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ABN Amro Complains About Interbank Liquidity Crunch, As CEO Says End Of Euro Would Make 1930s Seem Like "A Trifle"

Tyler Durden's picture


As we have been writing for a while now, it is not in the arcania of shadow banking that one needs to look to find increasing signs of the collapse in interbank lending. No: something as simple as Libor, especially its USD variant, which is so crucial to USD-crunched European banks, is more than sufficient to determine that not just Greece, or the PIIGS, but now the entire Eurozone is becoming completely dependent on the dollar generosity of the ECB, and the various other regional central banks. This by implication means that the Fed will once again be forced to step in, "in size" and bail out the world, only this time it is far more debatable if the world believes that even the Fed alone is sufficient to prevent a rising global insolvency tsunami. And confirming how bad it is, we now have none other than ABN AMRO's CEO on the tape, complaining loudly about liquidity: this is and always has been a move of total desperation as the last thing a bank wants to do is give any indication of funding weakness. Furthermore, since ABN Amro is not a USD LIBOR reporting bank, we can safely say that the dollar liquidity crunch has spread far and wide from the 18 BBA member banks, where it is hardly any easier to procure the former reserve currency.

As a reminder this is what USD funding costs look like: as Dennis Gartman would say: it starts in the lower left and proceeds to the upper right.

From Bloomberg:

Banks are seeking to retain their liquidity, making interbank lending more difficult, as funding from money and capital markets becomes harder to obtain, ABN Amro Group NV Chief Executive Officer Gerrit Zalm said.


Interbank borrowing for more than six months is also becoming problematic because banks are reluctant to lend to competitors with “big positions in weaker countries’ debt, for instance,” he said today on Dutch television program “Buitenhof.” ABN Amro is “well-capitalized,” he said.


Zalm was Dutch finance minister from 1994 to 2002, during which time he helped oversee the implementation of the euro currency and the associated “stability pact” aimed at ensuring member states adhered to specific budgetary criteria. Germany and France both exceeded those criteria during his later term as finance minister from 2003 to 2006.


He said today the euro region needs an independent authority to ensure budget discipline among national governments. Only when budgetary discipline has been achieved should the region as a whole consider issuing bonds, he said.

And an additional bonus is the realization that the end of the Euro, which now everyone is openly talking about, would destroy the Dutch economy:

A demise of the euro would have “catastrophic” consequences for the Dutch economy, which sends about three- fourths of its exports to other euro-zone states, and “would cause a recession that would make the 1930s a trifle by comparison,” Zalm said.

He said. Not us.


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Sun, 09/04/2011 - 17:01 | 1632098 speconomist
speconomist's picture

Is the Fed Bailing out or bailing in?

Sun, 09/04/2011 - 18:52 | 1632486 arizona11912
arizona11912's picture

WHY A EURO BOND WILL BE EVENTUALLY BE ANNOUNCED Europe (Euro zone) has no choice but to form a more closely knit monetary union Say Germany says to EU pissed off and says: "We are going back to the Mark". The short term effects is the Mark will increase in strength against Euro, USD, Pound, Yen, and all the other shit fiat currencies out there. Since all countries on Earth (at least in the long term) have to a balanced "balance of trade" except the USA (thanks to the Petrodollar system). If Germany's exports become too costly what will BMW, Volkswagon, Merc etc do? Naturally they will just expand their already established factories in Euro denominated countries. Already 2/3 of BMWs are made in Austria.

This hypothetical situation I've briefly discussed in what the Swiss are feeling right now. Moreover by Germany exiting the EURO zone they would naturally be responsible for their portion of the current Euro zone debt. The ECB would make damn sure that don't get away from not discharging their fiat debt. So not only going they'll have their currency high, debt incurred by EU, plus falling bond rates which would not attract other central bankers cheese since they couldn't mop of up all the excess liquidity in sufficient form in the long term since they wouldn't be a large denominated currency such as the "big 3". For an example of that taking place see Switzerland. The long term affects is Germany would be forced to engage in printing money til hitting the bottom to compete against the "big 3." For that example see Chile, Switzerland, India, China and now Russia has recently got in the game of debasement.

