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Short-Term ECB Dollar FX Swaps With Fed Soar To Highest Since December 2009

Tyler Durden's picture





 

While Europe is once again experiencing one of its brief, manic episodes of inexplicable euphoria sending all risk assets in the continent higher while everyone is still on vacation (and ahead of a surge in Spanish bond issuance in September, which only spikes even more in 2013 - more shortly), its banks have quietly run out of dollars again. Certainly, looking at the now irrelevant metric known as Libor which indicates precisely nothing of significance, and merely allows banks to feel good about themselves, and which has been declining, one could imagine that banks have zero problems finding unsecured follar funding. One would also be absolutely wrong because as the most recent ECB and Fed data confirm, 7-day dollar swaps between the ECB and New York Fed - the only real sign of dollar funding scarcity - has risen to $9.3 billion in the current week, the highest since December 9, 2009. And with 10 banks bidding at the last USD operation, one can be sure that at least 10 European banks are suddenly hoping that the bout of euphoria continues for at least 2 more weeks so that the executives of these 10 dollar impaired banks can continues their vacation in peace, until the eye of the European hurricane passes starting September 1.

 


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Fri, 08/17/2012 - 08:06 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

iiiiiit's Groundhog Day!

Fri, 08/17/2012 - 08:09 | Link to Comment malikai
malikai's picture

EURUSD cross this morning: http://www.quantsig.net/img/fx_eurusd.png

Fri, 08/17/2012 - 08:10 | Link to Comment ziggy59
ziggy59's picture

Its also friday, which explains alot..and options expiration?

Fri, 08/17/2012 - 08:13 | Link to Comment Let The Wurlitz...
Let The Wurlitzer Play's picture

Dollars?  We dont need no stinking dollars.

 

Fri, 08/17/2012 - 08:14 | Link to Comment Ted Baker
Ted Baker's picture

IS THE SNB SELLING EUROS AND BUYING PHYSICAL GOLD TODAY?

Fri, 08/17/2012 - 08:26 | Link to Comment malikai
malikai's picture

If they are as smart as people pretend they are, they've been buying it hand over fist since this time last year.

Fri, 08/17/2012 - 08:16 | Link to Comment diogeneslaertius
diogeneslaertius's picture

decent criminals would at least have the class to exchange money underneath a table or something

 

the banksters rape your future in the open

 

its a fucking fraud clearing house and Waterloo 2.0 (or whatever version we are in now) we look at the entire phenomenology taking data points and vectors like these and we end up with a component vector that makes the wildest conspiracy theory about elvis landing on the moon with chupacabras from planet pop tart seem cogent and reasonable

 

if you cant see the holographic #EconomicDeathstar at this point, you wouldnt know what to do with the metal even if you Were buying it

 

makes a fella want to move to sub-saharan africa and just mine manganese...

Fri, 08/17/2012 - 08:16 | Link to Comment Hype Alert
Hype Alert's picture

European vacation season ends soon and we have the volatile Sept and Oct months coming up.

Fri, 08/17/2012 - 08:19 | Link to Comment Inthemix96
Inthemix96's picture

Seeing as its Friday and all,

Fuck you bernank, and fuck you twice gietner you little fucking clown.

Fri, 08/17/2012 - 08:37 | Link to Comment Inthemix96
Inthemix96's picture

Two tigers in the jungle, one of them is licking the arse of the other one.

A giraffe walks past and says "you dirty, filthy, stinking, homo bastards, what in fucks name are you licking his arse for?"

The tiger says, "sorry, I've just ate jon corzine and I am trying to get the taste out me mouth"

:-)

Fri, 08/17/2012 - 08:39 | Link to Comment Doubleguns
Doubleguns's picture

Wonder what the banks take is on exchanging euros to dollars. Bet folks are getting corn holed everytime they buy dollars.

Fri, 08/17/2012 - 08:46 | Link to Comment GraveyardSpiral
GraveyardSpiral's picture

I need Dr. Engali or Mr. Hendrix or Pirate Slewie to explain something, please: The Fed accepts Euros as collateral for Dollars because Dollars are in high demand by Europe- (-an banks).  Doesn't this imply a rush to the dollar by everyone because the Euro is toast?  And if so, WTF would we accept a declining currency as collateral for more (relatively) valuable dollars?  For the interest payments of .25% ? 

 

Secondly, wouldn't this also imply a rise (ha-ha) in the worth of the dollar and so trigger a risk-off period until such time that the Dollar was not in such high demand?

When up is left, down is right, left is up and right is down....I am lost.  Is there only stacking and waiting left?

Fri, 08/17/2012 - 08:50 | Link to Comment Everybodys All ...
Everybodys All American's picture

Is this not effectively QE infinity for the Euro zone via the Fed? Does anyone think these euro transactions simply are used by Euro banks to buy Euro zone bonds? Either way it simply supplements the trash they own already. Our collapse is all but baked in because of Bernanke's negligence to protect the US interests from a Euro contagion.

Fri, 08/17/2012 - 10:21 | Link to Comment Unbezahlbar
Unbezahlbar's picture

M3 and velocity is dismal to nonexistent due to these EU banks and financial institutions sucking up dollars off the market perhpas. M2 is rising but M3 is stagnant from what I see....

Fri, 08/17/2012 - 10:26 | Link to Comment banksterhater
banksterhater's picture

So it must be the Fed keeping the Euro at 124, has to be.

Fri, 08/17/2012 - 10:51 | Link to Comment Perpetual Burn
Perpetual Burn's picture

Nothing beats their 300b swap lines in 2008...

Fri, 08/17/2012 - 11:23 | Link to Comment matt6348
matt6348's picture

Not exactly, if you look at the ecb data, even over this past year, this is a relatively low amount of dollar funding and a very small percentage of Euro LTMO or MRO.  http://www.ecb.int/mopo/implement/omo/html/top_history.en.html

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