ECB Issues Ultimatum To Italy, Threatens To Halt Bond Purchases
Three months ago, in exchange for the ECB's expansion of its sterilized monetizations of bonds to include Italian BTPs, allegedly the only backstop that has prevented Italian bonds from experiencing an all out collapse to date, Italy was presented with a list of strict "austerity" demands, among which were spending cuts, higher revenues and labor reform. Since then none of these has occurred... or will occur, simply because Berlusconi has no control over the government, yet neither does anyone else, although everyone in the local government enjoys having a scapegoat for the total chaos. It appears that the ECB has just made it clear that the status quo is about to end, unless Italy does in fact push with something. And unlike other cases, where politicians on both sides of the table are happy to spout rhetoric while knowing well that nothing will change, in this case, courtesy of Italy largely untenable debt profile in which €166 billion in debt and interest are due in 2012, the ECB will have no choice but to play hard ball. Reuters has just confirmed that, reporting that The European Central Bank often discusses the possibility ending the purchase of Italian government bonds if it concludes Italy is not adopting promised reforms, ECB Governing Council Member Yves Mersch said. "If we observe that our interventions are undermined by a lack of efforts by national governments then we have to pose ourselves the problem of the incentive effect," Mersch said according to extracts of an interview with Italian daily La Stampa to be published on Sunday. In other words on Monday the market will have to not only digest the implications of what the implications of the Greek vote of confidence are (last we checked G-Pap is still PM, and likely will be for quite a while), but also what happens now that the ECB has issued an ultimatum to Berlusconi to get his house in order. The problem is that he can't. Not without stepping down, that is. At that point the Italian pseudo stability that everyone has been taking for granted knowing full well it is nothing but an illusion, will fall and expose all the rot underneath. At that point we will truly see just how "hedged" all those Primary Dealers are, who have perfectly offsetting short positions to all their longs.
And here is what an ECB ultimatum sounds like:
Asked if this meant the ECB would stop buying Italy's bonds if it did not adopt reforms it has promised to the European Union, Mersch, who heads Luxembourg's central bank, replied:
"If the ECB board reaches the conclusion that the conditions that led it to take a dec
ision no longer exist, it is free to change that decision at any moment. We discuss this all the time."
Since the ECB resumed its bond buying programme (SMP) around three months ago it has purchased some 100 billion euros of government bonds, a majority of which are thought to be Italian BTPs.
Mersch said the ECB did not want to become a lender of last resort to help the euro zone solve its debt crisis and said it was concerned that its job could be made more difficult by governments that "don't meet their responsibilities."
And the punchline:
"Our job is not to remedy the errors of politicians," he said.
No, it is merely to issue long overdue "or else" statements. Yet since the EFSF is unable to raise even €3 billion EURs to fund the Irish bail out, we are fairly confident that the ECB will be purchasing Italian bonds for a loooong time, because Berlusconi has figured out all too well just who it is that has the Mutual Assured Destruction trump card, and who stands to lose the most if said Destruction is indeed Mutual.
As a reminder, here is what the Italian debt/interest repayment schedule looks like. Good luck.
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Long only cme margin trade, eh? lol.
Mama Mia thatsa no apizza pie!!!
No, it is definately not. It is just another empty threat. The ECB will have very little choice. They will keep buying into the sunset. The alternative for them as they see it is likely to be worse. If worst comes to worst (again, as they see it) it could even threaten the existance of the ECB. Let the expert game theorists figure this one out. Should be very applicable.
Can't raise a measley 3 billion for the ESFS and now they are saying we will stop buying italian bonds if they can't get their country in order, yea right. They are figuring out that the US, Germany, France, Netherlands, Luxembourg etc.. Are afraid of anyone failing because if they do, it will be worse for them than Italy or Greece or Ireland. Because from the way things are being done, we are very close to the end of the game and they know it. How do you explain to most of the US investors or customers who use these financial institutions for trades that they can't get their money out of it. Even though like MF, they by law shouldn't have mingled customer accounts with the companies.
