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How To Prevent Bailouts, Bank Runs & Other Fun Things To Do With Your Hard Earned Dollars
The setting of the infamous "Bamboozled" speech delivered by Malcom X on 125th Street in Harlem. Take careful note of the signs and banners and tell me if they don't apply to today's situation & what banks/captured regulators have gotten away with today...
A discussion on bank bailouts, bank runs and other fun things to do with your hard earned dollars... Plus a simple solution to prevent such occurrences.
Let there be no mistake, most have been "Bamboozled by the Banking Industry"
Dipping into the BoomBustBlog archives with "Bank Run" on the brain???...
So, does BNP have a funding problem, or is it at risk of the same?
BoomBustBlog subscribers know full well the answer to this question. I'm also going to be unusually generous this morning being that our prime French bank run candidate has approached my "crisis" scenario valuation band. So, as to answer the question as to BNP, let's reference 
Bank Run Liquidity Candidate Forensic Opinion - A full forensic note for professional and institutional subscribers, and otherwise known as BNP Paribas, First Thoughts...
The WSJ article excerpted above quotes BNP management as saying: "The bank has €135 billion in "unencumbered assets after haircuts" that are eligible to central banks."
OK, I'll bite. Excactly how did BNP get to this €135 billion figure? Was it by using Lehman math? Methinks so, as clearly delineated in my resarch report on the very first page:
The following two pages of this report go on to reveal the games being played to potentially come up with a figure such as the 135 billion quoted above. Boys and girls, I fear those may be Lehman bucks!
For those not familiar with the banking book vs trading book markdown game, I urge you to review this keynote presentation given in Amsterdam which predicted this very scenario, and reference the blog post and research of the same:
- a research note to subscribers, The Inevitability of Another Bank Crisis,
- followed by blog posts on the same, see Is Another Banking Crisis Inevitable?, as excerpted...
But wait, there's more - much more!
This document is 19 pages full of stuff that BNP management may have forgotten to tell you, as well as valuation for both "crisis" and bailout scenarios. What you have before is an anecdotal 5 pages. To put this in perspective particularly since no on the sell side warned about French bank risk before the fact, let's look at the chart as of the day this research was released and I'll let you tell me if it was worth the subscription...
Roughly 50% and falling as Vol and gamma explode!
Just to add a sense of chronological depth to this post, let's revisit the timeline from yesterday's piece, "As The French Bank Runs....":
Saturday, 23 July 2011 The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run Occurs!: I detail how I see modern bank runs unfolding
image012
Thursday, 28 July 2011 The Mechanics Behind Setting Up A Potential European Bank Run Trade and European Bank Run Trading Supplement
I 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
In 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!
- French Bank Run Forensic Thoughts - Retail Valuation Note - For retail subscribers
- Bank Run Liquidity Candidate Forensic Opinion - A full forensic note for professional and institutional subscribers
I also provided a very informative document for public consumption which clearly detailed exactly how this French bank collapse thing is likely to go down: French Bank Run Forensic Thoughts - pubic preview for Blog - A freebie, to illustrate what all of you non-subscribers are missing!
So, What's the Next Shoe To Drop? Read on...
For 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.
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Reggie - Your quip about toasters and Greek CDOs is an all-time classic! "What banks get bailed out for is not separating proprietary trading and risky banking hedge fund activity from traditional banking which is deposit taking. Deposit taking should be just that... You go give money into a savings account, you get a toaster in return - you don't get a credit default swap on a Greek CDO."
Thanks for all of your hard work Reggie, I watched you on CNBC yesterday with the "pinheads" who kept interrupting your answers. Keep on bringing it and keep holding their feet to the FIRE.
Well i for one thank you for your work..
Reggie's right. The bottom line is still cost effectiveness. Free content means no advertiser, looking over the shoulder. We shouldn't have to check our financial conscience at the door. It's best to stay out of the commercial extortion media racket.
Reggie, the way to end all of the bullshit and fraud is exposure.
Everything else is a distraction.
