‘Once again the markets began to tank. And once again several Fed stooges jumped forward to claim more easing could be coming. And so the markets, having failed to understand that the Fed cannot ease despite the Fed failing to unveil QE 3 for EIGHT straight FOMC releases, exploded higher.
We got the same nonsense across the pond where the ECB hinted at more bond purchases. In this case the insanity is of an even greater scope as over 25% of the ECB’s balance sheet is already PIIGS debt AKA toxic garbage.
However, it’s quite telling that both Fed and ECB officials decided it was time for a verbal intervention. The markets normally this behavior was primarily a Fed policy. To see not one but TWO Central Banks engaging in it on the same day smells of real desperation/ concern.
What on earth could the Fed and ECB be so afraid of?
The Bank of International Settlements provides a hint, namely that as of June 2011, EU banks had a liquidity shortage to the tune of some €2.78 trillion.
Quantitative impact study results published by the Basel Committee
The Committee also assessed the estimated impact of the liquidity standards. Assuming banks were to make no changes to their liquidity risk profile or funding structure, as of June 2011, the weighted average Liquidity Coverage Ratio (LCR) for Group 1 banks would have been 90% while the weighted average LCR for Group 2 banks was 83%. The aggregate LCR shortfall is €1.76 trillion which represents approximately 3% of the €58.5 trillion total assets of the aggregate sample. The weighted average Net Stable Funding Ratio (NSFR) is 94% for both Group 1 and Group 2 banks. The aggregate shortfall of required stable funding is €2.78 trillion.
Mind you, this was back in June 2011… before the market imploded and the ECB plowed some $1+ trillion (less than €800 billion) into the EU banking system. Which begs the question… if banks were experiencing a nearly €3 trillion liquidity shortage in June 2011… how has a measly €800 billion solved this problem?
hasn’t. All it’s done was provide some short-term liquidity to try and fool the
market into believing
Oh, and another thing, the Bank of International Settlements underestimates the real exposure and dangers facing the EU by an ENORMOUS margin.
point, according to the Bank of International Settlements, TOTAL German bank
to even back of the envelope analysis, Deutsche Bank has €2.8 billion worth of
just say that the Bank of International Settlements’ estimates for liquidity
April 12, 2012 By gpc1981
For months now I’ve averred that
1) Mean it taking the blame for the collapse of the Euro and EU.
2) Create a systemic Crisis in the EU banking system.
We must remember
As a result of this,
Thus Germany’s “Plan A” in dealing with the EU Crisis has consisted of offering bailout funds to Greece and others under conditions so onerous/ offensive that it was highly unlikely Greece or other nations would be willing to submit to them.
However, the PIIGS in general are so
desperate for cash that for the most part they’ve accepted
In the midst of this already tenuous
However, what choice did
“Plan B” consisted of two parts:
1) Writing legislation permitting it to leave the Euro but not the EU (this has already been passed by the way)
2) Reactivating its Sonderfonds Finanzmarktstabilisierung – Special Financial Market Stabilization Funds, or SoFFin for short.
Once things improved, SoFFin was essentially put on hold in December 2010. But in
the last three months,
The SoFFin will give up to €400 billion ($524.24 billion) in guarantees for banks and provide up to €80 billion for recapitalization. The fund, which for the first time will accept euro-zone government bonds, will be operational until Dec. 31 2012.
This is the mother of all bombshells
With that in mind, I’m already positioning subscribers of Private Wealth Advisory for the upcoming collapse. Already we’ve seen gains of 6%, 9%, 10%, even 12% in less than two weeks by placing well-targeted shorts on a number of European financials.
And we’re just getting started.
So if you’re looking for the means of profiting from what’s coming, I highly suggest you consider a subscription to Private Wealth Advisory. We’ve locked in 46 straight winning trades since late July (thanks to the timing of our trades), and haven’t closed a single losing trade since that time.
the level of my analysis as well as my track record, my work has been featured
in Fox Business, CNN Money, Crain’s
Summers, Chief Market Strategist,