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Bernanke Getting Cold Feet On European Bank Bail Out?

Tyler Durden's picture


Two weeks after Bernanke agreed to invest unlimited taxpayer funds in the form of global FX swap lines to prevent a worldwide dollar funding squeeze arising from the Europen financial collapse, the Chairman appears to be getting cold feet. BusinessWeek reports: "The Federal Reserve Bank of New York may ask foreign lenders for more detailed daily reports on liquidity as the U.S. steps up monitoring of risks from Europe’s sovereign debt crisis, according to two people with knowledge of the matter. Regulators held informal talks with some of the largest European lenders about producing a “fourth-generation daily liquidity” or 4G report, according to the people, who asked for anonymity because communications with central bankers are confidential. The reports may cover potential liabilities such as foreign-exchange swaps and credit-default swaps, said one person. The U.S. has already increased the number of examiners embedded in these banks, the person said." In other words, not only after Bernanke's pledge to fund as much money as is needed to prevent bank defaults around the world, is he actually going to have enough information to determine if there is any danger of this money not getting repaid. Well, better late than never. But at least we can permanently set aside any latent questions over whether European banks have liquidity problems. When even the Fed no longer believes you, you have far bigger problems than just liquidity (except for Dexia: liquidity there may well be the largest problem, but at least it won't be for long).

From Business Week:

Concern is growing that European lenders may falter as Greece teeters on the brink of default. U.S. Treasury Secretary Timothy F. Geithner has warned that failure to bolster European backstops would threaten “cascading default, bank runs and catastrophic risk” for the global economy.


“The Fed is trying to understand what the pressure points are in terms of liquidity and potential risks that are imposed by foreign banks to domestic institutions in our financial system,” said Kevin Petrasic, an attorney at the Washington- based law firm of Paul, Hastings, Janofsky & Walker LLC. “There is a little bit more sense of urgency as a result of what’s going on in Europe.”


"The report requires rapid and in some cases daily data on a banks’ assets, liabilities and potential claims to measure the degree to which the bank could be caught in the classic borrow- short, lend-long squeeze,” Petrou said. “The 4G is one of the tools to reveal liquidity risk.”

Oh, wait, so there is liquidity risk...because based on the prior set of lies, it didn't seem that way. And it gets better:

Regulators lack access to data on foreign institutions operating in the U.S. that would allow them to “make informed judgments about the adequacy of such firms’ capital and liquidity buffers,” William C. Dudley, president of the Federal Reserve Bank of New York, said in a Sept. 23 Washington speech.

But, but, isn't September 23 a week after the Fed pledged however much money is needed to rescue the world? Shouldn't the Fed have had this information before it took the generous decision to risk not only taxpayer capital but the reserve currency status of the dollar. Because based on historical experience, and based on Bernanke and Geithner's repeated promises that the only thing they care about is the stability of the dollar, there may be a modest to quite modest discrapncy between rhetorica and reality.

As for the actual 4G reports, we can't wait to find out just which European bank has bought or sold CDS on itself (because, unlike in the US, in Europe it appears that this is actually not prohibited).


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Sun, 10/02/2011 - 20:57 | 1731905 Robslob
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Sun, 10/02/2011 - 21:13 | 1731932 mcguire
mcguire's picture

Borat, is that you?  I thought you arrived in America's airport with clothings, U.S dollars and a jar of gypsy tears to protect you from AIDS...

Mon, 10/03/2011 - 05:01 | 1732439 Cynical Sidney
Cynical Sidney's picture

bruno loves Ron Paul and so could i. Dr. Paul will stop all this nonsense, he'll give you a bag of silver, a copy of auditing manual and a strand of bernanke's jewish beard to protect you from the FED's flagrant malfeasance in complete disregard of its mandates

Sun, 10/02/2011 - 21:55 | 1732010 brandy night rocks
brandy night rocks's picture


Sun, 10/02/2011 - 22:21 | 1732068 jekyll island
jekyll island's picture

What's the big deal?  The Bernank has unlimited resources, why shouldn't he bail out European banks, errr, countries.  I am sure his handlers have significant exposure and they need to protect their positions.  

Sun, 10/02/2011 - 23:41 | 1732212 Spirit Of Truth
Spirit Of Truth's picture

Seriously, who in the hell does Bernanke think he is?  This unelected dweeb is grossly out-of-touch with reality.  His PhD in economics testifies to this fact.  What's worse, he acts on his delusory worldview WITH EFFECTIVELY OUR MONEY (via taxpayer obligations)! What is this?!  How could such a system ever have been concocted in the first place?!!

America's Founding Fathers are rolling in their graves. 

Sun, 10/02/2011 - 22:16 | 1732057 Old Poor Richard
Old Poor Richard's picture


Sun, 10/02/2011 - 21:05 | 1731906 Market Efficien...
Market Efficiency Romantic's picture

well, now they have at least achieved to hold the key to directly crash and burn Europe or let it prosper at its will. Who was that again that owns the FED?

Sun, 10/02/2011 - 21:15 | 1731940 Spitzer
Spitzer's picture

Its just the opposite actually. The ECB holds the key to the dollars demise. If the ECB refuses to print then all the Fed primary dealer banks in Europe go broke. So the ECB is forcing the Fed to print rather then print Euro's. That is long term dollar negative and long term Euro positive.

