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Meanwhile In European Interbank Liquidity
Wonder why futures are up over 2%? It appears all it takes is two strategically placed and false rumors, since denied. That and of course the fact that US consumers are literally spending as if there was no tomorrow. Because for a whole lot of consumer there may not be once the bill comes in. Ironically, the same can be said about European banks, only they never even got a 10% of iPad. Because while stocks may be doing their usual oversold Manic Monday thing which surprises no one at this point, European liquidity is as bad as it ever was. As the ECB reported, cash deposited by risk averse banks soared by €19 billion overnight to a December 7 3M ECB USD repo pre-reset high €256 billion. And what is worse, that all important metric of the 3 month EUR/USD basis swap not only did not improve but has continued to deteriorate, dropping 1.9 bps to -148, the worst since October 10, 2008. What is ironic is that while we know banks have a USD funding problem, they also seem to be having a EUR sourcing issue, despite being able to pull as much cash from the ECB as they want. That is of course assuming they have sufficient collateral for the repo market. Which then begs the question: is the European liquidity crisis shifting to one of evaporating repoable assets? And if the repo market is drying up, that means that the ECB will soon be forced to accept staplers are worthwhile collateral before it all falls apart.
Deposits parked with the ECB:
3 Month EUR/USD basis swap:
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Freezing out there...
Better throw a couple of piles of fiat on the fire to keep us warm.
Absolute gem here:
'What is ironic is that while we know banks have a USD funding problem, they also seem to be having a EUR sourcing issue, despite being able to pull as much cash from the ECB as they want. That is of course assuming they have sufficient collateral for the repo market. Which then begs the question: is the European liquidity crisis shifting to one of evaporating repoable assets? And if the repo market is drying up, that means that the ECB will soon be forced to accept staplers are worthwhile collateral before it all falls apart.'
That is exactly why derivatives are such a bad thing. All that is concerned is that any object has a listed value. Whole thing reminds me of the 80's. Warehouses full of crap because the cash is scarce, but there is no end to the amount of crap that can be seized in a repo action.
Stupid thing is the real "value" of the repo. Just as any of us know, as soon as it leaves the store, the only person that finds value in the object is the owner. There are probably still warehouses full of Dolby HiFi turntable systems, Yugo's, dildoes, cat feeding mats, officer coolers, etc still propping up the Derivatives market.
Sad thing is none of it can be sold to recoup the blow up in the 80's, just imagine the crap we'll be seeing in the seizures coming up. Essentially that's what it boils down to again. Value.
What's the real value of anything, why is it fixed and how long does it remained fixed. My guess is until people forget and establish their usual Cognitive Dissonance on what reality should look like.
I think the desperation is people buying to re-sell. Makes sense. Nothing else can explain such madness except the pinnacle of creation, the Un-thinking consumer.
Interesting to note that Indian Exporters, especially the Infosys's and others of their ilk are saying Europe will hurt. Still no talk of the potential cliff dive of the US, the biggest outsourcer by far, from which the FIRE sector is by far the largest customer base.
A cone stood on it's tip will collpase and that is what this whole drachma is beginning to look like.
Teeter, totter.....
ORI
/the-plan/
The end is closer...new rulez
Spain will be State of Siege in days...
Fu..k all the politicians...CORRUPTED, RoyAl Family Corrupted, Banksters Corrupted...
Yeah, Spain was just waiting for the right people to be in Power. The Spanish gore is coming to Europe and soon to South America too.
ORI
Spanish history has more tyrants than it has established progressives, at least in modern Spanish history int he past 300 years. Unfortunately the Spanish people get the sharp end of the stick anytime the markets roll.
Somehow I don't think it will be any different this time. The current regime or the ETA, both are psychopathic banana republic born and bred.
Just glorious - drops the buy in price on my BBVA, EWI and STD puts. Sets it up for a niiiiice pop!
You have Argentinian banks?
Good luck with that.
No, I entered orders for PUTS on BBVA, expiring Apr 2012.
And BBVA's Spanish, not Argentinian:
http://en.wikipedia.org/wiki/BBVA
Seriously do you think any self-respecting ZH follower will go long on a Spanish bank?
