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European Money Market Industry Shutting Down As Goldman Closes MM Fund, Says In "Unchartered Territory"

Tyler Durden's picture


Update: BlackRock to restrict subscriptions into 2 Euro money funds

We were the first to bring news that overnight JPMorgan has halted investment in its European money market funds following the ECB's decision to cut the deposit rate to 0%. Now, it is Goldman's turn:


And finally the conclusion, which is rather obvious:


More from Bloomberg:

JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS) and BlackRock Inc. (BLK) closed European money market funds to new investments after the European Central Bank lowered deposit rates to zero.


JPMorgan, the world’s biggest provider of money-market funds, won’t accept new cash in five euro-denominated money- market and liquidity funds because the rate cut may result in losses for investors, the company said in a notice to shareholders. Goldman Sachs won’t accept new money in its GS Euro Government Liquid Reserves Fund, and BlackRock, the world’s largest asset manager, is restricting deposits in two European funds.


JPMorgan’s five closed funds had 23.7 billion euros ($29.2 billion) in assets as of July 5, the bank said in an e-mail, about 22 percent of all euro-denominated money funds. The funds are JPMorgan’s Euro Liquidity Fund, Euro Government Liquidity Fund, Euro Money Market Fund, Euro Liquid Market Fund and JPMorgan Series II Funds -- EUR.


The deposit rate cut “will almost certainly move cash bids in short-dated instruments into negative territory, and so we have taken the step to restrict subscriptions and switches into the funds in order to protect existing shareholders from yield dilution,” JPMorgan said on its website.


The company had $417 billion in money fund assets as of May 31, making it the world leader, according to Crane Data LLC, a research firm based in Westborough, Massachusetts. The entire euro-denominated money fund industry has about 108 billion euros, Crane Data’s statistics show.

Effectively, the European money market industry is now closed and only redemptions will be allowed as nobody can make "money" in money markets in a Zero deposit rate environment. As another reminder, there are hundreds of billions in residual cash in various European money markets which is no longer welcome. Which then begs the question: as the cash is unwound will it go into:

i) stocks
ii) bonds
iii) mattresses
iv) breaking the Swiss National Bank as everyone buys CHF and send the nominal yield on the 2 Year Swissie to -#Ref!
v) gold

We will find out soon enough.


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Fri, 07/06/2012 - 13:30 | 2592505 veyron
veyron's picture

Goldman was late to the party ...

Fri, 07/06/2012 - 13:33 | 2592521 notbot
notbot's picture

Nothing to see here...private sector "Doing just fine"

Fri, 07/06/2012 - 13:35 | 2592530 Ahmeexnal
Ahmeexnal's picture


Fri, 07/06/2012 - 13:45 | 2592574 Popo
Popo's picture

Buuut... did they really say "Unchartered" territory?   Because that would make zero fucking sense.   The term is "Uncharted" territory.   A typo on Tyler's part is of course forgivable.   A typo on a major Goldman press release on the other hand, just reinforces what we already knew:  These guys are neither the best nor the brightest.

Fri, 07/06/2012 - 13:45 | 2592589 bigdumbnugly
bigdumbnugly's picture


so was the "uss minnow" and we all know the story from there.   

Fri, 07/06/2012 - 13:50 | 2592619 HoofHearted
HoofHearted's picture

I think Euroland is about to be in LTRO9.99 territory. If all the underfunded banks now have yet another bank run because people can't make any interest on their fiat, it spells higher leverage and more risk. Unwind in stocks from the banks, but if the Muppets know this they will grab stocks at the nadir. Personally I'd go for option v)- gold, but WTFDIK?

Fri, 07/06/2012 - 13:56 | 2592652 Rahm
Rahm's picture

Gold & Silver, cocksuckerz!

Fri, 07/06/2012 - 14:45 | 2592810 I think I need ...
I think I need to buy a gun's picture

10% stocks 90% gold ;)

Fri, 07/06/2012 - 14:06 | 2592691 Randall Cabot
Randall Cabot's picture

So was Henry Hudson and we all know what happened to him.

Fri, 07/06/2012 - 14:16 | 2592729 Miss Expectations
Miss Expectations's picture

Do I have enough time to pack my evening gowns?

