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Wall Street Pundits' Instant Response To Global Fed Bailout

Tyler Durden's picture


From Reuters:


"It feeds into the idea that policymakers are at least beginning to address the problem. There was a very dark mood developing at the back end of last week. With the dire scenarios doing the rounds the last few days, it's all the more important they step in with aggressive measures to support the banking system and show they're beginning to confront the financing problems of the sovereigns as well."


"From a currency perspective the move has given risk currencies real lift. The liquidity injection means the world's most liquid currency the Dollar is less required near-term and is currently being broadly sold.

"Such an operation usually gives pairs such as Eur/Usd, Aud/usd a fairly lasting lift. It is an emergency measure and of course will do very little to aid Greek and other EMU nations debt woes further out."


"Initial reaction was bullish. The announcement caught markets by surprise and prompted short covering in dollar-euro and a firming in oil price. It is supportive. Difficult to predict for how long."


"This is something that is very welcome. This will not solve all deep-based funding problems which are due to the sovereign debt crisis. But there is an issue with dollar liquidity, especially with foreign currency and this measure addresses that. This helps the margin and also shows that central banks remain at unease with what certainly is very significant distress.

"We were expecting the ECB to deliver these measures next week ... the ECB has more scope to go, and we expect the ECB to announce more measures in next policy meeting (on Dec. 8). Now that is has done the swapline, there is scope to reduce the cost of liquidity banks get from the ECB regardless of the currency, and that goes via interest rates.

"Doing more on the collateral side is probably the second step. The ECB is helping the banking system while sovereigns do their homework."


"All terrific news for short-term traders. You can't fight the Fed, and now that we're in a global economy, you can't fight the global central banks. They are pushing liquidity. The upside is bigger than the downside. There is tremendous stress out there, so doing something in a concerted effort to relieve some of the stress is a good thing.

"ADP news is very good news. The private sector is adding jobs. China reducing reserve ratios is also very good. Governments around the world are acting in concerted to relieve the strains on the system. Stocks are very undervalued based on comparing equity yields versus bond yields, which shows the stress of the financial system. Under normal circumstances, stocks would be a lot higher."


"This shows that central banks across the world continue to cooperate and that the ECB, and its partners, are very aware of the funding stress that European banks are under at the moment.

"This decreases the cost of funding in U.S. dollars or other currencies so -- it's small -- but it's a boost to banks' profitability and gives them a better chance to shore up their capital ratios."


"Not a complete surprise. People were expecting China to do something before the end of the year, and given the stresses in the market there has been talk about the Fed backstopping what's going on in Europe. Desperate times and all.

"The move in (U.S. stock) futures is justified. Whether this solves our long-term problems remains to be seen, but when you flood the market with liquidity, risk assets go much higher."


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Wed, 11/30/2011 - 09:55 | 1929572 WonderDawg
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And this is how TPTB assure their billion dollar bonuses. Well played, assholes.

Wed, 11/30/2011 - 10:22 | 1929638 hedgeless_horseman
hedgeless_horseman's picture



...when you flood the market with liquidity, risk assets go much higher [nominally]

Oh yeah?  Well, when I exchange US Dollars for Mexican Pesos the amount of money I have in my pocket also goes much higher (nominally), but am I really wealthier?  No.


What Does Nominal Rate Of Return Mean?

The amount of money generated by an investment before expenses such as taxes, investment fees and inflation are factored in. For example, detailed data on a mutual might show a fund's nominal rate of return as 10%, but also show its return after taxes on distributions and sale of fund shares is only 7%. Investors should look beyond an investment's nominal rate of return to get a true idea of what their investment will earn.


What Does Real Rate Of Return Mean?

The annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external effects. This method expresses the nominal rate of return in real terms, which keeps the purchasing power of a given level of capital constant over time.

Wed, 11/30/2011 - 09:46 | 1929512 Boba Fiat
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Is it possible to win TIME Man of the Year twice?  Way to go Bernank!  You saved us!

Wed, 11/30/2011 - 09:47 | 1929519 youngman
youngman's picture

Save the Bankers again...injure the serfs/ peasants again...

Wed, 11/30/2011 - 10:08 | 1929646 Whatta
Whatta's picture

the is all about the bankers all the time.


Wed, 11/30/2011 - 10:41 | 1929842 CPL
CPL's picture

This is why you never ever hold X3 ETF's overnight.




Watched too many get trapped in X3 ETF trades and get badly hurt.  Both in bull and bear.