The ECB can print Euro's as easy as the fed can print dollars. If printing was the answer then why wouldn't the ECb just do it ?

Sun, 10/02/2011 - 21:34 | 1731983 Market Efficien...
Market Efficiency Romantic's picture

well, somewhat agree, to the FED, it appears to be a necessity, but it is not the ECB power, as the ECB is differently structured than the FED ( I guess that is what you refer to). Although, legally independent, it is a public central bank and not a private one, meaning, they will never bail out with astronomic balance sheet expansions as they have no legitimacy to do so.

Sun, 10/02/2011 - 22:00 | 1732015 Ahmeexnal
Ahmeexnal's picture

Silly Spitzer.  If the ECB refuses to print, uncle Sam will confiscate all european gold currently under US custody.


Crash, burn, reset.

From the ashes a gold backed Amero, and a tribal europe at war with itself....again.

Sun, 10/02/2011 - 22:05 | 1732026 Market Efficien...
Market Efficiency Romantic's picture

Right. In practical terms, the FED provides swap lines with the ECB guaranteeing instead of individual entities (as it is). As ECB members, EU nations will indirectly gurantee with their gold reserves in US vaults. 

Somewhat funny: US gold was virtually transferred to Germany to reflect trade imbalances, now it will be redirected to reflect currency imbalances. As if it had never moved, always residing in those NY vaults, right? At least that way, Europe would not be outraged if those gold reserves were not where they were promised to be. 

Sun, 10/02/2011 - 22:21 | 1732069 Spitzer
Spitzer's picture

France pulled out of the London Gold pool,  destroyed Bretton Woods 1 and sent a ship to New York to pick up its gold.

Confiscation didn't happen then and it will not happen now. The US had more legit reasons to play that card then and they didnt do it. The actions France took is what led to the oil shock in the 70's and 20% interest rates in the 80's.

Sun, 10/02/2011 - 22:27 | 1732079 Market Efficien...
Market Efficiency Romantic's picture

Well there is a difference between the gold reserves of France and Germany. And secondly, there is an even bigger difference between the degree self-confident, conflict-provoking action between what France has done and what Germany would ever dare to do to the US.

Sun, 10/02/2011 - 23:43 | 1732175 Ahmeexnal
Ahmeexnal's picture

Back in the early 70's the US was the worlds largest creditor. It ran a trade surplus (deficit on some years). It manufactured loads of goods. Giving France it's gold back would not break the bank.

Fast forward 40 years.

Now the US is the largest debtor. It runs a huge trade deficit.  Manufacturing has been mostly outsourced. The US will not give that gold back. Now now. Not ever.

Sun, 10/02/2011 - 23:51 | 1732234 Spitzer
Spitzer's picture

The ECB could easily threat to buy gold on the open market with all of its remaining dollar holdings if the US didnt hand over the gold.

Mon, 10/03/2011 - 00:08 | 1732246 Market Efficien...
Market Efficiency Romantic's picture

Right and at what price, why does China not follow that gold-focussed strategy with all its even bigger dollar reserves? Who is supplying such amounts of physical gold? No one, and that is why China is catching up so slowly with its open market gold accumulation.

And why threat? With the US being the by far largest holder of physical gold, a threat to exchange dollars for gold in the open market with drecreasing valuation of the dollar and increasing dollar valuation of gold would not really pose a threat to anyone. If it did, European and Chinese dollar reserves had long been used as a threat, but as we all know the are more a burden than anything else.

Mon, 10/03/2011 - 00:18 | 1732273 Spitzer
Spitzer's picture

No. The ECB has more gold then the US.

ECB 10,300 tons

US Treasury/Fed 8000 tons

Mon, 10/03/2011 - 00:34 | 1732284 Ahmeexnal
Ahmeexnal's picture

And who's got more ICBMs?

You think the MIC will just fold it's cards and give it's chips, when they are holding a Royal Flush?

You must be a 7 year old living in candyland.

Euro is dead. It was born dead. It was a scam to destroy some european economies and to reignite the same thousand year imperial pipedreams of old.


Mon, 10/03/2011 - 08:44 | 1732682 Spitzer
Spitzer's picture

its not as simple as un sophisticated gold bugs like you think.

Mon, 10/03/2011 - 08:04 | 1732580 BigJim
BigJim's picture

A sovereign holding large amounts of USD reserves threatening to spend them all on gold on the open market is the economic equivalent of dropping an ICBM on Washington DC.

Yes, the US has huge reserves of gold (though it should be remembered all the CBs in the world only hold an estimated 20% of all gold), but, at the moment, the US has something even better; it has world reserve currency status, the equivalent of a credit-card that never has to be paid back. If the US no longer has the exorbitant privilege of being able to exchange valueless paper for value, how long do you think its gold reserves will last?

This is why the US and its client states will fight tooth and nail to retain the dollar standard. The end of the dollar standard means OPEC are no longer exchanging US paper for oil.

The day we lose the dollar standard is the day we invade the entire ME to maintain our oil supplies.

