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  1. #1
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    Central banks pump money into market

    Stock markets have jumped after the Bank of England joins the Fed, ECB and Bank of Japan to make more dollars available to financial market to ease pressure on troubled eurozone banks. Here is what the experts are saying about the move.


    Central banks are making more dollars available to financial markets Photo: Bloomberg News


    4:48PM BST 15 Sep 2011


    Rick Klingman, Treasury trader at BNP Paribas

    "This is good for the European banking system, so we're seeing a push higher in equity prices. The ECB-Fed joint announcement is causing a risk-on type trade because they're providing dollar funding through year-end."

    Nick Parsons, head of strategy at National Australia Bank

    Mr Parsons said the decision to provide unlimited to liquidity well into 2012 was a big show of support to the global banking system

    "If Greece were to default, an announcement that there would be unlimited liquidity available from central banks is one of the things you would want to have in place beforehand."

    Marco Valli, an economist at UniCredit

    "This comes as good news," amid "increasing signs of tension in dollar funding for eurozone banks."
    Marc Ostwald, strategist at Monument Securities
    "This sort of liquidity flood implies that current funding pressures, and in the event of a Greek default some even larger pressures, are threatening to completely destabilize western financial markets."
    Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management
    “The central bank coordinated action is rather significant. We can take a little confidence in knowing that when money market funds or banks are unwilling to expand liquidity to each other, that central bankers are willing to step in and fill that void.”
    Geoffrey Yu, director of foreign-exchange strategy at UBS
    "This doesn't change anything. It helps the banks for the next couple of months but that's it."
    Michael Mullaney, who helps manage $9.5bn at Fiduciary Trust
    “It's nice to see that the risk factors coming out of Europe are abating somewhat. The US doesn't have a liquidity problem, it has a demand problem. While Europe has a demand problem too, it has a pressing liquidity problem. That addresses the liquidity issue that would be threatening the European banking system.”
    David Keeble, rate strategist at Credit Agricole
    "It's very useful, we've seen for banks their funding has shortened quite significantly and this takes the pressure off. It's straight out of the 2008/2009 playbook, it worked then and it stands a good chance this time, too."
    Suki Mann, Societe Generale rate strategist
    "Given the improved sentiment elsewhere, senior bank risk is at best only a touch better. To be able to issue bonds you need to see much lower levels on CDS and with that improved liquidity and better senior cash bond prices. That's not really being seen at the moment and clearly that will only come if you start getting some clarity on the sovereign situation.
    "If the market doesn't open, then the ECB has to continue providing liquidity but also maybe it, or the EFSF, decide to start buying senior debt to put a floor under levels. Even if the EFSF potentially started guaranteeing issues it wouldn't be a panacea for long."

    Central banks pump money into market: what the analysts say - Telegraph

  2. #2
    loob lor geezer
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    Hear comes the seventh cavalry at the 11th hour.



    However :

    "This doesn't change anything. It helps the banks for the next couple of months but that's it."

    Then its the little big horn all over again.

  3. #3
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    Whats that for to cover their bonus payments.

  4. #4
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    Comments from the New York Times make pleasant reading :

    E.C.B. Moves to Provide Extra Liquidity - Readers' Comments - NYTimes.com

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    Financial crisis: spectre of credit crunch returns as banks pump money into markets

    The spectre of a second credit crunch was raised when central banks were forced to intervene to stop the international financial system from freezing up again.


    George Osborne, the Chancellor, is to admit that Britain is 'not immune' to the international crisis Photo: Alamy

    By James Kirkup

    10:58PM BST 15 Sep 2011


    As the head of the International Monetary Fund warned of a new “dangerous phase of the crisis”, the Bank of England and other central banks said they would start lending cash to European banks that were struggling to borrow.

    Such “liquidity-providing operations” were last conducted in 2008 and 2009 at the height of the credit crisis, when banks’ reluctance to lend to one another threatened to cripple the financial system.

    The latest developments came on the third anniversary of the collapse of Lehman Bros, the US bank whose demise brought the financial system to the brink of meltdown.

    The central banks’ fresh intervention, which will run from October until December, was driven by the deepening crisis in the eurozone, which is struggling to cope with the debts of countries including Greece.

    George Osborne, the Chancellor, is to admit that Britain is “not immune” to the international crisis, telling The Daily Telegraph Festival of Business that recent events make it all the more important for the Coalition to stick to its deficit-reduction plans.

