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ECB Dollar Swaps With New York Fed Jump To Highest Since 2009, Surpass Recent Liquidity Crisis Highs

Tyler Durden's picture




 

Following the LTRO and the recent spate of successful bond auctions (until today's tailing Spanish issues that is) European liquidity was supposed to be fixed, with 3M Libor dropping for weeks in a row, right? So perhaps someone can explain to us why the ECB's FX swaps with the New York Fed (reported by the European central bank 9 days in advance of confirmation by the Fed) just rose to a post-crisis flare up high of $89.3 billion, up from last week's $84.5 billion (the increase a function of new 7 and 84 Day swaps, each getting 10 and 17 participating banks, respectively), more than any other time in 2011, 2011, when the liquidity crisis was rampaging, and in fact the highest since July 2009. So: what is fixed again?

 

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Thu, 02/02/2012 - 10:33 | 2119663 PaperBear
PaperBear's picture

Benjamin Fulford on American Freedom Radio 1-31-12

http://kauilapele.wordpress.com/2012/02/01/benjamin-fulford-on-american-freedom-radio-1-31-12-mp3-of-bens-portion/

Some suspect that this is COINTELPRO.

Ben says that Sicily is on strike. This is the second source that has said this and there has not been a thing about it on the corporate news media.

Ben says the physical economy is being isolating from the financial economy which makes me wonder if this is why the Baltic Dry Index has fallen off a cliff recently.

Ben says the dark cabal may try to hit the eastern coast of the USA with a tsunami by sinking Las Palmas.

Ben talks about the prospect of a new monetary system but I think Ron Paul has the correct idea in that government needs remove all obstacles to gold and silver circulating as currency and the bill he has introduced is called Free Competition & Currency Act, HR 1098 – see http://www.dailypaul.com/179051/ron-pauls-most-important-bill-yet-hr-1098

Thu, 02/02/2012 - 10:36 | 2119678 CPL
CPL's picture

It's in the MSM, it's just back page news next to the obituaries and buried under fist fulls of other ignored news.

Thu, 02/02/2012 - 10:42 | 2119712 LeBalance
LeBalance's picture

who is benjamin fulford? :: http://wellaware1.com/fulford/

Thu, 02/02/2012 - 11:12 | 2119836 SMG
SMG's picture

Fulford does report hearsay that turns out to be wrong sometimes, but it's still interesting to read it.

That site you posted is baloney though, but thanks for playing.

Thu, 02/02/2012 - 10:42 | 2119716 Dr Bob
Dr Bob's picture

Fulford? Really? The guy is a fraud. He is about as credible as Lindsey Williams.

Thu, 02/02/2012 - 10:34 | 2119666 trav7777
trav7777's picture

nothing is, bitchez.

Thu, 02/02/2012 - 10:34 | 2119667 Cognitive Dissonance
Cognitive Dissonance's picture

Anyone who looks at that chart (and dozens of others) and does not think we are in bizzaro land needs to lay off the drugs for a few days. :)

Thu, 02/02/2012 - 10:36 | 2119681 CPL
CPL's picture

Aye

Thu, 02/02/2012 - 10:54 | 2119743 hedgeless_horseman
hedgeless_horseman's picture

The Euro is fixed.

Thu, 02/02/2012 - 10:37 | 2119683 Ralph Spoilsport
Ralph Spoilsport's picture

Wouldn't more drugs help? The sheeple need to be reassured.

Thu, 02/02/2012 - 10:44 | 2119709 Cognitive Dissonance
Cognitive Dissonance's picture

I just refilled my Viagra script and I can reassure you that my raging erection is not distracting me in the least. Promise.

Now where did the spouse wander off to?

Thu, 02/02/2012 - 10:44 | 2119724 Ralph Spoilsport
Ralph Spoilsport's picture

Lulz....Tally Ho CD!

Thu, 02/02/2012 - 11:24 | 2119890 Shizzmoney
Shizzmoney's picture

If more people smoked weed, we wouldn't be in this mess.