Would you look at that, learn something new every day on here.
I associate it with Argentina, there seemed to be a bank every corner and heavily armed police every second corner when touring around a couple of years ago. I didn't notice any in Peru, then again Lima is a risky city, best not to go for a walk and make sure the safety is on.
And no...no longs, later, not now though. lol
No problem Che :-) BBVA has a massive bad loan portfolio. Couple that with Spain's cratering economy and you have trouble. Real trouble. Same goes for Santander.
The problem with puts is timing - but that's a problem with shorts in general. At least with puts the downside is limited.
BBVA is trapped in Italy with 4.000 Mn Losses.
This bank gonna hit 0.3 x P to Book value...
And Mexican Bancomer losing power (AUM) as Mexico is not growing as expected.
For me both big banks are sell
Yeah, I know. That is why I entered orders for PUTS on BBVA expiring Apr 2012. This will drop the buy in price big time.
Plus they have sooo many bad loans in Spain it's not funny.
And yeah, I said I was buying PUTS on BBVA and STD. I'm not. Going. Long.
So thanks for all the bad news on BBVA, it reinforces my decision big time!
What kind of strike do you consider, w APR 12 exp? (e.g. X % out/in money)
(Funny board: "Derivatives are bad & here are the ones to buy!")
Sorry, just a little annoyed that some didn't read what I was posting.
Strike price of 6. When I made my move the underlying was at $7.29. The underlying asset is at $7.90 currently, thanks to the hopium-inflated BS today. I didn't put a lot into it.
Like many on these boards, I just don't get it. We're in the middle of a European inter bank credit crunch, Spain sits at 20% unemployment, both BBVA and STD have massive bad loan portfolios ... and they have a > 7% jump!
Does. Not. Compute.
Two quotes address this completely rational confusion about a completely irrational situation:
John Rubino (on Chris Martenson's blog): "The problem with bubbles is that they blow right on through your rationally-arrived-at limits and keep on going before they burst. The dollar bubble is no different."
Maximus (from Gladiator): Three weeks from now, I will be harvesting my crops. Imagine where you will be, and it will be so. Hold the line!
If you find yourself alone, riding in the green fields with the sun on your face, do not be troubled. For you are in Elysium, and you're already dead!
Brothers, what we do in life... echoes in eternity."
From Bloomberg:
The biggest bond dealers in the U.S. say the Federal Reserve is poised to start a new round of stimulus, injecting more money into the economy by purchasing mortgage securities instead of Treasuries.
Fed Chairman Ben S. Bernanke and his fellow policy makers, who bought $2.3 trillion of Treasury and mortgage-related bonds between 2008 and June, will start another program next quarter, 16 of the 21 primary dealers of U.S. government securities that trade with the central bank said in a Bloomberg News survey last week. The Fed may buy about $545 billion in home-loan debt, based on the median of the 10 firms that provided estimates.
We're saved! Yay...
Will that be tacked on to the $800 billion going to IMF thus creating a single entry on the ledger? Ledger....Hahahahahahah LMAO......ledger.....Hahahahahahah.
Exactly, cooked books that are all fraudulent. At this point why bother, just print and hand it directly to the taxpayers. So the American taxpayer will continue to be fleeced until they all work for Chinese wages. Nice to see that the owner's plan has not changed. Let's see if the American taxpayers continue to accept this plan or will actually vote with their wallets and arms. When will enough be enough? My prediction is the sheeple stay on the couch until the SNAP cards stop coming.
Three book accounting.
One for the Bank
One for the Government
One for the truth.
I guess JP Morgan, Deutsche Bank , Barclays, City Group and UBS don't count as "big bond dealers" because they don't see this as a "Forecasts Likelihood ". You really should read the whole article and not just the headlines....
Ah, not quite. What are these bank's share of the 704 trillion dollar derivatives market. Their response is expected as they still expect to actually get paid. Moreover, they have several GOP candidates lined up and already own CONgress, so why should they worry.
This is America dammit. You ONLY read the headlines.
