A Lesson In Magical European "Value Creation"

Tyler Durden's picture

Behold a lesson in magical "value creation":

  • SPAIN'S BANK RESCUE FUND TO VALUE BANKIA SHARES AT EUR 0.01 - As a reminder, Bankia is the recently broke bank that was created when it subsumed a bunch of other formerly broke banks.

To explain for those confused: you start with a broke, literally, bank. You value the "equity" at the lowest possible increment in existence. Then you apply a reverse stock split. And finally, you end up with a perfectly solvent bank whose stock trades at EUR 1.00/share.

Financial magic and pristine solvency, European style.

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edb5s's picture

Stranger than fiction...

ihedgemyhedges's picture

Just like Shitigroup, different country though...........

nope-1004's picture

Ponzi.  Now if they did that with Treasuries, and the Fed was the only buyer, ........  oh, wait a minute.........


insanelysane's picture

and you don't trigger a CDS event.

Nothing ever triggers a CDS event.

flacon's picture

Bernanke walks into a pizza shop and orders one large pizza. The waiter asks him if he would like it cut into six or eight pieces. Bernanke replies: "Eight slices please. I've very hungry."

YBNguy's picture

Someone is getting paid tax dollars, at this very moment, to surf zerohedge and downvote every comment. Maybe a penny per vote... 

rcintc's picture

I'm ready to go short.....

fockewulf190's picture

Better than what they used to do....collect cans and ten dolla knee bends to feed the crack habit.

earleflorida's picture

you made my day, flacon

seriously... haven't stopped laughing out loud

keep em comin

balolalo's picture

They are playing three card monty with people's lives. 

Buy physical assests, they can't reverse split that. 

Nobody For President's picture

Great in joke, flacon - I could tell it to 20 of my friends, and I'm pretty sure only one of them would get it.

(You could substitute Merkel and it would still work...)

blu's picture

If anything ever even once triggers a CDS of any kind it will be the end of the entire financial world. In seconds.

Buying CDS is throwing money down the toilet. Money managers do it because it's in the checklist of Smart Things Smart Guys Do.

aint no fortunate son's picture

Larry Motherfucking FINK is long Bankia, and he's richer than Jamie Douchebag Dimon

tickhound's picture

You're relentless... Glad to see Larry mf'ing Fink is no longer flying under the radar.  The Arch-criminal has now told humanity "HE DOESN'T GIVE A FUCK ABOUT YOU" to your face.

Stackers's picture

And everyone with shares of Bankia just lost 99% of their money ?

gina distrusts gov's picture

When Bankio was created out of the many smaller bankrupt Sp. banks the deposeters got shares in exchange for there deposets. how do they feel about this game.

californiagirl's picture

At Bankia shares slides right back down to 0.01 again, post split.

spastic_colon's picture

i'll buy that for a dollar..........not

blu's picture

And they can split it again in 100 days. Have that bitch back at 40/share trading on vapors and nobody the wiser.

Then -- performace bonus time! Boo-yah!

Buck Johnson's picture

No kidding, no kidding.  They are doing exactly what we did.  Spain is about to go down also.

Key-Rick's picture

Uncle Ben's got nothing on the Euro-fags!

blu's picture

Mega-bullish!! My straight ruler has this stock at 1000 by May! Get in now before the crowd!!

Mark123's picture

Ben is pissed...he wants his magic PHD ruler back.

Wile-E-Coyote's picture

These bastards make up any old shit as they go along.

mr1963's picture

It's hard to trade under .01, it's easy to trade under 1.00. Look at it this way, it's about to trade at .01 again...

redpill's picture

Oppa Spaignam Style

ZeroPower's picture

Nice. Let's hope we get some magic bankia bonds which are priced at >100 too!!

Dull Which's picture

Seems reasonable in the current climate

pashley1411's picture
  • bullshit.

    They will be priced 1.00 Eur, until the shares hit the market.   They are worth less than the paper they are printed on.  

