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Surprise! Europe's Banks Are STILL Totally Insolvent...
While the US continues to bumble its way towards a debt ceiling crisis (somehow our President doesn’t have time to meet work on solving this, but does have time to make sandwiches with volunteers and give press statements about how we wants to work), Europe continues to make us look good by comparison.
Remember how we were told time and again that Europe was saved? Remember how repeatedly we were told that the European Central Bank (ECB) would do “whatever it takes” to fix things?
Turns out all of that was a total load of BS. Indeed, the IMF just announced the following:
Nobody knows the true scale of potential losses at Europe's banks, but the International Monetary Fund hinted at the enormity of the problem this month, saying that Spanish and Italian banks face 230 billion euros ($310 billion) of losses alone on credit to companies in the next two years.
Yet five years after the United States demanded its big banks take on new capital to reassure investors, Europe is still struggling to impose order on its financial system, having given emergency aid to five countries.
http://www.reuters.com/article/2013/10/13/us-eurozone-banks-idUSBRE99C03Y20131013
Remember, Spain was the banking system that was great right up until it demanded a 100 billion Euro bailout. Then only six months later, one of its largest problem banks (which had taken 18 billion Euros in bailout funds) announced it still had a negative valuation.
The entire EU banking system is insolvent. Unlike the US where the banks raised capital to address their problems, EU banks have not raised capital nor have they reduced their leverage (of 26 to 1 by the way). Instead, they’ve simply swapped garbage assets as collateral to the ECB, which counts this garbage at 100 cents on the Euro, and issues liquidity to the banks.
The whole thing is one giant lie. You have banks lying about what they own to the ECB which lies about the real risk of the banks which swaps out debt from EU countries that are lying about their finances in exchange for free money so the banks can keep lying.
Honestly, this whole mess makes the US look good by comparison. The bad loans, leverage and every other negative issue is worse for EU banks than for the US.
Makes you wonder why investors are piling into EU financials, doesn’t it? In general share prices in this space have doubled since the 2012 lows. The fact they’ve doubled on a colossal lie doesn’t bode well.
I expect we’ll see the European banking crisis back with a vengeance in the first half of 2014. Now that the German elections are over and Merkel has won, the “reality” of Europe should start leaking out (it’s not coincidence that the IMF released this report about Spanish and Italian bank woes just now after the German election as though this was suddenly “news”).
For a free Special Report outlining Europe’s upcoming banking crisis and its impact on US stocks as well as two other investment reports (one regarding the inflationary impact of the Fed’s policies, the other on hedging against market risk)… visit us at:
http://phoenixcapitalmarketing.com/special-reports.html
Best Regards
Graham Summers
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Innn the crusty ridge mountains of my vagina on the trail of the solvent banks. . .
where he shot his load and i shot mine. .
groan... "Remember how repeatedly we were told that the European Central Bank (ECB) would do “whatever it takes” to fix things?"
who told you that? some talking head from an American financial infomercial network? and remember that "fixing things" is an Americanism
yes, Draghi said the ECB would to "whatever it takes". yet he was talking about specifics. aka the "integrity of the eurozone", which translates into the ECB using unlimited monetary power to cut the knees off speculative raids on eurozone sovereign bonds
and this is still the cheapest way for a gang of national banks to behave: by threat. it's an european cb tradition
yet Draghi and the ECB have also repeatedly said that the long term adjustment (translated: "fixing things") has to be done by politics, i.e. by fiscal adjustment
for which we will need years
so stop this "europe is fixed" vs "europe is not fixed" idiot meme - that's not how the eurozone is thinking and acting (the UK is a different matter)
meanwhile this article talks about "european banks". it's pure BS to talk this way. which banks? a huge amount of them do indeed have a lot more leverage than similar American ones. yet they also show a completely different balance sheet, full of old-fashioned stuff the American counterparts have shed long time ago thanks to securitization and financialization. without getting heavely into details you can't compare them on this metric alone
Call me when boomer doomer wanna-be's at phoenix capital actually have a money making idea.
thx in advance
Kill the head vampire
IMF calls for a tax on household In a report, the IMF is concerned about the European sovereign debt and proposes a 10% tax on household savings to fix it!
A small paragraph at the end of a document 49 pages in a report the IMF . The type of document that is just starting to read the end. A paragraph in the form of proposition and if a sample once and for all on the one created capital?
Obviously there is a question mark, but also a robust reasoning. Indebtedness advanced countries is such that it has no choice. A tax on private savings has the advantage of not disturbing the system. Some even say it is right.
Tax levied onceBut this requires two conditions. Nobody can escape and be absolutely certain that it will be charged only once.
The report discusses the work of several economists based on historical examples where the assumption was considered to deleverage States.
Then he says if you want to return to debt levels before the crisis and the calculations for 15 countries in the euro zone, it should put in place a 10% tax on all households with a positive savings.
Tell me lies, tell me sweet little lies
"The entire EU banking system is insolvent. Unlike the US where the banks raised capital to address their problems, EU banks have not raised capital nor have they reduced their leverage (of 26 to 1 by the way). Instead, they’ve simply swapped garbage assets as collateral to the ECB, which counts this garbage at 100 cents on the Euro, and issues liquidity to the banks."
Sorry to burst your bubble, but this is exactly how the US banks did it too. Or, did you forget about TALF and the other "undisclosed" N.Y. Fed bond purchases?
http://www.youtube.com/watch?v=I5QwKEwo4Bc This is so spot on that people should view it every day to remind themselves of the farce that modern banking has become.
Would be funnier if it wasn't all true.
No problemo.
ECB can always sell the used tires they took as bank collateral to the Chinese to make those sturdy VC type sandals.
And sell them back to Europe as urban chic.
All the good news is coming out now, the Irish Government are looking for a second Bailout. That’s the best boy in the class looking for a second hand-out. Why you ask well the books still don't balance and the debt is piling up and that’s the best of the PIIGS. They are trying to dress it up as something else, O yes before I forget it will be a Bail-in or Cyprus 2 return of the thieving Government's
“I hold it, that a little rebellion, now and then, is a good thing, and as necessary in the political world as storms in the physical. Unsuccessful rebellions, indeed, generally establish the encroachments on the rights of the people, which have produced them. An observation of this truth should render honest republican governors so mild in their punishment of rebellions, as not to discourage them too much. It is a medicine necessary for the sound health of government.”
GFO