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Handelsblatt: "Four German Banks On The Brink"

Tyler Durden's picture




 

Several days ago we were confused why, out of the blue, a €1 billion loan BWIC appeared that was dumping German non-performing loans. After all, the whole point of the European "recovery" fable to date has been to deflect all the attention from the "pristine" German banks, up to an including world-record derivatives juggernaut Deutsche Bank,  and to focus on Greece and other insolvent peripheral European nation. Earlier today, German Handelsblatt provided an answer, when it reported that "four German banks are on the brink", i.e., four banks of which three are known, HSH Nordbank, IKB and MunchenerHyp, will likely fail the ECB's stress test whose results are due to be announced next Friday.

Keep in mind that this is a significant fraction of the 24 German banks that are undergoing the ECB's Stress farce test. So one wonders: if one in six German banks is so unsafe even the ECB (which kept Cypriot banks going well past their insolvency) will give them a black stamp (because in Europe failing a bank stress test is first of all impossible since both Bankia and Dexia passed theirs with flying cololrs, but more importantly a death sentence), what does that leave for the rest of Europe's banks, all of which are in far more dire shape than sleepy Germany?

In any case, here is Handlesblatt's warning:

The European Central Bank will give the results of its so-called “stress tests” to the banks on October 24. Shortly thereafter, at a Sunday afternoon press conference in Frankfurt, it will inform the public about which of the banks passed the months-long checkup into the health of their balance sheets. The test is designed to give the ECB a clean slate when it takes over the role of supervising Europe’s largest banks on November 4.

 

While Germany’s largest banks, including Commerzbank, are expected to pass the test, there are still four smaller banks putting in extra hours in hopes of passing ECB muster, according to information received by Handelsblatt.

 

“In part, data and justifications need to be sent over, in order to convince the regulators,” said one insider, who declined to be named.

 

Sources in the financial industry have named the state-backed regional lender HSH Nordbank, as well as IKB, a Düsseldorf-based bank supporting small and mid-sized businesses. The southern regional bank MünchenerHyp is also on the edge. The fourth bank is still unknown. The sources say it is possible that, after the last consultations, only two are really at risk of failing the stress test.

 

Commerzbank, Germany’s second-largest bank that is still 17-percent owned by the German government, seems to have cleared the hurdles. Deutsche Bank is also not being treated as a problem bank. [ZH: Kinda odd considering this] The largest German bank’s future legal costs are not being considered in the stress test and its capital increase last spring has a positive impact on the stress test rating.

 

Observers also give the all-clear to the publicly listed Aareal Bank and the cooperative financial institutions DZ Bank and WGZ Bank. Spokespeople for the banks would not comment before the results are released. When it comes to Germany’s state savings banks, BayernLB considers itself to be not at risk. CEO Johannes-Jörg Riegler said on Thursday: “You can assume that we are very, very solidly equipped and have considerable buffers to cushion some things. Do not worry.”

 

But the situation in the very north of the country is more dramatic, where HSH Nordbank is struggling to convince regulators.

 

Following an increased guarantee worth billions of euros on the part of the public owners Hamburg and Schleswig-Holstein, the state bank is so well financially padded that it could financially cope with the tougher guidelines from the ECB on the assessment of ship loans. According to the guidelines of the central bank, a lump reduction of 12 percent based on the calculated value of the ship will be levied, which naturally has an impact with ship lending volume of €20 billion.

Oh well: more bank failures means more central bank bailouts. All of which is, what else: bullish.

 

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Fri, 10/17/2014 - 11:08 | 5346696 jubber
jubber's picture

DAX HOD Total Ponzi

Fri, 10/17/2014 - 11:15 | 5346749 Divided States ...
Divided States of America's picture

EKM, where are you

Fri, 10/17/2014 - 11:39 | 5346945 Haus-Targaryen
Haus-Targaryen's picture

This is M. Draghi's return fire toward Jens.  

 

Fri, 10/17/2014 - 11:55 | 5347061 imaginalis
imaginalis's picture

Goldman Sachs will help them with a swap

Fri, 10/17/2014 - 11:55 | 5347064 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

 

 

When they say this:  CEO Johannes-Jörg Riegler said on Thursday: “You can assume that we are very, very solidly equipped and have considerable buffers to cushion some things. Do not worry.”

