FRA/OIS spread was 128 after Lehman. Not quite there yet.
FRA/OIS spread was 128 after Lehman. Not quite there yet.
FRA/OIS spread was 128 after Lehman. Not quite there yet.
FRA/OIS spread was 128 after Lehman. Not quite there yet.
Lehman Deja Vu: There Goes Market Liquidity
European liquidity just went into Defcon 1. Presenting the FRA-OIS spread. Oops.
And now moving to a US near you...
An explanation from a trading desk:
So the fact that Greece itself was stretched further on the rack was not the be all and end all of the new credit crisis and catalyst of the latest Libor jitters.
In reality, analysts immediately warned that the ramifications of any action on the 'threat' of French Bank downgrades was this time a significant event in the financing market.
When other EuroZone Banks had been downgraded or threatened with downgrades, the markets were to some extent immune because any shortfalls in Euro funding were continually topped up via swapped Dollars.
However, this '$-Funding' has been dominated by the Big French Banks and now we see the reality of such a polarized or skewed funding profile for Europe.
Not only are these French Banks significant players in the short-term $ markets, but many investors have large exposures to these entities either via CP?CD/ABCP or the Repo Markets.
**Based on the current market info on their money-market activities, we are told that the 3main French Banks collectively account for as much as 50% of all Eurozone CP/CD exposure as at recent month-end (31st May)...and, furthermore, they account for almost 15% of $ Repo Markets as per the end of Q1 2010 (31st March).!!!**
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on Wed, 06/15/2011 - 12:44
#1371465
Euro, we have a problem!
on Wed, 06/15/2011 - 13:04
#1371585
actually a fresh sell today on the Euro ETFs.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s218921777]&disp=P
EU stock ETFs with a solid new long term short.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3225058&cmd=show[s218732180]&disp=P
Hmmmmmmm.
on Wed, 06/15/2011 - 12:45
#1371468
DOW/GOLD ratio @ 7.82!
on Wed, 06/15/2011 - 12:56
#1371537
Along way to 3 , 2 ....1 still.
on Wed, 06/15/2011 - 14:09
#1371925
Vive La France!
on Wed, 06/15/2011 - 17:39
#1372682
God save the Irishmen! Jesus, bail them out, they are swapping shares for bonds. ;)
on Wed, 06/15/2011 - 12:45
#1371471
FIIGS?
on Wed, 06/15/2011 - 12:47
#1371476
Yes.
Like I noted days ago, it is infinitely easier to place Frankreich under another Vichy, than to deal with a Greek intifada.
on Wed, 06/15/2011 - 12:52
#1371502
The F-PIIGS to be precise.
on Wed, 06/15/2011 - 13:53
#1371833
Pfigis. And it sounds kind of German.
on Wed, 06/15/2011 - 12:53
#1371523
Might FIIGS be "Financial Institutions Including Goldman Sachs"?
Separate note - liquidity in equities IS gone except for HFT and options expiry prep. Really raising the stakes for a gianourmous problem when several HFT unable to be got off simultaneously in different names. Get out of the way of that panic!
on Wed, 06/15/2011 - 13:10
#1371622
or...Financial International Institutions Goldman Sachs aka FIIGS.... peut- etre...
on Wed, 06/15/2011 - 12:55
#1371531
PFIIGS
on Wed, 06/15/2011 - 13:03
#1371550
IF PIGS
on Wed, 06/15/2011 - 13:31
#1371682
- Ancient Chinese Proverb
on Wed, 06/15/2011 - 14:42
#1372075
Heh.
on Wed, 06/15/2011 - 14:42
#1372061
For general enlightenment I coined the term the "USUK"s (US+UK) -
The true, original Mega Fi Scum of the Earth.
The world caught its disease:
Anglo-Fi-Filia (symptums: cannibalism, incest, rape & murder).
Ceterum censeo Angloginem USUKs delendam esse!
on Wed, 06/15/2011 - 12:48
#1371477
Those PhD's Desks @ Soc Gen sure nailed it ;-)
on Wed, 06/15/2011 - 12:49
#1371482
"Lehman who?" - Wall St.
on Wed, 06/15/2011 - 12:47
#1371492
FRA/OIS spread was 128 after Lehman. Not quite there yet.
on Wed, 06/15/2011 - 12:49
#1371504
Where was it before?
on Wed, 06/15/2011 - 13:02
#1371565
80.8 on 08/15/08, exactly one month before bankruptcy.
