Can Someone Please Explain This News Release from the Bank of England?

[Yavin4]

In coordination with the European Central Bank, the Swiss National Bank, the Bank of Japan, and the Federal Reserve, the Bank of England is today announcing that it will conduct three US dollar tenders, each at a term of approximately three months covering the end of the year. These tenders will be in addition to the ongoing weekly 7-day tenders of dollar funding announced on 10 May 2010.

As before, these operations will be at fixed interest rates with counterparties able to borrow any amount against eligible collateral. The first tender will be held on Wednesday 12 October.

http://www.bankofengland.co.uk/publications/news/2011/084.htm

What does this mean?

[MineralMan]

1. Here's a little more information, from the WSJ:

http://online.wsj.com/article/BT-CO-20110915-709552.html

"Before the open of trading, the European Central Bank said it had decided in coordination with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank to conduct three dollar-liquidity operations with a three-month maturity covering the end of the year. The moves will be carried out as fixed-rate repurchase obligations against eligible collateral, the ECB's statement said.

Investors cheered the move, putting the market on track for its fourth-straight winning session, even though it was a tacit admission that banks are in need of coordinated aid as they struggle to meet their funding obligations."

As for what it means, I'm not entirely sure. I'm not a financial wizard in any way. However, it caused the DJIA to jump higher, so it must be good news in some way.

[bemildred]

3. Free money for banks is what it means. nt

[golfguru]

6. So banks will borrow more money and then become solvent?

Then Greece, Portugal, Spain, Ireland & Italy will soon be the leading economies! They surely have borrowed a lot!! Or....

Why they don't go the proven route to success of just printing money? Then there is no need to borrow! Zimbabwe has already shown us how that works.

[vets74]

16. ZERO INTEREST RATE POLICY. (Yes, Virginia. They are printing money.)

The big news here is more-more-more redistribution from the Middle Class to the top 1% by wealth.

Since 1980 the bill for these scams is $17-trillion inside the U.S. That's for a country valued at $55-trillion total.

There's also a bookkeeping scam on housing -- the 2003 total mortgage indebtedness was sitting at $4.9-trillion. Peak indebtedness hit $10.6-trillion going in to 2008. for a 10% increase to the housing stock.

Mortgage indebtedness was more than doubled. (Low-income federally encouraged mortgages are the highest quality segment of the mortgage pool. Those houses didn't inflate so much. They're barely under water.

I'm not including that housing-inflation "friendly appraisal" scam in the $17-trillion of outright theft :::

-- Reagan tax giveaways
-- Big Bubble I 1994-2000
-- Bush tax giveaways 2002, 2003
-- Big Bubble II 2003-2008

Big Bubbles are ZIRP gone wild. It's continued now so's housing prices just slide down the pole.

Too bad the Obama inner circle doesn't have a tough-minded econ guy........

[cyberpj]

13. MORE Free money for banks is what it means. nt

[dixiegrrrrl]

9. Denninger explains it well:

His perspective on finances is almost always on the money and ahead of the curve.


"Oh Look! More Accounting Fraud!

Wait a second... this isn't actually new!

Remember, The Fed previously (like more than a year ago) announced these swap lines and more-recently announced their extension. So not only is this not new, it's not news!

But the market is up big on the non-news news. Why? Because it appears banks are still going to be able to lie about asset values - for a little while longer.

Actually, it makes banks much more dangerous. Having neutered regulators you see lots of grins and no fear that actual accounting at current value is likely to show up any time soon. This in turn leaves banks levered up the ying-yang and in many cases deeply underwater.

This in not just a US phenomena, although you can sure see it here, as most of the big banks have stock prices of half or less of the claimed "book value." This is of course illogical; if anyone believed those values they'd immediately buy the company and make an instant 100% (or more) profit, even if they had to dismantle and sell off the bank to do it.

Clearly, the market's expectation is that the so-called "values" are lies. And from this belief comes systemic risk, because now any event that threatens to force recognition of true value is an immediate bankruptcy trigger."

http://market-ticker.org/akcs-www?post=194210

[whosinpower]

2. I was reading about it at zerohedge.

The central banks are printing money. Lots of it. And they are coordinating their actions. It is an effort to ease a liquidity crisis in USD in Europe - I think - to save the banks.

http://www.zerohedge.com/news/global-liquidity-bailout-arrives-ecb-announces-emergency-liquidity-providing-operations-conjunc#comments

[Turbineguy]

4. Ordinary people

have been removing cash from their bank accounts and putting cash into deposit boxes or their mattresses. American Money Market Funds have been removing money from the European banks (down by 97%). It's better to take your money out before the doors close. There has been a huge crisis of confidence in the solvency of the banks. Last week there was a news item about the Deutsche Bank having reserves of 1.7%.

