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Portuguese Regulator Bans Short-Selling After Banco Espirito Santo Unveils Massive $5 Billion Loss
Having waited until after the US equity markets closed, Portugal's troubled Banco Espirito Santo unveiled an enormous EUR 3.577 Billion loss - that is 15 times larger than the loss the bank suffered a year earlier. The data - to end-June, before the crisis really got going - already shows notable deposit flight, a 73.1% plunge in banking income, and a EUR 3 billion collapse in repoable assets (i.e. liquidity). On the heels of this Portugal's securities regulator has enforced a short-selling ban on BES... we suspect they would not have done that if all was systemically well in Portugal.
For some context on the loss... BES market cap at the close today was less than EUR 2 billion...
Highlights (or lowlights) of the data as of June 30th - before the crisis escalated
A collapse in banking income
Plunge in liquidity, collapse in Net Income, jump in operating costs, and tumble in total equity...
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With the President warning this is systemic, Draghi better hope they can figure out a bailout (or bail-in) soon...
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Full data release below:
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Can't wait for the final red x on the BES flowchart.
Oh, thank goodness -- because short-selling bans have never backfired before!
try this One Weird Trick to eliminate that 5 billion of debt:
what you bancosprito people need to do is leverage assets in in one subsidiary to borrow a ton of money that's counted as debt in another subsidiary offshore with unreported accounting.
that way you show a positive balance.
sound crazy?
crazy like a fox!
hugs,
ken lay
Imagine what the US bank's book's really look like!
Exactly. Why would they admit to a loss? Sounds like another Lehman- assets will be plundered to prop up another more favored entity.
Goldman Sachsssss you dirty so and sos.
More bailins! Socialism is awesome and it works. BTFD.
I don't bother with isms. It's plain old fashioned racketeering.
This is good right?
YELP made0.04 so the PE is just under infinity...bullish
Those "Unexpected Facts" are a bitch youze bitchez.
Those must be the "unexpected facts" referred to with the delayed shareholder mtg yesterday.
Facts are a real bitch! Guess that's why the US markets no longer trade in them for the unfactual unfettered Kapitalism. Sigh
Well, you can't have peepow selling stawk they don't own.
Pretty soon they'll want to buy stock they don't own. Oh wait. Better check my maff.
Short selling stock they don't own is STEALING.
Ban all short selling everywhere.
Ban all Markets everywhere? That is what you are suggesting.
I am going to give a VERY SIMPLE EXAMPLE.
If I sell a commodity then I am short that commodity and long cash.
If I borrow cash to purchase a commodity then I am short cash and long in the commodity. (Taking a loan out to purchase a home is shorting cash.)
If the price of the home increases and I sell the home and I take the cash then I net a Capital Gain AFTER PAYING OFF THE LOAN.. If the sales price of the Home declines and I sell the Home and I take cash then I net a Capital Loss AFTER PAYING OFF THE LOAN.
Nobody can afford to buy a Home without taking out a Loan. You short Cash by BORROWING IT, trading it for what you do not have, and then repaying it according to the terms of the contract....honoring the Terms and Conditions of the Contract.
Now it becomes more complicated if I were to include the dilution of Values of the Currency, Deprciation of the Property, etc. But I want it simple so that you get the concept.
If you are suggesting that the Credit Markets need to be illegal and you get your way then the Economy FREEZES. Nobody will be selling ANYTHING.
There are no pools of Cash lying around in this country, or, in any country. All that exists is CREDIT and DEBT.
It has been that way for decades...decades before I was born.
It is like what Eccles testified to Congress back in 1941 as the Chairman of the Board of the Federal Reserve. If there is NO Debt then there is No Money. At least they had some honesty back then.
Now if you do know this and want collapse then just come out and write it.
Collapse baby collapse. I want it destroyed as it is all based on fraud.
IF YOU SUPPORT FRAUD THEN YOU SHALL REAP YOUR DESERVED DESTRUCTION.
Go ahead and downarrow this. It will not change the fact.
