This page has been archived and commenting is disabled.

Europe's Old Nemesis, Illiquidity, Is Back

Tyler Durden's picture


One of the most-watched stress indicators from the European crisis (pre-LTRO) is starting to flash orange warning lights again. The 3-month EUR-USD basis swap (or how to get USD funding when no-one else will help) has just deteriorated its most over the past 5 days since mid-December. Having never realized more normalized levels from early last year, the rapid acceleration in this funding instrument's use last year and now this year is perhaps why bank stocks are under such incredible pressure as insolvency meets illiquidity head on once again.


Chart: Bloomberg


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 04/10/2012 - 14:02 | Link to Comment derek_vineyard
derek_vineyard's picture

a measly 5% draw down on spx after a 30% run up for year has bond yields compressing way too fast in coorelation

the money that is 'in the game' is moving around and magnifying market moves as no new money will enter

Tue, 04/10/2012 - 14:11 | Link to Comment SheepRevolution
SheepRevolution's picture


Tue, 04/10/2012 - 14:18 | Link to Comment derek_vineyard
derek_vineyard's picture

romney will just slow down the inevitable.....let obama win and let house collapse, so we start rebuilding sooner

Tue, 04/10/2012 - 14:25 | Link to Comment kindape
kindape's picture

house collapses faster under romney, which may or may not be good - depends on what the rest of us do with the crisis/opportunity

Tue, 04/10/2012 - 14:28 | Link to Comment SheepDog-One
SheepDog-One's picture

The house collapses when the FED gets together and see their returns are diminished and theres no point in going further with the same shit....that point is likely already passed by.

Tue, 04/10/2012 - 14:37 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

You can cheat a system for only so long. If central planning worked, we all would be comrades in a worldwide Soviet empire. The Fed is getting a dose of reality.

Tue, 04/10/2012 - 15:34 | Link to Comment Zero Govt
Zero Govt's picture

the only reality the Fed knows is when bankrupt WS Banks or the debt-ridden cash strapped US Govt comes a begging

Bubbles Ben knows nothing else but the world of cronism.. that's his job

Tue, 04/10/2012 - 18:01 | Link to Comment FlyPaper
FlyPaper's picture

Obama?  Do you honestly want to give 4-years to a guy who just made up his own executive order to give him complete and total control of everything in the US in case of "emergency" which he can declare?   Same guy who signs a bill cancelling your Habeas Corpus rights and is "unsure" if its OK to kill American citizens without trial?

We are watching a slow-motion coup de etait right in front of our eyes.

I'd rather roll the dice with Romney.  He's another establishment guy, and hopefully the right can pressure him.  Obama, as a lame duck, has nothing to lose and will step even further out of bounds without the electorate to reign him in.


Wed, 04/11/2012 - 00:41 | Link to Comment jeff montanye
jeff montanye's picture

if obama's so unsure, why does he kill u.s. citizens (and their teenage relatives) without trial?  i think he's lying.  it's the one thing he's good at.

Tue, 04/10/2012 - 14:19 | Link to Comment SheepDog-One
SheepDog-One's picture

Thats just it, they desperately need to pass off this printed money pump, but they cant do it. 'Retail' first of all is broke, and the mood in this country is anti Wall St and anti govt, no matter what the sycophantic media says to the contrary.

Tue, 04/10/2012 - 14:02 | Link to Comment Dr. Engali
Dr. Engali's picture

Just print about 5 trillion Ben and get it over with. You know you're going to.

Tue, 04/10/2012 - 14:08 | Link to Comment Everybodys All ...
Everybodys All American's picture

and then what ?

Tue, 04/10/2012 - 14:09 | Link to Comment carbonmutant
carbonmutant's picture

Change administrations...

Tue, 04/10/2012 - 14:10 | Link to Comment Dr. Engali
Dr. Engali's picture

Then they will have everything in place for the culling of the herd.

Tue, 04/10/2012 - 14:29 | Link to Comment CPL
CPL's picture

If it makes you feel better about things.  India, largest manufacturing facility on the planet for bullet and munitions, is out of coal and diesel and having a lousy time obtaining anything.  Pakistan is hosed and is on a rotating black out scheduel that doesn't run on scheduel.


