Liquidity Options Running Out For European Banks - "Liquidity Crisis Scene Set"

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Fri, 08/12/2011 - 08:47 | 1553767 disabledvet
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ooops!

Fri, 08/12/2011 - 12:13 | 1554492 Popo
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“The financial wreckage at many of these banks is along the lines of World War Two,” added the global markets chief. “There is so much detritus. But a lot of them don’t want to sell at these current prices, they know there will be a capital hit if things are properly priced.”

This is *exactly* the Japanese scenario.  Europe should take a good look at what happened to Japan.  For more than 2 decades they have dragged their people through economic pain, all because they couldn't take their lumps.

Fri, 08/12/2011 - 08:48 | 1553771 Weisbrot
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Liquidity Crisis based on an Equity Crisis due to False Equity from Toxic Assets that were never properly resolved - Jst like in the good old USA.

Fri, 08/12/2011 - 08:50 | 1553776 BigDuke6
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Came across this.

http://www.msnbc.msn.com/id/21134540#44080879

anyone from the good ol' usa out there?

he seems moronic and very sensible at the same time - who is he?  Ratigan.

Fri, 08/12/2011 - 09:02 | 1553805 NumberNone
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He used to be a talking head on CNBC Fast Money.  It seems Dylan's on-air self-control is in direct correlation to his self-control at the dinner table.  Keep eating Dylan, you're making more and more sense every day. 

Fri, 08/12/2011 - 09:08 | 1553824 BigDuke6
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He really goes off his nut admirably for a baby boomer and comes to the correct judgement that congress is bought.

it needs to be said.

one for you JW.

Fri, 08/12/2011 - 09:54 | 1553952 snowball777
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Not sure how an infrastructure bank addresses our campaign finance whorehouse, or how the president isn't just as beholden to the moneyed interests as congress critters.

In some sense, it would be nice to see Obama step up and show people the difference between his policies and real socialism....nationalize a few shitty national banks, for example.

Fri, 08/12/2011 - 09:09 | 1553826 BigDuke6
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double post - site playing up...

Fri, 08/12/2011 - 09:35 | 1553894 Manthong
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He has been on a rant pleading with Obama to show leadership and to magically produce government solutions out of our socialist, kleptocratic and grifter bankster financial sinkhole.

Some people think he has a refreshing perspective.

I think he's one of the many indications why we are doomed.

Fri, 08/12/2011 - 08:50 | 1553777 Cvillian
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My new avatar reflects the only logical savior to their solutions. And yes, he is a Uni-Brow-Corn.

Fri, 08/12/2011 - 08:59 | 1553801 espirit
espirit's picture

Got Skittles?

Fri, 08/12/2011 - 10:52 | 1554212 mess nonster
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Frida Kahlunicorn

Fri, 08/12/2011 - 08:55 | 1553782 HedgeFun
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rofl

Fri, 08/12/2011 - 08:55 | 1553784 machineh
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'the world's carry trade funding currency (once known as the reserve currency).'

Ah -- so that's what 'zero percent till mid-2013' means: unlimited guaranteed carry trading for GS and MS.

Thanks, Ben. You're a real tool.

Fri, 08/12/2011 - 08:55 | 1553785 Oh regional Indian
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And this has the feeling of one of the big stories, the ones that will rattle everyone this weekend.

China says no loan for you! Of course China's loans/liquidity injections are nothing but American money pumped into China, patiently over the last 20 or so years, so it could become a hands off weapon, today.

Duck, ducks!

ORI

http://aadivaahan.wordpress.com/2011/08/04/many-drafts/

Fri, 08/12/2011 - 08:56 | 1553791 cbaba
cbaba's picture

Not surprised, thats what i was expecting.

Banning the short sales will not help and will do just opposite , interbank lending will stop just like in 2008 . Wait and see the BIG BANG in coming weeks.

Fri, 08/12/2011 - 08:57 | 1553793 espirit
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Jus' print more fiatsco bitchez. Bring on the end game.

Fri, 08/12/2011 - 08:58 | 1553795 thunderchief
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Zero Hedge is my homepage.

It shoud be everyones..

Please text message this post to the sheeple people closest to you.

Fri, 08/12/2011 - 09:02 | 1553811 espirit
espirit's picture

The sheeple only care about their psychotropic rose colored outlook, the fall teevee lineup, and McBurgers.  Why bother?

Fri, 08/12/2011 - 09:34 | 1553890 Chump
Chump's picture

Sort of a Catch-22 there.  If the sheeple understand this post then they aren't sheeple.

