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Did The Fed Quietly Bail Out A Bank On Tuesday?

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Sat, 12/17/2011 - 14:38 | 1990047 Ralph Spoilsport
Ralph Spoilsport's picture

I agree lotsoffun. It was about 90% negative lately and anybody defending the Fed or the Squid was spanked. The level of discourse was far below ZH but still valuable to me since I'm not a trader and a novice. ZH is like a Grad level course compared to anywhere else I've been on the inter-tubes.

Sat, 12/17/2011 - 16:02 | 1990187 Last_2_Sense
Last_2_Sense's picture

You must have been singled out by yahoo because the comment section is still up and running. Or maybe it was just shut down temporarily?

Sat, 12/17/2011 - 14:42 | 1990055 Jena
Jena's picture

Perhaps it was a temporary glitch?  It seems all right now.

Sat, 12/17/2011 - 14:47 | 1990068 lotsoffun
lotsoffun's picture

jena - as always - you would appear correct.  as of close yesterday - the entire week it was down.  does seem to be up.  very strange.

Sat, 12/17/2011 - 14:53 | 1990079 Ralph Spoilsport
Ralph Spoilsport's picture

Confirmed. Commenting is back as of today. Who knows WTF is going on there.

Sat, 12/17/2011 - 16:17 | 1990210 Librarian
Librarian's picture

Right before the comments disappeared the automatic censoring of profanties completely disappeared. 

Although I enjoy a conspiracy theory just as much as the next guy, i've got to go with the simpler explanation.  Likely it was hacked and the autocensor went off line.  A week to get it up and running again isn't that long if you've ever outsourced programming to Mumbai.

Sat, 12/17/2011 - 14:59 | 1990088 TheMerryPrankster
TheMerryPrankster's picture

Put $ signs in his eyes and impale him upon a Euro symbol and you've got the cover for Time Magazines "person of the year 2012".

Nice work William.

Sat, 12/17/2011 - 18:56 | 1990398 ZeroPoint
ZeroPoint's picture

OH SNAP!!! Damn William, that's scary.

Sat, 12/17/2011 - 12:56 | 1989851 swissaustrian
swissaustrian's picture

Did anyone really believe that the FED would NOT bailout European banks? As if any US law could prevent them from doing anything. They´ll always find a way.

END THE FED!

... and support Ron Paul´s weekend moneybomb: https://secure.ronpaul2012.com/

Sat, 12/17/2011 - 13:19 | 1989894 Sam Clemons
Sam Clemons's picture

Exactly.  The only power these guys have is the ability to create a lot of fiat.  Why would they not use their elixir?

Sat, 12/17/2011 - 13:51 | 1989955 CrazyCooter
CrazyCooter's picture

I meant to do this yesterday and got run over by real life. Thanks for the reminder.

+25 to RP from me! :-)

Regards,

Cooter

Sat, 12/17/2011 - 14:29 | 1990034 erg
erg's picture

I just heard that pos suppurating lesion David Frum say that when you see RP to hit the mute button because he's a complete ignoramus. He also said RP is great if you want a great depression and want to buy apples with a silver nickel.

And the PM/RP corporate media smear campaign continues unabated.

+RP+     I greened him twice.

Sat, 12/17/2011 - 14:16 | 1990001 lotsoffun
lotsoffun's picture

i've given plenty to charitys, i've written letters and emails.  i  have never contributed to a campaign.

i've voted twice in 35 eligible years to vote - once for david dinkens (so he could be the first) and once for kerry (that was a wash).

i just sent money to ron paul.  this HAS to happen.  no more dope and chump change.  no more sociopaths.  a mature adult with a brain has to be put into office.  we can only hope.

 

Sat, 12/17/2011 - 16:16 | 1990204 lotsoffun
lotsoffun's picture

i'm plotting a guest host on why in a real democracy one doesn't 'fund' campaigns.  and clearly (thanks jon corzine, thanks bloomberg, thanks, etc. etc.) - if i can buy air time and votes, i can get elected.  corzine and bloomberg paid from their own egos/pockets.  other 'candidates' pay from somebody elses pocket to fund themselves.  whatever.  a real democracy has to have a better solution.  regardless - and for 54 years i've been relatively politically agnostic (it IS that bad right now i need to do something).  thanks guys - wish us luck.

Here are your transaction details:
Donation amount: $100.00
Transaction date/time: 2011-12-17 12:12:23
Transaction ID: 326558485

 

Sun, 12/18/2011 - 03:45 | 1990951 steveo
steveo's picture

exactly!   me too on all points

 

Sat, 12/17/2011 - 12:58 | 1989854 Larry Dallas
Larry Dallas's picture

When is this nonsense going to stop.

Sat, 12/17/2011 - 13:03 | 1989862 navy62802
navy62802's picture

The inevitable end is a disastrous worldwide financial collapse. The only question is timeframe.