Wed, 11/30/2011 - 09:48 | 1929529 Irish66
Irish66's picture

History did it work out before

Wed, 11/30/2011 - 09:49 | 1929534 John Law Lives
John Law Lives's picture

Nymex Crude Futures blasted through $101 per barrel this morning.

Great job, Fed.  This action doesn't create jobs, yet the masses get to pay higher energy prices...

Amazing what the 1% will do when THEIR wealth is threatened.

100% FUBAR.

Wed, 11/30/2011 - 09:50 | 1929537 tmftdoyle
tmftdoyle's picture

Under normal circumstances, stocks would be a lot higher.


And if pigs had wings they would fly, Mr. Kaufman.

Wed, 11/30/2011 - 09:57 | 1929579 Ivanovich
Ivanovich's picture

LOL, I know.  ES is up 38 points.  What does he expect?

Wed, 11/30/2011 - 09:51 | 1929541 slaughterer
slaughterer's picture

What will be the third piece of bullish news to complete today's trifecta?

1.) global CB bailout

2.) ADP 4 SD blowout

3.) ??

Wed, 11/30/2011 - 09:53 | 1929559 Boba Fiat
Boba Fiat's picture

War with Iran??

Wed, 11/30/2011 - 09:51 | 1929543 pepperspray
pepperspray's picture

Roll up a big fatty

Wed, 11/30/2011 - 09:52 | 1929550 valley chick
valley chick's picture

will someone please tell me how this addresses the DEBT the world is in by throwing fiat money at it?  How long can this hopium last?

Wed, 11/30/2011 - 09:52 | 1929551 GeneMarchbanks
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"It feeds into the idea that policymakers are at least beginning to address the problem. There was a very dark mood developing at the back end of last week. With the dire scenarios doing the rounds the last few days, it's all the more important they step in with aggressive measures to support the banking system and show they're beginning to confront the financing problems of the sovereigns as well."

Dumb. Stupid. Fire this fuckshite immediately.

Wed, 11/30/2011 - 10:01 | 1929606 kralizec
kralizec's picture

Agreed, it's just a handjob, the joy will pass quickly and we'll be back to square one.  These Neo-Keynesian douchebags wouldn't know effective leadership if it kicked them in the head.  And a good kicking is what these bastards need!

Wed, 11/30/2011 - 10:09 | 1929647 GeneMarchbanks
GeneMarchbanks's picture

It only gets worse:

11-30 8:57: Pimco's El-Erian says the ECB "needs to go all in";...

El-Erian needs to STFU, all the mouthbreathers take him seriously which is sad because the man is a complete imbecile.

Wed, 11/30/2011 - 10:44 | 1929856 The Real Fake E...
The Real Fake Economy's picture

yeah but he's got the best mustache in the business

Wed, 11/30/2011 - 09:53 | 1929553 William Finn
William Finn's picture

But ultimately isn't this is exactly the same as getting killed on an S&P futures position, getting a margin call, and then convincing the exchange to change the margin requirements so you can continue to fight the bad position?

Wed, 11/30/2011 - 10:27 | 1929781 Sunset chaser
Sunset chaser's picture

Yes sir. It buys time, fixes nothing, perhaps makes things worse in the long run by increasing the probability of collapse later.

Wed, 11/30/2011 - 09:54 | 1929565 AngryGerman
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"This decreases the cost of funding in U.S. dollars or other currencies so -- it's small -- but it's a boost to banks' profitability and gives them a better chance to shore up their capital ratios."

bonus bling bling!

you must love central banks..


Wed, 11/30/2011 - 09:59 | 1929596 Irish66
Irish66's picture

I still won't lend to BAC and I guess no one will either

Wed, 11/30/2011 - 10:01 | 1929608 Tsar Pointless
Tsar Pointless's picture

I hope and pray we have $4.00 gasoline by Christmas.

It will serve the serfs well to show them what fucking idiotic imbeciles they truly are.

Oh, I know I'm among those serfs, but I'll have a great time laughing at them when they can't afford a McDonald's hamburger. Which I won't be able to afford, too, but at least, I'll know why.

Wed, 11/30/2011 - 10:02 | 1929613 Shizzmoney
Shizzmoney's picture

I'm sure my wage will improve immediately.