Fri, 07/06/2012 - 14:19 | 2592740 Randall Cabot
Randall Cabot's picture

Took a second, LOL, good one.

Fri, 07/06/2012 - 14:44 | 2592809 bigdumbnugly
bigdumbnugly's picture

if you must.

but i'd kinda prefer clothing sewn from fronds and fig leaves and such.

Fri, 07/06/2012 - 14:48 | 2592821 Likstane
Likstane's picture

leave room to sew in barbarous relics.

Fri, 07/06/2012 - 15:01 | 2592848 bigdumbnugly
bigdumbnugly's picture

she could hide them inside the two coconut halves.


edit:  nah, first place they'd look.

Fri, 07/06/2012 - 15:23 | 2592963 Animal Cracker
Animal Cracker's picture

or green shoots?

Fri, 07/06/2012 - 15:00 | 2592875 Ookspay
Ookspay's picture

+ Ginger

+ Maryann

Sat, 07/07/2012 - 12:25 | 2594837 killedbyshortvol
killedbyshortvol's picture

Maryann all the way.

Fri, 07/06/2012 - 13:51 | 2592628 El Oregonian
El Oregonian's picture

It's unchartered because it was only supposed to be a 3 hour tour... Welcome to Gilligan's Island were we are all shipwrecked now...

Fri, 07/06/2012 - 13:55 | 2592634 Cast Iron Skillet
Cast Iron Skillet's picture

well, from the point of view of the squid, it might really be outside the charter usually bestowed to a CB, therefore unchartered.

Fri, 07/06/2012 - 13:53 | 2592639 Agent P
Agent P's picture

Supposably that's what they mint.

/sarc misspell

Fri, 07/06/2012 - 13:58 | 2592658 toady
toady's picture

I keep seeing these misspellings & misuses of every day phrases. It's almost like our educational system is failing us somehow ...

Fri, 07/06/2012 - 14:05 | 2592684 Agent P
Agent P's picture

"It's almost like our educational system is failing us somehow ..."

For all intensive purposes, I think its working just find.

/common blunders

Fri, 07/06/2012 - 14:26 | 2592761 Taffy Lewis
Taffy Lewis's picture

If I loose more money, I might have to move to Columbia.

/my 2 favorites

Fri, 07/06/2012 - 14:47 | 2592820 THX 1178
THX 1178's picture

You should have ended that sentence with an explanation point.

Fri, 07/06/2012 - 15:36 | 2593022 Silver Pullet
Silver Pullet's picture

That one is more then common.

Fri, 07/06/2012 - 15:25 | 2592972 Animal Cracker
Animal Cracker's picture

Too bad people take it for granite.  Or am I making them the escape goat?

Fri, 07/06/2012 - 15:41 | 2593054 Al Huxley
Al Huxley's picture

Its really a mute point anyway.

Fri, 07/06/2012 - 15:26 | 2592973 Thorny Xi
Thorny Xi's picture

Bernie Madoff was a pioneer in unchartered territory.  After all, if he'd had a bank charter, he'd have just been bailed put.

Fri, 07/06/2012 - 17:54 | 2593402 Clashfan
Clashfan's picture

Of course. Because the best, the brightest, and the hottest work for Bloomberg financial news.

Here's one of them, Sarah Eisen, so bored to be earning the big bucks pimping for the mainstream media that she is apparently caught, on camera, playing with the huge, black strapon under her skirt? Really? Really?

The ramifications of this are simply preposterous.

Fri, 07/06/2012 - 18:56 | 2593492 Clashfan
Clashfan's picture

Of course, every "conspiracy" needs an "official explanation." Here it is:

First, the other reporter's mic was malfunctioning, not Sarah's. Second, do they really believe that readers would think that she would have a microphone between her legs or have to hike up her skirt to fix it? Third, the piece mentions nothing about a strapon, which this image clearly represents. Of course, the piece offers no image.

It's important why? Because it shows how blatantly the mm lies. Can you not see it? The chick got caught playing with a strapon, and the spin is utterly ridiculous.

