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Sole European Bank Needs $60 Million USD And Comes Crawling To ECB, Confirming USD-Libor Funding Process Impaired
Today, the ECB announced one sole bank was allotted $60 million USD via its Fed-swap facilitated liquidity providing operation. At a comparable operation last week, the ECB announced that just one, almost certainly the same bank, had requested $40 million in dollar-denominated funding from the ECB. What is troubling is not that just one bank requested such a paltry sum of capital to last it for another 168 hours, but that precisely one bank did, indicating that the funding situation is so bad in Europe that a bank is unable to find a token $40 million in the interbank market and via traditional means, that it is forced to beg to the institution of last reserve, the ECB. Furthermore, the fixed-rate on the operation came in at 1.19% (an increase from the prior week). This is nearly 4 times the rate allegedly charged for 3 Month LIBOR, which today came in at around 0.30%. Oddly enough it is just today that the WSJ comes out with an article fanfaring the cheapness of interbank lending with "Libor Falls as Banks Sit on Cash." Judging by today's ECB action, the WSJ's article would be a little more relevant if European banks had at least some access to this abundantly cheap capital, which it appears is available to everyone except those who need it.
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icanhaztoilettpaper?
icanhastoiletpaper.
http://ftalphaville.ft.com/blog/2010/08/23/322586/schatz-ing-through-eur...
Rain in Spain again ??
http://www.zerohedge.com/article/spains-bbva-unable-renew-1-billion-comm... ....
I aint buy'n nuttin. I'm broke, and No you cant have none becuz, there aint none to be had.
Bernanke gets that out of the sofa cushions in his reception area.
Rounding error in bank funding for TBTFs -move along, nothing to see here....
OT
Jim Rickards says the Fed has a golden bullet. Gradually let the price of gold go up to $2,000 or more, sell the gold out of Fort Knox, and instantly get inflation as people jump out of dollars and buy stuff.
Starts at 15:40.
OMFG!
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/9/4_Jim_Rickards.html
Good plan if there was any gold left at Fort Knox.
Know what I'm saying?
That was one of many reasons I thought he was insane. I like the guy. This call is out there. He is calling for a currency crisis and thinking it can be reigned in as people come to trust the Fed after they let the price of gold go up. WTF. Thanks for your response taraxias.
Thats unreal. A single bank cannot raise a shitty $40 mil in the overnight market? Two things immediately stick out: how toxic is this single institution and what do the other banks know about the toxicity of that institution. Basically a dead givaway to it's insolvency. What the hell is going on over there?
The real kicker, to top it all off. The euro debt crisis and all the banks holding the doo doo.....the average CNBC zombie thinks this has been solved. We had one month of the euro scare when the insolvent agreed to bail out the insolvent. It effectively has been removed from memory fromt those other than ZH readers....
Austria perhaps? Sounds like they could be getting Hungary to me...
Unicredit???
Banking crises in Austria???.In fact it was the bankruptcy of Credit-Anstalt in 1931 that made the Depression truly global, and crippled banks throughout Europe and North America.
Cue the spooky music...
If we have seen an intermediate bottom in stocks, then I expect to see a huge rally in airlines, cruise lines, hotels, and other leisure and consumer stocks.
Forget about tax cuts, the consumer has already had one.
Because despite the shrieking and screeching of the perma-gloomers touting "Peak Oil" nonsense, gasoline prices have virtually collapsed the last few weeks despite:
1. Booming economy in India, evidenced by the Bombay Sensex reaching 52-week highs
2. Strong economy and record auto sales in China
3. Outright ban on offshore drilling in the Gulf of Mexico
Here's a chart of regular gasoline prices here in Los Angeles. Note how they are now crashing at a rate of 3 cents a day right now:
And notice how leisure stocks like Buffalo Wild Wings has totally shucked off an earnings miss a few months ago, and is not too far from 52-week highs again.
