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Ben Bernanke: "The ECB Is Well Capitalized"
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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Tyler, I think you made a mistake:
http://www.ecb.int/stats/external/reserves/html/assets_2012-01.en.html
Lists the official reserve assetts of the ECB at only 62 billion Euro. Am I missing something incredibly obvious here?
Bernanke is smoking on Charlie Sheen.
The ECB doesn't need to be capitalized because the ECB is winning. Duh
Bernanke has tiger's blood.
Panther blood - 60% of the time, it works every time.
"The ECB is well capitalized." This statement fits in well with other famous statements like "the check is in the mail", "of course I'll respect you in the morning", and "I promise I won't c....."
Ben Bernanke's being wrong at everything rate is now over 100%.
Guess Greece is solvent too, Bernanke? Better buy up those 1 Year bonds now yielding 850%. Just imagine, almost a 10 bagger in a year...
All we need now is Jim Cramer to tell us Greek Banks are fine, do not take your money from NBG and it'll be 2008 all over again.
Lehman is well capitalized.
Bear Stearns is fine!
where does the ECB get all that money?
It comes from the productivity and hard work of the European citizens.
The blood of the German people.
Since Bennie belives that debt is an asset he may have a point...lol
Markets are flat today. Imagine that.
and Zero Hedge is the only to know these numbers? Why there is not a single one who could confront Bernanke in that question round, not even Ron Paul who was campaigning rather than putting Bernanke on the grill, rubbing these facts in his face? Same with "decreasing unemployment", which is only decreasing thanks to seasonal fudging and decreasing working population?
trillions of fiat money created out of thin air, and not a word about it...
I guess all BANKS are also well capitalized, and COUNTRIES
Good points!
But sadly, to bust the Ron Paul bubble that's already deflated in hyprocricy, had Mr. Paul been in attendence and had he confronted such fantasy and dosed it with real truth, then he would have been campaigning. A nationally televised news clip offers free advertising for the Paul campaign! But he wasn't there and he isn't "there" hence, it's proven that he's not, actually, running to win.
Isn't Bernanke the one that said, "the one thing the Federal Reserve CANNOT do is tell the truth"? If not, then maybe he should have, but slightly modified "The one thing the Federal Reserve WILL NOT do is tell the truth".
After all since the entire world runs a Ponzi fantasy economy where bankers decide who gets money and how much and there is no relation to any actual value; we would have to assume that words are more important than facts and lies more valuable than truths ... OINK.
So if they're well-capitalized, we can end the dollar swap facilities.
Read Bernank's words clearly. Pay attention that educated people craft public comment to say EXACTLY what they're saying.
In this case, a WELL must be drilled and is a passageway deep into the ground that one can find water. There's little water on the surface hence the need to pull it far from below. It can run dry at any time. It's not a resevoir or a significant rain storm. It's only access.
Banks are Well Capitalized.
He also famously said: "Gold is not money" to Ron Paul a few hearings ago.
He is becoming more quotable than Yogi Berra.
That's one hell of an LTRO erection. Of course, it's not the size - it's what you do with it.
Ben Bernanke...= compulsive liar.
It's a no brainer.
Yep, they have plenty of ink and plenty of paper- well capitalized, indeed.......
Boys, boys.
Just wait til gold is freed from paper/electronic shackles, THEN you'll see exactly how well capitalised the ECB is.
Everything between now and then is just a game, and poor old Uncle Bucky is losing every time (as he refuses to take his medicine).
Gold...get ye some!
Come on, don't be so sensational! At only 37x (I had 39x but did not adjust for "sanitization") they could handle anything approaching a 3% move in their asset base, which is primarily sovereign obligations, either directly or held as collateral. When have sovereign bonds ever moved 3%? Italian 10-years "crashed" when they went from 4.5% to 7.5% and that's only 3%, right?
Oh, wait a minute! Where's my HP-12c? Let me see, bond price calculation.......
My compliments to Mr. Bernanke, he will get his bonus. First, if metals would have moved ahead, USD weakness programmed to 1.40 and second, making congratulations to M.Draghi was compulsory, a conditio sine qua non, obviously leaving BOJ out of the discussion. The race between the CB has only started, everyone wants to be the fastest in the race. So keep on looking for real assets. BB knows it full well.
Where is the Fed leverage picture ?
And: do not forget, BB needs Obama as president, or the other way round??
ridiculous. All the candidates except Ron Paul work for the BB. Obama is expendable.
ridiculous. All the candidates except Ron Paul work for the BB. Obama is expendable.
"the ECB is well capitaized." = "I will make sure that the ECB is well capitalized by money that I print."
We all have Friday Bets on FDIC failures and now we need to get a pool going on the European Banks.
Never mind the goddamn metals, they rise and fall. Not worthy of headlines.
Whenever Bernanke speaks about finance stuff, the markets drop.
Maybe he could talk about the process of oil refinery instead, so the price of gas drops a bit....
At the committee meeting today; "Mr Bernanke, you started moving your lips and the markets dropped, why is that"?
Bernanke; "That wasn't me, that was my sock puppet."
The Fed no longer well-capitalized.
It has no silver:
http://bit.ly/AqEhoK
Today the good doctor asked BB if he does his own grocery shopping.
When BB said yes, RP then suggested BB knows the old CPI numbers are over 9%,
and observed the Fed destroyed the value of money (and markets)...
He should have said: "The ECB has joined the Federal Reserve in creating infinite fiat money out of thin air. As long as we can convince the rest of the world it's worth something extend and pretend is still effective."
Irrational exuberance is back. But if everything is so great, why does it feel so awful?
What he meant was that there are many capitals in Europe....Athens, Rome, Madrid....
Hi there,
Please consider capital and reserve of the ECB not to be €b 82 but instead 476 because you have to take into account the line 11 €b 394 in the balance sheet, witch represent the cumulated profits so the real leverage is 6.3 that makes a difference!
Please consider this link to Jean Pierre Chevallier blog explaining that stuff in French(sorry):
http://chevallier.biz/2012/01/bce-son-tresor-et-olivier-berruyer/
Sorry about that
Regards
"The ECB is well capitalized" kind of like "There is no housing bubble to go bust".......
The Wall Street Ranter
He meant 'well-capitalized for a central bank (which doesn't need capital in my book because it can print unlimited amounts of money, which is even better)'.
It's a bit like 'I did not have sexual relations with that woman (she just gave me a BJ which is just a misplaced peck on the cheek)'.
Anyway, he's sent gold back to the bargain basement. What's not to like?
Life in Europe is good. The euro is strong. The ECB is rock solid. I believe Bernanke. After what he did to gold today, he is my new hero. I thought he was dumb but he proved me today that he was in charge of the world and that is something.
ECB is well capitalized..they just printed 700+ billion...
ECB hands out $712 billion in loans to banks
http://www.google.com/hostednews/ap/article/ALeqM5jp-dq7gfur-ayonHkclXFwDjvk-Q?docId=c3a589455370468f9283902a2f9291cd
NOT TRUE Tyler... they have about 500billions in carried profits, amongst others from Gold holdings...
You are not taking the Chinese, Russian and Arab implicit gurantee into account :)
it is funny.
http://www.jinrongbaike.com/
http://www.cnhedge.com/