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A Lesson In Magical European "Value Creation"
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.
- SPAIN BANK FUND AIMS FOR NOMINAL BANKIA SHARE VALUE OF EUR 1.00
- SPAIN'S BANK RESCUE FUND TO DO REVERSE STOCK SPLIT OF BANKIA STOCK
- SPAIN BANK RESCUE FUND SAYS BANKIA SHARES WILL BE WORTH EUR 1.00 AFTER 100-TO-1 REVERSE STOCK SPLIT
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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Stranger than fiction...
Just like Shitigroup, different country though...........
Ponzi. Now if they did that with Treasuries, and the Fed was the only buyer, ........ oh, wait a minute.........
and you don't trigger a CDS event.
Nothing ever triggers a CDS event.
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."
Someone is getting paid tax dollars, at this very moment, to surf zerohedge and downvote every comment. Maybe a penny per vote...
I'm ready to go short.....
Better than what they used to do....collect cans and ten dolla knee bends to feed the crack habit.
you made my day, flacon
seriously... haven't stopped laughing out loud
keep em comin
They are playing three card monty with people's lives.
Buy physical assests, they can't reverse split that.
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...)
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.
Larry Motherfucking FINK is long Bankia, and he's richer than Jamie Douchebag Dimon
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.
And everyone with shares of Bankia just lost 99% of their money ?
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.
At Bankia shares slides right back down to 0.01 again, post split.
i'll buy that for a dollar..........not
I get it, everyone gets .01 worth of their stock, and it's YOUR job to do the 100 to 1 ratio reverse to make it a whole share. Hows about we just add another ball to your juggling act.
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!
No kidding, no kidding. They are doing exactly what we did. Spain is about to go down also.
Uncle Ben's got nothing on the Euro-fags!
Mega-bullish!! My straight ruler has this stock at 1000 by May! Get in now before the crowd!!
Ben is pissed...he wants his magic PHD ruler back.
These bastards make up any old shit as they go along.
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...
Sounds awesome - where can I get a prospectus and share aplication form?
Without a Spiderman towel, you cannot play...
Oppa Spaignam Style
Looks legit.
Nice. Let's hope we get some magic bankia bonds which are priced at >100 too!!
Seems reasonable in the current climate
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.
What market? Ben will buy them at $1, then sell them to himself at $20...then use the profit to prop up the world.
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.
Perfect solution for Cyprus, too.
Should of just priced it as one Zimbabwe dollar.
VOILA!
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.
Collateralized LOL
Hire Rumplestiltskin and get a load of hay.
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...
you fool....you just started the great fire of Detroit!!!!!!!!
You have blood on your hands!!!!!
Como se llama "March Madness"?
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.
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'
thx Tyler. speechless about that and about price discovery in the "markets" ;) tgif
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.
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 drillshttp://www.dailymail.co.uk/news/article-2175966/Killer-whales-Seaworld-t...
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
http://dealbook.nytimes.com/2013/01/18/private-equitys-penguins-on-parade/
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.
Instead of a 1 trillion coin they got a 1 trillion shares.
You see these aren't any ordinary beans.....
http://www.youtube.com/watch?v=snsj0L8-4Iw
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!
classic
He just needs some floor pie to settle him down.
I wonder how much the government paid serial junker is getting paid. Will Obummer make a special medal for them too like the drone pilots medal?
Better they work out their issues here, rather than at a mall with an assault rifle.
Duck, Doc. More incomiiiiiiiiiing (junks, too funny)!
Ahhhhhh! I've been hit, I've been hit!
Stop being such a sissy. I've seen you with a lot more junks than that before.
There I junked you myself. See it didn't hurt.
Take that, right between the tits!
Hey watch it! I've set people on fire for less than that.
Now look you made me spill something on my keyboard.
Food or water balloons would be better. Been fun throwing junk around with you though.
The junk in the trunk is emblematic of the Central bank screwing we are all receiving, that's it!
There is definitely not enough food fighting. Speaking of which, I see the captain has turned on the "lunch time" cabin light.
See ya!
It's the Bernak, he's pissed about Wednesdays questioning from the insolent minions during his press conf...
