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Mark Grant And Rick Santelli On Europe: "It's A Ponzi Scheme To Be Honest With You"

Tyler Durden's picture


As Simon Hobbs noted this morning, Olli Rehn confirmed ahh that err "both the European Union and the ECB are ready to take action" but only conditional upon requests for aid. What is perhaps missed by most observers is what Rick Santelli and Mark Grant discuss in more detail in the short clip below. Greece managed to sell EUR4 billion short-dated bills this morning at remarkably low yields - not exactly the kind of thing that incentivizes political leaders to request aid - but how did they do it? Who bought it? Well, we suspect you know the answer but Mark Grant's clarifying response to Santelli's question concluded simply that the ECB-to-Greek-Banks-to-The-Bank-Of Greece-to-ECB circle-jerk is "in a sense, a kind of Ponzi scheme." Santelli's response that "it really is a rigged game" and that our reflexive response to the signaling of bond yields is remarkable given the manipulation; Grant agrees adding that "the real money guys are either out of Europe, getting out of Europe, or have cut back as much as they can" since simple math shows you that at some point Europe will have it's 'moment'.


Hobbs introduces, discusses Greece at around 3:00 and then Santelli and Grant take over at 3:40...


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Tue, 08/14/2012 - 12:36 | 2704074 vinu02
vinu02's picture

I wished governmet thinks about bailing out their citizen someday. I m tried of hearing bank getting bailout or country.

Tue, 08/14/2012 - 12:43 | 2704099 MillionDollarBonus_
MillionDollarBonus_'s picture

Peripheral debt is a screaming buy right now. The ECB and European commission are battle hardened and stand ready to take the necessary steps to promote economic stability. Only a fool would ignore these mouth watering double digit yields and pass up the investment opportunity of a lifetime.

Tue, 08/14/2012 - 12:49 | 2704113 No Euros please...
No Euros please we're British's picture

Alas, MDB, my worst fears are confirmed. You truly are a troll of the 1st order. Either that or a complete fool.

Tue, 08/14/2012 - 12:51 | 2704129 Roger O. Thornhill
Roger O. Thornhill's picture

MDB is just a gag- mocking the kool-aid drinkers and pollyannas - he probably laughs everytime he posts his nonsense.

As to this whole situation... it is the craziest thing I've seen in my lifetime. The whole thing really is a CONfidence scheme at this point. And how long until the marks get fleeced? Hard to say. Like musical chairs, no one knows it's over until the music stops - the question then is the ratio of players to chairs.


Tue, 08/14/2012 - 12:57 | 2704145 insanelysane
insanelysane's picture

We'll wake up one of these mornings and the European markets will all be closed.

Tue, 08/14/2012 - 13:15 | 2704215 Nage42
Nage42's picture

Well duh, it happens every year for the month of August, it's called "summer break" for the French.

I poiniently remember a coworker (French) who was explaining teary-eyed that he couldn't believe the level of slavery his employer held him to and that he "only" had 3-contiguous weeks of holiday in August, and had to reserve his remaining 10 days for the Christmas holiday... he was going on like it was the end of the world... that people would be so hard-put upon that they had to suffer with so little as 3-solid weeks of paid vacation with only 1 week in reserve for the winter.

peak oil ain't got nothing on "European peak piss-take {tm}."


Tue, 08/14/2012 - 13:28 | 2704288 Stackers
Stackers's picture

If a person did what they just described they would be prosecuted for a crime known as Check Floating. where you write checks to yourself to clear other checks, with none of the checks actually being good.

Tue, 08/14/2012 - 12:59 | 2704153 kliguy38
kliguy38's picture

just a computation for maximum damage remaining

Tue, 08/14/2012 - 13:17 | 2704223 SmallerGovNow2
Tue, 08/14/2012 - 12:56 | 2704142 A Lunatic
A Lunatic's picture

I wish those were my worst fears................

Tue, 08/14/2012 - 13:08 | 2704185 PiratePawpaw
PiratePawpaw's picture

Or perhaps there is a third option.

Perhaps he is employing sarcasm and acting as a straight man/devil's advocate.

Perhaps not, but that is how I choose to take him.