As the original poster noted, a long way to go.
on Wed, 06/15/2011 - 13:02
#1371571
And how many trillions in short-term central banking bailout capital was pledged on 8/15/2008 one month before bankruptcy?
on Wed, 06/15/2011 - 13:07
#1371604
TD how come Euro zone is short of liquidity given the QE-2 pumping they are supposed to have received according to ZH estimates?
Those Euro banks must be washed with 600 B USD of cash!
on Wed, 06/15/2011 - 13:13
#1371620
and TED Spread heading lower, not higher?
on Wed, 06/15/2011 - 13:14
#1371626
TED spread is completely irrelevant as it is based on LIEBOR
on Wed, 06/15/2011 - 13:15
#1371635
That was base cash needed for statutory requirements. Any incremental cash will need to come from the ECB, which in turn means reactivation of FRBNY FX swap lines.
on Wed, 06/15/2011 - 14:44
#1372066
you guys are totally missing out on Pandora.. empty your pockets and back up the truck!
on Wed, 06/15/2011 - 14:20
#1371982
@ falak_p: good question!
ducking the Q of cause here, i think one of the underlying "reasons" for these liquidity events is the leverage of the financials, esp TBTF, even the FED. so, a relatively normal event becomes a whoop-tee-freaking-doodoo as a 2-3% dip wipes out the entire capital equity structure of __________ (fill in blank; use xtra pages as needed).
on Wed, 06/15/2011 - 13:08
#1371614
Not arguing that they should be weighed on the same scale. Just agreeing that implying Lehman II is around the corner via Greece is a bit heavy-handed.
on Wed, 06/15/2011 - 13:21
#1371665
Why? Similar debt levels and possibly more rampant of a contagion, both financially and especially politically. Also need to factor in how more battered, bloodied and bruised the Global Financial System is in comparison to 2008.
The fact they cannot agree on a bailout may infer they simply haven't the resources to do so anymore.
on Wed, 06/15/2011 - 16:27
#1372504
One can only hope they've run out of bullets. All these bailouts should have never have happened in the first place, including here.
on Wed, 06/15/2011 - 13:22
#1371674
another thing to factor in....people are much more alert now, and expect smt to happen....which means they are much more inclined to shoot first and ask questions later...only this could speed things up very quickly....
not the same mindset as prior to Lehman....not many will stand up to the coming wave....people are not so sure the federalis got it together....its everyone for himself...
on Wed, 06/15/2011 - 13:24
#1371693
Excellent point. People are more in touch with where whatever is left of their savings and investments are and can easily call their fund managers and cash it in.
What percentage of the entire system is available in liquid cash? Less than 1% possibly. Imagine more than 1% of people cashing in their chips at the same time?
on Wed, 06/15/2011 - 13:30
#1371707
yep...lets hope for the best and prepare for the worst...
on Wed, 06/15/2011 - 13:34
#1371748
It is I think about 3%.
I have made the point previously that if the people knew there was virtually no "cash" in the system they might panic.
on Wed, 06/15/2011 - 13:48
#1371824
cash is now available, ad infinitum, by the CBs, especially the FRBNY
on Wed, 06/15/2011 - 18:27
#1372866
Good point. I was working on a combined value of €10 Trillion worth of Gold, Silver and liquid M0 cash assets as a tiny subset of €1 Quadrillon worth of Derivatives, Property and real estate, equities, bonds and other capital and short term money market instruments.
A lot of the derivatives cancel each other out, so the 3% may be more accurate, in a fire sale event.
on Wed, 06/15/2011 - 14:45
#1372081
Posted the play-by-play to my blog in hopes my regular folks reader will catch the drift - WE WON'T GET FOOLED AGAIN!
So, if a similar event occurred today where do we stand? From the exchange above we gain some perspective:
Link: Here.
on Wed, 06/15/2011 - 15:48
#1372354
eotw ftw
on Wed, 06/15/2011 - 16:07
#1372432
I'm sooo glad I got most of mine out some time ago.
on Wed, 06/15/2011 - 16:34
#1372515
+1
on Wed, 06/15/2011 - 18:28
#1372873
Nice summary of this interesting thread EOTW. Even 5% is a dangerous low number in a day of unravelling credit events.
on Wed, 06/15/2011 - 12:48
#1371495
Joe ASSHOLE LAFORNICIA on CNBS to the rescue!
on Wed, 06/15/2011 - 12:48
#1371499
And 3...2...1...queue French Riot!
on Wed, 06/15/2011 - 12:56
#1371518
At least the French remember how to properly riot.
on Wed, 06/15/2011 - 12:54
#1371510
No euros left in europe. They're over here buying dollars.
on Wed, 06/15/2011 - 12:55
#1371516
A Bidless market is coming....market crash of epic proportion, dead ahead!