Sat, 12/17/2011 - 13:17 | 1989890 The Big Ching-aso
The Big Ching-aso's picture

 

 

Zerohedgeinista's will likely be the first to cypher-out when the actual collapse occurs.   So we got that goin' for us.

Sat, 12/17/2011 - 13:18 | 1989893 Manthong
Manthong's picture

Maybe MF is indeed Lehman except for the fact that there won't be a subsequent correction until the absolute final one.

In that case you might have a year or so up to Dow 20K.

Sat, 12/17/2011 - 13:53 | 1989958 Rodolfito
Rodolfito's picture

MF filed for bankruptcy on halloween .. the scum like to do important things on such 'significant' dates .. and the significance of the bankruptcy is that the market mechanism has been broken.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/12/8_Ji...

The dawning of the fact that we cannot trust anything anymore is a slow-motion train wreck, getting bigger all the time.

Sat, 12/17/2011 - 14:09 | 1989987 CrazyCooter
CrazyCooter's picture

Oh, three new Jim Rickards interviews that I didn't catch ...

  1. http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/12/17_Jim_Rickards.html
  2. http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/11/29_Jim_Rickards.html
  3. http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/11/19_Jim_Rickards.html

This guy goes great with oatmeal, eggs, molases, and coffee on a lazy Sat morning. :-)

Regards,

Cooter

 

 

Sat, 12/17/2011 - 15:24 | 1990125 flacon
flacon's picture

Goats cheese and beer for me. 

Sat, 12/17/2011 - 15:49 | 1990166 Conrad Murray
Conrad Murray's picture

I read Currency Wars this week or last and I really enjoyed it. It covers a lot of territory, even some fairly deep territory, without being too technical or boring. Recommend it to anyone.

Sat, 12/17/2011 - 20:03 | 1990483 CrazyCooter
CrazyCooter's picture

I just bought a copy for my old man for xmas (my only gift this cycle). It is an excellent read.

KWN has 50 audio interviews with JR (I checked my local disk archive that I made my audio CDs from for when I drive). It is really must-listen stuff if you liked the book. He talks about all the same stuff, but explores many vectors in much greater detail. Just hit the KWN archive page, start the the botton, and snag all his MP3s.

I think there is a part two of his most recent interview out in a day or three, so that would make 51. About 15+ hours of audio in total.

Regards,

Cooter

Sun, 12/18/2011 - 02:54 | 1990897 Larry Dallas
Larry Dallas's picture

Thanks Cooter.

I listen to these at the gym on my iPod. Much easier to transfer and most cars today you can buy an iPod dock for.

 

Sat, 12/17/2011 - 13:43 | 1989938 The Big Ching-aso
The Big Ching-aso's picture

 

 

When they decide to stop the nonsense or when thing's are so fucked up they have no choice but to stop the nonsense.   

Whichever comes first.    In the end, you will get it in the end.   That's ASSured.

Sat, 12/17/2011 - 12:59 | 1989856 Mr. Q
Mr. Q's picture

Investigative financial journalism at its best.. respect!

Sat, 12/17/2011 - 13:43 | 1989940 machineh
machineh's picture

Ditto!

Unfortunately, if history is any guide, the Fed's open-handed generosity will only serve to levitate Wall Street's liquidity meter -- the S&P 500.

Which is probably the idea. CHRISTMAS GIF', UNCLE BEN!

Sat, 12/17/2011 - 12:59 | 1989857 Hansel
Hansel's picture

Good work TD.

Sat, 12/17/2011 - 13:00 | 1989859 firstdivision
firstdivision's picture

I'm going to go with this was an American bank, more than likely one with the word America in it.

Sat, 12/17/2011 - 13:04 | 1989865 navy62802
navy62802's picture

Wait, are you contradicting Dick X Bove? How dare you!! BAC is absolutely on sound financial footing. Haha ... Saturday afternoon humor.

Sat, 12/17/2011 - 13:06 | 1989870 Sockeye
Sockeye's picture

Uncle Warren thanks you.

Sat, 12/17/2011 - 13:02 | 1989861 chunga
chunga's picture

The magnificent bastards get bailed out every damn day.

tOO BiG To fAiL LOan MOdIFiCATioN FOrm r.1.A.002.B.XXXX

Taste great..or less filling?

Sat, 12/17/2011 - 13:05 | 1989867 davepowers
davepowers's picture

"QE1 unleashed a liquidity tsunami for the bank, which serves no other reason than to plug capital shortfalls - it certainly is not being lent out)"

 

I suspect that this claim is wrong.

While the reserves are not being 'lent out' in normal bank operations (eg... loaning you money to build, say, an apartment building or factory), the banks can and do 'lend' their reserves amongst themselves in the overnite market (which loans can themselves be rolled over for extended periods of time). This is the "Fed Funds Market." The total amount of reserves appear to be the same on the FED's books, but the ownership of same alters over time. 