Fri, 07/06/2012 - 13:38 | 2592548 sickofthepunx
sickofthepunx's picture

thanks to govts assuming all of their bad debts, why yes, it is

Fri, 07/06/2012 - 14:10 | 2592702 Stock Tips Inve...
Stock Tips Investment's picture

The intervention (manipulation) of the market by the ECB will have consequences in several respects. The decision is correct and GS is one of those consequences. The economic outlook continues to deteriorate in Europe and U.S. will have its effects. Wall Street has taken note of this. Today comes back. This situation will cause movements in the stock market. If we listen, we can benefit economically. Will be one of those few great opportunities.

Fri, 07/06/2012 - 14:10 | 2592706 Randall Cabot
Randall Cabot's picture

This could be serious: 2PM and not a ramp in sight.

Fri, 07/06/2012 - 18:16 | 2593440 Offthebeach
Offthebeach's picture

How can I as a designated Muppet offer up what little wealth that I have to the mighty Squid'n Whale?
I could also do a kidney, heart, lung, liver if say Paulson or such or family need a sacrifice. My family would be so proud.

Fri, 07/06/2012 - 13:32 | 2592512 hack3434
hack3434's picture


Fri, 07/06/2012 - 13:40 | 2592560 papaswamp
papaswamp's picture

Spam and Reese's PB cups

Fri, 07/06/2012 - 13:33 | 2592517 Dr. Engali
Dr. Engali's picture

<---VI) silver

<---VII)Gold ,silver, and mattresses.

Fri, 07/06/2012 - 13:36 | 2592536 surf0766
surf0766's picture

<---- VIII) food water lead

Fri, 07/06/2012 - 13:39 | 2592546 Dr. Engali
Dr. Engali's picture

Too many options and too few arrows.

Fri, 07/06/2012 - 13:39 | 2592549 TrainWreck1
TrainWreck1's picture

<---- IX) Obama's stash


Fri, 07/06/2012 - 13:39 | 2592556 Nothing To See Here
Nothing To See Here's picture

IX) <----- Green technologies creating thousands of billions of new jobs

X) <------ Campaign contributions to Obamney

Fri, 07/06/2012 - 13:47 | 2592602 francis_sawyer
francis_sawyer's picture

XI) "Corzined"

Fri, 07/06/2012 - 13:51 | 2592631 A Lunatic
A Lunatic's picture

XII hopium.

Fri, 07/06/2012 - 14:10 | 2592709 Agent P
Agent P's picture

<--- XIII) Hookers & Blow

<--- XIV) Additional Secret Service Protection (aka Hookers & Blow)

Fri, 07/06/2012 - 13:40 | 2592559 littleguy
littleguy's picture

<--- Ammo

Fri, 07/06/2012 - 13:33 | 2592520 dannyboy
Fri, 07/06/2012 - 13:33 | 2592523 Glasgow Gary
Glasgow Gary's picture

No, they didn't use the illiterate "unchartered" when meaning to write "uncharted" did they? What's next, using "loose" when meaning "lose"?

Fri, 07/06/2012 - 13:39 | 2592551 Unprepared
Unprepared's picture

I though the whole idea of the EU is to make the territories unchartered... I mean uncharted.

Fri, 07/06/2012 - 13:54 | 2592636 TruthInSunshine
TruthInSunshine's picture

GoldmanSquid, JPMorque and all the feeders off the mammary gland of the nanny-state (funded, mainly through collateralization of taxpayer debt slaves, current and future born) need to create an EPIC Hank Paulson "Tanks in the Streets & Martial Law by sunrise if we don't get more heroin, only this time provided to us on a massive, global, unprecedented scale, in the form of GLOBAL TARP/TALF/QE/KITCHEN SINK DOLLA' DOLLA' BILLS, YO" moment.

Look for really scary proclamations and dire warnings from the Too Big To Fail (but too f*cked up to truly fix) racketeers/junkies in increasingly ominous and alarmist volume over the coming days, weeks, until they get want they want.

Just like last time, if it takes quote stuffing-to-bidless markets to scare the 401(k) bagholders into phoning/emailing their "elected representatives," they'll take the indices all the way DOWN TOWN.

Fri, 07/06/2012 - 15:39 | 2593045 Arnold Ziffel
Arnold Ziffel's picture

I remember Hank:



For Henry Paulson Jr., a Goldman-sized tax loophole awaits his pleasure.