And due to a 30-year high in refined products inventories, none of the refiners are able to make a dime, and their stocks are still scraping at multi-year lows:
Heh...deflation in the things we need (refined products) and inflation in the things we absolutely don't need (hot wings baby). Somehow they missed earnings two months ago but who cares, gonna make it up on volume this quarter!
Think of it as a pair trade with Pepto.
Robo,
dismissing peak oil is a very risky assumption; the geologists have a strong opinion with a lot of backing about that.
Simply stated, to be pumped the oil must be found. The peak of findings was somewhere in the late sixties and most fields found then are in decline right now, take North Sea for example.
Market wise you might well be correct, right now there is a bit more supply then demand and prices come down.
If demand picks up too much or supply declines the price can go up again. Prdicting that change at the margin is a messy thing.
Ban on offshore drilling has no influence on today's prices; that oil comes to market in years, not tomorrow.
Not sure I can get on board the "tax cut" theory give the one-year trend in gas prices.
http://www.eia.doe.gov/petroleum/data_publications/wrgp/mogas_home_page....
8/16 8/23 8/30 Change one week Change one year
2.745 2.704 2.682 -0.022 0.069
2.681 2.644 2.607 -0.037 0.011
2.740 2.712 2.676 -0.036 0.000
2.707 2.681 2.639 -0.042 -0.018
2.644 2.595 2.563 -0.032 0.035
2.681 2.627 2.636 0.009 0.117
2.613 2.563 2.527 -0.036 0.068
2.802 2.806 2.820 0.014 0.206
3.102 3.079 3.038 -0.041 0.080
2.994 2.974 2.943 -0.031 0.120
Question is Robo are there any shorts to ramp out? Nice report as usual thanks for your views...
i agree "there is no reason for this to be interesting." this should be a "nothing but net" recovery. still i note "struggles." a "Bailout Too Far" perhaps? Unfair?? Indeed. By any rational estimates the Banks would have to earn probably 25 billion a quarter just to start recapitalizing. Needless to say "this is hard with all the people who have been unemployed" and with a "very politicized culture." And of course that's WITH the bailout that is still ongoing! So, yeah--25 million or whatever "signifies absolutely nothing." They're Europe--what could possibly be wrong over there? Must be one of those worthless Greek banks.....
In monday's "Finacial Times Deutschland' was in German an article that Irish state-owned "Anglo Irish Bank" is in so much trouble that it the rescue of the bank might be too much to bear for Ireland.
Link (German) http://www.ftd.de/unternehmen/finanzdienstleister/:folgen-der-finanzkris...
Coincidence/
The AIB story has been well played out already, but speaking of German... that is the talk today. Finally some stories making the rounds about German banks needing boatloads of dough to be compliant, and the Forex markets are taking it to task. Maybe the ever-buoyant ES might have a bit more ground to make up after Midnight than usual.
Of course, how much money has been made in the last year by selling ES after the close, and buying it back at Midnight (or least by 6am)?
add: can't forget to mention the Greece fear redux
All banks are insolvent under the traditional definition, liquidity is the issue. Ireland is the next Iceland. And therefore not so important, we have already had Greece. Lets see what happens...
WSJ: "Stress Tests Missed Debt at EU Lenders"
http://online.wsj.com/article/SB1000142405274870439210457547552094944039...
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Who is pointingtrade? and what's up with the hidden message?/disappearing posts? If these two posts go away, I won't ask agai...
Messages which achieve junks beyond a threshold are removed.
Asshats like pointingtrade are why.
Thanks for the info - this identical post was pulled last night and I was expecting the same with this one.
WOW they can't even find chump change! On a lighter note, I have been a long time follower of ZH but finally decided to create a profile, Thanks for everything ZH. Sometimes you are the only reason I don't lose faith in whats going on all together
Just print more money,another sticking plaster on a patient who can,t move due to the amount of plasters,operations and life support.Another day another make over.If banks won oscars for acting the EU would be the new Hollywood.
DOW/S&P500/FTSE/EURO short signal continues:
http://stockmarket618.wordpress.com