LTRO Long Term Refinancing Operations - Nu är helvetet löst

[kristensson]

Kort Resume (nja så kort det går iallafall), ECB får inte köpa skitpapper av Grekland Italien mm.
Dessa "underbara" politiker vad gör dom, jo, ECB lånar ut hur mycket pengar som helst till regeringar och stora Institutioner till 1% ränta och dom tar naturligtvis in säkerhet för lånen.
Säkerhet är inte guld hamnar flygplatser som man kan tro utan bara ett papper att tex Italienska staten är skyldig ECB 40 miljader € och på det får man låna 40 miljader € OCH för detta köper man Italienska statspapper med en ränta på idag 6%. Wooow gilla läget man tjänar 5% på spreaden utan att göra någonting. Ännu bättre ECB kommer att fråga varannan månad i tre år hur mycke pengar som stater och institutuiner vill låna. Känns förfarandet igen från andra sidan atlanten. Faaan man ska va bankir nu när det hänger låga gratisfrukter.
Vad får då ECB alla dessa pengar ifrån, jo "out of thin air" de skapas av dessa underbara ettor och nollor i datorer, de är alltså låtsas pengar, "hitt på pengar" om man så vill, de finns inte men skit samma programmet skall hålla på i tre år innan låntagarna skall betala tillbaka.
Man tror sig om att köpa sig tre år att lösa € krisen.
Med förhoppning att Europas medborgare vågar genomskåda bluffen och skjuter de teknokrater som fixat detta. Låt inte detta få fortgå i tre år.
 Kvar finns bara fattiga människor och ännu fattigare människor och vinnarna de som har något bestående.Om jag låter upprörd över detta så är det bara förnamnet, europas medelklass kommer att tillintetgöras.
Medborgare när skall vi upp på barrikaderna.
Ni som ännu inte är "all in" nu kan det vara dags att sluta titta på siffror i bankboken och skaffa något mer värdebeständigt.
Detta kära forumiter är QE på Europeiska via bakdörren att länderna köper sina egna skulder när ECB inte får
Sänder med en liten notis om detta från seeking alfa, men det finns säkert på många ställen att läsa.

Securities lawyer Avery Goodman explains at Seeking Alpha tonight how the European Central Bank's new long-term refinancing operations (LTRO) will constitute back-door quantitative easing, as big banks borrow from the ECB at negligible interest rates, buy the bonds of insolvent governments that the ECB is prohibited from buying, collect a handsome spread, and keep coming back to repeat the maneuver while the eurozone figures out how to monetize those bonds permanently.

Of course setting up interest-rate differentials that only big banks and investment houses can exploit long has been how the Federal Reserve has reliquefied and bestowed lucrative patronage on financial institutions in the United States.

The gold carry trade of the 1980s and '90s, apparently invented by Robert Rubin while he was at Goldman Sachs, before he became U.S. treasury secretary, was the same sort of mechanism to support government bonds and enrich financial institutions -- borrow gold from central banks at negligible rates, sell it, use the proceeds to buy government bonds, and collect a big spread risk-free as long as central banks kept dishoarding enough gold to prevent the price from rising and as long as they were ready to write off borrowed gold in cash settlement of leases.
 
That the gold carry trade devastated gold- and commodity-producing developing countries was no deterrent; indeed, this devastation, the suppression of commodity prices, was another objective.
 
Thus Western central banking becomes an ever-more totalitarian and parasitic system, which is why GATA long has been opposing and trying to expose it.
 
Goodman's essay is headlined "How Gold, Silver, and Platinum Will Respond to ECB's Money Printing" and it's posted at Seeking Alpha here:
 
http://seekingalpha.com/article/315636-how-gold-silver-and-platinum-will...

[kristensson]

Mer av samma skit från annat ställe
Ta er tid och läs och begrunda.

The European Central Bank Loses Its Virginity
And it means more than is apparent.

This post is adapted from analysis which appeared in The Strategic Planning Group.
 
Mario, relax . . . 
So yesterday, the European Central Bank (ECB) doled out €489 ($639) billion in loans to the European banking sector.

Why’d they do it? ‘Cause Europe’s banks are broke: That is, if all the crap they collectively hold on their books were marked to market, their liabilities would be greater than their assets. American banks shouldn’t smirk: The only reason they aren’t declared bankrupt for the same reason is because of the suspension of FASB 157 back in March 2009.

The ECB lent out the €489 billion against any and all collateral the European banks would put up. In exchange for this collateral—no matter how damaged—the banks got 1% loans, which is not merely free money but essentially subsidized money: Eurozone inflation is around 3%, and except for German and Dutch debt, all sovereign bonds are yielding more than 3%. Thus a 1%-interest loan from the ECB is like being paid to take out a loan—and who wouldn’t want that deal?

Ordinarily, no bank wants to be seen to be taking money from the central bank, because it makes the bank look weak, and therefore hurts its reputation on the markets. But in this case, 523 banks—count ‘em, 523—took the ECB money: Which proves both how fragile the situation really is, and how generalized that fragility really is. European banks no longer care what it looks like, as survival has trumped appearances.

