The European Central Bank taketh away and the European Central Bank giveth.
Yesterday, June 29, worries that the European Central Bank’s decision to end a $543 billion one-year special liquidity program would send European banks into a new crisis started a global stock market selloff. (For more background see my post https://jubakpicks.com/2010/06/29/the-european-central-bank-seems-determined-to-make-the-euro-crisis-worse/ )
Today, news that European banks asked the European Central Bank for just $162 billion in three-month loans has fueled an early rally in European stocks and the euro.
Analysts had projected that banks would need to draw down as much as $360 billion from the central bank.
 Today’s offering by the European Central Bank was seen as a kind of preview of the bank stress tests that European governments will report in mid-July. If banks had drawn down something like the $360 billion high-end estimates in new three-month money, markets would have taken that as a sign that banks are still having an extremely tough time raising money in the financial markets.
 So today’s relatively smaller $162 billion draw by banks on the central bank is being seen as a sign that some banks at least are able to tap the financial markets for the cash they need.
 European banks need to refinance that $543 billion under the European Central Bank’s expiring 12-month liquidity program tomorrow.
 This morning the euro was up 0.6% against the U.S. dollar to $1.2266 as of 8:45 ET in New York.
DJ – well played, I needed a good chuckle after this week
DJ: LMAO
georic – In your response did you mean “touche'”
meaning “to commend someone on a clever response to an argument” ?
BRC, touché.
yx, I think that M. Trichet is as trustworthy as M. Bernanke: both mean well but they are not beyond manipulating the figures for our own good as they see it. Same thing applies with the stress tests which I tend to consider as pure bull sh.. or should we say bear sh..
Georic — He’s making what is known as a “pun.” It is a bit of word-play.
You really think Jim doesn’t know what deja vu means?
Jim, in your title, do you mean “déjà vu”, the French for once again or same old story? you seem to be a well traveled man, one more reason for me to subscribe in due time.
How much can we trust ECB?