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Ben Bernanke: "The ECB Is Well Capitalized"

Tyler Durden's picture




 

This will be one of those "one picture is worth a thousand words" posts.

A quick preface:

During Congressional testimony, Ben Bernanke defended the Fed's FX swap lines by saying that the ECB was "well-capitalized." So instead of spending countless words explaining why that may not be quite so, we will merely show the bank's total assets (net of LTRO 2) and its capital and reserves (link). The adjusted balance sheet is pro forma for today's LTRO 2, which we noted earlier will add at least €311 billion in net assets to the ECB's balance sheet, and potentially much more. Assuming the minimum, it means the ECB's balance sheet will now hit €3 trillion. The capital backing these assets is €82 billion across the entire Eurosystem. In other words, the ECB's leverage is 36.6x. This according to Ben Bernanke is "well-capitalized."

And visually.

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Wed, 02/29/2012 - 13:55 | 2208727 trav7777
trav7777's picture

Not if they own silver today LOL LOL

Wed, 02/29/2012 - 14:01 | 2208748 nope-1004
nope-1004's picture

Ya, especially if they bought it yesterday at 8PM and sold it today at 9:25AM.

Only a 7 year old would do that, and an even less astute adult think of doing it, eh trav?  I've heard about the less sophisticated investors who have a 13 hour investment horizon.  Never met one, though.  NTMY.  LOL.

 

 

Wed, 02/29/2012 - 14:07 | 2208804 Sophist Economicus
Sophist Economicus's picture

Wait a minute.   You mean Trav is wrong and you don't buy when the price is going up and sell when it goes down?

 

Why, that would mean that you would sell into strength and buy when there are corrections!   Who the heck does that?

Wed, 02/29/2012 - 14:25 | 2208914 JW n FL
JW n FL's picture

 

 

Bernake Lends Against the Stock Purchases!

The Money is Rolled over into new Purchases of yet more stock!

The .25% that is paid on money barrowed?? that was raised from JUNK!! Collateral! to begin with? means NOTHING!!

 

Bernake Does NOT Need QE-3 outright where everyone can see it!

He has been printing every day of every week for YEARS! to push the market this much higher!

 

But becuase YOU FUCKING PROPOGANDA LOVING TOOLS DONT HAVE A WHITE PAPER ON HOW TO DO IT??? YOU ARE FUCKING BLIND??

 

It is days like today that I believe you fucking stupid fucks deserve what is happening to you.

Now down arrow for your ego becuase of your ignroance!

Wed, 02/29/2012 - 14:39 | 2208979 Schmuck Raker
Schmuck Raker's picture

Say it with me.

"Serenity now, serenity now, serenity now..."

Keep going. You're doing fine.

Wed, 02/29/2012 - 14:59 | 2209070 Bay of Pigs
Bay of Pigs's picture

Yes, with Trav here we need to keep our "bagholding" wits about us. LOL. What a clown.

Wed, 02/29/2012 - 16:44 | 2209564 Hard1
Hard1's picture

ECB should IPO with facebook, the last bubbles of the so called civilized world in 22nd century history books

Wed, 02/29/2012 - 15:00 | 2209081 steve from virginia
steve from virginia's picture

I saw the headline of this article and I had to laugh out loud.

Bernanke wouldn't recognize capital if it hit him over the head with a chair.

Wed, 02/29/2012 - 14:09 | 2208816 Troll Magnet
Troll Magnet's picture

and barack obama is a great president as ronald reagan was a great president.  our country is very sound financially.  debt is money.  paper is worth more than some hard, shiny metal.  hell, paper rules!  oh yeah, americans are smart!

Wed, 02/29/2012 - 14:16 | 2208857 ShankyS
ShankyS's picture

Wait, wait, wait a minute, will someone plese remind me how we got into this financial crisis in the first place? </sarc>

Wed, 02/29/2012 - 14:19 | 2208879 carbonmutant
carbonmutant's picture

You didn't question authority... :-)

Wed, 02/29/2012 - 14:40 | 2208987 Schmuck Raker
Schmuck Raker's picture

Because he is a Patriot.

Wed, 02/29/2012 - 14:52 | 2209043 disabledvet
disabledvet's picture

I know this may sound strange to humans but we are in fact an Alien race from the planet Aarghforyedmoin. In our world "everything is in fact the exact opposite of what we say." when we landed here we immediately in your "Wall Street" for only there did we find we find kindred spirits of a sort. things went great until your human year...2008 (known in our world as time zorplutta) then people uttered words like "trillions" and "easings" and quite frankly the strain of our ways became tiresome. We now habitate in your island world with your sandy beaches and your women. Thank you.

Wed, 02/29/2012 - 14:43 | 2209004 disabledvet
disabledvet's picture

I skipped the "mathy thing" myself.