Bank stocks have taken a serious (and well deserved) beating over the past few months.

When (and if) confidence returns, cash will flow back into the banks. Let's hope they deal with it wisely instead of thinking they'll make piles of profits lending it to some bankrupt government.

They are supposed to be increasing reserves under the new Basel Accord. And that's a good thing. But it will eat into fantasy profits and bonuses.

[Yavin4]

5. Jamie Dimon (CEO JPM Chase) Calls Basel "Anti-American"

Dimon said that moves by the 27 member-states of the Basel Committee on Banking Supervision to impose an additional charge on the largest banks go too far, according to the FT. He also criticized global liquidity rules as unfair, saying that regulations view European covered bonds as highly liquid while they discount U.S.-backed mortgage securities.

http://www.bloomberg.com/news/2011-09-12/u-s-should-consider-withdrawing-from-basel-dimon-tells-ft.html

[dixiegrrrrl]

8. # 4 and #5 statements above, are exactly what the problem is.

Banks are broke, won't admit it, and are fighting rules that will stop them from borrowing even more money with less collateral.
You KNOW that when Diamond is arguing against Basel he is admitting the Basel rules are a good thing.
And Basel rules are only a teeny fraction of what banks should be forced to hold in reserve.

the last gasp of the Ponzi scheme, this is what we are seeing.

the smart people are going to the bank of Sealy, the folks with tons of money are trying to stay in cash, and the really really smart ones are buying metals.

[Po_d Mainiac]

12. a Diamond is a gem.. jamie dimon ain't even close

:rofl:

[vets74]

17. Heard of Dominique Strauss-Kahn ??? The IMF Socialist guy ? Hotel problem guy.....

The Basel standards, hard ball, screw the worst-of-the-banks guy ?

The guy who want to move control of the international organizations away from The Fed ?

Broad appraisal of EU concerns and intro to DSK

And then this :::

Where DSK calls for European Resolution Authority and specific non-Bernanke tools to deal with failing banks.

DSK is as far as you're going to get in international banking from the ZIRP/screw-the-Middle-Class madness of The Fed.

DSK's "tools" include detailed management of credit default swaps and application of insurance regulation to all such risk-casino transactions. Just imagine the head-exploding reactions to DSK bringing these tools online in EU, resulting in wake-up calls in Washington.

BTW: rape in New York ?

Really ?

[Po_d Mainiac]

7. Can you say TARP with a French accent? n/t

[westerebus]

10. C'est bon.

L'TARP tres manifique!

[Po_d Mainiac]

11. Qui. je n'imagine pas pourquoi est bon??

BTFD!

[westerebus]

14. Mais, oui!

A tout de lours. Sa Bon! Le Dip! Sa tres bon!

[Po_d Mainiac]

15. lours??

[vets74]

18. Or "de l'ours" ?

[westerebus]

19. lors.

A tous d'lors. idiom: All the time.

Hey it was a hundred years ago and the nun was from Baastin Massachewzits. Mean mean woman.

The side of my head still has REPUBLIC RULER CO. embedded in it.

[Art_from_Ark]

21. Maybe you're thinking "toutes des heures"?

(toot day-ZER)-- all hours

Or "toutes les heures"?
(toot lay-ZER)-- hourly

Or "a toute a l'heure"
(ah toot a LER)-- See you later

Or maybe "toujours"
(too-ZHOOR)-- always, all the time

:shrug:

[westerebus]

22. Too zhoor.

That's the one.

Thanks, Art.

:hi:

[Art_from_Ark]

23. It must have been hard trying to learn French

while getting whacked over the head with a 2X4 ruler.

I think Cheech and Chong might have done a skit about your teacher in Baaastin. Her name wouldn't have been Mary Elephant by any chance, would it? :evilgrin:

[westerebus]

24. Well.

She was a very large woman, easily in the ranks of the East German Olympic Woman's power lifting team variety.

The school was in New Jersey.

Conflicting regional dialects in forging language study, there's a thesis paper in there some where. lol.

Dave is that you?

No. It's me.

Dave?

He's not here.

No, man. It's me.

[westerebus]

25. You spelling has gone down the tubes.

Thank you self, you could be a little helpful, say like hitting spell check for me, oh right, coffee break. Me bad.

[roamer65]

20. It means Greece will be defaulting within the next few weeks.

This is increasing liquidity to European banks for the inevitable event.