On a related note: the comment above about bailing out the citizen makes me think of the anonymous chinese citizenism citizen guy. An alt maybe?

Tue, 08/14/2012 - 12:47 | 2704114 tocointhephrase
tocointhephrase's picture

A bit like your advise to buy Facebook on the IPO? FOLLOW HIS ADVISE AT YOUR OWN RISK!!!

Tue, 08/14/2012 - 13:19 | 2704236 SmallerGovNow2
SmallerGovNow2's picture

AKA Farcebook...  or part II...

Tue, 08/14/2012 - 12:47 | 2704115 azzhatter
azzhatter's picture

MDB, you're barely trying anymore

Tue, 08/14/2012 - 12:51 | 2704127 francis_sawyer
francis_sawyer's picture


So with all your "gems" of recommendations of opportunities of a lifetime, when are you going to change your name to MillionDollarBAILOUT?

Tue, 08/14/2012 - 12:51 | 2704131 tocointhephrase
tocointhephrase's picture


Tue, 08/14/2012 - 12:52 | 2704132 Dr. Engali
Dr. Engali's picture

There are plenty of fools who get their investment advice from CNBC. I'm sure they will be glad to jump on the chance.

Tue, 08/14/2012 - 14:55 | 2704623 NidStyles
NidStyles's picture

It's called "the greater fool" for a reason.

Tue, 08/14/2012 - 12:58 | 2704146 kliguy38
kliguy38's picture

COUNT ME IN!!  I'll be behind you every step of the way .......... Bill Murray (Stripes)

Tue, 08/14/2012 - 13:01 | 2704161 LongSoupLine
LongSoupLine's picture

didn't you say the Facebook IPO was the "opportunity of a lifetime" too? 



Tue, 08/14/2012 - 13:02 | 2704162 Gringo Viejo
Gringo Viejo's picture

MDB....I'v got a double digit yield that'll make your mouth water. Whose your daddy?

Tue, 08/14/2012 - 14:55 | 2704625 NidStyles
NidStyles's picture

It is spellt "Who's". 

Tue, 08/14/2012 - 13:03 | 2704164 WhiteNight123129
WhiteNight123129's picture

 This time around MDB you disappoint me, look at Irish 10 Years, they trade inside Italy, while they were at 50 cents on the dollar last year. Ireland manufacturing to GDP is 22%, higher than Germany, so clearly it is a special case, maybe the only case of periphery where so far austerity seems to have been rewarded. There is no other way than pain, government shrinking expenditures, maintaining this tense situation for as long as necessary to keep the pressure on government to cut spending. Coene from ECB had a statement saying that it would serve no purpose to buy Italian and Spanish bonds if those government do not inflict more pain in the short term that is shrink the government expenditures to give some relief long term to the private sector. You can do better than that MDB, it is a temporary moment of fatigue I suppose. WHere is the surrealist poet in MDB today, is he on vacations?


Tue, 08/14/2012 - 13:09 | 2704188 prains
prains's picture


have you doubled down on face plant yet? or doubled over for the upcoming reaming?

Tue, 08/14/2012 - 13:27 | 2704274 Vincent Vega
Vincent Vega's picture

Last time I heard somebody use the phrase 'only a fool...' was when a friend of mine was telling me how much MCI-Worldcom stock she owned. I advised her to sell a substantial portion of it (at least enough to pay off her house and go ahead and fund the kids college). She replied 'only a fool would ever sell their Worldcom stock.'   just sayin' 

Tue, 08/14/2012 - 13:37 | 2704322 Anglo Hondo
Anglo Hondo's picture

MCI-WorldCom died a few months before my employee stock options matured. Only a quarter mill down the drain.  At least Bernie Ebbers is still in lockup - I hope.


Tue, 08/14/2012 - 13:52 | 2704375 Vincent Vega
Vincent Vega's picture

My friend worked there too. She lost about 800k. Sorry to hear about your deal. Pretty sure Bernie is still in lockup.

Tue, 08/14/2012 - 13:31 | 2704298 Q.E.easy
Q.E.easy's picture

+1 for being one of ZH's best trolls yet.... I can't believe theres still guys here who think your serious.

