This page has been archived and commenting is disabled.
Cue Panic As Fed Resumes Liquidity Swap Lines, Lends $200 Million To Swiss National Bank, Most Since October 2010
If yesterday's news broken by ZH that one bank was in dire need of US dollars and ended up borrowing $500 million from the ECB was enough to send the market down almost 5% today, then the follow up news that the FRBNY just reactivated FX swap lines with Europe will likely send ES limit down at tomorrow's open. The FRBNY has just announced that in the week ended August 17, it lent out $200 million to not the ECB, not the BOE, but the "most stable" of all banks: the SNB. This is the first use of the Fed's Swap Lines since March, and the most transacted under this "last ditch global bailout swap line" (see more on how the Fed bailed out the world using swap lines here) since October 2010. This event also gives us a hint that the European bank in question in dire need of cash is Swiss, which in turn means that it is not some usual PIIGS suspect, but one of the two "big ones." If true, this means that the European insolvency, liquidity and what have you crisis is about to take an exponential step function higher.
From the FRBNY:
And the history of FX swap usage:
»
- 84093 reads
- Printer-friendly version
- Send to friend
- advertisements -
I meant to ask how much interest is the fed going to pay the snb for taking the loan. it was sarcastic but was ruined by missing words.
edit: btw, thank you for the link. very professional.
I'd have to see more data but there seems to be a bullish correlation to fed FX swaps and US equities.
1/10 to 3/9/11 = +4.21% SPY
3/9 to 8/10 = -10.73%
3x that amount from 8/27 to ..forever = ?
appears to be a slightly bearish correlation of FX swaps to gold as well, but only temporary
Since commodities are money and gold is one of the most useless forms, why is most every commodity going down except gold???
You can keep your bushels of corn. I'll keep my "useless" gold. You can't eat corn!
(GMO corn that is:)
reading this caused me to check out the Fed's latest balance sheet which is just out
As of yesterday, the US Treasury had less than $9 billion at the FEd, where it has essentially all its cash.
Holy moley!
the FED is not gonna let the EU banking system fall apart. yet? i mean germany isn't even on their hook, yet. well, maybe that isn't exactly right, ok?
let me say that even tho germany appears to be hooked, the bankster in the chair holding the rod, on that gorgeous fuking motorboat with all the wondrous electronics, is playing it very, very carefully...
damn! that is some heavy gear! good luck, germany!
Is it possible that this could be a feint? If the name of the game is to stop the appreciation of the swiss franc and it cant be done directly (or with decreasing effect) could this action be used to undermine the gloss of switzerland as a safe haven.
If the goal is purely to shake confidence then you may as well only use a small amount.
Or is that preposterous? I'm new here :-)
This must be some sort of trick. We just got downgraded by super-smart Standard Poors and we're now lending to the Swiss??
Wasn't it Moody's who said we're a/ok?.
And France(LOL) is rated AAA?.
France............
Something is definately rotten in the state of Denmark ............. thank you Sheakspeare. This money was almost definately routed through Switzerland to either distract or confuse.
The money was for Denmark. Their banks have been selling assets over the past week as they cannot raise money in the market. As they are outside the eurozone they are using Switzerland to raise the money. They would not be able to tap the ECB?
Good point. Denmark facing another financial Amagerbanken?
http://online.wsj.com/article/SB10001424052748704422204576129910427759674.html
Too bad Tyler has to read thru this bullshit to get to the 1 good post that poses a real cerebral challenge...
Look up yearly charts of ED PEG SO D PCG XLU & IYR and tell me if SNB wouldn't like to own these INCOME STREAMS?
Last year, these stocks ran AFTER Jackson's asshole, this year its BEFORE. So scarrrry, oooh, sell my SPX stocks and run to 10 year junk @2% (that's 20% after 10 years). If the top 10% owns 80% of stocks, and can't be bothered to manage their portfolios, then its mutual fund managers of the world who are trying to scare us as they reposition. Fuck them and fuck you if you let them scare you. Its bullshit.
This is a false flag to suggest that something is wrong in Switzerland. The purpose is to weaken the CHF. It will work way better than any intervention.
So it will last two hours instead of one?