Mon, 10/03/2011 - 05:27 | 1732446 schadenfreude
schadenfreude's picture

While you might be right with the confiscation, a war in Europe is as impropable as Americans get out of their passiveness and start revolting against the corporatocracy.

Sun, 10/02/2011 - 21:48 | 1732005 jm
jm's picture

Rubbish.  The world hung its hat on cheap dollar funding that spewed out of the front end of the yield curve.  Operation Twist makes the TSY yield curve flatten and you get a funding squeeze trap. 

The ECB has been monetizing like wild, and it can't print fast enough because half of Europe's governments are bankrupt, and its financial system is net in worse shape.  You say the ECB has the Fed by the balls... the ECB is at death's door.    


Sun, 10/02/2011 - 21:59 | 1732021 Spitzer
Spitzer's picture

If the ECB was printing like wild then Greek interest rates wouldn't be through the roof.

The Eurozone is a net creditor with no trade deficit.

The US has about 50 billion in forex reserves, just enough to cover one months trade deficit.I could go on and on about how screwed the US is but some people need to learn the hard way.


Sun, 10/02/2011 - 22:08 | 1732036 jm
jm's picture

If the ECB was printing like wild then Greek interest rates wouldn't be through the roof.

Enjoy some facts:

Greece is a problem is bigger than the ECB printing press can handle, because nobody knows what flame it will spark. 

Your argument doesn't put the ECB in the drivers seat... it just speaks to the lengths people will go to justify their biases.



Sun, 10/02/2011 - 22:24 | 1732074 Cliff Claven Cheers
Cliff Claven Cheers's picture

Sunday, Oct 02, 2011 09:29 PM

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Sunday, Oct 02, 2011 09:29 PM

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Sunday, Oct 02, 2011 09:33 PM

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Sunday, Oct 02, 2011 09:52 PM

. . . . . . . . . . . . . . . . . . . . . . . . . 


Sun, 10/02/2011 - 22:28 | 1732081 Spitzer
Spitzer's picture

Greece is the whipping boy for the world when it comes to bad economics. Every time the US gets in trouble, like debt downgardes, they trot out a new story about Greece.

Funny how California is the biggest state in the dollar bloc and its in equally as bad of shape as little Greece. I wonder what Cali will look like with 50% interest rates....

The ECB doesn't want to print. It is not because they have a slower printer that interest rates are up.

Mon, 10/03/2011 - 01:30 | 1732334 IrritableBowels
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Just wondering...You penned the above link and it appears to be your only entry?

Mon, 10/03/2011 - 08:46 | 1732689 Spitzer
Spitzer's picture

I just started the blog a day ago.

Sun, 10/02/2011 - 22:43 | 1732106 abalone
abalone's picture

Standing ovation to you Sir

Sun, 10/02/2011 - 23:20 | 1732180 macholatte
macholatte's picture

Where do the Swiss fit into this?

They volunteered to hold up the Euro and print as much as needed. Soooo.. if the ECB was printing that would cause the Euro to fall but the Swiss have to print more to hold it up but everyone wants to dump the Euro so the Swiss have to print more. What was that section from Princess Bride>>>

You'd like to think that, wouldn't you? You've beaten my giant, which means you're exceptionally strong, so you could've put the poison in your own goblet, trusting on your strength to save you, so I can clearly not choose the wine in front of you. But, you've also bested my Spaniard, which means you must have studied, and in studying you must have learned that man is mortal, so you would have put the poison as far from yourself as possible, so I can clearly not choose the wine in front of me.

Sun, 10/02/2011 - 20:58 | 1731907 pauhana
pauhana's picture

I was laughing my ass off until I got to the last paragraph which is really not funny.  I knew our regulators were derelict but it seems they have lots of company.

Sun, 10/02/2011 - 21:03 | 1731914 Atomizer
Atomizer's picture

The Federal Reserve will use unconventional measures to prop up ghost assets.

Sun, 10/02/2011 - 22:11 | 1732046 X.inf.capt
X.inf.capt's picture

protect your assets accordingly

glad i broke out the post hole digger....

Sun, 10/02/2011 - 23:48 | 1732227 zorba THE GREEK
zorba THE GREEK's picture

One Fed governor when recently asked if the Fed was out of bullets replied; "The Fed is not now out of bullets, nor will the Fed ever 

be out of bullets". That may not be the exact quote but it is the exact meaning of the quote. What that conveys to me is that there is no limit

to how much the Fed can print. So if Bernanke's masters need him to bail out Europe and every bank in the western world and the U.S.A.,

he not only can, but will oblige them as the people look on in horror. One must always remember, Bernanke first and foremost works for

the banks.

Sun, 10/02/2011 - 21:03 | 1731916 buzzsaw99
buzzsaw99's picture

the only thing the bernank cares about is doing the Lloyd's work.

Sun, 10/02/2011 - 21:38 | 1731993 rocker
rocker's picture


Sun, 10/02/2011 - 21:08 | 1731918 Spitzer
Spitzer's picture

He has no choice. The ECB has the Fed by the balls.

