Now Is The Time To Prepare For The (Next) French Bailout Of Their Banking System & Potential Bailout Of France

Reggie Middleton's picture

 

An update of "shortable" (as in still having some meat on the bone) French banks is available for download to subscribers - French Bank Observations & Focus on...(519.21 kB 2012-06-28 08:36:37).  Part and parcel to this common sense update is recognition of the fact that Italy will bust French banks, causing France to do the socialist bailout thingy. See this chart from the report...

French bank Italian exposure

French bank Italian Exposure: As Italy pops with outrageous funding yields (just like Greece), France will be forced to bailout its banks once again, leaving the socialist country facing the dilemma of potentially having to ask for a bailout itself. As you may know from my previous writings, the French banking system is bigger than France itself so a true bailout cannot practically come from within.

Of course, this was apparent two years ago...

This impetus of this video stemmed from the post Ovebanked, Underfunded, and Overly Optimistic: The New Face of Sovereign Europe, for as France decides to to the socialist thingy, they may put themselves in the position of needing a bailout - as excerpted:

I will attempt to illustrate the "Overbanked" argument and its ramifications for the mid-tier sovereign nations in detail below and over a series of additional posts.

Sovereign Risk Alpha: The Banks Are Bigger Than Many of the Sovereigns

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Can the EU quasi-sovereign (they are not truly sovereign due to a lack of fiscal autonomy, and Germany is looking to limit that even more) states truly afford to bailout banking systems that are multiples of their GDP? Hell Nah!!!

I have made this quite clear in the past, namely in Watch The Pandemic Bank Flu Spread From Italy To France To ... where I simply quoted the arithmetical obvious, then in French Banks Can Set Off Contagion That Will ... where I basically did the same. Shouldn't the rating agencies start getting much rougher with France, or is the lesser of the dynamic bailout duo to sacrosant to touch with truly empirical bailout gloves???

Of course, all of this simply conforms to my F.I.R.E. thesis from the beginning of the year, a thesis which was actually aired through the MSM...

  1. Reggie Middleton Sets CNBC on F.I.R.E.!!! Jan 4, 2012 – Last week I offered my susbscribers examples of the 2nd and 3rd sectors of the FIRE...
  2. First I set CNBC on F.I.R.E., Now It Appears I've Set ... Jan 6, 2012 – burning-house Tuesday I literally Set CNBC on F.I.R.E.!!! as the only pundit/analyst/investor to warn of the FIRE (finance/insurance/real es...
  3. Portuguese Liquidity Trap: When You Add Too ... Mar 12, 2012 – In this followup to Greece Is Trying To Convince Portugal To MakeF.I.R.E. Hot I think we should get straight to the point - Anyone who does...
  4. Greece Is Trying To Convince Portugal To Make F.I.R.E. Hot!!! Mar 9, 2012 – Minutes ago I posted So, What's Next Step Towards The Eurocalypse? wherein I illustrated the folly in believing this CAC-powered Greek bon..
  5. The F.I.R.E. Is Set To Blaze! Focus On Banks, part 1 - Jun 13, 2012 – Note to subscribers, updated research availalble: GS Revenue Analysis Q2 12 - our opinion of the robustness of Goldman's upcoming quarter

No Capital Controls In The EMU? Liar Liar Pants On Fire 3 days ago – I have outlined the upcoming EU bank runs up to two years in advance (see the many links below). Whenever one expects a bank run, the first 

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