If you look at the last liquidity flood, you´ll see that the USD/CHF went from .70 to .79 and EUR/CHF from 1 to 1.14, so I wouldn´t say that it had a half life of a few hours.
My argument is that the efficiency of a public 200 mill. $ loan in terms of fx movements might be way bigger compared to the hundreds of billions that SNB printed so far.
I was being facetious, but you may well be right.
archived
archived
Maybe they needed it to buy 4 1/2 tons of gold to send to Chavez...
sarc/off
isn't this kind of a QE 3?
SNB: "Weez iz now bwoke, can we pleeze haz some monies?"
A emergency swap line with the SNB? that is super bearish news right there.
Could indicate the ECB is in trouble.
From turmoil to crisis: dislocations in the FX swap market before and after the failure of Lehman Brothers
http://www.bis.org/publ/work285.pdf
When foreign banks’ lending to these countries contracted sharply around the fourth quarter of 2008, domestic banks faced difficulties in borrowing in the interbank market and much higher costs of obtaining short-term dollar (or euro or Swiss franc in central Europe) financing through FX swaps (Graph 1). In particular, there was an abrupt drop in gross international claims (the sum of cross-border claims in all currencies and local claims in foreign currencies of international banks) on many of these countries.
Lastly
The implications of cross-border banking and foreign currency swap lines for the international monetary system
The wonder of it all is that not matter how bad it really gets - it's all been thunked out
+1
This is like skydiving in slow motion... without a parachute.
Maybe there is something to that Mayan and Catholic mystic prophecy afterall?
Unbelievable...
They may have been off by a year. I could of course be wrong, but I see this global fraud crisis coming to a head by the end of 2011 at the latest.
it seems to be easier to believe in the end of the world than in the end of capitalism, no?
the end of the Mayan Long Count never marked the End of the World, but the end of a very looooonnnngggg age...and the beginning of a new one.
Not really. Contrary to what Hank the Idiot Paulson says, the world will not end if the economic system collapses. The economic system exists to serve people, not the other way around. People survived the Great Depression. People survived the Weimar Republic. People survived in Zimbabwe. And we'll survive here in the USA. It will certainly be painful; there may be blood in the streets, but we'll survive. As will people in Europe.
What I find easier to believe is that regimes of fraud eventually tumble to their demise. Will capitalism survive the fraud apocalypse? I don't know. I'd put the chances at 50-50. And I'll also say that I don't see our predicament as a necessary outcome of free market capitalism. We haven't had a free market for many decades. It's too bad that most people don't realize that fact and will ultimately blame capitalism for the misery they are about to experience.
actually, there's a theory floating around that the Mayan Long Count ends on 10-28-11:
http://calleman.com/content/articles/5thNight_9thWave.htm
http://www.youtube.com/watch?v=tsak0fG6WE4
http://www.elenin.org/
santelli just reported this on cnbc ...
I think what this means is that there's going to be some sort of major announcement out of Europe this weekend. The central banks are making what are ostensibly major moves, as signaled by the $500 million and $200 million of loans over the past 24 - 36 hours. In order to lessen the impact of what is sure to be bad news, whatever is going to be released to the press will be released this weekend ... or on Friday afternoon/evening after all global markets are closed.
Max Kaiser said on The Alex Jones Show today that Societe General holds all of AIGs derivatives to the tune of $600,000,000,000.000.00. Societe General's market cap has dropped from over $100,000,000,000 to just $16,000,000,000 today. If this bank goes down it may be LTCM X 100 and look out beeeeeeeeelooooow. We ain't never seen a deflationary spiral the likes of which that would create!
"... but one of the two "big ones." If true, this means that the European insolvency, liquidity and what have you crisis is about to take an exponential step function higher. ..."
--
Ok, so this is THE genuine 'popcorn moment'? One of two "big ones" kaput?
One could get through a LOT of popcorn via this present exponential step function ...
PS: That Oct 2009 write up was fantastic Tyler.
Game on!
CNN Poll.:
Ron Paul 63.76% (4,136 votes)
Rick Perry 21.58% (1,400 votes)
Mitt Romney 4.73% (307 votes)
Michele Bachmann 3.48% (226 votes)
Someone yet to enter race 4.92% (319 votes)
Other 1.53% (99 votes)
Ongoing...mark your mark now!
http://www.foxnews.com/on-air/fox-friends/index.html
OK. Media Test....