Thu, 02/02/2012 - 10:41 | 2119707 LawsofPhysics
LawsofPhysics's picture

Yep.  Installing more 8 foot fence on a number of my properties.  Meeting with my employees and tenants on a more regular basis. Preparing, hunkering down.  Anyone who has run a business for the last ten years in the real economy (not the paper bullshit one) knows margins are cut back as far as they can go.   Dependable employees and friends will be worth their weight in gold and silver moving forward.  Hedge accordingly.  So will dependable power and water sources for that matter.

Thu, 02/02/2012 - 10:54 | 2119761 Dr. Richard Head
Dr. Richard Head's picture

Our margins are higher than ever and we are seeing a third straight year-over-year of double digit growth.  We've increased employee compensation by over 20% across the board and have increased staffsize by over 30% in one year.  Then again, we are in the data mining business. 

There isn't a greater need for our service, just pulling market share from competitors as consolidation in our industry quickens.  I know we are the exception to the rule of the crumbling US economy though.

Thu, 02/02/2012 - 11:04 | 2119796 Stack Trace
Stack Trace's picture

I get more business too as competitors whither on the vine. However, the business increasingly stinks with bad margins and shorter projects.

Just witnessed a colossal lay-off at one of my clients...in the hundreds just in the Dallas location.

Things aren't pretty but at least we all have Facebook to commiserate with one another.

On another note...food prices are way up again at my local market.

Thu, 02/02/2012 - 11:28 | 2119914 ReactionToClose...
ReactionToClosedMinds's picture

to preceding 3 posts .... thanks ... very insightful to hear the anecdotal impressions.

Since Fall of 2007, the teeter-totter has gotten more dramatic, volatile and sometimes violent in it's actions as the various governments & 'elites' try to 'manage' (firewall or contain) the cumulative damage (way more than just the Fall 2008 credit crisis .... some argue this goes all the way back to the New Deal and the 'isms' - socialism/fascism/communism, but more clearly link this to the late 1960s for a start ... 2008 was the torpedo that hit the badly designed ship's magazine).

We are in a damaged ship in a patch of icebergs ...... maybe we get through ... maybe we do not ... no one knows or can foretell such a thing.  These are arguably first time instances & experiences for humanity collectively ... there is no roadmap to the safe exit.

But we all know, those with cumulative experience, that in such situations your 'principles' are what will either save you or get you through when you have no template to revert to for guidance.  And personally, I think we in modernity have done everything we could do to toss over the side our heritage and cumulative societal wisdom (the baby has been tossed out with the bathwater) in our fallacy of mindlessly embracing technology as the, in-and-of-itself, solution to our woes & needs.

In Chinese historical parlance , 2012 is the Year of the Dragon ... which suggests that this is the 'make or break' year economically/financially.  We shall see .....  

Last ... never forget a Creditanstaldt experience to start the deflationary liquidity absorbing financial death run ...... could it come out of Europe, the current likely candidate like 1931, or might it be in the USA or China or ....?

 

Thu, 02/02/2012 - 12:12 | 2120113 seek
seek's picture

This sounds similar to my brother's recycling business. He took a big hit in '08 and early '09, and then things recovered as competitors went out of business; it down to him and one other, but business started to tank again back in August. He just recently relocated to a small building and cut his last employee -- the fascinating part being that the landlord funded the move and waived deposits, as he was the last tenant remaining in his building and the landlord wanted to turn it over to the bank!

My business took a 30% hit at the end of '08, and 2011 was a record year for me -- not because of growth, but because many of my customers (quite a few of which are subject to the two-minute hate here daily) decided to pay me for 2012 during the last three days of 2011. Over 20% of my annual billings for the year showed up via ACH deposits in those three days -- the obviously know 2012 is going to suck badly and were pushing expenses into 2011 to make 2012 look better than it really is.

Every manufacturing client I have as cut their forecast for annual growth almost in half since this time last year.

Thu, 02/02/2012 - 11:39 | 2119971 LawsofPhysics
LawsofPhysics's picture

What do you manufacture?  Our poultry side is up, so is the cotton and soybean part.  If you simply push paper, go fuck yourself.

