Submitted by Tyler Durden on 10/25/2011 20:51 -0400
European Central Bank
France
Germany
Greece
International Monetary Fund
From Peter Tchir of TF Market Advisors
ECB Bond-Buying Should End With New EFSF, German Motion Says
I think this is one of the most important bits of news on the day. This and the fact that the Dutch finally said something - and it wasn't positive.
I have been arguing that the solutions create contagion rather than prevent it. I've also argued that the ECB and EFSF and to some extent the IMF are all the same pools of money.
Now that Europe has actually tried to do some calculations, which it is apparent that up until last week, they hadn't done, they are coming to the same conclusion.
On Friday the "haircuts" on Greece get serious. No more bogus high coupon principal protected notes - but real notional reductions of 50 per cent or more.
I believe the ECB has a portfolio of 55 billion of Greek debt. If average price was 80 then that is a 16.5 billion actual loss.
ECB, unlike our beloved FED, doesn't want to just print money so they make a capital call on their members. Yes, the same members that back the EFSF.
How many of those members even remembered the ECB can call for additional capital (it's why they are so happy to employ the double down don't frown trading strategy).
The terms of ECB capital calls are worse than
http://www.zerohedge.com/news/beginning-european-endgame?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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