Guest Post: Keep The Faith….

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Thu, 12/01/2011 - 11:25 | 1934882 Ghordius
Ghordius's picture

just two sentences that are really important here:

"whilst it makes Dollar funding cheaper" and

"European asset disposal (forced or unforced) risks creating a tightening of financial conditions in other economies, and to the extent that this influences global growth expectations, it would affect currencies through changes in risk appetite and capital flows"

Now just insert "Dollar" between "European" and "asset disposal (forced or unforced)" and you get the reason for Uncle Ben's intervention... the dear old EuroDollar Market

And everybody and his mother is saying the EuroZone is doomed?

Thu, 12/01/2011 - 11:25 | 1934896 LawsofPhysics
LawsofPhysics's picture

Intersting analysis.  Surely you are not suggesting that the world's reserve paper is going bidless?  LOL! 

Thu, 12/01/2011 - 11:49 | 1934923 Ghordius
Ghordius's picture

LOL, no, not at all.

Here a fuller explanation 1934395

Very short and simplified: MegaBanks in the EuroZone don't want to recapitalize, know they get whacked on their head (nationalized) if they dump EuroBonds and scream loudly to Uncle Ben: help us or we sell our dollar denominated positions. Remember, they are talking of a lack of Dollars. The EuroDollar Market is huge, very important and Has To Be Maintained Whole At All Costs...

Meanwhile, Mr. King of the Bank of England "prepares" for a Great Storm. Break up of the DollarZone my hat... The Storm is Soon coming over The Isles (a pity, really, I wish this would all stop).

Thu, 12/01/2011 - 12:02 | 1935017 Ghordius
Ghordius's picture

hemm... nobody noticing the little strike that PM Cameron dubbed "a damp squib" in the UK? http://www.bbc.co.uk/news/uk-15953806

Thu, 12/01/2011 - 17:21 | 1936318 akak
akak's picture

First, I would need to know exactly what a "damp squib" is --- would that be like a wet baby pigeon?

And I am still trying to figure out this word "whilst".  Is that a bad abbreviation for "Whil Street", or perhaps some sort of weird contraction of "will have"?

I suggest that future contributors please not write in arcane dialects of English.

Thu, 12/01/2011 - 11:40 | 1934952 Sunset chaser
Sunset chaser's picture

When the banks no longer trust each other it will be game over and crash time. As Morgan testified before the Pujo Committee

"A man I do not trust could not get money from me on all the bonds in Christendom."

http://en.wikipedia.org/wiki/Pujo_Committee

And a forgotten gem can be perused here.
http://memory.loc.gov/service/gdc/scd0001/2006/20060517001te/20060517001...

Thu, 12/01/2011 - 11:58 | 1935005 buckethead
buckethead's picture

Very interesting read from Morgan.

Thu, 12/01/2011 - 12:06 | 1935036 Ghordius
Ghordius's picture

yes, JPM said this 1907 - modern Central Bank Architecture has "developed" to take care of this eventuality

imagine the CB as roof, every bank as pillar and the real economy as fundament: the very picture of an old greek temple

Thu, 12/01/2011 - 11:21 | 1934884 Ahmeexnal
Ahmeexnal's picture

Hope and Faith!

Thu, 12/01/2011 - 11:29 | 1934910 xcehn
xcehn's picture

faithopium

Thu, 12/01/2011 - 11:33 | 1934931 Ghordius
Ghordius's picture

you are really scary when you say that...

Thu, 12/01/2011 - 11:48 | 1934974 Sudden Debt
Sudden Debt's picture

I also have 2 pittbuls called Hope and Faith!!

