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Multiple Botched and Mismanaged Stress Test Have Created The Makings Of A Pan-European Bank Run
The
first two European bank stress tests were simply jokes without punch
lines. Failing to fully take into consideration sovereign default risks
doesn't even illustrate How Greece Killed Its Own Banks!not
to mention several other countries and the ECB. That was then, this
now. Here are some factual BoomBustBlog tidbits to chew on:
- A full eighteen Percent of the EU is Literally rated junk by the predominant ratings agencies
- Greece is rated CCC. Approximately 90% of the entities rated CCC default, historically...
- Greek Asset Sales Fall Short, As We Virtually Guaranteed They Would In Spring 2010
- Greece & Portugal Are Worse Off Than Central/South America During the Argentienian Debt Crisis The
PIIGS Nations' Problems Are Structural Not Cyclical, Thus Bailout Loans
Simply Pave the Way For Asset Confiscation Down the Road
- Greek contagion is spreading quickly... Italian Bank Problems Now At The Forefront and BoomBustBlog Traders Armed With BoomBustBlog Research Caught ~10% Deutsche Bank Fall
- I have shown that not only have the previous stress tests been rebuffed but "Another Banking Crisis Inevitable?
- And last but not least, It Should Be Obvious To Many That The Risk Of Defaulting Sovereign Bonds Can Spark A European Banking Crisis
It
is simply a damn shame that it has come to this. What the political
powers that be in Europe have done in their grasp to disseminate obvious
mis/disinformation is to sow the seeds for history's first Pan-European
bank run! It is more than obvious to the entire world that Eighteen Percent of the EU is Literally Junk, Carried As Risk Free Assets at Par Using 30x+ Leverage. What is the purpose of attempting to conceal facts hidden in plain site?
Bloomberg reports: Stress Tests Compromised by Greek Non-Default
European
regulators’ attempts to bolster confidence in the region’s banking
industry today are being undermined by their unwillingness to test for a
Greek default and a mutiny by Germany’s Landesbank Hessen-Thueringen.
The
European Banking Authority will release the results of the stress tests
for 91 banks as part of an effort to reassure investors the region’s
banks have sufficient capital. Helaba, as the landesbank is known,
refused to allow the EBA to publish its results in full, saying the EBA’s data “would lead to a halving of the core capital without legal grounds.”German regulator Bafin has also attacked the London-based EBA. Bafin Chairman Jochen Sanio said last month the watchdog lacks “legitimacy.”
The assessments are the first by the EBA since it was set up earlier this year. Last
year’s tests by its predecessor were criticized for not being tough
enough because banks were shown to need only 3.5 billion euros ($5
billion) more capital, a 10th of the lowest analyst estimate. The EBA
can’t force banks to take part, and can’t test for a sovereign default,
which policy makers are struggling to avoid. Greece has about a one in 10 chance of avoiding default, credit default swaps show.
“The
EBA has no teeth,” Bob Penn, financial-services partner at Allen &
Overy LLP, said in a telephone interview in London. It can’t “make
requirements from any individual bank because the framework was set up
to allow national regulators to keep supervisory powers,” he said. “This
isn’t Helaba poking a stick in the eye of the EBA, it’s Bafin.”
...“The new authority has been struggling to have more severe tests than last year,” Charles Wyplosz, director of the International Center for Money and Banking Studies in Geneva, said in a television interview with Tom Keene on “Bloomberg Surveillance” yesterday.
“Last year was recognized as a joke. The new authority wants to be
tougher, but I don’t think they are tough enough to convince the
market,” he said. “The real question is: do we assume there is a serious
default on serious public debt?”
It is apparently
not understood by this group that if you obviously attempt to hide the
truth of a very strong likelihood of default, you lose credibility...
thus destroying confidence. It is the lack of confidence that leads to
bank runs. Just ask the management of Bear Stearns and Lehman. I warned of those events ahead of time as well. It is amazing that lessons have not been learned from the past.
‘Depth Charge’
“The sovereign debt default problem is the depth charge to the credibility of this exercise,” Penn said. “There’s nothing the EBA can do about that because it’s politically unthinkable.”
Yeah, politics, that's the problem. To bad it's not economically unthinkable!
Standard & Poor’s own stress test, published in March, found
European banks would need as much as 250 billion euros in fresh capital
if faced with a “sharp” increase in yields and a “severe” economic
downturn. In contrast, a survey of 113 investors by Goldman Sachs Group
Inc. last month showed they expect banks to raise 29 billion euros after
the tests.
I have shown beyond a shadow of a doubt what happens in the case of Greek default, with specificity through several arenas...
Live, at one of the largest banks of Northern Europe
>
Through prominent European television and print media...
