Not to worry folks. The plunge protection team will make everything just fine,,,,,,,,,,,,,,,,,,,,,,,,,UNTIL they can't. Just buy the friggin dip and shut up LOL
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or believers in the status quo muddle-through scenario. First, 3-month LIBOR is waking from the dead having risen today after weeks of flat-lining in its irrelevant manner. Second, Deutsche Bank was the main driver of today's uptick in 3-month LIBOR (joining UBS as the only other bank in the LIBOR family post LTRO2 that has raised its willing offer rate for short-term liquidity). And third, most importantly, 3-month EUR-USD basis swaps (that expensive but anonymous market-based investment vehicle to find USD funding) have exploded with their biggest deterioration in five months pushing the premium that banks are willing to pay to receive USD over EUR to its highest in almost 4 months. So while Draghi suggests that we wait to see the effects of LTRO filter through to the rest of the real economy, once again he is clearly incorrect as banks are now desperately seeking liquidity (USD-based in this case) with short-term swaps only having been worse in the middle of the crisis last Fall and UBS and Deutsche Bank willing (or forced) to pay up for short-term money.
UBS and now Deutsche Bank are seeing higher offer rates in the LIBOR estimates...(reflective of both their willingness to pay up for liquidity and other bank's uncertainty with regard their credit worthiness)...
http://www.zerohedge.com/news/liebor-friendod-european-liquidity-corzined?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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