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European Funding Chaos Resumes
With much of Europe's credit trading parents to the unruly equity trading children still on vacation, it is still clear that Europe's liquidity situation remains as critical as ever. 2-year EUR-USD basis swaps have pushed to new post-LTRO record lows (its costs more now than in the last five months to create USD funding from EUR for a two-year term). With performing collateral in short-supply and a world awaiting the ECB to save the day, it seems odd that basis-swaps would be bleeding worse unless the reality is that the ECB is not about to put on its cape of invincibility. European Banks are nothing but desperate to lock in term funding at these premia and while hope prevails, it would seem the banks are indeed preparing for the worst.
2Y EUR-USD basis swap at 5 month lows (lower is more negative means a higher premium to pay for USD funding)...
Chart: Bloomberg
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Default Bitchez!!
The U.S. has terminated funding for a $20 million project to develop a Pakistani version of Sesame Street.
Decides to train them in ALCIADA camps instead.
I can see Bert running in screaming "Ernie Ackbar"
The US should just invade Pakistan, like Iraq and Afghanistan. They had Bin Laden and also WMDs.
They had Bin Laden, lol. Yeah, they had his nth photo double.
They have to wait their turn like the rest.
the US government is too busy invading america and tooling up to harm the american gentry to really put forth a good facsimile of the old old fashion college try typically required for an off shore for prime time bloodletting.
and ... it looks like certain sector short funds are behaving like equities, back when the dollar carry was in play, used to at FTSE close. should one have a sufficient tolerance for risk and work out the timing it might be more profitable than attempting to beat the invisible hand playing the ES board.
What do you gain by lending money to someone who is bankrupt?
bailouts & bonuses
As well as ocean-side villas and opportunities to tell the plebes on Bloomberg, from that villa, that they must eat their peas and retire when they die.
And all the while, seting up a "perfext storm" as a proverbial tsunami of a precursor for the next bail. it's beautiful, setting aside, of course, the expected toxicity and risk of being mobbed to death, the way the white show boyz are running that game, over and over and over and over ... infinity.
The problem with not fearing being mortally wounded is that one so inclined, one is ultimately, inevitably, historically and incurably, mortally wounded when the game runs down. Guessing the logic be it is better to secure ones legacy as a blood clot stain (at least) on a high end coffin mattress stuffed with zero value moola moola than being just an average joe dead on a plain jane ceremonial slab at his wake.
Time to deleverage, unwind and get the fuck out of the market.
Costomers who can buy american shit produced in china
Not much, especially when you are bankrupt yourself.
New friends.
nothing to see here..move along..
I don't see what the ECB can actually do at this point. Extending the 2nd LTRO or starting a 3rd round seems pointless, as banks have run out of healthy assets to pledge for funding. And the ECB cannot just outright print Euros because Germany would go nuts.
There is a rumor that the ECB is developing a very convoluted way to assist EZ markets.
Is your avatar pic Michael Jackson in drag?
Wot? You have a funding crisis?
Here, let me add some more 0s for you.
See, that was easy.
Funny that these PhD economists spent years studying Keynesian economic theory at ivy-league universities only to learn how to add 0's to the end of numbers to solve financial problems.
Adding a 0 is easy, the real test is "where" to add that zero and thats what they learn as part of their PhD programmes.
Adding zeros has no implications in a zero sum game.
Liesman was telegraphing that the "new" plan is for the IMF to dangle a giant carrot to recap the EU banks - just long enough to get through November no doubt. I'd dismiss it as a rant but Liesman is strictly an access journalist so the talk behind the scenes has to be ramping up.
How is the Fed doing on its currency swaps? Are they getting smoked or did they expire with Fed receiving premium plus basis improvement?
Scratch my question as I think the Fed does not bear exchange rate risk on these swaps. They still run the risk of not having dollars returned to them.
STD and BBVA surging off the lows.
Looks like some "bargain hunting" somebody is desperate to "make their year" with Spanish bank stocks.
Well of course they're surging. They're about to get a bailout aren't they?
Sorry Robo, I will stay away from STD thank you.
pods
Wow, more "rear-view mirror" bragging. Thanks captain hindsight.
Tyler, what do you think will be USD, EUR, TNX and TYX reaction if 6/20 Fed announcement is as you say (longer Twist, NOT balance sheet expansion)?
The ECB put on their cloak of invisibility...
...and mounted the disco ball of past failures.
But are they attacking the darkness?
Their balance sheet is a bag of holding.
"By the power vested in me to add 0s, I now pronouce thee Solvent."
This is how cavemen slew Mastodons back in the day. Run around like fucking crazy pygmies while the beast dies one spear at a time.
so easy a caveman could do it...
Hotkarl is long
Is the worldwide drain on gold currently straining the system a little too much????
Maybe the PTB know just how short of the real stuff the ponzi is getting.
Wouldnt it BE ABSOLUTELY NECESSARY if that is the case to drive everyone into cash i.e. a burst of deflation.
If we DONT see LOTs more printing soon that will be my conclusion.
OT
I'm getting ads for Obama and collective bargaining when I come to ZH.
Am I clicking on leftist porn sites in my sleep ?
Sacrilege -- dude -- did you sell my name ?
They are flooding sites everywhere with "winner winner chicken dinner with the Obamas and sarahjessicaparkerlookslikeahorse"
Click em & close em. They pay per click.
I thought it was a promo for the belmont and that was ill have another.....