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$10 Trillion In 2 years - 'Over' Abundant Liquidity And Expectations

Tyler Durden's picture




 

A funny thing happened while we all waited for the Fed to announce QE3. The rest of the world did it for them. Courtesy of Bloomberg's excellent Economics Brief, and the n'th time, here is what a multi-trillion dollar liquidity expansion looks like even with the Fed running silent. And this is also what $10 trillion in 2 years pumped into the markets looks like. Wonder where the market gets its "spring step" from? Now you know. Thank you Economist PhD's!

 

We do note that EUR strength recently (as the ECB appears done for now) and the acceleration of asset prices in Europe (bank stocks, credit etc.) appear to have done a good job of discounting the next LTRO already - and in fact are starting to retrace as LTRO 2 expectations are ratcheted back from the cajillion EUR level as the stigma continues to rise, ECB members raise concerns over dependency (banks are not forced to delever and also will not re-engage in the inter-bank lending market), and just like last year perhaps the ECB will hike rates to stall inflation fears (thinking of all-time record local currency gas prices as transitory is hard after a persistent 3 year trend higher).

 

Charts: Bloomberg

 

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Fri, 02/24/2012 - 09:56 | 2192342 Ivanovich
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Really?  You think the ECB will go back into a tightening mode?  I think the harm that does the PIIGS will be much greater than any inflation control they attempt.  Hiking drives up the EUR and the USD down, which spikes crude.  So do they have any real effect on oil prices anyway?

Fri, 02/24/2012 - 10:03 | 2192362 GeneMarchbanks
GeneMarchbanks's picture

They might hint at raising, doubt they'll actually go through with it.

Somehow I get the feel all this is tied to Greece and the upcoming events there.

Fri, 02/24/2012 - 10:22 | 2192415 Vagabond
Vagabond's picture

There was a lot more than 10 trillion pumped into the markets.

http://www.unelected.org/audit-of-the-federal-reserve-reveals-16-trillion-in-secret-bailouts

Fri, 02/24/2012 - 10:57 | 2192558 old naughty
old naughty's picture

check out the story of NY-Fed, HSBC, and Yohannes Riyadi

http://pppkingdom.wordpress.com/2011/06/17/yohannes-riyadi/

a 3X5 T (dollars) allegiately transferred from NY-Fed to HSBC-London, on ccount of Riyadi?

http://www.youtube.com/watch?v=eL5hqvTWkYg&feature=player_embedded

interesting stuff.

Fri, 02/24/2012 - 09:56 | 2192343 quebecgold
quebecgold's picture

Let’s play!

Let free the Tyler Durden in you! Today (02/24) everyone tweets ‘’Greece Defaults’’ on twitter at exactly 10:03 (ET).

It’s time to see how bad the Algos will react to this storm of tweets.

Respond to this message saying you are IN!

Fri, 02/24/2012 - 09:56 | 2192345 Ivanovich
Ivanovich's picture

Sure!

Fri, 02/24/2012 - 09:59 | 2192348 willien1derland
willien1derland's picture

All in! (Tyler Style BITCHEZ!)

Fri, 02/24/2012 - 10:00 | 2192353 French Frog
French Frog's picture

A better time might be (to throw the cat amongst the pigeons) just before the fake Uni of Michigan Consumer Sentiment at 09.55 and the New Homes sales at 10.00 ?

Fri, 02/24/2012 - 10:04 | 2192364 mayhem_korner
mayhem_korner's picture

 

 

Y'might wanna ignore the knock at the door at 10:04.

Fri, 02/24/2012 - 10:09 | 2192384 JPM Hater001
JPM Hater001's picture

Land shark.

Fri, 02/24/2012 - 10:20 | 2192412 SheepDog-One
SheepDog-One's picture

 Now THATS what Im talking about! We are legion, we have all this shit like Twitter, lets put it to use and send out thousands of Tweets saying 'Greece has defaulted and bondholders get zero'! Send the algos into hysterics.

Fri, 02/24/2012 - 10:41 | 2192485 EHM
EHM's picture

Fight club is now Project Mayhem.

Fri, 02/24/2012 - 10:48 | 2192513 JPM Hater001
JPM Hater001's picture

What am I typing? #Greece Defaults?  Or just "Greece Defaults"?

Fri, 02/24/2012 - 11:17 | 2192627 forward ho
forward ho's picture

So in. might as well spread our own brand of (truth).

Fri, 02/24/2012 - 11:17 | 2192628 forward ho
forward ho's picture

So in. might as well spread our own brand of (truth).

Fri, 02/24/2012 - 10:00 | 2192349 LawsofPhysics
LawsofPhysics's picture

Many here have been pointing this out for quite some time.  How gold is not $15,000 an ounce is a mystery (gold is the world's default reserve currency - tradition).  In addition, ZIRP is another name for QE, but beware, there is a very real cost for creating capital without adding any real value to the system.  Long commodities for sure.

Fri, 02/24/2012 - 09:59 | 2192350 Jason T
Jason T's picture

Triple Curve Bitchez!!  The monetary aggregates take over the financial while the physical economy collapses.  

Fri, 02/24/2012 - 10:00 | 2192354 mayhem_korner
mayhem_korner's picture

The rest of the world did it for them.

 

Didn't the Fed "accommodate" via steep discounts on currency swaps (and a wink & nod from chopper Ben)? 

Fri, 02/24/2012 - 10:02 | 2192357 mayhem_korner
mayhem_korner's picture

<< "Central Bank" is grammatically correct.

<< "Central Banks" is grammatically correct.

