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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ParkAveFlasher's picture

iiiiiit's Groundhog Day!

ziggy59's picture

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

Let The Wurlitzer Play's picture

Dollars?  We dont need no stinking dollars.


Ted Baker's picture


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.

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...

Hype Alert's picture

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

Inthemix96's picture

Seeing as its Friday and all,

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

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"


Doubleguns's picture

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

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?

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.

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....

banksterhater's picture

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

Perpetual Burn's picture

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

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.