Couple months ago I thought you were slipping.... and then you go and deliver in spades!

Tue, 08/14/2012 - 14:18 | 2704483 monopoly
monopoly's picture

I wonder, is MDB related to Robot Trader?

Tue, 08/14/2012 - 16:05 | 2704892 Lucius Corneliu...
Lucius Cornelius Sulla's picture

And if you didn't spend your wad on all of that Greek debt that was a "screaming buy" you might have some left to buy more!

Tue, 08/14/2012 - 18:45 | 2705234 boogerbently
boogerbently's picture

Where's the "<sarc>" sign ??

Tue, 08/14/2012 - 12:36 | 2704079 SaveTheGreenback
SaveTheGreenback's picture

Santelli for Mayor of NYC!!

Tue, 08/14/2012 - 12:58 | 2704151 insanelysane
insanelysane's picture

What do you have against Santelli???

Tue, 08/14/2012 - 13:35 | 2704311 SaveTheGreenback
SaveTheGreenback's picture

Nothing!   He is the man.

Tue, 08/14/2012 - 12:36 | 2704080 Yen Cross
Yen Cross's picture

Lets also toss Italy and Spain in the three ring circus.

Tue, 08/14/2012 - 12:40 | 2704094 buzzsaw99
buzzsaw99's picture

either the ecb or fidelity bought them

Tue, 08/14/2012 - 12:52 | 2704097 TruthInSunshine
TruthInSunshine's picture

Steps in Ponzi Scheme using Fractional Reserve Model:



1)  Lend fiat (where did it come from? how was it created? it magically appeared) to club members at 0.25% interest.

2)  Incentivize club members to buy treasuries yielding greater than 0.25% interest.

3)  Buy treasuries from club members and pay them a commission for the privilege of selling that which has already been profitable (due to massive, radical, central fractional reserve bank QEeesing and Twisting).

4)  Incentivize club members to invest fiat received in exchange for sale of treasuries into equities, other bonds and credit/debt instruments, and other assets they would ordinarily not buy without implied (or express) backstop under anything remotely resembling free market conditions.

5)  Allow club members to mark their current assets [liabilities] to unicornium levels.

6)  Crowd out private investment by non-club members, as well as completely break supply/demand curve, any ability for price discovery, and all other market functions along the way.

7) Repeat steps 1 through 6 over and over and over and over.....

Tue, 08/14/2012 - 12:57 | 2704143 francis_sawyer
francis_sawyer's picture

8) especially with regards to #6 above, create paper instruments to control the price of PM's & other critical commodities

9) Enrich executive members of 'club' with lavish bonuses so that they can systematically stockpile large quantities of the same PM's & critical commodities at firesale prices, (as well as construct personal defense bunkers) for the day when the plug is pulled on the entire operation.

Tue, 08/14/2012 - 13:04 | 2704170 LongSoupLine
LongSoupLine's picture

well done TIS


Tue, 08/14/2012 - 13:25 | 2704267 SmallerGovNow2
SmallerGovNow2's picture

Good post Truth...

Tue, 08/14/2012 - 13:28 | 2704290 yrbmegr
yrbmegr's picture

It would be much more efficient to just hand out Benjamins on the steps of the Treasury Building.  How many you want today?

Tue, 08/14/2012 - 12:44 | 2704101 ITrustMyGut
ITrustMyGut's picture



<3 it when truth leaks onto the interwebs and airwaves.. even if discarded and unseen...  it gives me a chubby

Tue, 08/14/2012 - 12:44 | 2704103 Cognitive Dissonance
Cognitive Dissonance's picture

Rick Santelli speaking truth to power. May I suggest you avoid hot tubes and light aircraft.

Just a word to the wise.

Tue, 08/14/2012 - 13:15 | 2704217 Nadaclue
Nadaclue's picture

Nah, they'll just Breitbart Rick and he'll be found face down, out of his nightly stroll. Sadly, his heart just gave out of him.

Tue, 08/14/2012 - 13:59 | 2704399 NotApplicable
NotApplicable's picture

As long as he's talking about Europe, he's fine, as it still fits into the divide and conquer theme.