He's probably crying his eyes out right now, muttering and clutching his teddy bear in desperation, all the while clicking down-votes all over ZH until his wee fingers bleed.
To feel better, he'll bail-out AIG again even if they don't want it.
Maybe it is new tax on ZH commenters?
What's the ticker symbol? I want to put an order in as soon as possible.
That's "innovation".
"Trade" to whom?
Hey rocky, watch me pull a rabbit out of my ass!!
beyond fucking comprehension.
You just know there are a bunch of banking wonks back in Spain giggling their asses off over how they pulled a fast one.
Sanity Watch: Negative
And it's just that easy. :)
pravda on the end of the eurozone. hilarious. begins with marx and religion as opiate and ends with the glory of wealth. putin is grinning from ear to ear.
-------------------------
Crisis in Cyprus shows collapse of the West 20.03.2013In 2014, all EU countries will hold parliamentary elections that may be won by the opponents of European integration. Recent EU measures to stabilize the situation in Cyprus showed that the foundations of the ideology of the Western world based on the Catholic and Protestant faiths have been undermined. The West is trying to explain its hurried decisions with the pressure from the Russian Federation.
After the summit in Brussels approved a plan of Cyprus "rescue" (by providing a tranche of 10 billion euros in exchange for the withdrawal of 10 percent of all deposits in the country), it became clear that this was the beginning of the end for the united Europe. The basis of any state ideology is religion. The measures undermined confidence in the notion sacred for Catholics and Protestants - inviolability of private property. Expropriation is a measure completely alien to the Western mentality and may lead to a social unrest. Jean-Claude Juncker, Luxembourg Prime Minister and former President of the Eurogroup (the club of finance ministers of the euro area) said that against the background of recession and rising unemployment he did not rule out the risk of a social rebellion.
The measure so far has been implemented only in Orthodox Cyprus (Orthodoxy, unlike Catholicism, encourages sharing and sees the path to salvation in poverty). However, people in many countries began to worry, even in the U.S., as the practice may become universal, particularly in those countries that have requested assistance from the EU, i.e., Spain, Ireland, Portugal, and Italy.
Meanwhile, Forbes magazine has already drawn parallels with the Great Depression in the United States that would not have been that destructive if the Federal Reserve abstained from a similar measure. The magazine wrote that Cyprus did away with the guarantees on bank deposits and removed protection from flight of capital, which may result in a cascade of bankruptcies. Indeed, regardless of what the European Commission says, people got alarmed and started withdrawing or transferring their investments to other currencies and countries. The euro is dropping in value against the national currencies and the dollar.
British magazine The Economist called this not only nonsense, but a catastrophe and said that the decision was unfair, short-sighted and self-defeating. The injustice is in the fact that the measure affected ordinary depositors, while holders of debt obligations have not been affected, the magazine wrote. The measure is called short-sighted because it would lead to risks and flight of capital. Also, these measures undermine the political credibility of the rescue program under the auspices of the EU. Reuters agency wrote that the Cypriot government would be forced to violate one of its most important promises - a promise that the contributions under 100,000 euros would be safe.
The European Union decided to clear the air by utilizing the old mechanism of blaming Russia that allegedly is most affected by the proposed measures. Raúl Ilargi Meijer from Business Insider speculated that with 37 percent of the deposits in Cyprus, Russians heavily pressured European politicians to take this populist decision - to punish the perpetrators, which made the Europeans neglect the consequences. Gavin Hewitt of the BBC agreed, saying that the Germans suspected that half of the deposits in the banks of the island belonged to the Russians, and these deposits are made for money laundering. Therefore, according to Hewitt, the Germans did not want to continue to save Cyprus by giving it money. The statement of Finance Minister of the Russian Federation Anton Siluyanov that in exchange for the extension of the credit to Cyprus (EUR 5 billion) Russia may require it to provide all the data on the Russian owners of the capital of the island only added fuel to the fire.