News from Cannes, German newspaper is full of articles that say that france, UK and US want German gold reserves as security for the Euro rescue:
http://www.focus.de/finanzen/news/staatsverschuldung/plaene-der-g20-in-c...
http://www.welt.de/wirtschaft/article13700369/Euro-Retter-schielen-auf-G...
http://www.faz.net/aktuell/wirtschaft/europas-schuldenkrise/schuldenkris...
why would the US want Germanies gold? It's a BR afterall...
Not the US, the Banks. US President represents the Banks.
For how much longer?
http://www.chicagotribune.com/news/local/breaking/chi-oak-park-joins-sites-of-antibank-protests-20111105,0,7563772.story
you gotta love Barry for having the audacity to at least try to have his cake and eat it too. Let's see, gets in office with Wall Street money, tries to stay in office by organizing protests about Wall Street. Wall Streets have become pawns for the political establishment. Let's face it, the government has been calling the shots for the last five administrations.
If by government you mean the families that own the central banks then yes, if you mean some figure heads that rotate in and out of power periodically then no. Government = Central Banks (old money roth/warburg/rockefeller etc.) = Mega-Corps. People who don't understand that equation don't understand the world. There is no seperate entity that is the government. It is merely one apendage of a vast interlocking concern.
If we go back to the gold standard the two most powerful organaziations on Earth will be the Vatican, and the Mormon Church. Both hold huge amounts of undocumented gold.
For further study look @ the inflection points of when Britain & US went off the gold peg (~1932 & ~1970), and the decline of Catholic global influence.
The conspiracy theorist in me says the Vatican may be pushing internal Italian politics towards a path in which the Euro will collapse.
Also having a Mormon president will be interesting, since his loyalties are to the Church first & foremost.
If it all goes back to religion in charge, I'm grabbing the next high-speed asteroid outta here.
religion = politics = system of control of masses throughout history
Mormons....non-profit tax exempt center for your assets with BILLIONS in revenue.
and you wonder why Mormons kids are overrepresented in Harvard Business School....They got the money!
I can't say I've known many Mormons but, the 10 or so that I have, except 1, have been very well off. And all 10 were at least 1/2 fucking crazy.
but I think that about most people, I guess.
Mormonism is a mix of christianity and free masonary.... Its founder, Joseph Smith was a mason and literally copied many masonic ceremonies and beliefs into mormonism. free mansonary is also a cornerstone of the NWO. The matrix is all encompasing, including the catholic church. an institution of any sway is infiltrated and controlled over time.
I know many fine upstanding mormons.... but, with respect to most of them, I can safely say that their ability to critically think about the church leadership and "conservative" political leaders has effectively been eliminated. and that is the point afterall, you can see why that would be useful.
serious cog-dis issues - guess that's why they seem crazy to me. The only family I've ever know that identified as masons was dirt poor and extra stupid.
Puh-lease, Catholic & Mormon gold will get stollen with the rest of the gold of the world by people with the bigger and better guns. LOL, in this day and age the only religion with political might is Islam. Judiaism isn't even a religion anymore, it's a social gentlemen's club by invitation only.
The first thing the Italian leader does when his economy starts to faulter and his leadership abilities start being seriously questioned is he starts ragging on the Pope and the Catholic Church. The Church as any type of political power is a big joke, especially in the United States.
when is the last time any major political figure actually took the Catholic church seriously? ....crickets, no?
duplicate post
You might want to dig a bit into that statement. Check out some VP links of this and past administrations for some clues.
LMFAO, did you say the only religious group with political might are the muslims? Then you proceed to write off the three most powerful religious groups in the world in favor of basically a third world hodgpodge rife with interecine conflict and which stands against usury and banking? That's where the power lies? LMAO! Wow!
If it all goes back to religion in charge, I'm grabbing the next high-speed asteroid outta here.
I'm sympathetic, but are we supposed to believe that having politicians in charge has been better?
Honestly, that's political propaganda, and the case for it is damn thin... aside from "everyone knows," of course.
put the bottle down - sympathetic but what?! did I say that?! Wha. . ?! Propaganda, blah, wha?! everyone knows what?
I think Tyler is a Mormon.
Long Mormons
Short Vatican.
We're short of titanium?
