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As dollar woes get worse, why don't the Fed's swap lines work? Let's answer that question.

Eurodollar University

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What the Dollar Swaps Tell Us Is That There's Trouble Outside in the Funding Marketplace

Dollar swaps tell us that funding irregularities have gotten so bad, or so far, that is causing some participants to start to turn to alternatives like these dollar swap programs. The whole system depends upon dealer bank intermediation, not Federal Reserve programs. So even though 6.27 billion at the Swiss National Bank is a drop in the bucket, the fact that it's not zero raises all sorts of warning flags.

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