What they really mean is:  We, I mean you, are fucked.

Fri, 10/17/2014 - 14:16 | 5347920 Sirius Wonderblast
Sirius Wonderblast's picture

And meaning that there are "things" out there that will cushionung, und bufferung. It may also mean they only have cushions and buffers for some of the "things" that are heading their way.

Fri, 10/17/2014 - 11:42 | 5346965 XAU XAG
XAU XAG's picture

The test is designed to give the ECB a clean slate when it takes over the role of supervising Europe’s largest banks on November 4.

 

Thier having a laugh!!!

 

What about the other European Banks

 

What news??

 


Fri, 10/17/2014 - 13:08 | 5347455 pelican
pelican's picture

Funny, so the Jews are going to need to bail the Germans out or the entire economy blows up.

 

 

 

 

Fri, 10/17/2014 - 15:41 | 5348401 Kirk2NCC1701
Kirk2NCC1701's picture

For starters, Israel could actually PAY for the Subs they got from Germany for free -- courtesy of it Steurzahler (Taxpayers).

Point is, at SOME point ALL War Reparations end.  I'd have told Bibi to shove it up his ass.  But Merkel's a pussy, and just another careerist, compromised plotician.

Fri, 10/17/2014 - 11:10 | 5346703 Tinky
Tinky's picture

"putting in extra hours" in order to shore up balance sheets to the tune of tens of billions, no doubt. Fortunately for them, shifting – or even creating – digital "wealth" only takes hours at most.

Fri, 10/17/2014 - 11:09 | 5346710 Herdee
Herdee's picture

I smell a very gigantic pile of derivatives in Germany.Reminds me of hot steaming dogshit in 100 degree heat.Damn flies.

Fri, 10/17/2014 - 11:14 | 5346734 LULZBank
LULZBank's picture

Europe might not need all that gas, afterall.

Fri, 10/17/2014 - 14:18 | 5347939 Sirius Wonderblast
Sirius Wonderblast's picture

Plenty of worthless paper to burn, starting with the ECB report.

Fri, 10/17/2014 - 11:16 | 5346758 Bangin7GramRocks
Bangin7GramRocks's picture

The brink of getting totally bailed out without even the hint of management firings. No big deal.

Fri, 10/17/2014 - 11:16 | 5346761 madcows
madcows's picture

so, central banks are nothing more than a collection of individual banks all operating under the direction of a board of directors.  They may be privately held, but they all work together.  So, what we have is the whole banking community coming together to lend money to its members to keep them solvent.  B/c, the thing is so leveraged and the collateral damage will be so great, that as soon as one of these guys goes belly it's "game over man!".

So, what we have is bankrupt banks lending money to other more bankrupt banks.  This is all SO stable.  I think i'll put my money in the market.

Fri, 10/17/2014 - 13:46 | 5347741 OceanX
OceanX's picture

As per JC Collins (Hegelian Dialect: Crisis, Reaction, Solution)  That will be what spurs us into the "multi-lateral system"  SDR becoming the new reserve currnecy...  In a recent interview, I heard someone mention, the IMF is the only one with a clean balance sheet.

 

... many currents and confused seas,

Fri, 10/17/2014 - 11:19 | 5346773 LULZBank
LULZBank's picture

Is it just me or the things are kinda accelerating?

Fri, 10/17/2014 - 11:46 | 5346986 Bangalore Equit...
Bangalore Equity Trader's picture

Listen.

Neither.

It's the depth and breadth of the ZH reporting. The exposure is increasing.

Fri, 10/17/2014 - 12:48 | 5347336 ParkAveFlasher
ParkAveFlasher's picture

Stop.  Collaborate.  THEN Listen.

Fri, 10/17/2014 - 12:00 | 5347081 Volkodav
Volkodav's picture

both

Fri, 10/17/2014 - 11:18 | 5346777 orangegeek
orangegeek's picture

oopla

Fri, 10/17/2014 - 11:20 | 5346781 insanelysane
insanelysane's picture

Didn't someone in the know recently say that we should be concerned about shadow banking???

