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So Much For The Bailout - European Funding Situation Worst Since March, As ECB Deposits And Emergency Loans Soar
When we observed yesterday that the ECB's deposit facility usage has passed €300 billion for the first time in over a year, we took it with a grain of salt: after all the data may have been compiled before the announcement of a global liquidity intervention by the Fed and central banks. Specifically, we said "Needless to say tomorrow's deposit facility update will be critical because unless there is a major drop in usage, it will confirm that in addition to a USD-funding shortage which should have been ameliorated even if very briefly, other EUR-based risks are being observed by Europe's banks, who better than anyone know what the interbank system risks are, and the Fed's USD liquidity injection will have failed to achieve anything except to ramp risk higher for a day or two." Today we got the update for the two key ECB liquidity lines for the day after the bailout. And things are actually much worse than even we expected. While the cash flight continued, indicating that absolutely nothing was fixed from the banks' perspective, and the ECB deposit facility rising to a multi-year high €314 billion or €10 billion higher overnight, another key factor was the ECB's Marginal Lending Facility - the last ditch "discount window" equivalent - which saw its usage explode from €4.6 billion to €8.6 billion overnight, or the highest since March. It appears that in addition to a dollar funding crisis, there is a broad EUR liquidity crisis as well, with the bulk of the banks continuing to pull cash from the domestic interbank market (even if USD funding issues are resolved briefly), forcing the weakest links to resolve ever more to the ECB to recycle the very same cash that other banking peers dump with it. Naturally, this means that the funding situation as seen from the lens of the key market participants - Europe's banks - just deteriorated materially after the so-called bailout. It also explains why this morning we are getting a repeat rumor (soon to be denied) that the ECB has proposed to loan €270 billion to the IMF, as nothing has been fixed and the authorities are well aware.
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lending frenzy bitchez
Bye bye soveriegnty, hello stern teutonic austerity, bitchez
http://azizonomics.com/2011/12/02/the-end-of-european-sovereignty/
The nightmare that never ends ...
in a couple of thousand years mankind will tell the stories of the poor Europeans singing "set my people free" - Exodus 2.0 bitchez
You think people will be around that long. You are very optimistic. Best just to focus on the mess we have now.
why does it look "cyclical"? seems to shoot up, then drop off significantly, then shoot up even higher again.
Recycled rumors you say! ES 5 handle to follow...
It's Friday, the market will close green.
It always closes green on Friday. It'll drop a hundred or so points then HFT 9000 will kick in at 10:30 and dump a trillion dollars worth of fiat into the bucket. and We'll close higher than anytime in the last year.
I wish I were being facetious about this, but we'll all been watching the same repeat for three years now. Monday down, Tuesday flat, Weds up, Thursday flat, Friday up.
Can we get a ECB chart including 08 crash?
I don't suppose you could superimpose USD/EUR over that? Or, maybe S&P 500?
almost frozen lake..don't walk on it
But, that's exactly what the TBTF banks are doing. And when they start to sink underwater, they demand that taxpayers throw them a lifeline.
the titanic is too big to sink.
To Big To Float.....
Too big to bail...
What taxpayers? The rich and big multinationals have bribed their way out of taxation and the other 99% are unemployed, underemployed, receiving food stamps, on social security, employed by the defense industry, or are among the 51% receiving checks from the US Gov.
The term 'crowding out' doesn't come close to describing the situation.
Of course there are some still employed in the 'private sector' in service industries and some few per cent employed in manufacturing. How long can this little group afford to bail out Euroland, the US, and continue to police the world?
Once the US Gov/Fed decided that the consumption model was far superior to the savings/capital accumulation model, the end game was obvious.
on ur first thoughgt about bribing their way out of taxation.....does the catholic church not have the best tax plan of all?
and to all...this has nothing to do with religion.....just structure
Looks like they tested the boiler seams in February 2011. But at that point the Deposit Facility was barely above the zero line.
Stress. Big time.
Doesnt the new swap rate begin in a few days, meaning....the bailouts not started yet?
ZH has it all wrong. All of those Euro banks are merely TESTING the discount window, like Jamie Dimon likes to do, patriot that he is.
/snarcasm
do not short this market til next year, these fuckers will not be denied their bonuses
I wouldn't be so sure. If the markets tank then it gives them reason to NOT pay $$$$$$$$ (and therefore save money, not to include the good publicity). If this is done on a coordinated effort by the banks, then who wins? The banks.
This is all about politicians holding on to power...it's bigger than the banks and bonuses. The system is bought.
Wise words
And ES futures rally... because bad news is good news. Sickening.
For your Friday auditory pleasure, electronic music of the highest order
Full Assed (a playlist): http://www.youtube.com/playlist?list=PLE0B9904C8D0B51A6
nice!
The Eurozone daisy chain has widened the circle; the only problem is that neither Merkel, Legrande, or Timmie have the right appendage to satisfy the one in front of them; the group orgasm is irretrievably broken.
The human centipede.
Come Jan 2012 and look back at the month of December and the M's(M2,MZM,Monetary Base)will resemble a Saturn V launch.
Little Timmy needs to take another trip to Euroland and explain, yet again, that the Fed isn't going to give them more fish. Instead, the Fed is going to teach them how to fish...US style, using TNT instead of fly rods.