Just don't come to close BECAUSE THEY'LL BITE YOUR ARMS OFF

Thu, 12/01/2011 - 12:17 | 1935086 xcehn
xcehn's picture
Cramer: We‘re ’Two Stages From a Financial Collapse So Huge It‘s Hard to Get Your Mind Around’

 

Nevermind the stock rally from Monday or the massive sales figures from Black Friday, CNBC’s Jim Cramer had a very grim outlook for the global financial markets going forward. In sum, the European crisis is so bad that the U.S. is grave danger. Business Insider explains:

http://www.theblaze.com/stories/kramer-were-two-stages-from-a-financial-...

Thu, 12/01/2011 - 12:19 | 1935093 xcehn
xcehn's picture

I think it's really defcon 1, but that's probably what Cramer secretly means too.

Thu, 12/01/2011 - 15:59 | 1935993 Random_Robert
Random_Robert's picture

Oh for fuck's sake...

Here come all the talking heads with their "the world is going to end if we don't go all print-happy again"...

I suppose next they're going to go drag Hank Paulson off of whatever tropical island he purchased and make him draw up another 3 paragraph term sheet for Congress to authorize TARP 2.0.

Here it comes, bitchez.... long, hard, thick, and aiming straight for your ass.

 

Thu, 12/01/2011 - 11:22 | 1934889 SheepDog-One
SheepDog-One's picture

Parasite banksters problem isnt a lack of money, they can print as much of that as they want, the problem is they just cant find anyone to pay them interest on it any longer.

 

Thu, 12/01/2011 - 11:23 | 1934891 Spooky Polish
Spooky Polish's picture

BS ! 

Thu, 12/01/2011 - 11:24 | 1934893 maxmad
maxmad's picture

so basically the global economy collapsed yesterday, bitchez!

Thu, 12/01/2011 - 11:28 | 1934908 Ahmeexnal
Ahmeexnal's picture

Yes, Credit Agricole went down.
It'll take a few hours for the sheeple to experience the effects.
The power elite already packed up their shit and moved on.
The sheeple are about to be swept by a tsunami.

Thu, 12/01/2011 - 11:52 | 1934987 Iconoclast
Iconoclast's picture

Educated guess? Good one, but like to know the source if possible Tia

Thu, 12/01/2011 - 11:31 | 1934916 maxmad
maxmad's picture

I think Fed’s Fisher put it well when he said "We are not bailing out Europe, we are trying to meet a shortage of dollars." In other words Europe still has all the problems it had two days ago.

 

Oh noes... there's a shortage of dollars... what do we do?

Thu, 12/01/2011 - 11:31 | 1934917 LawsofPhysics
LawsofPhysics's picture

1971, these are simply aftershocks.  Ben Bernanke is simply providing cover for the next "unforeseen" event.

 

At this point is looks to me like even the Fed doesn't trust the Fed and event the central banks don't want to lend to each other or trust each other.  The fact that this is becoming more and more a one man show show (oversimplification I know, but more rats abandoning ship every day) should scare the fuck out of everyone.

Thu, 12/01/2011 - 11:32 | 1934925 xcehn
xcehn's picture

It scares nearly everyone on ZH, for sure, including me.

Thu, 12/01/2011 - 11:26 | 1934899 Irish66
Irish66's picture

Taylor, which 8 banks?

Thu, 12/01/2011 - 11:28 | 1934905 Dr. No
Dr. No's picture

Fail

Thu, 12/01/2011 - 11:29 | 1934909 Irish66
Irish66's picture

reverse repo counterparties

Thu, 12/01/2011 - 11:26 | 1934900 tliberty
tliberty's picture

Any talk of whether or not the Fed should adjust interst rates is a band-aid on a gaping wound. In fact, I would say that and Fed action at all will only serve to make eveything worse. In fact, I would say that the Fed is an all aorund evil insitution that is destroying our financial lives. But that's just me.

I am a big advocate of silver and gold, but at this point my interest in gold is as an insurance policy against the nastiness of fiat money. End the Fed, end the State, etc.

www.golddeputy.com

Thu, 12/01/2011 - 11:28 | 1934903 xcehn
xcehn's picture

I have no reservations regarding any of this.  The situation was an emergency and the action was critical to prevent catastrophe.  It clearly is NOT a cure.