Fri, 02/24/2012 - 10:05 | 2192368 Atlas Shrugs
Atlas Shrugs's picture

"You are so money and don't even know it." - Movie quote from Swingers

Fri, 02/24/2012 - 10:05 | 2192369 babylon15
babylon15's picture

This is pretty misleading.  QE2 ended June 30, 2011 and according to this graph the global money supply was around 58.5 trillion.  Today it is around 59-59.5 trillion.  Most of the expansion during this graph was during QE2 (Q3 10 - Q2 11), not post-QE2 as the title implies.

Fri, 02/24/2012 - 10:14 | 2192393 Tyler Durden
Tyler Durden's picture

Swing and a miss. But good try.

Fri, 02/24/2012 - 10:19 | 2192410 kindape
kindape's picture

so we went from 48 to 59 trillion (in your Bloomberg graph) since Q2 2009. What did global GDP do over same period??

Fri, 02/24/2012 - 10:29 | 2192442 Apocalicious
Apocalicious's picture

But, but, but they promised a 1.5 X multiplier...

Fri, 02/24/2012 - 10:36 | 2192460 mayhem_korner
mayhem_korner's picture

 

 

Sure...every $ of liquidity produces 1.5x price increase.

Fri, 02/24/2012 - 11:56 | 2192797 Spigot
Spigot's picture

Point being that GDP numbers are crap anywhere you get them. The money went to filling galactic sized black holes at the top tier financials while they tried to figure a way to screw everyone else. Heck, do you recall that Wall St gave bonuses equal to 8% of M1 in 2009? (IIRC). This has to go much further on two fronts: enough free liquid to keep the top tier functional at the same time that they force debt liquidation on everyone below them. Do you notice what the ECB just did? Getting a clue there?

Fri, 02/24/2012 - 10:06 | 2192370 Irish66
Irish66's picture

Do I have to wait for stupid to go long before I do the opposite on the euro?

Fri, 02/24/2012 - 10:23 | 2192421 slaughterer
slaughterer's picture

Wait until EUR/USD 1.36 at least to start shorting. 

Fri, 02/24/2012 - 10:16 | 2192398 dcb
dcb's picture

you gotta provide libks to mmore data. I want to see them on bloomber, and can't find it, or if it comes with an article please. I am attemtping to convince other people in regards to things and only having ZH sources makes me very susptet.

Fri, 02/24/2012 - 10:16 | 2192401 SheepDog-One
SheepDog-One's picture

LOL, total insanity, puta's! 

Fri, 02/24/2012 - 10:22 | 2192416 mick_richfield
mick_richfield's picture

You know, I think this is exactly what Jim Willie said would happen about six months ago. 

That guy's starting to make me kinda nervous.

Fri, 02/24/2012 - 10:32 | 2192450 FunkyOldGeezer
FunkyOldGeezer's picture

Fed running silent. Who's done all the liquidity swaps?

Fri, 02/24/2012 - 11:41 | 2192738 slewie the pi-rat
slewie the pi-rat's picture

i'm sorry, the corporate robots are not releasing any info except as required by "law"

you see, this REALLY helps them ream us!  no matter what we try, they can just fade it and "paint" prices to win, overall

and then they can "monetize" their winnings [their losses to, b/c we are fuking DUMB!!!]

as in any casino, the winners are ecstatic about how wunnerful they are doing, and the losers tend to minimize their losses, publicly, so people won't think they are styoooopid!

Fri, 02/24/2012 - 10:43 | 2192462 FunkyOldGeezer
FunkyOldGeezer's picture

When is the Amerika coming on-stream. Bills and coins already made, so I've read.

Fri, 02/24/2012 - 10:37 | 2192473 EZYJET PILOT
EZYJET PILOT's picture

Makes me sick. Tyler am I right in thinking that the 2 trillion increase in the last few months is the Central bank swap plan announed in Nov 11 plus the recent LTRO? It'd be nice to see an article that outlines exactly what the 2 trillion is comprissed of..

Fri, 02/24/2012 - 10:44 | 2192498 e92335i08
e92335i08's picture

Greece Defaults 10:03

Fri, 02/24/2012 - 10:50 | 2192519 Bansters-in-my-...
Bansters-in-my- feces's picture

Incase any Central Bankers and/or their advocates are reading ZeroHedge.I stopped by to say "fuck you's " you pieces of shit.

See ya in hell.....

Fri, 02/24/2012 - 11:16 | 2192624 slewie the pi-rat
slewie the pi-rat's picture

dougNoland gives the a great weekly update on this "stuff"

here is a paste from a week ago today [A New Bull Market?]:

Federal Reserve Credit expanded $4.6bn to $2.918 TN.  Fed Credit was up $426bn from a year ago, or 17.1%.  Elsewhere, Fed Foreign Holdings of Treasury, Agency Debt this past week (ended 2/15) surged $26.3bn to $3.447 TN. "Custody holdings" were up $63.5bn year-over-year, or 1.9%.

Global central bank "international reserve assets" (excluding gold) - as tallied by Bloomberg – were up $958bn y-o-y, or 10.3% to $10.250 TN.  Over two years, reserves were $2.435 TN higher, for 31% growth.

M2 (narrow) "money" supply declined $7.4bn to $9.772 TN.  "Narrow money" expanded 10.0% from a year ago.  For the week, Currency increased $1.3bn.  Demand and Checkable Deposits declined $1.5bn, and Savings Deposits slipped $0.8bn.  Small Denominated Deposits declined $2.4bn.  Retail Money Funds fell $4.0bn.    

Fri, 02/24/2012 - 11:57 | 2192799 yogibear
yogibear's picture

Time for commodities, Food and oil to break their highs and continue on. Infitite pretend money chasing finite resoruces spells a huge spike in prices.

Huge stagflation in the cards. These Keynesians are not sticking to their rules. For decades they had their stimulus pedal mashed to the floor without paying down deficits. More and more deficits until it's reset time. 

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