It turns out that Russia began fighting corruption and "let down" Europe. Unfortunately, the EU is falling apart without Russian participation. There is no unity anywhere, including politics. Besides the opposition of the "hardworking North" and "lazy and irresponsible South", there are other conflicts, such as creditor countries vs. debtor countries, as well as contradictions between the leaders. Germany is accused of usurping power, the UK raised the issue of withdrawal from the EU, and France is unilaterally sending troops to Mali and is going to supply weapons to the Syrian terrorists. There is no peace and quiet at the national level either. Nationalists became active in all directions, from extreme left to extreme right. In Portugal, protesters are singing a revolutionary anthem "Grândola," Spain is splitting before our eyes torn by separatist movements, in Greece the Nazis emerged in the Parliament, and in France the far-right "National Front" of Marine Le Pen is activating. In Italy at the parliamentary elections a "clown prince" comedian Beppe Grillo secured sensational 25 percent of votes. In Germany, a new party "Alternative for Germany" was created that calls for the dissolution of the euro area and creation of small alliances with "some countries with healthy economies," namely, Austria, Finland and the Netherlands.
Founded on the basis of ideological confrontation with the Soviet Union, the European Union has created a system of social protection that the Soviet people could not even dream about. The benefits included average pension of 600 euros, year-end and Christmas bonuses, unemployment payments nearly equal to salary, and great medical insurance. But these guarantees were based not on the income growth of the real sector but the speculative funds of the banking sector. The crisis of 2008 caused the neoliberal economic model to collapse. Europe's population does not want to live as one family any longer. The term "welfare state" has disappeared from the vocabulary of politicians. ZDF channel reported that nearly half of Germans believe that their country would be better off without the euro. In other countries this percentage is much higher. In Spain, for example, it is 75 percent, in Portugal - 68, according to the Eurobarometer.
The election of Pope Francis, who first spoke about the Catholic Church as the Church of the poor, denying, in fact, wealth as a virtue, shows that the crisis in the West has moved from the economic and political spheres to religious and ideological ones. It makes its leaders and the elite face a dilemma - either change the model of wealth distribution and the burden of difficulties, or be destroyed.
Lyuba Lulko
Pravda.Ru
Read the original in Russian
It turns out that Russia began fighting corruption and "let down" Europe.
LMFAO! More like Putin torpedoed a few of his Russian competitors and the EU at the same time. Richly ironic that the torpedo was supplied by Germany's Merkel.
I need change. Anyone got two twenties for my ten?
Reminds me of the TruPS CDOs put together for community banks. The securities weren't investment grade but the IB houses got out their knives cut them up into various tranches and the rating agencies said investment grade. Little banks in two shoes Iowa were getting pricing of L+135bps. Ridiculous...
Someone has gone to the trouble of minus 1'ing all comments....a spanish bank rescue trojan maybe?
Someone ready to have a mental breakdown.
Hey, Junker...junk this..
Idiot
I should be so innovative with my taxes this year. Timmy, any ideas?
you see ...we have 3 shells here...now see the pea ? Ok, moving the shells around ...which shell has the pea this time?
It's spelled "p-e-e" and I think it's mostly in my shoe now.
I don't know why they call this financial innovation when all I end up doing is buying new shoes all the time.
I got a minus 2, I must be doing something right. Roll
in minus 3...as tedium sets in...
Who wrote this shite?
If you do a reverse shares split the value is unchanged.
The value of any company is determined by...
share price X number of shares in issue
If you do a reverse share split at 100:1 all that happens is you convert the shares into new shares at a ratio of 100:1 so every share holder has 100 times fewer shares.
The result is that the price rises 100 fold, but no value is created and no shareholder receives any money. As the formula for the value of the company is the same...
(Share price X 100) X (number of shares in issue / 100)
The reason why they have done this is because of the increments at which the shares are traded on the exchange. If a share falls 90% the increments become 10 times more significant and it hurts the liquidity of the exchange.
It's has nothing, absolutely nothing to do with value.
And whoever wrote this article is a thick as pig shit.
Merkel, is that you? Are you still upset from my DECAF and martini post earlier ?
Magical 100-1 leverage...EAT IT BITCHEZ!
Reverse stock splits: the alchemy of converting shit, into identically shit-like consolidated shit.
Otherwise known as the plight of the penny share.