He has amassed quite a fortune--a roughly $700 million equity stake in Wall Street's premier investment banking house. And soon, he will have the chance to diversify a good chunk of those holdings without paying a dime to the Internal Revenue Service.

By accepting the Treasury post, Paulson is poised to take advantage of a tax loophole that allows government officials to defer capital gains taxes on assets they have to sell to avoid a conflict of interest, as long as the proceeds are reinvested in government securities or a broad array of mutual funds approved by the government within 60 days.

Fri, 07/06/2012 - 19:29 | 2593414 TruthInSunshine
TruthInSunshine's picture

Ya' know, I'm glad you elaborated on Hank Paulson, or Hank the Tank as I know him.

Since the fix was in, he should've skipped the elaborate dog and pony show he put on (Martial Law, tanks in the streets, mutant strain of airborne herpes, etc) and went with a 1 cue card presentation to Congress that had no more than 7 words scribbled in crayon and a child's drawing of a monster on it, when asking for Wall Street Banksters Big Blank Check, and just made a really scary face while screaming "A-Booooga-Boooga-Booooga!!!"

Fri, 07/06/2012 - 13:39 | 2592554 NooooB
NooooB's picture

Think of all the "french benefits" fo such a decision! Irregardless of spelling... Or actual words...

Fri, 07/06/2012 - 15:07 | 2592899 aerojet
aerojet's picture

It hasn't impacted me yet.

Fri, 07/06/2012 - 13:40 | 2592558 sunaJ
sunaJ's picture

Your being way to demanding.

Fri, 07/06/2012 - 14:03 | 2592678 Popo
Popo's picture



That was intentional right?

Fri, 07/06/2012 - 15:33 | 2593007 SubjectivObject
SubjectivObject's picture

l, r

Fri, 07/06/2012 - 13:56 | 2592651 ptoemmes
ptoemmes's picture

I don't think the grammar/spelling police are gonna be any more effective...or is that affective...

Fri, 07/06/2012 - 16:17 | 2593182 slewie the pi-rat
slewie the pi-rat's picture


Fri, 07/06/2012 - 13:35 | 2592528 pods
pods's picture

Seems like the ECB just just pulled the fire alarm in a crowded theater?


Fri, 07/06/2012 - 13:52 | 2592632 HoofHearted
HoofHearted's picture

And why did this happen before markets closed instead of the usual? Some is losing control (or loosing it if we need to be in on their spelling)

Fri, 07/06/2012 - 13:57 | 2592654 pods
pods's picture

Don't really know.  Maybe they are really not in control?

And now with so much "liquidity" running around they are trying to stabilize it while directing it to the areas they want.

But with so many variables, they will undoubtedly make a mistake and blow the whole thing up.

This makes sense with the article yesterday about was it Finland that moved the deposit rate negative.

People are not going to want to suffer the dislocations of so much funny money chasing yield.


Fri, 07/06/2012 - 15:26 | 2592975 MachoMan
MachoMan's picture

They never were nor will be in "control" per se, but they can pretty much pinpoint when they want the thing to blast off or crater...  If the thing takes a shit, presume that TPTB wanted it to at the exact moment it does...  the only question for us is why now and why this direction (up or down)?

My take is that muddling through is killing everyone.  We'll get a controlled demolition until some point at which the waters are safe for uber-overthetop-super QE...  which will coincide nicely prior to the election in November.  I think we basically "U" shape from here.

Whether or not QE xxxxxx^10, in and of itself, spooks the herd is anyone's guess.

Fri, 07/06/2012 - 14:43 | 2592806 mendigo
mendigo's picture

Goldman not pleased it would seem.
Perhaps this was not OK'ed.

Fri, 07/06/2012 - 13:37 | 2592529 sickofthepunx
sickofthepunx's picture

why anyone would allow wall street to hold their near-cash i for a lousy 5 bps   instead of having it federally insured or in a mattress is beyond me.

Fri, 07/06/2012 - 14:52 | 2592838 Bam_Man
Bam_Man's picture

They're not called "muppets" for nothing.

