The Markets Just Called the Central Banks' Bluff

If anyone thinks that the world’s central banks can somehow solve the Crisis, they need to consider the following news story:

Dollar Funding Costs Rise As Central Banks' Plan Seen Inadequate

 

European banks are finding dollars an expensive commodity once again, as the afterglow fades from a coordinated central bank plan to improve liquidity.

 

Swapping euros for dollars now costs about as much as it did before the European Central Bank said Thursday it would work with counterparts in the U.S., Europe and Japan to provide dollars for banks struggling to access U.S. currency. The three-month ...

 

http://online.wsj.com/article/BT-CO-20110919-708511.html 

The ECB, Fed, Bank of Japan, Bank of England, and Bank of Switzerland staged a coordinated intervention only last week. Already the net benefit of their moves has been erased for the very institutions they were trying to help.

And while the S&P 500 is up 2%...

Belgian Bank and French banks have wiped out ALL of their intervention gains:

The same goes for German banks:

Folks, if a coordinated intervention on the part of FIVE central banks can’t even give us one week of gains in the European banks… nor lower the cost of Dollar swaps… then we’re in the absolute END GAME for central bank intervention.

Remember, this was not just a single money pump from the Fed. This was FIVE central banks working together. And they couldn’t even paper over the European banking system’s problems for ONE WEEK.

The mainstream financial media is out claiming that the reason we’ve already undone the gains produced by the intervention was because the central banks didn’t do enough. It’s interesting that having spent more money than WWI WWII and the New Deal combined central banks are still thought to not be doing enough. Never does anyone ask… “maybe the central banks can’t fix this mess?”

Let’s be blunt here. The Fed and pals just pasted a HUGE multi-trillion dollar band-aid over the system in 2008. They didn’t fix anything. The fact they’re now losing control of the system again and we’re fast approaching the next “Lehman” event should be proof positive that central banks have NO idea how to get us out of this mess.

I fully believe we could be on the verge of another 2008 episode. It’s clear Europe’s banking system is staring into the abyss. The US is not far behind either.

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Comments

[Little John]

Don't forget ink, paper, and "full faith and credit".

[Spirit Of Truth]

Indeed.  This is all about "faith and credit".

Here's the key heretical question posed in this article: “Maybe the central banks can’t fix this mess?”

The world "credit" means: Belief or confidence in the truth of something. 

http://www.thefreedictionary.com/credit

The global credit system is literally a Ponzi scheme that is only held together by 'belief and confidence' in what have become absurd lies.  What's most insane about the current state-of-affairs is that most recognize that the 'central banks', i.e., central planners, are striving to maintain a global fiction.  Thus, hopes placed in Benny and the Inkjets and the ECB are false hopes.  These are simply the minions of the false god of Mammon trying to keep a bogus faith alive at all costs.  But, alas, the efforts of TPTB are futile as the true God's 'invisible hand' will clear the markets and reveal the truth according to plan.  There's a reason these episodes are called 'corrections'.

JMHO

[Vendetta]

Indeed. The central planners and tir banks need to be 'corrected' ... Severely

[stewie]

Coordinated Intervention Bitchez!