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Lehman Moment For Austrian "Bad Bank" Means Worse Coming
Not "contained." Just six short months ago, the 2Y bonds of Austria's bank bank - HETA Asset Resolution AG - were trading well above par as the world and his mom reached for yield (~6%) in all the wrong places. Today, following the "spectacular development" over the weekend that the bank will be wound down due to the discovery of an $8.5bn "hole" in its balance sheet, the 2Y HETA bonds are trading below 50c on the dollar (at a yield of 54%). This is indeed Austria's "Lehman" moment as for the first time in the new European 'bail-in' era, senior debt is getting a massive haircut.
As we noted yesterday, the punchline, is that while the world was waiting for Greece to announce capital controls, or a bail-in over the past week, it was none other than one of the Europe's most pristeen credits (one which until recently was rated AAA/Aaa) that informed creditors a bail-in is imminent: "The finance ministry noted that creditors can be forced to contribute to the costs of winding down Heta - or "bailed in" - under new European legislation that Austria adopted this year so that taxpayers do not have to shoulder the entire burden."
Bloomberg confirms that the ministry announced that under new EU rules means creditors can be forced to share losses...
Resolution of wind-down vehicle of Hypo Alpe-Adria-Bank International represents first bail-in of senior debt under new European regime for imposing losses on bondholders, Gildas Surry and Geoffroy de Pellegars, analysts at BNP, write in client note.
Moratorium on liabilities of Heta Asset Resolution until May 31, 2016 gives time to work out necessary haircut and reduce the risk of litigation to a minimum
Bail-in legislation in Austria implements the European framework to the letter
Other jurisdictions that follow Austria’s example can be expected to treat resolution in this sequence: point of non-viability, independent review of assets vs liabilities, moratorium, haircut
Expect senior CDS old contract to trigger on Failure to Pay, and that HETAR govt-guaranteed sub bonds will continue paying (and trade with accrued interest)
* * *
And sure enough, the bonds have crashed...
Remember - these are senior unsecured notes of a major bank! Contagion is now a big problem for Austria (and its banking system).
* * *
Of course, this being Austria, and the Creditanstalt, aka the bank which failed in 1931 under almost identical circumstances and set off the dominos that led to a global financial crisis which in turn bank fanned the flames of the Great Depression, also being Austrian, suddenly everyone is asking: "what just happened and what happens next?"
As a gentle reminder, this is what happened to Lehman... Surprise!
One thing is certain when one bank's liabilities are another bank's assets, it is that such an arrangement is simply screaming for a systemic crisis to prove to everyone just how dumb this idea was from the get go.
The question is - how long do authorities let the contagion go before they 'change' the rules on bail-ins and apply taxpayer funds once again - as a one-off of course - to stabilize what is, after all, a well funded and highly liquid banking system... It appears HETA gave markets a glimpse behind the curtain as the lies of the recovery come out.
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Please do not worry..
When someone tells me not to worry, the first thing I do, Is worry.
I wonder if there is a way to just print up some currency that is equal in value to the bad debt?
I'll have to check with Krugman...
Again, Watch for the DAX breaking below 11,300
http://www.marketwatch.com/investing/Index/DAX/charts?CountryCode=DX
Not anytime this week I would imagine - Not while Draghi is around with his ECB wad
"Please, do not worry" - that's a Japanese Idiot, eh, I mean, Idiom?
Isn't it?
No
In Japan they just smile
What a bunch of fucking idiots. ^^^^^^
It’s just a good thing there are not a boat-load of derivatives written against any of that banks instruments.
There just cannot be tens of billions or more of that crap out there, can there?
(Bwaa ha ha ha ha ha!!)
Billions? Nope, we're well up into the trillions now......
Are you kidding?! This bank must be bailed in/out immediately!!1! We'll have tanks in the streets of Estonia if this isn't fixed RIGHT NOW!
Oh, wait....
Amateur analysis from ZH once again. Losses will be imposed on creditors and shareholders implying no taxpayer bailouts or "systemic" problems. UBS, Deutsche. PIMCO etc. will take a small hit. Nothing to see here, move along.
I suspect you deserve everything that is going to happen to you as a result of your willful ignorance regarding how bad the economy is.
The situation in Europe ain't great. But the endless chicken little act is getting old. A few weeks ago Greece was going to catastrophically leave the EU, now some Austrian bank is going to destroy the European financial system... wonder what ZH will come up with next week.
Do you agree it is generally falling apart? I know watching every little event can cause "collapse fatigue" where you just want them to get on with it already. It is stunningly unsustainable and each one of these can look like "it."