Be that as it may, the banks took the money. And like their American counterparts, who took the Federal Reserve’s $7.7 trillion of free money and used it to buy Treasury bonds, the European banks are likely to plow this ECB largesse into sovereign debt: Thus they will make risk-free profits. And what bank doesn’t want that.

This was a major move, by the way: The ECB—after protesting for months that it was not and would never be the lender of last resort—has become . . . the lender of last resort: It has finally lost its virginity. Not only that, the ECB—like every recently deflowered naïf—will find it next to impossible to say “No” the next time the European banks come looking for nookie.

There are three aspects to this situation that I want to look at here:

The first—the least financially important, but an aspect which explains why Americans are so blissfully unaware of the seriousness of the situation—is the reaction of the financial press on either side of the Atlantic. I think the reporting gives a window on the biases of mainstream financial reporting in America, and why it cannot be trusted to give an accurate view of the historic events taking place—and how in fact it is blinded.

The second issue I want to look at is how this money will not go into every European sovereign bond in equal measure: Rather, some countries will benefit from the banks’ bond-buying spree, while some other countries will be hurt precisely because their bonds will be shunned. And this analysis of sovereign debt winners and losers will not be a financial calculation, but rather a political one.

The third issue is, I’m going to look at the effects of this initial ECB free-money program, and how it augurs the break-up of the Eurozone. Closely tied into the second item of sovereign bond winners and losers, this free money’s effects on the European sovereign debt markets will determine both who will be able to keep on getting financing, and which countries will inexorably be forced out of the eurozone.

A Tale of Two Analyses

This is what Floyd Norris, the chief financial correspondent of the New York Times, wrote yesterday about the ECB lending program:

In recent weeks, the new [ECB] president [Mario Draghi] publicly insisted the central bank would never do any of the things that Germany opposed. The bank would not drastically step up its purchases of Spanish and Italian government bonds. It would not directly finance European governments. It would not backstop European rescue funds or print money that the International Monetary Fund could use to bail out governments.

It would do only what central banks normally do. It would lend to banks.

It turns out that may be enough to stem the European crisis for at least a few years, and go a long way to recapitalizing banks in the process. [emphasis added]
Compare that to what Louise Armitstead, the chief business correspondent of the London Telegraph, wrote yesterday as well:

The record half-trillion euro take-up – which was far greater than the market had expected – initially triggered a “sugar rush” of euphoria as the move was hailed as a decisive “game changer”. But stock markets fell as economists and financiers recognised that while the imminent danger of another credit crunch had been averted, the threat of sovereign defaults had not.
In short, per the NY Times: “Everything is wonderful! Europe is saved!”

And per the London Telegraph: “The patient got morphine to dull the deathbed misery.”

Ordinarily, Floyd Norris is someone whose judgment I find to be sound—but in this case, he’s dreaming: To think that this will “stem the European crisis at least a few years” is frankly ridiculous—

—but it reflects a peculiarly American trend of burying-in-the-sand Ostrich Think, so prevalent among mainstream publications: An unwillingness—bordering on inability—to look at financial news in a cold light, and see what it actually means, rather than what we hope and pray it might be.

Now of course, happy news sells more than depressing news: The kid with cerebral palsy raising a 4-H cow sells more newspapers and gets more ratings than the story about the dozen Afghani schoolchildren killed by a drone strike.

However, the consistent underplaying of the badness of the financial news—and Norris’ piece is a prime example—creates a false sense of okay-ness among the people, the sense that, “Oh yes, the situation is being handled—no need to worry.” And this false sense of okay-ness leads to shocks, when there’s inevitably a financial disaster.

It also leads—simultaneously—to both complacency and panic: Complacency, because it foments the notion that everything is wonderful, so there’s no need to clean house in the financial markets, and really apply a decent, hard-headed regulatory framework to curb against the excesses of the banksters. Panic, because when all hell breaks loose, ordinary people feel that the crisis came like a bolt out of the blue, and don’t realize that it was actually a long time in coming.

The Telegraph and the Times are equally serious, equally reaching to the educated, upper-middle class demographic—but the Telegraph’s readers will be aware of what’s going on, and thus prepared for when the shit hits the fan in Europe—while the Times’ readers will not: For them, it will be like a lightning strike.

Loves Me, Loves Me Not

The second point I want to make is how the ECB’s free money will affect each eurozone country differently—specifically, it will affect their sovereign debts differently.

Which eurozone country will squeeze its people through the austerity wringer (and therefore be a good sovereign bond bet), and which will not squeeze its people (and thus be a terrible sovereign bond buying bet) is a political determination, by the respective governments of those nations—not a financial one. And this political decision—not the relative economic health and welfare of a country—will determine which nation gets additional funding through the bond markets, and which does not.

And therefore, which eurozone bonds are a good bet, and which are dogs.

We all know how the European bond markets are doing: German, Dutch and Finnish debt is doing great (10-years yielding <2.5%), French and Austrian debt not so great (+3%), Belgian debt a little worse (+4%), Spanish and Italian debt in the worry zone (+5.5% and +6.5% respectively), Irish debt in the red zone (+8%), Portugues debt really in the red zone (double digits), and Greek debt a total basket case (+35%).