If he gets too far off base, he'll be let go and wind up over at RT, where he'll be portrayed as a loon by the MSM. Once again, fitting into their divide and conquer operation.

Tue, 08/14/2012 - 12:45 | 2704107 Atomizer
Tue, 08/14/2012 - 12:50 | 2704124 TruthInSunshine
TruthInSunshine's picture

Oh My God!

Is it?  Sonofabitch, bitchez!!!  We've been had!!!!

Tue, 08/14/2012 - 12:46 | 2704108 AnAnonymous
AnAnonymous's picture

'American' economics are based on Ponzis, eternal growth and all.

Give me your resources, I'll repay you with the same plus interests...

Give them to me 'cause I am the best at consumption and the most likely to repay you, yeah, sworn on that last one...

Tue, 08/14/2012 - 12:49 | 2704120 Dr. Engali
Dr. Engali's picture

You forgot to say U. S. citizenism.

Tue, 08/14/2012 - 13:13 | 2704207 PiratePawpaw
PiratePawpaw's picture

+1 for beating me to it.


Tue, 08/14/2012 - 15:11 | 2704682 akak
akak's picture

He also forgot to add "US Citizen nature is eternal".

Yes, 100,000,000,000,000,000 years from now, when the universe is nothing but an incredibly dilute and cold sea of  elementary particles, all matter having long since disappeared via proton decay, somehow US Citizens will apparently still be roaming the universe, blobbing-up all those random elementary particles, monolizing the speeching means, and farming the poor (whatever all that means).

Tue, 08/14/2012 - 12:46 | 2704110 Dareconomics
Dareconomics's picture

Greece is insolvent, but the MSM is not addressing this issue or the ongoing subterfuge perpetrated by the ECB to cover this up. I wrote about this a couple of days ago:

Tue, 08/14/2012 - 12:48 | 2704111 azzhatter
azzhatter's picture

Simon Hobbs is a complete tool. This guy is a perfect shill for the status quo, ignores all facts and just spews the "We are the EU" rhetoric. A perfect example of the entire CNBC network with a shitty Brit accent

Tue, 08/14/2012 - 12:48 | 2704119 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Fed ponzi, Europe ponzi, BoJ ponzi, let's just call it was it is - it is all a big ponzi based on a fiat standard which has no merit, no value, and it will all fail.

Tue, 08/14/2012 - 12:49 | 2704121 Meesohaawnee
Meesohaawnee's picture

truth.. i could swear one of only a million on the chi trib commentary board that is any voice of reason. your id looks familiar.

Tue, 08/14/2012 - 12:50 | 2704123 Bay of Pigs
Bay of Pigs's picture

Ponzi. Shell Game. Three Card Monte.

Take your pick.

Tue, 08/14/2012 - 12:54 | 2704135 Quinvarius
Quinvarius's picture

It is funny to see the media painting everything as if the market is hoping for something or predicting something instead of reacting to something that has already happened.  Just once I'd like to see CNBC say, "the market is rising today because we created too much fkn money since 2008".

Tue, 08/14/2012 - 13:00 | 2704154 TrustWho
TrustWho's picture

...I would just like a discussion of economic lags. All economist who have build and econometric model understand lags. Assume CPI is a good measure of inflation, current CPI would be a poor predictor of increasing or decreasing price inflation.

Tue, 08/14/2012 - 13:11 | 2704197 Nadaclue
Nadaclue's picture

Maria says "but, but, if CNBS tells the truth, and explains the truth to the muppets, we will be out of a job."

Tue, 08/14/2012 - 12:55 | 2704139 TrustWho
TrustWho's picture

....When people believe they can control outcomes....hell, leaders of Soviet Union had good intentions as they did not want to destroy the system that supported them....ooooopppps

Tue, 08/14/2012 - 12:55 | 2704140 asteroids
asteroids's picture

Greece is terminally insolvent. You can't fight the math or physics. The implosion will come overnight and with little warning.

Tue, 08/14/2012 - 13:46 | 2704348 XitSam
XitSam's picture

Can't fight math or phycics? You obviously have not met politicians. My state legislature often votes to stop the clock so they can pass more bills. 