 The world gets a new monetary system every 30 or 40 years, and it is past due for a change. We had the classical gold standard from 1873 until World War I(43 years), the gold exchange standard between the two world wars(21 years), the Bretton Woods 1 system from 1944 until 1971(27 years), and since 1971, the entire world has been on the Bretton Woods 2 system or the dollar standard.(40 years and counting)

Now let's look back at Bretton Woods 1 again....Full article link


Sun, 10/02/2011 - 21:27 | 1731961 Alvaro de Esteban
Alvaro de Esteban's picture

Are everybody so insane to use a multicountry ( yes Greece included), multidebt, unanimous decission diven & Draghi ( Greece scamm designer) supervised currency as the new standard????.

Yes I know the actual is not much better

Sun, 10/02/2011 - 22:02 | 1732028 Spitzer
Spitzer's picture

Who said anything about a standard ?

The Euro is simply designed to piggy back  gold after the dollar self destructs.

Every government will be dealing with the same circumstances as the govt of Jamaica after the reset. No borrowing power because nobody will be using bonds as a store of value.

Sun, 10/02/2011 - 21:25 | 1731965 Market Efficien...
Market Efficiency Romantic's picture

sorry, but I cannot follow the logic of the article, If you condemn debt and call for a move to an asset-backed reserve currency, then EUR is clearly inferior to USD. 

Due to China's lack of assets to back, the new world power will agree to lift SDR, the meta fiat, to power. The only difference: The IMF is global and virtual, so it cannot be attacked, voted down by people or traded against by any member.

The only way to avoid the final enslavement is for politicians to publicly state that the current debt situation cannot be solved, requiring a global haircut - or a social redistribution of wealth. If it was only for the elites to be haircut, that would be an easy task for politicians, but unfortunately, the elites managed to involve the majority of the people in the credit markets. Lets say, 80% are involved with 10% ownership through pension funds and life insurances. With that, the elite knows that no politician will dare to declare the necessity of a global haircut.

Not declaring the necessity will require a last resort lender, and with central banks being increasingly inelligable, it will be the IMF, resulting in the vanishing of monetary sovereigns and thus the national grip on their economies.

Sun, 10/02/2011 - 22:13 | 1732050 Spitzer
Spitzer's picture

You are totally underestimating the power of gold.

None of the millionaires in a country like Jamaica save their purchasing power in the local currency because they know it can be duplicated and spent by the socialist government. The Jamaican dollar still works fine as a medium of exchange for short term purchases even though nobody is saving in it. That is also why when a banana republic country decides to print money, inflation is realized the next day because there is so little purchasing power to draw on from printing. Now you know why you see all those random inflation numbers in banana republics at 8 to15 to 30 percent.

Now take the concept above and apply it to the developed world. What if all the savers in the world decide to start saving in a currency that cannot be duplicated ? (gold)

Would governments and central banks have anything to gain by printing ? No

Will local fiat currencies in the developed world still work fine as a medium of exchange ? Yes

Sun, 10/02/2011 - 22:22 | 1732070 Market Efficien...
Market Efficiency Romantic's picture

I get your point, but IMHO you overstimate the power of people grown up with fiat systems to truely revert to not only asset backing but asset. There is a power behind the fiat that derives its wealth from fiat inflation. They need to roll instead of shifting to an asset. IMF SDR are the perfect solution, especially given China will due to its lack of gold not support a gold reserve.

Sun, 10/02/2011 - 22:33 | 1732090 Spitzer
Spitzer's picture

"There is a power behind the fiat that derives its wealth from fiat inflation"


The only reason wealth can be derived from fiat is because people are using fiat denominated bonds as a store of value.

If fiat had value in itself then printing world work equally as good in any country. The reality is, it doesn't. The only places where fiat printing works is where there is savings to be accessed through duplication.

Sun, 10/02/2011 - 22:46 | 1732114 Market Efficien...
Market Efficiency Romantic's picture

Agree, but if they do so

"using fiat denominated bonds as a store of value."

why would they allow for shifting to an asset, which would due to an imbalance of fiat to asset mean writing down fiat-created bonds? Makes less sense than extending the fiat lie to the virtual world of the IMF.

And the China argument is still valid. Who will follow the US to a gold-backed-US-controlled-currency away from the next superpower China. Doing that would be an worthless statement of loyalty to the US at the price of cutting trade ties with China. Hm, no, don't think so.

But I agree, it would be in the interest of the US as a nation. The only problem, the US as a nation does neither create a currency nor is it the driver of dollar policy. 

As a result, the elite holding fiat bonds and controlling the FED would have no interest in appreciating and shifting to gold, neither has China, so why would it happen. Because of the people in social control of currencies, you are not serious about that???

Sun, 10/02/2011 - 23:00 | 1732146 Spitzer
Spitzer's picture

why would they allow for shifting to an asset

They have no control over the situation. That is like saying, why would they allow housing prices to fall. It wasn't in the bankers interest for that to happen either.


Sun, 10/02/2011 - 23:11 | 1732167 Market Efficien...
Market Efficiency Romantic's picture

Good point, but wrong interpretation: Right, housing prices fell, but who paid the bill? Capital power did not accept the write down of its inflated assets, instead it passed the mess to the next level in the fiat system. Why would the people not turn to an asset as source of value back then? That is exactly the same as passing decreasing sovereign bonds to the IMF at face value. 