Now for another example say Portugal and Greece says get me out of the Euro zone.... Will they do it on their own terms? No, because they would be forced to pay back the fiat from the ECB denominated debt plus filing from bankruptcy is too much of a risk for their spineless politicians. Also their bond rates would shoot to the moon. Initially it would attract Chinese investors which are already increasing their holding of Greek and Portuguese debt (because the backstop is France and Germany and they see the writing on the wall for the USD) but will falter since neither country has a functioning economy which would run a negative trade balance. This would erode the standard of living for Portugal and Greece.

Again this is thanks to Keynesian thinking "long term it doesn't matter, we're all dead" so no one would be willing to sacrifice now and clean house then establish themselves as a viable economy. So the concise conclusion is if the PIIGS back out all the debt that's not written off rides on the backs of France and Germany which will cause bonds to rise (at least hypothetically) and the qualitative reason is the politicians want a unified Europe and they don't give a damn how it has to get there as long as it gets there. The latter half of the sentence is probably the most influential of why there will be a unified Euro bond in the near future.

Sun, 09/04/2011 - 20:35 | 1632781 sushi
sushi's picture

But the "I don't give a damn" eurocrats will spend the next 3 years debating how to move forward while Europe and the remains of the global economy collapse in rubble around them. And do not forget der pitchforken volks who will emerge in large numbers to de-elect those very same "I don't give a damn" eurocrats.

Sun, 09/04/2011 - 21:10 | 1632889 arizona11912
arizona11912's picture

Hi Sushi,

The ECB knew from day one that that a unified Euro bond within the monetary union would be unveiled. It was just a matter of when they were going to reveal it. I've been waiting for these guys to say this for two years now. Give it a little time. It gets easier and easier for me to see how these guys work.

Sun, 09/04/2011 - 22:16 | 1633084 sushi
sushi's picture

Hello Arizona:

In that respect the Euro ruling elite are no different from the US elite: they are willing to disregard democratic process in order to achieve their aims. In doing so they invite a strong negative reaction and once that negativism is given voice no one will be able to put it back in the bottle.

If the eurocrats seek to achieve their ends by a rewrite of the Lisbon Treaty it will take longer than forever. The world will burn before they achieve an outcome. 

If the eurocrats had dealt with Greece in a realistic fashion a year or so ago (having Greece exit the euro-zone) then today alternatives would be possible. But they sought to achieve the impossible, their publics are turning against them and collapse beckons.

Mon, 09/05/2011 - 06:15 | 1633670 reload
reload's picture

The democratic credentials of the European commision are virtualy zero.

Commisioners are appointed by politicians and recieve fabulously generous lifetime benefits. Commisioners are not elected by citizens and citizens have no mechanism to remove them. It matters not how disengineous, corrupt, innefficient and self serving they are.

Legislation is packaged in mind numbing volumes of legal jargon. Most Euro MP`S do not get close to attempting to understand the complexity of what they are `voting` on. If questioned on specific legislation the Commisions stock response is `its a package, if you want X you will also accept Y & Z.

Deals are done behind closed doors, fifedoms and influence are constantly nurtured and grown. The citizen is the last on the list of considerations when descisions are made.

The EU has become a monster beyond the worst nightmares of even the most ardent Euro sceptics. Personaly I would accept the pain of collapse if we could have some real democracy as a result. I am not holding my breath. The current situation will be used by the institutions which have already proved to be unfit for purpose as a reason why they must have more power and influence.

It is an awful prospect.




Mon, 09/05/2011 - 08:53 | 1633825 Reptil
Reptil's picture


Detachment from free market economic principles in a spiral downwards, while political accountabillity has become a liabillity and is therefore dispensed with.

"It's dead, Jim."

My account manager at the ABN Amro advised me (unbeknownst of my previous investments) in june 2010 to invest in physical, and stay away from EFTs. I smiled. ABN Amro is state owned (was nationalised in 2008, this, after the board of directors and Groenink sold off the extensive international network, and collected substantial bonusses). Hip hip hurray for the state bank.. lol

Sun, 09/04/2011 - 21:10 | 1632890 arizona11912
arizona11912's picture

Hi Sushi,

The ECB knew from day one that that a unified Euro bond within the monetary union would be unveiled. It was just a matter of when they were going to reveal it. I've been waiting for these guys to say this for two years now. Give it a little time. It gets easier and easier for me to see how these guys work.