All the people betting against the EU fail to realise that they will do anything to keep the EU together. Syriza never wanted to leave the EU, Draghi will do whatever it takes and Germany will continue to bailout everyone because it benefits from a weak currency. As long as everyone is deeply committed, the EU will continue along despite the high unemployment and languishing economy. This may change if a political party is willing to walk away from the EU but this has not happened so far.
I am afraid you make good points. Apologies.
No matter how much they want to keep all that together, it IS unsustainable and mother nature WILL catch up to the whole shit show eventually. Supply lines will fail, that is what it will take to wake folks up and make something different happen.
I defend ZH because they front run this kind of news and I value that. Yeah it is doomer porn, yeah it is sort of edge of the seat all the time and the boy crying wolf effect kicks in, but I would rather be saturated with this awareness vs. the economy has recovered bullshit.
My guess is that 4th stooge was being SARCASTIC here.
Exactly that.
+100
Media noise for the relentlessly lewd "hot on media-noise" cocksuckers.
Without media and stories and hypes 24x7 they are lost brain-dead zombies in no-mans-land.
Insane.
You may be right, it really just depends on magnitude of the impact (and it's resulting ripple effects)
It's already got the classic structure required for systemic melt-down:
1. It involves an immediate and credible threat to the banking world, not some "real world" company or industry which nobody gives a shit about in banking circles.
2. There are counter-parties involved whose "asset" is this bank's debt/promise. And those counter-parties are other mostly banks.
3. Sufficient Magnitude of Impact.
Big enough, you set off the banking "planet killer". It doesn't matter where it happens, everything goes down. But if it's not big enough, the impact is absorbed and nothing happens. THERE IS NO IN-BETWEEN, HOWEVER. It's a "lightswitch" effect- on or off.
oh, but that's the right kind of tanks, isn't it? /obscure reference to leaves on British railroads
I find it interesting that bailed-in and bailed-out sound as if they're the exact opposite of one another and yet in both cases the banker scum ends up with you're money, only the route it takes differs slightly.
from the banker's side they are roughly equivalent, but for the taxpayers and the bank account holders there is a vast difference between the two
And nothing mentioned on any of the MSM that I've seen. Nothing but Netanyahu talking to congress and other such bullshit. Total mind blower....
Jewish settlers destroy 300 olive saplings in West Bank
February 28, 2015 --Jewish settlers have uprooted at least 300 olive saplings near the city of al-Khalil, West Bank, Rateb Jabour, coordinator of the Popular Committee against the Wall and Settlements in al-Khalil, told The Anadolu Agency. "Some 300 olive saplings were destroyed by Jewish settlers on a land owned by the Housheyya family near the Yatta town in southern al-Khalil.” He added that the trees had been planted a week ago on the land "which had been controlled by settlers before an Israeli court ordered it back to the [Palestinian] family a few months ago."
http://rt.com/news/line/2015-02-28/#82607
Carl, when you say total mind blower you mean business as usual? Besides, the sleepy sheeple will look at a foreign bank failure and say, wtf. If you said credit anstalt 99% would have no idea what you're talking about.
BTW, no disrespect, I assume you're being sarcastic. You contribution are great. Very clear thinking clearly expressed. Bark like a dog Mrs Robinson, oh you know you want it...
Under a representative government, there were ways to have solved this crisis to the benefit of the people and not to the perpetual benefit of the perpetrators of these crimes. But since 1913, the banks have been partnered with the government to the detriment of the people they were to serve.
The Federal Reserve System is a cartel in partnership with the government; the Fed international bankers crafted this partnership because they needed the force of law to enforce their cartel agreement. Bastiat called it legal plunder.
This is not a banking system, it is legalized plunder operated by a counterfeiter in cahoots with its bought representatives on Capitol Hill.
The U.S. Congress effectively allows these investment banks to buy anything they want with money created out of nothing and use it as collateral.
From Warburg 1913 to Greenspan/Bernanke/Fischer 2015, this banking cartel has had a deliberate game plan—massive profit from easy money and control of the money supply, elimination of the competition, manipulation of markets, monopoly of the financial system, and Bailout--shift the inevitable losses from the owners of the big banks to the taxpayers or unwary depositors under the argument that if the “TBTFs” are allowed to fail, the nation, and the world, would suffer vast unemployment and economic disruption. Even Volcker sang this song.
Well, how many more times must we suffer “vast unemployment and economic disruption recoveries” before we believe our “lying eyes”?
