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European Banks Are In Trouble
With Austrian bank contagion impacting European stocks on Friday, we thought it worth a look at the 'recovering-out-of-the-crisis-all-is-well-and-stress-tests-will-prove-it' European banks. It appears, having bid with both hands and feet for Europe's peripheral debt - thus solidifying the very sovereign-financial-system linkages that were the cause of the European crisis contagion - Europe's banks had the jam stolen from their donuts when Mario Draghi did not unveil a massive bond-buying scheme (by which they could offload their modestly haircut collateral at 100c on the euro, raise cash, take profits, and all live happily ever after). A TLTRO is no use to the banks who now know even the first sign of one dumping his domestic bonds will cause this illiquid monstrosity to collapse under its own weight. It is clear - as the following chart shows - that investors are quickly coming to that realization and exiting European bonds in a hurry.
Since Draghi failed to unveil QE, European banks have collapsed to one-year lows relative to world banks...
Of course, some knife-catching Bill-Miller-ite will come to the rescue, buying-the-dip - but as BNP's Ian Richards notes,
"The prospect of supporting material credit growth and better earnings revisions in the banking sector is further down the line than the market had hoped.”
Source: Bloomberg
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No Bullshit around here, Tyler lays it out there matter of fact.
"European Banks are in trouble".
Proceed with caution and bullish and European mattress manufacturers ..
The solution to the problem is very easy....DEATH to the central bankers.
Which ones?
We might need some more specificity at this point.
All. Power corrupts.
Oh come now...
We all know Janet Ben Yellen will bail out the stupid euroweenies...
And then add it to OUR debt!
We all know Janet Ben Yellen will bail out the stupid euroweenies...
And then add it to OUR debt!
All the more reason to make the Euro the reserve currency. We KNOW the EU is stable and has a big international police force ready to defend the weak, feed the hungry and come to the financial rescue of all countries without regard to race, religion, color or creed.
Oh wait ......
Or maybe the Chinese. Yea. That's it!
The Chinese are financially big and powerful and peace loving and ...
Oh wait ......
No Euro-Easing + Neg rates = Melt-up in US equity markets. FED will then raise rates slightly to attract paper buyers and also have the ability to "lower" rates during the next (current?) recession.
"All. Power corrupts."
I was going to write: Especially the power to steal the people's labor and product by way of fraud and counterfeiting backstopped by the violence of their partners in crime, government.
But then I realized that those that do such a thing are already corrupt.
That sounds like a logistical problem. We've got a lot of money printers.
In defense of New Zeeland...they are raising rates. I vote for clemency!
Specificity...All of Them.
DirkDiggler11
All of this, ever so slowly (and has for years) points to hard assets.
Banks failing means that even CA$H FIAT$ might be worth more than electrons in a bank.
Hard assets to look at:
Gold. Other PMs. Land & survival goods. Even Bitcoin.
dude. stick to little metal balls.
Our bearing business is nicely profitable, thank you for your suggestion.
"Proceed with caution and bullish and European mattress manufacturers .."
Putting your cash in your mattress wouldn't work the same way in Europe as in the U.S. Euro currency is issued with an expiration date - after which it is demonetized. One is periodically forced to turn in his old bills for new ones.
So far, the U.S. has never demonetized any of its currency, with the exception of gold coins. A gold certificate from 1912 is no longer redeemable in gold, but it is still money and could be spent for its face value.
Do you have a link on that? I could not find anything about expiration dates
Not just EU banks. Latin banks too.
Ecuador, the country that provided asylum to Julian Lasange at their London embassy, will now be handing over its Gold to the Fed, for... get this... more... "Liquidity".
Yeah, real assets, real wealth for Confetti.
Isn't that how they got Long Island... Baubles for real estate? With the Locals that dumb and gullible, no wonder the Aliens keep winning.
p.s. What happens to Lasange, when Gold Man has said gold and Ecuador's need for another "fix" needs to be addressed?
http://finance.yahoo.com/q/bc?s=DB&t=6m&l=on&z=l&q=l&c=
fonz: as a fellow LI'er, do you have any plans for when the shtf? There aren't very many places to hide from the fsa zombie apocalypse around here.
i no longer see a shtf moment. i see a slow mudslide over time. i do honestly wonder if maybe being here has some merits. if you go to Russia for example you have the big cities that are full of wealth and then the outskirts are desolate. Maybe that is the next 20 years here. maybe more, maybe less. Maybe i have lulled myself into complacency and will get caught off guard.
