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FRBNY Swap Update

CalibratedConfidence's picture





 

Zerohedge pointed out again today in its continuing series on the Fed's direct bailout of Europe (the one Senator Corker told the American public Bernanke was not going to be involved in during a closed door meeting) that the Fed injected $99.3 billion into European Banks.  A key focus for moves such as this aside from the H.8 is the FRBNY FX Liquidity Swap facility.  Just this past week a near doubling of the amount to the ECB coincides with the Fed's non involvement with the direct bailout of European banks from $4,192 million to $8,343 million.

 

Levels of the ECB's over-night deposits at their facility have continued to drop since July of 2012.  This facility contains volumes in EUR millions for 1) open market operations; 2) recourse to the marginal lending facility; 3) use of the deposit facility; 4) autonomous liquidity factors; 5) current account holdings; and 6) reserve requirements:

Looking at the levels of the ECB's allotment amount in their main refinancing ops which allow for the smooth fulfillment of reserve requirements, we can see the sharp increase after July 2012, the same time Deposit Facility levels were cut: 

As was hypothesized in the aforemention Zerohedge post:

It is also unknown is the Fed's reserves, reappearing as cash, and then
siphoned over to European bank HoldCo via payables, is then used by,
say, Italian and Spanish banks to purchase BTPs and Bonos, and give the
impression that all is well. Because unlike before, keeping the EURUSD
high is not as critical any more. But what is critical is to give the
impression that Italian and Spanish sovereign risk is contained. And
after all, let's not forget that as of January, Italian bank holdings of
Italy state bonds just hit a record of EUR200 billion.

 


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Sun, 03/10/2013 - 12:28 | Link to Comment CalibratedConfidence
CalibratedConfidence's picture

For clarity, you're address inflation/deflation in Europe?  I agree with you however I did not see any "evidence" here to your claim.  Would you share with us your sources? 

Sun, 03/10/2013 - 13:48 | Link to Comment Orly
Orly's picture

It appears that the velocity of money and the rapidly decreasing amount of liquidity (as per your charts...) signify a deflationary scenario, already in place, that is only getting worse.

How long can the Europeans rely on the Fed for their liquidity problems?  Ad infinitum?  Probably not.  If the Fed were to back out and leave the Euro to fend for itself, assets would have to be sold to increase liquidity by themselves.  Surely, they would take a haircut on those sales.

Now, the Fed has doubled the back-door "aid" to European banks this week?  Where does it end?  Is this why Dr, Bernanke and Mario Draghi both looked like zombies in their respective testimony?

:D

Sun, 03/10/2013 - 19:55 | Link to Comment CalibratedConfidence
CalibratedConfidence's picture

I disagree

Sun, 03/10/2013 - 09:37 | Link to Comment CalibratedConfidence
CalibratedConfidence's picture

Don't fill the comments on my posts with this shit, it helps no one. Go to Business Insider if you're going to shout off points of view without factual back up. If you can't prove your point with the charts and facts, shut the fuck up, this isn't a game for the little kids.

Sun, 03/10/2013 - 10:20 | Link to Comment Orly
Orly's picture

CC, with all due respect, I try to make my commentary as useful as possible and ask pertinent questions when I can.

This person, akak, however, "stalks" me around ZeroHedge with his green-arrow buddies and calls me names and worse.  Anyone who happens to see my point of view also gets a diatribe of filth launched at them.

While I have offered much evidence to support my claims of very little inflation in the real economy, all we get from akak centeres around the words "disingenuous" and "bitch."

I apologise for spoiling your post with his nonsense.

:/

Sun, 03/10/2013 - 15:16 | Link to Comment akak
akak's picture

Orly, if confronting your ignorance, argumentative evasions, and outright glaring dishonesty constitutes "stalking", then I am proud to be a 'stalker'.

You have not only NOT provided ANY evidence to date of your absurd and ridiculous "point of view", you have very pointedly evaded and refused to respond in any direct and logical manner to the MANY facts and arguments which have refuted that point of view.  THAT is why you have received so many downarrows here --- because your kind of cowardice, lack of moral and intellectual integrity, and unwillingness to honestly debate the issues are instantly obvious to most members here, and are not appreciated nor tolerated by them.

I only wish you could realize what a laughing stock and embarrassment your purported deflationary arguments continually make of you here.  You consistently come across, like Bernanke and Krugman, as the clueless pro-establishment academic who stubbornly stands by his theories in the face of all evidence to the contrary.