Fri, 10/17/2014 - 11:19 | 5346782 Baldrick
Baldrick's picture

hey Tyler, i bought a used ipad for reading zh and now i am clicking ads for you. send a tweet of thanks to: boa (a lot!), blackrock (a lot!), hsbc, vanguard, options express, prudential, bai, and synchrony. :)

Fri, 10/17/2014 - 11:21 | 5346805 SpanishGoop
SpanishGoop's picture

Used ?

You must be really poor.

 

Fri, 10/17/2014 - 11:24 | 5346821 Bangin7GramRocks
Bangin7GramRocks's picture

ssshhhhh! He doesn't want them to track him. Pulled out all of his teeth too.

Fri, 10/17/2014 - 11:46 | 5346985 RaceToTheBottom
RaceToTheBottom's picture

If you are going to go down that path, click the Bankster sites mostly.  

Click them day and night.  Click and then click some more.  

I am sure that those @sshats will forward the costs on to their customers but maybe their Muppets will wise up...

Fri, 10/17/2014 - 13:39 | 5347676 Baldrick
Baldrick's picture

i do. whan blackrock showed up i was hitting their ad like a hyper-active five year old!

Fri, 10/17/2014 - 11:20 | 5346792 SpanishGoop
SpanishGoop's picture

It only takes a small domino tumbling over to start it.....

 

 

Fri, 10/17/2014 - 12:40 | 5347125 Urban Redneck
Urban Redneck's picture

But is a domino in this "real" universe also a domino in every other universe that makes up the multi-verse?

Following up on something written earlier (which no longer exists in this universe)- back when I was an evil bankster I actually preferred taking the girls from marketing to "lunch" at Sam's when in town... but when the guys hit happy hour it's the local office staff that picks the "theater" venue...

Judging by Yelp, most people just can't grasp that two distinct truths and states of existence can simultaneously coexist (ala Schrödinger) in their own day to day lives and experiences much less behind the wizard's curtain at the Emerald Palace. Or it could just be that most people are fucking ignorant or illiterate of the ways and signs of the world... after all I hear red light bulbs are still popular on politically correct US college campuses... Friday Happy Hour has kicked off here in Europe where I don't think anyone here is ignorant of that signage.

I was actually in a bar on a beach in Thailand meeting some bankers to look/pick over a big concrete carcass that died of Tom Yum Goong Disease at the time they announced the last Landesbank "Bad Bank" a number of years ago. So what's to stop them from slapping another universe into the multiverse (Rinse, Repeat), if in fact a domino is not necessarily domino, and we still waiting for Godot for the foreseeable future?

Fri, 10/17/2014 - 14:01 | 5347839 OceanX
OceanX's picture

I am sorry sir, I don't understand your English...

Fri, 10/17/2014 - 14:02 | 5347842 OceanX
OceanX's picture

I am sorry sir, I don't understand your English...

Fri, 10/17/2014 - 14:22 | 5347964 Sirius Wonderblast
Sirius Wonderblast's picture

I think he's saying it's all bollocks.

Fri, 10/17/2014 - 22:35 | 5349561 Urban Redneck
Urban Redneck's picture

OK, so before I went out for drinks I packed as many obscure and crass references to both finance and sex into a single post as Money McBags used to, except that the soothing eye candy has been replaced by painful existentialism, theoretical physics, an American fairy tale, and a thought experiment (or few)...

In one sentence- it boils do "Why can't they kick the can again?"

There are two lines of evidence which might indicate that it is actually possible.

1) They've done it before (Rinse, Repeat)

2) There is an esotericism and duality to public financial discourse that is often not appreciated. Just as when adults talk about sex at the dinner table with children present- when serious financiers and economists talk shop on television, a single set of words can have multiple meanings based on one's perspective, and neither perspective is necessarily wrong even though they may appear mutually exclusive.

Thinking that the only two options are that either "I am right and the Fed is wrong" or "the Fed is right and I am wrong" is dangerous, particularly when other options include "both the Fed and I are right" or "both the Fed and I are wrong". For simplicity I'll ignore the option that "both the Fed and I are both right and wrong."

So without getting into the existentialism or theoretical physics (too much more), while drunk posting after 3am... most people on ZH are at least vaguely familiar with Berspankme's Congressional testimony, or at least the choice sound bites such as gold is a "barbarous relic" and subprime is "contained". However, just as there is more to those individual quotes, there's actually more a lot more to his testimony (which very few ever actually read) such as Washington needs to bring the budgets under control, and the Banks need to strengthen their balance sheets, and on, and on.

