French Banks Can Set Off Contagion That Will Make Central Bankers Long For The Good 'Ole Lehman Collapse Days!

Reggie Middleton's picture

I took the weekend off and all types of nonsense occurs in my wake.
Well, I'm back with some fresh research. Subscribers, we have found
another bank at risk (and you know how well the other banks that we
targeted fared in the past - Bear, Lehman, the entire French banking
system, etc.) and will be releasing the research in the next 24 hours.
In the meantime, I would like to address the massive bear market
rally/short squeeze that probably created many a draw down. First, a
little misdirection and disinformation as reported by CNBC: Greek 'Haircut' No Threat to French Banks: Noyer 

banks could cope with a significant Greek "haircut"—a private sector
writedown of Greek bonds—but it is still possible that the country's
financial institutions may have to be recapitalized, Christian Noyer,
governor of the Bank of France, told CNBC.

is not a problem for the French banks," Noyer said. "The total
(exposure) of the French banks to Greek sovereign debt is significantly
smaller than the first half of profits for the French banking system."

That exposure amounts to roughly 8 billion euros, while French banks' first-half profits totaled about 11 billion euros.

Noyer would not rule out recapitalization for banks in France, given
that all of Europe's banks' could face mandatory increases to their
required capital base, depending on a decision by the European Bank
Authority (EBA), the European Union's banking regulator.

Where shall I begin? Well, Reuters reports German Finance Minister Insists Greek Debt Haircut Should Be At Least 50-60%, as excerpted:

debt crisis cannot be solved without larger write downs on Greek debt
and governments are trying to persuade banks to accept this, German
Finance Minister Wolfgang Schaeuble said on Sunday, just days ahead of a
key EU summit.

in the interview with ARD whether there could be a Greek debt
write-down of as much as 50-60 percent, Schaeuble said: "A lasting
solution for Greece is not possible without a debt write-down, and this will likely have to be higher than that considered in the summer."

July, private creditors agreed to a voluntary write-down of 21 percent
on their Greek debt, a figure which now looks insufficient. Euro zone
officials said last week losses are now likely to be between 30 and 50

course we would like, if possible, to agree together with the banks.
That is why we will be discussing things with them. But it is clear,
there must be a level of participation which is enough to bring about a
lasting solution for Greece. That is enormously difficult," Schaeuble

The market has an even higher implied actual haircut! Analysis - Greek debt enters Argentina-style twilight zone

Reuters - Even that would be a better deal than levels of a 60 to 70 percent haircut currently priced into Greek debt. Most Greek bonds are trading at around 35 cents on the euro. For emerging market players with experience of Argentina, which defaulted on $100 ...

course, a little useless financial engineering can make things all good
right? Yeah, right! You see, what looked like a bad deal just a week
ago... EU Officials: Private Sector Bondholders Could Expect 30-50% Haircut Business Insider - ‎Eurozone officials told Reuters today that the private sector will likely see a 30-50% haircut on holdings of Greek bonds
if they participate in a debt swap deal. That's far more than the 21%
that had been expected under the initial terms of the July ...

Looks like a hell of a bargain today... Greek Bond Deal: Too Good to Last

Wall Street Journal (blog) - Reason 2: As we have pointed out before, a sharp fall in Greek bond
prices since July 21 makes the bond swap look like an even better deal
to bondholders. The new bonds they would receive through the exchange
have other benefits to investors—they ...

Pointless Greek bond swap dead — long live pointless Greek bond swap

FT Alphaville (blog) - For all we know, the terms of the current bond swap may simply be tweaked to get the “new” haircuts, for example by lengthening the maturities of the new bonds or cutting the coupons paid by Greece, while keeping other things (like collateral) much the ...

Contrary to Noyer's opinion above, both Reggie Middleton and other disinterested yet objective sources state Greek banks can withstand haircut of up to 30 percent - sources
Reuters UK - ATHENS (Reuters) - Greek banks could endure a loss of up to 30 percent on their Greek government bonds but could not stand significantly bigger haircuts, Greek banking sources said on Thursday. "Banks can withstand a haircut of up to 30 percent but a ...

