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ECB Deposits Jump 10% More To Record EUR452BN

Tyler Durden's picture




 

While sovereign spreads are leaking modestly tighter this morning as European credit markets emerge from the holiday hibernation, the ECB Deposit Facility surged 10% further to a LTRO-busting EUR452bn. While we assume there is some year-end 'management' involved here (and some will argue that putting the LTRO-carry-trade to work takes time), the sheer velocity and scale of the ramp in deposits suggests this is not a game-theoretically optimal use of this new-found cash (neg-carry-trade) but instead a clear message that banks will delever and remain risk averse no matter what the central banks 'suggest' is appropriate. Didn't we learn this lesson already in Japan (for two decades of debt minimization as opposed to profit maximization) and the US (Fed reserves skyrocketed as dealer bond inventories drop precipitously?). Also, those saying that banks are just waiting for the new year to start putting LTRO cash to use, there is no reason to wait - Italian BTPs are already at 7% - all banks are doing by delaying is giving up on days of free carry trade, thus this argument is pure rubbish. We are also seeing EUR-USD basis swaps starting to decompress (worsen) once again. In summary: since LTRO day, EUR187 billion of the 210 billion free money has been redeposited at the ECB.

And longer-term, showing the complete lack of seasonality.


 

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Wed, 12/28/2011 - 04:34 | 2015509 Cassandra Syndrome
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ECB eating its own puke?

Wed, 12/28/2011 - 04:40 | 2015511 Fips_OnTheSpot
Fips_OnTheSpot's picture

trololol

Sat, 03/31/2012 - 02:21 | 2305870 jaffa
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Tue, 05/01/2012 - 06:47 | 2387618 jaffa
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Wed, 12/28/2011 - 04:40 | 2015512 Sudden Debt
Sudden Debt's picture

And that other 23 billion went to transfer fees and bonusses.

Wed, 12/28/2011 - 04:48 | 2015513 lolmao500
lolmao500's picture

That's good for the ECB, they can leverage this 40X times and solve it all!

Or even like Deustche Bank and leverage it 60X times!

Wed, 12/28/2011 - 04:47 | 2015514 YesWeKahn
YesWeKahn's picture

Money from the donner goes back to the donner's pocket. How bullish is that! S&P to the moon!

Wed, 12/28/2011 - 05:20 | 2015528 phungus_mungus
phungus_mungus's picture

Honestly, they didn't expect this?!??!

WTF---Over?!?!?

Wed, 12/28/2011 - 05:22 | 2015530 e-recep
e-recep's picture

Large corporations in Europe are withdrawing money from their various European bank accounts and accumulating them in ECB accounts. They must be expecting bank runs.

Wed, 12/28/2011 - 05:31 | 2015535 Sandmann
Sandmann's picture

They should, their accounts are not insured. Siemens has 10 billion Euros on deposit at the ECB

Wed, 12/28/2011 - 06:14 | 2015542 youngandhealthy
youngandhealthy's picture

With a negative carry of 75bp why do they do it?

Its €1.5Bn Euro in interest, probably more since 200Bn its the net of all "three" activites  by ECB.

I believe one should look at the ECB deposits from June 2010 when the ECB did their "first" 1yr LTRO.

The cash is not yet burning in the banks pockets and it is "new year balance sheet" tricks to show sound business before the recapitalization binge that will start during the spring.

 

 

Wed, 12/28/2011 - 07:20 | 2015590 Fips_OnTheSpot
Fips_OnTheSpot's picture

ECB deposit over the last 10+yrs http://www.querschuesse.de/wp-content/uploads/2011/12/1a127-450x357.jpg

 

Raw data, 5th column is the facility usage in Mio:

Date,Open Market Operations (excl. Securities Markets Programme),Marginal lending facility,Deposit facility,Net liquidity effect fro
m Autonomous factors and Securities Markets Programme,Current accounts,Reserve requirements,Covered bond purchase programme

01/06/2010,843486,24,316405,328564,198541,211269,55131
02/06/2010,846898,9,320367,327515,199025,211269,55331
03/06/2010,846982,315,299471,331853,215973,211269,55416
04/06/2010,847381,9,350903,325162,171325,211269,55848
05/06/2010,847381,9,350903,325162,171325,211269,55848
06/06/2010,847381,9,350903,325162,171325,211269,55848
07/06/2010,847528,8,361692,319684,166160,211269,55995
08/06/2010,847695,29,364587,328398,154739,211269,56162
09/06/2010,846693,1327,368978,331212,147830,211269,56347
10/06/2010,845164,735,365904,329073,150922,211269,56547
11/06/2010,845330,367,384260,323633,137804,211269,56713
12/06/2010,845330,367,384260,323633,137804,211269,56713
13/06/2010,845330,367,384260,323633,137804,211269,56713
14/06/2010,845495,50,381220,323692,140633,211269,56878
15/06/2010,482608,679,77168,317971,88148,211269,57467
16/06/2010,855756,30,200733,316038,339015,213000,57883
17/06/2010,856086,11,213085,318151,324861,213000,58213
18/06/2010,856454,11,232045,328737,295683,213000,58581
19/06/2010,856454,11,232045,328737,295683,213000,58581
20/06/2010,856454,11,232045,328737,295683,213000,58581
21/06/2010,856895,1517,226129,341612,290671,213000,59024
22/06/2010,857154,11,213562,344205,299398,213000,59283
23/06/2010,878130,0,214254,355349,308527,213000,59398
24/06/2010,878416,1,250019,356084,272314,213000,59684
25/06/2010,878604,565,284357,349749,245063,213000,59872
26/06/2010,878604,565,284357,349749,245063,213000,59872
27/06/2010,878604,565,284357,349749,245063,213000,59872
28/06/2010,878953,540,304444,348565,226484,213000,60205
29/06/2010,879234,429,302228,339488,237947,213000,60486
30/06/2010,910450,27,309106,349046,252325,213000,61144