And so, it is postulated, why not let Congress patch these giant fraudsters up again, why not let the TBTFs up the risk ante even higher using what’s left of America’s standard of living as collateral—all on the same old canard that if “they” default, the American government will ‘protect the public” by bailing the bankers out? Well, the American people don’t want this kind of financial bondage any longer.
They don’t want international bankers making a personal fortune off the downfall of America. It is not just a case of discount policies, “reserves” and interest rates. Worse, it’s a case of war, depression and fraud…of financial manipulation to the detriment of nations by the IMF/World Bank.
Make no mistake. As G. Edward Griffin said, “the cabal will not let go without a ferocious fight.” And “if we are to have a safe passage” through this crisis of a nation, he says steps must precede abandonment of the Fed by those skilled in drafting legislation. The first step is “to convert our present fiat money into real money…100% backed…
“It’s better to fail trying than to do nothing,” says Griffin. “Like men on a sinking ship, we must risk the water. We cannot stay where we are.”
Already, the bell tolls...
Why the hell would anyone vote down on 'Please do not worry..'
Bitcoin Last Price $261. Up from around $200 two and a half weeks ago. Woooohooooo. Yipee Yi Yipee Yeah Yipee Yip Yip Yip.
Shove those shitcoins!
Where else can you get 54% on your money? Buy Buy Buy. Or is that Bye-bye.
Looking at the charts it appears that bitcoin has gone through its bubble phase and may be returning to a mean.
Comparing this
http://www.globaldeflationnews.com/wp-content/uploads/2014/02/bubble2.jpg
to this 1D chart
https://bitcoinwisdom.com/markets/bitstamp/btcusd
Maybe not. A little bit interesting to compare though.
fonestar?
Foneystar is a complete bit-douche. It seems natural that he would be peddling all those bit coins he bought at $1000, now that their value has fallen to 200.
Jailbird with no free card.
We only hear from them when the mkt is up. At least fonestar was a shameless promoter whether price was up or down.
Given that I prep for a complete breakdown of civilization, something that requires electricity and global communication is low on my priority list.
Id rather spend the money on more kerosene and first aid equipment. And spam. You can't have enough spam.
I get where you're coming from. I am in the process of doing the same. Actually, given my location and the severe weather here, I could be without electricity for weeks in certain circumstances.
That's how you start. Definable, easy to reach goals. For example, I live in hurricane country. It makes sense to have a few weeks of emergency supplies on hand.
When you've established a base, you keep working on it. Every paycheck you add a little bit more. Soon you'll have one month, then six, etc.
If you ever need advice on prepping just ask. I'd be glad to help.
That's very considerate. Thank you!
I've been at this awhile, and now I'm working on the bigger ticket items. I moved out to my BOL last year, and have been working on fencing it. Next is a new roof, etc. etc. I start beekeeping whenever my hives arrive sometime in a month or two. Can't wait.
What you described is exactly what I did. Every trip to the store, I bought a little extra. Before you know it, you are filling up 5-gallon buckets with mylars and O2 absorbers. My biggest help was finding a local wheat farmer that'd sell me wheat berries. I can't imagine the shipping for several hundreds of pounds of wheat berries. The local Asian supermarket is the best place to purchase rice and spices though. My LTS food stayes untouched, and I keep a full pantry of stuff we eat. Occasionally, I break out the mill and we'll make stuff from fresh ground wheat or corn though.
I like to buy old tools because of what you illustrated. And, I can usually find them at reasonable prices. They are just a lot more work! For instance, I drilled a bunch of connection pins (made from #3 rebar) for my fence braces with a hand brace. That shit got old pretty quick. But, It got done.
Next up is planting a bunch of fruit trees/honey trees. Thanks again for your offer. It was very kind. If you'd like to compare notes, I'd always be glad to do so. You might be doing something that I could learn from, and vice versa.
Sounds like you already have a good bit of knowledge. I'm always open to the exchange of experiences. After all, that's how civilization was built.
Is there a way to send a PM on this site? I haven't been able to find one. I think we could both learn from each other.
Oh, about the wheat: see if there's a feed store in your area. They carry wheat and oats and such for horses. It won't be as clean as human grade wheat, but it will still be safe to eat and much cheaper than paying the shipping.
If you don't like the animal grade wheat, you can order wheat berries from Auguson Farms. Walmart carries their products and offers free shipping above a certain dollar amount. The wheat will have to be repacked, but that's easy. I got a couple hundred pounds of wheat that way.
Don't forget a hand powered grain mill to crack all your wheat! The wonder junior mill is very high quality, but a bit expensive.