Of course, those loyal BoomBustBlog readers knew this to be the case a year and a half ago!
Subscription analysis from early 2010 shows Greece was nearly guaranteed to default as its banks were stuffed with trash:

File Icon Greece Public Finances Projections
File Icon Greek Banking Fundamental Tear Sheet

Spreadsheets (professional and institutional subscribers only) showed
that haircuts were to be multiples of the originally proposed 21% if
Greece were to even have a chance of digging itself out of the hole!!!

I also explained the situation in public, and for free, early in 2010: Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!
The situation with the Greek banks is the same situation with the
French, German, etc. banks. Leverage piled upon depreciating assets
simply wipes out equity. Period! How Greece Killed Its Own Banks!

...These downgrades are going to cause people to increase their risk weightings,” Yelvington said.

the answer is.... Insolvency! The gorging on quickly to be devalued
debt was the absolutely last thing the Greek banks needed as they were
suffering from a classic run on the bank due to deposits being pulled
out at a record pace. So assuming the aforementioned drain on liquidity
from a bank run (mitigated in part or in full by support from the ECB),
imagine what happens when a very significant portion of your bond
portfolio performs as follows (please note that these numbers were drawn
before the bond market route of the 27th)...


The same hypothetical leveraged positions expressed as a percentage gain or loss...


I even went so far as to compare Greece to Argentina, complete with
online models. No matter which way you slice it, a 50% haircut would be
akin to a snowy Christmas in the summer of a devout muslim country -
highly unlikely! A Comparison of Our Greek Bond Restructuring Analysis to that of Argentina

referencing the bond price charts below as well as the spreadsheet data
containing sovereign debt restructuring in Argentina, we get...

Price of the bond that went under restructuring and was exchanged for the Par bond in 2005


Price of the bond that went under restructuring and was exchanged for the Discount bond


On that note, ZeroHedge has come out with a blockbuster explanatory article:
Credit Suisse Buries European Banks, Sees Deutsche Bank And 65 Other
Bank Failing Latest Stress Test, €400 Billion Capital Shortfall

A day after Credit Suisse killed the Chinese bank sector
saying that the equity of virtually the entire space may be worthless
if NPLs double, as they expect they will to about 10%, the Swiss bank
proceeds to kill European banks next. Based on the latest farce out of
Europe in the form of the third stress test, which is
supposed to restore some confidence, it appears that what it will do is
simply accelerate the flight out of everything bank related, but
certainly out of anything RBS, Deutsche Bank, BNP, SocGen and Barclays

I'd like to add that I've ridiculed all of these
stress tests, US and European, although the European stress tests were
by far the biggest joke. Dexia passed with a grade of A (or so), and
will be nationalized momentarily. 'Nuff said!

To wit: "In our estimation of what could be the “new EBA stress test” there would be 66 failures, with RBS, Deutsche Bank, and BNP needing the most capital – at €19bn, €14bn and €14bn respectively. Among the banks with the highest capital shortfalls, SocGen and Barclays would need roughly €13bn with Unicredit and Commerzbank respectively at €12bn and €11bn. In
the figure below we present the stated results. We note RBS appears to
be the most vulnerable although the company has said that the
methodology, especially the calculation of trading income, is especially
harsh for them, negatively impacting the results by c.80bps." Oops.
Perhaps it is not too late for the EBA to back out of this latest
process and say they were only kidding. And it gets even worse: "We
present in this section an overview of the analysis which we published
in our report ‘The lost decade’ – 15-Sep 2011. One of our conclusions
was that the overall European banking sector is facing a €400bn capital
shortfall which compares to a current market cap of €541bn." Said
otherwise, we can now see why the FT reported yesterday that banks will
be forced to go ahead and proceed with asset firesales: the mere thought
of European banks raising new cash amounting to 75% of the entire
industry's market cap, is beyond ridiculous. So good luck with those
sales: just remember - he who sells first, sells best.