Disclosure: Long VXX, FAZ, UUP
Disclosure: I can't believe I got the fucking math question to post this message incorrect and had to try twice!
on Wed, 06/15/2011 - 13:06
#1371573
don't feel bad, f's with me constantly. I think its a formatting/text issue. gets me posting as well.
on Wed, 06/15/2011 - 12:55
#1371517
CSCO looks very very sick today
on Wed, 06/15/2011 - 12:56
#1371535
Any minute now, those shares will find "value." Holding my breath...
on Wed, 06/15/2011 - 16:57
#1372583
Time for the Blowhorn to use that phrase today...
Call Liesman and get him back on the air to pump this ***** back up!
on Wed, 06/15/2011 - 13:03
#1371570
Sounds crazy, but I'm gonna be buying soon (CSCO).
on Wed, 06/15/2011 - 14:24
#1372006
Same here not crazy. Short term high probability bounce. cya.
on Wed, 06/15/2011 - 13:16
#1371643
Well, yeah, but it's looked sick since May of last year...
on Wed, 06/15/2011 - 14:30
#1372025
Nokia looks even sicker. The horror. The horror
on Wed, 06/15/2011 - 13:00
#1371522
Globalized, interwoven, incestuous margin/leverage/hot derivative-on-derivative action, *****es!
We've yet to see the prequel, let alone the main show, but we're much closer.
on Wed, 06/15/2011 - 13:11
#1371612
Well said. Pithy.
ORI
on Wed, 06/15/2011 - 13:19
#1371654
Well said. Pithy.
ORI
on Wed, 06/15/2011 - 12:58
#1371529
the TED spread looks like it has heading lower over the last week...what gives?
on Wed, 06/15/2011 - 12:58
#1371530
You would think that a South American style renegotiation and extension for all of these borrowers is priced in the market. Thus the 600 Billion that went to Europe from QE 2 per Zero Hedge yesterday. This looks like the perfect set up for the insiders to load up on stocks and PMs.
on Wed, 06/15/2011 - 12:59
#1371545
Jerome Kerviel was the patsy: he was just far ahead of his time in running his own small piece of a total Ponzi hidden in plain sight! They tried to tell you it was just a one-off, criminal mischief thing but don't believe 'em: he was surrounded by colleagues who were all doing the same (as he testified and as others leaked). He was just the goat.
He needed to be silenced and the market sold off hard on this otherwise "transitory" news because the traders at big Wall Street banks knew: it risked exposing and collapsing the world's biggest Ponzi involving derivatives traded back and forth across the Atlantic as a means of generating fake fees, bonuses and giving the appearance of business being conducted. The big accomplishment of 2008: Now that Ponzi is the headache of not just the banks but US and Euro central banks and governments too.
on Wed, 06/15/2011 - 13:04
#1371557
PFIIGS
The P is silent as in swimming.
on Wed, 06/15/2011 - 13:01
#1371559
calm down folks all of the banks just passed stress tests not long ago..
on Wed, 06/15/2011 - 13:01
#1371560
Markit Itraxx up 4.2%
on Wed, 06/15/2011 - 13:11
#1371607
Uh oh! What is going to happen in Asia tomorrow?
Another Thursday? Blackish looking already?
scrrrrrlllluppppppp.... the sound of liquidity going down a black hole.
ORI
http://aadivaahan.wordpress.com/2010/12/20/twit-twit-2hooo/
on Wed, 06/15/2011 - 13:16
#1371657
This is the crisis they need to justify QE3. More moola to hoist up the Euro ponzi scheme is on it's way!
on Wed, 06/15/2011 - 13:31
#1371715
True but QE3, regardless of how they package it, will redefine the term "crisis" in the end.
on Wed, 06/15/2011 - 13:25
#1371702
Now I feel better. I thought I was the only one who got the math question wrong. And I had a math minor in college when I was a punk. lol
This market almost looks like it is real. Liking this FAZ. And there goes the mighty dollar. I guess we will be the last ones entering Hell.
on Wed, 06/15/2011 - 13:40
#1371750
The captcha should be reformulated to be a Keynesian-Krugman inspired forumula based on the creation/destruction of fiat in a fractional reserve economy.