Fri, 07/06/2012 - 13:35 | 2592533 dwdollar
dwdollar's picture

You forgot...

vi) guns

Fri, 07/06/2012 - 13:39 | 2592550 HellZero
HellZero's picture

Just wondering if this means they are actually opening loads and loads of money market funds. Btfd in money funds?

Fri, 07/06/2012 - 13:39 | 2592552 HungrySeagull
HungrySeagull's picture

vii) IOU's

Fri, 07/06/2012 - 13:40 | 2592557 nasdaq99
nasdaq99's picture

GREEK VOTE OF CONFIDENCE SUNDAY NIGHT...............................................

Fri, 07/06/2012 - 13:41 | 2592563 surf0766
surf0766's picture

There is no one left to vote

Fri, 07/06/2012 - 16:57 | 2593272 knukles
knukles's picture

That sounds so just wrong.

Greek vote of confidence.
a) Yes, I like it
b) It's better to give than to recieve
c) Ewwwww
d) Bend that German over again
e) Why me?

Fri, 07/06/2012 - 13:42 | 2592569 Unhedged
Unhedged's picture

Doesn't this lead to liquidity crunch for institutions that rely on MM funds?  Worst case, runs?

Fri, 07/06/2012 - 13:47 | 2592606 MsCreant
MsCreant's picture

More like the screaming mimi's (sp?) really.

Fri, 07/06/2012 - 14:13 | 2592718 Unhedged
Unhedged's picture

Either way, being long gold might not be the way to go short term.

Fri, 07/06/2012 - 15:09 | 2592904 aerojet
aerojet's picture

The Mexicalis

Fri, 07/06/2012 - 13:42 | 2592573 Vincent Vega
Vincent Vega's picture

Anyone, besides me, having that feeling just like when LEH and BSC went kaput? Perhaps some weekend emergency meetings and Sunday evening announcements?

Fri, 07/06/2012 - 15:23 | 2592961 Bananamerican
Bananamerican's picture

yup. rivets popping on the bulkhead....

Fri, 07/06/2012 - 17:07 | 2593284 knukles
knukles's picture


Look at the Kitco chart for the last 3 days.
Like clockwork, same time, same Bat Station, whammola

They're seemingly in something of a contain the shit no matter what mode.
Maybe not this weekend, but seemingly getting worser and worser.

Also, I'm getting the tone from friends and acquaintances in the biz... bad vibes.  Just plain bad mojo.  The official lines are the same as always, the individuals are chafing at the collars keeping them in line.

I've told them that I don't see it as very bad right now but that's because I'm in the gonna get one hell of a lot worse camp.  Like ya'll ain't seen anything, yet.
And might even be a prolonged period of water torture, drip by drip.
What the fuck do I know?
Who knows?

This is when I'm glad that I'm in safe stuff.

Like talking with clients, etc.
How does one measure risk these days?
By how well one sleeps.

Fri, 07/06/2012 - 13:43 | 2592575 papaswamp
papaswamp's picture

Shhhh Shhhhh it will be ok.... Just sleeeeep

Fri, 07/06/2012 - 13:44 | 2592582 RobotTrader
RobotTrader's picture

Meanwhile, retail stocks are surging again today, and gold stocks are imploding.


The U.S. Consumer is totally unfazed by Europe, job market, etc.  They are still spending come hell or high water.

Because "Risk Off" simply means crashing commodity prices which translates into a huge tax cut.

Fri, 07/06/2012 - 13:50 | 2592623 francis_sawyer
francis_sawyer's picture

Well from my POV, first you have to have a few garments if you want to start sewing your gold into the hems...

Fri, 07/06/2012 - 13:58 | 2592656 Canaduh
Canaduh's picture


Fri, 07/06/2012 - 13:45 | 2592588 Missiondweller
Missiondweller's picture

If they're smart, gold.


May not be available soon. Tyler's earlier post:


Devaluation in Western currencies are comng and the only protectin is PM's

Fri, 07/06/2012 - 13:46 | 2592597 williambanzai7
williambanzai7's picture

Solar powered bathsalt production plants.

Fri, 07/06/2012 - 13:48 | 2592608 HungrySeagull
HungrySeagull's picture

Next up will be rocksalt.

Fri, 07/06/2012 - 14:05 | 2592689 i_call_you_my_base
i_call_you_my_base's picture

Perhaps human flesh powered? That's when things get interesting.