Fri, 08/12/2011 - 08:58 | 1553797 monopoly
monopoly's picture

September is going to be an interesting month.

We just have to get through the dog days of summer with low volume, no volatility and all the traders gone.What a sleepy week this has been. Let the teenagers party. Grown ups will be back soon enough.

 

Fri, 08/12/2011 - 09:16 | 1553847 24KGOLD FOIL HAT
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Yep; theyre in the hamptons or their very own private Gilligans Island!

The Govt is the Skipper, public is Gilligan, Professor is quants, MaryAnn the hard workin single mom, Ginger the "social director", Howells are shadow owners of earth.

These big things seem to happen in the fall- see Marty Armstrongs theories on financial history.

Fri, 08/12/2011 - 09:18 | 1553851 24KGOLD FOIL HAT
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Bill Banzai- I need your graphic talents to burnish Goldmans Island!

Fri, 08/12/2011 - 08:58 | 1553798 Silverstar
Silverstar's picture

ehh... that is bullish yes ???

Fri, 08/12/2011 - 08:59 | 1553802 Mediocritas
Mediocritas's picture

After having so much taken away from them by austerity measures, the ECB is then going to turn around and devalue whatever euro-denominated savings Europeans had left.

Long: riots. Short: parked cars.

Is there an intrade market for Germany to leave the euro by the end of 2012?

Fri, 08/12/2011 - 09:02 | 1553807 No Bid
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flash crash in eur fra/ois @ 5:15amET

back to normal now and rising.  

Fri, 08/12/2011 - 09:09 | 1553818 falak pema
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This is the killer question. As we all know the so called sovereign debt in the West is in reality a private sector debt created by USA's laxist monetary and deregulatory policy that allowed the private sector to create the leveraged, toxic world wide financial ponzi, into which the private sector banks of the EU bought in massively. Now the governments, having panicked and thrown in the towel, have socialised this massive debt into government debt and have done nothing to stop the ponzi from growing since three years, 2008-2011; a criminal neglect.

Now without growth and with the market barking at their necks the EU sovereigns having no game plan run around like headless chickens, their banks all exposed and with falling equity to debt ratios as their market capitalization melts like snow in front of our eyes. 

So the next step is a bank liquidity run in EU. Why does this not happen in US where the debt situation is even worse? The answer is simple : the FED has the largest printing press in the world and the USD is world reserve currency. Nobody can stop BB! So no liquidity crunch in the US ...! Simple as that!

Can the ECB print money to save the euro private banks? Its not in their current mandate! That's why the US HF are having a field day in Eurozone puts! 

And the EU countries look on and moan and groan. They don't have the balls to take on the US challenge in this global financial derivative cum currency war. By going federal and issuing true EURo Bonds, which will entail concerted fiscal reforms and structural adjustments and huge investments to make Euro economies kick start. 

Big mess... The euro has to choose plan A or plan B and two tier two money economy; one for club Med one for new DM zone.

Fri, 08/12/2011 - 09:06 | 1553819 mberry8870
mberry8870's picture

I don't think the result will be the same, it will be much worse. When the situation is the crap assets on the books of the banks is soveriegn debt, this is a problem of a completely different magnitude.

Fri, 08/12/2011 - 09:07 | 1553822 BlackVoid
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Don't worry, the ECB will print as much money as necessary. Or the books will be cooked. Laws will be broken, rules will be bent. The banks will be rescued.

 

It will all blow up, when:

- there will be real oil shortages

- parliaments in Europe will be burning.

 

That is coming soon too.

Fri, 08/12/2011 - 09:08 | 1553823 Cdad
Cdad's picture

The market of "stawks" is moving inversely, tick for tick, to gold.  It has become that simple.  And while I think a correction in gold will continue for another session, the idea of getting long equities into that inverse reaction is monumentally stupid.  Of course, stupidity reigns in this vacuum tube market.

As  such, selling long positions well is  simply a matter of picking just where gold will bottom today.  

Any guesses? 

Fri, 08/12/2011 - 09:10 | 1553830 24KGOLD FOIL HAT
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A smaller near term result: Euro declines vs $- which helps German exports?

Seems to fit.  US and Germany each have alternate "crises" to weaken their own funnymoney.

Fri, 08/12/2011 - 09:13 | 1553836 janus
janus's picture

yup, sixteen trillion just don't go as far as it did back in day.

liquidity's just another word for nothin left to lose/

nothin, and that's all bernake left me

or

freedom's just another word (period),

janus

Fri, 08/12/2011 - 09:14 | 1553840 Stoploss
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All i know is there is a cluster death cross, 20/50 and 50/200 that's 2 at the same time. Pay attention because everything gets liquidated.

