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25 Banks Said To Fail European Stress Test, 10 In Talks On Capital Shortfall

Tyler Durden's picture




 

With the results of Europe's annual AQR, aka Stress Test, due out on Sunday, most had been expecting that despite some rhetoric that various brand name banks may fail, that it would be largely more of the usual: puff. That, however, may not be the case, and as Bloomberg just reported, a whopping 25 banks are set to fail the stress test, compared to 105 which are set to pass. As Bloomberg notes:

  • 105 banks passed the test, draft document shows
  • Number of banks that would have shortfall even after capital-raising to Sept. 30, 2014, is the subject of ongoing talks, a person with knowledge of the matter says
  • Negotations continue with about 10 banks shown to have net shortfall after 2014 capital measures, the person says
  • An ECB spokesman says the central bank can’t comment on speculation about the outcome of the comprehensive assessment. Any inferences drawn as to the final outcome of the exercise would be highly speculative until the results are final on Oct. 26, spokesman says

Note: the outcome is fluid and somehow still pending negotiation, some 48 hours before the announcement. How that makes the test any more credible is beyond our meager comprehension skills. More importantly, as we noted earlier, stress test failures means more ECB bailouts. Which is, of course, bullish.

Then again, some bad news for the panic-buying vacuum tubes - contrary to some expectations, notably the Fed's, Deutsche Bank will not get a multi-trillions bailout and in the process make George Soros a trillionaire: from Reuters:

  • Deutsche Bank Set To Achieve 8.8 Percent Core Tier One Capital Ratio In Ecb's Adverse Stress Test Scenario - Sources
  • Deutsche Bank Set To Achieve 12.6 Percent Core Tier One Capital Ratio In Ecb's Baseline Stress Test Scenario - Sources
  • Deutsche Bank Declines To Comment

But apparently has no problem leaking.

 

 

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Fri, 10/24/2014 - 08:51 | 5371651 jubber
jubber's picture

Paschi that POS up 9% LOL

Fri, 10/24/2014 - 09:05 | 5371696 GetZeeGold
GetZeeGold's picture

 

 

Do your patriotic duty.....sign up to get bailed in today!

Fri, 10/24/2014 - 09:06 | 5371703 Haus-Targaryen
Haus-Targaryen's picture

Thank God the "European" economiy is in recovery. 

Fri, 10/24/2014 - 09:08 | 5371707 Headbanger
Headbanger's picture

And for all the sanctions against Russia too!

Fri, 10/24/2014 - 10:09 | 5371986 nope-1004
nope-1004's picture

Wait a minute.  5 years ago Geithner and Bernanke said it was all fixed and banks are no longer a threat.

 

Were they lying?

or

Are they stupid?

 

Has to be one or the other.

 

Fri, 10/24/2014 - 10:18 | 5372023 GetZeeGold
GetZeeGold's picture

 

 

 

Yes.

Fri, 10/24/2014 - 13:53 | 5373147 KnuckleDragger-X
KnuckleDragger-X's picture

Those two questions are tied together. They are stupid AND lying. Simpler that way.

Fri, 10/24/2014 - 10:34 | 5372129 JRobby
JRobby's picture

Wells will accomodate. They have the most excuses as to why you can't have YOUR money today.

Fri, 10/24/2014 - 10:51 | 5372212 Kaiser Sousa
Kaiser Sousa's picture

(Reuters) - Last year Madrid’s city and regional governments sold almost 5,000 rent-controlled flats to private equity investors including Goldman Sachs and Blackstone. At the time, the tenants were told their rental conditions would remain the same.

But as old contracts expire, dozens of people have received demands for higher rent, been told their rents will increase dramatically, been threatened with eviction or moved out to escape the insecurity. Thousands of Spain’s poor now depend for their homes on the generosity of private equity.

Jamila Bouzelmat is one of them.

The mother of six lives in a four-bedroom flat on the outskirts of the Spanish capital that was bought jointly by Goldman and a Spanish firm. The 44-year-old said that until March her family paid 58 euros ($73) a month in rent out of her husband’s 500-euro unemployment benefit. In April, her bank statement shows, her new landlords suddenly took 436 euros from her bank account.

She discovered the payment when she tried to pay an electricity bill.

“We went to take money out and there wasn’t a cent left in the bank,” she said, her 18-month-old daughter playing at her feet. She got charity hand-outs to feed her children, aged between 18 months and 19 years, and now lives in fear of the rent bill. Goldman declined to comment.

