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MARKETS SURGE AS FED/ECB/BOJ/BOE/SNB/BOC ANNOUNCE COORDINATED INTERVENTION
Business Insider ^ | 11/30/2011 | Joe Weisenthal

Posted on 11/30/2011 7:12:04 AM PST by SeekAndFind

All the world's central banks have just announced a big coordinated intervention to lower swap rates.

What does that mean?

Basically this: European banks have been parched for liquidity, and need access to dollars. The ECB can't supply them dollars unless it borrows them from the Fed.

Essentially today's action makes it easier for the ECB and thus European banks to borrow dollars.

It's not a solution to the euro crisis by any means; it just means that the most acute liquidity problems will be mitigated for now.

The market is loving the news.

US markets had been down by 0.5% at one point this morning, but now futures are pointing to a 3% gain. Dow futures are up 2.83%.

Note that there are some other bullish things going on today. China lowered its Reserve Requirement Ratio also this morning, and we got a strong ADP jobs report.

So, lots of bullish action going on.

(Excerpt) Read more at businessinsider.com ...


TOPICS: Business/Economy; Society
KEYWORDS: centralbank; eu; eucrisis; fed; stockmarket

1 posted on 11/30/2011 7:12:13 AM PST by SeekAndFind
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To: SeekAndFind

European Central Bank Decision:

The Governing Council of the European Central Bank (ECB) decided in co-operation with other central banks the establishment of a temporary network of reciprocal swap lines. This action will enable the Eurosystem to provide euro to those central banks when required, as well as enabling the Eurosystem to provide liquidity operations, should they be needed, in Japanese yen, sterling, Swiss francs and Canadian dollars (in addition to the existing operations in US dollars).

The ECB will regularly conduct US dollar liquidity-providing operations with a maturity of approximately one week and three months at the new pricing. The schedule for these operations, which will take the form of repurchase operations against eligible collateral and will be carried out as fixed-rate tender procedures with full allotment, will be published today on the ECB’s website.

In addition, the initial margin for three-month US dollar operations will be reduced from currently 20% to 12% and weekly updates of the EUR/USD exchange rate will be introduced in order to carry out margin calls. Those changes will be effective as of the operations to be conducted on 7 December 2011. Further details about the operations will be made available in the respective modified tender procedure via the ECB’s Website.

Information on the actions to be taken by other central banks is available on the following websites:

Bank of Canada (http://www.bankofcanada.ca)

Bank of England (http://www.bankofengland.co.uk)

Bank of Japan (http://www.boj.or.jp/en)

Federal Reserve (http://www.federalreserve.gov)

Swiss National Bank (http://www.snb.ch)


2 posted on 11/30/2011 7:13:41 AM PST by SeekAndFind (u)
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To: SeekAndFind
How much is this going to cost us?

Mike

3 posted on 11/30/2011 7:14:58 AM PST by MichaelP (The ultimate result of shielding men from the effects of folly is to fill the world with fools ~HS)
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To: SeekAndFind

The Dow is up 3.35%. This means the economy is booming, right? (sarcasm)


4 posted on 11/30/2011 7:16:35 AM PST by Rational Thought
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To: SeekAndFind

COORDINATED INTERVENTION....must be newspeak for MANIPULATION....


5 posted on 11/30/2011 7:21:13 AM PST by OB1kNOb (The prudent see danger and take refuge, but the simple keep going and pay the penalty. - Prov 22:3)
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To: Rational Thought

I agree with Tyler Durden at Zerohedge...

One of our most watched indications of the pressure on European funding markets is the EUR-USD cross-currency basis swap. This simple trade is a way for European entities to take the excessive EUR funding they can get from the ECB and ‘swap’ it into USD to meet their significantly problematic USD funding needs.

It has smashed higher (well lower in the charts) as the cost of the transaction moves with demand for the swap - indicating that demand for USD is huge and we are in as much of a liquidity crisis as we were in the middle of the 2008 critical period. What is fascinating to us is today’s reaction - a 22bps jump - while being large, merely moves us back to the same levels of stress we were at one week ago.

