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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Fri, 03/22/2013 - 13:37 | 3362838 edb5s
edb5s's picture

Stranger than fiction...

Fri, 03/22/2013 - 13:40 | 3362843 ihedgemyhedges
ihedgemyhedges's picture

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

Fri, 03/22/2013 - 13:42 | 3362859 nope-1004
nope-1004's picture

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


Fri, 03/22/2013 - 13:43 | 3362865 insanelysane
insanelysane's picture

and you don't trigger a CDS event.

Nothing ever triggers a CDS event.

Fri, 03/22/2013 - 13:47 | 3362893 flacon
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."

Fri, 03/22/2013 - 14:10 | 3362996 YBNguy
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... 

Fri, 03/22/2013 - 14:29 | 3363086 rcintc
rcintc's picture

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

Sat, 03/23/2013 - 14:34 | 3366166 fockewulf190
fockewulf190's picture

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

Fri, 03/22/2013 - 14:17 | 3363033 earleflorida
earleflorida's picture

you made my day, flacon

seriously... haven't stopped laughing out loud

keep em comin

Fri, 03/22/2013 - 14:55 | 3363191 balolalo
balolalo's picture

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

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

Fri, 03/22/2013 - 15:08 | 3363250 Nobody For President
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...)

Fri, 03/22/2013 - 13:54 | 3362929 blu
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.

Fri, 03/22/2013 - 14:02 | 3362968 aint no fortuna...
aint no fortunate son's picture

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

Fri, 03/22/2013 - 14:11 | 3362999 tickhound
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.

Fri, 03/22/2013 - 14:11 | 3363002 Stackers
Stackers's picture

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

Fri, 03/22/2013 - 14:25 | 3363072 gina distrusts gov
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.

Fri, 03/22/2013 - 15:14 | 3363282 californiagirl
californiagirl's picture

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

Fri, 03/22/2013 - 14:04 | 3362973 spastic_colon
spastic_colon's picture

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

Fri, 03/22/2013 - 13:50 | 3362908 blu
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!

Fri, 03/22/2013 - 21:07 | 3364601 Buck Johnson
Buck Johnson's picture

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

Fri, 03/22/2013 - 13:43 | 3362863 Key-Rick
Key-Rick's picture

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

Fri, 03/22/2013 - 13:43 | 3362867 blu
blu's picture

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

Fri, 03/22/2013 - 13:49 | 3362903 Mark123
Mark123's picture

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

Fri, 03/22/2013 - 13:45 | 3362887 Wile-E-Coyote
Wile-E-Coyote's picture

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

Fri, 03/22/2013 - 14:46 | 3363166 mr1963
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...

Fri, 03/22/2013 - 13:38 | 3362840 reload
reload's picture

Sounds awesome - where can I get a prospectus and share aplication form?

Fri, 03/22/2013 - 18:18 | 3364100 StychoKiller
StychoKiller's picture

Without a Spiderman towel, you cannot play...

Fri, 03/22/2013 - 13:39 | 3362841 redpill
redpill's picture

Oppa Spaignam Style

Fri, 03/22/2013 - 13:39 | 3362845 tokengator
tokengator's picture

Looks legit. 

Fri, 03/22/2013 - 13:40 | 3362848 ZeroPower
ZeroPower's picture

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

Fri, 03/22/2013 - 13:41 | 3362852 Dull Which
Dull Which's picture

Seems reasonable in the current climate

Fri, 03/22/2013 - 13:41 | 3362858 pashley1411
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.  

    Fri, 03/22/2013 - 13:48 | 3362900 Mark123
    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.

    Fri, 03/22/2013 - 13:57 | 3362942 Eally Ucked
    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.

    Fri, 03/22/2013 - 13:42 | 3362860 insanelysane
    insanelysane's picture

    Perfect solution for Cyprus, too.

    Fri, 03/22/2013 - 13:42 | 3362861 toys for tits
    toys for tits's picture

    Should of just priced it as one Zimbabwe dollar.

    Fri, 03/22/2013 - 13:42 | 3362862 geotrader
    geotrader's picture


    Fri, 03/22/2013 - 13:45 | 3362866 falak pema
    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.

    Fri, 03/22/2013 - 13:44 | 3362870 Mongo
    Mongo's picture

    Collateralized LOL

    Fri, 03/22/2013 - 13:44 | 3362871 Joebloinvestor
    Joebloinvestor's picture

    Hire Rumplestiltskin and get a load of hay.

    Fri, 03/22/2013 - 13:43 | 3362872 Kreditanstalt
    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...

    Fri, 03/22/2013 - 13:46 | 3362890 Mark123
    Mark123's picture

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


    You have blood on your hands!!!!!

    Fri, 03/22/2013 - 13:45 | 3362874 squid virtuous
    squid virtuous's picture

    Como se llama "March Madness"?

    Fri, 03/22/2013 - 13:45 | 3362878 Mark123
    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.

    Fri, 03/22/2013 - 13:45 | 3362880 Cacete de Ouro
    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'

    Fri, 03/22/2013 - 13:45 | 3362881 optionsman
    optionsman's picture

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

    Fri, 03/22/2013 - 13:45 | 3362883 Jack Burton
    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.

    Fri, 03/22/2013 - 13:46 | 3362889 Zer0head
    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






    Fri, 03/22/2013 - 13:48 | 3362896 morning
    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.

    Fri, 03/22/2013 - 13:47 | 3362898 nonclaim
    nonclaim's picture

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

    Do NOT follow this link or you will be banned from the site!