There's no way that the funny math with the funny money can make this go away. The debt crisis is coming right back up the pipeline, and soon.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
..also please tell me reggie that you are not black...?...and spelled 'malcolm 'malcom'...?
The setting of the infamous "Bamboozled" speech delivered by Malcom X on 125th Street in Harlem. Take careful note of the signs and banners and tell me if they don't apply to today's situation & what banks/captured regulators have gotten away with today...
Reggie, you need an editor.
Your numbers and charts are incisive; however, your narrative needs review to add validity to correct "they're" versus "their", plurals, and other spelling/grammatical inconsistencies.
I would accept payment in Gold and Silver coinage, preferably Austrian Philharmonics.
How about $3 a page or 1/2 cent per word?
For this post at 12 pages and 926 words (per Microsoft Word count) that would be $36. Cheap!
I volunteer my services.
Umm... nevermind, I see Reggie has answered himself.
Actually, that's quite expensive. The $36 that goes into editing the page, plus analyst resources, graphic design and my time would be offset by $___ paid by those who read this article (just think about how much you paid to read this article). Now multiply that by 20 to 30 pages per week. Understand? That is why so many of the financial bloggers (at least many of the one's that are both worth their salt yet don't have critical mass traffic to get ads to work) are starting to charge for content. The more mainstream rags don't put as much into deep dive analysis, so thier costs are lower, therefore leaving room for an ad model. As long as content is free there will never be a prudent business justification to add the expense of an editor. The paid content gets edited, the free content is... well... free.
ZH is a little different. They are getting gobs of traffic which drives up ad revenue, but that is because their content is unique, plentiful and hard hitting. Nevertheless, don't be fooled into thinking that its a prudent business move to dump many dollars into an operation because you would prefer to see they're versus (a probably automatically spell checker adjusted) there in the middle of a sentence.
People are going to have to get used to the new dynamics of new media. Although you have the ability to publish some pretty hardhitting stuff to the masses for cheap, cheap is still not freea and the masses (particularly the higher end financial masses) are going to have to choose whether they are in this for the grammar or the financial analysis.
Hey, Money magazine has plenty of editors to spell check their work but that grammatically correct work will pail in comparison to BoomBustBlog when it comes to actual actionable content. It all depends upon what you value. I found that the guys who are sticklers on the misspelling of a word that is obviously a typo are not the type to drop $3k on a high end blog subscription. Alas, I could be mistaken.
The world could literally be ending from any number of things, and the newspaper headline could read "Worlds Gonna End Today" and some dumb motherfucker will be trying to call the Editor on the telephone as the meteorites rain down on us, the nukes detonate or the zombies eat us for lunch.
No celebratory "we're taking down the head of the SNB" still. Of course everyone knows that's ZH. All the rest of us need to do is add some color...like "maybe if he did the backstroke instead of...the breaststroke!" and PRESTO!
Naw, sorry- I'm not going to dummy-down just because those who can't perform say it's ok not to care....
Dude, it's simple spelling and grammar, and if you're trying to set an example and change the views of others, you have to gain their respect, and that begins with shit we all learned in the 4th grade;
We're gonna tune out when we see simple errors- that's just the way it's always worked, and it's not gonna change for you.
None of us like to have others point out when we make mistakes, but your street works both ways- if you're enjoying the benefits that come with the luxury of being able to leap-frog over traditional journalism avenues via your exposure on Zerohedge, then what's the problem with keeping up with the level of P's and Q's set here by Tyler? At most, it only takes a second set of eyes to check these things.
You make great points in your articles, but the smartest people in the room are ALWAYS tripped up by stuff they feel is "beneath" them; As it happens, proper spelling and grammar relates to image-
Will you be wearing a t-shirt and jeans on your next CNBC interview?
Why not?
Exactly.
Who cares about pail or pale, only a grammar Nazi. I could care less than les (Paul that is). It matters not when we talk numbers! WTF, it's free! I deleted the ahole comment I made.
You seem to be missing the point. Those who tune out when they see a typo, yet will accept a logical, financial or math error because they choose not to investigate are quite welcome to do just that - skip over my posts. They are not my target audience, but are more akin to the audience sought after by much of the mainstream media. Nobody forces them, nor you, to read my posts. The fact that you are here now is proof positive of that. Now, if you complained about content that you paid for that I profited from, then that is a different story.