ECB bearing the credit risk for the Euro bank sector:)
Let's see. 6.2bE in capital. 70+bE in MtM losses from euro debt.
Thanks Ben.
It just seems like it would be so much quicker and easier to tell the bankers to get fucked.
Who dropped that rumor about ECB loaning to IMF?
Bloomberg
The dollar's dropping like a stone and it has a whole lot of room before it hits the bottom of the channel, so hold onto your seats kids, it's time for the Santa Clause Rally. If you liked October, you're gonna love December.
Wwwwwwweeeeeeeeeeee!!!!!!!!!!!!!!!!!!!!
When all things euro turns into shit, what do the eurocommies do?
Well, according to Austria...
Austria Finance Minister Sees More Euro Members in Future (BBG)
Hahahaa, i need to go change my diaper...
Expedite the Croatian nation!
They need those hard currency countries to help lend support to the Euro. YOu know which ones: Serbia, Kosovo and Montenegro. :)
Oh, and the Poles said they would be in the Euro within the next 4 years.
You can't make this stuff up ;)
here, use mine, i'm done with it!
ECB lending money to the IMF?
Let's back this plan out a couple more steps. Federal Reserve lends money to the ECB. Fed Reserve master Ben Bernanke creates more money out of thin air. US tax payor(s) now once again bail out foreign banks.
yep, thank you!
now i go and eat my golden croissant while drinking überexpensive italian wine.
buahahahahahahahaha!
No, the US taxpayer is not bailing out the EU because the dollar stopped being a dollar a long time ago. Now, it's just a chit, a poker chip backed by nothing. The USA is broke, it can bail out the EU about as well as a skid row bum can bail out you or I and pay off our credit cards. The bum can write IOUs, but they don't mean anything either.
The amount of fiat printed and debt created has severed the connection between fiat and wealth. Fiat spent now is meaningless because it is mortally ill and there is too much debt to ever be repaid. Throwing fiat around now is just a juggling act to keep everyone's eyes off of what is really happening while they stall and stack gold to get ready for a new system.
anyone watching this pissing match with Rogers and Faber?
I've been watching the one between Rickards and Roubini.
without watching it I am guessing Rickards is winning
Rickards 10
Roubini 0
God this is so 2008, credit markets freezing up, banks not lending to each other, interbank lending rates going up... Still I'm not sure if this is late 2007, or pre 2008-Lehman... Something is seriously wrong, and we need just one or more big banks to go down (other than Dexia) to get our Lehman event.
God I hope they don't print more money to inflate away the debts, global hyperinflation... (shudders) We'll all be ruined.
You know what all this seems to be most like?
4:02 -- says it all
http://www.ali.com/legend_liston.php
So when can Bernanke strart printing Euros???? He can print Dollars now...why not Euros too....he is a Central banker..a big one...with a beard...looks important...has a good resume..went to a good school...so why not
Lots of counterfeiters fit that description.
Why not give every family it's own little printing press? Surely that would solve the currency shortage problem.
My family wants one that prints gold backed ETFs... so we can join in the gold manipulation game. :)
With the recent announcement of a paper blizzard among the central banks, these numbers could increase exponentially, in the coming months. If we see that happen, inflation will be a runaway train wreck. So far, they've kept all of this borrowed debt, in - house. Eventually, the end result is that they're subsidizing bad monetary policy.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
Again I ask, What did my Tax Dollars buy me???.............
A happy congresscritter
This isn't rocket science. If you live in an EU country and you are worried you might wake up one day and all your Euro's in the bank have been converted to "New Crap Currency" thanks to the internet and having a venue fo people to finally telling the truth, you would do the rational thing and take your Euros out of the bank and either convert it to dollars or just hid them so they cannot be converted to crap currency.
That's it people are hording Dollars.
Merkel and Sarkozy either don't understand what they're saying is needed, or don't know how to explain it. Let me try:
French departments and German states will be the same. MUST be. They will report to one central fiscal department and will get and give taxes from same.
It's time to make a map of Germany and France without national boundaries, only local jurisdictions. That and that alone will bring the point home.
This is just like the US in 1785, before the Constitutional Convention, but with currency union done ahead of the rest of it. Problem: The 'rest of it' is a cataclysmic upheaval of the last 300 years of solidification of national identity and the political/legal/social structures that came with it.
Interestingly, for countries other than France and Germany it will be less traumatic, either because the countries are smaller and operate much like they will in a fiscal union already (Belgium, Portugal, Netherlands) or have a less robust national history as opposed to regional/local identity (Spain, Italy). It is France and Germany where this will cut to the bone.
And all this for...banks and bondholders' profit?
IT AIN'T GONNA HAPPEN PEOPLE!!!
The French and the Germans loath each other.
The whole point of the original 1950's Coal and Steel arrangement was to create a common purpose, so that they would not go to war (again).
Unfortunately, this simple arrangement, that was stable because it actually made economic sense, got inflated by political ambition into the unstable EZ we have today.
Yes, but Greece won the "Bailout Bowl" today with a 150 decline in 10 year sovereign rates! Won't last, of course.
"It's Beginning to Look A Lot Like Christmas ..." Unemployment Falls to 8.6%, Labor Force Participation Falls to 64% - Greece Today's Winner of the "Bailout Bowl"
http://confoundedinterest.wordpress.com
The ECB lending to the IMF. How quaint of an arrangement is that. Criminals lending to Criminals.