Amsterdam's
VPRO Backlight and Reggie Middleton on brutal honesty, destructive
derivatives and the "overbanked" status of many European sovereign
nations
Amsterdam's VPRO
Backlight and Reggie Middleton on brutal honesty, destructive
derivatives and the "overbanked" status of many European sovereign
nations
Those who wish to download the full article in PDF format can do so here: Reggie Middleton on Stagflation, Sovereign Debt and the Potential for bank Failure at the ING ACADEMY-v2.
And last but not least, through my own BoomBustBlog...
Although
the EU refuses to publish the truth, I have done so freely for blog
subscribers and have available a detailed list, currently in its 3rd
rendition, that explicitly walks though what will probably happen as any
combination of the PIIGS group defaults.
Our most recent subscriber document explores the banking side of Greek failure - 
European Bank's Greece exposure,
but I have put a significant amount of info into the public domain as
well. If one were to even come close to marking the EU banks books to
reality, market prices, or anything in between, the Lehman situation
would look tame in compariosn! As excerpted from the subscriber document: The Inevitability of Another Bank Crisis
Then there's the obvious twists from other impetuses:
-
It Should Be Obvious To Many That The Risk Of Defaulting Sovereign Bonds Can Spark A European Banking Crisis
-
For Those Who Failed To Heed My Warnings On Portugal, Visualize The Contagion That Causes European Bank Failure!!!
And in the End, What Does It All Mean?
LGD 100+: What's the Possibility of Certain European Banks Having a Loss Given Default Approaching 100%?
- advertisements -
Reggie
You've no doubt heard Van Rotten (the EC's Chief unelected Communist Dictator and inept 4-eyed toe-rag) has called an EU meeting of heads of State to discuss "supporting the Euro" and the "future of Greek finances"... reading between the lines that's a 'Greek Out' and Damage Limitation Exercise for the Euro . . .
...so which banks (name names please) will be getting absolutely hammered next week and which banks (name names) do you think might actually collapse aka Lehmans within weeks/months of Greece's meltdown??
...please tell us if you can coz no official channels are going to!!
Google was good because of all the reasons you said, and now, people notice them because they like their social network....oh well, I got get me a newer android phone so It can automatically send my photos to my google + account, if I only had one......
Google was good because of all the reasons you said, and now, people notice them because they like their social network....oh well, I got get me a newer android phone so It can automatically send my photos to my google + account, if I only had one......
Reggie is the man
look at the size
of that chart....
Reggie, the plan is very simple -- to rip off the taxpayer of every fucking thing they own, and every fucking thing they will ever earn using "government-sponsored-crony-capitalism" as the conduit. That is it.
Welfare for the incorporated rich off the backs of the unincorporated animals.
Debt slavery is Jim Crow of the new era. Papers and credit report, please -- animals go to the back of the bailout bus.
"It is simply a damn shame that it has come to this"
unfortunately the right people have not been damned or shamed yet
Good one, so true
...but faggots are getting everything they want as the media is chalk full of fags and perverted journalism.
Hey, I'm a faggy little dog, I'm not getting anything special, at the most I'll get what other bug mean straight dogs get marriage, war etc....
We have become enslaved to consumerism with personal and public debt beyond any hope of emancipation. Even if China were to forgive interest payments on US Treasuries for a year or two, or the debt ceiling is raised, we would still be in default within a year or two. Only hope is to default now ,and change our wayward ways Big Time and stop rewarding Banksters who are gaming the system to the detriment of savers, workers, elderly and others in middle class and wealthy who are experiencing asset declines.
LETS DO IT NOW
"History's first Pan-European bank run"
I call malarkey, what about the failure of Creditanstalt?
Europe was the name of a continent when the C.A. went down and deepened the Great Depression. Back then, only weather systems were pan-European. Today European is the European Union with one currency and even more tighter linkage than in the 1930's.
You're both right, but Reggie is more right and not deserving of the malarkey call.
As someone who has been junked 17 times on one post, I have some experience with making wrong calls on ZH.
Reggie deserves flutes of ze French champaign raised in honor of the quality of his work and posts on ZH.
But did not the Cahirman Bernank say "the recession is over" in 2009?
Or do I heareth wrong?
"... European banks would need as much as 250 billion euros in fresh capital..."
Print, Baby, Print...sayeth the Chairman.
It ain't money if you can't print it!
but it's a great way to make money!
Europeans will put their money in 2 things. Real estate and PM's.
And real estate is a hughe bubble so when that one pops, PM's will become pretty hard to find.
I cant trust you white people posts...since I don't know the race of anybody on this blog except you and Reggie, I can't trust anybody but Reggie cause I know you are white and an arse and every other possible white person must be an arse too because you ruined it for all white people, you were an arse so all white people must be an arse.. Except white dogs of course....
Nice call on Google.
BNP Paribas is French for AIG.