Fri, 07/06/2012 - 13:48 | 2592609 Everybodys All ...
Everybodys All American's picture

no thank you ...

Fri, 07/06/2012 - 13:56 | 2592646 rsnoble
rsnoble's picture

Market skimming right along support can't get it up.  Volumes dried out, waiting to see a big green Fed Stick lmao.  Not looking to fresh at the moment, failed bull flag, a break of SPY 135 and we'll have a -300 day on our hands.  Could happen any minute.

Your friendly drunken trading update. Yeehaw.

Fri, 07/06/2012 - 13:58 | 2592653 tony wilson
tony wilson's picture

getting close to false flag distraction time.

a puppet show which will rip apart and kill  real brown innocents.

 depleted uranium us,uk nato missiles locked and loaded

death and distraction

war and reset

Fri, 07/06/2012 - 14:00 | 2592665 potlatch
potlatch's picture

one of course always hopes this is simply not how bad it is getting, but history does not lie, does it?

Fri, 07/06/2012 - 14:41 | 2592798 papaswamp
papaswamp's picture

3.4 million job openings, 27-34million need living wage jobs. Which is faster, increase jobs or rapidly reduce population?
I suspect war... It is the only natural population control left.

Fri, 07/06/2012 - 13:59 | 2592659 potlatch
potlatch's picture

if by "unchartered" they mean: "this is fiat activity too far, it is beyond what can be rationally chartered thereof," then nm.


If they mean uncharted, then go watch gilligan's island until you get the diff right: the passengers CHARTERED a ship for a three hour cruise but got stranded on an UNCHARTED island getaway.

Fri, 07/06/2012 - 21:12 | 2593843 UnpatrioticHoarder
UnpatrioticHoarder's picture

+1. What is it with some people having to poncify their words e.g. backwardation => backwardisation. So much more credible-sounding.

Fri, 07/06/2012 - 14:00 | 2592663 BalanceOrBust
BalanceOrBust's picture

Ummm..  If the ECB is paying 0%, shouldn't gold be a strong buy?  Granted, there are costs to storing gold, but they are not that high and, what is more, there is no risk of governments renegging.


Gold should be through the roof.

Fri, 07/06/2012 - 14:49 | 2592829 pirea
pirea's picture

and it is lower today, so use the discount and buy some more.

Fri, 07/06/2012 - 14:02 | 2592672 bnbdnb
bnbdnb's picture

They should short the eur/usd.

Fri, 07/06/2012 - 14:09 | 2592700 geno-econ
geno-econ's picture

Only safehaven will be paid up property you can rent by the room for a day or night and ability to feed yourself. Amazing how fast gold becomes  available for a bite to eat. During depression Ford cars were sold for gold watches, and I dont mean Rolex's.  A good supply of gold does help---just in case

Fri, 07/06/2012 - 14:16 | 2592727 slaughterer
slaughterer's picture

The closing of these MMs means there will be capital inflows into ...

Treasuries and Bunds.  

That is all.  

Fri, 07/06/2012 - 14:46 | 2592813 rsnoble
rsnoble's picture

Wow, talk about no volume. Not enough to break lower that would be a real event for this time of day.  I'm still waiting to see if they can float this POS up the last hour.  No wait, scratch that. It's not worth fucking with im getting another beer. LMAO.

Fri, 07/06/2012 - 14:48 | 2592826 Bam_Man
Bam_Man's picture

This just means that the UST, Gilts, Bunds and JGB bond bubbles get that much bigger.

When these suckers eventually pop, it will be something to see.

Fri, 07/06/2012 - 14:51 | 2592835 Nathan American
Nathan American's picture



Fri, 07/06/2012 - 15:03 | 2592877 RichardENixon
RichardENixon's picture

Between you and I, Goldman, the affects of a grammatical misstake such as that cannot be understated and doesn't jive with the way press releases should be prioritized.


Fri, 07/06/2012 - 15:11 | 2592913 aerojet
aerojet's picture

It doesn't "jibe."  It's fucking jibe!!!!!

Fri, 07/06/2012 - 15:38 | 2593040 RichardENixon
RichardENixon's picture

You're response doesnt jive with the intent of my post.