Sat, 03/09/2013 - 22:41 | Link to Comment Divine Wind
Divine Wind's picture

 

 

This was a good piece.

i would think that anyone who does the household shopping would most certainly agree that we are experiencing inflation, at least in terms of food prices, though the current attempt is to hide it through smaller product volume.

Just yesterday evening I stopped into a local Sunoco station and grabbed a pack of REESE'S PIECES.

The package was a good 20% smaller than the last time I purchased. This irked me. I mentioned it to my Arab pal behind the counter who owns the place and he showed me how the manufactures are also reducing the volume of chips in a small bag. Same package size but lesser amount of content + slightly more air.

In both instances, the wholesale price, and that to the consumer, were unchanged.

Lower product volume or higher price... the net effect is the same.

The FRN is just not buying the same amount of 'stuff'.

 

 

 

Sun, 03/10/2013 - 01:45 | Link to Comment Orly
Orly's picture

"Lower product volume or higher price... the net effect is the same."

Not inflation.

Gimmicks to get around higher input costs secondary to commodity speculation.

Not systemic inflation.

Does anyone understand?

And you go to a convenience store and expect to have a grasp on food prices?  "Anyone who does the shopping?"

Seriously?  Reese's Pieces from the Sunoco?  Guess Miffed's husband got the feta cheese there, too?

Y'all really need to get a grip on what you're talking about.

:D

Sun, 03/10/2013 - 02:09 | Link to Comment akak
akak's picture

Orly, you are completely full of shit, and WILDLY ignorant of monetary history (and current fact), if you even dare try to fall back on the threadbare, dishonest and disingenuous claims of every money-debauching statist that "speculation" is the sole or primary cause of steadily rising prices.  At best, you are ignorantly confusing cause and effect here.

I can still remember from my childhood Richard Nixon, clueless Keynesian bastard that he was, blaming "speculators" for the inflation of the early and middle 1970s, when EVERYONE today obviously knows that such speculation as was occurring at that time was strictly secondary to the primary cause of rising prices, currency depreciation.  Speculation almost always happens primarily as a result of currency depreciation, or expected currency depreciation.  To blame it for a multi-year (not to mention a multi-decade) ongoing trend of rising overall prices is the height of either ignorance or dishonesty.

Sun, 03/10/2013 - 02:21 | Link to Comment Orly
Orly's picture

blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah.

Sun, 03/10/2013 - 02:37 | Link to Comment akak
akak's picture

That was your most intelligent, and honest, post on the topic of currency depreciation in this forum to date.

 

PS: It does seem that the number of 'blah's in your posts seems to be inflating.
Or is that just a speculation on my part?

Sun, 03/10/2013 - 02:38 | Link to Comment Orly
Orly's picture

blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah.

blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah.

blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah, blah blah, blah.

Sun, 03/10/2013 - 02:43 | Link to Comment akak
akak's picture

Behold the wisdom of flat-earth deflationism.

Make me laugh.

Sat, 03/09/2013 - 19:20 | Link to Comment shovelhead
Sat, 03/09/2013 - 17:55 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Interesting charts, pity there is no interesting explanation coming with it!

 

Sat, 03/09/2013 - 22:08 | Link to Comment CalibratedConfidence
CalibratedConfidence's picture

Sorry I'm not entirely holding your hand.  feel free to click the links i provided in my last comment response  and do some short reading

Sat, 03/09/2013 - 16:29 | Link to Comment Michelle
Michelle's picture

After 100 years of corruption, We The People aren't taking it anymore!

Federal Reserve Bank

b. 1913

d. 2013

RIP

Amen!

Sat, 03/09/2013 - 18:28 | Link to Comment de3de8
de3de8's picture

Dream on.

Sat, 03/09/2013 - 18:12 | Link to Comment Bear
Bear's picture

Would love it ... but how's this going to happen when they can print and Obama will keep kicking the can. It is going to collapse, but not this year as there is no go to place that is safe (except PM's)

Sat, 03/09/2013 - 18:12 | Link to Comment NoWayJose
NoWayJose's picture

Like many 'great' countries, the US emerged as a world power and ascended the first 50 years from 1913 to 1963. The next 50 years are a time of descent when the leaders promise more than they can deliver or pay for. Unfortunately the final fall will happen much much faster.

Sat, 03/09/2013 - 15:08 | Link to Comment Mediocritas
Mediocritas's picture

I've been expecting, for years, to see the swap lines getting hammered, but so far nothing much. The rats are preferring other tunnels so far.

Sat, 03/09/2013 - 15:23 | Link to Comment Orly
Orly's picture

What do you make of the fact that the Fed's remittance to foreign banks doubled this week, even as the chart above shows liquidity drying up faster than a watermelon in the Mojave?