In the buildings sold to the funds, Reuters has spoken to more than 40 households who face similar difficulties. They include some of Madrid’s most vulnerable people: an unemployed single mother of five with a severely disabled daughter, for example, and an HIV patient with one lung. Both faced evictions that were temporarily halted at the last minute.

Fri, 10/24/2014 - 13:57 | 5373161 KnuckleDragger-X
KnuckleDragger-X's picture

No need to quote Animal House anymore, parody and reality are now the same thing. Call it the Moronic Convergence.

Fri, 10/24/2014 - 08:53 | 5371655 RealityCheque
RealityCheque's picture

First up: every bank in Ireland.

High finance, the only industry where having no money doesn't mean the end of the line.

Fri, 10/24/2014 - 09:00 | 5371681 LULZBank
LULZBank's picture

High finance is a very specialised field, beyond the comprehension abilities of low life mere mortals.

Monetary policy is even more complicated. You need to have atleast a PhD just to begin to understand how money is created.

I know, I know some of you morons would say whats so difficult about printing money?

Which actually proves my point, that its beyond your ability to understand.

Fri, 10/24/2014 - 09:07 | 5371695 Manthong
Manthong's picture

It’s just a good thing that gold isn’t a universal Tier 1 holding. and even if it was, it gets a 15% haircut.

That is a great way to position the most durable asset in the history of man.

Basel III abolished the Tier 3 capital class – all assets fell either under Tier 1 or Tier 2 capital. Under these recommendations gold remained eligible collateral with a haircut of 15% just as it was under Basel II."

http://www.kitco.com/ind/Radomski/20130116.html

 

Fri, 10/24/2014 - 09:05 | 5371698 Divided States ...
Divided States of America's picture

The street was expecting 44 banks to fail this so called 'stress test' and 24 to have capital shortfall...thus this news is BULLISH.

 

Fri, 10/24/2014 - 09:06 | 5371699 knukles
knukles's picture

OK  Everybody, sing along!
(standing clapping hands above head)

Everything is beautiful,
In it's own way
Life shines beside us,
Lal la lah lah la lah al ya ya day
Bullshit is beautiful

Fri, 10/24/2014 - 09:22 | 5371767 DeadFred
DeadFred's picture

How anyone can use these works of fiction to base real decisions is beyond me. Why not just use an existing novel for your blueprint? It saves paper that way. Maybe a Tom Clancy novel, with his plots of terrorists crashing planes into buildings and weaponized ebola to depopulate the world he has an established track record.

Fri, 10/24/2014 - 09:04 | 5371690 Sudden Debt
Sudden Debt's picture

Does anybody remember that the MAIN SHAREHOLDERS OF THOSE BANKS ARE THE GOVERNMENTS THEMSELVES????!!!

 

I know for example that Dexia, slash Belfius is on the hook for about 260 Billion euro's. So how is Belgium going to pay for that one?

And than there's France, Germany, Portugal, Ireland, Holland... man O man....

Fri, 10/24/2014 - 09:10 | 5371714 LULZBank
LULZBank's picture

 

So how is Belgium going to pay for that one?

 

US Treasuries?

Fri, 10/24/2014 - 09:44 | 5371864 Ghordius
Ghordius's picture

I was hoping for... chocolates. But the unacknowledged cousin of Sudden Debt - the new Belgian Health Minister - might have eaten them all

paying? why paying? there are soooo many other options. default, or forced restructuration come to mind, among many others. though I understand the very word "default" has become somewhat... archaic. Fetch a written syllabus, chances are you might find it's definition

my favourite course would to break them all. set a limit on how big a bank can be. but our American and British Cousins think that Big Is Beautiful, which of course leads us again to Sudden Debt's dear Minister Maggie

relax, folks, is only an AQR. American Banks pass them with flying colours every year. Of course they do a completely different business, particularly in regard to lending to businesses, so that again we are comparing what can't be compared, so perhaps better if you forget what I wrote and.... PANIC

Fri, 10/24/2014 - 10:44 | 5372185 gatorengineer
gatorengineer's picture

Dont they have Mark to Unicorn yet in the EU?

Fri, 10/24/2014 - 10:46 | 5372186 Cacete de Ouro
Cacete de Ouro's picture

Belgian health minister goes on a two week vacation
http://youtu.be/XY5KTVA_2ys

Fri, 10/24/2014 - 08:53 | 5371659 JustObserving
JustObserving's picture

So the real numbers are 105 banks fail and 25 pass?

