“Spanish banks, already hooked on cheap European Central Bank loans, are haemorrhagingdeposits as the government debates whether to seek a bailout.

Households and companies drained 26 billion euros ($34 billion) from Spanish bank accounts in July, driving the ratio of loans to deposits among lenders to 187 percent from 183 percent in December and 182 percent a year earlier, according to data compiled by the Bank of Spain. Shrinking deposits undermine the ability of banks to support economic growth by lending to companies and consumers.”

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“Squabbling among European governments over the next steps needed to overcome the region’s sovereign debt crisis raised the specter of renewed turmoil as last week’s market rally eased pressure to forge a common path.

A Sept. 14 European Union finance ministers meeting in the Cypriot capital of Nicosia deadlocked over the timetable for a more unified EU banking sector, with a German-led coalition pushing back against a more ambitious plan sought by France, Spain and Italy. The ministers also bickered over the terms of bailout requests and the role of the European Central Bank.”

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Chinese stocks fell bucking the trend across Asia as concerns grew that there might not be more stimulus to come.

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The fine seems to me to be very little…

It’s no wonder so many on Main Street believe the stock market is rigged.

Adding to the crisis of confidence on Wall Street, the New York Stock Exchange admitted yesterday that it gave select clients a major trading advantage over average investors.

The Big Board agreed to cough up $5 million and make a number of fixes to settle charges by the Securities and Exchange Commission that it delivered precious trading data to paying clients ahead of everyone else.

While paltry in terms of dollars, the fine marks the first time a major exchange has been slapped with a monetary penalty by Wall Street’s biggest watchdog.

“The Federal Reserve laid out a serious quantitative easing program Thursday, including $40 billion in mortgage security purchases a month, and Bank of America economists took the central bank at its word.

“This is the Fed engaging all their major policy tools to support a stronger recovery in the labor market,” BofA economists Michael Hanson and Ethan Harris write in a note to clients obtained by Business Insider.

Indeed, the Fed expressed serious concern about unemployment, now 8.1 percent, with Chairman Ben Bernanke saying in his press conference, “We’re looking for ongoing, sustained improvement in the labor market.”

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Fun times developing….

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More fun times to come….

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Fun times…..

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A trigger that could send shock waves around the world.

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” As the financial markets widely anticipate an aggressive easing action from the Fed (to be announced on 9/13), it is once again worth making a comparison between the conditions that lead to QE2 in 2010 and the current financial/economic conditions. The goal is to focus on the factors that central bank asset purchases can actually impact as opposed to those that the FOMC wishes to influence. Here they are:”

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“Chinese Premier Wen Jiabao said the nation has room for fiscal and monetary measures to support growth and will meet this year’s economic goals, triggering gains in Asian stocks.

“Be it monetary or fiscal, we still have ample strength,” Wen said at the World Economic Forumin Tianjin yesterday. A fiscal stabilization fund of 100 billion yuan ($16 billion) is available for “preemptive” measures, he said.

Morgan Stanley today became at least the fifth bank to estimate that China’s economic growth this year will be 7.5 percent, the same as Wen’s target and the weakest pace in 22 years, afterimports slid in August and industrial production cooled. While the premier’s comments encouraged investors, the government may limit stimulus to restrain inflation and bad loans and avoid undoing a campaign to cool the housing market.

“The government has fiscal and monetary war chests to revive growth but there does not seem to be much appetite to roll out a large-scale stimulus package,” said Wang Qinwei, a London-based economist with Capital Economics Ltd. who previously worked at the People’s Bank of China.”

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As a result of the vote the German bunds fell in overnight trade…

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Lots of folks both here and abroad say liquidity is tight unless you are already privileged with padded bank accounts and assets.

Maybe to stimulate the economy the liquidity in the system should trickle down.

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Interesting commentary on the ECB and their new bond buying plan.

Hey you never know! Let’s all hope the odds are just like lotto.

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“(Reuters) – From the outskirts of Las Vegas to the coast of California, stretches of undeveloped land in some of the most depressed housing markets in the U.S. are in high demand.

Money managers such as BlackRock Inc, hedge fund Angelo Gordon & Co and real estate investment firm Starwood Capital, are beginning to cash-in on so-called shovel-ready residential land-tracts with most of the pre-construction and zoning approvals already in place.

The investors snapped up land on the cheap in bankruptcy proceedings, from cash-strapped home developers and banks that seized the properties after foreclosing on them when builders ran out of money.

Now they are re-selling the land, often for returns of more than 20 percent on their initial investment, in the latest sign of a modest recovery in the U.S. housing market. Other investors, meanwhile, are looking to partner with homebuilders to develop the tracts.”

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“Just six months ago, money market traders expected the Federal Reserve to raise interest rates by the end of 2013. Now, they see borrowing costs staying at record lows for about three more years as the economic outlook worsens.

Bond market measures from overnight index swaps, which indicate no increase in the federal funds rate until mid-2015, to a 62 percent decline in a measure of volatility in government bonds signal that rates will stay near zero for longer. The gapbetween two- and five-year Treasury yields, which decreases when traders expect benchmark rates to remain subdued, is more than 50 percent narrower than its average since 2008.

Investor expectations for sluggish growth and low inflation remain intact even though the collapse of Lehman Brothers Holdings Inc., which triggered the worst financial crisis since the Great Depression, happened four years ago. While the economy expanded in the second quarter, the unemployment rateremained above 8 percent for the 43rd-straight month in August.”

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“The U.S. Treasury is offering to sell $18 billion of American International Group Inc. (AIG) shares in a transaction that is likely to cut taxpayers’ stake in the firm to below 50 percent for the first time since its 2008 bailout.

The insurer plans to buy back as much as $5 billion of the shares and Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. are managing the sale, the Treasury said yesterday in a statement.”

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On Wednesday the 12th, a German federal court will decide on the use of 500 billion euros as a part of the ESM. This decision could be a make or break scenario for the euro and the ECB bond buying plan .

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FYI this does not sound like “what ever it takes”

Here is what Draghi has said so far.

Sterilized buying. Mostly short term note purchases.

He is asking for conditions to be followed or else the bond purchase program can be terminated at any time.

Developing…..

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The ECB met to discuss monetary policy; rates remain unch. Details are emerging on the bond buying plan.

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