Sun, 09/04/2011 - 21:55 | 1633032 Which is worse ...
Which is worse - bankers or terrorists's picture

My theory is this: Germany LETS Greece go, in a Lehman-like way, just to create enough fear and distortion in the markets to get the EuroBond passed.

It's the only way Merkel gets re-elected. 

Sun, 09/04/2011 - 23:07 | 1633199 arizona11912
arizona11912's picture

I don't think the bankers will allow Greece to slip out of the matrix that easy. Maybe they'll sweep the Euro-bond issue until after the elections then implement the Euro-bond.

Sun, 09/04/2011 - 22:35 | 1633130 Which is worse ...
Which is worse - bankers or terrorists's picture

My theory is this: Germany LETS Greece go, in a Lehman-like way, just to create enough fear and distortion in the markets to get the EuroBond passed.

It's the only way Merkel gets re-elected. 

Mon, 09/05/2011 - 07:59 | 1633725 Filanderer
Filanderer's picture

Surprising that Sushi talks about US Elite and Europe Elite separately , there is only one real elite ruling both sides of the Atlantic.

Sun, 09/04/2011 - 17:46 | 1632243 john39
john39's picture

imagine my shock... calls for more centralized government control following an engineered collapse.  couldn't see that one coming.

Sun, 09/04/2011 - 17:55 | 1632269 tasmandevil
tasmandevil's picture


Sun, 09/04/2011 - 17:56 | 1632276 Ahmeexnal
Ahmeexnal's picture

This is bullish for the Gulden.

Sun, 09/04/2011 - 18:01 | 1632298 tasmandevil
tasmandevil's picture

and for brigitte bardot by dutch masterpainter

Sun, 09/04/2011 - 17:53 | 1632251 Ahmeexnal
Ahmeexnal's picture

Schroeder is a scumbag.

He's the one that passed a gag law in which any mention of his wig in the media was a crime.

Then he passed another gag law so no one could criticize him for handing out billions to GAZPROM.

BTW, right after leaving office, he got a phat job at GAZPROM.

Sun, 09/04/2011 - 18:53 | 1632491 arizona11912
arizona11912's picture

Good find Irish 66.

Sun, 09/04/2011 - 20:48 | 1632827 sushi
sushi's picture

Schroeder argues that the euro states should willingly give up their sovereignty. He just needs to take his argument one step further and he has a winner:

             Sell Europe to the Chinese.


Sun, 09/04/2011 - 17:03 | 1632109 LeBalance
LeBalance's picture

What is the consensus for the opening in Au?

Sun, 09/04/2011 - 17:05 | 1632120 speconomist
speconomist's picture

So far has risen $2

Sun, 09/04/2011 - 17:15 | 1632155 Sudden Debt
Sudden Debt's picture

It's not important anymore how much our PM's go up, it's more important to see how much the rest is going down.

Never the less, this week we'll be making a killer!!! :)


Sun, 09/04/2011 - 18:08 | 1632324 LeBalance
LeBalance's picture

the proper phrasing would be: "making a killing."

We gauge the "rest going down" by the inverse valuation of them in Gold.

Thus the view of Gold as surrogate to "death of the dollar."

Sun, 09/04/2011 - 18:23 | 1632363 cossack55
cossack55's picture

SD may have had it right after all.  If the Euro goes kaput, I believe many former stable folks may turn to killing.

Sun, 09/04/2011 - 19:03 | 1632515 Durchbruch
Durchbruch's picture

Yep, if the euro goes kaput the economic crisis will be a never-seen-before scene. We would go back to the state of the economy we had before discovering America. Think of 40 % of China export vanishing and of the chinese factories having to face lire and pesetas weaker than their renmimbi. Then go to the USA export data and delete the export-to-europe row (already kinda of a triangulation from shangai to europe). 

Sun, 09/04/2011 - 19:19 | 1632570 Bicycle Repairman
Bicycle Repairman's picture

Wonder what the US will do with all their troops stationed in Europe?

Sun, 09/04/2011 - 22:38 | 1633138 Which is worse ...
Which is worse - bankers or terrorists's picture

Start shooting people who do not pay their debts. 

Sun, 09/04/2011 - 17:04 | 1632116 golfrattt
golfrattt's picture

Not much fuse left on that timebomb....

This is where the guy in the movie throws it as far as he can before it explodes. The problem is that he can't throw it far enough...

