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Committee Of European Banking Supervisors Issues Statement After Getting Caught Commiting Fraud By WSJ
The CEBS has just issued the following statement on the recent disclosure by the WSJ that not only was the stress test a fraud, but all sovereign debt representations continue to be lies (and EuroStat still has no clue what the real debt of Greece is). In other words it all contained - buy stocks, sell puts, take our a 7th mortgage and buy that long awaited 576th iPad. In the meantime, lies and fraud shall continue until confidence returns.
CEBS Statement on the disclosure of sovereign exposures in the context of the 2010 EU-wide stress testing exercise.
CEBS notes that the EU-wide stress testing exercise conducted on 91 European banks and published on 23 July 2010 was an unprecedented exercise designed to assess the resilience of the EU banking system to possible adverse economic developments, in particular shocks to credit and market risks, including sovereign risks.
Individual disclosures of sovereign exposures were an essential component of the exercise and a great enhancement in terms of transparency. This transparency efficiently complemented the design of the sovereign shocks applied in the adverse scenario of the stress test exercise, which excluded the possibility of a sovereign default. In order to harmonize the reporting and to provide a meaningful and consistent view of banks exposures to sovereign debt, CEBS and national authorities jointly developed guidance to the participating banks. In particular:
The “gross exposures” disclosed were on-balance sheet exposures net of impairments but gross of collateral and hedging. In order to provide a meaningful picture of the economic risk borne in the trading book, banks were allowed to deduct offsetting short positions when reporting gross exposures.
CEBS notes that comparison with other sources should be treated with caution as a result of different reporting dates and reporting methodologies. For instance, data provided by the Bank for International Settlements (BIS), is aggregated in a way which makes comparison with the data disclosed by banks during the CEBS exercise impossible.
So a gross number becomes even more "gross" when adjusting form something totally different? There was a time this was called "netting"... but in ECB-ponzi Europe, gross is to net as mark-to-market is to mark-to-unicorn.
And now you know - it is not fraud, it is merely "impossible" to compare two numbers that differ by 3 zeroes cause, you know, it's Europe after all. And nobody knows anything. So all is good.
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So because they doubled counter party risk with offsetting transactions, less risk overall was taken? GENIUS!
Sovereign risk was never accounted for in the first place on the Hold To Maturity books if you will recall (only on trading... and that was 0.1% of total). They took all the sovereign exposure benefits, but none of the risks. Total and complete fraud.
In Europe (almost) every 1 is a socialist/communist and for this type of person numbers dont matter, they know they can take what they want from the population, as Stalin said 1 million in debt is a tradegy 1 quantillion a statistic
I cant find a better comparison for Europe than the Titanic, the ship is sinking everybody knows it but people are still dancing and pretending everything is fine because at lease they will die together(sure the billionairs will get the boats) but as long as your neighbor dies with you all is ok.
I guess all kinds of socialism/comunism are nihilistic in nature
'In Europe (almost) every 1 is a socialist/communist and for this type of person numbers dont matter, they know they can take what they want from the population, as Stalin said 1 million in debt is a tradegy 1 quantillion a statistic'
Leaving aside spelling, this is clearly bollox. Try telling the Germans they are socialists and communists.
I live in Germany and even though no1 likes to admit it, they either already know they are socialists or are but dont know it regardless how they feel about being called socialist
I have met many proud socialists in Germany and virtually no free market people(not that there arent any just not many), whenever i have spoken about free market principles and free market economics with other Germans I always got that look when some1 either does not have a clue what you're talking about or passionately dissagrees, and I spoke to regular middle class people who pay taxes
Europe yes.
The USA next.
The rest of the world shortly.
Good insight! Danke!
Just have to ask this, but where on this planet can you really find any free market people?
Every nation and their speculators as well as investors want to control the markets so that there wouldn't be any set backs or losses (We all do).
Fraud is a word to denote deceit, trickery and cheating. In fact, it derives though the French language from the Sanskrit root for he injures.
However, in our law, our legal masters have attached intentional to deceit-trickery-cheating., as in intentional deception.
