Thursday, February 5, 2015

ECB: Banks can't use Greek debt as collateral

The ECB continues to act from a position of leverage when not exists. If Greece defaults and withdrawals from the Euro (and Eurozone), its economy will recover. This recovery will encourage others to follow. If it stays, its economy will stagnate under the weight of austerity at the expensive of its citizens. This will irritate the masses to the point of action.

Market's reaction, a selloff in global equity market and Euro to the news, suggests an understanding of the depth of illiquidity within the European banking system.

Headline: ECB: Banks can't use Greek debt as collateral

The European Central Bank has revoked a waiver that allowed banks to use Greek government debt as collateral for loans. The ECB, in a statement late Wednesday, said it was no longer able to assume there would be a successful conclusion to the Greek government's bailout talks with its lenders. The Dow (Dow Jones Global Indexes: .DJI), which had been up 100 points just before the ECB release, quickly turned negative following the news.



Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.