That's the results.
How long will it take to conjure up another story to divert attention away from Ron Paul.
Say, a story about the hard fought 3 way battle for second without mentioning second nor first.
The moment he's not marginalized and starts getting some real air time.... watch out!
"I was tea party when tea party was uncool"
-read here on ZH
LOL > 300% in front of the next highest!
Ok ... let's ignore the crazy old coot ...
Democracy bitchez!
CS is number 3 here http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2011/08/Canada%20Risk.jpg
Tier one is not exactly giving a whole lot of leg room for say a liquidity event now is it.
Nope, not CHf intervention, because that would raise dollars (other FX). The dollars (other FX) needed if they were buying CHf... (not right now Twattles I've a head ache)
So, why the need for US$?
In front of our noses!
US branches of foreign banks.
Say Swiss Bank Numbnuts (just using Swiss as they're the nswap counterparty) announces fuck all's falling apart, End of Business Days, then they'll have a run on US$ here in the US, so, mayhaps, the End of Business Days bank is (in order to protect leak of bad information as to specifics) using the SNB as the vehicle to procure the short term funding in case of liquidity squeeze.
Viola!
Occam's Razor in action, fits with news of last few days, too.....
Question about volatility:
We can see volatility (at least VXX) as the increase of the options premium. It's also an indicator of the sentiment of the market.
Can we also imagine a volatility-driven financial system? You know, where it's not a measurement of the state, but a parameter that is controller by whatever phD in whatever bank or country. And the harvesting begin.
watching suckers getting decimated buying into bulltraps/dips on Asian markets. Jeez EZ is a c-hair away from a major FUBAR trade.
FRED's m2 getting a bit RANDY:
http://m.research.stlouisfed.org/fred/series.php?sid=M2&show=chart&
That truly leaves me speechless...I think everyone can feel the colossus roller coaster drop is coming
http://goo.gl/25cDy
Maybe this is all part of the plan. The markets need to crash far enough to provide political cover for QE3 in the form of people begging for more liquidity. Never mind that it's a solvency problem. What better way to spook people than to indicate trouble in Switzerland. Not sure it's enough to trigger the thousand point drop on the Dow they'd love to have though.
So much for "Swiss neutrality" bitchez!
“To some this downturn may seem like a destructive event, the economic crisis is actually a constructive event that paves the way for the future [silver, gold, bitcoin] … The stability of several major European banks has been seriously threatened and government leaders are in constant teleconferences to discuss how to halt the crisis. The US, on its part, has lost its status as AAA and 7 trillion dollars of stock value has gone up in smoke … Yet, a downgrading of the US creditworthiness and the loss of 7 trillion dollars of stock value really does not mean anything except that the numbers associated with certain papers have been depreciated. It is thus essentially correct when commentators say that so far the crisis has not had any effect on the ¨real economy.¨ The recent fall in the markets simply shocked the mental duality between abstract values and real values. There is however no reason to expect that it will be possible to limit the crisis to the ¨unreal economy¨. Thus, I expect that now also the real economy will be hit. How quickly this will actually manifest is hard to tell but I expect that events will lay the foundation for massive unemployment in many major Western countries (It is of course high already, but for many it has still been possible to keep on with the previous lifestyle). I also expect that there will be a large runaway from the stock markets and the stability of currencies will be negatively affected to a point where new radical solutions need to be considered … I think it is realistic that there will be some kind of political reaction to the developing chaos” - Carl Calleman
http://dont-tread-on.me/money-banksters-and-august-2011-%E2%80%93-the-coming-silver-revolution/
the mother of all margin hikes is just in the wings now, but they need a good volume-faux-break above resistance to make it lucious.
huge worldwide swoon coming sept/oct... one of those where every thing... every thing including jo momma, gets sold... everything... swiss francs, loonies, gold for sure, silver at 20, t-bills FINALLY assuming room temp, C & BAC sacrificed on the altar... Obama and little Timmy to the rescue
Why would gold and silver be sold, it will be one of the few value stores, along with food, water and oil . . . .
i'm not for sale. maybe for rent, though.
