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Egyptian Pound Plummets As Egyptians Get Their First Taste Of A Bank Run

Submitted by Tyler Durden on 02/06/2011 11:52 -0500

Today, for the first time in two weeks, the Egyptian banking system will be open, and the result: huge lines and a very possible bank run at the 200 or so banks which the Egyptian central bank announced would be open between 10:00 am and 1:30 pm today. And just to make things a little bit easier (yet harder) on itself, courtesy of a withdrawal limit of 50,000 Egyptian pounds and $10,000 a day, depositors will take out the max which should promptly deplete bank stores, and also set the population on edge, which withdrawal limits tend to do virtually everywhere. Also, the Egyptian central bank, which has one upped Blackhawk Ben, and been restocking through a military cargo plane, will soon need a far bigger one: "The central bank moved 5 billion pounds ($854 million) of cash into the financial system as depositors gained access to their savings. The regulator, which has $36 billion in reserves and guarantees deposits, used military cargo planes to bring in the funds, Governor Farouk El-Okdah said yesterday on state-run television." And another lesson Egypt has learned from both the US and the EU: mask any smell of insolvency with that truty old pyramid scheme known as bond issuance: "The government plans to sell 15 billion pounds in treasury bills tomorrow after canceling last week’s auction as protests against Mubarak intensified. Yields on Egypt’s bills may surge about 30 percent, said Shahinaz Foda, the head of treasury at BNP Paribas Egypt." 

 

 

 

The "Risk On" Lemming Stampede - LCMGroupe February Market Commentary

Submitted by Tyler Durden on 02/06/2011 12:05 -0500

We are experiencing unprecedented moves in financial equity markets as a direct result of the US Federal Reserve money printing operations. The Federal Reserve is no longer operating as the traditional "Lender of Last Resort" but rather is now experimenting in untested waters as the "Buyer of First Resort". Everything is being done by the US government to restore consumer confidence in an attempt to restart the US economy, which even after trillions of government spending, lending and guarantees is at best lethargic. Employment is no longer just a US problem as systemic growth and rebalancing issues face the entire globe. These issues are acute enough to now be seen to be igniting social unrest in many countries other than just the EU. - LCMGroupe 

 

 

 

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