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Euro Basis Swap Flashing Coordinated Liquidity Intervention Red Light
As we noted last week, the EURUSD cross-currency basis-swap - or European bank's most desperate way to fund itself in the absence of any further ECB aid, a lack of collateral, and no interbank-lending (trust #fail) - is flashing a warning light. Today that light went ultraviolet. For maturities beyond the LTRO (greater than 3Y or so) the current level of stress is greater than at the end of November last year which was the trigger for the globally coordinated central bank response. 3Y basis swaps are now back above 70bps (below -70bps) and near record lows - signaling a real desperation for term funding among European banks - as we explained here. Translated: central bankers are now calling each other and planning; the only question is what they can do this time: last time the FX swap margin was cut from OIS+100 to OIS+50 bps. Now what: interbank lending at no cost? - Thank you Uncle Ben.
3Y EURUSD basis swap rates are crisis-like...
and normalized to the 11/30/11 levels of last year's critical global intervention, we are worse now...
As we said just last week...
In the middle of the European crisis last fall, EUR-USD cross-currency basis swap spreads were on the tip of every trader and media-personality's tongue as the critical means for providing banks with access to short-term USD liquidity was ratcheting lower and lower. This means the European banks were willing to pay a higher and higher premium to be able to offload their EUR funding into USD funding. With LTRO funding now faded and perception of the sustainability of European banks becoming dismal, US banks are charging ever higher rates for Eurozone banks to borrow. What is more worrisome is that with the relative liquidity of USD assets, it would appear that the widening in the basis swap spread means the European banks have run dry of money-good USD collateral to unwind. This repricing of USD liquidity costs (now at 4 month highs and increasing rapidly) suggests that the Fed-provided swap lines could get a fresh calling to save the day and/or just as we have noted so many times in the past, the collateral squeeze continues to be the critical part of Europe's demise (and thus negates anything but absolute monetization by the ECB as a solution for the banking system).
Charts: Bloomberg
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FB is currently green, PMs are red ... no need to print
FB longs are about to get their faces ripped off and shoved up their asses...again. Don't take the bait...don't bail out the stupid.
I thought for sure Central Bank intervention would work this time....
I see that Ben’s got the Fedmobile over at the ECB.
http://i49.tinypic.com/29psu9u.jpg
The Fed controlling the economy.... LMFAO. Benocide is highly delusional thinking he can affect the outcome of this mess. Just all depends how you want your RESET, fast or slow. But it is coming.
Expect a headline any minute before Europe closes to ramp stocks into the green. If it doesn't come: LOOK OUT BELOW!!!
CB's about to dump liquidity on the world? Must be why PM's have been pummeled so hard today... so they ramp higher from a lower base.
Welcome to the bizarro world of PM investing (not a world for the impatient)
Gold is a "risk asset". Bonds and paper money are "safe havens". Perversely.
AAPL will do well because (so far...!) it pays a dividend and the clowns-that-be CRAVE yield...
Love the sarcasm. Is is sarcasm, right?
Anyway, Doctor Bennie and the Swap Squad will be out in force and save the day.
Count on it.
Gimme a second...I'll take care of that green issue on FB.
Time to turn on the nonsense twitter generator and aim it.
http://www.bbc.co.uk/news/business-18180861
Facebook, its founder Mark Zuckerberg, and the banks leading its flotation are sued over claims that financial information was not disclosed.
---------------------------------------------------------
They forgot to tell them that they had no revenue stream as such!!! LOL
>>"They forgot to tell them that they had no revenue stream as such!!! LOL"<<
Whoopsie!! They accidentally on purpose forgot to insert that in the prospectus maximus of the FarceBook gluteus maximus, printed in China by Morgue Gun Stan Lee. They saved $.003/issue by outsourcing the translation...
Don't worry... Suckerberg has another REVOLUTIONARY way to generate revenues... "selling ad space on his hoodie"
LMAO!!!
GAME OVER!!!
Everything is GREAT!!
http://www.setyoufreenews.com/2012/05/04/we-are-preparing-for-massive-civil-war-says-dhs-informant/
>>"“What they [DHS] are expecting, and again, this is according to my sources, what they’re expecting is the un-sustainability of the American dollar,” Hagmann said.