Tungsten. Titanium is used in high-temp/high-strength stuff like jet engine compressor blades, tungten is wrapped in a sheet of gold foil and stacked in some Army base in Kentucky....
Good, we have a strategic stockpile of this useful industrial metal and they were smart enough to disguise it as that useless relic metal.
http://af.reuters.com/article/metalsNews/idAFL6E7M50PH20111105
Thanks for that heads-up! I had been following FAZ in light of the unique positions the Germans find themselves in as the Deep Pockets of last resort. As I have studied German and spent time in Germany and Austria, I was also able to read the mood from the commentary.
Just registered and posted my first comment. My skills were rusty, but I got across the gist of my message: Don't trust the banks. Both the Euro and dollar are at risk of inflation, and the currency devaluation that entails. Best advice: buy gold and silver, keep it to yourself.
The Pope and the Mafia will not be amused.
Anyone ever ask how much gold the Vatican has, or should I say, ever get a straight answer when they asked?
I suspect they have more gold than most imagine and perhaps more than any other "country".
Vatican to become the world's central bank?
Wonder who would come to the Vatican's rescue if the Italians came knocking and said; "hand it all over". No one. They would all come looking for a share. That instantly solves Italy's issues, screw off EU. Italy is now the powerhouse of Europe because they have the riches from longest running looting scheme in history that they get to examine back to its dirty beginnings.
The Vatican is a sovereign nation. Mess with it, and the Swiss Guards will stomp yer ass.
all 100 of them?
100 Swiss guards with pikes versus the Italian Army.
Would be an interesting contest.
A little more relevent would be the reaction of 1 BILLION + Catholics.
Got asset forfeiture?
The Vatican has more friends than you would suppose. They've been playing that game for a LONG time.
amen brother
Usury is strictly forbidden by the Catholic church, at least at one point in time, hording however has been a many millenial long project.
Yeah, and vows of poverty were de rigueur. So tell me, how then did they acquire all that gold, silver, precious gems and real estate?
Hoarding and whoring ideas mon ami.
The Crusades
After the collapse-who will your neighbors be?
http://alt-market.com/articles/310-after-the-collapse-who-will-your-neighbors-be
double post
The last person who tried to fuck the Vatican's finances over was hung by the neck off London's Blackfrairs Bridge by the masons...so don't underestimate them
Could be bluff/posturing/poker by ECB. In the end there are few avenues open to them. They MUST support Italian bond mkt
Worked on Greece, how much longer can they keep it up?
Right, this is a bluff with no credibility. Do what I say or I'll shoot myself. Somebody supply the appropriate youtube clip.
Austerity now!
http://mediacenter.dw-world.de/english/video/#!/308947/Anger_in_Italy_at_cuts
http://www.dw-world.de/dw/article/0,,15513218,00.html
How about a quote instead - "Don't move or the nigga get's it" - Blazing Saddles
Do what 'e saaay! Do what 'e saaay!
Ask and you shall receive! Fuck these fucking jokers.
http://www.youtube.com/watch?v=fFl3pWbfVX8
Buying bonds IS a "remedy the errors of politicians" - no free market!
That don't have the money!
Don't sweat about it. We've got a boy who's handeling things as we speak.
Remember, I was here all night.
I know. Good Luck
Yes, and China will stop buying American Debt or sending their people to American Universites in mass. Riiiiigggghhht.
Blah, Blah, Blah. Everyone trying to be the "producer" or the "manufacturer" when ALL their customers are broke. Fucking stupid.
Cut through the crap, invest in areas of importance where people aren't, any questions?
Boring world we live in.
Aren't you late for your CNBC segment? Because this nonsense sounds better when it's on camera.
At last check Italy had the 5th or 6th largest Gold holdings as reserves. Berlusconi is holding the cards and knows it. What are they going to do let the Euro blow up? Italy will be just fine going back to the Lira
And like berlusconi said: 'recession? All the restaurants are full in Italy!'
And he has to book his teenage hookers six weeks in advance!
Italy is actually #3 per wikipedia:
http://en.wikipedia.org/wiki/Gold_reserve
keep in mind this list does not include the Rothschilds, who are reputed to own more gold than all these countries and IMF combined.