One company I like to use for getting unusual grains or beans is Walton feed. The prices are good. They also offer all of their products pre packages in buckets with Mylar and absorbers. Some of my food I did myself, and some I bought.
The Jr Wonder Mill isn't that expensive compared to some of the other options. Yeah, you can get cheaper, but those tend to not last.
I haven't done it myself but if you look to the right side of the screen, next to My Relationships, is ZChat Instructions. Click on that
I have a Country Living grain mill, and some back up components for it. Buy once, cry once. They occasionally have them on sale due to factory blemishes, but they are never deeply discounted. I like the looks of the GrainMaker, but they are even more costly than the Country Living mills.
I packed all my own LTS food. It was just a matter of economics for me. My local Walmart doesn't carry Augasson Farms stuff, but it can be ordered. What I couldn't get at the Asian or Mexican markets, or Walmart, I'll try to suppliment with gardening and canning myself. Meat is the easiest thing to can, and it makes for quick dinners. Just wait for the meat to go on sale, and buy in bulk. You can get about a pound of meat per pint jar. Canning takes care of a lot of your water needs for meals too, and everything is pre-cooked. It's a win-win all the way around.
Monsanto has been on the rampage around here, and the local mills won't sell to individuals any longer for fear of lawsuits. No kidding. I'm not averse to eating animal grade wheat berries, especially if I winnow it before putting it up. Nothing a chair, a little patience, and a box fan can't fix.
Don't forget putting up salt and sugar. You can get about 50-pounds in a 5-gallon bucket in my experience. Grains, beans, rice---you can get about 33-pounds per 5-gallon bucket. Popcorn from Sam's is pretty cheap in 50-pound bags. Popcorn make the best cornbread IMHO. I'm also a big fan of lentils after living in India for awhile. They are pretty cheap, and cook fast.
While you're not going to get white table sugar without other equipment, but sugar:
https://www.youtube.com/watch?v=s4nK8lnZEA4
Cool! Thanks for the info. I've got some beets, turnips, radishes, clover and chicory in my little pature right now. I have an eye on feeding my goats and bees with the same food plot (and harvesting the odd deer that wanders in). I started making hugel mounds along my fence line with all the shit I cleared away for putting my fence up, and am just letting all dry out before I start covering it. The plan is then to plant some black locust trees as a hedge row in this area. I've got a hedgerow of trifoliate orange going across my front already started (I may regret this later---jury is still out). Once the hugel mounds get covered, I'l plant all sorts of stuff that can be used as bee forage and goat & sheep forage.
That video made me want to build another wood-fired pizza oven. Yet another thing to add to my to-do list. The last one a built could get up to about 800-degrees F, and could cook stuff for about 24-hrs if you staged all your stuff right. It would cook a pizza in less than 5 minutes, and made a damned good expedient tandoor. The chicken tikka kababs and naan I made were the bomb! As the oven approached the end of the cooking session, I'd cut up a bunch of roma tomatoes, drizzle with salt and balsamic vingar, and dry them out, then pack in olive oil.
I don't have the amount of land, or the tractor to do beet farming like that dude does. I have to do everything by hand. It takes forever. I wish I could grow and process sorghum for the same reason this guy is growing beets.
If it comes to that, I'll be making an horno. Very similar to a pizza oven, except that it uses mud instead of bricks. Drive through a reservation around here and you're likely to see a few that are in use by the natives, and boy can they cook! There is a little stand in the Jemez on the rez that they sell stuff cooked often over wood fires, in an horno, etc... I don't know where they get their ingredients, but there are a lot of farms on the rez and no USDA interference. It's good stuff.
The only real critical measurement in any wood-fired oven is the ratio of the interior oven height to the door/opening height. I want to say the door height needs to be 63% of the interior oven height, but that is going from memory. I used all refractory brick on the interior of mine, and used an angle grinder to cut the brick. I over did the insulation (add lime and pearlite to cement to make a fairly light weight insulation layer), and it took longer for the oven to get up to temp as a result. I used ideas from this website to make mine; http://www.traditionaloven.com/wish_list.html
I'd recommend taking a look at this book if you want to build a horno; http://www.amazon.com/Build-Your-Own-Earth-Oven/dp/096798467X/ref=sr_1_10?s=books&ie=UTF8&qid=1425317227&sr=1-10&keywords=pizza+oven
if you don't already have it.