This Fed Funds borrowing and loaning (which appears on the banks records as Fed Funds Bought or Sold, go figure) is, I further suspect, used in combination with securities lending and extended repo'ing to fuel stock and commodity speculation. That's why QE encourages price inflation in stocks and commodities even though the Fed/Ben claims that the reserve expansion is 'sterilized' (held in place at the FED and doesn't enter the real economy) due to the fact that the FED is paying a tiny bit of interest on reserves. The consistent level of overall reserves masks all sorts of movements within the mass of reserves that have various real world impacts.

Thus, the growth of bank reserves via QE is not simply to mask bank capital problems.

Sat, 12/17/2011 - 13:49 | 1989951 machineh
machineh's picture

Overall liquidity is unaffected by banks lending Fed funds among themselves  -- for every borrower there is a lender.

How would banks rehypothecate reserves at the Fed to leverage themselves? As the Talking Heads used to say, 'That ain't allowed.'

 

Sat, 12/17/2011 - 19:05 | 1990417 davepowers
davepowers's picture

one clue of this is the fact that banks are allowed to group Fed Funds Borrowed/Sold + Securities lent/borrowed + Repos in one category for reporting purpose, suggesting the relationships are joined at the hip.

And perhaps the leverage to which you refer is not at the bank level, but at the level of associated clients (eg hedge funds) who participate in these transactions.

And there are surely few things that banks 'ain't allowed' to do if they set a mind to it, David Byrne notwithstanding.

Let me put the question to you  - IF the typed up QE generated bank reserves are truly sterilized, as the FED says and the overall level of reserves on the FED BS seems to suggest, then how does QE generate price inflation? Because QE was paid for via typing up reserves.

Sun, 12/18/2011 - 09:03 | 1991162 flattrader
flattrader's picture

Now this would have been an interesting conversation...which unfortunately came to an abrupt halt.

Yes, let's all talk about the Money Bomb and other assorted BS...

Sat, 12/17/2011 - 13:06 | 1989871 GBnotEU
GBnotEU's picture

 A french bank perhaps? That might explain the sudden anti UK hostility from the CESM.

Sat, 12/17/2011 - 13:07 | 1989873 agent default
agent default's picture

QE is well in its way, but until they say so in the open, nobody will notice.  Why don't they just say they will QE and do nothing?  It will still be good for a few thousand points on the DOW.

Sat, 12/17/2011 - 13:11 | 1989877 Judge Arrow
Judge Arrow's picture

Tyranny goes from soft to hard in the blink of an eye...

Sat, 12/17/2011 - 13:11 | 1989878 Bernard_2011
Bernard_2011's picture

Well, interesting investigative work there. 

In the context of this comment from Tyler:

"the Fed did a mid-month settlement of $31 billion in MBS purchases - a transaction which allowed a Primary Dealer to source critical liquidity"

If this MBS transaction was done for "bailout" purposes, then we should look at the Fed Primary Dealer list and scan for European banks and moreover those that would most likely have been under funding stress.

If we do this, then if this was indeed a bailout, it would have had to have been a bailout of BNP Paribas or Societe Generale.

 

Sun, 12/18/2011 - 02:31 | 1990873 delacroix
delacroix's picture

why not a japanese bank?

Sat, 12/17/2011 - 13:11 | 1989879 booboo
booboo's picture

"There are three kinds of men, ones that learn from books, men that learn from observin and men that have to pee on the electric fence for themselves" Will Rogers

BenRoid will have to pee on the fence, best not be touching him when he does.

Run.

Sat, 12/17/2011 - 13:13 | 1989881 Irish66
Irish66's picture

Excellent work Taylor, thank you!

Please stop by your ATM as soon as possible and make withdraws.

Time is short.

Sat, 12/17/2011 - 13:42 | 1989937 ATM
ATM's picture

thank you.

Sat, 12/17/2011 - 15:02 | 1990098 Bansters-in-my-...
Bansters-in-my- feces's picture

Hey Irish66, Just for the record,I am pretty sure the super-humans name is "Tyler". Calling him"Taylor" is kinda like calling "Bill"..."Bull"

Sat, 12/17/2011 - 16:17 | 1990209 Miss Expectations
Miss Expectations's picture

Durden.  Tyler Durden.

Sun, 12/18/2011 - 01:22 | 1990772 Calmyourself
Calmyourself's picture

Who down arrows the man's name while your on his site, Jamie, Ben, lloyd is that you??

Sat, 12/17/2011 - 13:13 | 1989882 holdbuysell
holdbuysell's picture

Any way to get the CUSIPs on those MBS that the Fed bought? Would that be a way to figure out who was feeding at the Fed trough?

Sat, 12/17/2011 - 14:21 | 1990012 lotsoffun
lotsoffun's picture

holdbuysell - could very well not be, because many tranches or passthrus so distributed.  on the other hand - could very well be as often a single tranche is bought in whole, or there could be a process of elimination as to set theory - which bank held each cusip.

the data isn't always 100% - the HDS function on bloomberg allows one to see who owns what cusip on a quarterly basis.  not sure if foreign holdings need register if not held in an american subsidiary registered here in US.  others would be able to fill in my gaps.

 

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