My in laws are pretty close to buying a place around Park City Utah. I suppose if the markets took a sudden massive leg down and things get shaky, assuming there is time, that is where i would be heading. How about yourself?
No, the rest of my family isn't paranoid like me, so they're not thinking about having to scram at any point. I'm single so I guess I can get up and go pretty quickly, but where to is an issue. I know nothing about buying land, and even less about living off it, so I hope your slow mudslide forecast is right.
fuck it maybe we go to montauk. there is a lot of agriculture on the east end. plenty of deer and you can prob grab a striper off montauk all year long.
Yeah but you are on the same island with the riff raff in queens and the bronx, its only a matter of time before they make their way down the railroad tracks to montauk and kill and eat you. You boys are better off having a nice decent sized yacht in Sag Harbor outfitted and ready to go, you don't need to work the land when you can fish and trap crabs and lobster off the coast. You can sail your way up to Maine to less populated areas and set up anchor in a nice protected bay.
https://www.youtube.com/user/briantrautman
these folks been living on this boat for quite a while and having a BLAST.
Here is a nice pretty much unsinkable boat by virtue of its trimaran independent hulls.
https://www.youtube.com/watch?v=oydcwPqXDxY
With a sailboat you are pretty much independent of gasoline. If you have a diesel on there running biodiesel, you can make your own fuel from seal blubber etc...
"Lobster traps and snapper." Just get a Montauk and start hauling in the fishes. Maybe even a funa or two...
@ pheonyte: www.survivalistboards.com
Get crackin'!
Simplistic.
.............all they need is Billy Zane...
https://www.youtube.com/watch?v=8NYZF90aPX4
Fonz you're starting to sound like Knuks.
You have an obligation to educate your followers.
http://www.bloomberg.com/news/2014-07-06/bond-anxiety-grows-in-1-6-trill...
The Federal Reserve’s bond purchases combined with demand from banks to meet tightened regulatory requirements is making it harder for traders to easily borrow and lend certain desired securities in the $1.6 trillion-a-day market for repurchase agreements. That’s causing such trades to go uncompleted at some of the highest rates since the financial crisis.
“The effect of all the collateral issues we see now is an indication of not so much how things are, but how bad things will be when you really need liquidity,” said Jeffrey Snider, chief investment strategist at West Palm Beach, Florida-based Alhambra Investment Partners LLC, in a telephone interview June 30. “That’s when you get into potentially dire situations.”
Most people don't understand unwinding inflation Fonz.
Nice Job.
Most people are eediots.
They think it is their relatively insignificant demand deposits being on-loaned infinitely that create the huge growing money supply.
They understand it's all a ponzi scheme, yet think that there is actually enough money in existence to justify or support the prices they pay for goods and services.
Bond shortage? LOL. Keep reading the MSM. They need liquidity b/c they are leveraged up the ass. so when they get stuck its a liquidity issue and the FED to the rescue. Same as it ever was. 2008 was it really that long ago?
I see triangulation. The question is, where will that price go from here?
YAWN.... Cant they just get the ECB to print more Euros, to pay for the wealth transfer of middle class Euro dude's bank holdings plundered by the rich who took that money out to invest in speculative real estate developments that went bust.
As usual in the speculative game the connected individuals keep driving the prices up by 'flipping' until they dump the crap on a pension fund which ultimately takes the loss (something similar happened to Calif largest pension fund with those Apt Blds in Manhattan, they lost billions). So the middle class dude gets screwed thrice. His pension is Kaput and so are his savings in the Bank which went to create the bubble through easy lending, now with all the extra Euros printed to partially 'bail' out the banks (the bondholders ie the ones who took out the big loans are made whole while the depositors take a loss ala Cyprus style bailout), inflation skyrockets.
Its a game that has been going on in the middle east since the beginning of time. Hype it up, get out of it before the set collapse, then go back in and buy it for pennies on the dollar. Rinse and repeat in a few years time while doing the same in the meantime with another asset class.
"Cant they just get the ECB to print more Euros"
The short answer is Yes.
The longer answer is if the Kremlin allows it, or raises oil price to compensate.
The answer is an susinct NO! Albeit you have good intention's CrashisOptimistic.
The European banking system isn't like the United States, in that it's just a shell "sovereign" .
TOTAL (oil) from France is nothing more than an sovereign shell company.
Assuming Russia doesn't require payment in something else entirely...
