Third And Final Espirito Santo HoldCo Is Bankrupt: Is "Banco" Next?

Tyler Durden's picture


Having admitted that the banking system problems in Portugal could be systemic, the President has a bigger problem now as the 3rd (and final) Holdco of the Banco Espirito Santo capital structure fiasco just filed for bankruptcy:


First it was ESI (storm in a teacup), then RioForte ("contained"), and now ESFG ("systemic"), and given the CEO's recent "detention" for money-laundering, we wonder how long before Banco Espirito Santo is forced to liquidate?

As Bloomberg reports,

Espirito Santo Financial Group SA says it requested to be placed in the regime of “controlled management” under Luxembourg law, according to a regulatory filing.


Espirito Santo Financial Group says it concluded that “it is unable to meet its obligations under its commercial paper program and obligations associated with the company’s standalone debt obligations.

One by one they fell...


It's Systemic!


President Anibal Cavaco Silva is the first high-profile politician to warn of a possible economic impact from the Espirito Santo crisis, after the family asked for creditor protection for one of its key holding companies on Friday.




"We cannot ignore that there will be some impact on the real economy."

Which does not leave much room for Portugal's growth....


And now the CEO is detained on money-laundering:



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Thu, 07/24/2014 - 13:23 | 4999116 El Vaquero
Thu, 07/24/2014 - 13:24 | 4999139 max2205
max2205's picture

Portugal don't surf!

Thu, 07/24/2014 - 13:28 | 4999179 cifo
cifo's picture

Too small to count.

Thu, 07/24/2014 - 13:22 | 4999127 NOTaREALmerican
NOTaREALmerican's picture

Well,  luckily this is just a small isolated event and couldn't cause any damage to other European banks.  

Thu, 07/24/2014 - 13:25 | 4999155 john39
john39's picture

reminds me of this gem from turbo tim:

"no risk"....

Thu, 07/24/2014 - 19:19 | 5001329 Buck Johnson
Buck Johnson's picture

The rot is coming to the surface and they can't hide it anymore.



Tue, 07/29/2014 - 09:46 | 5017300 shanearthur
shanearthur's picture

It's like when painting ceilings that have leaked before and you need to put Kilz stain remover on it. Sure the Kilz will work, but not if you fail to fix the leaking roof. Our global banking system is that leaky roof. The Fed and the MSM provide the Kilz.

Thu, 07/24/2014 - 13:22 | 4999128 maskone909
maskone909's picture

is this systemic as in global?  or is this contained within portugal

Thu, 07/24/2014 - 13:24 | 4999138 El Vaquero
El Vaquero's picture

Only one way to find out.  Wait.

Thu, 07/24/2014 - 13:26 | 4999150 maskone909
maskone909's picture

agreed.  we will just have to wait to see how long the counterparties sit on their thumbs. 

Thu, 07/24/2014 - 13:35 | 4999219 COSMOS
COSMOS's picture

Never fear, Belgium  will step in and hose the incident with billions of Euros so no rich people lose any money.  However those nice public beaches in Portugal will be bought up and made private.

Thu, 07/24/2014 - 13:45 | 4999267 Ludwig Von
Ludwig Von's picture

Yeah, we 're good he ! :-)

Thu, 07/24/2014 - 13:36 | 4999221 Tall Tom
Tall Tom's picture

What outside institutions hold the Credit Default Swaps?


What is the leverage on those Derivatives?


What are the underlying Asset Levels which form the basis for the solvency of those institutions?


If the move is large enough does that wipe out those institutions and do they become insolvent?


I am praying for the Daisy Chain and the Order of Magnitude Lehman Bros. event that takes down the entire ECB. The United States follows rapidly as the Derivatives Markets implode.


That will end the Fraud once and for ALL...FOR everyone.


Then we can rebuild it on an honest and stable foundation where confidence and trust will be restored.


Collapse baby, collapse.

Thu, 07/24/2014 - 14:43 | 4999629 JRobby
JRobby's picture

50 to 1

Thu, 07/24/2014 - 15:04 | 4999779 Tall Tom
Tall Tom's picture

That will wipe them out. I have read somewhere that it was more like 100 to 1.


The problem is that nobody knows for sure. There is no oversight on these trades.

