[roccman]

When is someone gonna tell these chimps it is not a liquidity problem, but a solvency one?

Got gold?

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.

[Zardoz]

Play money. Imaginary cash. Virtual wealth. Counterfeit currency. Smoke and mirrors.

What a scam...

[bonehead]

Love your avatar Zardoz!

[pedalling_faster]

$this->bbcode_second_pass_quote('roccman', '[')url=http://www.bloomberg.com/apps/news?pid=20601087&sid=ag2wFxEsMXwY&refer=home]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.[/url]

[roccman]

$this->bbcode_second_pass_quote('pedalling_faster', '')$this->bbcode_second_pass_quote('roccman', '[')url=http://www.bloomberg.com/apps/news?pid=20601087&sid=ag2wFxEsMXwY&refer=home]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.[/url]

[IslandCrow]

$this->bbcode_second_pass_quote('roccman', 'J')anuary times up.

[gnm]

Anyone have thoughts on where US T-bills might go in this climate? If they crash would that help variable mortgage holders whose interest rates are set (with a margin) against them allowing less pain in the sub prime markets? Or are most of them set against LIBOR and other such?

-G

[mattduke]

When the market realizes the inflation policy will continue and will not be stopped, demand for bonds will fall and interest rates will rise sharply. Obviously we are not there yet. I sold all my US bonds long ago.

[gnm]

mattduke, are you saying that the interest returns on the bonds (and as such the mortgages) will rise sharply? An attempt to make bonds more palatable? And doom the variable rate holders. Thanks, just trying to wrap my brain around all the ramifications....

-G

[highlander]

This move is suppose to lower interest when borrowing Euros. I wonder if this move will start the dollar back down.

[frankthetank]

Guess i'll be eating rice and noodles in the new year No meat for me!

[kadoomsoon]

Nothing will happen in 2007, have a happy New Year party, this will be the happiest you will ever have again.

[mattduke]

$this->bbcode_second_pass_quote('gnm', 'm')attduke, are you saying that the interest returns on the bonds (and as such the mortgages) will rise sharply? An attempt to make bonds more palatable? And doom the variable rate holders. Thanks, just trying to wrap my brain around all the ramifications....

[mmasters]

Damn, that's a serious amount of money to be injected at the top.

[Bas]

taking some heat off the back of the dollar. Not sure what to think of it being in a Euro economy, on the one hand the strong Euro was starting to bite with regards to ex-Eurozone exports but on the other hand this will increase inflationary pressures here. You have to take into account that since the introduction of the Euro, the ECB has been more bullish than any other CB to control inflation and build up a reputation in that regard.

[Eli]

I think you have to be very careful here. Dumping this money into the banks does not necessarily create inflation.

The money has to get out and be loaned to the public to create inflation. Right now they have a black hole of bad debts and insolvent banks that are freezing the banking system. This money was put into that rat hole.

It will become inflationary only if it comes out the other side, which in my opinion it won't.

There are insolvent banks still operating, things can't improve until everyone knows who they are.

[Bas]

apart from Northern Rock I haven't heard of any other banks/loan institutions being in trouble in Yurop. I'm sure this was done in greater benefit for the American financial situation than Europe's as America's financial stability is worth a lot to Europe too. But indeed, inflation in Europe will probably not be a problem over this considering, like a pointed out before, the very tight monetary policy history of the ECB. (and people are buying so much Euro's these days that deflation might become a bigger concern)

[Eli]

Bas there are others out there, but no one is telling.

That is what the 500 bil is for to cover those guys without having another Northern Rock run.

Imagine a major German, and French bank going tits up at the same time ala Northern Rock. The ECB would have no hope of containing the panic.

[Bas]

$this->bbcode_second_pass_quote('Eli', 'B')as there are others out there, but no one is telling.

That is what the 500 bil is for to cover those guys without having another Northern Rock run.

Imagine a major German, and French bank going tits up at the same time ala Northern Rock. The ECB would have no hope of containing the panic.

[kadoomsoon]

A CT? Bwa ha ha ha.