This year gold.
Next year yuan.
The year after that, Ukraine.
Poland.
Romania.
Hungary.
We can play this game for a couple decades. Whatever Russia wants.
Of course they can, silly. But such measures are not yet considered necessary. In case you haven't noticed, the recession in Europe is over, and growth is surely, albeit slowly, returning to the continent.
there is no more growth. you cannot make growth anymore wherever you are.
it is eye powder, they manipulate numbers too, an economy cannot growth when each month you add 15k-40k unemployed.
this is insanity to still speak about growth.
uk & germany you work for less than 5$/hour ... you call this growth ?
10% france live with less than 12500$/year.
the place is dying slowly. 50% youngs in spain do not work....
etc....
all messed up.
This is old news,but just the same it shows how corrupt banksters control Washington.They put up a security fee in order to stay in Russia.http://rt.com/business/159196-visa-mastercard-morgan-stanley/
Draghi will do some more jawboning/ Show me the collateral Bitchez? Europe is a hulking shell of DEBT!
Draghi will bail them out like has already been done in Japan and US. then Spain an Greece can finance their debts at .6 % also...
More likely is that someone actually invades Spain and Greece.
In ancient times, Spain and Greece were invaded. You bring up a good point.
"WHERE'S MY TWO DOLLARS!
WHERE'S MY TWO DOLLARS!"
I am sure the muzzies would love another shot at ownership of the Iberian Pen.
Iberian pen? I'm ignorant?
The other side of Spain. I was looking at Catalonia.
It is the land mass of Spain and Portugal. The Muslims conquered it in 711.
http://en.m.wikipedia.org/wiki/Iberian_Peninsula
Ho.Liy.Shi.T. Is the market finally figuring out that fiat central banking is a paper tiger?
Draghi better 'do whatever it takes' ASAP so that those who hold real assets will welcome with open arms those in the central bank's casino looking for real stuff.
The big print is yet to come, and the bell tolls for fiat central banking.
It might soon become apparent the economic efficiency of credit is beginning to collapse and the additional money poured into the system coupled with lower rates can no longer drive the economy forward. When this happens we are at the end game.
At some point the return on loaning money is simply not worth the risk! Why do you want to loan money if most likely you will never be repaid or repaid with something that is totally worthless? When this happens the only safe place to store wealth will be in "tangible assets" and the only lenders will be those who print the money that nobody wants.
The collapse of credit can pose major problems such as what we saw when many sellers were forced to demand payment up front before shipping goods in 2008. More on this subject below.
http://brucewilds.blogspot.com/2014/06/the-economic-efficiency-of-credit...
There is even risk in borrowing money! I for one would not borrow at zero percent. Where could I safely invest any money I get/got with the full intention of paying it back?
Paying back money created out of thin air ?
Only my suppliers would get paid back.
Fuck the banks and the Fed they rode in on.
This is stupid. Epic, huge creation of credit just can't continue. The world is waking up, bit by bit, that none of this shit is mysterious.
Fiat debt compounds, and if your vision of investing involves fiat credit growth then you are out of your gourd.
As long as their check is in the mail, does anyone care anymore? Are they increasing the chocolate rations again?
They've been slowly waking up since 2008, its been 6 years. Maybe it is us who are slowly waking up to the idea that the effects from credit creation / QE are not so imminent and immediate. I mean if we stop saying things that have already been said repeatedly since '08 this place would get real quiet around here.
it bear repeating - these debts are sham debts. Fake. Promises to pay back money created out of thin air.
Debt, of course, has grown exponentially faster than "money" - but who benefitted?
Repudiation, haircuts, and {gasp} collapses are the way to handle this.
Of course, what the debt "is" and how it "arose" will remain obfuscated by the magick of economics and the sophistry of pundits... and TPTB will not let the crisis go to waste, using it to get more control of 'real' assets.... which is the name of the game to begin with, I'd wager.
"Phuck Detroit!
Regards...Goldman Sachs."
If things get rough across the globe expect eyes to return to problems in Europe, where they continue to talk. I have not written much about the Euro-zone as of late because nothing is really happening to solve the existing problems.