    The eurozone debt crisis has led to growing fears in financial markets about the stability of major European banks, especially those in France.
    Investors, particularly US money-market funds, are increasingly worried that the European banks are exposed to huge losses on loans they have made in Greece and other indebted eurozone countries.
    Assurances from European regulators have not allayed those fears. Moody’s, a credit ratings agency, has downgraded two of France’s biggest banks, Société Générale and Credit Agricole, and issued a downgrade warning to a third, BNP Paribas.
    The Financial Services Authority, the UK market regulator, called senior executives from British banks to a meeting to discuss the City’s ability to withstand the eurozone crisis.
    Stock markets jumped after the intervention, with bank shares rising sharply, amid relief that an immediate financial collapse had been averted.
    The FTSE 100 index of leading British companies closed at 5,337, up 2.1 per cent. Banking shares made the biggest gains: Lloyds Banking Group rose 6.6 per cent, Barclays gained 4.4 per cent and HSBC rose 3.8 per cent. European and American markets also rose sharply.
    However, analysts warned that the short-term measure would not change the fundamental problems in the eurozone and elsewhere.
    “This is about central banks buying time for politicians,” said Michael Symonds of Daiwa Capital Markets.
    Marc Ostwald, a strategist at Monument Securities, said that the central banks’ decision to “flood” the inter-bank market with money demonstrated the scale of the problem the global financial system faced.
    He said the intervention implied that current funding pressures and the possibility of a Greek debt default were “threatening to completely destabilise western financial markets”.
    Investors’ fears are also being exacerbated by growing evidence that major economies are slowing and could slip back into recession.
    Christine Lagarde, the head of the IMF, said that international leaders must do more to address fears over debt and economic growth.
    “We are certainly living through a very troubled time at the moment with great economic anxiety,” she said. “The economic skies today look troubled, they look turbulent, as global activity slows and downside risks increase. We have entered into a dangerous phase of the crisis.”
    She added: “Without collective, bold action, there is a real risk that the major economies slip back instead of moving forward.”
    The European Commission warned that growth in the eurozone economies would “come to virtual standstill” later this year.
    The commission also cut its forecasts for growth in the British economy this year, from 1.7 per cent to 1.1 per cent.
    Figures this week showed that UK unemployment had climbed above
    2.5 million, and the Treasury is expected to cut its growth forecasts later this year.
    Martin Weale, a member of the Bank of England’s Monetary Policy Committee, warned that Britain was at growing risk of a double-dip recession. “Looking at what’s happened in the last two months or so, anyone would have to say that it [the risk of recession] is greater than it seemed in July,” he said.
    Mr Osborne will insist today that the Government will not water down its programme of spending cuts.
    “Here at home we are not immune to what is going on at our doorstep. America and the eurozone are our two biggest export markets. But I am confident that we can weather this storm,” he will say.
    “Our plan was designed for both good times and tough times. If we abandoned it now there would be a collapse in that confidence and a surge in interest rates.”
    The Treasury is working on a package of reforms to spur growth, and Nick Clegg, the Deputy Prime Minister, has said that a “gear change” in such work is required.
    But privately, ministers concede that the Government’s scope for action is limited and are looking to the Bank to provide fresh stimulus for the economy with a new round of quantitative easing.


    Financial crisis: spectre of credit crunch returns as banks pump money into markets - Telegraph

  6. #6
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    Quote Originally Posted by Bangyai
    Geoffrey Yu, director of foreign-exchange strategy at UBS
    "This doesn't change anything. It helps the banks for the next couple of months but that's it."
    best comment yet,

    Quote Originally Posted by Bangyai
    Suki Mann, Societe Generale rate strategist
    "Given the improved sentiment elsewhere, senior bank risk is at best only a touch better. To be able to issue bonds you need to see much lower levels on CDS and with that improved liquidity and better senior cash bond prices. That's not really being seen at the moment and clearly that will only come if you start getting some clarity on the sovereign situation.
    that one also,

  7. #7
    loob lor geezer
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    Naturally enough, gold fell of a cliff again when this news broke but its rallied a bit and is holding up pretty well , all things considered.

  8. #8
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    Quote Originally Posted by Bangyai View Post
    Naturally enough, gold fell of a cliff again when this news broke but its rallied a bit and is holding up pretty well , all things considered.
    Now that we know the current floor for gold it is a good opportunity to buy since we have seen it has the capability of reaching $ 1,900 at least.

    The sad thing is that this treats the symptom, not the problem. So by pumping money into the system stocks have risen, but the underlying commercial factors that keep forcing stocks down haven't changed.
    Last edited by Thormaturge; 16-09-2011 at 09:22 PM.
    I see fish. They are everywhere. They don't know they are fish.

  9. #9
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    And then there's the jerk who ripped a Swiss bank for a few billion...

    How do these guys get in the door?

  10. #10
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    Quote Originally Posted by BaitongBoy View Post
    And then there's the jerk who ripped a Swiss bank for a few billion...

    How do these guys get in the door?
    it appears he has been with them for a number of years and that he has "made" billions in profits over the last few years.

  11. #11
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    OK then...that should balance nicely...


  12. #12
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    As long as the financial institutions can continue to pay their staff their :volume related" bonuses..that's absolutely fine.

    The fact that these greedy C*NTS all piss in the same pot as the politicians do while singing from the same Hymn sheet...lets face it they've got to keep this game going for as long as humanly possible.

    Oh and Bollox to the rest of the world, you don't matter one toss!

  13. #13
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    Nobody seems to have learned anything.

    The current system isn't working.

    The entire banking system, and especially the method of remuneration, needs to be overhauled. Banks have become "not for profit" businesses due to the staggering rewards paid to incompetent staff....and still we hand them money.

    I'm in the wrong job.