And the scary charts:

1. Capital Shortfalls under Stress Test part Trois (9% min. CET1 ratio)

anyone over there has two synapses to spark together, I would fully
expect them to take my research over much of the anecdotal drivel passed
around the Street as research. For instance, from the outside looking
in, the Greek writedowns (yes, even the mark to myth Greek writedowns)
will most likely wipe RBS profit for the year. Now, try applying what
the real losses will be... Okay, after you do that, try realizing that
no Greek default will occur in a vacuum and all peripheral assets will
suffer in solidarity, not to mention their own solvency issues. Then add
to that that RBS is an insolvent ward of the state to begin with, after
passing stress tests itself then being nationalized. Okay, now that
we've dispensed with the most of the optimism and good news (I'm going
to skip over DB, since much of the market appears to be doing in
assuming that Germany cannot be touched despite the fact that it is
already very much "touched") and head on to the bank that I warned my
payiing subscribers about in late August - in time to see its share
price halved despite not a damn peep of a warning from the sell side of
the pop media. May I please be allowed reminisce, as excerpted from Small Independent, Bombastic Financial News Show Dramatically Scoops the Financial Times On French Bank Run Story :

 Post Note: BNP management is now shopping around for capital investment.

On that note, let's review my post last week, "BoomBust BNP Paribas?" (it is strongly recommended that you review this article if you haven't read it already) I started releasing snippets and tidbits of the proprietary research that led to the BNP short, namely File Icon Bank Run Liquidity Candidate Forensic Opinion -
A full forensic note for professional and institutional subscribers. It
outlined some very telling reasons why BNP's share price appears to be
spillunking, namely:

    1. Management is lying being less than forthcoming with the valuation of toxic assets on its books.
    2. The sheer amount of these assets on the books and the leverage employed to attain them are devastating
    3. BNP has employed the proven self destructive financing methodology of borrow short, invest in depreciating assets long!
    4. BNP
      management lying being less than forthcoming about reliance on said
      funding maturity mismatch, despite the fact it handily dispatched Bear
      Stearns and Lehman Brothers in less than a weekend!

Another BIG Reason Why BNP Paribas Is Still Ripe For Implosion!

As excerpted from our professional series File Icon Bank Run Liquidity Candidate Forensic Opinion:


is how that document started off. Even if we were to disregard BNP's
most serious liquidity and ALM mismatch issues, we still need to address
the topic above. Now, if you were to employ the free BNP bank run
models that I made available in the post "The BoomBustBlog BNP Paribas "Run On The Bank" Model Available for Download"" (click the link to download your own copy of the bank run model, whether your a simple BoomBustBlog follower or a paid subscriber)
you would know that the odds are that BNP's bond portfolio would
probably take a much bigger hit than that conservatively quoted above. 
Here I demonstrated what more realistic numbers would look like in said
model... image008image008

note page 9 of that very same document addresses how this train of
thought can not only be accelerated, but taken much further...


how bad could this faux accounting thing be? You know, there were two
American banks that abused this FAS 157 cum Topic 820 loophole as well.
There names were Bear Stearns and Lehman Brothers. I warned my readers
well ahead of time with them as well - well before anybody else
apparently had a clue (Is this the Breaking of the Bear? and Is Lehman really a lemming in disguise?).
Well, at least in the case of BNP, it's a potential tangible equity
wipeout, or is it? On to page 10 of said subscription document...


Yo, watch those level 2s! Of course there is more
to BNP besides overpriced, over leveraged sovereign debt, liquidity
issues and ALM mismatch, and lying about stretching Topic 820 rules, but
I think that's enough for right now. Is all of this already priced into
the free falling stock? Are these the ingredients for a European bank
run? I'll let you decide, but BoomBustBloggers Saw this coming midsummer
when this stock was at $50. Those who wish to subscribe to my research
and services should click here.
Those who don't subscribe can still benefit from the chronology that
led up to the BIG BNP short (at least those who have come across my
research for the first time)...

