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Guest Post: If Greece Default Would Wreak Havoc On European Banks Then CEO’s Should Be Fired

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Thu, 05/26/2011 - 18:22 | 1314676 Yen Cross
Yen Cross's picture

 Science Fiction. Will never happen! Greece would be slowly expatriated at the very least, over a large period of time. Which I think is currently happening.

Thu, 05/26/2011 - 19:06 | 1314812 IdioTsincracY
IdioTsincracY's picture

We cannot let it happen ... Save our CEOs! ... protect the Oligarchy ... save the best our race has to offer!

Thu, 05/26/2011 - 18:27 | 1314682 Racer
Racer's picture

There are losses and there are losses, but they have taxpayers, pensioners and unborn children

Thu, 05/26/2011 - 21:45 | 1315222 HuggaBushy
HuggaBushy's picture

That is why we need a complete separation of state and economics.

Fri, 05/27/2011 - 10:14 | 1316382 Manthong
Manthong's picture

Roger that.

It is beyond ridiculous. Case in point:

State College Area School District in Pennsylvania several years ago abandoned plans to build a new high school. This month, it received a notice that it owes $10 million to Royal Bank of Canada for skipping an interest payment on money it never borrowed for a school it didn't build

http://online.wsj.com/article/SB1000142405270230365480457634177292113383...

Thu, 05/26/2011 - 21:59 | 1315253 Anonymouse
Anonymouse's picture

The very definition of moral hazard.  Why should they take any loss when they have a free backstop to prevent that.  RISK ON!

Thu, 05/26/2011 - 22:03 | 1315272 defender
defender's picture

Stock holder:  "Look at all of these loses!  How are we going to cover this?!"

Bank CEO:  "Think of the children..."

Thu, 05/26/2011 - 18:27 | 1314684 Rainman
Rainman's picture

Biggest mistake humans make is thinking the bankster class is really smart. Shoot, BAC actually believed Countrywide was a steal.  

Thu, 05/26/2011 - 18:34 | 1314724 Bay of Pigs
Bay of Pigs's picture

I wonder what percentage of Countrywides loans were actually legitimate and not fraudulent? 

 

Thu, 05/26/2011 - 18:49 | 1314772 Yen Cross
Yen Cross's picture

  Bay of Pigs. I have never been involved in the mortagage industry. I have had some special people in the private sector, do some research.

   The net results of the research are;  Banks are holding inventory.

                                                   ;  Mortgage lenders are trying to buy back inventory, to become solvent and resell the inventory.                             

                                                    ; Small banks are really pissed off, because of Barney Frank, Dodd's son @ Fanny. Credit Unions.

                                                     ; REIT's are region and commercial based with some JUNK real estate tracts in their portfolios. THAT is the TRUTH.

 

 

 

Thu, 05/26/2011 - 19:29 | 1314863 BanksterSlayer
BanksterSlayer's picture

The same as their Fed interest rate: 0.01%

Thu, 05/26/2011 - 19:08 | 1314827 XRAYD
XRAYD's picture

In the old days, bankers had to be above average in looks and below in intelligence. Both these are no longer minimum requirements.

Thu, 05/26/2011 - 18:28 | 1314686 buzzsaw99
buzzsaw99's picture

All CEOs should be shot, but instead they will receive bonuses.

Thu, 05/26/2011 - 18:25 | 1314689 the bankster
the bankster's picture

Good thing the banks passed their sovereign risk stress tests, right Peter?

Thu, 05/26/2011 - 20:05 | 1314953 ATM
ATM's picture

Amen to that. Just think what could happen if all those Greek bonds were marked down 60%!

Dominoes baby.........

Thu, 05/26/2011 - 18:30 | 1314690 nope-1004
nope-1004's picture

Banksters never were, and never will be, CEO fabric in the traditional sense.

They are WCC's:  White Collar Criminals.

 

Thu, 05/26/2011 - 21:47 | 1315229 Ned Zeppelin
Ned Zeppelin's picture

Mafia. 

Thu, 05/26/2011 - 18:26 | 1314692 RobotTrader
RobotTrader's picture

A "Shock and Awe" rally out of the financial sector would not surprise me in the least.

