The Global Liquidity Bailout Arrives: World Central Banks Announce Global Dollar Shortfall Funding Resolution

Remember that dollar liquidity crunch Zero Hedge has been covering for the past month? Here is the denouement, in the form of the first global liquidity bailout of the world for 2011, on the 3 year anniversary of the Lehman collapse.

Papandreou to Cabinet: Blame The Media And 85% Is Good Enough

Greek PM Papandreou address his cabinet this morning explaining how hard he has been working, how Greece is simply the scapegoat, how the media is to blame for the ever-decreasing circles they are running in, and how achieving 85% of what was expected of them in August was good enough.

Market Response: The Euro Is Saved (If Only For A Few Hours)

By now, we know that isolated central bank intervention has a half life of about 24-48 hours. Next, we will find out what the duration of a concerted global central bank intervention will be. The kneejerk reaction so far, at least in the EURUSD is good to quite good. And when the impact of this latest bailout is phased out, as it eventually will, who will step in for the next much needed heroin shot of unlimited liquidity? Mars? Or, more likely, Uranus.

And If There Was Any Doubt...

... Why Goldman lowered their S&P price target 12 hours ago, which as we said last night "leads us to believe that today's firing of David Bianco was merely due to him refusing to play along with the revised script. Which is as follows: the banks are buying everything that their clients have to sell in advance of, you guessed it, QE3 in the US and more QE in the UK, Europe and Japan for one last record bonus hurrah. While we can only hope we are wrong, if we are right this means the short squeeze on the market is about to slam shut and Goldman will make out like a bandit as usual, with the S&P soaring several hundred points on ever worse macroeconomic and geopolitcal data" now you know.

Global Central Bank Intervention Half-Life: 30 Minutes?

One of the bigger beneficiaries (BNP) of this mile-wide hose-pipe of USD provided by the global central bankers has already retraced more than 75% of the reaction spike. As humans realize the desperation in this move and that solvency and liquidity are two critically different things, we suspect reality will set in further.

Here Is What Just Happaned

What just happened? The Central Banks have agreed to either create programs to lend in $'s or in the case of the ECB, expand their existing 7 day program. It is definitely globally co-ordinated, but for any central bank to offer a USD program, they need to work with the Fed, so assuming the ECB decided to work with the Fed, it seems like a no brainer to involve the other central banks. Bank of England is an obvious candidate - look at the share price declines of Barclay's and RBS. The Swiss Central Bank was likely to join already, but a day with UBS announcing a $2 billion loss, they had extra reason to go along. Japan always seems to be up for a good intervention. So it is globally co-ordinated, that is important, but it was also and easy and obvious co-ordination. What is the next action?  I suspect we will see some effort to push sovereign CDS spreads tighter.  Would it be something as intelligent as immediately forcing all sovereign and bank cds to be cleared?  Heck no, that might annoy someone.  It is more likely to be announcement of banning naked shorts, increased margins, and the ability for the EFSF if not central banks themselves to sell protection.  CDS would gap tighter and bonds are unlikely to react much.  When the ECB intervened in the Spanish and Italian bond markets, the initial reaction in the bond market was big.  Over 1% in yield terms across the board in a very short time frame.  The CDS never reacted as positively.  In any case, the market remained dubious of the effectiveness and we have seen yields rise in spite of continued buying.  CDS shorts will be painful if this occurs, but it won't fix anything long term.  There is nothing about the budget problems in various countries that are affected by CDS.  It also means that auctions are likely to do less well as the short covering bid dries up and that moves down will be exaggerated, just like the moves up.

Philly Fed Misses, Market Soars As Inflation Roars Back With Prices Paid Doubling

Love bizarro day, Embrace bizarro day, Have its child. The Philly Fed missed consensus of -15.0, printing at -17.5, though better than last month's abysmal -30.7 print... and stocks rip on expectations of more, more, more, intervention. As for how QE will work when the Philly Fed just announced its Prices Paid category doubled from 12.8 to 23.2... well, it don't matter to Jesus.

UBS Rogue Trader Had Been "Reduced To Watching Fox News For Guidance"

This could probably explain a lot. According to the FT, which has managed to sneak a peek into Kweku Adoboli aka, the scourge of UBS, Facebook profile, in a July 31 update said: "Will they? Won’t they? Reduced to watching Fox News for guidance, it’s a grim affair". It appears that Adoboli should thus be commended - under those conditions we believe it is a miracle a person's loss can be confined to just $2 billion. FT continues with the cyberstalking: " That was followed a week later amid steep market falls, by an entry that read: “Can we shut down global markets for a week so everyone can just chill out?” It also appears that the Delta One'er (which is just a fancy name for "correlation desk" trader) enjoyed his downtime as well: "He came across as someone who worked quite hard to get where he was and played quite hard too," said the acquaintance. Yet by all counts it appears that the event that did ole' Kweku in was the Swiss intervention on September 6: "However, the final message left by the trader on his own Facebook page on September 6 simply read “need a miracle”." Odd: so does Tim Geithner and the Eurozone. Alas, as the latest "rogue trader" incarnation just found the hard way, those are in short supply these days.

The Tax Cheating Treasury Secretary Lies Again

Compare and contrast. This from Marketwatch yesterday: "Treasury Secretary Timothy Geithner is not going to Poland to push European finance ministers to boost the size of the euro-zone bailout fund, a U.S. official said Tuesday" to this just released from Reuters: "U.S. Treasury Secretary Timothy Geithner is likely to suggest to European finance ministers on Friday that they leverage their bailout fund along the lines of the U.S. TALF programme, EU officials said." And this: "Geithner will probably insist on the importance of leverage to have more funds to ringfence the big Europeans, Italy and Spain, and to find a solution for Greece," one EU official said. "The leveraging of the EFSF -- I think this is something that he will put on the table," the official said. "There could be some openness to the proposal." Read more here. All in all, just another  day for the world's biggest pathological liar, tax evader, and overall economic disaster since, well, ever.

US "Misery" At Fresh 28 Year High

It was just three months ago that we posted that the US Misery Index (inflation plus unemployment) hit a 28 year high. Today we boldy recycle that headline, and pretty much the entire post, as the US Misery Index just hit a fresh post 1983 high. Really nothing to add here: #WinningTheFuture.

Global Central Bank Intervention Impact - Total Retrace

Just two hours after the coordinated global central bank intervention signaled the all-clear for risk assets to infinity and beyond and a total solution for European sovereigns and financials, we are sad to deliver the news that all of the impact in equity markets has now been removed. ES has completely retraced the spike as have French banks. The only thing that is still holding better is financials spreads in Europe which are -25bps at 263bps.

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