Fri, 10/24/2014 - 08:56 | 5371660 Ness.
Ness.'s picture

Apparently this news is extremely bullish for risk.  ES futures ripping higher.  Failing banks, ebola in NYC and dropping bombs on brown people seems to be the perfect recipe for higher stock prices.  Whodathunkit!?

Fri, 10/24/2014 - 08:54 | 5371662 Cognitive Dissonance
Cognitive Dissonance's picture

Simply amazing how long they can keep us looking into their Ponzi crystal ball.

Fri, 10/24/2014 - 08:56 | 5371672 LULZBank
LULZBank's picture

Amazing how long we are willing to look into their crystal ball. ;)

Fri, 10/24/2014 - 09:08 | 5371705 GetZeeGold
GetZeeGold's picture

 

 

I looked straight into it's eyes......is that bad?

Fri, 10/24/2014 - 09:13 | 5371718 SpanishGoop
SpanishGoop's picture

Worse, we are paying them to look in their crystal ball and tell us what they see.

 

Fri, 10/24/2014 - 08:57 | 5371673 skbull44
skbull44's picture

Or, is the 25 supposed failures a 'trial balloon' to set the stage for fewer reported fails and thus the appearance that things are not all that bad? Psyops and spin at every turn...

http://olduvai.ca

Fri, 10/24/2014 - 08:57 | 5371674 SheepDog-One
SheepDog-One's picture

AH! Gee finally some bad news stawks can really sink their teeth into and shoot higher!

Fri, 10/24/2014 - 08:59 | 5371677 Notsobadwlad
Notsobadwlad's picture

So, just create some more fiat for them ... unless the intent is to make them fail so that there are fewer banks to control.

Fri, 10/24/2014 - 08:59 | 5371678 john_connor
john_connor's picture

Unicorns.  Rainbows.  Make Believe.  Bullish.

Fri, 10/24/2014 - 09:35 | 5371680 SickDollar
SickDollar's picture

Geez When is this Ponzi scheme going to be over

Working/dealing with sheeples is hard , especially when u know what is going on and they think you are strange/wierd

I hate kisss ass sheeples

 

 

Fri, 10/24/2014 - 10:35 | 5372139 HamRove
HamRove's picture

@ SickDollar

Right there with ya. Shit is getting old. 

Fri, 10/24/2014 - 09:01 | 5371682 Panic Mode
Panic Mode's picture

How on earth they passed the test with all those junk bond holdings??!! Unless the test does not include the bond holdings or values them in a la la price.

Fri, 10/24/2014 - 09:02 | 5371683 nakki
nakki's picture

25 European nations fail stress test!! There fixed it for you.

Fri, 10/24/2014 - 09:01 | 5371684 ben_bernanke
ben_bernanke's picture

Ramp on this news. Ramp on ebola.

Fri, 10/24/2014 - 09:05 | 5371691 Keltner Channel Surf
Keltner Channel Surf's picture

The 'failed test' headline made me think of the ending of Kafka's "The Test":

So I sat down. He asked me several things, but I couldn't answer, indeed I didn't even understand his questions.  So I said: "Perhaps you are sorry now that you invited me, so I'd better go."

But he stretched his hand out over the table and pressed me down. "Stay," he said, "that was only a test. He who does not answer the questions has passed the test."

Fri, 10/24/2014 - 09:06 | 5371697 TheEndTimes
TheEndTimes's picture

http://www.alexa.com/siteinfo/zerohedge.com

 

 

I know how much you guys love to use the words "plunge" "drop" "tank" etc.

how about this for a headline "EBOLAHEDGE READERSHIP PLUNGES TO ALL-TIME LOW AS MEMBERS REALIZE WHAT AN ABSOLUTE JOKE THEIR FEAR MONGERING BULLSHIT ARTICLES ARE THESE DAYS"

Fri, 10/24/2014 - 09:13 | 5371723 LULZBank
Fri, 10/24/2014 - 09:06 | 5371700 SidKhadak
SidKhadak's picture
PetroDollar War – French Energy Giant Total CEO Assassinated

 

Just hours earlier, De Margerie had met Russian Prime Minister Dmitry Medvedev at his country residence outside Moscow to discuss foreign investment in Russia. In his speech hours before the plane crash that took his life, de Margerie said U.S. and European Union sanctions on the country were “unfair and unproductive,” and that he opposed efforts to render it “isolated from the major global economic and political process.”

