MAMBONI: Superlatives Fail. ECB Checkmates Bundesbank & All CBs As of 2.19.2012

[beefsteak]

Mamboni and other perspicacious GS-US'ers,

The last link below is a difficult read, but please find a quiet uninterrupted 25 minutes and read for comprehension.

It TRULY is different this time. And from this point forward.

NEVER in the history of debt instruments has one Central Bank put primarily another central bank (Bundesbank) and all other CBs SIMULTANEOUSLY into the cross hairs of a chessboard checkmate via Sovereign Subordination.

But it has been done this morning; trumpeted ala Bill Gross--posted courtesy of Tyler Durden.

Superlatives fail. ALL that is left is "sound and fury...." that and transitory precious metals holdings as the system faces reset.

All Sinclair could do this morning was re-iterate "please listen to the audio re: 5 US banks now being in default" posted on 1.30.2012 w/Ellis Martin. He's in bed with these guys, and is German by bloodline. No wonder he was furiously pacing and pontificating these last 72 hours.

Recognizing JES was furiously writing and warning of something major for the last 72 hours, we NOW have the why and the WHAT!

This isn't broken, it is shattered, trifurcated, and ALL SOVEREIGN game over.

Considering Jim Simon wrote this erudite piece PRIOR to this weekend is in itself, simply amazing.

Pimco's Gross ceremonially blows Shofar (שופר)

"Bill Gross Gets It"
Submitted by Tyler Durden on
02/19/2012 10:33AM EST -0500

The bond king [Bill Gross-USA] just tweeted:

Gross: #ECB subordinates all #Greek debt holders
& in so doing subordinates all holders of [all] Euroland sovereign debt. {{red emphasis=mine}}

He gets it. For those who don't, [link below] is an explanation.

http://www.zerohedge.com/news/subord...-default-world

beefsteak

[Horn]

You'd think Spain or some other would wise up & make the jump off firstly.

Been noticing protective measures being put in place all week.

[beefsteak]

Sorry, Horn, but you failed Reading for Comprehension part. Not too late to go back and slug through it.

[Horn]

International law is what it is, non-applicable unless approached.

[mamboni]

I got through half that tome at ZH before my head started to throb. So, it looks at though the ECB will wind up buying and monetizing the Greek sovereign debt, over-riding any blocking bondholders or CACs, yes? So basically, all other European sovereign debt contracts are virtually deballed, worthless, yes?

[letter_factory]

damn! wall of text!...my...only weakness............must....back click....

[Sparky]

I got through half that tome at ZH before my head started to throb. So, it looks at though the ECB will wind up buying and monetizing the Greek sovereign debt, over-riding any blocking bondholders or CACs, yes? So basically, all other European sovereign debt contracts are virtually deballed, worthless, yes?

Yow, that is a doozy. But I think you have the gist of it.

I don't really understand the workings of the world bond market, but I have come to appreciate that with regard to the world's fiat financial structure, it's the most important thing. The bond market is the massive cornerstone of world credit, and it requires that the appropriate relationship between risk and reward (interest payments) remains reliable. It's gotten so inter-woven with hedge funds and credit default swaps that it's become a house of cards. I'm no expert, but my sense is that you don't want the foundation of the world's financial structure to be comprised of a house of cards. As an outsider, it's hard to gauge just how precarious it is. I'm willing to respect the warnings of those who seem to understand how it works.

The world's financial situation is such that we have either a long slow grind ahead of us, or some kind of major dislocation or collapse. The bond market seems to be at the heart of the collapse scenario. What's freaky is that a Eurobond crisis would only further inflate the price of already overpriced US Treasuries (and the US dollar) to even great heights. That's why I think an AmeriCollapse is at least a couple of years away. The EuroCollapse has to happen first.

[beefsteak]

The jist of it is this, people. The Can Kicking is OVER. The ECB won.

Here are the distilled facts:

FACT 1)
The END GAME of sovereign debt is to accumulate key "blocks" of DISTRESSED SOVEREIGN DEBTS ISSUANCE, to put oneself into a superior litigious position when the "credit event" materializes, i.e., the 70% write-down agreed to by Greece govt.

FACT 2)
ROR for the Hedgie bond holders is not made on the piddling coupon interest. NOT EVEN CLOSE!