Tue, 08/14/2012 - 14:00 | 2704405 NotApplicable
NotApplicable's picture

Bullet time.

Tue, 08/14/2012 - 13:06 | 2704172 Grey-Ghost
Grey-Ghost's picture

Come on, the West had stolen Inca gold (etc.), Iran oil (etc.) and now it can only keep pillaging by its armies or by its Financial Crime Cartel's shenanigans.

Even worse - for the West and its slow sinking into the quicksand grave - is that Chinese communist party does not hurry i.e. it will keep using its slave labour to supply the West with its trinklets (there's some irony in it - the westerners used colored glass to steal from others, now they use shiny iPhones themselves to tweet about their demise and "like" the same on the Facebook) during its fall to hell, it will keep buying REAL properties all over the world (think Africa etc.) and will keep, at a slower pace, buying West's funny money (debt) so to keep the illusion alive, unil they figure out how to take over.

They are not stupid. If, say, the Chinese decide to nationalize Apple and have its 800,000 workers working from themselves, the Fifth Fleet, or whatever is there, would nuke them. They know how insane and dangerous the West's sociopath Overlords are and need to move on slowly.

All that bull, re: Greece or other economically insignificant countries is just  a smokescrean - the dying American empire will use every tool at its disposal (dollar, i.e. petrodollar, oil stolen from the Muslim lands; its military) to keep tyrannizing and looting the world for the amusement and pleasure of its brainwashed, boiled-frogs of a nation.

Tue, 08/14/2012 - 13:07 | 2704177 youngman
youngman's picture

It is extremely quiet on the Gold and Silver front....very quiet...makes one wonder with all this "ponzi" going on....that it is so me when its quiet...something is going on...when you look at the Spanish banks ...Italy...Greece...Japan....the USA....we really are in trouble...they talk of raising taxes....but taxes are charged on earnings....and those are going to be tough in the new recession....and even if you blame the rich..they are going to be losing the most....and will cut spending the tehm 75% and they will quit...go John Galt....there are three arenas this game is playing out...the world arena where countries have a bunch of this fiat...and I think they want to get rid of it....the countries arena..where there are the government wrkers vs the rest of the population...and in your local household...where you are making your investment decisions on what you read...hear...or someone tells you...

These HFT´s failures are not failures or mistakes....they are testing something....for the big day....they are getting ready...look at the raid on gold today...they are very good...

I have a wierd feeling right now....something is up!!!!

Tue, 08/14/2012 - 13:11 | 2704198 Meatballs
Meatballs's picture

Sometimes even CNBS get it right.

Tue, 08/14/2012 - 13:13 | 2704206 JLee2027
JLee2027's picture

You have to learn to read these bastards. Santelli is a fresh breath of honesty. But for example, Biden, when he says "They're going to put you back in chains" is actually revealing his intention - to enslave people. Liars typically accuse others of what they are planning to do.

Tue, 08/14/2012 - 13:59 | 2704400 SmallerGovNow2
SmallerGovNow2's picture

Whomever down arrowed you must be a Bidenite tool...

Tue, 08/14/2012 - 15:22 | 2704741 Blankenstein
Tue, 08/14/2012 - 19:32 | 2705338 SmallerGovNow2
SmallerGovNow2's picture

LOL Blank!!!!  Very entertaining.....  Thanks...

Tue, 08/14/2012 - 13:18 | 2704234 Nadaclue
Nadaclue's picture

Well, ya gotta admit, no one can derail a thread faster than MDB.

Tue, 08/14/2012 - 13:21 | 2704242 billwilson
billwilson's picture

Well ... if they are a Ponzi ... so is the US Military Industrial Complex. US borrows money from China (its biggest enemy) to fund an insanely large, but now essentially useless military machine. It thinks it has bought strength, when it has only hollowed itself out and opened itself wide to a monetary attack.

Tue, 08/14/2012 - 13:40 | 2704335 walküre
walküre's picture

What else is there besides Angloamerican energy and finance imperialism and the military industrial complex and massive propaganda to defend the illusion? Nothing. China is already rolling over. If they started making noise, they'd be cut off in an instant.