I fully agree, from the people's perspective or from a normative perspective, condemming fiat and bailout policy is so necessary, but I have learned that the pragmatism of power works differently.

Sun, 10/02/2011 - 23:51 | 1732230 Ahmeexnal
Ahmeexnal's picture

Once again, you prove to all you don't know shit from shinola.

It was in the bankers interest to have a subprime meltdown and have housing prices fall.

Goldman Sachs and other major banks were betting on this to happen, against their own clients!!

Sun, 10/02/2011 - 23:55 | 1732244 Spitzer
Spitzer's picture

Yeah and Goldman was on balance, bankrupt in 2008.

Everyone likes to pretend they are Peter Schiff now. Nobody really thought housing prices where going to crash. They still dont think so in Canada or Australia.

You dont know jack shit.

Sun, 10/02/2011 - 22:26 | 1732078 abalone
abalone's picture

Please stop discussing your wet dreams in public.

Sun, 10/02/2011 - 22:34 | 1732096 Spitzer
Spitzer's picture

It is what it is... Whether you choose to believe it or not is irrelevant.

Sun, 10/02/2011 - 21:05 | 1731920 PulauHantu29
PulauHantu29's picture

Deflationary Death Spiral?

..RE, plunging...

...Wages, plunging...

...stock market, plunging...


Is this the Dance with Deflationary Death?


Sun, 10/02/2011 - 21:56 | 1732017 traderjoe
traderjoe's picture

And you think in a deflationary spiral the debt-based fiat will increase in value as the system is collapsing?

Sun, 10/02/2011 - 23:26 | 1732110 cranky-old-geezer
cranky-old-geezer's picture



Ahhh yes, economists' great dilemma, consumer demand collapsing while currency is printed out the wazoo to keep dead banks walking.

Is it inflation or deflation?

It's GDP collapse combined with monetary inflation, way fewer products and services being chased by way more dollars, otherwise known as hyperinflation.

Prices don't fall because the currency is weakening rapidly. Demand collapse normally causing prices to fall is offset by rapidly weakening currency resulting is prices staying more or less where they are.

But paychecks don't buy squat anymore because the dollars in those paychecks are weakening rapidly.

It's classic textbook hyperinflation. Not "stagflation", not "biflation", nor any of that bullshit.

"Hyperinflation" covers both aspects of it.  Falling GDP and currency printing. 

"Hperinflation" is a comparison term so to speak.  It describes falling GDP with steadily increasing money supply, or steady GDP with rapidly increasing money supply.  Both cases yield the same result in terms of prices.

Mon, 10/03/2011 - 00:00 | 1732254 Waffen
Waffen's picture

I have no idea why so many ZeroHedgers avoid the hyperinflation word.  its gonna happen people

Mon, 10/03/2011 - 01:32 | 1732336 Cliff Claven Cheers
Cliff Claven Cheers's picture

How will it happen?

Mon, 10/03/2011 - 11:07 | 1733111 cranky-old-geezer
cranky-old-geezer's picture



It's already happening.  The US dollar has lost over 1/3 of its value since Sept '08

Sun, 10/02/2011 - 21:10 | 1731929 bugs_
bugs_'s picture

One thing we've learned is that a troubled institution NEVER fully discloses how deep in the hole they are.  The same goes for countries.  So Bernank should be much do they really need?   Will I, the Bernank, have to go to congress to get the debt ceiling raised again and again for a need that has nothing to do with the needs of United States citizens?

Sun, 10/02/2011 - 21:13 | 1731933 oogs66
oogs66's picture

now the fed controls the ecb...he really is superman

Sun, 10/02/2011 - 21:16 | 1731944 Spitzer
Spitzer's picture

No the ECB controls the Fed. The ECB is extorting dollars.

Sun, 10/02/2011 - 21:14 | 1731936 Sean7k
Sean7k's picture

It's all fun and games until someone poops in the liquidity pool. Talks cheap Bernanke and for all you European fools attempting to manage the titanic. The boy who cried wolf is not going to be believed anymore. Deflation has eaten granny (and not in a good way) and Little Red Riding Germany is next. That woodsman Sarkozy is going to cut and run Red. 

Don't worry, like all good fairy tales, there will be a good ending for bankers. Unless this is one of those original Grimm fairy tales...


Sun, 10/02/2011 - 21:14 | 1731939 Unprepared
Unprepared's picture

"Brenanke getting cold feet"

Does he also see a light at the end of the tunnel? Yes Dr. Faust, run toward the light.

The pleasure-loving Emperor demands money and more money, and the imperial coffers are empty. Faust, with Mephisto, solves his dilemma by the creation of paper currency. The Emperor, far from profiting by his new solvency, demands fresh extravagant entertainment, and Faust is persuaded to conjure up for him the shades of Paris and Helen. He succeeds in doing so, inspite of great difficulties and hazards; he summons the goddesses , but, when the figures appear, he is so taken with Helena's beauty that he attempts to seize her; the shades dissolve, an explosion shakes the hall, and Faust falls senseless to the ground.”

Goethe’s Faust, a summary from the German Literature Companion.

Mon, 10/03/2011 - 00:44 | 1732293 slewie the pi-rat
slewie the pi-rat's picture

"doctor faustus" quite popular in elizabethan theatre, too! 

