LTRO 2 102: Projected LTRO Take Up By Bank

Tyler Durden's picture


Earlier today, we presented a Top-Down analysis via SocGen of Wednesday's ECB massive extended Discount Window operation, also known as the second 3 Year LTRO operation (whereby we once again remember that unlike the Fed, the ECB is fully unaware of the adverse consequences of the stigma associated with borrowing last ditch liquidity, but when all else has failed, one has to do what one has to do). And while we will conclude our LTRO preview series with LTRO 2 103: Bottoms-Up, as a courtesy fo those who are fine-tuning their LTRO stigma trade (long banks that will not participate in the upcoming LTRO, short banks that will) SocGen's prediction of which banks will take down LTRO 2 funding, and how much. Draghi said there is no stigma trade. We proved him wrong, at least in the interim. LTRO 2 will finally decide who is right and who is wrong.

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Mon, 02/27/2012 - 16:53 | 2201578 nudlee
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Mon, 02/27/2012 - 16:54 | 2201579 marketblip
marketblip's picture

If it's free money then banks would be stupid not to take it

Mon, 02/27/2012 - 17:04 | 2201606 css1971
css1971's picture

If it's free money why can't I have a billion or two?

Mon, 02/27/2012 - 17:25 | 2201700 noses
noses's picture

Ask Commerzbank. It's free until you suddenly feel ECB's cold tentacles violating your tender orifices and you become a zombie of some government.

Mon, 02/27/2012 - 22:02 | 2202399 satan2liberals
satan2liberals's picture

Well that's assuming the ecb isn't  ass raping my short positions in the first place so yeah

I'd borrow a few thousand billion.

Mon, 02/27/2012 - 17:48 | 2201814 JohnG
JohnG's picture

They park it back at the ECB for a -0.75% carry dumbass.  Read more before you make an idiot of yourself.

Mon, 02/27/2012 - 17:01 | 2201594 TheGoodDoctor
TheGoodDoctor's picture

Isn't this money coming from the currency swaps with the Fed? Is that what the deal was last week when someone suggested the US has to step up now? I forgot who said that, was it Draghi?

Mon, 02/27/2012 - 17:06 | 2201620 Rogier
Rogier's picture

No, it isn't.

Mon, 02/27/2012 - 17:03 | 2201609 Chimerican
Chimerican's picture

Does anyone know where I can borrow @0 for three years with my Greek bonds as collateral?

Mon, 02/27/2012 - 17:07 | 2201623 TrustWho
TrustWho's picture

From Draghi: "You are not my family nor a friend, so FU."

Mon, 02/27/2012 - 17:05 | 2201612 Rogier
Rogier's picture

Deutsche taking a minimum of 5bn in LTRO 2 after Ackerman's statement regarding LTRO 1? Now, that would be special...

Mon, 02/27/2012 - 17:17 | 2201672 walküre
walküre's picture

And guess what?

All that money is going to do sweet fuck all for the European economy.

There's no growth, no success. It's just stuffing holes and pretend the boat will stop leaking.

Even the bankers aren't that stupid. So, what are they really planning for?

A massive flood of withdrawals is my uneducated guess.

Mon, 02/27/2012 - 17:32 | 2201721 TrustWho
TrustWho's picture

Amazing, not too long ago if a bank borrowed money from the central bank, this was not considered a good sign for the bank's future or the economy's future. My, my, my....I am such an old fart! 

Mon, 02/27/2012 - 18:04 | 2201878 slewie the pi-rat
slewie the pi-rat's picture

i think tyler has got it on the low end

i interpret nowotny's "press release" as a carney's call to get this fuker outa the 100-300 B EUR range

but, between the redemptions, non-covered redemptions, the carry trade, and the "stigma" of borrowing money at a discount window...

...i think i'm turning japanese!

Mon, 02/27/2012 - 18:48 | 2201989 jm
jm's picture

Judging from who is taking carry, it looks like double-down time. 

Tue, 02/28/2012 - 03:51 | 2202994 belsebub
belsebub's picture

Sorry, but this matrix is inaccurate. Swedish banks (Nordea, Swedbank, SEB and Handelsbanken) did not take anything in the first LTRO.

Tue, 02/28/2012 - 06:35 | 2203104 Nussi34
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