De Margerie was a keynote speaker last spring at Putin’s annual economic summit in St. Petersburg—an event that many Western executives decided to skip—where he signed a deal with Russian oil group Lukoil (LUKOY) to develop shale oil in Western Siberia. De Margerie also pressed ahead with major Russian investment, including the $27 billion Yamal natural gas venture in the Arctic led by Russian gas group Novatek (NVTK:LI), even as sanctions against Novatek and one of its owners, Gennady Timchenko, have complicated financing.

De Margerie told Bloomberg News recently that he was “doing everything” to move the Yamal project forward, in keeping with his belief that politics and business should be kept separate. Total, the world’s No. 4 non-state-owned energy group, has said that Russia could become its largest supplier of oil and gas by the end of this decade, up from its fourth-biggest supplier in 2013.

 

De Margerie’s death removes from the scene a businessman who rarely shied away from geopolitical debates and became one of Russia’s most outspoken allies in its efforts to avoid economic quarantine, willing to say what others only dared think. Although European corporate giants from Siemens AG to Renault SA (RNO) have built close relationships with Russia, most business leaders have preferred to keep their lobbying private to avoid offending governments committed to punishing Putin.

PetroDollar War – French Energy Giant Total CEO Assassinated
Fri, 10/24/2014 - 09:07 | 5371701 agstacks
agstacks's picture

One bank to rule them all.

Fri, 10/24/2014 - 09:08 | 5371708 GetZeeGold
GetZeeGold's picture

 

 

We call it the BIS.

Fri, 10/24/2014 - 13:32 | 5373018 Kirk2NCC1701
Kirk2NCC1701's picture

Bank of Israel?  Baal Is Supreme?

Fri, 10/24/2014 - 09:08 | 5371704 SpanishGoop
SpanishGoop's picture

Only 25 ?

Must be something wrong with that test.

They probably forgot to use a 2B pencil to fill in the forms because you would already have passed if you fill in the name of the bank correctly.

 

 

Fri, 10/24/2014 - 09:12 | 5371715 LawsofPhysics
LawsofPhysics's picture

Banks?  Please, there are no more banks in the traditional sense, let alone banks that can "fail".

Fri, 10/24/2014 - 09:16 | 5371742 yogibear
yogibear's picture

Draghi hands out Euros like monopoly money. Constant bailouts of the PIIGS, banks, whatever.

Everyone knows the game, be reckless and get in trouble or send money to offshore accounts and then cry "I want my bailout!" again.

Join Japan in the printing to the bottom. 

Rather than take recievership and clearing the debt it goes on and on devaluing the money, robbing the 80%.

Fri, 10/24/2014 - 09:19 | 5371759 yogibear
yogibear's picture

Wha, wha, wha, I want my bailout!!!!

- Banksters

 

Fri, 10/24/2014 - 09:38 | 5371855 centerline
centerline's picture

Translation:

Banks need more money to gamble with.  For our own good of course.  God's work and all.  Keeping the tanks off the streets one day at a time.

Fri, 10/24/2014 - 10:18 | 5372038 JRobby
JRobby's picture

If they are announcing it, the consolidation plan / bailout is already approved.

Fri, 10/24/2014 - 10:32 | 5372116 Bahamas
Bahamas's picture

25..2+5 = 7 !! ..sarc on

Fri, 10/24/2014 - 10:32 | 5372122 QuantumCapitalist
QuantumCapitalist's picture

Nothing to see here.....As you were

Fri, 10/24/2014 - 10:43 | 5372182 Seize Mars
Seize Mars's picture

If they're saying 25 failed, it means that the real number is... All of them!?

Fri, 10/24/2014 - 13:08 | 5372887 robertocarlos
robertocarlos's picture

They should make the test easier.

Like this, "Got any money?"

"Yes"

"OK, you passed".

Fri, 10/24/2014 - 13:34 | 5373031 Kirk2NCC1701
Kirk2NCC1701's picture

So.. these "banks" you speak of... they're getting the Short Squeeze or the Squeeze in their Shorts?

Fri, 10/24/2014 - 14:38 | 5373413 jmcadg
jmcadg's picture

Don't panic. This stress test is incredibly stringent.
It's like a test of whether you can play gold, and Obama passed with flying colours.
What's to worry about

http://www.youtube.com/watch?v=H9m3GyDh6M8

Shit.

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