FAQ  |  Search  |  Memberlist  |  Usergroups   |  Register  |  Profile  |  Log in to check your private messages  |  Log in 

 Here Comes The Global, US-Funded Liquidity Bail Out View next topic
View previous topic



Post new topicReply to topic
Author Message
bdc63
Schumpeter Reincarnate


Joined: 16 Feb 2007
Posts: 4392
Location: Maryland

Here Comes The Global, US-Funded Liquidity Bail Out
PostPosted: Wed Nov 30, 2011 1:42 pm Reply with quoteBack to top

An alternative title for this article might be "ECB Cries Uncle"
or "Yes Europe, There is a Santa Claus & his name is Ben Bernanke"

http://www.zerohedge.com/news/.....y-bail-out

As expected, the Fed has just bailed out the world once again:

FED, ECB, BOJ, BOE, SNB, BANK OF CANADA LOWER SWAP RATES - BBG
ECB, FED other major central bank to lower the pricing of existing USD liquidity swaps by 50BPS
And as we have been writing every single day, the worldwide dollar crunch is now confirmed:

At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar
And finally, a promise to bailout Bank of America when it hits $4.00 again:

U.S. financial institutions currently do not face difficulty obtaining liquidity in short-term funding markets. However, were conditions to deteriorate, the Federal Reserve has a range of tools available to provide an effective liquidity backstop for such institutions and is prepared to use these tools as needed to support financial stability and to promote the extension of credit to U.S. households and businesses.
This means that the global situation is far, far more dire than the talking heads have said. Luckily, when this step fails, which it will, Mars can always come and bail us out.

For release at 8:00 a.m. EDT
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system. The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.

These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points. This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.

As a contingency measure, these central banks have also agreed to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant. At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar, but the central banks judge it prudent to make the necessary arrangements so that liquidity support operations could be put into place quickly should the need arise. These swap lines are authorized through February 1, 2013.

Federal Reserve Actions
The Federal Open Market Committee has authorized an extension of the existing temporary U.S. dollar liquidity swap arrangements with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank through February 1, 2013. The rate on these swap arrangements has been reduced from the U.S. dollar OIS rate plus 100 basis points to the OIS rate plus 50 basis points. In addition, as a contingency measure, the Federal Open Market Committee has agreed to establish similar temporary swap arrangements with these five central banks to provide liquidity in any of their currencies if necessary. Further details on the revised arrangements will be available shortly.

U.S. financial institutions currently do not face difficulty obtaining liquidity in short-term funding markets. However, were conditions to deteriorate, the Federal Reserve has a range of tools available to provide an effective liquidity backstop for such institutions and is prepared to use these tools as needed to support financial stability and to promote the extension of credit to U.S. households and businesses.

_________________
"Socialism only works in two places: Heaven where they don't need it and h*ll where they already have it." -- Ronald Reagan
"Everybody, sooner or later, sits down to a banquet of consequences." -- Robert Louis Stevenson
“Gold is money. Everything else is credit.” -J.P. Morgan, testifying to Congress in 1912


Last edited by bdc63 on Wed Nov 30, 2011 6:28 pm; edited 1 time in total
View user's profileSend private message
bdc63
Schumpeter Reincarnate


Joined: 16 Feb 2007
Posts: 4392
Location: Maryland

Re: Here Comes The Global, US-Funded Liquidity Bail Out
PostPosted: Wed Nov 30, 2011 6:27 pm Reply with quoteBack to top

Ron Paul has released the following comment on the coordinated FED action:

Quote:
The Fed's latest actions in cooperating with foreign central banks to undertake liquidity swaps of dollars for foreign currencies is another reason why Congress needs enhanced power to oversee and audit the Fed. Under current law Congress cannot examine these types of agreements. Those who would argue that auditing the Fed or these agreements with central banks harms the Fed's independence should reevaluate the Fed's supposed independence when the Fed bails out Europe so soon after President Obama promised US assistance in resolving the Euro crisis.

Rather than calming markets, these arrangements should indicate just how frightened governments around the world are about the European financial crisis. Central banks are grasping at straws, hoping that flooding the world with money created out of thin air will somehow resolve a crisis caused by uncontrolled government spending and irresponsible debt issuance. Congress should not permit this type of open-ended commitment on the part of the Fed, a commitment which could easily run into the trillions of dollars. These dollar swaps are purely inflationary and will harm American consumers as much as any form of quantitative easing.

The Fed is behaving much as it did during the 2008 financial crisis, only this time instead of bailing out politically well-connected too-big-to-fail firms it is bailing out profligate government spending. Citizens the world over deserve better than this. They deserve sound money that cannot be manipulated and created out of thin air by central planners who promise printed prosperity. Fiat money caused this European crisis and the financial crisis before it. More fiat money is not the cure. The global fiat currency system has proven itself a failure, we need real monetary reform. We need sound money.

_________________
"Socialism only works in two places: Heaven where they don't need it and h*ll where they already have it." -- Ronald Reagan
"Everybody, sooner or later, sits down to a banquet of consequences." -- Robert Louis Stevenson
“Gold is money. Everything else is credit.” -J.P. Morgan, testifying to Congress in 1912


Last edited by bdc63 on Wed Nov 30, 2011 10:55 pm; edited 1 time in total
View user's profileSend private message
mahalo guy
Demolition Man


Joined: 28 Jun 2008
Posts: 2082
Location: Honolulu

Re: Here Comes The Global, US-Funded Liquidity Bail Out
PostPosted: Wed Nov 30, 2011 9:21 pm Reply with quoteBack to top

I bought EDZ the day before and just got Creamed!!!!!!