    Mark123's picture

    What market?  Ben will buy them at $1, then sell them to himself at $20...then use the profit to prop up the world.

    Eally Ucked's picture

    I don't think so. If they properly wrote down all losses then that paper is worth much more than any other banks. If they have even minimal recoveries in the value of loans in the future the value of that paper would increase. But there is big IF there.

    insanelysane's picture

    Perfect solution for Cyprus, too.

    toys for tits's picture

    Should of just priced it as one Zimbabwe dollar.

    falak pema's picture

    why european style?

    Spanish style. No european involvement there which is apparent, unless I miss something.

    Words have meaning. Rajoy and consorts are spanish; just like those cyprus banks are cypriot.

    Sovereign states and local shenanigans.

    Mongo's picture

    Collateralized LOL

    Joebloinvestor's picture

    Hire Rumplestiltskin and get a load of hay.

    Kreditanstalt's picture

    This is something like taking a foreclosed house with a current market value of $0.05, burning it down and then revaluing the now-vacant lot upon which it sits at $50,000...

    Mark123's picture

    you fool....you just started the great fire of Detroit!!!!!!!!


    You have blood on your hands!!!!!

    squid virtuous's picture

    Como se llama "March Madness"?

    Mark123's picture

    This is a joke right?


    Take 10 people with an IQ each of 10, and give them a problem to work on.  It will have the same result as givng the problem to a person with an IQ of 100.  or better yet 100 people with IQ of 10 and you have the greatest mind in the universe.

    Cacete de Ouro's picture

    A positive valuation only exists since the Bank Rescue Fund values the pre reverse split shares at a positive non zero value, so the shares outstanding have a positive value. The other steps are immaterial. If the shares are non worth 0.01 then the valuation is flawed and the market will determine the price.

    Just sayin'

    optionsman's picture

    thx Tyler. speechless about that and about price discovery in the "markets" ;) tgif

    Jack Burton's picture

    Financial engineering. This field now attracts some of the greatest minds in math and physics, these skills added to banker sharks and presto! Any number of something for nothing schemes!

    We have witnessed these skills applied to banking and trading now for over a full decade. While technology and human advancement needs these great maths and physics people to apply their skills to advancement of the human knoweldge and condition, instead the lure of easy money and fake wealth attracts and captures their skills.

    HFT and derivatives trading just a few such fake wealth creators. More like weath skimmers. Financial engineers seek to create a playing field in which the few wealth creators and productive workers left can have most of their wealth creation skimmed off by sharks who rig every game, who rig every market, who simply now make the rules!

    Bernanke is their great enabler. The world's central banks steal, via inflation, from the population and feeds the cash into the financial engineers for ZIRP and in unlimited quantities. The Fed hands over 82 billion a month in free money to America's financiers, and they use it to skim away whatever is not nailed down.

    The EU plays this same game.

    Zer0head's picture

    Off Topic

    Blackstone BX America's Landlord

    - this is how they treat some of there other tenants (they own SeaWorld)

    'Killer whales at Seaworld had teeth removed with power drills



    Meanwhile at BX HQ - who else but Marco Rubio and Mr. Schwartzman (http://graphics8.nytimes.com/images/2013/01/18/business/dbpix-penguins3/...)  for a fun day with some Penguins - these people are sick






    morning's picture

    Then you short it to oblivion and they rinse, repeat, and deathspiral for eternity. Even if you cannot short it, anyone will sell lower after a while.

    nonclaim's picture

    Instead of a 1 trillion coin they got a 1 trillion shares.

    Dr. Richard Head's picture

    You see these aren't any ordinary beans.....

    orangedrinkandchips's picture



    HOMER SIMPSON: Ooh, look at me! I'm making people happy! I'm the Magical Man from Happy-Land, in a gumdrop house on Lollipop Lane! Oh, by the way, I was being sarcastic!