Thursday, 28 July 2011  The Mechanics Behind Setting Up A Potential European Bank Run Trastde and European Bank Run Trading Supplement

identify specific bank run candidates and offer illustrative trade
setups to capture alpha from such an event. The options quoted were
unfortunately unavailable to American investors, and enjoyed a literal
explosion in gamma and implied volatility. Not to fear, fruits of those
juicy premiums were able to be tasted elsewhere as plain vanilla shorts
and even single stock futures threw off insane profits.

Wednesday, 03 August 2011 France, As Most Susceptble To Contagion, Will See Its Banks Suffer

case the hint was strong enough, I explicitly state that although the
sell side and the media are looking at Greece sparking Italy, it is
France and french banks in particular that risk bringing the
Franco-Italia make-believe capitalism session, aka the French leveraged
Italian sector of the Euro ponzi scheme down, on its head.

I then provide a deep dive of the French bank we feel is most at risk. Let it be known that every banked remotely referenced by this research has been halved (at a mininal) in share price! Most are down ~10% of more today, alone!

So, What's the Next Shoe To Drop? Read on...

those who claim I may be Euro bashing, rest assured - I am not. Just a
week or two later, I released research on a big US bank that will quite
possibly catch Franco-Italiano Ponzi Collapse fever, with the pro
document containing all types of juicy details. This is the next big thing, for when (not if, but when) European banks blow up, it WILL affect us stateside! Subscribers,
be sure to be prepared. Puts are already quite costly, but there are
other methods if you haven't taken your positions when the research was
first released. For those who wish to subscribe, click here.

Now, let's refresh the output from And The European Bank Run Continues...and more importantly BoomBustBlog BNP Paribas "Run On The Bank" Models (they range from free up to institutional, I strongly urge those who haven't to click upon said link and download your intellectual weapon of choice!) where I modeled Greek losses on BNP.  Below is sample outout from the professional level model (BNP Exposures - Professional Subscriber Download Version) that simulates the bank run that the news clippings below appear to be describing in detail...(Click to enlarge to printer quality)This scenario was run BEFORE the Greek bonds dropped even further in price...


Using more recent market inputs (you know, assuming this stuff was Level 1), we get the following...


Notice here the base case TEC impairment is now approaching the
adverse case from just a few weeks ago - and this is using market
pricing, not some pie in the sky model!

I have not recalculated
the adverse scenario in this example, but you can simply use your
imagination, or download the model and run it for yourself.

Greek default with haircuts somewhat inline with market prices will
wipe out 13% of BNP TEC, with a more severe cut (quite likely) taking
out nearly 20%. This is not even glancing upon the many problems we
discussed in our forensic reports (File Icon French Bank Run Forensic Thoughts - Retail Valuation Note - For retail subscribers,File Icon Bank Run Liquidity Candidate Forensic Opinion - A full forensic note for professional and institutional subscribers).

if the ZH referenced report above is accurate (and I believe it is) the
banks are going to try to delever by selling assets in the open markets
(all at the same time, selling the same assets to the same pool of
potential buyers at the same bad times). This means that the prices used
to populate this model are probably still too optimistic. Even if they
weren't, look at the capital short fall the Greek default will leave BNP
with assuming our institutional bank run thesis holds true and they see
a slight withdrawal of liquidity of 10% this year and 15% next (knowing
full well the numbers for Lehman and Bear were much, much higher than
that before they collapsed). First, a refresher on our European bank run
theory espoused 5 months ago...

  1. Let's Walk The Path Of A Potential Pan-European Bank Run, Then Construct Trades To Profit From Such
  2. Greece Is Fulfilling Our Predictions Of Default Precisely As Predicted This Time Last Year
  3. The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run Occurs!
  4. The Fuel Behind Institutional “Runs on the Bank” Burns Through Europe, Lehman-Style!