(3X Bear-emerging markets)

SH!T

Should I hang on to it?
View user's profileSend private message
dreamer
Demolition Man


Joined: 09 Aug 2007
Posts: 2101
Location: Northern California

Re: Here Comes The Global, US-Funded Liquidity Bail Out
PostPosted: Thu Dec 01, 2011 1:29 am Reply with quoteBack to top

Flush it.

QE to infinity and beyond is a'coming. The PTB will print and steal until they cannot and then the PTB that write the laws will write 'em just so and will enforce peace and safety on the sheeple...of course many sheeple will need to be killed getting to the peace part...but the PTB will do just fine just fine. It will be peaceful and safe at the end point...for them...and they will have total control to make sure it is so. IMHO I've read about this happening...from somewhere...Hmmm.

_________________
There isn't anything so bad that the Government can't make worse...

The 4-functions of government today are the same as a criminal enterprise: Lie, Cheat, Steal, and Kill...
View user's profileSend private message
achtung
Nitroglycerin


Joined: 03 Jun 2010
Posts: 716
Location: Germany

Re: Here Comes The Global, US-Funded Liquidity Bail Out
PostPosted: Thu Dec 01, 2011 1:58 am Reply with quoteBack to top

Didn't need binoculars to see this one coming.

Feel bad for the shorts and Call sellers. Hurrah for GLD longs.

Been selling strangles into this mess for the last 10 days. Had to adjust quite a bit today. Fun times.

_________________
“Debt and deficits are not inventions of ideology. They are facts of arithmetic.”

– Paul Martin
View user's profileSend private message
bdc63
Schumpeter Reincarnate


Joined: 16 Feb 2007
Posts: 4392
Location: Maryland

Re: Here Comes The Global, US-Funded Liquidity Bail Out
PostPosted: Thu Dec 01, 2011 12:17 pm Reply with quoteBack to top

mahalo guy wrote:
I bought EDZ the day before and just got Creamed!!!!!!

(3X Bear-emerging markets)

SH!T

Should I hang on to it?


my opinion, for what its worth: sell half your postion today & hold the other half for a few more days. and be REALLY careful with those double and tripple shorts going forward in this headline-risk environment.

_________________
"Socialism only works in two places: Heaven where they don't need it and h*ll where they already have it." -- Ronald Reagan
"Everybody, sooner or later, sits down to a banquet of consequences." -- Robert Louis Stevenson
“Gold is money. Everything else is credit.” -J.P. Morgan, testifying to Congress in 1912
View user's profileSend private message
bdc63
Schumpeter Reincarnate


Joined: 16 Feb 2007
Posts: 4392
Location: Maryland

Re: Here Comes The Global, US-Funded Liquidity Bail Out
PostPosted: Thu Dec 01, 2011 1:00 pm Reply with quoteBack to top

Peter Schiff's spin on yesterday's action

http://www.zerohedge.com/news/.....ans-future

_________________
"Socialism only works in two places: Heaven where they don't need it and h*ll where they already have it." -- Ronald Reagan
"Everybody, sooner or later, sits down to a banquet of consequences." -- Robert Louis Stevenson
“Gold is money. Everything else is credit.” -J.P. Morgan, testifying to Congress in 1912
View user's profileSend private message
achtung
Nitroglycerin


Joined: 03 Jun 2010
Posts: 716
Location: Germany

Re: Here Comes The Global, US-Funded Liquidity Bail Out
PostPosted: Fri Dec 02, 2011 4:07 am Reply with quoteBack to top

anyone have an opinion on GDX or GDXJ the miners and jr miners?

_________________
“Debt and deficits are not inventions of ideology. They are facts of arithmetic.”

– Paul Martin
View user's profileSend private message
bdc63
Schumpeter Reincarnate


Joined: 16 Feb 2007
Posts: 4392
Location: Maryland

Re: Here Comes The Global, US-Funded Liquidity Bail Out
PostPosted: Fri Dec 02, 2011 12:21 pm Reply with quoteBack to top

achtung wrote:
anyone have an opinion on GDX or GDXJ the miners and jr miners?


I prefer to actually buy a basket of miners & juniors. I like the research that Casey Research does, so I subscribe to their newsletters (Big Gold and International Speculator). Not all miners -- especially juniors -- are created equal. I don't like the idea of some unmanaged ETF picking a basket of them.

Just MHO.

_________________
"Socialism only works in two places: Heaven where they don't need it and h*ll where they already have it." -- Ronald Reagan
"Everybody, sooner or later, sits down to a banquet of consequences." -- Robert Louis Stevenson
“Gold is money. Everything else is credit.” -J.P. Morgan, testifying to Congress in 1912
View user's profileSend private message
achtung
Nitroglycerin


Joined: 03 Jun 2010
Posts: 716
Location: Germany

Re: Here Comes The Global, US-Funded Liquidity Bail Out
PostPosted: Fri Dec 02, 2011 2:14 pm Reply with quoteBack to top

bdc63 wrote:
achtung wrote:
anyone have an opinion on GDX or GDXJ the miners and jr miners?


I prefer to actually buy a basket of miners & juniors. I like the research that Casey Research does, so I subscribe to their newsletters (Big Gold and International Speculator). Not all miners -- especially juniors -- are created equal. I don't like the idea of some unmanaged ETF picking a basket of them.

Just MHO.



Great Point. Thank you.

GG in your basket? or is it just to hyped?

_________________
“Debt and deficits are not inventions of ideology. They are facts of arithmetic.”

– Paul Martin
View user's profileSend private message
Display posts from previous:      
Post new topicReply to topic


 Jump to:   


Merge topics 

View next topic
View previous topic
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum




Powered by phpBB 2.0.22-2 (Debian) © 2001, 2002 phpBB Group :: FI Theme :: All times are GMT