done on purpose.

If you asked me years ago if this was possible, I would have called you a "nut."

Yet its really happening.

Day after day.



HoofHearted's picture

Is this a way to hold of ISDA? Or should this trigger the CDS as soon as a month from now?

Gold and silver, bitchez!

BlackholeDivestment's picture

Bankonzhongguo, I understand what you are saying and agree in principle ...but, let me tell you about something that may inspire you to come up with something other than burning the shit paper when it's to early to be used for needed heat. Lol 

...a long story short, I was burning some bills in the fire, with the same protestant lamentation, and all of the sudden one of the people that happen to be there at the time, who really has no clue about much of anything, because she was so young and poor, well, ...she reached into the fire. Let me tell you, that hit me hard and quick.

That was just one of my continuing revelations ...of me being a dumb ass. I gave her the rest of the cash a was going to slowly drop and burn, as I piously made my remarks about how evil the system is ...and all the crap we  who are watching know about. I realized shit paper has value and can still wipe an Ass clean in the short term. LMAO

Please, do not be a dumb ass like me. Learn from my mistake. Come up with a better idea. I beg you. You feel like burning something, maybe burn a flag or two while you have a mask on of a Central Banker or something. Lol. You could do it in front of a bank or government building and hand out the cash to kids who are walking with their parents while you say ''have some of your parents debt'' err something. Lol

bankonzhongguo's picture

Hold your G_d damn dollar, euro, dinar, yen, yuan, franc up to the camera and set it on fire.

If the Central Banks are so intent on setting fire to our future through debt and servitude, and if money is debt after taking us off a gold standard, then setting fire to the currency is the same as extinguishing our debts.

Burn it down.  And maybe in the process some of the assholes responsible or those that profit from our tolerance and obedience will get taken down in the process.

Its not enough to size up the phantom "elites," the "blue bloods," the "czars" and the like.

In addition we have to pass judgement upon their limo drivers, their chefs, their body guards, maids, lawyers and tax dodgers, their friends on corporate boards and the favorite charity ball, etc.

The direct servants of this class IS responsible for pulling the plug on these charades.

Until an IMF body man turns to their master and says; "No More." and fires a few rounds, not much is going to change.

Burn the currency is a statement to liberate the world from a future of usurious debt bondage and the cryptic and undemocratic designs therein.

Perception is reality.  After all that is what your fiat is.

BlackholeDivestment's picture

...yeah yeah yeah, and like I said, I'm ahead of you, my heal is bruised from kicking my own ass, but, my friend, the point being made, by the girl, THE SAME IMAGE AND REALITY OF THE EVIL SHORT TERM GAINS  of the Selfish Suiicide Vampire Squid of the Great Wal Mart of China, the producers of the shit paper and the burning image of her dusty ass. That young girl is a virgin child, not the Whore of Babylon. Just because we are offering our own claim it is still their image and it does not mean we are not unbecoming in this case, so long as she is compelled and in possession.

Did you not understand the Cremation of Care ritual slaughter of a child upon the Alter of Moloch? If you did, how is it that you would burn this young girl and not be guilty OF NOT CARING?

Put it to you this way. You do not burn the child in order to make your point. Do not cast your judgment upon her and expect not to be burned my friend. Wipe your ass and keep your hand out of the fire. When she can stand fast, as we comfort her with the heat of shit paper, we will not stand as fools out of time and season, we will be standing fast and doing no harm.

If we have shit paper to burn are we not careless assholes, just like ''them''? long as she is drawn like a Moth to the flame? Let us no be tempted.


old naughty's picture

If you don't mind me asking,

just how many years the term has been?

MsCreant's picture

Calm down. Both and more. Germany, Weimar. US, Print and randomly change the rules midgame to one's advantage (as Knuckles reminded us).

No need to make a choice of one or the other.

Check kiting, you and I "buy" or "swap" with each other.

Hide the sausage. I hide your debt on my books while your auditors look, then you hide mine on yours while my auditor looks.

Fake organizations and "funds" that are really power grabs. 

Sweetheart, don't you get it? Don't worry your beautiful soul. They are doing it any and EVERY way they can. You notice one scam, I see the other, and our Florida boy focuses on something else. Don't get bent. It's all Ponzi now. Forrests and trees, oh my!

LowProfile's picture

I know, but I'm trying to resolve a timing question (buy more gold NOW, or WAIT until the dollar rallies hard), and the douchebagmotherfuckingasshole JR is fucking up my crowdsourcing.

JW n FL's picture

Keiser Report: Scam On Epic Scale (E238)

Uploaded by RussiaToday on Jan 19, 2012

In this episode, Max Keiser and co-host, Stacy Herbert, discuss 419 scams and Tim Geithner's gimp. In the second half of the show, Max talks to financial blogger and semi-retired Wall Street executive Warren E. Pollock about MF Global, wealth confiscation and bank holidays.

KR on FB:

if you were to watch the Video..

the Video..


Would Describe the ANSWER!

To the Question YOU ASKED!

but since you are toooooo fucking stupid to be able to push the PLAY BUTTON!


"SELECTIVE INTERESTS" is the President being set in Bankruptcy Courts!

as it applies to Segregated Accounts!

You Checking, Savings, Money Market and / or Trading Account are by Definition Segregated Accounts.

Now if you don’t understand the BIG WORDS! used too pacify the Sheep! it is because YOU ARE A FUCKING SHEEP!

I answered your Question; you lack the ability to comprehend the language used to keep you in the dark... Hence the Video!

no good deed goes un-punished.