[capitalismos] GAMES OF CENTRAL BANKERS

 

ECB now purchases government bonds in emergencies. Not only has this been prohibited until now, it also contradicts the central bank's overarching goal, keeping the value of money stable. Now this taboo is broken, and the very foundations of eurozone are eroded. ECB's independence' has now been shown to be nothing more than a sham, a chimera, a will-o'-the-wisp. In the end, ECB and euro will be punished for this decision to stand down from what had previously been considered sacred.

This policy effectively makes ECB a bad bank, a bank that buys up toxic assets as a means of helping out other institutions, all protestations of its president to the contrary. The pile of junk bonds on the ECB's balance sheet continues to grow. The fact that the ECB is keeping prices artificially high is downright encouraging banks to unload their risky assets onto the central bank.

Basil Venitis points out the European Central Bank has been buying up Greek bonds by the bucketload, even though Athens is already getting money from an EU rescue fund. There is a French plot behind the massive buy-up, as it gives French banks the perfect opportunity to get rid of their Greek assets. German banks, on the other hand, are not potential sellers, because they have made a voluntary commitment to Finance Minister Wolfgang Schaeuble to hold their Greek bonds until May 2013.

ECB is creating excess supply by buying at overinflated prices. In other words, many creditors are more inclined to sell their risky assets to the central bank under these terms. It's a free lunch. Anyone who doesn't take advantage of this opportunity to get rid of his securities now only has himself to blame.

The Governing Council of the European Central Bank(ECB) has reviewed the risk control measures in the framework for assets eligible for use as collateral in Eurosystem market operations. The resulting changes stem from the biennial review of the Eurosystem risk control measures and the Governing Council's decision of 8 April 2010 to introduce graduated valuation haircuts for lower-rated assets.

The new schedule duly graduates haircuts according to differences in maturities, liquidity categories and the credit quality of the assets concerned, based on an updated assessment of risk characteristics of eligible assets and the actual use of eligible assets by counterparties. The new haircuts will not imply an undue decrease in the collateral available to counterparties.

Greece might negotiate a restructuring of its debt before missing a payment. This would require investors to take a significant discount on their debt holdings and could include extending maturities. Bondholders might see haircuts of anything from 20 to 40% of the net asset value of their debt positions. The current two-year Greek-German bond yield spread is consistent with a 33% chance of a 40% haircut of Graecobonds.

Moreover, the definition of liquidity categories for marketable assets and the application of additional valuation mark-downs for theoretically valued assets have been fine-tuned following the review. In particular, all non-Jumbo covered bonds, including structured covered bonds and multi-issuer covered bonds, together with traditional (UCITS-compliant) covered bonds, will be classified in liquidity category III. The additional valuation mark-down of 5% currently applied to theoretically valued asset-backed securities will be extended to theoretically valued bank bonds (including uncovered as well as covered bank bonds, namely Jumbos, traditional and structured covered bonds and multi-issuer covered bonds).

Basil Venitis, an Athenian orator, notes that Greece needs the constructive destruction of bankruptcy! Let it be. Bailout of Greece is a destructive distraction. The default of Greece, a bottomless pit, cannot be avoided. The challenges facing Greece are similar to those that confronted Argentina, which defaulted on $95 billion of debt in 2001. There are a lot of similarities in terms of inflexibility of the currency, capital flight, huge taxes, and the risk of austerity measures leading to a sharp contraction in growth. Greece's financing needs are huge in the coming two years. It needs to prove to the market that it can drastically reduce expenses, taxes, sinecures, and Graecokleptocracy. The markets demand to see at least one Graecokleptocrat in jail! Let it be.

Venitis asserts the Fourthreichian bank stress tests are a hoax! Fourth Reich(EU) wasted an opportunity by not pushing harder criteria and by leaving important crisis scenarios out of the tests, such as Eurokleptocracy, gigaregulation, Antitrust Armageddon, gigataxation, especially VAT, a real estate crash, the collapse of certain markets, and total defaults of PIGS. The hoodwinking test did not bring any real insights. The whitewashed test criteria prevented what could have been an opportunity to really clean up the banking sector. Stress tests were never expected to show massive capital shortfalls, as banks have also already raised about 300 billion euros since the start of the crisis, which includes about 170 billion euros of government support to 34 banks.

Venitis notes one scenario used in the fake stress test was a drop in the value of Fourthreichian government bonds. The test assumed a 23% drop in troubled Greek bonds relative to their levels at the end of 2009. Five-year German government bonds, on the other hand, dropped just 4% in the scenario. The writedowns, only done on paper, were based on the securities that are already listed in the banks' account books in which all securities that are meant for sale must be listed at their market values. But most government bonds are held in the bank book, meaning they are not intended for sale but will be kept until they mature. Bonds held in the bank book were not included in the test.

A single speech of Ronald Reagan, the Great Communicator, drastically changed the world! Reagan's Time for Choosing speech in 1964 is the historic event that launched his magnificent political career. Smart words are more effective than smart bombs. For your conference, get a dynamic keynote speaker who can transform your people and your world. Take advantage of the best libertarian orator of our times, Basil Venitis. As many associations, colleges, industry groups, companies, pullpeddlers, rabblerousers, and many gluckskinds have discovered, speeches by Basil Venitis add immeasurably to the enduring value of a conference.

Basil Venitis doesn't restate what you can learn from regular sources, but he stretches your imagination to new horizons. Venitis is extensively involved in policy issues and the Global Tax Revolt. He is often a part of the process, working to shape and direct critical components of libertarian issues. Speeches by Basil Venitis enable audiences to truly learn, and provide fascinating, provocative venitist insights and analysis by slicing right through the political jargon and getting to the heart of the matter. It's no wonder that Basil Venitis is the most frequently cited on the Internet and is so often called upon to present venitism and to clarify issues for the public. The many advantages of using Basil Venitis include the magnificent seven:

* Value. A single speech of Basil Venitis will be cherished by your conferees forever, guiding them at the crossroads of their lives and your organization, increasing their efficiency, and improving the good will of your organization.

* Access. When scheduling Basil Venitis for your organization, you work directly with Venitis at venitis@gmail.com to craft a keynote speech that fits your precise needs. Venitis works with organizations to ensure that his speeches provide maximum value, and he shares their dedication to making their conference a huge success.

* Publicity. The announcement of Basil Venitis, leader of Global Tax Revolt and venitism, speaking at your conference will appear on most blogs and Internet groups all over the world.

* Insight. Given Venitis's great experience in speaking across the globe, and with his unparalleled knowledge of politics, economics, finance, sciences, philosophy, and spirituality, he can help you determine the keynote for your conference.

* Transformation. Your people will be transformed in shock and awe to a new level of knowledge, attitude, and organizational climate.

* Revampia. Your organization will be revamped with new soul, vision, and values.

* Affordability. The cost of having Venitis speak at your conference is 5,000 euros plus travel expenses from Athens.

__._,_.___

Reply to sender | Reply to group | Reply via web post | Start a New Topic

Messages in this topic (1)

Recent Activity:

• New Members 77

Visit Your Group

Switch to: Text-Only, Daily Digest • Unsubscribe • Terms of Use

.

__,_._,___