And the BNP results????


trillion euros here, half trillion euros there... Sooner or later,
we'll be talking about some real money! Since the problems have not been
cured, they're literally guaranteed to come back and bite ass.
Guaranteed! So, as suggested earlier on, download your appropriate BoomBustBlog BNP Paribas "Run On The Bank" Models (they range from free up to institutional).

next post should also include research on the next bank that we have
found that has been (again) overlooked by the market, the media and the
sell side. Can we expect the same that we saw in BNP, Bear, Lehman,
etc.? Well, paying subscribers shall find out forthwith.

I can be reached via the following channels, or directly via email:

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will be releasing the date (probably this week), location and time of
the NYC meet and greet within the next 24 hours or so, so we can chat,
drink, debate, argue and fraternize with pretty woman together in a
trendy spot in the Meat Packing District or the Bowery (I apologize in
advance to all of my female readers/subscribers). Those who are
interested in attending should email customer support.
There has been strong interest in the London meeting, enough to warrant
the venue - I simply need to get the travel and venue organized due to a
change of plans.
For those that are new to the blog, these are pics of previous meet and greets...





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swamp's picture

Why not an article on the fraudulent IRS and how "income tax" is illegal and how income tax goes to the private bankers of the private Federal REserve and that the IRS was set up at public expense to collect the interest on the debt to pay the bankers. All illegal. All of it, including the IRS which are the henchmen of the Federal Reserve and who collect alleged debts without due process as they bypass all court systems. Per our Founding Fathers the Federal Government is not even entitled to know how much money we earn.

Republicae's picture

Once again, incorrect, while the 12 Regional Federal Reserve Banks are indeed quasi-private, meaning large commercial banks, S&Ls, nationally chartered banks (banks which all are required by Congressional law to be members and own stock in the Federal Reserve Bank) and some state chartered banks are given the option to become members and own stock in them, private individuals cannot own stock and the Federal Reserve Central Banking system itself is a government agency, with government appointees, government payroll and government benefits. The Board of Governors are  all government appointees. The vast majority of proceeds from the sale and interest on government bonds are relinquished by the Federal Reserve and reverts to the Treasury.

It is important to understand the workings of the so-called private portion of the FED, they too were established by the Federal Reserve Act and are under the oversight of Congress, their actions are not independent from that oversight, but their actions are not directly accountable either due to the nature of the Federal Reserve Act itself. Now, as far as just how the corporate structure of the 12 Regional Federal Reserve Banks operates, they are similar to a private corporation in that their organization is based on such a structure and stock in them is held by private commercial banks however, that is where the similarity ends. All Federal Reserve Stock, that is stock issued from the 12 Regional FEDs can never be sold by the member banks, it can’t be traded, the dividends are static at 6% annum, they can never be securitized for a loan and the stock-holding banks have no voting rights within the Regional Federal Reserve Banks as an actual private corporation would allow. Indeed, the by-laws are completely a government construction and laid out by Congressional decree, not by a private decree.

Actually, the Regional Federal Reserve Banks don’t operate or function like a private corporation at all, nor are the member bank stockholders allowed to change the by-laws of the Regional Federal Reserve Banks. They are however, quasi-private to the extent that those member banks own a set amount of shares, but that is it. Thus, the structure, completely unlike a privately held corporation has three levels of organization that is lead by the Federal Reserve Bank Board of Governors a completely government controlled and paid portion of the system, then the 12 Regional Federal Reserve Banks, which are also under the direct oversight of Congress and then the member banks to those Regional Banks, which are stockholders with no corporate voting rights, no power to change by-laws and a dividend that is set by Congressional Act.  Doesn’t sound very private to me, it doesn’t operate or function as a private corporation.