Collapse baby collapse. LMAO at you fraudulent bastards.
I will do whatsoever is necessary to help it along.
Enjoy your deserved suffering, criminals.
What about regular selling stock they don't own, is that ok?
If you borrow the stock, sure.
You are selling something that really exists.
As long as you replace what is borrowed there is no problem.
Naked shorting, on the other hand, is pure fraud.
pfft.
that's nothing.
what you do is, you mark-to-model your 5 billion debt as though it is 5 billion of asset.
then use that as collateral for a couple of ten-trillion-notional derivative products.
model those products as "offsetting hedges"
net them out to be 50 billion of profitable investment.
use a portion of that to pay yourself.
use the rest as collateral for more "offsetting hedges"
they are risk-zero, so it's ok to let exponential growth do what it does so well.
hugs,
jamie and lloyd
Remember the days when $5 billion was a large number? Now it is merely an annoying issue that the U.S. Fed will fix with some end-around funny money shuffled through Belgium.
A trillion here, a trillion there, and suddenly you are talking real money.
long shitty boats and scuba gear
It's a Pirate's life for me!
The moment all the superich get on their megayachts and head out for the middle of the pacific or atlantic oceans you know ww3 is about to go down. They will sit out the insanity as far away from the masses as they can get. Those boats can be parked in the middle of the ocean and be self sufficient for at least a few months with all their tanks topped off. And you can be sure they will take another ship stuffed full of fuel to act as a mini tanker. Well provisioned they wont come back to shore for a good year. By then the radiation levels should of come down. This is another reason why the superich buy megayachts, you can be sure they are well armed and in the middle of the ocean are a much safer place to be than the on land if a war or epidemic happens.
Let us not forget that pirates raided on land as well as the seas. Fits the current oligarchs quite well.
and that a "healthy" bank
Europe is not ready to handle a large financial shock at the moment. I hope this will stay contained.
It's been shown that the problem lies here with the Fed, the debt, and the unfunded liabilites. They will be fine, it's here where the real panic should hit soon.
Shown by whom? What liabilities, and are you sure they are unfunded as opposed to underfunded? If they are underfunded, is it a big deal if they are funded up to 80% for future obligations, say 30 years down the future? See, if we are going to recite this "unfunded liability" bullshit, we better include some context. The oligarchs loathe context.
Where were you when $23 trillion of private debt (big bank/financial services industry debt) was dumped on the US taxpayers as a result of the 2008 financial collapse? $23 trillion of private debt made public. Forgive me, is that the unfunded liability you are complaining about?
Stop being part of the problem.
CREDIT DEFAULT SWAPS. DERIVATIVES EXPOSURES.
What other European Banking Institution hold those on Banco Espirito Santo?
Are they leveraged in the Derivatives Markets?
What are the sizes of the assets of those Banking Institutions?
Did the DEFAULT just wipe out those Banks Balance Sheets and make them insolvent?
It has not been contained. It is just beginning.
Collapse baby collapse.
Those Russian sanctions should calm the EU waters.
/sarc
No containment please, let the dominos fall.
Greece --> Cyprus --> Detroit --> Argentina --> Portugal --> Spain --> Italy --> France --> Chicago --> New Orleans --> Pittsburg --> Torrance --> Philadelphia
Short sellers don't kill banks. Bankers kill banks.
The best way to rob a bank is to own one. (William Black)
So what's the best way to own a bank? ( I set that up for someone... c'mon ZH don't let me down...)
Get chased by some hells angles and jump off a bridge.
Bloody Fall (2014) all the way down to the bottom.
Give a crook a gun and he'll rob a bank.
Give a crook a bank and he'll rob the world.
To bad most people in portugal are to poor to bailed in on their accounts
Thought of anther way…
What’s the reverse multiplier on $5,000,000,000? Leverage Ratios are gonna hurt. LoL
Soon 'redemption’s' will be banned.
Short selling ban..we seen this before.
Just absurd...so if the news is too exceptional for a specific company can we have a long ban to protect those previously short..