So even if this is seen as some huge form of liquidity surge, it seems not to have even solved the liquidity problems of banks, let alone solvency problems.

The FED just bought Europe a few weeks at most... don’t be suckered into getting into the Euro market.


6 posted on 11/30/2011 7:22:24 AM PST by SeekAndFind (u)
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To: SeekAndFind

So..............making it easier for lots more banks to borrow lots more is bullish?

How does borrowing lots more money fix the problem of too much debt?


7 posted on 11/30/2011 7:22:58 AM PST by CGalen
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To: OB1kNOb
COORDINATED INTERVENTION....must be newspeak for MANIPULATION....

Bet on it.

http://www.cnbc.com/id/42794512/The_Fed_Will_Make_Sure_Obama_Wins_in_2012_Strategist

8 posted on 11/30/2011 7:26:03 AM PST by ScottinVA (I miss America.)
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To: CGalen

It’s just bits in a computer somewhere.


9 posted on 11/30/2011 7:26:30 AM PST by DonaldC (A nation cannot stand in the absence of religious principle.)
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To: SeekAndFind
Gentlemen, start your presses:


10 posted on 11/30/2011 7:27:37 AM PST by RightGeek (FUBO and the donkey you rode in on)
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To: SeekAndFind

What we are seeing is hyperinflation. Watch the price of all commodities.


11 posted on 11/30/2011 7:28:14 AM PST by Neoliberalnot ((Read "The Grey Book" for an alternative to corruption in DC))
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To: OB1kNOb

COORDINATED INTERVENTION....must be newspeak for MANIPULATION....

Bada Bing!...


12 posted on 11/30/2011 7:29:52 AM PST by AngelesCrestHighway
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To: SeekAndFind

Get those printing presses running at high speed! We need more money in the system!


13 posted on 11/30/2011 7:30:43 AM PST by PogySailor (Obama is a SCOAMF)
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To: CGalen

A BIG train wreck is a’comin...


14 posted on 11/30/2011 7:31:16 AM PST by AngelesCrestHighway
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To: SeekAndFind

Gold surges too...because it’s all on the credit card, yet again.


15 posted on 11/30/2011 7:31:32 AM PST by montag813
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To: Neoliberalnot

Crude’s up $1.68 at the moment, and gold’s up $27.60....


16 posted on 11/30/2011 7:34:27 AM PST by mewzilla (Santelli 2012)
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To: SeekAndFind
It's just getting started, Gilligan...
17 posted on 11/30/2011 7:35:13 AM PST by AngelesCrestHighway
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To: mewzilla

Only key commodity not up at the moment is nat gas.


18 posted on 11/30/2011 7:36:20 AM PST by mewzilla (Santelli 2012)
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To: montag813

What is to stop the central banks from buying up chunks of debt and then writing it off? I don’t see this stuff ever being paid back, not entirely anyway, so that means somebody must write it off eventually.


19 posted on 11/30/2011 7:36:20 AM PST by DonaldC (A nation cannot stand in the absence of religious principle.)
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To: SeekAndFind
They're not betting that things are getting better, they're just betting that they can make a buck today before the total wipeout hits.

It's like finding a great sale on patio furniture while the fireball of the approaching meteor continues to grow larger in the sky.

20 posted on 11/30/2011 7:43:25 AM PST by dead (I've got my eye out for Mullah Omar.)
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To: DonaldC
...somebody must write it off eventually.

By design, through inflation, the taxpayer will foot the bill.

21 posted on 11/30/2011 7:54:33 AM PST by Roccus (POLITICIAN...............a four letter word spelled with ten letters.)
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To: dead

When everyone hits the exit at the same time...


22 posted on 11/30/2011 7:55:12 AM PST by AngelesCrestHighway
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To: SeekAndFind

Screw our kids and grandkids, let’s party!!!!


23 posted on 11/30/2011 7:55:27 AM PST by dfwgator (I stand with Herman Cain.)
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