Now, the member banks are members because, by Congressional law, all nationally chartered banks must join and it is optional, but any state chartered bank may, by application also join under  the clause found in12 USCA 282. Now, by joining the Federal Reserve Bank, a member becomes a stockholder, but it is a set amount of stock, there are no majority holders and the dividends are set and remember the stockholders have no voting rights as to the direction of the Regional Banks. Thus, if your claim that the Federal Reserve is privately owned, that is true only to the extent that there are private banks who hold stock, but that is the extent of it, from that point there is no more resemblance to a private corporation. With no voting rights, those member banks have very little power to direct the way the 12 Regional Federal Reserve Banks are run, but the member banks can vote for 6 out of the 9 directors of their respective Regional Federal Reserve Banks. Those directors, in turn, have control over the operations of those Regional Banks, but only to the extent that they operate under the guidelines and the oversight of the Federal Reserve Board of Governors, which has the sole power over all monetary policy, the directors in the 12 Regional Banks have no power over monetary policy.

So, is it private? It has attributes of a private corporation, but is far less of a private corporation than say FannieMae or FreddieMac, which are GSOs with far greater independence than the Federal Reserve Bank or the 12 Regional Federal Reserve Banks. If private ownership is one where the government makes you own something, make you be a member and own stock, then that is a very strange type of private corporation, don't you agree? Addtionally, since the vast amount of interest paid to the Federal Reserve, approximately $78 Billion out of the $80 some odd Billion it collected for 2011, was returned to the U.S. Treasury, as stated in the Federal Reserve Act, the idea that all that interest is retained by either the Federal Reserve or the Banks is simply a myth. Now, it is true that under the Fractional Reserve Fiat Monetary system, banks reap huge benefits from the fact that they can pyramid interest and profit greatly from such a scheme. But, as far as the interest paid to the FED on government Treasuries through the monetization of debt, most, around 97%, is returned to the Treasury itself. Thus, the government is the greatest beneficiary of the operations of the Federal Reserve. 

The problem is that there are influences from both the political and commercial side of the equation that controls decision making with the Federal Reserve, it is neither dependent nor completely independent of those influences, as such, there is a propensity for the FED to act in ways that are not necessarily in the interest of the people of the United States, more than it acts in the interest of politics and the patronage system our government has created through corporatism.

It is better to repeal the Federal Reserve Act, dissolve the complete Central Banking system, repeal the 16th Amendment, repeal the 17th Amendment which nationalized the Senate, return this country to an actual classical gold standard without government influences or intervention. On top of it all, make sure that the States once again take their place as Free, Sovereign and Independent States; that this federal government, being the creation of the States as they acted as deputized agents of the People, who are the only source of Sovereignty, reign in this federal regime and limit it to only the powers delegated to it by the Constitution.   



falak pema's picture

the spiel does not change the reality of FED play under Greenspan and BB. The writing of criminal collusion with Treasury support all along to privilege GS is all over the place. GS philosophy ruled the day, and it was short term and market manipulation all the way.

Republicae's picture

By no means, the fact is that the entire system is rife with corruption, from the government on down, every sort of treason, crime, misconduct, slimmy patronages, militarism, corporatism, croney capitalism, quasi-fascism-socialism, bailouts, regulated monopolies and wholesale give-a-ways of the taxpayers "money". The heads of many of them should be on pikes!

sherryw's picture

Thank you for the explanation! It's been a missing piece of the puzzle for me.

LookingWithAmazement's picture

Finally, Armageddon. About time.

falak pema's picture

so the week sounds less boring. Changed your x mas plans? 

swamp's picture

Hopefully it will happen now. 

philipat's picture

At least in the UK, there is the possibility to fully nationalise RBS as a means of providing additional capital, thereby finally "Doing a Sweden". The Bank could then be made to lend and we would have at least one socially worthwhile Bank?

tom a taxpayer's picture


Reggie - Thanks for the world-class analysis of these world-dominating banks. 

By the way, you mention a chance to "fraternize with pretty woman". Some of us older, experienced men would relish a chance to fraternize with jolie femme Christine Lagarde.