Fri, 07/06/2012 - 16:38 | 2593221 Mysteerious Roo...
Mysteerious Rooshian Vooman's picture

+1 Well done! You haff made ze Mysteerious Rooshian Vooman laff.

Fri, 07/06/2012 - 15:06 | 2592894 Imminent Collapse
Imminent Collapse's picture

Riots in 5, 4, 3...

Fri, 07/06/2012 - 15:22 | 2592954 Catullus
Catullus's picture

"we can't see how a MMF in Europe doesn't break the buck under this scenario".

September 2008 redux.

Fri, 07/06/2012 - 15:47 | 2593075 W10321303
W10321303's picture

If the forest fires and the Free Radicals don't get ya Children,

There' always the Derivatives Market....

As the Economist points out:

The sums involved might have been huge. Barclays was a leading trader of these sorts of derivatives, and even relatively small moves in the final value of LIBOR could have resulted in daily profits or losses worth millions of dollars. In 2007, for instance, the loss (or gain) that Barclays stood to make from normal moves in interest rates over any given day was £20m ($40m at the time).

Authority (FSA) in Britain and America’s Department of Justice, Barclays accepted that its traders had manipulated rates on hundreds of occasions.

And the idea that one party’s loss from the manipulation was another’s gain is irrelevant to those on the losing side:

….banks will be sued only by those who have lost, and will be unable to claim back the unjust gains made by some of their other customers. Lawyers acting for corporations or other banks say their clients are also considering whether they can walk away from contracts with banks such as long-term derivatives priced off LIBOR.

I expect the firms involved to face a locust swarm of litigation. Lawyers may accomplish what regulators and politicians refused to do: strip the banks of ill gotten gains and bring their preening CEOs and “producers” down a few notches. A day of reckoning may finally be coming.  (

Fri, 07/06/2012 - 17:41 | 2593335 falak pema
falak pema's picture

The Economist, like the WSJ in USA, has been the greatest proponet of Big Bang Thatcherian economics that hatched this monster of City. She is the original queen bee mother of an ideological revolution that has turned a nation state into a casino state all centered around the City; just like Ronny did with WS. 

Having trumpeted for three decades this economic philosophy of corpocracy, Oligarchy haven, based in London, these same media shills, uber sophisticated paragons of free market enterprise, pretend they HATE the resultant corruption now exposed whereas they LOVED the philosophy that nurtured it, right from inception.

As that seminal article here on ZH has shown, you cannot be a supporter of the Creature of Jekyll Island, and then complain about crony capitalism, rampant political/bankster hand in hand corruption, financial scam and monopolist price fixing.

It was written in concrete right from beginning in the articles of that philosophy. As if The Economist didn't know that...turn coats all, following the weather vane.

Fri, 07/06/2012 - 17:03 | 2593183 Cangoroo
Cangoroo's picture

Why Soros won?


Looking at the strange inverse yield curves of some European debt it seems to me as if the short maturity debt was considered a safe haven bonanza to exploit. Because liquidity in money markets is higher it was an easy bet to buy high yield short maturity debt and sell long term maturity debt. Stupidity of so called rescue crew made this arbitrage easy, knowing that Greece and Italy and Spain were to finance via short maturity debt and as such were easy prey. So the books are closed now.Where does the money go? Well, it is relatively easy to assume that one side of the yield curve is a wee bit undervalued. 

Fri, 07/06/2012 - 16:26 | 2593202 max2205
max2205's picture

They might as well do the same here...MM's "paying" .01%.


Thanks Ben you're a douche

Fri, 07/06/2012 - 16:40 | 2593226 Cangoroo
Cangoroo's picture

Yes, it will be bitter when they face reality, they were fooled. It was all about bloody easy arbitrage. And the beauty is, politicians will be delighted to show they have managed the crises when there was none in the first place.


Must read, which shows that risk premiums are a theory, well an unproven one.


Fri, 07/06/2012 - 16:34 | 2593217 pashley1411
pashley1411's picture

The governments of Europe have made it, in effect, impossible to compete with European governments for cash.   See:  Argentina.

Fri, 07/06/2012 - 17:16 | 2593301 falak pema
falak pema's picture

the USD has been in unchartered territory since 1971. It never bothered GS.