...the situation must have been really bad for such action as it was clearly not as pro-active as they may like to suggest. A crisis was very close indeed and whilst this action eases the situation it may not be a cure.

 

Thu, 12/01/2011 - 11:30 | 1934914 RobotTrader
RobotTrader's picture

1994 vs. 2011

 

Here's what 1994 looked like during a brutal consolidation and chop period, much like today.  When the gloomers said it was the "end of the world" for stocks:

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosetti...

Here's what happened afterwards:

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosetti...

Thu, 12/01/2011 - 11:33 | 1934928 maxmad
maxmad's picture

Amazing..........  almost like analysis of a 3 year old..

Thu, 12/01/2011 - 12:12 | 1935059 tsx500
tsx500's picture

why are u insulting 3-year olds like that ?!?!

Thu, 12/01/2011 - 17:30 | 1936339 akak
akak's picture

I wish Tyler, or the Tylers, would stop inflicting this puerile and idiotic RoboTroll momo-chasing, stock-pimping shtick on us already --- it is really getting old.

Come on, Tyler, give it up --- most of us have figured out by now that YOU are RobotTrader, posting egregious bullshit one-liners and mindlessly pro-equities, pro-Establishment flyby posts just to goad and tease us.  Do you REALLY need to resort to such measures?

Thu, 12/01/2011 - 11:46 | 1934935 LawsofPhysics
LawsofPhysics's picture

Sure, now overlay that with information the changes in energy production, tax revenues, and the real and project expenditures of the Federal government for the same time period. Very different situation today.  Can't give home or student loans now to get us out of the slump like we did back in 1994 AND the boomers are tired and ready to retire.  Nice try captain hindsight.

Thu, 12/01/2011 - 11:52 | 1934986 fuu
fuu's picture

It's like 1994, again.

Thu, 12/01/2011 - 11:32 | 1934924 Dapper Dan
Dapper Dan's picture

OT:

Do you think there is a financial war going on?

US state dept says Obama administration supports properly designed, targeted sanctions on Iran Central Bank at appropriate time - @Reuters

Targeted indeed!  Who do they think they are fooling?

Thu, 12/01/2011 - 11:47 | 1934948 LawsofPhysics
LawsofPhysics's picture

I didn't think that Iran had a central bank.  That is the problem, their banks are not part of the centrally planned network of central banks under the Federal reserve or IMF, hence the Iranian people will be "liberated" from their horrible tyranny.

Thu, 12/01/2011 - 13:20 | 1935100 Dapper Dan
Dapper Dan's picture

Up next, sudden aerial bombing syndrome,  we are going to liberate the shit out of them.

Peace bullets, love bombs and friendly fire.

Fighting for freedom is like fucking for chastity!

North Dakota is next  if you use this state department logic.

One bank to rule them all


Italy recalls its ambassador from Iran, foreign minister says - @Reuters


US committed to take steps to freeze Iranian Central Bank assets and to work with allies to take similar action, US official says - @Reuters

Thu, 12/01/2011 - 11:37 | 1934945 NEOSERF
NEOSERF's picture

Don't get caught short when the Germans do that U turn...it has to happen and will happen as without it there is no euro, no ECB, no one for Germany to export to and banks shut down in Europe...it will happen...even a "closer fiscal union" does nothing...okay so they allow the ECB to be the Fed...then what...printing because the ONLY other way to deal with debt is to stimulate growth and tax your citizens more which hasn't happened here and won't there...this is a devaluation race to the bottom and wouldn't be surprised to wake up and see that the UK says screw printing which take too long, I am going to pull an overnight devaluation and just drop it to par with the dollar.  God help us if gold starts to waver as a true store of value...