“And we know for a fact that we can no longer service our debt. There’s going to be a period of hyperinflation . . . the dollar will be worthless . . . The economic collapse will be so severe, people won’t be ready for this.”"<<
Suggestion for a Zuckerberg status update: "Bazinga!"
Everything is flashing red with my rose colored glasses on.
BEnron lives in the Red light district. He owns a flat in the center of it all where he can pimp his bitches. And nothing gets him more excited than a flashing RED LIGHT because thats a GREEN LIGHT for more PONZI FIAT!!!
Ther's no plan to save the Euro. All plans have been executed. It would take years to come up with another plan - not weeks.
Gold is saying "Mad Max Sudden Stop" in Europe.
There has ALWAYS been a plan to save the Euro (both currency and the union).
WWIII
Can't make an omelet without breaking a few eggs, you know.
Bend over, people...
Ok Biff. Please be gentle. I have heroids
You mean, lying face down isint good?
Correction: BENd Bernank Over, sheeple...
somebody is about to do something "helpful" ... position yourselves accordingly
the only safe position is out of the market, lets face it.
and into gold & silver in your own private unknown storage location insured by smith & wesson & glock and a shitload of hollow point
I lost mine in an unfortunate boating accident.
We sure are a bunch of shitty boat handlers here at ZH.
I just bought a whole bunch of silver, now it's down. I wish I had that money back--so I could buy more silver!
Do I have time to lube up? Or is this just a dry run?
Do I have time to lube up? Or is this just a dry run?
The FED will provide "liquidity" worry not...
BEnron gets all wet just thinking about it...
The big RED LIGHT in the sky is flashing GET GOLD NOW because QE4 is imminent!!
Lead Brass Gold Gun powder
GAME OVER
Is it possible to have dry runs?
It can be dust ... if you're old enough.
Funny! Made Mysteerious Rooshian Vooman laugh!
That can't be good.
10, 9, 8, 7, 6, 5, 4, 3, 2, 1 . . . . . . . . BAILOUT!!!!! yippee the female "talent" on the comedy station can get all wet in the groin again
Time for the expected can kicking. One day ,however, just as we are about to kick it again, our leg will fall off.
expect QE3 , liquidity swaps , bazookas, water pistols.....and everything ....in June 1st week...
Rehypocating midget dancing
It's coming.
Clearance sale...all PM's marked down today in a Euro fire sale, get em while they're HOT!!
Reuters reports that Europe Summit finally found a solution. Reportedly Chuck Norris agreed to issue the Eurobonds.
Awsome, he should swing by the Middle East for 15 minutes and clean that situation up as well - while he's over there.
I would like to see them (CBs) do nothing and just let the whole house of cards vaporize - so we can all say "audios motherfuckers! and good riddance!".
Whoa!! Wouldn't want to snowboard down that bitch...
http://www.kitco.com/charts/livegold.html
Yep...no raid there.....I watch the Comex...lots of settlements????? but nothing going thru Comex....how do they do that??????
how can swaps not work for a lobby that runs the world? Unless the world runs on hot air. Is that part of global warming, hyperactive swap lines?
Sounds they deserve to be amongst the 12 best porn stars, the hyperactive swaps now the hottest sluts on the block.
Maybe they can put the Eiffel tower or the Champs Elysees up for collateral.
Brooklyn bridge?
I am sure Ben will be involved.....there has to be some cash shortages for cash in Europe...and someone has to be supply it....look at the banks ..down 4% today.....that is panicking me and I do not own any shares....revenues are down...expenses are up...but I have to admit...its pretty quiet...a little meeting here..another there....but nothing happening solid....PM´s getting killed but I think as I always do its a raid to get the Physical....the paper is being called in...the banksters shorts are reducing....unfortunatly it hurts us all...paper still rules....at least at this point...how they call this play by play will be interesting...the Bankers will say they are fine..then the next day be nationalized...the dollar will go sky high...until peoole figure out the balloon has no helium ..only air....and a large hole....risk is now a word or two in a bond contract.....lawyers will now start to take over enonomies and countries....and then watch out...Militaries do not like to be shortchanged and have a power structure set up and in force....they can take control and very fast...that could be good..or bad...depends on the Generals and what kind of men they are...I am very very long PM´s.....there are just no other options I see as a good investment right now...