Wed, 02/29/2012 - 14:26 | 2208922 ryanseventyfive
ryanseventyfive's picture

MDB would like a word with you.  Somthing about gimmick infringment or something.

Wed, 02/29/2012 - 14:13 | 2208834 true brain
true brain's picture

Everyone is ignoring the elephant in the room: US debt. Of course Bernanke is going to print, he has no choice. Interest rate is going to be flatline beyond 2014. Why because of US debt; he will monetize all US debt as far as the eye can see. Even if the interest rate creeps up to 2-3%; US is in deep trouble. Once the interest rate payment exceeds 30% of revenue, which will happen to US government this year, the US is toast. He is only saying that QE3 is not on the way to bring down gold and oil to pave way for Obama re-election; he can't let gold and oil skyrocket and wake up the sheeple. All media circuit analysts are clueless. I'll buy more gold on the dip.After that more printing, print the debt away; no way out.

 

Secondly, i'm sick and tired of reading idiotic posts by morons who got nothing  intelligent to say. either make me laugh or educate me. otherwise shut the fuck up.

Wed, 02/29/2012 - 14:18 | 2208865 Sophist Economicus
Sophist Economicus's picture

Agree with what you said EXCEPT the interest rate stuff.   Fed will buy any and all government paper - they 'give back' the interest every year.   Treasury has no fears of paying interest.   The ponzi won't unravel because of interest payments.   They've got that base covered

Wed, 02/29/2012 - 15:20 | 2209132 AlaricBalth
AlaricBalth's picture

I'm inclined to agree with true brain and respectfully disagree with you concerning interest rates. Net foreign holdings of Treasuries has increased in the past year by $296.5 billion. Although China and Russia have been net sellers, Japan, Canada and the U.K. have more than made up for it. As interest rates rise you will see greater foreign participation. 

Wed, 02/29/2012 - 14:23 | 2208901 A Lunatic
A Lunatic's picture

Feeeeed meeeeee!

Wed, 02/29/2012 - 14:30 | 2208949 lotsoffun
lotsoffun's picture

when they decide to take the chips off the table - pm's will be down also.  i'm long term not a 'trader'.  long term you want pm's.  but the dow, sp, rus 2000 are going to drop 50% and so will commodities.  then the hyperinflation kicks in and the stocks won't go up this time.  the commodities will

 

Wed, 02/29/2012 - 22:09 | 2210746 StychoKiller
StychoKiller's picture

The Asian PM whipsaw continues, Au up $21 and Ag up $0.44, currently.  The Chinese luuv the Bernank and his Ponzi wayz! :>D

Wed, 02/29/2012 - 14:38 | 2208977 jtg
jtg's picture

You are right, there is no way out, we are boxed in. Most think that if only the Republicans or Democrats push the right buttons all will be well again. We are entering the last bubble, pushed by the central banks monetizing debt and debasing currency. The antidote is physical gold and silver, and staying out of the way of the statist steamroller and social discord to come. We will not be out of this until the early 2020's.

Wed, 02/29/2012 - 14:46 | 2209015 Melin
Melin's picture

A caller on Peter Schiff's show talked about finally finding the hidden treasure in a Polish home.  The family knew their grandparents had hidden all their wealth during WWII and had searched for years to find it.  They were certain they'd find silver and gold. 

They found long-dead fiat instead.

Wed, 02/29/2012 - 14:48 | 2209020 collon88
collon88's picture

By my calculations, interest payments as a % of federal tax revenues for 2011 was 20.9%.  This is based on $454 billion in interest payments and $2.173 trillion in tax receipts.  It is likely your 30% figure for 2012 is way out of line.  What are you basing this number on?

Wed, 02/29/2012 - 14:59 | 2209077 Obaminator
Obaminator's picture

You Dare challenge da TRU BRANE(sic)? now now.

 

Wed, 02/29/2012 - 15:40 | 2209245 true brain
true brain's picture

It's not out of line because this is only feb/2012. You have to estimate what the deficit will be, what gdp will be (I'm betting flatline to recession toward end of year), what tax revenue will be.  And if they do iraq redux in iran, then of course it's going to hit 30%. Even if it does not hit 30% this year, and it hits that next year; tell me what the difference is. the equation and the prognostication have not changed, only delayed a year, not a bit deal. the big picture will still be the same: indefinite printing.

Wed, 02/29/2012 - 14:56 | 2209059 Obaminator
Obaminator's picture

How the Fuck do we make you Laugh?  AHHHH AHHHH AHHHH

 

SILENCE!

Wed, 02/29/2012 - 16:19 | 2209441 true brain
true brain's picture

I'm laughing already.

Wed, 02/29/2012 - 14:59 | 2209078 disabledvet
disabledvet's picture

"what do you mean my math formula was the entire planet's financial system?"