Sun, 09/04/2011 - 17:43 | 1632238 DeadFred
DeadFred's picture

Those nuclear hand grenades can be a bitch.

Sun, 09/04/2011 - 17:57 | 1632281 Ahmeexnal
Ahmeexnal's picture

how can he throw when his arms have been chopped off?

Sun, 09/04/2011 - 18:37 | 1632419 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

You should see the other guy!

Mon, 09/05/2011 - 01:53 | 1633513 Ms. Erable
Sun, 09/04/2011 - 18:11 | 1632332 WoodMizer
WoodMizer's picture

Or, the protaganist starts cutting wires in the hope of stalling the timer, but reality is not Hollywood.  The more the Keynesian bomb squad buries the bomb in debt the higher the chances it will go thermo-nuclear.

Sun, 09/04/2011 - 17:06 | 1632125 mikmid
mikmid's picture

It appears the euro crash is near, which will cause problems in the US. I just wonder how big and how fast things will deteriorate.

Sun, 09/04/2011 - 17:11 | 1632135 rubearish10
rubearish10's picture

No need to worry, China will have its soft landing and we'll all be ok once USD printing re-commences.

Sun, 09/04/2011 - 17:51 | 1632254 Spitzer
Spitzer's picture

It looks to me like the ECB is refusing to re capitalize  banks in Europe. That is not a currency issue for the Euro, it is a systemic issue for the Fed.

Sun, 09/04/2011 - 17:09 | 1632130 flyr1710
flyr1710's picture

this chart should scare the hell out of everyone

Everyone is putting their money in the Fed...


look out below

Sun, 09/04/2011 - 17:13 | 1632146 Irish66
Irish66's picture

making 2009 look good. thanks

Sun, 09/04/2011 - 18:01 | 1632299 New_Meat
New_Meat's picture

I'm a total newbie on these "High Finance" subjects.  Thanks and a greenie for the link. - Ned

Sun, 09/04/2011 - 18:24 | 1632370 cossack55
cossack55's picture

Sweet. Danke.

Sun, 09/04/2011 - 17:13 | 1632148 Sudden Debt
Sudden Debt's picture

Looks like ABN AMRO is running out of Dutch boys to plug the leaks in their dikes :)



Sun, 09/04/2011 - 17:58 | 1632284 tasmandevil
tasmandevil's picture

running outta dikes ya mean? lookit them waves coming from the east

Sun, 09/04/2011 - 18:02 | 1632306 New_Meat
New_Meat's picture

them dykes don't have the plugging capabilities of the Dutch boyz.

Sun, 09/04/2011 - 18:34 | 1632308 dearth vader
dearth vader's picture

Come on, ABN Amro is 100% government owned and Dutch dikes are fine, come hell or high water.

Here is what Zalm said: Kicking Greece out of eurozone not a solution

From VolksKrant [People's Daily] via Google Translate

VolksKrant UPDATE That said former VVD minister of finance and chairman of the board of ABN Amro Gerrit Zalm in Buitenhof Sunday. He thus responded to a ruling VVD celebrity Frits Bolkestein.

Bolkestein said in Nieuwsuur [News Hour] Saturday that the EU should continue to support Greece, but only on condition that Greece gets out of the eurozone. Zalm pointed out in Buitenhof that Italy will be the next quickly. "And then Ireland, then Portugal and eventually you just stay with the Netherlands and Germany."

Drastic measures
He pointed out that Greece has taken "drastic measures to reduce salaries. The first priority he believes is the reorganization of the IRS. "There is still a huge gold mine. There is a huge black economy. "

Expanding the emergency fund for Greece, he said, not yet needed. "But politicians say they are willing to fund."

Zalm also said to be against an additional tax on the banking sector. Imports of European government bonds (Eurobonds) he finds not a good idea.

"The bank tax will be passed on to customers as the dealer does with the excise on petrol. Banks will be stricter in issuing credit and charge higher costs for it. Also, the savings rate decline, "said Zalm.

The European Commission is considering for some time after the issuance of Eurobonds, which Member States are today the euro guarantee each others debts. "The Netherlands must not join it if no conditions are created so as to know that it is satisfied."

Budgetary discipline
According to Zalm, the northern states of the eurozone, who have their budgets into balance, should bring the fiscal discipline back to the southern members. Zalm advocates of such a European regulator that is independent of politics. "Politicians are always wheeling and dealing again, it weakens the whole thing."