Sun, 10/02/2011 - 21:15 | 1731941 max2205
max2205's picture

Why does Germany worry about adding more bailout money, Ben s gonna backstop till the whole thing explodes in our face. Boom

Sun, 10/02/2011 - 22:11 | 1732043 Market Efficien...
Market Efficiency Romantic's picture

Wonder why that FED audit reveals such horrible news just now? The Bernankster has just been degraded to a powerless observant. This move shifts the last resort lender power from the FED to the IMF, hoewver, unluckily neither serving Europe nor the US.

Sun, 10/02/2011 - 21:15 | 1731942 digalert
digalert's picture

"requires daily data on a banks’ assets, liabilities"  WTF?

We've been asking for ANY bank data for years, and here they demand daily reports! Preposterous, the nerve. 

Sun, 10/02/2011 - 22:33 | 1732092 jekyll island
jekyll island's picture

What is the M3 at this year, anyway?  Oh, that's right, Bernanke must have run out of ink when he was printing the money supply report.  

Sun, 10/02/2011 - 22:54 | 1732131 Bicycle Repairman
Bicycle Repairman's picture

The Greeks ran out of ink when it was time to print new tax forms.  Maybe we've hit Peak InkTM.

Sun, 10/02/2011 - 21:17 | 1731949 Captain Willard
Captain Willard's picture

If the Bernank is getting cold feet it is a good thing.

The only chance to avoid disaster is to nationalize the weak European banks as soon as possible. His "cold feet" will force the hand of the ECB, as it were. Even then, it may not work.

The expanded dollar swap line just won't be enough.

Sun, 10/02/2011 - 21:22 | 1731959 disabledvet
disabledvet's picture

Is there anything older than "having to ask for the money first"? obviously not. "opening swaps lines" isn't the same as "feeding time for the pigs." What you call cold feet is simply a "request for information." in short "how much do you need" for Wall Street is answered differently when it's "the entire Continent of Europe on line 2 sir." Shall we answer what the next question is Sheeple? "What do you want it for" is how i recall "the conversation" going. Now let's be honest: here's what Europe wants the money for:

Sun, 10/02/2011 - 21:23 | 1731960 A_MacLaren
A_MacLaren's picture

Counter-Party Risk?  Huh?

Just roll the dice!  Baby-needs-new-shoes!

Sun, 10/02/2011 - 21:25 | 1731967 Cabreado
Cabreado's picture

""The Federal Reserve Bank of New York may ask foreign lenders for more detailed daily reports on liquidity as the U.S. steps up monitoring of risks"


Who is this "Business Week" that you speak of, and why do they say such embarrassing, pathetic things?

Do not these "Bloomberg" and "Business Week" and "FRBNY" people recognize they are naked, are behaving as imbeciles, reached the pinnacle of their intelligence long ago, their self-absorption has gone sour and is no longer welcome, and now even some of the slowest of sheep find them not only laughable, but downright dangerous?

The Self-Absorbed are grasping at straws, but, they stole them too.

Sun, 10/02/2011 - 21:31 | 1731979 DavosSherman
DavosSherman's picture

Bernanke is a fucking indicisive inept moron who can't make a decision.  Total fucking assclown.

Sun, 10/02/2011 - 21:33 | 1731981 lapedochild
lapedochild's picture



Schäuble sieht in "mehr Europa" die Lösung der Krise


"Schauble sees in "more Europe" the solutions of the crisis. Schauble is the waivering FinMin who is against expanding the EFSF before he was for it before he was against it..



Sun, 10/02/2011 - 21:45 | 1732003 kito
kito's picture

When will the hyperinflationists realize ben won't kill the dollar? Its his source of power. Ben sees what lies ahead. he must protect his precious fiat and not succumb to "tradition".

Sun, 10/02/2011 - 21:49 | 1732006 mynhair
mynhair's picture

The asshole doesn't want the TEA party to swing him from a lamppost.  Go Cain!

Mon, 10/03/2011 - 04:43 | 1732437 owensdrillin
owensdrillin's picture

I would like nothing better than to see a black guy swing a bunch of those white fuckers.

I ain't black but am starting to feel in the minority being the fall guy.

Sun, 10/02/2011 - 21:52 | 1732011 monopoly
monopoly's picture

So our futures are slightly higher and Asia getting beaten up. Hong Kong down 3%. Tokyo almost 2%. All is well.

Can Bernank just quit? Would that not be the news of the day. Dream on.


Sun, 10/02/2011 - 22:18 | 1732060 mynhair
mynhair's picture

Watch out for the dead dog bounce.

Sun, 10/02/2011 - 22:42 | 1732103 kaiserhoff
kaiserhoff's picture

That's not quite..., OK, you're entitled to your own perspective;)

Sun, 10/02/2011 - 22:54 | 1732130 EvlTheCat
EvlTheCat's picture

LOL.. "dead dog bounce".. love it!

Sun, 10/02/2011 - 22:00 | 1732023 Aeonios
Aeonios's picture

Lulz. Asia opens gap down. Take off every ZIRP, for great injustice.