"PM´s getting killed but I think as I always do its a raid to get the Physical....the paper is being called in"
~~~
Think of it like a sponge... Every "QE", "LTRO", "Twist", or whatever operation is like putting a sponge onto a liquid spill (which is the available amount of physical PM's around the planet at any given time)... The operation lasts until the last bit of liquid is soaked up by the sponge (whereby the sponge can hold no more)... At that point, the sponge is lifted off the liquid spill and squeezed out into a vessel that is owned by the private entities...
Then, the newly expunged 'sponge' is then re-introduced to the liquid spill in yet another operation, & repeated over many operations, until what WAS the liquid spill is now bone dry & all the former liquid is securely in the vessel of choice...
Home sales are up no need for printing. It just seems that this is all too subdued to cause a printing. No one is really in any sort of panic, there are still plenty of buy the dip articles going on. A print now would be political suicide, Obama would have to come out against it or he'd look like he was bailing out Wall Street right before his election. We need more pain than this so that people can say we need to print and it will feel like the right thing to do. Hell most stocks aren't even below their 200 day MA
No stick save for the markets today. TPTB are are trying for a yes vote in the Irish referendum and Greek vote. See, if you don't vote for the bankers, we will crush you.
MS is going to blow up their trading desk propping up Farcebook in this tape.
Everyone off to the side and watch while the fed does nothing and we take out the twist lows before the next out right print fest begins.. or so I'm thinking.
http://fiatflaws.blogspot.com/
For all this talk about how LTRO helped things-- it's all fucking bullshit! Did nothing but make things worse as the banking and financial system is no better off and all those emergency funding measures could have actually been used to help people was wasted on self-serving broke insolvent financial institutions.
I have been saying there would be no QE because of several reasons of which you guys are aware.
That being said, I have to add that if they allow things to get out of control and deteriorate at a faster rate (in other words, if there is real market action) the need for QE could be upon us very quickly.
We all know that is their only choice to keep the boat afloat a little longer. I just thought they were going to be able to drag it out further. With events occurring at a faster rate and a more severe level of deterioration, they will have to print much sooner. The main reason they will print is to pump more money into world equity markets so they can keep the facade alive and stem a revolt by the 401k worshipers.
So... you're saying there's not going to be QE, but there's going to be QE?
check
if i got it correctly swap eur/usd is going south that means that usd in interbank market is strenghtening against eur?? banks are running out of monies (here eur) and want to have more liquidity and buying more and more usd and thatmakes it going up?? if so whats happening to balance sheets of banks that they need more usd?? bonds in eurozone are losign value and they need to meet up with collateral? margin calls?
If Facebook has taught us anything its that all we have to do is farm our digital fields and exchange the crops at the market for gold...no wonder gold is down....
JUNE 28 BITCHEZ. Q-to-the-E.
Why specifically June 28th? I note that the FOMC meets June 19-20...
It's a date that Jim Sinclair came up with. Operation Twist ending, plus also NDAA deadline:
"Beijing is planning to avoid U.S. financial sanctions on Iran by paying for oil with gold. China’s imports of the metal are already large, and you can guess what additional purchases are going to do to prices. On the last day of 2011, President Obama signed the National Defense Authorization Act for Fiscal Year 2012. The NDAA, as it is called, attempts to reduce Iran’s revenue from the sale of petroleum by imposing sanctions on foreign financial institutions conducting transactions with Iranian financial institutions in connection with those sales. This provision, which essentially cuts off sanctioned institutions from the U.S. financial system, takes effect on June 28."
Hence Jim Sinclair says, "Gold is officially replacing the US dollar June 28th."
Could be clearing the decks for the summit later, frienzied selling without an immediate trigger smells of a big rat...i have started to dip my toe in on the long side EUR/USD, going to try and nurse a position into the meeting.
I know an alley where you can find a good game of dice, "player". LOL
i have started to dip my toe in on the long side EUR/USD, going to try and nurse a position into the meeting.
***********
I just covered my EUR/USD short and added to major gold miners-
There's a turning in the making--imo--
Seems to me that things are beginning to move with increasing speed now. This summer might well be one of those 'interesting times'.