Zalm said that the inter-bank loans begins to stagnate, mainly because of the ongoing debt crisis in Europe. "Up to a period of six months, it still works, loans with longer maturities are scarce."

Another reason, according to Zalm's new demands on the financial sector, known as Basel III. Banks shall under those rules include greater reserves.

"We may well keep up our own pants," said Salmon of ABN Amro. "We are adequately capitalized and will not return to the Minister for additional capital."

Sun, 09/04/2011 - 22:31 | 1633122 Pure Evil
Pure Evil's picture

So what they're saying is that no matter how deep the hole, now is not the time to stop digging?

A couple hundred years from now they'll be giving existential classes on how Europes central banks and politicians turned a black hole into a super massive black hole.

Yes, I'd like to place a call to the scientists a the CERN laboratory. I think if you turn the equipment on when the shit finally hits the fan over there you might actually have a chance at finding the Higgs Boson, The God Particle.

The resulting implosion of European Banks should generate showers of exotic particles.

Mon, 09/05/2011 - 09:31 | 1634019 Reptil
Reptil's picture

A return to the famous "Zalm-norm"? I don't believe that is still possible, it's going down right NOW. Greece and Italy can't balance their books, it's delusional to expect this.


Sun, 09/04/2011 - 17:13 | 1632149 Kimo
Kimo's picture

Why all this problem with lending if they can hedge their risks with derivitives?   /sarcasm=off

Sun, 09/04/2011 - 17:13 | 1632150 Rue
Rue's picture

ABN are owned by Royal Bank of Scotland. Doesn't that mean they'll be able to get funding through RBS?

Sun, 09/04/2011 - 17:54 | 1632266 Ronaldtheone
Ronaldtheone's picture

Abn Amro has been split up. The part Gerrit Zalm is CEO of is government owned. An other part is owned by RBS.

Sun, 09/04/2011 - 17:56 | 1632275 Rogier
Rogier's picture

ABN isn't owned by RBS. RBS bought just a part of ABN before blowing itself up. What is now known as ABN is owned by the Dutch government.

Sun, 09/04/2011 - 17:57 | 1632279 Danielvr
Danielvr's picture

They are not owned by RBS. RBS only took over parts of ABN-Amro. The remainder was merged with Fortis and nationalized in 2009. They continue to operate in the Netherlands as ABN Amro.

Sun, 09/04/2011 - 17:13 | 1632152 ISEEIT
ISEEIT's picture

On a long enough timeline...........

Bears always win. So has the strucure been formed. ALL PONZI schemes collapse. That is why they are PONZI schemes.

You nigga's ought to know this.

Flought it up they may due, but DOWN it will land.

Science bitches.

Yes, I'm merrily crazy as fuck, and correct as well.

Just true.

Sun, 09/04/2011 - 17:16 | 1632159 Hansel
Hansel's picture

This week in stupid shit CEOs say...

Sun, 09/04/2011 - 17:20 | 1632170 gwar5
gwar5's picture

Poor babies. They should have thought of that before the ill-conceived economic Mengelism experiment. NWO supranationalism is more decadent than plain old vanilla nationalism they said they were trying to avoid. 






Sun, 09/04/2011 - 17:23 | 1632176 Sudden Debt
Sudden Debt's picture

Luckely for the dutch they export 75% of their cheeze abroad....

crappy cheeze that is...

Never the less, when global warming kicks into high gear, they'll drown do problems will fix themselves :)


Sun, 09/04/2011 - 17:42 | 1632235 Confuchius
Confuchius's picture

We understand that your avatar is a portrait of either:

Yourself, or

The leader of the walloons...

Sun, 09/04/2011 - 18:27 | 1632376 cossack55
cossack55's picture

But is the Keukenhof still pumping out the tulips?

Sun, 09/04/2011 - 19:41 | 1632638 disabledvet
disabledvet's picture

I have it on good authority that a one "Wallace" considers their cheese delicious. Here's the video:

Sun, 09/04/2011 - 20:41 | 1632793 Marcuz Aurelius
Marcuz Aurelius's picture

Awww, did that Fortis deal hurt you as a "Belgian Nationalist" ?

Sun, 09/04/2011 - 17:28 | 1632188 RobotTrader
RobotTrader's picture

No wonder the dollar is rallying.  The scramble for liquidity is on.