I hate these fucks...always moving the goal posts.
Wrong.
If, as I've heard they've only banned naked shorts, that's fine.
Selling shares that don't exist is fraud.
I'm not sure that the regulators appreciate the difference...or, for political reasons, _want_ to understand.
After all, they don't want sell orders.
Doesn't matter to them if those sell orders would settle properly or fail.
Watson
Draghi-reverse Robin Hood, your move
According to the release this was a mere "extraordinary event" meaning if they'd just bail them out this one time, all will be ordinary and profitable next year...swearsies.
Give Brussels a call. They'll print you up some fraud in a hurry.
ECB was in Frankfurt last time I checked...
Correct. By treaty it has to be.
http://en.wikipedia.org/wiki/European_Central_Bank_Headquarters
But Brussels is the Capital of the European Union. And THAT IS THE LOCATION WHERE ALL OF THE Foreign Ministers meet to make the decision to fucking PRINT.
The ECB, unlike the Federal Reserve, cannot act unilaterally. That is the Achilles Heel of your entire Financial System, SOCIALIST!!!
But somehow I believe you to already know that and are acting as a FUCKING TROLL.
Your European Union and your European Central Bank are as FRAUDULENT as the FEDERAL RESERVE.
So yeah. Go to Brussels and lobby those Foreign Ministers to PRINT UP SOME MOAR FRAUD.
he just stated a fact and you accuse him of trolling? well done/s
"fucking PRINT?" did you note that the ECB's balance sheet is shrinking? this means... the opposite of printing, btw
Is anyone shorting PT or buying puts?
https://www.google.com/finance?q=NYSE%3APT
"The liquidity" has decreased. I thought that was unpossible.
5bn USD loss became an unexpected fact yesterday, nobody noticed anything was up for the 364 days prior to that? hehe
Reminds me of a story I heard when getting the full tour(and lunch) of Lloyds of
London from my broker.The first claim on a maritime policy was disputed because the insurer
claimed that a year policy was only for twelve lunar months. The unlucky ship foundered
on the 357th day of the policy.They lost in court years later.A much defered loss.
In an alcove there,in a glass cabinet, is also the stuffed body of the first whole life assured
policy,a barrel organ monkey.
Figures ;)
1 Bi EUR in loans to Panama and Luxembourg.....Nice thiefery!!!!!!!
Wanna bet that loss is off by an order of magnitude?
How many?
I bet it is closer to 50 billion.
Brilliant. Short circuit the price discovery mechanism. What could possibly go wrong?
Gonna sleep on it, i'll give you an answer in the morning!
To be clear, they only banned naked shorts, in order to protect any children who may be watching.
Are there any depositors left...at all?
Calling all creative accountants...you are needed...stat!
Ehm, excuse me, I have a question:
that is for the months JANUARY TO JUNE 2014 ONLY?!?!
They must have known this for some time!!
HO LI FUK!!!
so when you buy, who takes the other side of the order?
a seller?
but if no one buys, then everything is good. right?
LMFAO
Oh and on pages 47 and 48 the unit is "Eur million" but should be "EUR thousand".
just three orders of magnitude wrong. what the heck?
Lost Word, et al:
The Most Important Thing a Man Can Know is What He Doesn't Know.
"Short Selling" :
http://www.talentseekscapital.com/uploads/3/2/6/9/3269986/short_selling_pv2.pdf
The bank (BES) still seems to have substantial uncollateralised exposures with other entities in the 'Group' which have themselves sought Court protection.
To me, such loans should be marked to zero?
So more big losses to come?
Maybe this was why no new investors for the bank were announced at time these results were published: even if potential investors think there is a decent business somewhere, they will not invest until all the existing problems are totally written off.
Watson
Just wait until the shit hits the fan with Credit Agricole
If this is big enough for little Portugal, the sheer insolvency, fraud corruption and false accounting at Credit Agricole will burn your fucking eyes out.
What it does the little fat faggot fart holland and and the French economy is anyone's guess