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Remember that dollar liquidity crunch Zero Hedge has been covering for the past month? Here is the denouement, in the form of the first global liquidity bailout of the world for 2011, on the 3 year anniversary of the Lehman collapse.
Much Ado About Nothing
What just happened? The Central Banks have agreed to either create programs to lend in $'s or in the case of the ECB, expand their existing 7 day program. It is definitely globally co-ordinated, but for any central bank to offer a USD program, they need to work with the Fed, so assuming the ECB decided to work with the Fed, it seems like a no brainer to involve the other central banks. Bank of England is an obvious candidate - look at the share price declines of Barclay's and RBS. The Swiss Central Bank was likely to join already, but a day with UBS announcing a $2 billion loss, they had extra reason to go along. Japan always seems to be up for a good intervention. So it is globally co-ordinated, that is important, but it was also and easy and obvious co-ordination.
Just two hours after the coordinated global central bank intervention signaled the all-clear for risk assets to infinity and beyond and a total solution for European sovereigns and financials, we are sad to deliver the news that all of the impact in equity markets has now been removed. ES has completely retraced the spike as have French banks. The only thing that is still holding better is financials spreads in Europe which are -25bps at 263bps (a lot of which is index skew compression as single-names are less excited).
Greek PM Papandreou address his cabinet this morning explaining how hard he has been working, how Greece is simply the scapegoat, how the media is to blame for the ever-decreasing circles they are running in, and how achieving 85% of what was expected of them in August was good enough.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.8 percent before seasonal adjustment.
The energy index has risen 18.4 percent over the last year, while the food index has increased 4.6 percent.
In the week ending September 10, the advance figure for seasonally adjusted initial claims was 428,000, an increase of 11,000 from the previous week's revised figure of 417,000. The 4-week moving average was 419,500, an increase of 4,000 from the previous week's revised average of 415,500.
# Empire Index: -8.82; Exp. -4.0, , decline from -7.72 previously; 4th consecutive decline; Manufacturing continues to look ugly
In the days leading up to the collapse of Lehman Brothers, then French Finance Minister (now IMF Managing Director) Chistine Lagarde told then-Treasury Secretary Hank Paulson that he could not allow Lehman to fail. The ramifications would be catastrophic, she said. She was mostly right. Three years later, it will be Angela Merkel talking to President Obama,Treasury Secretary Geithner and Federal Reserve Bank Chairman Ben Bernanke with exactly the same message. The United States government and the Federal Reserve must come to the rescue of the Eurozone or the ramifications will be catastrophic. And she will say that she needs roughly $1 trillion in financial guarantees and liquidity support [emphasis added]. That's the number that will calm the markets.
an effort to save the entire Eurozone, or specific countries we don't give a damn about (Greece, Italy, French, swiss or German banks) would be political suicide...
The war had a direct bearing on the United States' foreign relations and the relations that were most important were those with the two dominant powers of Europe, England and France. Each country was a monarchy, and a monarchy does not ordinarily like to see a rebellion succeed in any land. (The example may prove contagious.) Yet the war had not progressed very far before it was clear that the ruling classes in each of these two countries sympathized strongly with the Confederacy-so strongly that with just a little prodding they might be moved to intervene and bring about Southern independence by force of arms. The South was, after all, an aristocracy, and the fact that it had a broad democratic base was easily overlooked at a distance of three thousand miles. Europe's aristocracies had never been happy about the prodigious success of the Yankee democracy. If the nation now broke into halves, proving that democracy did not contain the stuff of survival, the rulers of Europe would be well pleased.
1863-1864 Russian Fleet Expedition to North America This American expedition became a military demonstration by Russia during the U.S. Civil War. England and France advocated for the southern rebels. Russia held a friendly position in respect to the federal government in the North. It increased hostility toward Russia on the part of England and France, which strove for loosening its international influence. The Russian government decided to send two ship squadrons to the US to demonstrate support for the northerners, as well as to create a potential threat to marine communications of England and France in order to make them refuse assistance to the South States.
Gold has the potential to jump more than fivefold as the precious metal’s price catches up with the surging amount of money in the U.S. economy, according to Dylan Grice, a global strategist at Societe Generale SA.
The CHART OF THE DAY shows the price at which each U.S. dollar in the monetary base, compiled by the Federal Reserve, would have been backed by an ounce of gold for the past half century. International Monetary Fund data on the country’s gold reserves were used in the calculation.
Grice, based in London, identified this price as the metal’s “fair value” yesterday in a report. Since June, it has exceeded $10,000 an ounce, as depicted in the chart’s top panel. Gold for immediate delivery closed at $1,819.63 an ounce on the spot market yesterday.
“There is a demand for an honest currency,” Grice wrote. “The last time honesty was perceived to be so scarce -- in the 1970s gold mania -- the dollar was over-backed by gold. If it happened then, why not again?”
Originally posted by Vitchilo
reply to post by Rockpuck
We sure as hell would never save France.
Funny you say that since France helped the American revolution a lot...
Originally posted by marg6043
Well how much more is the US tax payer going to keep bailing out EUzone? doesn't anybody knows that through the IMF that is exactly what the US and the Fed is been doing for years.
What are they talking about 1 trillion dollars more, are we to ever know the real cost of the US market crash domino effect?.
Originally posted by Rockpuck
We would never help save Germany.
We sure as hell would never save France.