It's just the usual market manipulation at the end of the month to be able to communicate a better performance to clients. This will go on tomorrow, maybe a little bit more on Wednesday, but then it will be done.
Staplers are OK LTV if they are full of staples.
The eur is gonna keep ripping higher, and so are stocks. Into mid-December. We will see 1220 on the s&p and 1.36 eur/usd. Being a bear here is suicidal.
Wow, all the way back to 1220, huh?
They could go the rehypothecation route to buy some more time (assuming they are not already doing this).
Oversold rally.
This is fuckin insane! Anyone see where Bernanke is buying a half a trillion in Mortgage backed securities? I thought QE3 wasnt coming? This whole sytem is built on lies and deception and these wild swings are insane. US shoppers have decided to drink up the Kool Aid the Obama clowns are serving and the debt spiral continues while I honker down in hopes to see another month of civility before the big collapse.
It is truly insane. But think about it. They have the ratings agencies in their pocket. Most other countries are either on board or too bogged down with their own shit to care. The public in general is a mass sea of dumb animals. That saying that the market staying irrational longer than you can stay solvent is true. There is a good chance that people just gol broke slowly and painfully and there is no big giant event.
Look on the bright side. Go buy a car with money borrowed at 3.2%.
According to Milton Waddams I can keep the red stapler. I asked him.
http://vegasxau.blogspot.com
Is it a Bostich?
Well since it still seems to appear that the Europeans are having $ funding issues therfore only one solution remains and that is to sorta collaterallize err.monetize that stuff ya occassionally/accidentally stepped on yer way to work.
*As Fabre tells it, Toulouse’s scatological action plan to clean up the mess and turn squalor into dollars began when he in 2009 created France’s first “Office of Tranquility.” The city’s official grievance bureau in its first two years received more than 600,000 calls.
“The majority of the people complained about dog merde” Fabre says. “We have seven dog parks, but the dogs refused to use them.”
Historical research showed that it wouldn’t be easy or pleasant to monetize dog droppings. The only successful venture in this field took place in Victorian England, when the homeless wandered city streets to collect what was then called “pure” or “scitan” (a noun in which the “sc” is pronounced “sh”) for use in tanning leather.
Fabre says solving the problem required a fresh strategy. He called Cabanes and their government-private sector partnership was born. The duo immediately decided to attack the dilemma from the rear.
“Everyone was looking in the wrong direction for an answer,” says Fabre, who began his veterinary career working with goats in Africa. “It’s not the dog owner who chooses the place his dog will poop. It’s the dog who makes the decision and it required a lot of deep thought and analysis to get the dog owners of Toulouse to realize it.” *
http://www.bloomberg.com/news/2011-04-19/dog-poop-project-in-france-seeks-to-convert-sidewalk-feces-into-fertilizer.html
....and you guys thought i was talkin' shit.
No problem, they'll just start seizing the gold of the public......
Oh, that never happens........
Wonder why futures are up over 2%? err,... make that 3%?
slewie didn't do it! trust me
i have been sitting here scratching my unmentionables about it, too! all i can figure is that the peeps who calculate "fair value" are scratcing even more furiouser
if i were long some puts puts as a fringe blogger/popcorn-hungry trader, i would wonder is that all there is? nomo risk off? we see the dance of the sugar-plum currencies, "structural problems" visiting us like marley's ghost, primary dealers a-milking, and that market goose is getting really really fat
isn't it, santa?
the operative rumor du jour seems 2B: the LSAP (QE) by the FED to buy mortgage debt
bullshit!
the FED is having its mortgage-market-making toy boys do the jawboning, that's all. plus, anytime the fuking banksters can get "QE" or LSAP out thru the talking heads w/ titiies, the "market" goes upskie. duh
not that the propaganda isn't believable, but i'm from missouri on this one. hard evidence, if you please, at this point 4moi: like Au = $2000, Ag = $50. after all, fringe pirates have standards, too!
We can be the wise sage truth tellers all day until the big-stack at the table drives us out of the game. Maybe the wise trade is being a pilotfish on the FED shark (i.e. trade like a criminal).
.
When will LIBOR stop creeping slowly up and spike like a mofo?