There could be no right answer to any of the potential queries as the context is fatally and insanely flawed, but it would be more fun.
on Wed, 06/15/2011 - 14:09
#1371903
My keyboard won't let me enter the numeral 8, on its side. ;)
on Wed, 06/15/2011 - 14:40
#1372064
Alt 236
∞
on Wed, 06/15/2011 - 13:30
#1371714
bck to the important news my potatoes have appeared in 7 locations.. just tiny little leaves but great to see...
on Wed, 06/15/2011 - 13:51
#1371842
lovin' it
on Wed, 06/15/2011 - 13:42
#1371784
US banks are gonna stop lending to European (French German names), all pretty orchestrated as noted several times. If you cant be the demand, create the demand. All fairly straight forward one would think. EURO sacrificed at the holy altar.
on Wed, 06/15/2011 - 14:08
#1371908
Why so many people are enjoying that market is crashing? I understand that the market is corrupt, rigged and manipulated.
But exactly what will happened in reality if its indeed crashes hard? I am not talking some ideals and sifi theories.
Realistically, if the market will crash what will happened to regular people? 100 People has some gold stashes.... then what? they will be running around to exchange their precise gold for some more amount of fiat money?
Or the idea that it will be like a switch flip? All rich will become poor and every1 who managed to get some gold will became rich overnight?
Of cause there are plenty of comments that if it crashes hard we will be on the way to healthy recovery.. will we?
on Wed, 06/15/2011 - 14:12
#1371924
When was the last time you ate some radish ?
I have today, after a long period of abstinence.
It was delicious and very spicy.
Yummy !
on Wed, 06/15/2011 - 14:20
#1371966
had Radieschen tonight for dinner along with smoked salmon and horseradish. num num!
on Wed, 06/15/2011 - 16:33
#1372512
the ones we get at the market are meant to look nice, and just that. They don't have the small very spicy not so pretty ones anymore :-(
I grow strawberries in my backyard!
on Wed, 06/15/2011 - 14:13
#1371948
Just about a month ago, on these pages and elsewhere, I said we would see a massive June liquidity crisis and almost all of the postings and data by Tyler and others have confirmed that fact.
Welcome to the crisis. This is going to make 2008 look like a piker.
on Wed, 06/15/2011 - 14:40
#1372060
So what you are saying is The Bernanke is going to have to buy approximately 5 to 20 times the amount of U.S. Government Fiatski-based Notes, and pump about 5 to 20 times the liquidity into the global markets, just to temporarily prevent a collapse, as a direct result of his actions circa 2008-present, as he did during that same 2008-present period?
And you're further saying that assuming that he did do this, the resulting inflation would be in the triple digits in emerging markets and double digits in developed nations, and this would crush whatever is left of any organic, non-government propped economic activity, and throw us into an absolute economic black hole for a very, very long time?
I concur.
on Wed, 06/15/2011 - 16:07
#1372436
Big difference between 2008 and today:
We had a myriad of "Fed Programs" to openly support various parts of the financial system lending to banks and buying assets. Now we just have, uh, the discount window. That window ain't big enough to save the PIIGS and our system so it's an either or all women and children for themselves proposition.
The Fed's only goal this time is to save the Fed, rest of the world and the U.S. be damned.
on Wed, 06/15/2011 - 16:19
#1372466
Agreed.
The Fed has already planned their own fake suicide, like a hedge fund manager who has been engaged in a massive Ponzi for years, but only recently widely disovered and busted by the people, so he flies his plane that was supposed to contain his 'body' into a mountain or the ocean, while parachuting out prior to impact.
I wonder what the new, colorfully named, replacement version of the 'Federal' Reserve Bank will look like?
on Wed, 06/15/2011 - 14:57
#1372037
Just wait until Mr. Market or the ratings agencies wake up and realize that exposure of the Spanish Caja's to Greek paper will cause even more havoc within the French banking system.
Smoke some SocGen if you have it.
Perhaps the recently announced massive reductions in daily/weekly ATM availability of funds by La Banque Postale were a notable exception to the fiscal imprudence of France's banking sector.
on Wed, 06/15/2011 - 15:45
#1372337
I am affraid that this is just the begining.
Bankia - hahahaha (just that)
Bank of ireland - needs 5.3 bln EUR of capital form investors, MCAP 680 million EUR (goooood luck with that, the general meeting was today)
Banco Santander - last week sold only about half the offering of 1 billion EUR of covered bonds backed by loans to Spanish regional and local governments
Dexia - Zerohedge said it all some time ago, if you realy want to laugh go look at their short term debt structure.
Unicredit - Needs aprox. 6 bln EUR of capital
and the list goes on, and on, and on...
on Wed, 06/15/2011 - 17:38
#1372678
Timberrrrr