Taken in their totality, the testimony is Absurdist and evidence of nothing. The traditional prognosis among ZHers is collapse (suicide) but there have been some people arguing for collapse (and for the same valid reasons) since Nixon closed the gold window in 1971, and there are others who have advocated the same ends (collapse) by different means in countless preceding generations. The traditional characterization of the alternative prognosis among ZHers to collapse (suicide) is a deus ex machina from the Fed (transcendence). Transcendence has failed to deliver us as long as suicide as failed to destroy us. By deduction, acceptance of the Absurdism would appear to to be the default solution that we will Rinse and Repeat (again).

If so, what would this future look like? The status quo certainly cannot be maintained indefinitely. Paradigms shift, and nations ascend and descend with the changing of the epochs. I think a certain subset of ZHers will be in Beckett's Hell waiting for Godot to finally deliver suicide, while certain central bankers will be in Sartre's Hell with Huis Clos. However, there is a great undefined and uncertain middle ground between the two extremes (both of which are, literally and metaphorically... Hell).

...

(At least) one of the "work from home" spammer accounts that infest ZH got deleted earlier today and took with it something I posted in the reply chain - that is the primary meaning of "something written earlier which no longer exists in this universe"

Fri, 10/17/2014 - 11:28 | 5346842 yogibear
yogibear's picture

The best way to rob a bank is to own one.

Transfer reserve funds to off-shore accounts and run the banks into bankruptcy, it's the only way.

Why be responsible when you get bailed out all the time?

Bankers are encouraged to act like corporate raiders and extracting wealth leaving just debt.

Nobody goes to jail for fraud and criminal activity unless your a small bank. Too big to jail.

Fri, 10/17/2014 - 12:00 | 5347090 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

You forgot the "run up an incredible amount of debt" part.

Fri, 10/17/2014 - 11:26 | 5346852 STG5IVE
STG5IVE's picture

Yeah, nothing will happen.

Fri, 10/17/2014 - 11:26 | 5346857 Otto Zitte
Otto Zitte's picture

If failing banks get your money, they show you the failing set of books. If stable banks get your money, they show you the stable books. Either way you're going to get wined & dined. 

Fri, 10/17/2014 - 11:29 | 5346883 RabbitOne
RabbitOne's picture

Banks are like humans – No pain no gain. 

Fri, 10/17/2014 - 11:42 | 5346961 Paracelsus
Paracelsus's picture

KREDIT ANSTALT

KREDIT ANSTALT

KREDIT ANSTALT

KREDIT ANSTALT

KREDIT ANSTALT

Fri, 10/17/2014 - 11:54 | 5347054 itchy166
itchy166's picture

Sounds to me like its political.  If Germany doesn't play nice with Brussels, German banks fail stress test...

Fri, 10/17/2014 - 11:54 | 5347055 itchy166
itchy166's picture

Sounds to me like its political.  If Germany doesn't play nice with Brussels, German banks fail stress test...

Fri, 10/17/2014 - 12:44 | 5347288 THE DORK OF CORK
THE DORK OF CORK's picture

The role of the Irish conduit is to bail out these units.

 

There is no longer any fat or indeed muscle to extract.

They are now bitting into its heart muscle,

The Irish society of dupes has imploded already.

When the "Irish model" is seen to have economic ebola these units will crash also.

More irish deflationary porn on the way - stay tuned.......

 

Fri, 10/17/2014 - 13:46 | 5347739 Otto Zitte
Otto Zitte's picture

Same in the US only the scale is different. 

Fri, 10/17/2014 - 16:19 | 5348577 THE DORK OF CORK
THE DORK OF CORK's picture

But Per capita we beat all.

"we will not bow down to any sponser"

 

https://www.youtube.com/watch?v=KjB6r-HDDI0

 

Fri, 10/17/2014 - 12:53 | 5347355 THE DORK OF CORK
THE DORK OF CORK's picture

millions of euro

Consumption of Personal Income at Current Market Prices

Clothing and footwear

Peak Y2007 : 3,992

Trough Y2013 :  2,906

 

The ultimate Euro potemkin village is not in recovery.

All remaining energy is being used to bail out the high end consumer war economy of Germany at the expense of the most basic of goods..

