ECB injects 1/2 trillion into markets

ECB injects 1/2 trillion into markets

www.bloomberg.com

Dec. 18 (Bloomberg) -- Money market rates tumbled after the European Central Bank injected an unprecedented $500 billion into the banking system as part of a global effort to ease gridlock in the credit market.

(visit the link for the full news article)

[-snip-]!!! This cannot be good. It seems the storm clouds are getting closer and the elite might be scared [-snip-]...

www.bloomberg.com
(visit the link for the full news article)

Mod Edit: Profanity/Circumvention Of Censors – Please Review This Link.

[edit on 12/18/2007 by Gools]

Yes the problem has to be big enough to need all this money, I wonder if this will help anything at all.

Or just a quit fix until the holiday spending is over just to give a false sense of stability to the American and Eurpoean regular consumers.

"These are strong-arm tactics intended to show the market they're seriously committed to breaking the deadlock,'' ..." The ECB is helping to bankroll banks out of a problem that they themselves created."

The decline may signal that policy makers, in their first coordinated action ...are making headway in reviving lending between banks.

The central bank measures have had mixed results.

The ECB action "doesn't address the fundamental issues of banks hoarding cash and while the central bank has succeeded in stabilizing the shorter-term rates, it makes little impact on the longer-term rates,'' ...

That last quoted sentence is the most important in the article IMO. As long as the long-term rates remain where they are this is just a band-aid for short term window dressing.

A half trillion dollars (is that in one day?)! The money injections just keep getting bigger and bigger with smaller and smaller margins of return whilke the end game keeps drawing closer.
.

reply to post by Gools


I found this article that talks of the expected predictions for 2008 is not looking good, the GDP that our government rely so much to tell how healthy is the economy is going to blast some people away.

FINANCIAL OUTLOOK 2008
City experts give us their top predictions

The US economy is in the danger zone. GDP growth in the fourth quarter of 2007 (0.0pc) and first half of 2008 (0.8pc in the first quarter and 1.8pc in the second quarter) is expected to be very weak.

www.telegraph.co.uk.../money/exclusions/hubpages/outlook2008/8Eglobalinsi.xml

The markets are not going to like this at all.

Profanity? Isn't that relative Sorry couldn't help it with my tourettes syndrome and all...

[edit on 18-12-2007 by pityocamptes]

Morgan Stanley's Asia Chairman, Stephen Roach, made this observation in a New York Times op-ed on Sunday: This recession will be deeper than the shallow contraction earlier in this decade. The dot-com-led downturn was set off by a collapse in business capital spending, which at its peak in 2000 accounted for only 13 percent of the country's gross domestic product. The current recession is all about the coming capitulation of the American consumer - whose spending now accounts for a record 72 percent of G.D.P.

Unfortunately, the Fed bailout has achieved nothing. Libor rates---which are presently at seven-year highs---have not come down at all. This is causing growing concern among the leaders of the Central Banks around the world, but there's really nothing they can do about it. The banks are hoarding cash to meet their capital requirements. They are trying to compensate for the loss of value to their (mortgage-backed) assets by increasing their reserves. At the same time, the system is clogged with trillions of dollars of bad paper which has brought lending to a halt. The huge injections of liquidity from the Fed have done nothing to improve lending or lower interbank rates. It's been a flop. The market is driving interest rates now. If the situation persists, the stock market will crash.

www.speroforum.com...

Eventually the Piper MUST be paid. Greenspan pushed the bubble up WAY too big. Everyone I know was blown away by the increase in house prices. It was a total debacle. Now we will reap the whirlwind.

Inflation is fun. If you have any savings I would invest that monopoly money in something with value and real quick too.

did they print this money out of nothing or is there anything to back it? dumping $500 billion worth of paper that's actually worth nothing won't really ease any economical pressure, it'll just create bigger problems.

go central banking!

Well a spokeman for one of the bank said clearly in CNBC that liquidity is nothing but psychological, so I guess that is their way to cope with the lack of real assets to back the influx of monopoly money.

The US needs to take a reality check at this point...

It simply is not worth risking the future stability of the US economy over this issue...

Interest rates need to rise sharply, and now...

The major banks and brokers need to take their losses and lick their wounds...

Unfortunately, potentially 100's of thousands (or even more) people are going to have to be foreclosed at silly prices...

This is the price that must be paid for greed...

Greed on the part of people who thought they could afford to live beyond their means forever...Greed on the part of the corporations who thought massive profits on these loans would last forever...Greed on the part of government who thought the massive increase in tax dollars as a result of the "good times" would last forever...