Wed, 11/30/2011 - 10:03 | 1929618 adr
adr's picture

So confirmation that the world is in dire need of money and is actually totaly bankrupt is uber bullish? America ceases to exist in 2012 and that is uber bullish? The banksters need to die there is no other solution left. This is the exact same thing as an entire town saying, We all want Ferraris and we won't pay for them. All the other towns must pay for them and be happy about it. We refuse to work for anything but expect to be given everything regardless of the consequences to people outsie our town. It would be better for everyone outside our town to kill themselves because we deserve to live better anyway. I'd take Stalin or Hitler over Obama and Bernanke. 

Wed, 11/30/2011 - 10:04 | 1929623 WineSorbet
WineSorbet's picture

And Robotrader is proven right again.  They will never let the ship sink....  Until it does.

Wed, 11/30/2011 - 10:22 | 1929633 John Law Lives
John Law Lives's picture

Strange times we live in.  In simple terms, there was once a notion that an economy was based upon workers performing units of work and delivering products and services that added value to the community.  Now, it seems to be based upon bureaucrats adjusting fiat currency supplies with whoremongers cheerleading them every step of the way.

Scary future in store for the next generation.

100% FUBAR.

Wed, 11/30/2011 - 10:09 | 1929650 spanish inquisition
spanish inquisition's picture

Here comes Santa Claus, Here comes Santa Claus....   

Right down Santa Claus lane....

Wow. A completely manufactured, worldwide, coordinated Santa Claus rally. Who knew that Central Bankers believed so much , that they would step in and help out old Nick when he was in trouble.


Wed, 11/30/2011 - 10:09 | 1929654 Sudden Debt
Sudden Debt's picture

I just checked my bank account.... and I didn't receive a billion dollar bailout.... bummer..... MAYBE NEXT TIME!!!


Wed, 11/30/2011 - 10:09 | 1929655 DavidJ
DavidJ's picture

It is looking more and more like 2012 is when it comes crashing.  Be merry now, as next year much tougher times are coming.



Wed, 11/30/2011 - 10:15 | 1929695 maddogs
maddogs's picture

Today starts another trillion out the door.. bad CDSs, to "help the E.U.. Goldman and JPM sold worthless CDSs on Foriegn exchange Euros 2009-2010, did not set the procceeds aside in reserves, claimed it in revs/profits, took hugebonuses.
Now Greece CDSs not payable=voluntary..Goldman set the CDSs on Greece.
The trillion+ CDSs position GS and JPM is essentially being bailed out-more Fed money-GS and JPM are the most powerful of the Advisory comittee of the Federal Reserve.
This is another Bank Bailout.. it will be followed by another and the Central Banks are no longer about the economyies they are supposed to represent, but about a drug like need to not pay for their investments....ever.

Wed, 11/30/2011 - 10:34 | 1929814 Sunset chaser
Sunset chaser's picture

By now it should be obvious to the central banks that they are shelling out more and more only to buy decreasing amounts of time while exacerbating the final outcome, which is a foregone conclusion.

Wed, 11/30/2011 - 11:14 | 1930039 sleepingbeauty
sleepingbeauty's picture


It is pretty clear that they are only trying to pad their escape before the big kaboom.

Wed, 11/30/2011 - 10:16 | 1929713 Taxmeifyoucan
Taxmeifyoucan's picture

Funny how the mayans predicted it all. 2012 we´ll shout TIIIIMBER!


Wed, 11/30/2011 - 10:38 | 1929827 decklap
decklap's picture

Keeps banks from freezing up so they can buy bonds from their governments.... yayyy

Wed, 11/30/2011 - 10:46 | 1929866 Downtoolong
Downtoolong's picture

Instant Response To Global Fed Bailout

It's amazing how quickly these folks can assemble a commentary like this. Kind of makes you think that some people knew about it before the rest of us, eh?

Wed, 11/30/2011 - 11:17 | 1930061 dcb
dcb's picture

OK, the gaps tell me this is a short squeeze rally, because we aren't dropping back down to tend.

Wed, 11/30/2011 - 11:19 | 1930076 monmick
monmick's picture

I wonder whether Dick Bove will say today that he was wrong about being wrong? It certainly would not be below him to do so...

Wed, 11/30/2011 - 11:38 | 1930238 CPL
CPL's picture

Doesn't matter anymore TPTB isn't even pretending to act in the populations interest anymore.

Wed, 11/30/2011 - 11:47 | 1930265 Antifederalist
Antifederalist's picture

We gotta take these bastards. Now we could do it with conventional weapons, but that could take years and cost millions of lives. No, I think we have to go all out. I think that this situation absolutely requires a really futile and stupid gesture be done on somebody's part!

THE FED to the global markets.


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