Thu, 07/24/2014 - 13:29 | 4999184 Dr. Richard Head
Dr. Richard Head's picture

I hope it spreads quicker than the plague or ebola.

Thu, 07/24/2014 - 13:38 | 4999231 Tall Tom
Tall Tom's picture

Amen to that.

Thu, 07/24/2014 - 13:30 | 4999193 Juno Rock
Juno Rock's picture

@mask - Who owns and holds the OTC credit default/interest rate swaps? Whoever is up to their pockets with this toxic crap is literally crapping their pants right about now! Time will tell whom, or what else, goes down with this ship! All I can say is - "Look out below!"

Thu, 07/24/2014 - 13:23 | 4999132 Oscar
Oscar's picture

Free gold and silver technical analysis posted daily.

Thu, 07/24/2014 - 13:23 | 4999135 firstdivision
firstdivision's picture

This shits a massive buy!

Thu, 07/24/2014 - 13:26 | 4999149 WTFUD
WTFUD's picture

Anyone for a game of Dominoes?

Thu, 07/24/2014 - 13:27 | 4999164 Bangin7GramRocks
Bangin7GramRocks's picture

Let's see....let it play out and potentially destroy the world financial system or invent more money to patch the holes and party on. Which one will they choose? I think I know.

Thu, 07/24/2014 - 13:55 | 4999306 Tall Tom
Tall Tom's picture

If this sets off the Daisy Chain they cannot print $300 Trillion. The Currency would become worthless overnight.


Let me give you a clue since you are a perrenial pain in the ass.


What is the REPORTED size of the US National Debt? It is over $17 Trillion. Our GDP is a little under $17 Trillion. Understand that? Good.


JP Morgan Chase holds over $70 Trillion in Derivatives. That is Three Times the size of our National Debt and our GDP.


Imagine having to print $70 Trillion. Imagine paying at least $12 per gallon of Gas tomorrow morning.


Can you handle that shock? Perhaps you can. I do not know your financial situation.


Do you think that most Americans can?


That is just ONE BANK. But the Derivatives Market is TEN TO TWENTY TIMES LARGER THAN JPM CHASE.


If it all were to implode then can you imagine paying $120 per Gallon for gas tomorrow morning? Could you handle that shock?


I can. I have Gold.


Do you have Gold?


You had best get some if you do not.


Do you understand it now?

Thu, 07/24/2014 - 14:05 | 4999365 ghostzapper
ghostzapper's picture

Bro - you're being far too intelligent and coherent while properly applying basic mathematics.  Now, a real crisis would emerge if Bieber failed to come out with another little cutesie jingle and we didn't get upgrades to the Ipad and iphone before christmas.  Phew!!!!

Stay on point with the Overlords.  Nothing to see here, move along now . . . . . . . .


Oh, and BTC sitting again at another correct buy point but never mind that. 

Thu, 07/24/2014 - 15:26 | 4999869 Tall Tom
Tall Tom's picture

To the IDIOT who downarrowed my post...


If they printed that amount of Cash to cover that market then the result will be instant hyperinflation.


You can junk me all that you want. I really do not give a damn. IT DOES NOT CHANGE THE UNDERLYING TRUTH.




Even Warren Buffet, a complete corrupt jazkass, said that the Derivatives Market is a Weapon of Financial Mass Destruction.


Just because I lack any respect for him, whatsoever, does not mean that I will deny the truth just because it is uttered from his mouth.


I am in this for the Truth. That is what I matter how fugly it turns out to be.


This is not a fuckin' personality contest. So you can go and suckle upon your own penis since you are so spineless as not to debate.


As for me I am actually having some fun writing this and laughing my ass off.

Thu, 07/24/2014 - 15:26 | 4999897 SickDollar
SickDollar's picture

it's funny how peope think  after the  BIG crash they  will be saved by gold. It will not be that easy trust me


Thu, 07/24/2014 - 16:05 | 5000170 Tall Tom
Tall Tom's picture

Actually I do not think that Gold will save me during the Big Crash.


My bet is that I do not survive it as I am old and unhealthy.


It will be very useful afterwards however for those that survive.


However if you do not have Gold before the Big Crash, then you will probably not have any Gold afterwards, and you will be doomed to a dismal sustainance existence.


Good luck with that plan.