Somehow, some way, a "deal" will be struck to save the PIIGS.  The CEO's are now conspiring with TPTB to engineer some "announcement" which will catch all the short sellers off guard.

Thu, 05/26/2011 - 18:56 | 1314785 gulf breeze
gulf breeze's picture

Robotard

You have been calling for a Financial rally for months.  One day you will be correct and one day you will finally have a winning week on your sports book.  Get back to  your room and eat your CMG

Thu, 05/26/2011 - 20:28 | 1315020 CrashisOptimistic
CrashisOptimistic's picture

Everyone wants it to happen.  Everyone wants to hold onto their lifestyle.

But more particularly now, versus more or less all other times, everyone is hyper vigilant to ensure that "it happens" at the expense of someone else.  This is why the Chinese rumor captured such fancy.

But the Chinese are among the vigilant.  And this vigilance is why there is no way out unless military force is brought into play.  Someone has to be forced to sacrifice for the lifestyle of others.

Thu, 05/26/2011 - 23:57 | 1315510 topcallingtroll
topcallingtroll's picture

Naah. No one has to be forced. Those who sacrifice will be the last ones standing when the music stops.

We should thank them.

Thu, 05/26/2011 - 20:57 | 1315086 DeadFred
DeadFred's picture

Days like today make me agree. The purpose of the market is to shear sheep and the sheep are short now.

As far as the CEO's go, why is this the only place you will hear about firing the CEOs?

Thu, 05/26/2011 - 21:47 | 1315227 Ned Zeppelin
Ned Zeppelin's picture

Why junk RT when he merely calls it as it is, whether we like it or not? Who do you think is winning this war on Truth, the good guys? 

Thu, 05/26/2011 - 18:29 | 1314702 Everybodys All ...
Everybodys All American's picture

I couldn't disagree more. Ireland, Greece, Spain, Portugual, Belgium, and on and on. There is no escaping the contagion in Europe.

Thu, 05/26/2011 - 21:28 | 1315170 downwiththebanks
downwiththebanks's picture

"The Banker-Gangsters must be repaid ... at any price.  Liquidate public health and public safety.  Fund the casinos!"

Thu, 05/26/2011 - 18:44 | 1314754 disabledvet
disabledvet's picture

we like this talk.  "the default has already occurred" of course--which means "the talk is about the past and what has already happened" (cue to pics of mass demonstrations--we really do need to go "all in on multimedia" here)--the question therefore is not "default" but "who defaults after Ireland and Portugal which have also already defaulted?"  "Belgium, Italy and Spain"??  "I sense Empire Incorporated" rockin' and rollin' here.

Thu, 05/26/2011 - 18:48 | 1314759 Debtless
Debtless's picture

Regular people don't give two shits if all these insolvent banks go down. There or here.

It's THE SYSTEM worried about saving itself.

Thu, 05/26/2011 - 18:56 | 1314790 disabledvet
disabledvet's picture

EXACTLY!  "The banks are doing just fine" it's just "we're phucked."  Now "what's my Congressman/woman up to?"

Thu, 05/26/2011 - 20:56 | 1315097 DeadFred
DeadFred's picture

Hotel maids?

Thu, 05/26/2011 - 18:57 | 1314784 aka_ces
aka_ces's picture

Perhaps these banks believe that they've hedged their exposure via various derivatives in shadow markets ?  

Not that such "hedges" wouldn't be closed-loop, either incestuously or onanistically.

Thu, 05/26/2011 - 18:58 | 1314797 disabledvet
disabledvet's picture

is "onanistically" similar to "orgasmically?"

Thu, 05/26/2011 - 19:32 | 1314880 alex_g
alex_g's picture

8 bln notional CDS on Greek sovereign, 300 bln straight debt, you make the call...

Thu, 05/26/2011 - 21:30 | 1315179 downwiththebanks
downwiththebanks's picture

Is that the only way to short Greek debt?  

Fri, 05/27/2011 - 08:26 | 1315875 Urban Redneck
Urban Redneck's picture

There is about 175 billion Euro of Greek government debt that matures prior to 2017.

