Don’t Miss a Post. Subscribe now.

The ECB Chimes In On Liquidity, I Translate ECB President Christine Lagarde

March 20, 2023

•

1:54 am

•

33 comments

•

Economics

ECB President Christine Lagarde from ECB website

Please consider these Statement by Christine Lagarde, President of the European Central Bank, on the announcement on 19 March 2023 by the Swiss authorities

CL: “I welcome the swift action and the decisions taken by the Swiss authorities. They are instrumental for restoring orderly market conditions and ensuring financial stability.”

Mish Translation: We are praying this will restore order to the mess central bankers made.

CL: “The euro area banking sector is resilient, with strong capital and liquidity positions. In any case, our policy toolkit is fully equipped to provide liquidity support to the euro area financial system if needed and to preserve the smooth transmission of monetary policy.”

Mish Translation: Bank liquidity is pathetically weak, otherwise we would not need to stress the fact we have a toolkit to deal with illiquidity.

Janet Yellen Says “Liquidity is Strong”

In case you missed it, please consider Janet Yellen Says “Liquidity is Strong” [Ignore the Man Behind the Curtain]

Liquidity Rules

If you feel compelled to issue a statement on liquidity, things are not liquid.
If you have to provide hundreds of billions of dollars to maintain liquidity, things are not liquid.
When multiple banks in the US and Europe have to be bailed out to stop runs on banks, things are not liquid.
When governments resort to forced shotgun marriages of banks, things are not liquid.

This post originated at MishTalk.Com.

Thanks for Tuning In!

Please Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

Mish

Subscribe to MishTalk Email Alerts.

Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.

This post originated on MishTalk.Com

Thanks for Tuning In!

Mish

Comments to this post are now closed.

33 Comments

Newest

Oldest Most Voted

david halte

3 years ago

In 2013, Larry Summers presented his rationale for zero interest rate policy to the IMF, under the title of secular stagnation theory. Several European countries bit down hard, and took their actual rates below zero, Switzerland was the first. While the U.S. lowered relative rates below zero, later during the pandemic. The ECB and IMF will have significant difficulties with these banks, including Germany. Plus, the IMF is pouring gasoline on a dumpster fire, by bailing out Argentina and its 100 percent inflation rate with $44B over the next 30 months.

KyleW

3 years ago

I mean, of course they’re not going to tell the truth.

Lisa_Hooker

3 years ago

Mish, your liquidity rules are the best.

Portlander2

3 years ago

The “experts” in Europe and the U.S. are managing the financial system just about as well as they are managing the war in Ukraine. Sanctions have only hurt Europe, helped create inflation (and the current financial crisis) and the West has run out of artillery shells. That’s a scandal, yet our “leaders” strut like peacocks saying “all is well”! The West is running out of “tools” for crisis management.

In other words, the curtain has been lifted and the “experts” are revealed to be trying –unsuccessfully–to fake it ’til they make it while giving reassuring press releases. The Fed has an army of PhD economists, the CIA and MI6 have their own armies of linguists, spies, networks–all failing at their jobs. Many don’t know they are failing. They keep plowing ahead with obsolete ideologies and assumptions about the world. They have a false illusion that they can control things. They think this “control” is making things better. What if all of these “experts” are just making things worse?

These people will only LEARN when they are forced to. There must be an accounting. Heads must roll. I’d start with Powell. He must explain what he and the Fed got wrong about SVB or resign. I’d also require a full financial, operational, and regulatory audit of the Fed and the regional banks, starting with the glorious Market Street monolith in San Francisco.

The FDIC must explain: if you are going to fund insurance for all, the “insurance premium” must be charged to all, right? Did you guys even think about that? And how will you do that? Or will the obvious remedy be resisted by the donor class as a “tax on wealth”?????

Lisa_Hooker

3 years ago

Reply to Portlander2

I want an audit of Fort Knox and the basement of the New York Federal Reserve.

HippyDippy

3 years ago

Reply to Lisa_Hooker

Shouldn’t take long for them to audit empty shelves.

xbizo

3 years ago

We can talk about the Fed response being late, but why don’t we point the finger at Congress for the main problem? Two stimulus too many and we are still trying to burn off the excess cash.

The policy question is, why didn’t the Fed not raise rates with trillion dollar stimulus number 2 and number 3? There’s a lag for the stimulus and rates. They should have seen that. How about rolling out a new idea for future increases from here on out? The Fed is willing to hold rates. Future tie for rates is government spending, not inflation or unemployment. Raise rates when spending increase is over 2%. Lower rates when spending increase is below 1%.

StukiMoi

3 years ago

Reply to xbizo

“but why don’t we point the finger at Congress for the main problem?”

Because Congress wouldn’t have anything to “stimulate” with, if it wasn’t for The Fed. It is, after all, not as if the deadweight leeches holed up in Congress, are particularly competent at anything; Gold-digging included.

ga7pilot

3 years ago

re: “restoring orderly market conditions”

Does anybody really have any faith in markets that are made completely orderly by government?