Thu, 12/01/2011 - 11:39 | 1934951 Mark123
Mark123's picture

"There is now so much expectation at the December 9th meeting and even EU leaders have ramped up its importance by suggesting it is now or never!"

Of for crying out loud....when will this BS end??????????  The Fed (graciously on our behalf) has agreed to provide cheap loans to Eurozone banks, and sure enough they go and support Spanish and French bond auctions today with vigor.  So, really, the US (which is bankrupt) is buying European sovereign debt on margin.  Great...sure sounds like a great long term solution....very similar to how the US govt propped up GM (which will end in tears sooner or later).

 

Thu, 12/01/2011 - 11:44 | 1934962 ndotken
ndotken's picture

Banks aren't gonna lend when profitability takes a backseat to survival.

Thu, 12/01/2011 - 11:44 | 1934963 spanish inquisition
spanish inquisition's picture

If the FED is swapping a shitload of cash around the world....Aren't all currencies being guaraunteed and backed by the dollar.

Seems to me that anyone who is issuing bonds now is actually issuing dollar denominated bonds by proxy and that their currencies have effectively failed.

Or am I missing something?

Thu, 12/01/2011 - 11:49 | 1934978 Mark123
Mark123's picture

Right....it is all tied to the US dollar.  In my opinion the US dollar has also failed, but people just don't know it yet.  This supertanker takes a long time to change course.

Thu, 12/01/2011 - 11:54 | 1934991 GS21A
GS21A's picture

No, you haven't missed anything.  This action is a recognition of looming soveriegn default.

Thu, 12/01/2011 - 11:48 | 1934975 Iconoclast
Iconoclast's picture

What I'm finding increasingly disturbing is how a few words and a lame piece of action can suddenly 'soothe' all the capitalist worries..

Incidentally, the Merkozy alliance met 14 times in twenty one months, this sticking plaster applied yesterday 'achieved' more in nano seconds, just goes to show all those meetings, including Cannes at room rates of 30 k a night, weren't worth a damn.. They could have done it all through fukcin Skype ffs...well maybe not, there's the issue of Berlusconi's room service but you get the point..

Thu, 12/01/2011 - 12:00 | 1935011 wisefool
wisefool's picture

Reminds me of the Al Gore Climate change summits in the old days. The helecopter did a maritime extraction from his houseboat in tenesse, took him back to the mansion to get dressed (meter/rotors still running) then delivered him to the regional airport where a gulfstream was waiting.

Quick lay over in D.C. to freshen up the drinks and get the talking point from K-Street. John Edwards and his hairdresser already on the chartered 747 to Kyoto. 

"We must reduce our carbon emissions!"

Thu, 12/01/2011 - 11:51 | 1934983 Irish66
Irish66's picture

We now have a collateral problem

Thu, 12/01/2011 - 11:56 | 1934999 LawsofPhysics
LawsofPhysics's picture

Yes, or in other words a solvency problem.  Being solvent means you have something of real value to offer in exchange.  Damn this finite system!

Thu, 12/01/2011 - 12:05 | 1935027 Irish66
Irish66's picture

In a reverse repo, dealers offer interest rates at which they would lend money to the Fed versus the Fed’s Treasury general collateral, typically Treasury bills.

Thu, 12/01/2011 - 11:59 | 1935006 americanspirit
americanspirit's picture

Those who we call bankers are more appropriately called what they are - slave traders. And I've finally realized that smooth talking Oreo in the White House is a descendant of Kenyan slave traders dedicated to selling US into slavery. For him it's payback - for the cabal of slave traders worldwide its payday. Get ready to be pickin' cotton everybody because that's the plan.

Thu, 12/01/2011 - 12:02 | 1935018 Bansters-in-my-...
Bansters-in-my- feces's picture

"Firstly. this action,comming in a timely fashion,was certainly waranted"

Fuck you,you fucking boot licking sack of shit.

That sentence alone shows YOU....are part of the problem,fuck for brains

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