Greed at every level of society...

Unless something is done to make the people involved lose wealth as a result of their actions...Subprime homeowners, their lenders and ultimately the big banks and investment houses who bought these loans...

The entire US economy is at risk of a recession which could come very close to rivaling the Great Depression...

For god's sake, I hope the Fed does the right thing and raise rates as soon as it can...

Stagflation together with rising unemployment is not a pretty thing to deal with...

Only half a trillion? HAHAHA, the housing market is worth 150+ trillions... 2008-2009 will be awful, it will reboot the entire world economy, destroy the US dollar so foreign investors can buy every infrastructure like in a third world country.

Make sure you invested your money in something you can eat, use or trade in the real world.

reply to post by Rilence


Fed gives $20 billion to US Banks

The Fed today gave the top contending banks $20 billion with a 28 day return at 4.7% .. other markets around the world did the same, but the European Union with 500billion is obviously the biggest.

I don't think it is only America who needs to be worrying about this issue, this is a world wide crisis.

Fed to lend $20 billion to banks

NEW YORK (CNNMoney.com) -- The Federal Reserve announced Wednesday that it was lending $20 billion to banks in the first of four special auctions designed to help alleviate the credit crunch on Wall Street

money.cnn.com...

Now let see who will be lining up to get their hands on Americas pot if they already have it.

Abu Dhabi of $7.5 billion in Citigroup

Since August, 785 companies worth $129 billion have been acquired by foreign purchasers- the fastest rate of purchasing since 2001.

China 10% purchase of the private equity firm Blackstone group

United Arab Emirates purchase of the department store Barney’s for $942 million

United Arab Emirates purchase $622 in computer chip maker AMD

www.economyincrisis.org...

I have the feeling that China is no longer the worst out there.

reply to post by Rockpuck


He, he, you got me first.

Originally posted by Vitchilo
Only half a trillion? HAHAHA, the housing market is worth 150+ trillions... 2008-2009 will be awful, it will reboot the entire world economy, destroy the US dollar so foreign investors can buy every infrastructure like in a third world country.

...and then, bienvenidos Amero!

Just in time to cut the ribbon on the NAFTA superhighway, and haul away the guts of the country.

(not a one-line post)

I can hear it now.. Bush saying to the Fderal reserve mints "fire up the printing presses and let them run".

reply to post by pityocamptes




well, the Europeans let the cat out of the bag..

something that chairman Bernake and the U.S. Federal Reserve
were reluctant to reveal to the masses.
the banking systyem is frozen with fear,
that's why they won't lend to each other or borrow from the discount window-
as by showing up there would be 'sending up the flag'
that their bank was in deep trouble, and a run on the bank might result.



Why would the ECB make 500 billion in funds available?
did all those EU banks buy an outlandish ammount of that toxic
mortgage & debt paper from places like Goldman who created
a lot of those debt instruments??
then sold those overpriced investments to all those EU banks
to a tune of 1/2 trillion Euros or an equivelent in USD??



i say the whole system is Insolvent, & we're in for a rude awakening

on another thread there's a link to: www.larouchepac.com/news/2007/12/17/realization-grows-banking-system-insolvent.html

Udio, they are with fear because already some banks in Europe has been summoned to court in bases of hiding the truth to their costumers.

I remember that it was some calls by congress on some of the major mortgages in the US but I don't know what happen.

You know that in America we are rule by corporate so they can get away with anything in congress.

Get to know the ones that brought our mortgage to the mess is now.

Dec. 20 (Bloomberg) -- Bear Stearns Cos., the securities firm that helped trigger the collapse of the subprime market, reported its first-ever loss after writedowns for mortgage holdings and declines in trading and investment banking.

They are falling like dominoes.

The fourth-quarter loss of $854 million, or $6.90 a share, was almost four times wider than the average estimate of analysts surveyed by Bloomberg. Bear Stearns fell as much as 2.9 percent in New York Stock Exchange composite trading

Do you think they will have splendid bonuses this Christmas after this?

This are the other ones involved.

The company's writedown, while smaller than at Citigroup Inc., Morgan Stanley and Merrill Lynch & Co., adds to the more than $80 billion of charges reported by the biggest banks and securities firms since surging defaults on U.S. subprime mortgages prompted investors to shun high-risk, high-yield debt.

www.bloomberg.com...

[edit on 20-12-2007 by marg6043]