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Nomura Threatens Espirito Santo Cross Defaults, Said To Demand Immediate Repayment Of €100MM Loan
Earlier today, we reported that in addition to getting a new executive team, the "Espirito Santo family sold some 4.99% of its stake in Banco Espirito Santo the company to an unknown party, using the proceeds used to repay a margin loan, issued during the bank's capital increase in May." Subsequently, Bloomberg reported the identity of the lender: "Espirito Santo Financial Group borrowed more than 100 million euros from Nomura to buy shares in Banco Espirito Santo, Portuguese newspaper Expresso reported, without saying how it got the information."
Moments ago Bloomberg followed up with what could be a further dose of cold water to one of Portugal's most powerful families and certainly the holding company at the very top, Espirito Santo Financial Group...
...when it reported that Nomura threatened to seek the immediate repayment of at least €100 million of loans to Espirito Santo Financial Group, prompting today’s sale by the Portuguese co. of a stake in Banco Espirito Santo, according to people with knowledge of the talks who asked not to be identified.
It also explains why while the market has since moved on, BES bonds tumbled once again to record lows earlier as we reported previously, and Senior CDS blew out by 48 bps to 448 bps: the widest since October. It probably goes without saying that after trading to all time intraday lows, BES stock closed at just shy of its all time low price.
And while the market is once again convinced there are no concerns of contagion, Bloomberg added that "failure to repay the loan could have triggered multiple defaults across cos. within Espirito Santo group, said the people." In other words, precisely the kind of liquidity waterfall (in the wrong direction) that took out AIG and put the Lehman financil crisis into overdrive.
Officials at Nomura declined to comment.
So will an Espirito Santo collapse be indeed "contained" and not spread to other banks? Stay tuned for the answer.
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MARGIN CALL BITCHEZZ !!!
Thats the sound of dominoes falling
Get to work Janet!
That is Mr. Yellen to you son.
pods
TD needs to stop taking checks from the frigging toe fungus people. At lunch time no less!
Repayment!!??
Hahahahahaha!
Shirley you jest..
How do you say Creditanstalt in Portugese?
It is pronounced "Espirito Santo".
I'm sure BES used that money wisely to give all their Chiefs nice, big, fat bonuses. Claw back your 100mm loan from those guys....if you can...
I thought the threat of CDS cascade had been mitigated by emergency Fed and ECB facilities and actions...
Or did everyone simply double down?
Remember that the BIS told the CBs to bring the downturn forward so they had a chance to maintain control. The DeadFred odds are only 20% that they can keep it orderly. Actually 19.67% but I'm generous.
Instabilatees to fund the financees.
It will be the new new funding source....chaos...like feeding depositors to the Circus Lions.
There will be bail-ins, confusion and funding.
Dismal economics.
Worse..."they went about life as normal" since "bailouts always work."
Long the Pentagon and the JCS. Everyone's talking but no one has a clue what's going on...let alone what they're doing.
Double down ? Try QUADruple down.
It's pretty simple, if they want the crapstorm to start the Banksters will let it default.
If they want to wait, they'll come in and paper it over with central bank fiat.
Gotta love a centrally planned economy.
Some day that CB papering over will alight on fire. Burn baby burn!!
This is all wrong. There are no more defaults. Who wrote this script?? Rewrite!!
My mistake...We call defaults as 'restructurings' nowadays. How could they call it a default. There can be no more any defaults.
Draghi said so...'whatever it takes'. Paulson and Geithner scared us too...saying ...they had no idea what will happen if the system were to collapse....after getting paid 20m bucks a year....they didn't know the implications of whatever they were doing...guess they did not get a job description for their roles....they took billions in wages over years and have no clue on consequences of a bank closure for their constituents. What kind of public servants they are?
What a farce!
A hundred million here....and a hundred million there...and pretty soon...we are talking real money....
How much debt can be created on top of existing debt in our modern world economic theory?
Answer: Infinite!
Because we keep kicking the can down the road by changing Basel rules, allowing banks to write off losses over couple of years instead of the same year, bailing them out, keeping interest rates for banks at zero, nationalising them and allowing them to continue with their nefarious and mostly fraudulent activities and just pay a small fine which must be less than 1 year's profits!
It's good to see that the markets are able to fearlessly ignore any possible domino effect that might result from this. I guess all the interdependencies and derivative chains and excessive leverage were successfully cleaned up after 2008, and now that we've learned our lesson we can proceed with the assumption of systemic stability.
Zzzzzzzz
$100MM is chump change. Non-event, Yawn
Correct - it is a few days turnover. But do they have the Folding?? and if not, it shines a light on how empty the vaults are
Portugal, Spain even France are basket cases. Not picking on these 3 as they're ALL fucked. Enter Mario & Janet left of stage.
Bullish Baskets.
If i was the head of that insolvent "Portagee" shit bank i'd tell Nomura the following...
FUCK OFF...
They should just tell Nomura that 'I think Mario or Janet has your money, you should check with them'.
Cyprus paved the way.
Didn't this klepto bank pass Mario "stress test"? Look folks, this shit pile won't collapse until something breaks. Then everyone will rush for the exits. Stawks will fall quickly, last weeks 1% move will seem like nothing at all. It IS inevitable. We've had 7 years of mal-investment, that will catch up with you.
7 years, 7 years... that magic number 7 ....
did you hear Lagarde's mumbo jumbo numerology gobbledy gook?
apparently the 7 years of draught are behind us and we're going full steam ahead into the 7 BEST YEARS OF OUR LIVES!!!!!!!
growth? who needs growth?
https://www.youtube.com/watch?v=QYmViPTndxw
if the conclusion is correct, there will be carnage on the 21st of THIS month
Here's the rub, the code she wants you to hear isn't the real code.
You'll just loose a packet shorting and buying pm's while they sit at IMF HQ having a good old belly laugh
nothing bad will be allowed to happen to the maggots
€100 million shouldn't be a problem for a bank that supposedly has € 2.1 billion as a safety cushion.
See, the problem is that the collateral is all crap! Sure in someone's unicorn shitting skittles universe the bank's balance sheet shows 2.1 billion but in the real world, not so much.
When it comes right down to it, there's no cash.
Ciao e mille grazie,
Bancarotta Monte dei Paschi di Siena
http://www.zerohedge.com/news/italy-just-bailed-out-worlds-oldest-surviv...
Any chance that the eminent collapse of Espirito Santo and today's horse whipping in gold and silver are unrelated events?
no, next question
Espirito Santo just sold a cool 100 million in future gold contracts to cover this request.
Where's the problem?
Portugal should build some stadiums, or sumpt'n.
Get the pump primed. Green shoots. Shovel ready.
They just need to internally devalue and crank up the plastic shoes and cork exports.
I would return to Nomura a strait answer, Nudellman - type, f**k off.
If the sale of the 4.99% stake is enough (with other stuff) to repay the Nomura loan (which is how I read the Reuters article), why is there a continuing problem?
Watson
It will be quite the Conga Line!
there will be no CDS activation, there will be no official default. Bad debt will be bought and bought and bought to prevent declarfation of default.
(unless your name starts w A and ends w -rgentina.)
I woke up this morning, suddenly it all made sense, the myriad of connections, the elites, the central banks, the government and their puppets... I finally figured out how they've kept it together so far and how they can keep it going for eternity if they want to...
Its so simple all they have to do is.... No wait, its the swift, nope, i mean the... You know the whatsit, er,
Shit i've lost it again