 

Source: http://www.ecb.int/stats/pdf/monetary/lm/liq_daily_2010.zip

Wed, 12/28/2011 - 06:14 | 2015554 El Gordo
El Gordo's picture

When you lose money on every transaction, it's hard to make it up on volume - whether you are a European bank or Sears, the math works out the same.  Can you read red numbers?

Wed, 12/28/2011 - 06:27 | 2015564 Paul Thomason
Paul Thomason's picture

Whatever 'they' are doing it ain't working (yet) - good article by Chris Sheridan on the credit market/equity market disconnect - Markets Plagued By Financial Dissonance

Wed, 12/28/2011 - 06:37 | 2015566 simone
simone's picture

As shown by the chart, the ECB was clearly managing deposit usage well during the first half of 2008 leading into the crises, but the subsequent seasonal percentage increase YoY was incalculably record breaking.

Wed, 12/28/2011 - 06:44 | 2015570 youngandhealthy
youngandhealthy's picture

And now we know that at least 1.73Bn went into 2yr Italian "Zero" Bonds with a yield significantly lower than last time

"...E1.733bln of Sep 2013 CTZ; avg yield 4.853% vs 7.814%, cover 2.24 vs1.59 previous...."

And the 9Bn Bill not so bad either....

"...E9.0bln of new 6-month BOT, avg yield 3.251% vs 6.504%, cover 1.691 vs 1.47 previous..."

And of course everyone says ECB bought the hole shebang...

well they can not and there were obviously more than one bank that bid.

 



 

Wed, 12/28/2011 - 06:33 | 2015573 Goldmund
Goldmund's picture

They should of lent the money to Corzine, he would of invested it.

Wed, 12/28/2011 - 07:00 | 2015574 Freebird
Freebird's picture

But as highlighted here, if the European banks are too nervous to park their new funds among themselves or anywhere with counterparty risk, aside from the ECB - well, simple depositors should by now be getting very very worried.

So when the SHTF do the Swiss go down with the proverbial, or de_link the chf from the euro?

Wed, 12/28/2011 - 07:34 | 2015594 youngman
youngman's picture

Its pretty amazing this is going on all out in plain site....this morning the big news is that Italy sold their bonds at half the rate they paid last time...wow....what a success...you give out 500 billion for free and people will buy your trash...because you will take the trash as collateral..and give them more free cash to buy more trash....what a world we live in....amazing....and gold and silver is down...and treasuries had a 26% gain this year....I am so perplexed...I think we have passed the safe haven buying...its now time to invest for Mad Max i think...this is in-explainable...they will take over all accounts..I.E. MF Global...and they will make gold and silver illegal....that is what I see as the end game...the final nail in the coffin...the final survival move for the banksters...

Wed, 12/28/2011 - 08:39 | 2015646 hrischuk
hrischuk's picture

Take heart because this is going on in plain sight because it means the end of the arrogant is near.  Psychopaths (and I do mean that) are rarely caught at the beginning of their terror reign because they cover their tracks well.  It is only when they get sloppy that they are caught.  This being in plain sight is very sloppy and speaks to the desperation of the psychopaths.

Power lust trumps money lust so the politicians will reign in the financial psychopaths to save their own skin.  It will not be till the very end.

I am much of a noobie to the forensics that are discussed here but even I can see the obvious financial market manipulations.  Go back to Sept and Oct and see how the Dow magically levitated from losses during the day to a gain where that levitation always started at 3 PM, ramping linearly to a couple of points above its prior closing.

Keep doing what you know is correct.  Remember this is a psyops operation and the psychopaths are doing everything they can to make people act incorrectly (i.e., think that gold is not money).  Eventually, they will reap what they sow.

Wed, 12/28/2011 - 09:08 | 2015666 machineh
machineh's picture

How are they raising the cash? Partly, by selling SILVER.

SLV closed under 28 yesterday, at a 10-month low. Today it's looking to get whaled hard after breaking support at 28 ... next stop 25.

Don't stand between me and the exit door, or you're liable to get trampled!

Sat, 03/10/2012 - 05:52 | 2242798 jaffa
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Tue, 03/13/2012 - 06:38 | 2249771 jaffa
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The amount banks deposit overnight at the ECB has increased sharply since the central bank offered its first ever three-year loan to banks in December. Banks tapped the ECB for a massive amount nearly half a trillion euros then and the amount of overnight deposits hit an all time high of over EUR528 billion in mid January. Thanks for sharing.
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Thu, 03/29/2012 - 04:56 | 2299886 jaffa
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The sheer velocity and scale of the ramp in deposits suggests this is not a game theoretically optimal use of this new-found cash but instead a clear message that banks will delever and remain risk averse no matter what the central banks suggest is appropriate. Thanks.
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Fri, 03/30/2012 - 03:30 | 2302844 jaffa
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Fri, 04/13/2012 - 05:17 | 2340942 jaffa
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