Sun, 10/02/2011 - 22:03 | 1732029 Terra-Firma
Terra-Firma's picture

Change they believed in!

Any other social worker want to be President?

Sun, 10/02/2011 - 22:07 | 1732033 Ahmeexnal
Ahmeexnal's picture

Had the US voted Ozzy for president, the world wouldn't be in this mess.

Sun, 10/02/2011 - 22:58 | 1732141 EvlTheCat
EvlTheCat's picture

At least the music would be better then the shit they pump out now.

Sun, 10/02/2011 - 22:07 | 1732034 Spastica Rex
Spastica Rex's picture

A little old lady at the back of the room got up and said: "What you have told us is rubbish. The world economy is really a flat plate supported on the back of a giant ball of fake." The economist gave a superior smile before replying, "What is the ball of fake standing on?" "You're very clever, young man, very clever," said the old lady. "But it's balls of fake all the way down."

Sun, 10/02/2011 - 22:16 | 1732053 PrintButtonMoney
PrintButtonMoney's picture

God forbid Audit the Fed had any real effect on their practices.  Not that transparency would matter anyway.  "Give me control of a nation's wealth and I care not for its laws." 

Let's just rebuild the Roman empire while we're at it, no questions asked.  And print Euros right out of our treasury instead of skipping all these silly steps in between. 

Hell, even better, how about world bucks based on the overall pungency of Ben Bernanke's flatulence.

oh wait, they're the same

Sun, 10/02/2011 - 23:27 | 1732192 Market Efficien...
Market Efficiency Romantic's picture

nice Rothschild quote to make the point. What the audit shows, as has the banking system, the derivative market and its penetration of the system and relative dollar value in the system has by now disabled the opportunity for counteraction. 

No, we cannot tell you, what our real risk exposure is. Yes, we hold gross derivative exposure of x trillion. (Any major global bank)

Yes, we had to sponsor the banking system with 16 trillion to avoid a total collapse due to counter party failure in derivative markets. No unfortunately, we did not tell anyone and so the argument for regulation was not really pervasive.  (the FED)

Financial deregulation and innovation and their subsequent ballooning of OTC derivatives just constituted the undebatable necessity to maintain the banking and FED system against policy intervention. The perfect poison pill.


Sun, 10/02/2011 - 22:16 | 1732056 rosethorn
rosethorn's picture
So US regulators have been making uninformed judgments up to this point...great :(

Sun, 10/02/2011 - 22:46 | 1732111 TheDarkKnight
TheDarkKnight's picture

No they are completely informed. The judgements they make however are just not in your best interest by design so I see why you believe him to be "uninformed".

Sun, 10/02/2011 - 22:19 | 1732064 mfoste1
mfoste1's picture

this is just one big shit will they solve it? print more, simple as that.

Sun, 10/02/2011 - 22:26 | 1732077 RobotTrader
RobotTrader's picture

Its too late.

The Plunger Group had its chance for a monstrous short squeeze last week, but they totally blew it.

Looks like they simply want the markets to crash out and the system to clear once and for all.

Everyone is tired of emergency measures, bailouts, rescues, etc.

Bernanke has had enough, he's just going to let everything get bombed, and he can blame Europe and China for tightening too soon.

Sun, 10/02/2011 - 22:32 | 1732088 X.inf.capt
X.inf.capt's picture

ROBOTRADER, are you O.K. you sound...


Sun, 10/02/2011 - 22:38 | 1732098 All_Is_Well
All_Is_Well's picture

I call bullshit. 1)The Leopard can't change his spots. 2)He does it and there's nowhere on this earth he can hide...

Sun, 10/02/2011 - 22:49 | 1732123 disabledvet
disabledvet's picture

It's been all government all the time since day one of this collapse. Ignore the clowns vying to be part of "the new powers that be." stick with your natural gas plays and let those who only gain what they gain through the sword continue down that path. U and I..though maybe victimized at some point by these creatures need not proceed down that path to succeed. That is what I have shown all of you...and you all have seen the numbers so you know it to be true. Fly over the Cuckoo's Nest--be Indian Joe.

Sun, 10/02/2011 - 23:00 | 1732145 Coldfire
Coldfire's picture

As if the banks have any idea what their liquidity positions are. Their balance sheets are crime scenes. And as if the asshump Fed who secretly - secretly! - lent out $16 trillion to prop up the banks under its supervision would have any idea of how to assess the adequacy of their capital and liquidity buffers. This is The Fatal Conceit writ large. Once you start lying - and the fiat-based financial system is tissue of lies - you forget what the truth even looked like. You can ignore reality, but you can't ignore the consequences of ignoring reality. QE to infinity, which is theft on the grandest scale imaginable. If a critical mass of people ever connect the dots and figure out what is being done to them with the connivance of their "representatives" in Congress, blood is going to run in the streets.

Sun, 10/02/2011 - 23:34 | 1732202 Market Efficien...
Market Efficiency Romantic's picture

I am wondering under what contract did the FED provide the 16 trillion? At that level, classic collateral does not make sense. But it does not emerge in the banks' balance sheets either. So, the only possible explanation to me is: the FED took out a very toxic section of the derivative market. But still, it does not make any sense, where is the amount in any public balance sheet? Lastly, the FED should explain that and so should the receiving banks.