RobertMugabe's picture

Reggie is such a pimp. People like Reggie, Hugh Hendry, and Kyle Bass are personal heroes of mine for going against the tide of MSM idiocy and in process helping many "small people" people protect their assets in distressed times like these. Thank you for all the work you have done! Your research has made an impact on the lives of many, myself included. I cannot thank you enough for your honesty, a rare commodity in an age of CNBC.

mt paul's picture

them french banks 

are gonna be playing ....

hide the baggette soon 

Buck Johnson's picture

Your analysis is beyond well done.  Most of the financial pundits on television don't go anywhere  close to the depth that you analyze and show the public.  Also your meet and greets look great.

max2205's picture

100 years from now people will wonder why investors/banks ever would have put money in things like PIIGS CDS ABX MBS 3X TZOO BIDU CROX Ect. We just need a TULIP 3X to top it off.

flyonmywall's picture

That's a lot of euros to print. Are they going to have enough ink? I highly doubt it.

TexasAggie's picture

The FED would not take kindly if someone else purchased ink the FED requires.

Akrunner907's picture



I would love to join you on one of your field trips.  I find your anlayses to be some of the best, and you go the extra step of interjecting some thought provoking observations.  Thank you! 

Ruffcut's picture

Nice analyst of the situation, but don't currently see this in the option market pricing. THese chains are saying not yet, but they can change in a hurry if the time has come. These market makers are not idiots, you know.

Zero Govt's picture

Fabulous Reggie

You're head and shoulders (pattern) above other financial analysts if the dribbling crones of the sector can even be described as such!

The Freddie Kruger slicing and dicing of walking dead horrors like BNP, Goldman and JPM (plus Bear and Lehmans beforehand) is bang on the button and a wonder to behold ....and in addition warms the cockles of my heart (much needed as i'm 2,000 meters up some chilly European mountains at the mo' looking to be out of reach of all blood-sucking Euro-Zombie Govts!!)

Hope to make one of your luncheons in a few months once i've settled down/in

SemperFord's picture

Be nice if you actually brought some facts Reggie!

Seriously though, thanks for your work, gives us more oppurtunity to make fiat to purchase PM's.

apberusdisvet's picture

Apres moi, le deluge

Now of course the question is who is "moi"?

DSK, Trichet, or pehaps Bernanke?

Or will it be Sarkozy and Merkel in a pissing contest of golden showers?

MacGruber's picture

Yeah, got the message, BUT WHEN??? This French bankning disaster has been forecast for months now.

LawsofPhysics's picture

It will take years and garbage will begin to pile up in the streets all over Europe.

ebworthen's picture

Now all we need is for average citizen depositors to make runs on their banks in Europe and U.S. after deciding that they don't believe in either the banks or their governments; and that cash under the mattress is at least tangible and doesn't cost you $5 a month (or more).

Looks and sounds like you are having fun Reggie, keep up the good work.

Hacked Economy's picture

While not exactly a "run" on my bank, I've nevertheless withdrawn most of my money from my bank accounts, while maintaining cash and PM reserves at home or otherwise off-site.  Not necessarily for TEOTWAWKI, but at least to have sufficient tangible cash for any unforeseen circumstance.

The banks can take their new monthly fees and stuff it.  I still have some accounts at major banks (with only the minimum amounts required to keep them open), but I've opened a credit union account and have begun the process of moving some money over now, in case the Big Boys decide to change their rules even further and try another new way to filch my money from me.

Dugald's picture

But with whom does Union bank ???????

Salvage's picture

Hope you're not talking about Union Bank of California--


Piranhanoia's picture

"Governments are trying to persuade the banks to accept this"     Says it all.

LawsofPhysics's picture

Thanks Reggie.  Bring on the contagon already.  We have hedged accordingly.  Ironic I know.

falak pema's picture

RM : Hope to see you at Cannes film festival next year. You look like you're getting prepared for it!

covert's picture

europe has always been a kleptocracy.