Mon, 09/05/2011 - 02:03 | 1633522 PeterB
PeterB's picture

Don't bother explaining it Robot. The fact is if you melt your gold that's liquidity too! isn't it?

Sun, 09/04/2011 - 17:35 | 1632209 PulauHantu29
PulauHantu29's picture

Bonuses.That's all the CEOs worry about. Bonuses.

Sun, 09/04/2011 - 17:36 | 1632213 BarryG
BarryG's picture

Gerhard Schroeder - "We Will Have To Give Up National Sovereignty"

"Great Britain causes the greatest problems" (cheeky b****d)

Sun, 09/04/2011 - 20:13 | 1632734 PY-129-20
PY-129-20's picture

Schroeder is not very popular in Germany. In fact, he is despised. He created a lot of the problems that Germans face today.

One German word to describe his character: Machtgier - the lust for power.

Sun, 09/04/2011 - 17:39 | 1632224 Peter Pan
Peter Pan's picture

Apart from the rush of funds to the USA, i would hazard a very informed guess and say that a serious amount of money has been pulled from European banks and placed under matresses and in attics.

In the near future people will ask themselves why they even bothered with paper money of any colour when the system is so broken.

Watch for the big announcements out of Europe and the USA,

Sun, 09/04/2011 - 17:39 | 1632225 buzzsaw99
buzzsaw99's picture

the bernank can fix this in 15 minutes.

Sun, 09/04/2011 - 18:00 | 1632290 Mudduckk
Mudduckk's picture

My dad's a TV repair man. He's got the ultimate set of tools. I can fix it. [/spicoli=off]

Sun, 09/04/2011 - 19:55 | 1632690 Sgt.Sausage
Sgt.Sausage's picture

People on 'ludes should not drive.


Mon, 09/05/2011 - 00:02 | 1633321 WonderDawg
WonderDawg's picture

Is he gonna shit or is he gonna kill us?


Sun, 09/04/2011 - 18:04 | 1632314 New_Meat
New_Meat's picture

buzz: how will he make it last 15 minutes? ;-) - Ned

Sun, 09/04/2011 - 18:28 | 1632384 cossack55
cossack55's picture

15 minutes? Shit, thats 3 ounces of gold.

Sun, 09/04/2011 - 17:49 | 1632249 kito
kito's picture


Sun, 09/04/2011 - 19:58 | 1632696 Sgt.Sausage
Sgt.Sausage's picture

Truth. And you shoulda planted those nut trees a decade ago. Fuck, they take forever. Most of my fruit trees produced within the second or third year (most were 3 year old transplants). Fuck. The nut trees are, like, on year eight and still haven't thrown off one edible nut. Fuck. Fuck. Fuck.

Sun, 09/04/2011 - 22:38 | 1633140 Pure Evil
Pure Evil's picture

With so many ornamental fruit and nut trees being planted in the urban landscape its amazing any trees produce at all.

What happens when the pollen from an ornamental fruit or nut tree pollinates a fruit or nut bearing tree?

Who's genome wins the battle for supremacy?

Sun, 09/04/2011 - 23:53 | 1633301 Sgt.Sausage
Sgt.Sausage's picture

Let me edumacate ya: It doesn't matter what pollinates it. As long as it's something compatible it will produce its fruit (or nut, as the case may be) true to the type of tree it is. My Granny Smith apple tree will *always* produce Granny Smith apples, not matter what polinates it - and in my yard that could be any one of a dozen of my orchard apples, or one of 4 ornamental Crab Apple trees. Does not matter. The fruit is always the same. Always Granny Smith apples from a Granny Smith tree.

Where you run into problems is the seed from that fruit (or with planting the nut from a nut tree). What grows from the seed or nut in the next generation is where you may end up with your mongoloid, franken-fruit. What grows the next generation will be a mish-mash of the parents. This is a good thing  - it's how we've gotten over 2,000 varieties of apples. Cross-breeding makes for new discoveries all the time. The bad part? Only about 1 out of 10,000 of these monstrosities will produce desirable results. The rest will be inedible garbage.

Sun, 09/04/2011 - 17:59 | 1632277 knukles
knukles's picture

Joe: Hey boss, we got a bad liquidity problem

Boss: How bad, Joe?

J:  Like really serious fucking bad, boss.  Like fucking medieval bad.

