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Where Are The Ratings Agencies Before UK & German Banks Go Boom? How About Those Euro REITs? Agencies Anybody?

Reggie Middleton's picture




 

Last week I illustrated the interconnected EU master duo with the most ironic of divergent agendas: When The Duopolistic Owners Of The EU Printing Presses Disagree On The Color Of The Ink! 
Basically, Germany and France are pulling in two different directions
trying to get off of a boat that will drown them both, regardless. Then I
posed the taboo question:
Are The Ultra Conservative Dutch Immune To Pan-European Pandemic
Contagion? Are You Safe During An Earthquake Because You Keep Your Shoes
Tied Snugly?

The Dutch are probably
in for a banging that the vast majority of the populace are not
expecting. The presentation below is a subset of the keynote speech that
I gave at the ING CRE Valuation Conference in Amsterdam last April.
Some may say it was quite prescient. I'd say it was a matter of paying
attention.

Before you peruse through the Power Points and related videos, glance over Interbank_Contagion_in_the_Dutch_Banking - 2006 (pdf)  and then review Cross_Border_Bank_Contagion_in_Europe_- 2006 (pdf). It is apparent that I wasn't the only one who used calculators and common sense before it was too late. To wit:

We investigate interlinkages and contagion risks in the Dutch interbank market. Based on several data sources, including survey data, we estimate the exposures in the interbank market at bank level. Next, we perform a scenario analysis to measure contagion risks. We find that the bankruptcy of one of the large banks will put a considerable burden on the
other banks but will not lead to a complete collapse of the interbank market. The exposures to foreign counterparties are large and warrant further research.

The
following presentation shows not only Euro-area banks going bust but
European CRE as well. So, why aren't German and UK banks - and REITs
(yes, even Dutch REITs) on negative watch with the ratings agencies? And
even more interesting question is why isn't the industry that I prepped my subscribers for in regards to the next forensic report
beng put on watch by the ratings agencies? The quick answer is...
Because they know they'll get paid to come to a pile of smoldering ashes
with a fire hose, anyway. Let this be the official declaration: The man that called the fall of WaMu, CountryWide, Bear Stearns, Lehman Brothers, and GGP as well as the problems of about 32 regional US banks as well as the Pan-European Sovereign Debt Crisis
(all while these enttities were investment grade and AAA rated) is now
calling BS to the ratings agencies as they fail to take it to the UK,
Germany and CRE. You heard it here first, and you'll probably hear an "I
told you so" in a few months as well.
Below, click the graphic to advance it, or you can click the play button at the bottom of the black box for "autoplay".
Note: I'm having a problem embedding the presentation, so click here to view it on my site, towards the bottom of the post.

Subscibers are welcome to discuss this in the private forums:

 

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Wed, 11/30/2011 - 17:06 | 1932317 Normalcy Bias
Normalcy Bias's picture

Pounding their mistresses? ...Just a guess!

Wed, 11/30/2011 - 17:18 | 1932226 The Big Ching-aso
The Big Ching-aso's picture

 

 

Uh oh.     Reggie's on this one like a hound dog over a bitch with three pussies.

 

Wed, 11/30/2011 - 16:25 | 1932064 37FullHedge
37FullHedge's picture

I live in the UK and I can confirm the carnage in CRE over my way,

In a local town a Macdonalds has just closed down in the town centre and it was reported in this town centre Rochdale has a 29% vacancy rate, Some landlords due to this desperation are reducing rents to £1.00 Per quarter day just to keep tenants in, So in effect much CRE is of zero value and yes I am sure the banks book value for this will be around 100% from a few years ago.

Pubs are going bust all over the place and now have next to no value and soon to be as hard to find as a honest politician,

Barclays bank and RBS and such like have just been downgraded However I would assume MHFT subs was aware of this crap a long time ago.

No worries the BOE will debase sterling via QE and pay full price for the crap though. 

Wed, 11/30/2011 - 18:07 | 1932729 EscapeKey
EscapeKey's picture

Surrey is looking plush. Kingston, Weybridge, Guildford, Walton... they all laugh at this "recession" thing, as towncentres are refurbished.

It'll be an abrupt awakening.

Wed, 11/30/2011 - 17:31 | 1932511 dugorama
dugorama's picture

37 Full? Where in the UK?  this is NOT being reported on this side of the ditch.

Wed, 11/30/2011 - 15:57 | 1931893 SILVERGEDDON
SILVERGEDDON's picture

Hey - where's the loincloth and spear shot? 90% of your post's media photogenic appeal - aaannndd - it's gone.

Wed, 11/30/2011 - 15:44 | 1931823 falak pema
falak pema's picture

When will RM print a forward analysis of the derivative bubble in US private finance? 

Should be very instructive; especially if we open the banker's balance sheets to off balance sheet items parked off shore. 

Wed, 11/30/2011 - 14:26 | 1931384 Georgesblog
Georgesblog's picture

The ratings agencies work muscle in the central bank protection racket. The banks want countries in financial trouble. The central banks gain power over national govetnments and exact tribute from popularions. That is the end game and the end goal.

 http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

Wed, 11/30/2011 - 14:24 | 1931347 JOYFUL
JOYFUL's picture

 

You heard it here first, and you'll probably hear an "I
told you so"  in a few months as well.

An unusually subdued submission from the now official "Fourth Horseman" of the EUpocalypse. More likely a few weeks from now, the way things are going....but I can understand your newfound conservatism. Nobody wants to be braying from on top of the city walls while they are actually collapsing! We're that close now.

My previous suggestion (that you consider taking over the reins of an now has-been, terminally bankrupt former imperial power) was clearly a demeaning interpretation of the logical sweep of where your achievement in prognosticating things to such an exact degree should take you. I must retract that suggestion and apply a more realistic one.

It's clear to me now that the best and most logical reward for your excellent track record would be to have you head up the Eurozone itself, as a kind of newly fashioned "plenipotentiary" sent to them by higher powers.(aka Reality). If it seems a bit farfetched at first glance, think about it:  they've always taken to imported American jazz musicians, AND the positions of highest authority there DO NOT REQUIRE ONE TO GO THROUGH THE RIGORS OF ACTUAL ELECTION! 

So you could probably keep your day job AND lord it over those woodenheaded Dutchmen too! Still not biting? Ok, and a megayacht in each ClubMed Members best port! ...Tax free diesel...final offer.

Wed, 11/30/2011 - 14:15 | 1931301 AndrewCostello
AndrewCostello's picture

When it gets to the point that you are borrowing money to pay back what you already owe - it's the beginning of the end.  This whole thing was planned, and the sheeple should wake up to this.

 

Read:

http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref

Wed, 11/30/2011 - 14:04 | 1931214 apberusdisvet
apberusdisvet's picture

when the sheep wake up to the fact that liquidity is only for the banksters and not for anyone else, maybe there will be an epiphany; then again maybe not.

Wed, 11/30/2011 - 13:56 | 1931184 distopiandreamboy
distopiandreamboy's picture

It's ok we'll just borrow what we need to cover our losses from our friends. Guys? You there?

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