BTW, yes, I will appear on CNBC with jeans and a T-shirt on. I appeared in a Dutch documentary that aired internationally and actually received wide acclaim, and I wore a Bahamian beach shirt, jeans and a handmade bead necklace that my daughter had just made me. This got much more penetration than a single CNBC appearance, and the CEO of ING was impressed enough to invite me over to give the keynote speech at his client conference - and I will be starring in another similar documentary next month on rating agencies. So, you see, the guys that actually pay for truly utilitarian, unique stuff often have a different set of criteria than the those that nitpick over spelling. See the compilation of 40 or so interviews below as an example.
Glad to see you putting out the longer posts Reggie. Cheers. Very insightful.
Good analagy and filtration for "Your not the sucker I am looking for, move along now." Keep up the good work Reggie, minr spellin erors n typooos dnt bthr me much!
May I suggest a leather tie:
http://www.ebay.com/itm/QUALITY-DEAL-Black-Lamb-Leather-Tie-2-inch-5-1-cm-/250966592690?pt=US_Mens_Ties&hash=item3a6ec64cb2
80's look, yes!
Sold!
For me yes..
Reggie? Naaa.. Reggie has to got the Brooks Brothers Route.. fitting in for Reggie is to profitable to ignore.
I dont miss those days.
reggieitotALLYAGREEWITHWHATYOUSAYABOUTTHECOSTOFHAVINGFREECONTENTBEENSAYINGTHESAMETHINGFORYEARSSOKEEPUPTHEGOODANALYSISANDFORGETPUNCUTATIONANDSPELLLLLINGCHECKER
Fair enough.
My thought was that your analysis would be harder hitting with the uppity types in the financial world who may use spelling/grammatical errors to denigrate your thoughts, facts, and figures.
I can look past them, and I'm certain most ZH readers and the general public can too.
You are having an impact or you would not have been on CNBC on Tuesday talking about "F.I.R.E." and deigning to suggest that GS has solvency risk.
Cheers,
Eric
Reggie, you can spell your shit however you damn well please. The information you provide in "they're" is bonafide bad-ass and worth every unpaid penny in my opinion. Keep up the good work. I'm surprised you release it so frequently knowing full well you could charge for it.
Their maybe will be an time win spellin is important but right now ain't that tym.
Cheers and I'll do you one more. I'll spell check it for free as a courtesy to you (hell, I read them all anyways.)
I value Reggie's work, too - a lot - but agree that 10 minutes editing would make it more presentable, easier to read.... and more credible.
Thing is, Reggie - one assumes you (deservedly) make a fortune from your work; would it kill you to get one of your staffers to cast an eye over your articles and get rid of the more egregious errors before they're posted? Really, 10 - 15 minutes would catch 95% of them.
Yes, you're right, spelling and grammar shouldn't matter. But people will assume: "if the guy can't be bothered getting his letters/punctuation right, why would I assume he's any more careful with his numbers? If he hasn't mastered spelling, how can I trust he'll have mastered math?" These are faulty conclusions but they're common. People are in a hurry, and one of the ways they maximize their time is to use filters to sieve out stuff unlikely to be useful to them. And 90% of the time, if someone can't write well, they can't think well either.
You're clearly a wizard with numbers, analysis, and synthesis. And articulating your thoughts verbally. Bravo! That puts you well ahead of most of the rest of us. But you clearly are poor at spelling and grammar, or are uninterested in them, and it diminishes your writing.
Or, to put it colloquially: why spoil a ship for a penny's worth of tar? For the want of a nail the horse was lost; etc, etc.
disclaimer: not saying I'm a spelling or grammar whizz myself, either... but then, I'm not selling chunks of writing :-)
BNP owns rights to a shitpile of future silver production @ about 20.00 and oz, on a deal they made 2 years ago
I love my silver more than ever now that everyone's afraid of it
silver.. America's other white meat!
Buy silver