B: Anybody else know about his, Joe?

J: Nope, just you and me, Boss.  What should I do?

B: Sit tight Joe.  I got an interview on Cable Network BizNuts Bullshit Newts in a few minutes and I'll mention it.  Maybe scare up a few deposits.  Whaddya think, Joe?

J: You're the Boss, Boss.

B: Fuckin'-A you know it, Joe.

                 (curtain descends as depositors run on the bank immediately after Boss' interview where he pisses and moans about the unfair liquidity conditions and that if everybody'd just give a little he'd not have to give a lot.)


Sun, 09/04/2011 - 17:59 | 1632283 vast-dom
vast-dom's picture

Again and over and over we all catastrophize and call the great recession (yours truly included) and teh fed and powers that be pull a SP/DOW/RUSSELL levitation act on anemic volume -- when is this mother going to go under already?


Anyone hear of FUNDUHMENTALS?

Sun, 09/04/2011 - 18:00 | 1632293 knukles
knukles's picture

Funduhmentals?  Yeah, Grandpa used to tell us about them things that people thought mattered a long time ago.

Sun, 09/04/2011 - 18:08 | 1632318 vast-dom
vast-dom's picture

Back in the days of olde when the abacus actually accounted for something vs. HFT voodoooo.


Let Barnanke do the dervish with hissing snakes and bitten off chicken heads and a little speaking in tongues poof the DOW at 13,600!

Sun, 09/04/2011 - 18:31 | 1632394 cossack55
cossack55's picture

I notice the Chinese never developed the CDS/CDO version of the abacus.

Sun, 09/04/2011 - 18:48 | 1632469 FinalCollapse
FinalCollapse's picture

WTF you talking about? What price discovery? We have Central Planning and Politburo. Fundumentals and Technicals are a joke now.

Sun, 09/04/2011 - 18:13 | 1632339 kaiserhoff
kaiserhoff's picture


Allow me no announce the critical capital needs of the new nation of Durdenia.

physical location - rumored to be near Nigeria - who gifs mit der big rat's ass?

banking - handled by our friends in the Caymans, due to our previous exploited, colonial status, BS, ad nausium.

mission - to help our poor, impoverished, illiterate, pissed upon population...,by borrowing a few trillion from the Fed, to be invested in physical pms, with a little rake off for rifles, shotguns, hollow point rounds, armour piercing, etc,.., gotta make this shit look real, has to be some graft.

duration of the scam, er God's work, er community action program, yeah that's it.

A - until we have more money than God

B - until the inauguration of President Ron Paul

C - until the public hanging of Ben von Numbnuts

D - until the dollar reaches parity with the dong

E - Hey, these aren't mutually exclusive - we could hit the quatrafecta.

      Who's in?


Sun, 09/04/2011 - 18:36 | 1632417 Mauibrad
Mauibrad's picture

Nice find.

Sun, 09/04/2011 - 18:52 | 1632482 nah
nah's picture

bullshit jobs for these bullshit bankers and their bullshit accounting to give us bullshit inflation leaving nothing but bullshit employment prospects


hurry up and save the world, bullshit

Sun, 09/04/2011 - 18:55 | 1632500 rittter
rittter's picture

There has been Zero mention of what I consider a well kept secret and topic that I have not found any discussion on.  What happens to the safety trade stocks.  Those multinational US companies that have enjoyed no taxes on their foreign profits as well as some of their US profits (which they have squirreled off shore) complements of those fucks in congress?  #1)  How is Congress going to give them a tax holiday, because you can't ask them to pay taxes, that would kill job growth?  If those companies repatriate that cash, won't they implode those foreign banks?  Those banks are leveraged 40:1 with that cash.  #2)  If the Euro implodes, and the companies want their money back before all hell breaks loose,  where in hell are those banks going to get that many Euros to buy dollars to pay them back with?  The greed and corruption between Congress and our major corporations must be so great that they don't have time to look ahead to see the train coming at them.  I think these multinationals are going to end up like our banks with over valued assets, except it will be with "cash", that may or may not exist, or that they may never get access to.  And one other thing, how in hell did all these corporations end up with record amounts of cash on their balance sheets during a record economic downturn?  Damn, they must be good!         