:D

Sat, 03/09/2013 - 15:39 | Link to Comment Mediocritas
Mediocritas's picture

I make of it that one of the rats it a bit more desperate than the others, but wake me up when there's more squeaking. Maybe we should lay some baits?

Sat, 03/09/2013 - 15:43 | Link to Comment Orly
Orly's picture

Could be the Brits, I suppose.  They're always first out when the going gets rough.

Are they laying the groundwork for Carney to come in and do an out-right devaluation?

Sat, 03/09/2013 - 15:04 | Link to Comment Orly
Orly's picture

Wow.  Where do y'all get all this stuff?

Amazing!  Thanks, Tyler!

:D

 

Sat, 03/09/2013 - 15:07 | Link to Comment CalibratedConfidence
CalibratedConfidence's picture

some sources are in the body embedded as links but here for ease here are the source:

http://www.newyorkfed.org/markets/fxswap/fxswap.cfm

http://www.ecb.int/stats/monetary/res/html/index.en.html

Sat, 03/09/2013 - 15:13 | Link to Comment Orly
Orly's picture

Thanks.

:D

Where does the LTRO remissions equate to this?  Why, if liquidity is drying up in Europe, would European banks give liquidity back to the ECB?If it were only for optics, then Draghi should have pulled them aside and said, "Hey, you don't want to do that right now..."

It seems that the Europeans are hunkering down here.  Are they getting a warning that the Fed doesn't know about?  Or is it that the Fed knows, as the global reserve currency, they have to stay afloat while everyone else seeks safe harbor?

This looks bad.

Sun, 03/10/2013 - 10:24 | Link to Comment Orly
Orly's picture

For instance, CC, where's the answer to this question?

Rather scold children for playing too loudly?

Or is this "holding my hand," too?

 

Okay.  Well, I see where this is going.  Have a wonderful day.

 

Sun, 03/10/2013 - 12:35 | Link to Comment CalibratedConfidence
CalibratedConfidence's picture

Don't let excitement skirt your focus.  I was addressing the comment about it being a "pity" the charts didn't have explainations. Readers of ZH tend to be autodidact

Sat, 03/09/2013 - 15:08 | Link to Comment Orly
Orly's picture

Sure looks like money velocity is slowing to a crawl in Europe.  The only way forward is back.  Looks like they're about to get slammed hard by deflationary forces.  Watch your faces, traders.

No wonder Draghi and Bernanke looked like zombies...

:/

Sat, 03/09/2013 - 15:13 | Link to Comment akak
akak's picture

Somehow, I strongly suspect that you do not have a clue what the word "deflation" actually means.

 

PS: Still feasting on those 99 cents/lb chicken breasts?  Someday you will have to loan me that magical time-traveling flying rickshaw that you borrow from AnAnonymous to go back to 1988 to do all your grocery shopping.

Sat, 03/09/2013 - 15:21 | Link to Comment Orly
Orly's picture

I'll send you the receipt.

Best deal I got today was an 18 ounce package of Chilean blueberries for $4.78.  Less than half price.

See, I know how to shop.  You apparently have your "people" do it for you.

:/

Deflation is a decrease in monetary velocity.  End of story.

Not some mysterious decrease in money supply.  Monetary velocity.  As I repeatedly point out, to your chagrin I'm sure, is that as long as the Fed's "printed money" stays locked up in a bank somewhere, it is not inflationary.  The only reason it is there is because we live in a deflationary environment.  Otherwise, logic dictates that if the bank could be making more money off of the cash, they would.  The fact that they can't speaks volumes.

And it's not a rickshaw.

 

Sat, 03/09/2013 - 18:13 | Link to Comment WhiteNight123129
WhiteNight123129's picture

No, deflation is not decrease in "monetary" velocity. First of all what people call money include many items which are technically prone to failure (like a commercial bank deposit). If it is prone to failure, it is not money but credit, period. The only real money in fiat is dollar bils and excess reserves.

There are two means of payment, money and credit. It is possible to have deflation coming from money. It is a rare occurrence but it happens when productivity increases faster than monetary base. That was teh case post 1873 Silver demonetization in the United States. A state of deflation coming from money. So here is for deflation coming from money. It does not mean a contraction in real output, far from that. Just an expansion of the monetary base slower than the productivity. 