European banks receiving the ECB free money will of course plow it into safe bets—the euro-banksters will turn a profit off the ECB’s free money at the minimum of risk, so as to bulk up those tasty year-end bonuses. (What, you think banksters are just an American phenomenon?)

Euro-denominated safe bets will of course be eurozone sovereign bonds—but not all European sovereign debts are equal: Some of them are more equal than others. Some give a tasty yield—for instance Ireland, Portugal, Greece—while others give a crap-yield—for instance Germany.

Question: Where would you invest a couple of billion in free euros?

Answer: The sovereign debt that yields the most—but which has the lowest risk of default or haircuts.

Question: Which countries have the lowest risk of default or haircuts?

Answer: Ireland and Italy.

Over the last year, five countries have ushered in “austerity” governments: Ireland, Portugal, Greece, Italy and Spain—surprise-surprise, they are all of the PIIGS.

However, which of these countries is the most likely to stick to austerity measures through thick and thin?

Ireland and Italy.

See, at this time, though all of the PIIGS are in the austerity camp, only Ireland and Italy will see it through: They will squeeze their people mercilessly—and allow their GDP to contract—so as to not run afoul of the eurocratic establishment. Everything they have done and said in the last year proves this: The Irish essentially taking over their insolvent banks and guaranteeing all the loan, the Italians with their recent show of austerity measures.

Portugal, Greece and Spain? Yeah sure, they’re doing the Austerity Jig now—but they are all on the knife-edge of saying “Fuckit”.

The reason is political: The governments of Portugal, Greece and Spain don’t have the political muscle to stay the course. There are enough opposition elements in those countries to present the people with a viable alternative—default. Hell, the opposition in Portugal is already calling for this, and rather vocally at that. And Greece—well, really, what’s there left to say about Greece, anything?

But Spain is the real worry: Spain’s economy has been suffering for too long—unemployment has been hovering at 20% for too long—youth unemployment especially has been stuck at 50% for too long.

Politically, Spain cannot afford austerity: Therefore, Spain’s debt—which is yielding 5.38, over 150 basis points under Italian debt, and a full 5% under Irish debt—is a lot riskier than Italian or Irish bonds, precisely because Italy and Ireland have the political will to stick with austerity, while Spain does not.

So as banks take the ECB’s €489 billion and begin to decide where to allocate this free cash, they will recognize that Italy and Ireland will pay up—while Spain, Portugal and Greece will likely not. So the ECB largesse will flow to Irish and Italian debt, while Spanish, Portuguese and Greek debt yields will begin to rise—drastically.

The UK will not get a bump up on their sovereign debt—after all, it’s priced in pounds. so the UK is on its own.

But Irish and Italian debt will begin to rise—sharply—even as Portuguese, Spanish and Greek falls—sharply.

The Fate of the Euro

As Irish and Italian debt is bouyed by this ECB free money, Spain’s, Portugal’s and Greece’s debt will begin to collapse—

—and thus the rising yields will make the debt situation in Spain, Portugal and Greece a self-fulfilling prophecy: As the markets ignore their bonds in favor of Irish and Italian bonds, their costs of financing will continue to rise, until they can no longer finance themselves on the debt markets—

—and this is the dividing line between the countries that will remain in the eurozone, and those that will exit it: Italy and Ireland will stay, while first Greece, then Portugal, then finally Spain exit the eurozone.

At SPG, we have already discussed (in fairly exhaustive detail) the shape of a eurozone break-up—both a complete break up, and a partial one, and the financial effects of each of the variables.

If the European Central Bank continues with this massive lending program—and there is absolutely no reason to think that they won’t—then it is inevitable that funds will flow to Ireland, Italy and France, driving down the yields on those sovereign bonds, while Portuguese, Spanish and Greek debt yields will begin to rise.

Thus Portugal, Greece and especially Spain will find it impossible to continue funding themselves.

Thus these three are the ones that will exit the eurozone.

At this time, Spanish debt seems a better bet than Italian debt—but the future considerations of sovereign credit-worthiness will no longer depend on financial reasons, and begin to depend on political ones, specifically one question: How hard are the governments of Italy and Spain willing to squeeze their people in

[kristensson]

En bidragande orsak till fallet på guld/Silver nu kan vara att alla de som lånade tillsynes billigt, 1 % och lämnade olika mer eller mindre värdelösa säkerheter för sina LTRO lån då nu säkerheterna för de som lämnat bl a statsobligationer har minskat och då kommer "margin call" som ett brev på posten, alltså måste låntagarna fram med mer säkerheter.

Så vad har dom kvar - sina PM kanske, tror en del fått släppa till PM för att backa upp sina säkerheter.

Känns som att PM är på väg att damsugas från överbelånade länder till deras kreditgivare.

Om det är så då ska vi nog räkna med fortsatt kräftgång för PM ännu ett tag till.

[kristensson]

Nu börjar återbetalningarnas tid - spännande se hur detta fortlöper.


http://www.di.se/artiklar/2013/1/21/aterbetalning-av-lan-lyfter-rantor/