Sun, 09/04/2011 - 19:42 | 1632644 Toma Haja
Toma Haja's picture

1)  How is Congress going to give them a tax holiday, because you can't ask them to pay taxes, that would kill job growth?  If those companies repatriate that cash, won't they implode those foreign banks?  Those banks are leveraged 40:1 with that cash.  #2)  If the Euro implodes, and the companies want their money back before all hell breaks loose,  where in hell are those banks going to get that many Euros to buy dollars to pay them back with?


I was thinking along those same lines.  Aside from the Multinationals having need for working capital abroad, ie, that's where there growth and profit potential exist and are anticipated, repatriating 100's of billions would decimate economies around the world and destroy the very markets the multinationals are seeking to develop.  Besides, its not like the big U.S. corporations don't have cash to invest domestically (even if most may be parked off shore), they just can't justify it. 

Sun, 09/04/2011 - 20:19 | 1632749 delacroix
delacroix's picture

they borrowed it

Sun, 09/04/2011 - 18:57 | 1632506 chump666
chump666's picture

LIBOR spreads have been acting weird for a few mths now.  CDS market didn't really recover from the last equity sell off under a mth back.  You can feel something is seriously wrong.

Sun, 09/04/2011 - 19:07 | 1632526 FoieGras
FoieGras's picture

The 30s in Europe were not as bad in the US. That's what he meant.

Sun, 09/04/2011 - 19:26 | 1632589 bankruptcylawyer
bankruptcylawyer's picture

i here the mission impossible theme song in my head. 

Sun, 09/04/2011 - 19:31 | 1632606 Coldfire
Coldfire's picture

Among European bankers it is a well-known and uncontroversial fact that interbank liquidity is non-existent. ABN Amron is just stating the obvious. Another question is why they would do that. Loose lips sink ships.

Sun, 09/04/2011 - 20:51 | 1632835 how to trade ar...
how to trade armageddon's picture

The end of the Euro can wait, things are going to get interesting enough right here right now with Greece back on the brink of default.

Sun, 09/04/2011 - 21:00 | 1632859 lolmao500
lolmao500's picture

So what. If the euro implodes, they can still sell their stuff in EU countries... but it'll be sold in another currency. No biggie. All things being equal, of course.

But really, things won't be equal if the euro implodes. People will get poorer so they'll buy less stuff, not to mention the currencies will have to rebalance.

Sun, 09/04/2011 - 21:13 | 1632900 the balf
the balf's picture

Come on Timmy Geitner, stick your finger in the dyke!

Mon, 09/05/2011 - 06:43 | 1633680 Tompooz
Tompooz's picture

Awww! Not there!!

Sun, 09/04/2011 - 23:55 | 1633305 Lucius Corneliu...
Lucius Cornelius Sulla's picture

The European banks just passed a stress test.  There's nothing to worry about...the politicians and bankers told us so!

Mon, 09/05/2011 - 00:51 | 1633420 mcguire
mcguire's picture

"To those who would bet against the euro, watch out for your money because we are fully determined to defend the euro," Sarkozy said in a keynote speech. "Mrs Merkel and I will never -- do you hear me, never -- let the euro fall."

Mon, 09/05/2011 - 04:45 | 1633646 zippy_uk
zippy_uk's picture

My theory is that the Eurocrats think they know what they are doing, and think they have a plan. Actually they are incompetant and clueless with no plan. The real conspiracy is not German, French, or Eurocratic, it is the unspoken conspiracy of stupidity and collective ignorant group think.

There is a solution to all this - it is called bankruptcy

Mon, 09/05/2011 - 06:49 | 1633682 Tompooz
Tompooz's picture

They are laying the groundwork for a all-encompassing mutual swap arrangement between the Fed, the ECB and the IMF.

The creation of a  super-lender of last resort with cross linked currency and gold swaps to provide emergency liquidity where no single parliament or congress can hold any central banker responsible and all political leaders can point the finger at each other.

The final Act in the grand coup d'etat.

Mon, 09/05/2011 - 08:11 | 1633744 shacai
shacai's picture

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Mon, 09/05/2011 - 14:03 | 1635074 johnjb32
johnjb32's picture

Yes, but keeping the Euro would be far worse. This is a scare tactic. Not that the demise of the Euro wouldn't hurt. But it would then, as happened with Iceland, free nations and regions to prepare without a crushing debt load. -- Michael C. Ruppert

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