Webej

3 years ago

A discussion about liquidity inevitably resembles a discussion about whether water is wet, and if so, how wet.

KidHorn

3 years ago

What happens if people pull money out of UBS? Who’s going to absorb them? They’re the only bank left in Switzerland. Will the ECB step in?

If I had assets at UBS, I would be looking at other banks.

Jack

3 years ago

Reply to KidHorn

Credit Swiss was too big to fail.

UBS may now be too big to save.

Portlander2

3 years ago

Reply to Jack

Well, both UBS and Credit Swisse have big depositors whose secrets must remain secrets. The government can’t nationalize Credit Swisse because then it would discover things it wouldn’t like to, including the many politicians around the world who have — strangely, given their modest salaries — very large accounts there, and all the money transfers to those accounts.

Banks governance must stay private or the whole corrupt game will collapse.

MikeC711

3 years ago

The translations were concise and hilarious

whirlaway

3 years ago

I have a few 3.3% CDs maturing in Jan 2024 (each of them below 250K!). If I break them now, I must pay a 90% penalty, but can roll them into new 5-year CDs that give 3.8% to 4.2%

I don’t know if the rates will remain that high until 01/2024. Looks like the market expects Fed cuts by summer? Any opinions? Thanks!

KidHorn

3 years ago

Reply to whirlaway

The penalty is 90% of what?

whirlaway

3 years ago

Reply to KidHorn

Oops! Sorry. Terrible mistake. The penalty is 90 DAYS’ interest. Not 90%. (That was posted before I had my coffee!).

KidHorn

3 years ago

Reply to whirlaway

You’ll lose about 1/4 of the interest. Roughly 0.8%. Not worth it IMO.

I’m in the same boat and unless it’s like a 2% difference, better to just let it sit.

FromBrussels2

3 years ago

Reply to whirlaway

The way the FED gang is now ”printing” like never before , 50 % inflation is in the cards …..Fed cuts ? Really? Wishful thinking if you ask me. …..Not my wishful thinking though, I want a healthy, inflation compensating interest rate on my savings without having to step into any Ponzi scheme scam, tha’s wha’ I want …. but won t get , I am afraid ….

HippyDippy

3 years ago

Oh yeah, here’s a link to the unpunished Legarde case. Minor fluff piece to distract the slaves.

https://www.bbc.com/news/world-europe-38369822

HippyDippy

3 years ago

Wasn’t Legarde found guilty of banking fraud? On the bank runs; shouldn’t they be compared to the Great Depression? Or is that a coming attraction.

8dots

3 years ago

Investors will do what it takes to avoid US 10Y. They will park in the front end. The 10Y will rise above the 3M and the 2Y, ending the yield curve inversion.

8dots

3 years ago

Reply to 8dots

In Europe the same.

TheCaptain

3 years ago

I think you got it all, except for calling it a Global Debt Ponzi.

MPO45v2

3 years ago

The rescue squad is on the case…

https://www.cnbc.com/2023/03/19/fed-other-central-banks-set-joint-liquidity-operation.html

The Fed on Sunday said it had joined with the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank in a coordinated action to enhance the provision of liquidity through the standing U.S. dollar swap line arrangements.

I’m gonna sleep like a baby tonight…

prumbly

3 years ago

Things are not going too well for Lagarde and her cronies. They are losing their war with Russia, their industrial economies are collapsing, and now they have the beginnings of a huge financial crisis.

Siliconguy

3 years ago

Reply to prumbly

The first led to the second which lead to the third.

prumbly

3 years ago

Reply to Siliconguy

I think you’re right

HippyDippy

3 years ago

Reply to prumbly

But the slaves will never revolt.

Columbo

3 years ago

Reply to HippyDippy

Except when they raise the retirement age.

HippyDippy

3 years ago

Reply to Columbo

Don’t worry though, they’ll still let the state choose their heroic savior. Anything to keep themselves in chains. A slave hates freedom more than anything else. Those chains are the only thing they’ll die for. Huxley was right about that.

Maximus_Minimus

3 years ago

Reply to HippyDippy

The slaves are tuned to soccer/hockey/baseball news. Who can blamed them when they find out to have been robbed? /s

HippyDippy

3 years ago

Reply to Maximus_Minimus

I blame them. They choose this so they can live mindless lives chasing all the distractions the state offers them. But their sorriness shouldn’t afflict others. And their insistence that this time, unlike every other time in history, they’ll vote their savior in. And it will rain lollipops forever and ever. Madness! I really hate those embracing ignorance. Gholems, each and every one. It inconveniences me to no end when one of the idiots, that idiot voter’s elected from those selected for them, starts acting as if I should care about what they’ve got to say. Voters are such idiots.

Click each image to view details or purchase in the store.

Stay Informed

Subscribe to MishTalk

You will receive all messages from this feed and they will be delivered by email.

Don’t Miss a Post. Subscribe now.

The ECB Chimes In On Liquidity, I Translate ECB President Christine Lagarde

Share this:

Recommended Articles

Decorate Your Walls with Mish Fine Art Images

Stay Informed

Subscribe to MishTalk