What is the daily volume on Greek debt?

At the end of the day someone has to be holding the $175 billion of debt and take a loss in the event of default.  Until then- it is a game of musical chairs, but the banks can only offload the debt to a willing a buyer who has the requisite billions. 

Is Peter Tchir suggesting that the $175 billion should have been off loaded to the public balance sheet of the ECB, or the IMF?  Someone must possess the toxic paper. This isn't like toxic waste from Fukushima that can just be buried or dumped in the sea.  Greek debt only and must exist in "Balance Shi/eet World" and cannot escape it.

Thu, 05/26/2011 - 19:00 | 1314803 baby_BLYTHE
baby_BLYTHE's picture

Where is everyone today? usually ZH has 2x-3x as many comments. Holiday weekend hasn't started yet either.

Thu, 05/26/2011 - 19:04 | 1314816 Yen Cross
Yen Cross's picture

  Hit the books and charts. (BLYTH)

    You will thank me next week.

Thu, 05/26/2011 - 19:13 | 1314835 baby_BLYTHE
baby_BLYTHE's picture

Yeah, I went out and got Ron Paul's new book "Liberty Defined". Pretty good read so far, he definitely has a better chance in the race this go around.

Thu, 05/26/2011 - 20:26 | 1314928 Yen Cross
Yen Cross's picture

  Thank you! That is a good read. I'm still cumfused when I try to figure out the political parties of Australia. There is not one unique party. They are all the same.,

Thu, 05/26/2011 - 20:48 | 1315069 Rynak
Rynak's picture

Most parties in most countries are - they just hire different marketing departments.

Thu, 05/26/2011 - 21:49 | 1315234 Yen Cross
Yen Cross's picture

 Do some good work. Don't hurt people. Have a (dip) with them.  Smiles.

Fri, 05/27/2011 - 01:20 | 1315615 terryfuckwit
terryfuckwit's picture

I despair because UK has no Ron Paul's and no balanced journalism anywhere. The zombie brainwashed here would relegate you to the tin foil hat brigade for mentioning anything you read on here

Thu, 05/26/2011 - 19:05 | 1314813 XRAYD
XRAYD's picture

Americans have been "firing" their presidents every 4 to 8 years for the last thirty five years now.

 

Not worked out so good, has it?

Thu, 05/26/2011 - 19:11 | 1314826 Yen Cross
Yen Cross's picture

 An American President can serve 2 (4 year terms) Congress is on odd years @ House and Senate. It was designed to control majorities. Not worthless minorites!

Thu, 05/26/2011 - 19:06 | 1314821 Cursive
Cursive's picture

complete faith in the government to bail you out.

FTW.

Thu, 05/26/2011 - 19:09 | 1314822 Tic tock
Tic tock's picture

perhaps the safest place to hold a bad loss is in a bank, I mean, for everyone else it matters.

Thu, 05/26/2011 - 19:17 | 1314837 ReeferMac
ReeferMac's picture

Thank you Peter!

You absolutely nailed the fundamental issue right on the proverbial head!

If you make a bad decision in business, you lose money. Enough of them, you go out of business. Period. There is no tooth-fairy w/ a giant bag of money to bail you out! You failed! You hang your head in shame, beg for a gig @ some third-rate brokerage house, and hope your family is not destitute!

Failure has ceased to exist in this Too Big To Fail world, and that in a nutshell, is the entirety of the problem!

Thu, 05/26/2011 - 19:21 | 1314847 Lord Welligton
Lord Welligton's picture

"If these fears are valid, then some senior bankers should be fired immediately because they have wasted the opportunity to reduce their exposures with reasonable losses"

If you want to be that stupid all your life then so be it.

Banks = State.

State = Banks.

It really is that simple.

No one gets fired.

Thu, 05/26/2011 - 20:53 | 1315083 CrashisOptimistic
CrashisOptimistic's picture

Why reduce exposure when you can blackmail your prime minister with terror of total national meltdown if he or she doesn't flow taxpayer money to the relevant bailout (which conduits to your bank)?

 

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