(Irish car (tank) sales up 30 % this year)

 

Fri, 10/17/2014 - 12:58 | 5347403 THE DORK OF CORK
THE DORK OF CORK's picture

Irish consumption of household equipment and operation at current market prices

Peak Y2007 : 6,187

Trough Y2013 : 3,187

 

 

Fri, 10/17/2014 - 13:02 | 5347426 THE DORK OF CORK
THE DORK OF CORK's picture

 

Recreation, entertainment and education consumption

Peak Y2007 : 9,152

Trough Y2013 : 7,516

 

 

Fri, 10/17/2014 - 13:13 | 5347495 AbbeBrel
AbbeBrel's picture

What is amazing to me, even as Draghi postures in a keynesian fashion from his hovering helicopter, that there is one Deutsch Dude, and a Center Banker no less, that stands his ground in the downwash from said helicopter. As reported by David "no spin here" Stockman:

<< Finally, Weidmann landed a solid punch on Draghi’s scheme to pursue QE through the back door of buying what amounts to junk bonds on the secondary market. The the President of the Bundesbank rightly said that the ECB’s program to purchases bundles of loans to households and businesses, with the aim of raising money supply and boosting the flow of credit to the private sector—-

” transfers risks from financial institutions to the central bank and, ultimately, taxpayers. This would run counter to everything we have strived to achieve in banking regulation over the last years…..”

Were some modern day Diogenes to travel far enough north through the statist and Keynesian desolation of Europe’s policy councils, he would indeed find an honest man. >>

http://davidstockmanscontracorner.com/horray-for-herr-weidmann-for-utter...

This is an amazing article in many ways...

Fri, 10/17/2014 - 13:19 | 5347532 Silverymoon
Silverymoon's picture

Achtung Baby, Get those Funny money Euro QE machines fired up real quick.

Fri, 10/17/2014 - 14:26 | 5347535 THE DORK OF CORK
THE DORK OF CORK's picture
Ireland has destoyed its society & social economy so that it can buy more useless machines. It will now buy 20 to 30 thousand extra new cars this year at the cost of a civilizational collpase !!!!!!! Even this will not stop the aging of the car fleet. "Using these data it is also possible to calculate the average age of the private car stock in each year. The trend in   the average age of private cars over the period 1990 to 2013 is shown in

 

Figure 15.  It can be seen that the average age declined and reached a low of 5.6 years in 2000 and has since risen to 8.6 years in 2013. This ageing of the   fleet is to be expected due to the low turnover in the car stock since 2008, with fewer new cars being bought and   consequently older cars being kept on the road for longer." In Europe we put our cars before people.

   
Fri, 10/17/2014 - 15:44 | 5348426 Duffy
Duffy's picture

I think I speak for everyone when I ask:

 

Ummm...what?

 

 

Fri, 10/17/2014 - 14:39 | 5348072 Sirius Wonderblast
Sirius Wonderblast's picture

Mendacious sanctimonious arsehole scum being "tested" (oh my aching ribs) by other mendacious sanctimonius arsehole scum. These ECB tests have been purest bullshit since they were first conceived, and are plainly intended to conjure an aura of respectability and probity in favour of the big banks, and a couple of small layers will be happily tossed into the flames for the "greater good".

Fri, 10/17/2014 - 14:40 | 5348086 Saratoga
Saratoga's picture

The 4th bank is Kaput International.

Fri, 10/17/2014 - 15:45 | 5348430 Kirk2NCC1701
Kirk2NCC1701's picture

Don't fuck with Kirk's DB account!  You give my account a "hair cut", and your scrotum gets a "haircut".  With a dull blade. 

Ponyemayesh?  Vestehst Du?

Sun, 10/26/2014 - 13:58 | 5379612 flow5
flow5's picture

Economics is simple. Economic prognostications are infallible. What's wrong is that economists: don't know that aggregate monetary demand is measured by monetary flows (MVt), not nominal-gDp; don’t know the difference between the supply of money & the supply of loan funds; between means-of-payment money & liquid assets; between financial intermediaries & money creating depository institutions; don’t recognize that interest rates are the price of loan-funds, not the price of money; don't recognize that the price of money is represented by the price level; don't realize that inflation is the most important factor determining interest rates, operating as it does through both the demand for and the supply of loan-funds.

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