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Hypo Real Estate Keeps Asking For More

Raymond Shaw's picture




 

It seems Hypo is back asking for more money according to the chairman of the oversight board, Michael Endres, in his interview with Welt am Sonntag (in German).  Ed Harrison at Credit Writedowns wrote a smashing post on this venerial disease known as Hypo Real Estate (HRE).  It extends on latest analysis done by Ambrose Evans-Pritchard, which is highlighting tell-tale signs of serious problems in the Spanish real estate market.

For anyone whose not familiar with this German Government backstopped abomination - Hypo is a very large Munich-based company, which operates in the commercial real estate lending market in Europe.  Hypo took a serious lick when its Irish subsidiary Depfa blew up last year, as it could not roll over its short term funding requirements.

Quoting from Evans-Pritchard's Telegraph article:

Hypo Real's Mr Endres said earlier management had expanded at breakneck speed in foreign markets that they never understood, wading cluelessly into US housing through its Dublin operations. "The property market is like farming: you don't buy a field until you have walked around it a few times," he said.

 

Hypo Real was saved last October in a €50bn joint rescue by the Bundesbank and private lenders. The government's stabilisation SoFFin has since taken over 90pc of the Munich bank, though fresh capital has so far been limited to €3bn.

A leaked memo by the German regulator BaFin said Hypo Real had "problematic assets" of €268bn.

 

The agency said German banks need to take advantage of green shoots optimism and help from the state's "bad bank" scheme while they can, or face trouble in coming months.

Please read the following for more information on the disgusting state of this company:

  • The Finanzmarktstabilisierungsergänzungsgesetz (Zero Hedge)
  • The €1 Trillion+ German Toxic Asset Problem (Zero Hedge)
  • Hypo Real Estate Owners Approve Government Takeover (Bloomberg)
  • Hypo Executives Kept Quiet on Probe, Tietmeyer Says (Bloomberg)
  • Hypo Real Estate: 600 billion in off-balance sheet assets (RGE Monitor)
  • HRE: defusing the German financial timebomb (Credit Writedowns)
 

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