Fri, 08/12/2011 - 09:19 | 1553853 janus
janus's picture

i think i know what you're talking about. but would you kindly explain what you mean by 'death-cross'?  how do you identify it?

Fri, 08/12/2011 - 09:17 | 1553848 janus
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does anyone know a reputable source for learning about the way the repo market works...or are you people just too lazy to casually point a finger?

Fri, 08/12/2011 - 09:55 | 1553957 24KGOLD FOIL HAT
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They aint lazy...its just that the markets open...they might have time Sat. I know a little but traders will be worth reading.

Fri, 08/12/2011 - 11:15 | 1554301 janus
janus's picture

that makes sense.  just thought i'd bang the ole fist on the desk.

Fri, 08/12/2011 - 10:21 | 1554054 Cvillian
Cvillian's picture

James Aitken has co-authored a few IMF working papers on shadow banking that are interesting

Search last name Aitken to read some of his stuff: http://www.imf.org/external/pubind.htm

Hope that helps

Fri, 08/12/2011 - 09:18 | 1553854 jm
jm's picture

I wonder about the driving reason for the funding pool shut down. Many questions. 

Is it because banks are getting hammered for holding impaired bonds they can't use as collateral in repo?

Or is it because the banks are holding imparied bonds as tier I capital?

Something else?

Won't the ECB buying bonds resolve this? 

Fri, 08/12/2011 - 09:25 | 1553870 Tic tock
Tic tock's picture

ECB spends money without any thought of its value - in no way is this an acceptable form of 'financial assistance to the Banking Industry'. Is there a single person in Europe who thinks that there is any relevance of popular participation in politics?- but it is not just that - the Eurocrats are not at all interested in anyone agreeing with them,.. they are right because they will bludgeon to death anyone who stands in their way - the entire history of the EU is of the same fibre: these pig-farmers are even worse.

Fri, 08/12/2011 - 14:28 | 1554982 falak pema
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do you then prefer the FED method? QE and then dummy QE as they can do what they like?

Fri, 08/12/2011 - 09:28 | 1553877 papaswamp
papaswamp's picture

Coupled with the 6.9% contraction in the greek economy was an increase in unemployment to 16.6% with over 60% being in the 15-34 yr old age group.

http://johngaltfla.com/wordpress/2011/08/12/the-greek-economy-is-implodi...

 

All is well ...rally on.

Fri, 08/12/2011 - 09:30 | 1553883 Nozza
Nozza's picture

Liquidity crisis lol

I'm heading out for a Mojito - that will solve my liquidity crisis.

Noz

Fri, 08/12/2011 - 09:35 | 1553892 mcguire
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ZH, any thoughts on these events from a hegelian perspective?  if fractional reserve/central banking is thesis, and lehman brothers/greece is antithesis, what would be synthesis... the bancor, right??  if there is a man behind the curtain, certainly he is not just reacting to these events, but planning them???  

Fri, 08/12/2011 - 09:44 | 1553917 Reptil
Reptil's picture

reaction EURUSD schizofrenic (rising) - this market is broken!

Fri, 08/12/2011 - 09:48 | 1553933 snowball777
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So how long until that AAA requirement gets fuzzed out in the name of piling more sovereigns into the already tipping lifeboat?

 

Fri, 08/12/2011 - 09:50 | 1553939 24KGOLD FOIL HAT
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This story from IFR was planted by Reuters.

Guess who controls Reuters. TPTB.

Perhaps they want a little crisis Monday AM?

Fri, 08/12/2011 - 10:13 | 1554032 rekfhardy
rekfhardy's picture

Janus, start at www.repowatch.org

Fri, 08/12/2011 - 11:16 | 1554305 janus
janus's picture

thanks

Fri, 08/12/2011 - 10:33 | 1554074 GiantWang
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"Should this liquidity crisis transform into its next and more virulent phase, even the Fed will find it does not have enough capital to prevent a worldwide short squeeze on the world's carry trade funding currency (once known as the reserve currency)."

Umm, wouldn't a short sqeeze in dollars send DX through the roof and be very, very bad for gold?

This seems very counterintuitive for those thinking in terms of hyperinflation, unless we're talking about a huge run up in the dollar that amounts to a bubble which ultimately pops. 

Anyone care to elaborate?

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