– Here Comes The Global, US-Funded Liquidity Bail Out (ZeroHedge, Nov. 30, 2011):
As expected, the Fed has just bailed out the world once again:
- FED, ECB, BOJ, BOE, SNB, BANK OF CANADA LOWER SWAP RATES – BBG
- ECB, FED other major central bank to lower the pricing of existing USD liquidity swaps by 50BPS
And as we have been writing every single day, the worldwide dollar crunch is now confirmed:
- At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar
And finally, a promise to bailout Bank of America when it hits $4.00 again:
- U.S. financial institutions currently do not face difficulty obtaining liquidity in short-term funding markets. However, were conditions to deteriorate, the Federal Reserve has a range of tools available to provide an effective liquidity backstop for such institutions and is prepared to use these tools as needed to support financial stability and to promote the extension of credit to U.S. households and businesses.
This means that the global situation is far, far more dire than the talking heads have said. Luckily, when this step fails, which it will, Mars can always come and bail us out.
For release at 8:00 a.m. EDT
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system. The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.
These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points. This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.
As a contingency measure, these central banks have also agreed to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant. At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar, but the central banks judge it prudent to make the necessary arrangements so that liquidity support operations could be put into place quickly should the need arise. These swap lines are authorized through February 1, 2013.
Federal Reserve Actions
The Federal Open Market Committee has authorized an extension of the existing temporary U.S. dollar liquidity swap arrangements with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank through February 1, 2013. The rate on these swap arrangements has been reduced from the U.S. dollar OIS rate plus 100 basis points to the OIS rate plus 50 basis points. In addition, as a contingency measure, the Federal Open Market Committee has agreed to establish similar temporary swap arrangements with these five central banks to provide liquidity in any of their currencies if necessary. Further details on the revised arrangements will be available shortly.U.S. financial institutions currently do not face difficulty obtaining liquidity in short-term funding markets. However, were conditions to deteriorate, the Federal Reserve has a range of tools available to provide an effective liquidity backstop for such institutions and is prepared to use these tools as needed to support financial stability and to promote the extension of credit to U.S. households and businesses.
Information on Related Actions Being Taken by Other Central Banks
Information on the actions to be taken by other central banks is available on the following websites:Frequently Asked Questions: Foreign Currency Liquidity Swaps
Sure, put all the bad stuff on the backs of the American citizens so the banks can continue to gamble in the shadow economy of CDS and other obscure hedge bets. When they lose, they go to the FED, when they win, they pocket the profits. Now, we are underwriting the entire world of corrupt banking. Who the hell is going to pay for this? As it stands, the only growth over the last 12 years has been debt, and the numbers far exceed the amount of real money in the world. Financial insanity.
For those of us protesting the corrupt market practices, the senate just passed a bill adding the military as police. They will have the power to grab and lock up anyone for years without charges, rule of law (habeas corpus was destroyed under W) or any recourse. This is how they plan to repress our rightful protests around the world. Also, censoring the Internet is passing quickly as well.
I see no future, it is over for us. Setting aside the financial problems, we have the Japan disaster continuing to spew radiation poisoning into our air, water, soil and crops. Japan is now burning the waste, giving us even more radiation. It is baffling why they are doing this…..it doesn’t make sense on any level.
Thanks to this website alone, I am able to give my friends tips on dealing with acid rain, remind them the radiation continues unabated, and there is no technology to stop it.
Yet, they expand the wars using the idea of nuclear weapons as a threat.
Instead of working to stop the radiation, they come out with new iPhones. It is total madness on all sides. One person on Huffington Post told me it is the Tower of Babble……this is insanity. It makes no sense at all.
Nothing makes sense to me anymore.
Thanks for all you do.
Sincerely,
Marilyn Gjerdrum