Fri, 07/06/2012 - 17:57 | 2593407 Clashfan
Clashfan's picture

Okay, folks, please help me. Is this real? A Bloomberg finance show hottie caught playing with her huge strapon whent the camera reaches her too quickly because of a "technical difficulty?" Is this really what it looks like, and if so, how does this happen?

Talk about unchartered territory or whatever... dang! That thing looks like it has some, ahem, serious ramifications, some unpredictable consequences, some kind of market shake-up... I could go on?

I just want to know if you all think that this is what it looks like or if you can explain it?

Fri, 07/06/2012 - 18:15 | 2593439 Clashfan
Clashfan's picture

Someone told me that internet excuses were claiming that this is a microphone. Um, I'm sorry, but there's no way Bloomberg is making reporters this hot put microphones this big between their legs. Sorry.

I don't think this is a members only queef cam for paying subscribers, is it?

Bloomberg hotties wear strapons, bitchezzzzz! Bend over and get ready to scream because this thing is huge.

Fri, 07/06/2012 - 18:53 | 2593530 jonjon831983
jonjon831983's picture



There has also been some news about Money Market funds across the pond (from Europe to US) lately... about letting USD Money Market funds float more freely from $1 (aka let it sink)

Fri, 07/06/2012 - 23:04 | 2594077 WallowaMountainMan
WallowaMountainMan's picture

i gotta say, it looks more and more like the us of a is gonna come out on top in the whole shabang. ben squeeks by with extending 'twistie', a piddling amount in the face of the rest of the planet. china guesses wrong again and cuts rates trying to use up all that coal they gots. ecberoudoetchagaundteitfraupizza is soooo far f''k'd that toast is its new nickname.

patience ben patience. the bernanke put has to end now is possible....patience ben. patience.

Mon, 07/09/2012 - 04:39 | 2598063 Reptil
Reptil's picture


Dutch transport pension fund to sue Goldman Sachs AM [updated]
06 Jul 2012
NETHERLANDS – Vervoer, the €11bn pension fund for the Dutch transport sector, is planning to sue its former fiduciary manager Goldman Sachs Asset Management (GSAM).
Walter Brand, director at the scheme, told IPE's sister publication IPNederland that the claim, which will seek as much as €250m in damages, would be filed with the High Court in London later today.
He said the lawsuit would focus on the scheme's assets and their disappointing performance in the years leading up to the financial crisis.

"We left Goldman for good reason, and eventually we concluded that we should file suit," he said.
Brand could not comment further on the claim until it had been filed, but he did say that "all the details would become clear" once the 70-page suit had been recorded.

For its part, GSAM questioned the merits of Vervoer's complaint.

A spokesperson said: "We acted prudently and complied with our mandate, fulfilling our obligations to our client.

"We have not yet seen a claim, but believe one would be without merit based on the facts of the situation, and we would certainly contest it."
Brand there was no connection between Vervoer's lawsuit and the April 2010 suit filed by the US Securities and Exchange Commission, which claimed Goldman Sachs had knowingly misled investors over the sale of certain mortgage-backed securities – a case that came to light only after the pension fund had already terminated its contract with the asset manager.
In the run-up to the crisis, a number of Dutch pension funds that had invested in a global tactical asset allocation strategy run by GSAM confirmed to IPE that they had been deeply disappointed with its performance.
At the time, all but one of the pension funds IPE spoke with confirmed that the strategy's performance had been very poor in 2006 and the first four months of 2007.
In April 2010, Brand told IPNederland that this underperformance had been the key reason behind Vervoer's decision to drop GSAM.
"You can talk endlessly about a good fit and all that, but, in the end, what it's really about is securing a pension for our plan participants, and to do that, you need performance – that's the bottom line," he said at the time.
"The investment results did not live up to what we agreed to and did not meet our objectives."
Author: Mariska van der Westen


Mon, 07/09/2012 - 21:45 | 2600793 zorba THE GREEK
zorba THE GREEK's picture

I have an interest checking account of over $50,000. I just received my

statement and I was credited with 31 cents interest for the month.

I hope this doesn't mean I am going to lose my monthly interest.

How will I get by?

Do NOT follow this link or you will be banned from the site!