All those government orders of billions of rounds of ammunition aren't coming.  Ever.  no power = no factory orders...


Oh yeah cotton shortage as well has dampened the mood of production as well.  Have a guy in my circles on g+ that enjoyed the big military expo, but all he can do is fill orders...that don't show up.


#PeakEverything baby


Tue, 04/10/2012 - 14:15 | Link to Comment ATM
ATM's picture

Print $10T, then $20T then $40T then $1Quadrillion..................That's always been the end game.

Tue, 04/10/2012 - 14:24 | Link to Comment CPL
CPL's picture

Extra special gas prices for everyone to enjoy.

Tue, 04/10/2012 - 14:18 | Link to Comment insanelysane
insanelysane's picture

Instead of printing 5 trillion, we could just have 2 years of no taxes.

Tue, 04/10/2012 - 14:31 | Link to Comment CPL
CPL's picture

That's coming...but it'll involve a government credit collapse first and employee checks bouncing and other fun things like gas being 15 a gallon.


Even then, nobody will know what a buck is worth

Tue, 04/10/2012 - 14:26 | Link to Comment SheepDog-One
SheepDog-One's picture

$5 its going to be hillarious seeing this country deal with $6-$7 gas!

Tue, 04/10/2012 - 14:09 | Link to Comment Peter K
Peter K's picture

Socialism es muerte:)

Tue, 04/10/2012 - 14:09 | Link to Comment Village Smithy
Village Smithy's picture

Maybe buy a little here as we can expect another synchronised central bank intervention tonight.

Tue, 04/10/2012 - 14:10 | Link to Comment urbanelf
urbanelf's picture

How is illiquidity a "nemesis" when it's the easiest problem to solve?

Tue, 04/10/2012 - 14:16 | Link to Comment SheepDog-One
SheepDog-One's picture

Seems theyre now past the point where adding 'liquidity' to 'solve' things is now a negative.

Tue, 04/10/2012 - 14:53 | Link to Comment Vince Clortho
Vince Clortho's picture

when the only tool you have is a hammer ...

Tue, 04/10/2012 - 14:13 | Link to Comment SheepDog-One
SheepDog-One's picture

Gosh thats a shame, central banksters taking it right up the kazoo again....and just think, they had it all certified totaly fixed just a few weeks ago!

Tue, 04/10/2012 - 14:29 | Link to Comment pods
pods's picture

I got some liquidity for ya!

Tue, 04/10/2012 - 14:32 | Link to Comment CPL
CPL's picture

Front left pocket...just reach in and touch it.

Tue, 04/10/2012 - 14:50 | Link to Comment Winston Churchill
Winston Churchill's picture

Humpty Dumpty had a big fall..........

All the Kings central bankers couldn't..........

Tue, 04/10/2012 - 15:34 | Link to Comment Zero Govt
Zero Govt's picture

..put the Bubbles together again

Tue, 04/10/2012 - 15:13 | Link to Comment Cat Woman
Cat Woman's picture

Must you boys be disgusting?

Tue, 04/10/2012 - 15:26 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

a rising libor is about the opposite of a rise

last time (last year) didn't the FED toss out a buncha "swaps" with the EZ banksters?  the "dollars4shit" deals?

who knows what anybody will do now?

so much fungibility;  so little time...

Tue, 04/10/2012 - 16:11 | Link to Comment Olympia
Olympia's picture

...the barbarians, who forced beautiful Europe to get down Zeus’“back” and made her a prostitute ...the unworthy Europeans, who in 1945 “took Europe down” from “Mount Olympus” and in 2012 relinquished “enslaved” Europe to the Phoenician loan sharks.

Germans are proved to be the easy solution to breach Europe’s door. Whoever wishes to “set foot” on Europe and demolish it, the only thing he has to do is to “fool” the Germans. For a second time in less than fifty years, Europe’s idiots become the victims of foreigners and they serve their interests at the expense of Europe...



The German traitors of Europe along with the Phoenicians from Asia may have forced Europe to get down from the "back” of the Greek “bull”, but it remains to be seen how they shall pull it through with the “bull”.



Tue, 04/10/2012 - 18:19 | Link to Comment katchum
katchum's picture

America isn't any better, liquidity at JPM, C, WFC has decreased too.

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