Note when you have "accidently" cause a car accident, you did not do intentional harm , but you are still responsible for a share of the damages...out of fairness.
Adding intentional to deceit-trickery-cheating is a legal alteration that creates a loophole so that lawyers can make it very diffficult to prove any intent. A wronged party thus is easily screwed because there remains only accidental deceit-trickery-cheating, and recovery is often minimal after a long legal ordeal.
E.g., it was a typo...it's Moody's AAA-rated so no worry... trust me, I am V.P. of the bank...the [fired] BP secretary cut-and-pasted "walrus,sea lions and polar bear" from the wrong environmental impact statement for the Gulf Of Mexico...the [fired] salesman was told never to lie about that...read and understand all that fine print, then sign...FDIC will pay 100% of all deposits [omitted datum: they do not say when you will be paid]...etc.
"...that sort of gambling in "clever strokes" which constitutes the very essence of theft, swindling and all sorts of similar anti-social deeds."
Fraud is enabled by misunderstanding. Transparency is the enemy of fraud.
The Michael Lewis/ VF article "Beware the Greeks Bearing Bonds",accessible below on Bloomberg, is a must read. The level of fraud, deception and bogus accounting in Greece is staggering. And, like the US and other 3d world countries, public servants make several times as much as private citizens, between salaries, pensions and bribes.
Hmm, can someone explain why the FTSE and DAX have been going up on steroids?
DavidC
That's because the primal forces of nature want it that way.
us dollar forced down?????
They are already preparing next week's option expiries
Because a problem's not a problem until it becomes a problem ands no longer a problem after its recognized as a problem after its been addressed and treated as a problem. Ergo, problem solved. Until the next problem is recognized as a......
This is an world class example of why propaganda is such a powerful tool.
"Hmm, can someone explain why the FTSE and DAX have been going up on steroids?"
Central bank and coordinated government manipulation. Next question.
Bureaucrats are running things now.....doublespeak is in vogue.
I only care to hear Erin's thoughts on this bit of news. Tell me how the WSJ is lying to me Erin. Please say it ain't so.
You are being rude!
Hahahaha!!!
http://www.youtube.com/watch?v=0r-O4qDdhks
CEBS notes that the EU-wide stress testing propaganda exercise conducted on 91 European banks (OK, we missed a few) and published on 23 July 2010 (but leaked in advance to a favored few) was an unprecedented propaganda exercise designed to assess the resilience of the lies of the EU banking system to possible adverse economic developments of our own making, in particular shocks to our population of the knowledge that they are now chained to untenable credit and market risks, including sovereign risks. Please report to the nearest bank for your weekly injection of hopium.
What do you expect? They got the idea for the stress tests from Geithner in the first place.
The European banking cartel is levered 150% above and beyond the US banks.
Next stop 200%
This, this, this is good news! Buy buy buy the S&P up 10 points!
Darn joke, well, might aswell lure some more bulls to the slaughter. Guess I'll be having cattle 'til next christmas. Yupp, fading.
And if you continue to be rude to our guests then you will not been invited back to post...
You were rude to me. Stop speaking the truth, it is so rude.
Omitted passage from WSJ piece:
To be sure, this is not the first time the so-called stress test has been called foul, most notably by the maverick online finance blog ZeroHedge.com which called the results phony before they were actually released...
the correct adjective (and thank god for SHIFT F7) is cantankerous: http://www.observer.com/2010/wall-street/goldman-sachs-dishes-sweetheart-loans-tied-ipos?utm_medium=partial-text&utm_campaign=home
Post something about the gremlin munchkin, uh, I mean Mischkin, he's out warning everyone about the T buying on CNBC... Hmm it didn't cross his mind to warn people about Iceland. Mischkin, prisoner 000003 at the newly reopened alcatraz, he's been wanting to get penetrated up the ass by 000001 (Greenspan) and 0000002 (that little dork called Krugman) so he'll like it just fine.
