The European Dollar Funding Crunch Is Back: Fed Does Another $500 Million In USD Swaps This Time With The ECB

Tyler Durden's picture

And now for some disturbing news out of the ECB, just in time for tomorrow's sub-1% GDP announcement and Jackson Hole disappointment. Unlike last week, when the Fed conducted a $200 million FX swap with the Swiss National Bank, this week the bank in dire needs of dollar funding is the ECB itself... and for two and a half times than last week. Furthermore, unlike last week, when we knew in advance that at least one European bank was experiencing a dollar liquidity event, this time the update from the ECB indicated no USD-based liquidity constraints: the $500 million in 7 day USD punitive loans quietly expired and everyone once again assumed that Eurozone liquidity is back to normal. It isn't. The question once again now becomes, who finds themselves in a dollar funding crunch?

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Silver Bug's picture

This nonsense won't end until they are forced to stop. I don't think the "can", can be kicked down the road much further.

Fukushima Sam's picture

It's all lulz when the velocity of money causes it to get ahead of itself.  It is like watching good slapstick as it tumbles head-over-heels up the hill...

That Peak Oil Guy's picture

Hmmm, liquidity crunch in dollars, reminds me of this excellent article:

"This is very important: Once hyperinflation commences it is characterized by a running shortage of cash, even though it appears like the opposite to the outside observer. The currency collapses in value against economic goods because the debt and the credit collapsed. There is no credit, only cash, and there is a shortage of cash for everyone, including the Elite and the government. So they, the Elite/government, print and print for their own survival while saying it is for yours."


Mec-sick-o's picture

While supply remains higher than demand, there won't be hyperinflationary pressure until there is supply destruction.

This time the money is mostly electronic, so the crash will be faster, no need for physical cartloads.

max2205's picture

Don't roads have a place where it's no longer a road? Where's that dead end sign?

MarketTruth's picture

Monkeys swapping worthless shit FIAT paper currencies electronically. Swapping my worthless US Dollar electrons for your worthless Euro electrons.

Nozza's picture

9 tonnes of gold peanuts lol

vast-dom's picture

Fuck You USD!

Fuck You ECB!

Fuck Unsterilized!


Clampit's picture

Took Comex up on their discount gold offer this morning, another ounce next to the ol' .40 hp. I haven't felt like I was buying a gun until, well the last time I bought a gun. A printed sign on the counter said over $1500 and you have to show ID, $3000 and the ID is recorded. Financial weapons indeed. Their fee structure also "changed" ~2x from the last transaction.

Astute observers will no doubt notice glaring signs that we're approaching some massive inflection point in precious metals prices, I really, really hope I've just pissed a bunch of money down the bubbly-peacekeeping drain.

smiler03's picture

I can't vote for both :O(

TruthInSunshine's picture



SocGen, bitchez!

A Rotchschild isn't worth their weight in gold if they can't get some Bernank Luvin'

alien-IQ's picture

500 million here, 500 million there...before you know it, we're talkin real money:-(

New Revenue's picture

Coincidence with short-sell extension....I think not!

gun4A's picture

Sosi Genital, that would be "suck genitals" in russian

euromario's picture

more accurate sosi khui or sosi pizdu 

Dick Darlington's picture

And with all the cheering earlier today abt the disappearance of the USD swaps.

Now what did the five fingers say to the face?


JohnG's picture

A Chapelle fan!  I'm saving Clayton Bigsby for trav.

SheepDog-One's picture

'Jackson Hole disappointment'...damn straight...they CANT deliver on QEuphoria, theyre screwed at this point. Temper tantrums all around tomorrow.

TruthInSunshine's picture



The Black Fade, Nouriel Roubini, is speaking live on CNBS - T minus 30 seconds

mayhem_korner's picture

How do you say "easing" in Euro-ese?

JohnG's picture

Uuuuuuuuurrrrrrrrrgh, kerplunk.

centerline's picture

European liquidity drying up quick.  Maybe days instead of weeks from the next rout.

TruthInSunshine's picture



There are some prominent 'types' across the pond (in the UK) who claim the Bangers&Mash Omen is flashing bright red.

Bernank's/Trichet's Credit Crunch 2.0

Greater Fool's picture

110bp for a seven-day use of USD with EUR collateral is highway robbery.

Nozza's picture

110 bps annualized. So the 500 million will cost about $100k over the week. That's less the the wages of a Premiership footballer in the UK.

Greater Fool's picture

It's the rate, not the dollar cost. It's just plain weird when private banks claim to be able to fund for 7 days well under 100bp but the central bank that backs them can't.

equity_momo's picture

Paper circle jerk. Who cares anymore. Just raise margin on gold so its back to 1400 please and then I can unload my brokerage account into what's left of physical supply. At the end of the day all this jacking off is gonna do is give people arm ache . These fuckers are out of juice and no ones getting a happy ending.

Waffen's picture

So is this literally 500 million in cash for banks that have to hand out money for those trying to exchange their money into dollars or withdraw cash dollars from European banks?

rubyruffruff's picture

hehehehe....i luv jean claude......raised rates twice.....about 2 ease twice.........touche bitchez

rubyruffruff's picture

hehehehe....i luv jean claude......raised rates twice.....about 2 ease twice.........touche bitchez

FoieGras's picture

In 2008 I would have guessed some German Landesbank. Now I'd guess: Some crap Volksbank in Austria that's about to go belly up on toxic Eastern European CHF loans. 

lolmao500's picture

They should buy US treasuries from China. China don't want them, Europe needs US dollars. Win/Win.

TruthInSunshine's picture



Roubini says Bernank is low on policy 'booooolits.'

caerus's picture

what's up with bini's head shots?  you can tell he knows his stuff cuz one of his eyebrows is raised and he's not smiling

TruthInSunshine's picture



Look at Maria Big Ass Bartiromo.

She's literally pining for QE3, almost on her hands and knees, rubbing her meaty thighs together.

TruthInSunshine's picture



Roubini is begging Obama to 'stimulooos' the economy.

He's blaming Republicans for all the economies ails; no mention of Democrats like Bwaney Fwank or Chris Dodd, let alone regulators, or Geithner or The BenBernank.

Roubini is a whore.

He's the whore of Babylon for the month.

I'm putting Roubini in the Whore House of Shame.


Gotterdammerung's picture

Wait,... wait.. Marie has meaty thighs?!  Say it aint so?!

raki_d's picture

Havent you seen Buffet doing the same today morning ? He knows his stuff too.. the only difference is he smiled..