Europe's Horrendous Liquidity Just Got Even Worse (And Nonexistent In Spain)

Even as the regularly scheduled take down of gold sends the risky FX pairs (but not the EURCHF), and their immediate computerized proxy, the S&P, higher, the truth about Europe's bad and deteriorating liquidity is out there in plain view. The most recent ECB Discount Facility usage just hit a fresh new all time high at €365 billion, 15 billion higher compared to two days ago, and €80 billion higher compared to a month ago. Banks are now openly warehousing every euro bill they can find with the ECB. Compounding the issue, is the continuing grind higher in the EUR Libor, hitting a fresh 2010 high of 0.65%. The primary driver for these adverse development was the earlier news in Spanish newspaper Cinco Dias that Spanish interbank liquidity no longer exists. And while reality is uglier by the day as the double dip reality seeps in, in the realm of rosy mythology, we have Ben Bernanke seeing US economic growth, and the World Bank rising global GDP growth forecasts. Picks your side.

ECB deposit window usage:

EUR Libor: