The situation is out of control in the euro zone, as I have been writing it for a while…
The latest ECB press release ended Aug. 12 showed that the interbank market does not work: bank deposits increased by €71 billion in the week to reach €441.5 billion (liability item 2) …!
Euro-zone banks managers have lost confidence in other banks. So they deposit their cash with the ECB rather than lending it to banks that need it as they would in normal times: the ECB lent €548 billion …, an increase of €43 billion in one week (asset item 5)!
Another important point: the ECB has lent €491.9 billion in various securities… (asset item 7)! and purchased junk bonds, particularly PIGS Treasuries bonds who amount to… only €96 billion!
The ECB developed these transactions in press release:
Tyler Durden has rightly noted that ECB had lent $500 million (USD) last August 17 at a bank that might be in default, as last year’s May 6,
ECB monthly bulletin, June 2010, page 38, confirmed what I wrote at the time: 2 or more banks in the euro zone were in default May 6, 2010. This caused a flash-crash in U.S. markets,
The swap lines that were concluded and renewed should avoid another crash but not the crisis in the euro zone,
Falling dominoes euro dropouts did not occur because the financial community keeps euro weightless against the dollar, particularly shots of misinformation from S&P confirming that AAA France is totally justified!
It hurts when the Potemkin village-euro zone collapse!
Click here to read the article by Tyler Durden on Zero Hedge which has seen that a bank in the euro area was very ill yesterday, this was reported to me by a reader of my blog whom I thank.