Thu, 02/02/2012 - 12:07 | 2120085 Dr. Richard Head
Dr. Richard Head's picture

HR service based provider to companies across every spectrum of industry domestically.

Thu, 02/02/2012 - 12:24 | 2120171 QQQBall
QQQBall's picture

I am always busy and since November I have been swamped - I am booked 6 weeks out. When CRE values go up I'm busy and when they come done I am busy. I always try to get the "asset management" stuff that has to be valued every 6 to 12 months. I get a steady flow of those deals and have definitely gotten a reach-around from the low rates supporting the sale and refi markets.  Fees are weak and expenses are up, margins are squeezed big-time, but I work out of a home office and my IC sec'y is in another state. I work hard, live below my means and save and invest. No debt, low expenses, financially independent - been at it almost 30 years; not my first day in skool. 

 

Thu, 02/02/2012 - 10:41 | 2119708 Global Hunter
Global Hunter's picture

If more people smoked some herbs more people would understand what is happening.

Thu, 02/02/2012 - 10:46 | 2119730 mess nonster
mess nonster's picture

African Herbsman!....

 

Thu, 02/02/2012 - 10:56 | 2119767 Global Hunter
Global Hunter's picture

I really wish my ZH handle was Steppin Razor alas I signed up as Global Hunter (an inside joke only understood by me).  Thank Jah for the reggae music

Thu, 02/02/2012 - 10:48 | 2119732 Ralph Spoilsport
Ralph Spoilsport's picture

True, but too many reef smokers get complacent and dare I say, sheep-like.

Thu, 02/02/2012 - 10:55 | 2119765 Cognitive Dissonance
Cognitive Dissonance's picture

Dude, just chill out man.

And don't bogart that joint my friend. Pass it over to me.

(Not that I would know anything about that.)

http://www.youtube.com/watch?v=EvGJvzwKqg0

Thu, 02/02/2012 - 11:04 | 2119775 hedgeless_horseman
hedgeless_horseman's picture

 

 

I do not enjoy transacting business with people who are high.  We Americans are dumb enough as it is.  Just try to get a stoned American to follow instructions or give you accurate information.  Have you ever been in a position as a professional where you absolutely must deal with someone high on coke?  And your job is to make them understand your position?  Good luck.

Thu, 02/02/2012 - 11:06 | 2119798 Ralph Spoilsport
Ralph Spoilsport's picture

Agreed. People who are high on the job are assholes. If you can't wait till you get home you really do have a drug problem. I hated doing business with alcoholics who came to work drunk, sneaked swigs from a bottle all day, and kept it up until they were caught passed out in the mens room. Then the company pays for drying them out. Repeat ad nauseum.

Thu, 02/02/2012 - 11:01 | 2119781 Ralph Spoilsport
Ralph Spoilsport's picture

I've probably smoked more reef than everybody on ZH combined. Of course I started a lot earlier. My only drug problem is that most of my suppliers died of old age.  :-0

Thu, 02/02/2012 - 11:39 | 2119965 Cognitive Dissonance
Cognitive Dissonance's picture

Your suppliers didn't die. They just became primary dealers for the Fed. :>)

They saw the wisdom of an unlimited "money" supply from the Fed and switched career paths.

Thu, 02/02/2012 - 11:42 | 2119980 ATM
ATM's picture

I doubt it and I will give you a negative arrow for even suggesting such blasphemy.

Thu, 02/02/2012 - 10:36 | 2119677 Everybodys All ...
Everybodys All American's picture

The Federal Reserve is simply funding auctions in Europe ...

Thu, 02/02/2012 - 10:46 | 2119727 Quinvarius
Quinvarius's picture

Some day the Euro shorts will figure out who is really printing all the money.  Not that it matters too much.  All paper money is the same thing as long as these swap agreements and central banker cooperation are taking place.  The magic of the FOREX ponzi system is that anyone can print anyone else's digital money.