I would rather have Gold and not need it rather than need Gold and not have it.


But you are free to choose.

Thu, 07/24/2014 - 20:18 | 5001577 Bangin7GramRocks
Bangin7GramRocks's picture

Listen penis hole, those derivatives will never be paid. All contracts will be cancelled for the health of the system. The sky will indeed fall one day. But this little Portugal thing will not bring it all down. The Fed is firmly in control and can miracle money at an instant to fix these problem.

Thu, 07/24/2014 - 20:18 | 5001578 Bangin7GramRocks
Bangin7GramRocks's picture

Listen penis hole, those derivatives will never be paid. All contracts will be cancelled for the health of the system. The sky will indeed fall one day. But this little Portugal thing will not bring it all down. The Fed is firmly in control and can miracle money at an instant to fix these problem.

Thu, 07/24/2014 - 13:29 | 4999177 F0ster
F0ster's picture


(Buy The F'ing ALL Time High & Systemic EU Banking Crisis)

Thu, 07/24/2014 - 14:06 | 4999377 ghostzapper
ghostzapper's picture

Bit of a mouthful but I suspect both Yellen and Lagarde are used to that. 

Thu, 07/24/2014 - 13:29 | 4999182 ekm1
ekm1's picture

Sacrificial lambs appearing slowly, but this is a small one.


Which primary dealer has written swaps on this?

We'll find out soon.

Thu, 07/24/2014 - 13:35 | 4999214 ekm1
ekm1's picture


This is the very simple and totally uncomplicated little Greece banking interconnections.


Draw your own conclusions

Thu, 07/24/2014 - 13:40 | 4999237 ekm1
ekm1's picture


And this is the extremely simple and uncomplicated global swap interconnections.


No risk at all

Sail safely here.

Thu, 07/24/2014 - 13:31 | 4999194 starman
starman's picture

"Seeks protection from creditors" shareholders neds to go on vacation to rest, its middle of summer for God's sake.

Thu, 07/24/2014 - 13:30 | 4999197 Sudden Debt
Sudden Debt's picture

All this positive news is really hammering silver down into the ground today...

Thu, 07/24/2014 - 13:33 | 4999203 Quinvarius
Quinvarius's picture

I am waiting for them to run the 50 and 200 DMA.  I know that is what they are going for.  Then I will be buying some Koalas.

Thu, 07/24/2014 - 13:34 | 4999210 orangegeek
orangegeek's picture
Is "Banco" Next?


of course not.  everything's fine.



Thu, 07/24/2014 - 13:35 | 4999213 JRobby
JRobby's picture

CD Swaps kicking in all over the world casino. Janet! More liquidity!

Thu, 07/24/2014 - 13:40 | 4999242 firstdivision
firstdivision's picture

I'm pretty sure the ISDA has this one covered

Thu, 07/24/2014 - 13:42 | 4999248 1stepcloser
1stepcloser's picture

No one trusts, no one...Credit system lock up in 3...2....1

Thu, 07/24/2014 - 13:38 | 4999232 Kaiser Sousa
Kaiser Sousa's picture

buy the dip.

Thu, 07/24/2014 - 13:40 | 4999240 firstdivision
firstdivision's picture

Remember when AIG was bankrupt and wasn't going to pay bondholders...

Thu, 07/24/2014 - 13:41 | 4999245 Kaiser Sousa
Kaiser Sousa's picture

presented without comment..
other than fraud that is...

Thu, 07/24/2014 - 15:10 | 4999821 Tall Tom
Tall Tom's picture

Is that fuckin' incredible??? (And I mean that most LITERALLY???)

Thu, 07/24/2014 - 13:45 | 4999269 1stepcloser
Thu, 07/24/2014 - 13:53 | 4999307 Quinvarius
Quinvarius's picture

The collapse in banking stability, home prices, commodity prices, economic activity, geopolitical stability, Dollar hedgemony, and monthly QE will not effect US stocks.  Everything is cool. 

Thu, 07/24/2014 - 14:08 | 4999391 kchrisc
kchrisc's picture

They need a missile launcher in Portugal for all the black swans.

Thu, 07/24/2014 - 14:33 | 4999548 Joebloinvestor
Joebloinvestor's picture

I am looking forward to the expanded Zero chart that shows how this cascades into the world market.


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