Mon, 10/03/2011 - 04:03 | 1732424 terryfuckwit
terryfuckwit's picture

absolutely spot on coldfire... the best comment i have ever read on ZH..No well organised plot here just one lying scammer being scammed by another lying scammer...


rock on

Mon, 10/03/2011 - 09:00 | 1732725 dcb
dcb's picture

blood should have run in the streets a long time ago. Now, you see what's going on in NYC with the occupy wall street protests. they are doing all they can to ebd it afraid people will wake up and go after the banks as they should. Bloomberg proves he's a total douce, sinc eht eonly response he should have given was a thorough investigation of the cops involved.


It's all about pushing the boundries of what theyc an get away with, and untilwe stop the police state it will never end. what ever happened to peacefull assembly, well not in nyc.

Sun, 10/02/2011 - 23:02 | 1732150 s2man
s2man's picture

See Myth Busters' segment on cold feet.  Happens when you are scared shitless.

Sun, 10/02/2011 - 23:04 | 1732156 msmith
msmith's picture

The Euro continues to slide against the buck.  Plenty of more downside ahead for the Euro against the USD.  Long term EURUSD chart analysis  It should find short term support soon.

Sun, 10/02/2011 - 23:05 | 1732157 onlooker
onlooker's picture

------------robotrader---------- so I gave you a plus. Please take it and get another beer, You sound eh, like a beer or 10 would help. Buck up man, the press aint broke yet.

Sun, 10/02/2011 - 23:05 | 1732158 caerus
caerus's picture

asia's tanking

Sun, 10/02/2011 - 23:12 | 1732169 LeonardoFibonacci
LeonardoFibonacci's picture

Thank God

Sun, 10/02/2011 - 23:30 | 1732198 caerus
caerus's picture

short bidu... if you haven't already

Sun, 10/02/2011 - 23:34 | 1732204 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

I think Robottrader is getting pessimistic too soon. There is one more BIG short squeeze left in this market. Disclaimer: I am NOT in the market.

Sun, 10/02/2011 - 23:36 | 1732209 RobotTrader
RobotTrader's picture

Copper making new lows, silver and gold getting dragged down with it.

Sun, 10/02/2011 - 23:51 | 1732235 Market Efficien...
Market Efficiency Romantic's picture

I am wondering, has the copper aluminium substitution since late 2010 at all been integrated into the equation? Sharply falling copper prices may well be partly due to that. A subsitution did occur in many industrial appliances and only with the knowledge that aluminium would not react as much to increasing demand as would copper.

Just a sidenote, though, as PM in general seem to falter, however rather owing to strategic manipulation than to substitution.

Sun, 10/02/2011 - 23:38 | 1732214 vast-dom
vast-dom's picture


Sun, 10/02/2011 - 23:44 | 1732218 monopoly
monopoly's picture

Hong Kong now down 5%. Gold, silver still ok. Up a bit. Miners might get hurt again tomorrow. Robot had a good post today. Let it all melt down and lets get this over with. But that might lead to a depression in the near term and it would clean out the system. Can't do it without pain though.

Even if they print another Trillion or 2, how long will the effect last. Soon, game over.

Mon, 10/03/2011 - 00:49 | 1732301 slewie the pi-rat
slewie the pi-rat's picture

the 4G shoulda been a sex toy!

infinite fiat lube-job included w/ the optional 220 plug...

Mon, 10/03/2011 - 02:43 | 1732374 Tic tock
Tic tock's picture

Isn't the danger, that once Dexia is nationalized it just becomes a matter of (not much) time before several other banks are also nationalized?

Mon, 10/03/2011 - 06:04 | 1732457 reload
reload's picture

It is a certainty and will make it easier for BAC to get nationalised as well.

Mon, 10/03/2011 - 03:32 | 1732414 choorles
choorles's picture

you are infinite consciousness

Mon, 10/03/2011 - 04:06 | 1732425 ivars
ivars's picture

Pls check this post in TF metals:

They allow posting pictures, and thus post becomes much more informative.

Mon, 10/03/2011 - 05:37 | 1732447 nah
nah's picture

money aint cheap bitchez

Mon, 10/03/2011 - 07:10 | 1732499 Dingleberry
Dingleberry's picture

What's a few trillion $ between (central banking) friends????

Mon, 10/03/2011 - 07:16 | 1732502 Withdrawn Sanction
Withdrawn Sanction's picture

Regulators lack access to data on foreign institutions operating in the U.S. that would allow them to “make informed judgments about the adequacy of such firms’ capital and liquidity buffers,” William C. Dudley, president of the Federal Reserve Bank of New York, said in a Sept. 23 Washington speech.

This is bald-faced lie.  US regulators have the authority to oversee any bank operating within the confines of the US.   Period.

Mon, 10/03/2011 - 08:56 | 1732715 dcb
dcb's picture

the f"ing ecb can print unlimited amounts of money to lend to their banks to buy dollars. the only reason Bernenke is worried is because he knows this time around he's going to have to face Ron Paul and is going to ask why we are bail;ing out european institutions again with billions of no interest loans, while people who actually pay taxes can't even get a discount on their credit card rates.

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