Thu, 02/02/2012 - 10:37 | 2119687 disabledvet
disabledvet's picture

Everyday these clowns watch Satan come for yet another soul...and everyday they cannot even fathom "i'm coming for you in due course as well."

Thu, 02/02/2012 - 10:37 | 2119689 achmachat
achmachat's picture

Yet another proof that the fiat experiment is basically dead.... and still there's no panic buying into whatever is real assests??!

Thu, 02/02/2012 - 11:44 | 2119993 ATM
ATM's picture

Be thankful that is hasn't happened - yet. It gives you a chance to fill your larder.

Thu, 02/02/2012 - 11:47 | 2120004 ATM
ATM's picture

DP

Thu, 02/02/2012 - 10:38 | 2119690 DormRoom
DormRoom's picture

It's working for now.. wealth effect via stock market rally in effect. 

 

you can't short given CB hard on for intervention.

 

We are in a liquidity trap.

Thu, 02/02/2012 - 10:39 | 2119694 Ralph Spoilsport
Ralph Spoilsport's picture

And a currency war.

Thu, 02/02/2012 - 10:43 | 2119721 LawsofPhysics
LawsofPhysics's picture

been in a currency war for 30+ years dude, the real trade wars are just getting started.

Thu, 02/02/2012 - 10:38 | 2119693 qussl3
qussl3's picture

This shit will only stop when EUR and USDs cant be traded for real goods.

Gonna be a damn long while, considering the sheeple.

 

Thu, 02/02/2012 - 10:51 | 2119751 tarsubil
tarsubil's picture

You are thinking that change will be gradual. It will occur so quickly that it will be like a light switch being turned to the 'on' position. Punctuated equilibrium.

Thu, 02/02/2012 - 11:41 | 2119976 Raymond Reason
Raymond Reason's picture

Right.  There has to be a trade-off for exporting inflation via the reserve status.  Foreigners can jump ship more easily than the US citizens.   Then the inflation comes home to roost. 

Thu, 02/02/2012 - 10:40 | 2119700 Global Hunter
Global Hunter's picture

IMO this is why the USA, UK and Israel need their war with Iran

Thu, 02/02/2012 - 10:44 | 2119718 Nepenthe
Nepenthe's picture

Shocked. Absolutely shocked. No one could see this coming.

 

Convienently, this was released before Stammerin' Ben's testimony.  (Raises eyebrow)

Thu, 02/02/2012 - 10:44 | 2119725 mess nonster
mess nonster's picture

What is fixed...

Elections, courtesy of Israeli electronic voting and vote counting machines, RNC/DNC collusion.

Media- if you like Kim kardashian, you're in heaven.

War- you'll learn to like it- or else!

Food- GMO is the way to go!

Internet- ACTA SOPA PIPA

Your Wagon- for all the obvious reasons

 

 

 

Thu, 02/02/2012 - 10:45 | 2119726 lizzy36
lizzy36's picture

No worries.

Cramer said we are in a new bull market. Apparently Facebook is going to bring the marginal buyer of stocks back into the market. He did admit that stocks have been a horrible place to be over the last decade, which begs the question of why he was pumping them the whole time if they were such a terrible place to be.

Of course expecting introspection for Cramer is like expecting Bernanke to show restraint with policy (never going to happen)

Thu, 02/02/2012 - 10:51 | 2119753 Everybodys All ...
Everybodys All American's picture

Pathetic ... No one with any sense believes this market besides the ex Goldman clown Cramer. No matter how much he may yell and scream.

Thu, 02/02/2012 - 10:48 | 2119736 mess nonster
mess nonster's picture

Why do people even watch that idiot? Oh, duh.

Thu, 02/02/2012 - 10:48 | 2119737 max2205
max2205's picture

Firewall

Thu, 02/02/2012 - 10:49 | 2119739 Dr. Richard Head
Dr. Richard Head's picture

What was fixed?  My faith in paper money.  I once had ignorant faith of paper money and now that faith is gone.  The fix is in baby.

Any have an link to this chart extending backward from early 2008 to now?