Best to sit back, relax and enjoy family and like minded friends. Let them have their world and their illusion. Just don't make the mistake of arguing your reason and point of view.

Tue, 08/14/2012 - 13:26 | 2704277 Conman
Conman's picture

Farage has been saying the same for years. They will keep kicking the can, becuase simply the alternative is chaos and change to the status quo (living hte life as a fat cat politician/banker).

Tue, 08/14/2012 - 14:53 | 2704617 Shizzmoney
Shizzmoney's picture

This just in: central bankers, politicans like keeping their jobs

Tue, 08/14/2012 - 13:32 | 2704302 walküre
walküre's picture

circle jerk for sure

any different from the US created Super Ponzi?

Santelli is on to something ... but will anyone here in the US or in Europe understand what is happening and see just how naked the Emperors are?

Tue, 08/14/2012 - 13:38 | 2704323 youngman
youngman's picture

I think they will...I think they far they have been doing a good job keeping it hidden....but if you are a wealthy you want your portfolio full of Spanish bonds??????  I doubt it...I don´t even care if you are the King....I bet you are selling them....letting the ECB buy them up....and get into something gold..or some tradition like that

Tue, 08/14/2012 - 13:48 | 2704361 Whoahthere
Whoahthere's picture

Funny how Bernie Madonff's ponzi scheme landed him in prison, but the U.S. ponzi is O.K.  Two-class system, elites vs. slaves.

Tue, 08/14/2012 - 13:54 | 2704383 BlackSunshine
BlackSunshine's picture

I'm reading a book called "The History of Money" and I'm in the Roman era right now.

The Romans Empire (not republic mind you) survived for 500 years while devaluing the currency 200 fold. The sisterci had less and less silver in it over time.

I'm not saying it's the devaluation that kept them alive, what I'm saying is, just because devaluation happens, doesn't mean it's the immediate end.

We could go for along time on this model of ponzi's, scheming, shadow pools, fractional reserve, re-hypothecation, QE, etc....

Maybe money really is just a 1 and a 0 entry somewhere, and someone has to flip the right bit, and that's all the system needs to keep going. Ever thought of that? Party on.


Tue, 08/14/2012 - 16:16 | 2704918 TruthInSunshine
TruthInSunshine's picture

Those are all great points, and I just want to add that some believe that kick-the-can Ponzi schemes end with a bang, while others believe they end with a whimper.

Maybe they end both ways, but they do ultimately end, no matter how clever the schemers.

And when they end, it feels just like someone pulled the foundation out from under your home.

Tue, 08/14/2012 - 19:30 | 2705334 OneTinSoldier66
OneTinSoldier66's picture

I think that at the same time, it would also feel liberating.

Tue, 08/14/2012 - 13:56 | 2704385 SovietCong
SovietCong's picture

How is this ECB-to-Greek banks Ponzi any different than, say, QE2 POMO scheme?

Tue, 08/14/2012 - 14:49 | 2704581 Shizzmoney
Shizzmoney's picture

Imagine how bad things would of been this summer if Europe DIDN'T have EURO 2012 and London 2012 going on?

Now that their governments and corporations are back form their 3 month vacation........reality will strike back, soon.

TBH, this whole Euro crisis and the ECB's reaction to it, reminds me when KGB told Mike McDonald, after he lost the first leg of a heads up-4-rollz poker match in "Rounders": "It's fyne.  I'mk paying you, with your maney!"

Tue, 08/14/2012 - 16:16 | 2704916 SwingForce
SwingForce's picture

Total Hillarity SpinFest, "Green on the Screen"? I can't take no more.......

Tue, 08/14/2012 - 16:16 | 2704919 terryfuckwit
terryfuckwit's picture

Oranges and lemons

Tue, 08/14/2012 - 17:38 | 2705084 SRVDisciple
SRVDisciple's picture

most appropriate video:


Wed, 08/15/2012 - 01:10 | 2705954 indio007
indio007's picture

What came first the chicken or the egg? Funds buy the bonds that buy the funds? Or is it Sell Bonds for Funds that buy Bonds that you sell for funds...



I'm gettin dizzy......

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