Tyler, many people and organizations have called you and your web site many things. But "Cantankerous finance blog Zero Hedge" is just way over the top. I'm outraged. Time to call the lawyers. :>)
Per your link above.
http://www.observer.com/2010/wall-street/goldman-sachs-dishes-sweetheart-loans-tied-ipos?utm_medium=partial-text&utm_campaign=home
kind of a global hub for cantakerous catastrophists
Sounds like a conspiracy theory to me. :>)
the correct adjective (and thank god for SHIFT F7) is cantankerous: http://www.observer.com/2010/wall-street/goldman-sachs-dishes-sweetheart-loans-tied-ipos?utm_medium=partial-text&utm_campaign=home
Haaa! Yes, I was shocked to learn that when IB business-for-stock ratings was explicitly banned, IB business-for-commercial lending sprang up in it's place!
Maverick?
From day 1 the stress test excercise has been a back-slapping farce among career bureaucrats in Europe due to its heavy intellectual tilt towards reinstituting centralized planning and centralized risk evaluation.
It is beyond hubris for them to think that they will succeed in rigging the outcome by first tying up the hands of the free market and then popping up making annonucements way beyond their level of competency.
Expect more face-saving and backward we-did-not-borrow-enough rationalization from confused central bank proponents, fallen Kenyesians and candybar politicians reaching out to the masses spewed out from a MSM outlet near you in a rude manner.
"treated with caution" = drink the poison slowly
In other news the sky is blue.
- also in other news, Fox News is on top of it !!
http://www.youtube.com/watch?v=SB68dac-ejk
No doubting the ponzi like Euro bank complex but the timing of the flare ups is woth more examination as compared to say the consistent batters in the Treasury complex. The US has already told the Europeans in no uncertain terms they are losing representation at the IMF. Weber, expected to arrive in Oct-11, may not be the poodle that is Trichet; admittedly he led the charge for liquidity extension. All as the US growth goes into reverse and the Fed is q-ing for more ease. hmm....
"The nine most terrifying words in the English language are: 'I'm from the government Fed/Treasury and I'm here to help.'" - Ronald Reagan
Love how you evoked a quote from Regan. He is part of our extend pretend crap....he helped initiate the creation of the PPT.
Reagan was a fraud. If he really was capitalist and anti-gov, debt wouldn't have skyrocketed during his mandate. And as mentioned, he is the one who started to manipulate markets for the 'good of the state'.
Please don't start bashing Reagan. Way too many people still think he was the second coming and did no wrong. We don't need another junking thread here on ZH other than those devoted to Israel and BP.
"Is that a junk in your pocket or are you just happy to see me?"
Ronald Reagan was a bitch for wall street.
name one over the last 20 years that has not/is not.
Now we know the meaning behind what Ben Bernankee meant when he said, "this problem is contained."
The WSJ article had this amazing detail: instead
of going to the banks and reviewing the books ( 4 in France for instance ),
the national regulators just send them a to-be-filled-in
form, high mark-to-non-sense... And they want
to make Trichet head of the forthcoming European
Systemic Risk Board ??
***** "More Swaps
“There are more, or even many, of this kind of swap operation, which we have to clarify,” said Radermacher, the former president of the German Federal Statistics Office who was appointed as the EU’s chief statistician in April 2008. “The Goldman Sachs case was the beginning.”
Greece has told the agency that the other contracts were each significantly smaller than the ones signed with Goldman Sachs, Radermacher said. Signed in 2000 and 2001, the Goldman swaps reduced the country’s foreign denominated debt in euro terms by 2.367 billion euros and lowered debt as a proportion of GDP to 103.7 percent from 105.3 percent, according to a Feb. 21 statement by Goldman.
Goldman Sachs spokewoman Fiona Laffan declined to comment for this article." *****
http://www.bloomberg.com/news/2010-09-07/greek-debt-deals-hidden-from-eu-probed-as-400-yield-gap-shows-bond-doubts.html
God's Work, QE1 back office...
TD,
The fraud continues until the national security apparatus scratch that the rating agencies pull the trigger...
Quite sure y'all will be tapping to that tune when the event horizon nears.
This 'article' like so many others will fade away in the randomwalking spin cycle.
After all QE2 cannot set sail until Euroland is on the rocks.
Don't think the Federales have lost control of the rudder yet, the Beast ...'t shall go hard.