Could you please provide a link for your statement?
Like he said it's reputed...not a verifiable fact.
Here's a link for you on the reputed statement:
http://lmgtfy.com/?q=Rothschild%27s+gold+hoard
U S A
U S A
U S A
Good to know we are still #1 at something.
So glad we have Fort Knox...
Right?
Right?
Bueller?
Bueller?
The Italians have always had a very opportunistic relationship with The Euro/EU, as compared with the idealistic view held by the French. They will not be loosing much sleep over this feeble bluff.
I think you mean that they won't be losing any quality time with the mistress over this bluff
I think you mean that they won't be losing any quality time with the mistress over this bluff
At last check Italy had the 5th or 6th largest Gold holdings as reserves. Berlusconi is holding the cards and knows it. What are they going to do let the Euro blow up? Italy will be just fine going back to the Lira
It's ah me-eh Mario!
'At that point we will truly see just how "hedged" all those Primary Dealers are, who have perfectly offsetting short positions to all their longs.'
Funny in a tragicomic way...
As for the comment about not bailing out politicians... priceless.
Don't come any closer or I'll shoot!
I said don't come closer!!
Go away!! You're standing in front of my gun! Or I'll shoot i say!
HE! GIVE ME BACK MY GUN! Orrr..... Oh....
Monday is shaping up: margin change, Italy AND Greece.....
UK... RBS... Whatever :) there'll be plenty of things read on ZH on monday, and Tyler better get a good nights rest this weekend because he'll need it :)
Then the latest release from rumors.com. ssdd There is way too much negativity this weekend. It's almost certain to be the prelude to a ramp job. But hey, maybe this time it IS different.
This means Zero Hedgers are going to short. Bullish.
Everyone always shorts early, even zher's.
However as of now Italy cannot roll over 100 billion plus debt in 2012 without the EFSF or huge increases in ECB purchases.
Put that in your bong and smoke on it.
"Our job is not to remedy the errors of politicians," he said.
What have they been doing if this isn't so these last.... Since always?
Isn't this the basic job one of central banks?
1) Remedy Errors of politicians
2) Maintain full employment
3) Keep inflation under control
See they have fucked up all three! Glad they are here.............
Real job of Central Banks:
#1 control/create fiat currency conjured with a stroke of the keyboard.
#2 contract/expand said money supply to bring about economic crises
#3 place lien's on real goods and property
#4 further consolidate power for the owners of central bank stocks
Hat tip to this paraphrase from Truthinsunshine
ECB stops buying Italian debt= game over for EMU
and Berlusconi knows it.
What a fools errand these asshats in Brussels are on. It's all going down anyway so why not end the drama and let it happen already? Oh, nevermind-- there is still a bit more taxpayer wealth to excavate before that happens.
The ECB is bluffing.
Latest ploy to get IMF money
If Mersch had wanted to deliver an ultimatum he could have called Berlusconi on the phone. Instead he delivers this crafted statement in a news interview. Why? Does he think popular pressure will change things? Is he giving the ECB political cover for a decision which they know they'll hand down soon that will have extreme consequences? This is surely going to squirrel up the markets, is there some reason he might want to do that? If it were Bernanke I'd guess he's trying to get cover for QE3.
draghi is italian, says all about the "why"
OK OK , am I the only fucking one...IMF, ECB, Italy, Greece, Iceland, Germany ALLLLLL of it is an absolute disaster and so? Has it always been this way, have we always walked the razors edge on the precipice between absolute oblivion and salvation? Who the hell is the world bank and the IMF? I mean who invited them to control the world. Who's hegemony is this anyway.
Somebody tell me - has it always been like this or are we really on the verge of a systemic global financial collapse? What is it and why? And lets not forget the When?
AND ALL OF THIS TAKES THE ATTENTION OFF THE US BANKS AND OUR PROBLEMS...Brilliant ploy by the office of information and awareness...brilliant.
Armegeddon has many venues. Pick your poison.
Europe going to throw a temper tantrum in an attempt to get IMF money?
If Italy does not hand everything over to the banksters, the banksters will contrive a crisis and collapse markets until the Italians give them the answer that they want.