  14. #14
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    Quote Originally Posted by Bangyai View Post
    Naturally enough, gold fell of a cliff again when this news broke but its rallied a bit and is holding up pretty well , all things considered.
    Central bank intervention in the gold market caused gold to fall.

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    Quote Originally Posted by socal View Post
    Quote Originally Posted by Bangyai View Post
    Naturally enough, gold fell of a cliff again when this news broke but its rallied a bit and is holding up pretty well , all things considered.
    Central bank intervention in the gold market caused gold to fall.
    .....pucker up...Socal...

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    It will go up again, like yesterday, and to the moon if we're lucky Monday, or in the next six months.

    it's very catching this economic forecasting.

  17. #17
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    ^

    I figured gold had $ 3,000 in it and I stand by that figure. I'll sell at around $ 2,850 and not before.

  18. #18
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    Quote Originally Posted by Thormaturge
    The entire banking system, and especially the method of remuneration, needs to be overhauled. Banks have become "not for profit" businesses due to the staggering rewards paid to incompetent staff....and still we hand them money.
    The US banking system needs regulating properly (the rest of the world has to follow), the greedy politicians and bankers who colluded need jailing and the financial system needs to be run on the basis it's for everyone not just the few greedy cowboys who are convinced they're invincible!

  19. #19
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    Quote Originally Posted by The Bold Rodney
    ....financial system needs to be run on the basis it's for everyone not just the few greedy cowboys who are convinced they're invincible!

    Agreed....but exactly where are we going to find those guys...
    Stalin couldn't find them.....

    bit like trying to find a virgin on her wedding day....she is surely there...
    but she takes some uncovering....and rarely lasts the night....
    Last edited by baby maker; 18-09-2011 at 01:19 AM.

  20. #20
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    Quote Originally Posted by The Bold Rodney View Post
    Quote Originally Posted by Thormaturge
    The entire banking system, and especially the method of remuneration, needs to be overhauled. Banks have become "not for profit" businesses due to the staggering rewards paid to incompetent staff....and still we hand them money.
    The US banking system needs regulating properly (the rest of the world has to follow), the greedy politicians and bankers who colluded need jailing and the financial system needs to be run on the basis it's for everyone not just the few greedy cowboys who are convinced they're invincible!
    Market forces will regulate it properly. When the majority of the world starts saving in gold, then the bankers and politicians will have no access to peoples savings and capital. If fiat is only used as a medium of exchange then there will be no incentive to print because there will be no means of accessing purchasing power.

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    Quote Originally Posted by The Bold Rodney View Post
    As long as the financial institutions can continue to pay their staff their :volume related" bonuses..that's absolutely fine.

    The fact that these greedy C*NTS all piss in the same pot as the politicians do while singing from the same Hymn sheet...lets face it they've got to keep this game going for as long as humanly possible.

    Oh and Bollox to the rest of the world, you don't matter one toss!
    This southern europe thing, Greece, Italy PIIGS, having a good feast on borrowed credit available to them when they got into the program. The program is flawed. There is no way UK or US reg. officials would have allowed Greece or Italy into eurozone

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    Quote Originally Posted by Butterfly View Post
    Quote Originally Posted by Bangyai
    Geoffrey Yu, director of foreign-exchange strategy at UBS
    "This doesn't change anything. It helps the banks for the next couple of months but that's it."
    best comment yet,

    Quote Originally Posted by Bangyai
    Suki Mann, Societe Generale rate strategist
    "Given the improved sentiment elsewhere, senior bank risk is at best only a touch better. To be able to issue bonds you need to see much lower levels on CDS and with that improved liquidity and better senior cash bond prices. That's not really being seen at the moment and clearly that will only come if you start getting some clarity on the sovereign situation.
    that one also,
    I am sure you support eurobonds, so your belgian shit would be paid off by rich northern europe - not this time but forever. that is what eurobond means, every fucking greece or belgium can sell them, but at the end of the day rich nations must pay for it, germany, finland, austria, the netherlands, - if UK was in eurozone it would be one these rich nations and would pay in par with germany

  23. #23
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    Quote Originally Posted by The Bold Rodney View Post
    Quote Originally Posted by Thormaturge
    The entire banking system, and especially the method of remuneration, needs to be overhauled. Banks have become "not for profit" businesses due to the staggering rewards paid to incompetent staff....and still we hand them money.
    The US banking system needs regulating properly (the rest of the world has to follow), the greedy politicians and bankers who colluded need jailing and the financial system needs to be run on the basis it's for everyone not just the few greedy cowboys who are convinced they're invincible!
    But still for this meeting US high horse Geithner came over with a limo at last moment, as EU financial ministers arrived earlier on shared bus earlier. Does not look good. Then Geithner gave some advice to europeans. europeans said fuck you. my take is Geithner needs to learn some diplomacy and continental europe must bloody cut off southern part of it or die for future

  24. #24
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    Quote Originally Posted by nostromo
    so your belgian shit would be paid off by rich northern europe
    You may want to review your European geography.

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    Quote Originally Posted by nostromo
    Then Geithner gave some advice
    He came, he "advised", he opened the US wallet.

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