Change the Rules Part 2

 

 

 

by Larry Levin

 

 

In yesterday's epistle I wrote "Just because you call a rabid junk yard dog a healthy specimen doesn't make it so: it is still sick and needs to be put down.  This was fine when the rating agencies called a pile of dog crap (CDO) a perfect AAA rated bond, but the banksters knew that they were really junk and didn't care that the rating was wrong. Now, however, they're unhappy with the new found backbone of these firms."
 
"...And since the banking mafia is not allowed to lose money, the recent talk out of Europe is simply that they will ignore the ratings agencies when they implement a structured default.  When it no longer suits you - change the rules."
 
"...The news wires carried this earlier, EU FINANCIAL REGULATION CHIEF: EU COULD LOOK INTO POSSIBILITY OF SUSPENDING RATINGS ON EU COUNTRIES RECEIVING BAILOUTS"
 
"...Yes sir, when it no longer suits you - just lie - change the rules."
 
Well, they did exactly that.  The rating agencies have effectively been kicked out of Portugal because they dared to tell the truth.  Soon they will be kicked out of Europe altogether as the metastasized financial tumor continues to spread through the rest of the PIIGS.
 
In a press release this morning we read the following...

 
PRESS RELEASE - link
7 July 2011 - ECB announces change in eligibility of debt instruments issued or guaranteed by the Portuguese government

The Governing Council of the European Central Bank (ECB) has decided to suspend the application of the minimum credit rating threshold in the collateral eligibility requirements for the purposes of the Eurosystem's credit operations in the case of marketable debt instruments issued or guaranteed by the Portuguese government. This suspension will be maintained until further notice.

The Portuguese government has approved an economic and financial adjustment programme, which has been negotiated with the European Commission, in liaison with the ECB, and the International Monetary Fund. The Governing Council has assessed the programme and considers it to be appropriate. This positive assessment and the strong commitment of the Portuguese government to fully implement the programme are the basis, also from a risk management perspective, for the suspension announced herewith.
The suspension applies to all outstanding and new marketable debt instruments issued or guaranteed by the Portuguese government.
 
So I guess the European banking mafia is learning a lot from the clown-posse in the US. As I read it, the "suspension" is supposed to be "transitory" (Ben Bernanke) but one wonders if the whole single currency of Europe is "transitory."
 
Now that these lying banksters have changed the rules they can force a (INSERT NEW NAME HERE)-default and simply ignore all of the rules in their own Maastricht Treaty.
 
To be sure, the United States AAA rating is at least a big of a farce as what's happening in Europe.  We are broke, but for the kindness of strangers.  Now the banking/political mafia in the USA can follow the European lead when it loses its AAA status: just change the rules (read: ignore it).
 
Debt junkie?  Debt ceiling problem?  Ignore it - problem solved!
 

Trade Date: 7/7/11

E-Mini S&P Trades*

(before fees and commissions):

1. No "Secrets" trades filled today.

2. Algorithm positions (0)

3. "Reading the Tape" positions (2) ...combined Secret's, Algo, & "Reading the Tape" total...-1.00 

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