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Number of European Banks Using Fed USD Swap Facility Increases By 100% In Prior Week

Tyler Durden's picture




 

Something odd happened today when the ECB disclosed the number of banks using the Fed's USD swap facility - it increased by 100%. And granted it was an increase from one bank to two banks, but still. As we have been highlighting for over a month, one bank had for five weeks in a row been responsible for borrowing $60 million from the Fed using the ECB as an intermediary, paying roughly 1.19% for the privilege, implying it had been constantly locked out of the USD interbank market. Today, bank #2 joins in, this time for a much more substantial amount of half a billion dollars. The most likely reason for this (absent some major behind the scenes front-end deterioration in a PIIGS bank, which in Europe tends to be given), is that as we highlighted yesterday, European liquidity conditions have recently gotten far more tight, courtesy of the massive liquidity extraction following the latest LTRO expiration. And whether one looks at it as a 100% increase in the number of banks, or almost 1,000% increase in the amount of borrowings, the development is certainly not good. Which, the cynics out there may say, is why stocks are up: it is most certainly not due to JPM missing revenues estimates, and booking and projecting a hilarious drop in charge-offs in light of the foreclosure freeze which will do precisely the opposite. But who cares about reality.

 

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Wed, 10/13/2010 - 08:05 | 645632 T Rex
T Rex's picture

Do we have to save EVERYONE?

Wed, 10/13/2010 - 08:09 | 645637 Edna R. Rider
Edna R. Rider's picture

Just save Apple.

Wed, 10/13/2010 - 08:11 | 645643 Sudden Debt
Sudden Debt's picture

and adobe :) or better yet, merge them into Apple Adobe Inc.

THE AA CLUB BITCHEZ!!

Wed, 10/13/2010 - 08:10 | 645640 Sudden Debt
Sudden Debt's picture

SWAP LINES FOR EVERYBODY!!!!

 

Greetings from the European continent! We'll send you a all a thank you note on the back of your tax forms!

WHOEHAHAHAHAHAHA!!!

Wed, 10/13/2010 - 08:11 | 645642 themosmitsos
themosmitsos's picture

Tyler, the amounts are too small ;)

2's company, 3's a trend?

Wed, 10/13/2010 - 08:16 | 645646 Sudden Debt
Sudden Debt's picture

it's like in the 70's where people in California said:

He look! 2 Mexicans! Let's take a picture!

And if you try to take a picture now these days without a Mexican in the picture it becomes a collectors item! :)

Wed, 10/13/2010 - 08:58 | 645701 hussaifa
hussaifa's picture

+1

Wed, 10/13/2010 - 09:19 | 645734 Sudden Debt
Sudden Debt's picture

I see somebody junked me... probably because he didn't understand it. Here's the translation:

 

it' s tiene gusto en el 70' s donde la gente en California dijo: ¡Él mira! ¡2 mexicanos! Is toma un cuadro! ¡Y si usted intenta ahora tomar un cuadro actualmente sin un mexicano en el cuadro se convierte en un artículo de los colectores! :)
Wed, 10/13/2010 - 18:36 | 647636 themosmitsos
themosmitsos's picture

HAHHAHAHAHHAHAHAH

+100000000000000000 on translating it!!!

Wed, 10/13/2010 - 08:15 | 645648 Orly
Orly's picture

And so the worm turns...

Wed, 10/13/2010 - 09:44 | 645772 99er
Wed, 10/13/2010 - 10:58 | 645994 trx
trx's picture

Wed, 10/13/2010 - 11:16 | 645997 trx
trx's picture

Can't figure out how to post a pic, however - here's my comment...

 

Mon, 01/31/2011 - 07:39 | 919664 shawnlee
shawnlee's picture

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