It already is interesting. Extremely interesting. But yes, I think things are speeding up as well.
"Each layer is prevented from collapse by the heat and outward pressure of the fusion process in the next layer inward; each layer also burns hotter and more quickly than the previous one—the final burn of silicon to iron consumes its fuel in a few weeks at most."
All that is left is for Mario to do the DIRTY:)
QEeeeeeee.
EUR/USD=> Mind the Gap:)
This Friday evening, after the markets close for the Memorial Day weekend, might be as good a time as any for Greece to crash and burn.
Uncle Sham will have three days to try to stabilize things, and the extra day might reduce the chance that a bank holiday would have to be declared in the US.
exponential hyperbolic fiat ponzi scheme will lead to hyperinflation and global economic collapse, protect yourself and yours with precious metals (currently at 50% discount) and of course arable land not directly down wind of reactor #4
I'm still trying to get some info on the Vixes and FAZ. Looking at their histories, they have been almost to 100 before and because I'm still relatively new to ETFs and stocks (mostly I'm in phys PMs), I'm looking for some pointers. I know ZH has the one post that is a warning about trading the Vix in certain scenarios, but there is a lot of dry tinder it appears for the summer, or at least between now and mid June, after which more can kicking may ensue, and so I'm just looking for any pointers. Is it illogical to think these volatility and bearish indexes could go back up to their extreme high territory?
No need to worry about thinking you're giving bad tips, because I'm still going to think through it some more but would like to know some more because I have no interest in stocks aside from bearish, volatility, and PSLV/miners.
I've stopped thinking about futures and options.
There is sufficient activity in the following ETFs.
ETF Trading Strategies
I’ve been following 4 ETFs that have nice wide trading ranges.
ERX (long Energy), ERY (short Energy)
FAS(long Financial), FAZ(short financial)
The Long side holds shares of 20 or more big cap stocks. The short side uses futures and other derivatives to approximate short selling.
You are not held to any 90 day rules as done by mutual funds.
Bollinger-Bands give some indication of a stock’s potential to change direction.
I start thinking about selling when price hits the upper Bollinger band.
I look to buy when price hits the lower Bollinger band.
Stochastic measurements of Overbought and Oversold have some value in relating current price to Buy/Sell decisions.
As the up trend ends, I sell the ERX or FAS and buy shares of the Short side, ERY or FAZ.
You should have similar dollar position sizes. I use an Economic Order-Quantity of $5,000 to calculate # shares in each trade.
All shares are held in a ROTH-IRA. All income is tax-free, Legally!
1- When Price gets near the Upper Bollinger Band and Williams Ratio turns down, sell;
When Price bounces off the lower Bollinger Band and Williams Ratio turns up, Buy.
Problems (Rising price) The up-trend continues for many months and the final TOP looks like it will reverse soon
(Declining )
One step at a time baby... one step at a time...
2008
2012
2014
2015
Jun 2016
Dec 2016
Mar 2017
Apr2017
15 May 2017
30 May 2017
......... thats how the Ponzi folds.
I think this timeline if off a bit... You forgot QE lite, QE 2, Twist and Operation China direct
Goes like this
2008
2010
2011
June 2012
September 2012
October 1st 2012
October 15th 2012
October 22nd 2012
October 30th 2012
GAME OVER
You wanna bet?
Sorry forgot the 2000 dotcom bubble bursting. 8 years, 4 years, 2 years, 1 year, 6 months, 3 months...
Each successive major crash is after half the time of the previous one and twice in magnitude. So basically, it can continnue forever hence we have HFTs which trade in nano mano seconds.
BTW... I was only plotting the timeline of the market crashes, not what tricks FED was pulling out its hat. The only reason to introduce a fiat currency, is to be able to print to infinity, and trick the sheeple to exchange their assets and labour for paper and bring in the feudal system.
If they wanted sound economy, they would have used sound money.
stronger dollar, cheaper commodities for usa. stimulus inacted for the non 1%. economy grows stronger. dollar cash heavy usa corps ecstatic. people happier. debt reduced. etc.
ben can slow down to a trickle, at let the others print away. if he has the peoples' interest at heart.
sure stock market falls out of artificial highs. buying opportunity ensues.
patience, ben, patience.
honor the lower unemployment mandate, ben!!!