FACT 3)
ROR is not even made on the anteing up for the higher paying coupons demanded by the distressed debt market gamblers, which acc'd to Tyler can easily and quite normally run into the 50% per annum ROR....just based upon as to whether or not the Debt Issuer is listing port or starboard at any given moment, going toward default...

The ISDA doesn't ever utter that word...The CDS would kick in if they did.

FACT 4)
No, the money is to be made in the litigation on all BELOW THE TOP DOG BOND HOLDER, i.e., AGAINST the sub-ordinates holding sovereign debt, and holding physical collateral.

FACT 5)
In this case, the subordinates ARE the entire planet's Central Banks...ALL OF THEM. The Pimcos, Symons, Soros' are the Gambling Hedgies picking up the crumbs from the Central Bank's balance sheet castoffs are behind their respective CBs in this game now.

This headlock/ litigation is based upon who can climb on top of the debt dung heap and who also have the superior litigators. The returns acc'd to the chart in that article are between 50% and 2222%...just for the blocking chunk holder, calling the shots on the subordinated collateral holders.

FACT 6)
The reason this is a stunner, is that for the first time EVER in the history of national debt issuance, a CENTRAL BANK HAS CHECKMATED, SIMULTANEOUSLY ALL OTHER CENTRAL BANKS, in one fell swoop.

Just as there were "rules" that said "MF Global's customer money is segregated" turned out to not be true, turns out those MFG customers were subordinated by Bushy Jr's re-work of the Fed. Bankruptcy Laws here stateside --and all other brokerage customer funds elsewhere aren't segregated either....
..........there are international rules that say in a bond haircut/write down/liquidation event, all bond holders ARE in the same "class" and have to be treated fairly. In otherwords, all Central Banks and all Hedgies have to be treated alike under the basic Fairness assumption that has ruled the bond markets since before the firmaments were divided and the lesser light ruled the night while the greater light ruled the day.

FAIRNESS DOCTRINE NO LONGER EXISTS!

Up to this point, the top dog has been the clever Hedgies, the Soros', Symons', Gross's and other Hedgies putting the screws to Central Banks who are the ultimate guarantor of sovereign debt issuers.

CBs, their ability to print money, their ability to exercise sovereign imminent domain collaterialization demands, etc., these CBs ARE the COLLATERAL THEMSELVES. They are now Subordinated to another, quicker, more clever, more swift CENTRAL BANK...the ECB no less.

And for the First Time ever, A CB has risen above the Hedgies in this game of supremacy SUPERIORITY AND SUBORDINATION.

The ECB has a applied a HEAD LOCK to other what were formerly considered "equals" but are now SUBROGATED/SUBORDINATED Central Banks caught in this web of "helping out poor little old Greece, Italy, Ireland, Portugal, Spain...."

The ECB hasn't gone after some string of archepelagos off Greece, nor the Parthenon itself. The ECB has put a headlock directly upon GERMANY's CENTRAL BANK. Deutscheland's been distracted trying to accumulate a "blocking chunk" but didn't get it done first. The ECB did.

FACT 7)
GERMANY's CB HAS JUST HAD A GLOBAL MARGIN CALL.
DITTO FRANCE'S.
DITTO the NY FED RESERVE and every other CB on the planet.
Each has just received THEIR Global Margin Call from the superior ECB.

FACT 8 ) the Trickle Down effect
The big 5 Banks here stateside, just received THEIR Global Margin Call.

Being subordinated to the ECB in the possession of enormous chunks of NON-CAC debentures of GREECE debt which are performance guaranteed by OTHER Central Banks is a global margin call on their physical collateral, commodity positions, swaps, and anything else the ECB might want to amuse themselves by asking for.

The historical 2222% return is going to look downright niggardly in retrospect, as these Greecian Sovereign Debts owned by all the non- CAC bondholders has to now forfeit---from inferior litigation position--- to the ECB who is now in Senior Position.

----------------
Ask yourself this question: what DOES the NY Federal Reserve actually own? And where are they going to come up with the "money" to meet their margin call?

[Horn]

to put oneself into a superior litigious position

Yes, we've seen the less than spectacular results in our own Constitutional bodies, on a daily basis...

[Book]

Up to this point, the top dog has been the clever Hedgies, the Soros', Symons', Gross's and other Hedgies putting the screws to Central Banks who are the ultimate guarantor of sovereign debt issuers.

THE ONLY REAL VICTIMS WORLDWIDE