Is $200MM a lot of money in these circles? seems like a rounding error.
someone's wife needed a bolt-on job
maybe the Swiss
will trade
gold foil covered
chocolate coins ...
for fresh printed
fiat dollars....
Look... this post is old thinking. ancient... like 2008
Did anyone see T-bills [that would be USA] today? and, IF the Swiss had real issues, would such a loan facility be publicized by Babylon herself?
Nay, friends, this is all carefully-scripted to quickly bring about the central Soviet of Europe - the very "Externalizaton of the Hierarchy" that matters.
nevermind the 6% DAX drop... what does it matter? if those pesky Germans aren't subdued they'll end up undermining china. Europe needs a Holy Roman Loanshark-in-Chief, and they will have one very soon.
Chartwise, FWIW, the devil is oftentimes in the details, namely today's trannies at 4299 atop the downside leaderboard, the only major index taking out the 8/5 lows, and pointing to 1 year, round number horizontal support at 4000: the bad news being that that support level is down another 7%:
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Index&symb=djta&time=9&startdate=1%2F4%2F1999&enddate=8%2F18%2F2011&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=3&maval=50&uf=0&lf=1&lf2=0&lf3=0&type=2&style=320&size=3&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11&x=39&y=12
If they need the money, as it appears they do, then it is match, set, point. Game over.
UBS down 8.5% today
...and Deutsch bank looking very much BoA/Citi group re: 2008. What is messed up about all of this, apart from the insolvency/debt/EZ recession/social upheaval etc etc etc/ EZ is gonna have one helva banking crisis...Should flip China out since greedy Euro banks pumped billions into Asian investments.
Totally FUBAR situation unfolding.
In the scheme of things, 200mn is not much dough, something stinks.If it was Billion, yeah..................million?.
Pocket change to SNB.
Yodel-odel-ay-ee-ohhhfuuuuck!!!!! Klaus, I tinks I may haf chust scheissed my lederhosen.
Now that's a stretch!
...the follow up news that the FRBNY just reactivated FX swap lines with Europe will likely send ES limit down at tomorrow's open.
So we should see ES down 55 by open.. hardly!
it's on: http://media.smh.com.au/sport/sports-hq/us-and-china-basketball-brawl-25...
EUR, CHF Targets: EURUSD 1m 1.40 3m 1.40; EURCHF 1m 1.20 3m 1.25
God the french are butnuts...
Time to run to the nearest nuclear bunker (if you have one) when the secret meeting happens friday night somewhere in New York bringing together anxious members of the Fed, Wall St & the Govt: Dudley, Geithner, Bernanke, Blankfein, Dimon, Pandit & Moynihan.
B of A cutting 10,000 jobs. When the B of A board is reviewing the quarterly statements, I wonder, do they ask, "did a cow shit in here"?
.
Comet Honda? Causing Earthquakes?
Honda is a rock around 3/4 Mile in diameter and it passes closer to Earth than almost all other big things. It just passed 3 days ago, there was 10 minutes ago a 6.8 around 40 miles from Fukushima.
I combined the previous close passes of this comet, using NASA data, and Earthquake data from USGS and the results are astounding. The close pass dates to the Earth are highlighted in Blue, and the Earthquake Dates are highlighted in yelllow, and I list surrounding earthquakes so you can get some idea of how many big earthquakes there are per year, to judge relevance of being close to comet passing.
http://oahutrading.blogspot.com/2011/08/comet-honda-causing-earthquakes....
Banks gettting crushed in the overnight. CNBC talking heads asking for "global response."
SNB Press Release http://www.snb.ch/en/mmr/reference/pre_20110817/source/pre_20110817.en.pdf
http://www.reuters.com/article/2011/08/19/china-fed-jacksonhole-idUSL4E7JJ1Y220110819
China not interested in the Jackson Hole meet....yawn....
There was a post here just yesterday? About the net equity of various large banks. The post highlighted problems in Canada, remind me to short EWC, but had PIIGS banks, Swiss banks, French and German banks. The problem with the relatively huge size of the few dominant banks in Europe is their poor states of capitalization plus their ownership of bad sovereign debt. They probably own a few bad mortgages as well.
.