The Euro-zone is engaged in a talkathon, with fear of an immediate collapse off the table the members of the Euro-zone much like their political counterparts in America just talk about solutions without any action. For us in America news from across the pond dribbles out in small doses with almost daily media boost of promises that things are getting better. For more on all of "what is not happening" see the article below.
http://brucewilds.blogspot.com/2014/04/euro-zone-update.html
It is only a matter of time before the IMF steps forward on the European and world stage. Liquidity is being printed at the ECB but still banks are nearing open public failure. SDR's from the IMF will be the new liquidity savior. All it will do is transfer more wealth to the tiny banker and investor minority. Learn the names and terms IMF, SDR we will hear lots about them soon enough.
As for Europe, we all need to be aware that winter could be a crisis time. Not only in Ukraine which may collapse economically this winter, but the instability and banking failures there could unhinge parts of Europe. Especially if this winter becomes a gas war as Russia finally reacts to Kiev's war. Russia is more likley to be an agent of Ukraine's economic collapse than military invader.
Europe is on thin ice, it can't afford to take care of it's newest ward, the EU Ukraine.
Funny thing, I was watching some crap on youtube and USA video was from 2012 and the mofos were predicting a major war on the European soil. They were some kind of think tank. Guess they were planning the Ukraine deal and hoping for a major war. Putin wont give it to them. He will let them go bankrupt expecting a war to save the dollar. Instead they will die a slow painful death and the Euro punks going along for the ride will freeze to death. Fuck all of you crooks, I want my constitution and gold/silver based currency back.
Oh and I dont want my money to be behind destabilizing another country and causing the deaths of innocent civilians. Fuck you crooks on Wall Street and the killers in DC
Draghi will find a way to kick the can. If he isn't doing QE right now, he must be playing a political game with the EU Commission. He wants something, and they are going to have to go to him screaming before he will "reluctantly" do QE. This movie isn't ending anytime soon.
I invoke my "Right to Forget", European banks a fine.
Tyler really? You're smuck raking comments?
Sleep well everyone.
So far we have had Paschi, Espirito, BNP,and Erste, I would be looking at Unicredit, Raiffeissen Den Danske Banco Espanol Intesa Credit Agricole Soc Gen KBC Commerzbank Nordea HSBC Deutsche UBS Credit Suisse RBS Bank of ireland Barclays Santander as a start as the worst + all the others
Incompetent bankers are a global phenomenon; luckily the inept American and UK bankers have had trillions of QE to cover their losses from bad trades.
Unfortunately, the ECB has been prevented from a similar process in Europe and European banks are still desperately trying to hide their losses.
One of these European banks is of course Deutsche Bank, the world’s number one player in derivatives.
When this little baby goes down, all that QE money pumped into U.S. and U.K. banks will be shown to be a complete waste of time.
Prior to 2008, the banking sector told us how derivatives spread risk through the system and made the system immune from boom and bust.
When it was put to its first test with the collapse of a small sector of the U.S. housing market (sub-prime) derivatives did just the opposite and spread contagion through the Western banking system.
National Central banks in the UK and US bailing out their parts of the system are no protection when the major player in derivatives is a European bank that is still a house of cards.
1.) Get your money OUT of all banks. They are paying NO interest on deposits, so why risk seizure (a "bail-in")?
2.) Buy hard assets: gold, silver, land, food, guns, ammunition - whatever has REAL value that you can later sell for something else of real value.
Very sound advice.
But the banks anticipated people doing that by making it very difficult to withdraw large sums of cash from a bank. Before that - going back years and also more recently - Western governments introduced money laundering laws which impose severe limitations on transacting using cash. And what will people do in a world of digital money, another plan which is slowly gathering momentum?
The aim is to force people to use banks, prevent them from withdrawing their money and steal it whenever they need to, to prop up their fraud and malfeasance. All totally supported by central banks and governments. It is theft on a grand scale.
I dont think they will bail-in the small accounts of 150 million armed currently passive sheep
Bankers start off as highly intelligent and rational human beings, but when given too much money and/or power, quickly descend into insanity with “Masters of the Universe” syndrome.
Alan Greenspan’s last rational comment was in 1996 when he spoke of irrational exuberance in markets. Soon after he descended into insanity and became convinced that he could control everything and financial bubbles no longer mattered.
During the summer he was often seen at the beach, near his holiday home in the Hamptons, trying to hold back the tide.
I don't care they can go to hell. Burn them! No more money for the banksters.
eurobanks are in trouble
whatever happened to 'greece is just the tip of the iceburg, all the piigs are going to default, europe going down in flames'
Its been like 5 years, did all that already happen or is it still iminent? I just cant remember anymore
Imminent: 1 year 4 months 3 weeks 2 days 1 hour more.