At no time do their hands leave their arms.
(And by the way is it just me or do the rating agencies' offices on the island remind ya of a funeral home, albeit with better refreshments.)
When you can't convince the plebs to do something that's clearly contrary to their best interest, the only method left is to create the socioeconomic conditions to will leave the plebs on their knees begging to be screwed once again. Then you pull out the (new and improved with jalapeno peppers) K-Y and oblige.
"Quite crying you little jerk. If you had said yes when I first demanded, I would have left out the jalapeno. Now this really will hurt you more than it will hurt me."
Yah, alles ist gut!!!!!
STRESSED OUT
http://williambanzai7.blogspot.com/2010/09/stressed-out.html
"The “gross exposures” disclosed were on-balance sheet exposures net of impairments but gross of collateral and hedging."
Bueller....Bueller....Bueller???
Tyler - I AM supposed to be confused, right?
Have some fun with it - let them explain that. Hiding behind cryptic definitions is their game after all.
thank you for your post - Cryptic Definitions for $100, Alex indeed - Truly shows the lack of moral/ethics today - Is there NO SHAME left in the world?
Two legged table propped up with slinky's
better fraud than expected Bitchez ?
And the Euro is up on this news?
French striking, uncovering that stress test was farce, continued problems with Irish & Greek bonds? HUH?
Thank God John McCloy - I greatly appreciate your post because I feel EXACTLY the same - I am soooo confused presently I expect Trichet to descend from a Bubble with Glenda the Good Witch on their way to meet Ben & Tim
...everyone piled in short
The committee discovered that the price of EUR should go up.
We ought to have faith in the regulators.
CEBS notes that the EU-wide stress testing exercise conducted on 91 European banks and published on 23 July 2010 was an unprecedented exercise designed to assess the resilience of the EU banking system to possible adverse economic developments, in particular shocks to credit and market risks, including sovereign risks.
The test was to see what the market participants would do if a heap of lies and phony analysis was pushed at them.
Whatever they are all doing (lying, obfuscating, lining their own pockets, burying their heads in the sand, cheerleading, changing rules as necessary), it is working. Things have yet to fall off a cliff, 1040 S&P is defended better than the Alamo, folks bought Portuguese bonds (I think Columbus could finance a new voyage nowadays with the market's need to believe), and Greece still has a functioning electrical grid. The average PM is sitting on his or her hands, never selling but putting new 401K inflows to work on the dips, and most everyone---save for regular ZH readers---has agreed to believe in miracles. Even the unemployed have yet to take to the streets, which was probably a fear of the PTB a year or so ago. No doubt they are all beginning to believe that reality is whatever they decide to make it.
Absent some new trigger, I can see the possibility of a 1966-1982 type market for the next decade. It makes no sense, but it is what it is. In a way it has become like the proverbial soap opera...you can miss a year's worth of episodes, but turn it on again and immediately be up to speed. ZH will be running articles like this a year from now, and the S&P will still be 1040-1130 rangebound, the DAX will be 5800-6200, and gold will probably trade 1150-1300.
What can trigger a move outside of these ranges? "Priced in" is the new faith.
We can now be sure of one thing: the Ponzi System (central banks, governments, banks, and all the people who refuse to see the reality) will never accept his defeat until he's technically dead.
I am more and more convinced that Bernanke will cause an hyperinflation, but will never surrender and accept the deflation. Never.
The central banks are currently backing up every sign of trouble and will continue to do it. When will it stop?
It has to stop one day, that's for sure. Otherwise, humanity would have found the secret of horn of plenty and nobody will ever have to work. "A bill? Call Bernie!" "Wanna buy a house house? Call Bernie and his printing press!"
CEBS notes that the EU-wide stress testing exercise conducted on 91 European banks and published on 23 July 2010 was an unprecedented exercise...
... in making a game of confidence.
would that the wall street urinal had as much concern about american fraud as about european fraud.....and aren't we all supposed to bow to european tastes, standards, and mores - those oh so sophisticated, wordlywise, rescuers from the first great depression....
Gold, bitchez! Sorry, somebody had to do it.
Nice article thanks.
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