There is another form of deflation coming from credit. It is also called credit contraction. This is when Credit can not be expanded anymore. In a fiat regime it happens when lowering the rates does not work anymore the income can not sustain further increase in credit through lower the rates since the rates touched bottom. You can fight it by printing money. If you do not fight it, you have a depression. But in a depression the economy gets very very bad but at some point the credit contraction stops. The best way to avoid permanent depression and if you want to have V shape recovery without printing is to let bad credit fail. It looks like Europe is doing L shape because it is not writing down its bad debt yet borrowing is more in line with income right now. (For Spain that means they are forced to borrow at a level consistent with their income that means VERY LITTLE INCREMENTAL BORROWING RIGHT NOW in relation to income)

As for US money is starting to move, it was turning in financial assets so far but it starts to move in the real economy. Treasuries are smelling the coffee and are getting wacked.

 

Sat, 03/09/2013 - 15:30 | Link to Comment akak
akak's picture

 

See, I know how to shop.  You apparently have your "people" do it for you.

And again with more of your offuscation, misdirection and evasion.

The fact that one can find bargains, in food or in anything else, does NOTHING to deny the fact of overall rising price trends.  You keep trying to throw out anecdotal data in the attempt to disprove the trend of steadily rising prices, over the last few years in particular, and I keep pointing out to you that your isolated bargains are meaningless in the face of that overall trend.  You DO know what the word "trend" means, don't you?  Or is that concept not taught in Deflationary Propaganda 101?

Next thing we know, you'll be agreeing with JimmyJames (as you did earlier) that "constant inflation-adjusted prices prove that there is no inflation".

LOL

Sat, 03/09/2013 - 15:34 | Link to Comment Orly
Orly's picture

"Next thing we know, you'll be agreeing with JimmyJames (as you did earlier) that "constant inflation-adjusted prices prove that there is no inflation"."

In other words, the line is fairly constant.  There has been no spike in inflation.

You seriously need to get out more, ak.  Spend some time with your family.  Or something.  Ranting about inflation is getting you nowhere but making you look silly because everyone knows this is a deflationary envirnoment.

When you see real inflation, you'll know it.  You don't know it yet because you haven't seen it- but when you do, you'll know it.

Please get a clue.

:D

Sat, 03/09/2013 - 16:39 | Link to Comment akak
akak's picture

 

In other words, the line is fairly constant.  There has been no spike in inflation.

Who said anything about a "spike in inflation"?

If by "the line" you mean the roughly constant and ongoing rate of currency depreciation, then I would agree.  But I suspect that that is not what you mean.

My only point in all this debate is that only a fool can deny the real and ongoing depreciation in the US dollar.  But you, Orly, appear to be that fool.

Sat, 03/09/2013 - 22:25 | Link to Comment Bay of Pigs
Bay of Pigs's picture

She's a numbskull on the topic. I noticed she wouldnt touch the recent ZH thread on the 1200% increase in college tuition over the last 35 years.

Transitory right? LOL... 

Sun, 03/10/2013 - 01:40 | Link to Comment Orly
Orly's picture

Not inflation.

Numbskull.

Sat, 03/09/2013 - 19:44 | Link to Comment Miffed Microbio...
Miffed Microbiologist's picture

Akak, yesterday I asked my husband to pick up some feta on the way home. I was making a greek salad and this was the only thing I lacked. He stomped into the kitchen and slammed a 12 oz container of feta on the counter and said " hope you are happy, that cost 10 bucks". I stared at him briefly, composed my thoughts and said " there is no inflation, how do I know? CPI, Ben and ZHers have told me so. What we have here is someone who has failed to learn how to shop properly. Your problem is that you have not substituted the item for a less costly item. Until you admit your failings this conversation is over." he glared at me and retorted " I DID look for alternatives!! I checked all the other cheeses, they were all like priced! There was nothing else to be found!!" then he went into a total melt down how I was unreasonable and what was he supposed to do... Try the store dumpster or eat my iPad. I just had to hold up my hand and repeat " What can I say? There is no inflation so the problem obviously lies with you and if you would just admit that we can move on." Well, I can't tell you what happened after that. Let's just say I am relieved I didnt have to make an embarrassing visit to the ER to remove a 12 oz container of Feta from a body orifice. I guess my husband is just not well enough educated to understand the deflationary environment we currently find ourself in.

Miffed;-)

Sat, 03/09/2013 - 14:37 | Link to Comment disabledvet
disabledvet's picture

"careful what you ask for...
http://www.youtube.com/watch?v=q7yMgJSOksc
you just might get it."

Sat, 03/09/2013 - 20:49 | Link to Comment philipat
philipat's picture

I wish we still had free markets. All debt self-corrects if the market tells you you can't borrow any more

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