Thu, 03/01/2012 - 01:28 | 2211366 Elvis is Alive
Elvis is Alive's picture

"Even if the interest rate creeps up to 2-3%; US is in deep trouble. Once the interest rate payment exceeds 30% of revenue, which will happen to US government this year, the US is toast."

On one hand, I agree. If we hit 4 to 5% interest rates on our debt, we likely will have to default.

However, we "only" paid $200+billion in interest this year, and that is "only" 10% of the total budget. The interest rate averaged around 1.5%. To get to your 30% amount, we'd have to be at 4.5%

The real thing is if you have growth, you get inflation, and then you have to raise rates. Well, if we have that, we default, so the government is going to squash any growth.

I think people misunderstand the debt issue thinking that we MUST suffer from inflation from all this supposed money printing. What we really are going to suffer from is no growth just like Japan has.

Nobody is thinking long term anymore. We needed to deleverage, raise taxes a little, balance the budget, and cut entitlements. We could have sacrificed short term pain for long term gain, but we did the opposite.

I think if a president came out and asked that everyone cut back it would be doable. Reagan was the last president who was honest and said that to fix things there would be pain. No one dares say anything like that today. Well, Obama said it and then didn't do it.

I don't think we default as much as have twenty years of no growth. At 1.5% rates, this country can handle $25 billion of debt, and guess what? We are going to be there in five or six years.

Wed, 02/29/2012 - 13:59 | 2208750 idea_hamster
idea_hamster's picture

.

Wed, 02/29/2012 - 13:58 | 2208753 JumpinJonnyK
JumpinJonnyK's picture

keep an eye on the gold price and silver prices and buy when it's down (like today).  Just keep buying small amounts every month because you are going to need protection!!

Wed, 02/29/2012 - 14:01 | 2208772 SRVDisciple
SRVDisciple's picture

I've got some SPDR GLD, but do you recommend physical gold and silver?

Wed, 02/29/2012 - 14:20 | 2208884 LowProfile
LowProfile's picture

Depends on whether you prefer paper promises or the actual thing in your pocket.

Wed, 02/29/2012 - 14:29 | 2208931 Piranhanoia
Piranhanoia's picture

Live in Canada?

Wed, 02/29/2012 - 13:59 | 2208758 battle axe
battle axe's picture

Wasn't Lehman and Bear Sterns well CAPITALIZED also BENNY?

Wed, 02/29/2012 - 14:04 | 2208785 nope-1004
nope-1004's picture

+1.

Why should the Fed only lie once or twice?  Their existence is a lie, so that's their MO.

 

Wed, 02/29/2012 - 14:06 | 2208794 A Nanny Moose
A Nanny Moose's picture

So were Fanron and Fredron

Wed, 02/29/2012 - 14:09 | 2208818 Nothing To See Here
Nothing To See Here's picture

I think the Greek banks are well capitalized too if I follow my central bankster textbook correctly.

Wed, 02/29/2012 - 14:14 | 2208842 Manthong
Manthong's picture

"The ECB Is Well Capitalized"

It depends upon what the meaning of the word "well" is.

                       Now if you take "well" to mean deep hole with toxic sludge at the bottom, he is entirely correct.

Wed, 02/29/2012 - 14:24 | 2208910 SAT 800
SAT 800's picture

Correct. Perfectly well capitalized. Approved by the regulators, etc. everything was fine. Until it wasn't. One of the main tells for a major stage in the present de-fuckafication having passed, will be the death of the Euro. And, I mean, death. not one to one, not "a problem", death. this is one of the things that will have to happen before we can start to get things straightened out. The Euro was a giant mistake; it will be corrected.

Wed, 02/29/2012 - 14:41 | 2209000 SoCalBusted
SoCalBusted's picture

LEHMAN and BEAR STERNS are now well capitalized.

Wed, 02/29/2012 - 14:08 | 2208811 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Trav, you own silver.

Wed, 02/29/2012 - 15:02 | 2209090 Bay of Pigs
Bay of Pigs's picture

Cut your nose off to spite your face?

Wed, 02/29/2012 - 14:11 | 2208829 johnQpublic
johnQpublic's picture

the ECB is well capitalized

in fact, all the letters "ECB" are capitalized

Wed, 02/29/2012 - 14:27 | 2208927 SAT 800
SAT 800's picture

An extremely stupid comment.

Wed, 02/29/2012 - 14:30 | 2208946 Banksters
Banksters's picture

Trav, was your first menses traumatic?   

 

 

Wed, 02/29/2012 - 14:32 | 2208954 SAT 800
SAT 800's picture

LOL.

Wed, 02/29/2012 - 14:59 | 2209075 tmosley
tmosley's picture

You own silver you hypocrite. 

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