still reeling from theECB changing the rules - retroactively

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Wendy S. Delmater's picture
Wendy S. Delmater
Status: Diamond Member (Offline)
Joined: Dec 13 2009
Posts: 1988
still reeling from theECB changing the rules - retroactively

Zero Hedge had a real zinger yesterday - important enough that Dr. Chris is talking about it in a subscriber-only format,. There is nothing that says we cannot talk about it among ourselves, too. An excerpt:

Since the ECB can now retroactively change any bond contract to whatever it likes and with any nation in its dominion then the valuation of European sovereign debt must be re-examined for what it really is which is no longer what anyone previously thought. Starkly put; the bonds issued by the sovereign nations in Europe are no longer pari passu, on equal footing, with the bonds issued in the United States. We have just passed a clearly defined “break point” where the legal rules were changed to the great disadvantage of all the private debt holders. The risk of ownership of European sovereign debt is now infinitely more dangerous in my estimation than it was last week. has the full article.

Basically, the European Central Bank (ECB) changed the rules so that they go to the head of the line if Greece defaults on their loans, and mathematically there is no way Greece cannot default. Every single other creditor will get either nothing or pennies on the dollar. This rule change was made retroactively: that means it voids all earlier legally agreed upon things like contracts and such.

And what was their rationale for doing this? Because they can. It looks like theft of investor assets to me. Don't think for one moment this only affects the "rich". This concerns a lot of people who are older and hoping to live off their investments in retirement, and various government workers who have had state and local governments invest retirement funds. It can lead to a much morel likely global financial crash, because it rerodes TRUST.

Add that to the whole mess with  MF Global, which basically was a regulatory agency (the Chicago Board of Trade) treating client funds as one asset class instead of another, which stripped billions from pensioners and others who NEED that money to live. Not to mention the domino effect of a cascade failure running through our economies so fast that there is no long decline, there is a quick chaotic SHTF scenario.

Color me displeased, and helpless in the face of rapacious insanity. .



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