Thu, 02/02/2012 - 10:52 | 2119742 Jlmadyson
Jlmadyson's picture

As I've said many times we are in Wonderland baby. Where this train stops who knows but it will be far, far, worse than 08.

The only reason they are doing the swaps is to prevent another Lehman and you could clearly see in Dec they are well beyond being able to stave off the coming end.

Thu, 02/02/2012 - 10:55 | 2119747 mktsrmanipulated
mktsrmanipulated's picture

I know most dont follow technicals but this chart shows the constant battle to get thru 1.32 area i believe we are at a truning point int the rally and will proceed to test the lower bounds

http://www.charthub.com/images/2012/02/02/Untitled_MP_2.png (market profile)

 

and for the real technical guys heres a head and shoulders of the euro

 

http://www.charthub.com/images/2012/02/02/Untitled_3.png

neckline 1.26 area that breaks we will see 1.2 then 1.17 then close to parity

 

just time, just time

Thu, 02/02/2012 - 10:52 | 2119755 adr
adr's picture

So now we know why those auctions went over so well in Europe. The game is borrow dollars to buy Euro bonds, then tank the dollar even more making it easier to pay back the loans. Then use the strong Euro to buy US bonds, tank the Euro to make it eaiser to pay back. Rinse, repeat.

Thu, 02/02/2012 - 10:55 | 2119766 rsnoble
rsnoble's picture

Pesky charts.  That's like believing in the massive recovery and then looking at the chart of the BDI. If you haven't seen that lately you might want to look at it. Yep, full blown recovery allright! 

Thu, 02/02/2012 - 11:00 | 2119778 Peter K
Peter K's picture

But Europe is fixed ;)

Thu, 02/02/2012 - 11:01 | 2119783 Jlmadyson
Jlmadyson's picture

Oh yea March is going to be oh so fun for Euroland when most of these swaps are due and Greece payments to be made.

Thu, 02/02/2012 - 11:16 | 2119859 FranSix
FranSix's picture

Short term interest rates have jumped 1000% from just a hair above zero to 0.06% in the last month.  This would indicate a sudden, massive influx of short term paper in the last month.

Thu, 02/02/2012 - 11:17 | 2119862 the PTB
the PTB's picture

Can someone explain what, exactly, is being swapped.  Fiat scrip?  Is it all not just a grand show?

Thu, 02/02/2012 - 11:31 | 2119928 dcb
dcb's picture

just don't call it a bailout

Thu, 02/02/2012 - 11:36 | 2119955 Fox-Scully
Fox-Scully's picture

So: what is fixed again? "The entire game"

Thu, 02/02/2012 - 12:38 | 2120242 AndrewCostello
AndrewCostello's picture

The whole economy is a fixed fraud, and anyone who can't see that is a bit stupid.

 

Read:

http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref

Thu, 02/02/2012 - 12:51 | 2120294 pmm009
pmm009's picture

anyone have a link that shows the sovereign offerings schedule by date, type, and country?  There was a great ZH blog showing this for December but cannot find anything for 2012 this specific.

Thu, 02/02/2012 - 13:37 | 2120502 falak pema
falak pema's picture

LTRO to 1T more on the cards?

Thu, 02/02/2012 - 14:40 | 2120733 youngandhealthy
youngandhealthy's picture

Easy money available in EUR and money need yield which Mr Market beleive is outside EUR. Hence interest in USD v.s. EUR. And guess what? You swap it.

Thu, 02/02/2012 - 15:13 | 2120870 AldoHux_IV
AldoHux_IV's picture

Essentially the channels through which the ponzi is distributed is fixed. The swap arrangements have essentially created a one world central bank whereby $'s are used as the perceived safe haven conduit.

The G7ish have effectively merged in terms of central bank responsibility in providing liquidity to the insolvent banking structure.

Won't end well but that's something our dear central planners don't care about as protecting a broken financial system and managing unsustainable sovereign debt via inflation are the 2 most important mandates regardless how damaging it is upon the real economy.

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