My local feed store sells horse chow in 55 gallon food grade barrels. People that buy the chow and then return the empty barrels back to the store(there is a deposit I believe) and you can buy the used barrels for $30. Makes storing grain much easier then all those buckets. You still need to bag the grain and do your O2 packets so I line up 9 buckets, fill the bags, drop in the O2 packets, force most of the air out with CO2 and seal them up. For most dry goods, Wheat, rice, corn etc you can get nine 5 gallon bags in a barrel. 300lbs of dry goods per barrel. Beans seem to take up a little more volume so I sometimes can't quite fit the full 300lbs in. Drop in a 450 gram box of silica gel and you are good for 20 years or so of shelf life(may need to dry the gel periodically). Oh and don't put the silica boxes in the bean barrels, beans can get to dry and become hard to rehydrate.
Spam, you say? https://www.youtube.com/watch?v=anwy2MPT5RE&spfreload=10
*Shudders*(
I don't even like the smell of Spam. I suppose if I hadn't eaten for a couple of days I'd change my mind, but that's more for you.
Prefer beef jerky myself although i do have some spam on hand. If you're hungry enough you'll eat almost anything!
Yup. If I had to, I could make a makeshift smokehouse out of a pile of rocks and sticks and jerk my own meat. (No Malaka!) While not as good as something like instacure, smoke does act as a preservative to a degree. So does being dryer than hell.
I believe the salt is a big part of the preservation
Slice it thin and fry it in bacon grease until nice and crispy on the edges, food of the gods I tell ya!
Honest banking is a useful part of any economy. It's a shame we've rejected it.
though bail-ins are, at the end, way more honest then bailouts. though it's a sign of the degeneration of our times that few seem to understand this
the cash you gave to the bank? it's a loan. it was never anything else then a loan. whoever told you otherwise was either willfully lying or repeating bs
You're not wrong.
I can't change the nature of the banking system. What I can do is limit my exposure to it.
the current banking system has several defects
the first is that retail banking isn't separate anymore from business banking, private banking and investment ("merchant") banking. the last one is key
the second is that it's a fractional reserve banking, though this is a complex matter anyway
the third is that banks are allowed to become very, very big. the TBTF phenomenon
the fourth is that it's seen as an industry itself. finance used to be 2% of the economy, something like grease in the machinery
the fifth is that we all live under the shadow of Nixon's 1971 Mighty Global Reserve Currency Dollar, regardless where you live on this planet
the sixth is that banking attracted too many bright minds to something that should be done by boring people
the seventh is that it pays bonuses. particularly bonuses paid out before the trades/loans are off the books
the eight... it allows the Vampire Squid Firmly Attached To The Face Of Humanity.to exist. This alone warrants one special mention
I'm sure there is more, but I get easily tired of typing
9th: noone is required to have skin in the games they play
10th: mark to fantasy
11th: regulatory capture
12th: legislature capture
Not just the current banking system.
Most importantly - "the political system" is nothing else than just ONE HUGE defect and nothing but a pest anymore. Without it the banking system would have collapsed already much earlier.
Bankers and Politicos - relentlessly greedy and completely out of control motherfuckers and cocksuckers in one bed.
rejected honesty? yes - we have
And the wars over here, but your over there, go figure.
The man behind the curtain better start pulling some levers
he's been pulling levers since ~1913
Of course there is the issue of Austria as a country. What could go wrong?
https://notayesmanseconomics.wordpress.com/2015/03/02/will-austria-lead-...
Surely this is the first domino. Finally !!!
If this is the start of the collapse I've been waiting for, I am both excited and terrified. I don't know which is stronger.
There may not be "a collapse", wendigo. I think it is very likely it will be more of a slow, relentless exhalation. They seem to be able to cut off any major drops, and if they are determined, they can probably keep doing so for awhile.
But over time, the momentum will remain on the downside.
So, maybe we end up with a market at a fraction of current values in say, 2 years time, but with no huge one-day 'events' to give it definition. One step forward, two steps back...
Something like this could actually take out a lot more 'wealth' than a straight-up crash would, because there'd be nothing to alert folks to the fact that THIS time is no different. Instead of pulling their money out, they may fail to act quickly enough in the absence of an 'event', and see it all dissipate over a much longer timeline.
wasn't VietNam the first domino? has anybody ever made a history of the "domino theory"?
So far the Dutch press seems to be ignoring it, so all is well.
Neapoliean, but that was before he couldn't find his stolen stash.
The domino theory may very well have been a ruse. Wars need to be legitimated to the public.
don't hold your breath - or make any bets on it
In America the Police Are the Terrorists.!
https://www.youtube.com/watch?v=CksSslF5j8Y
seesm the austrians forgot about the austrian school... lmao
P < P + I
Credit = Trust
It's either there or it isn't. And definitely non-linear.
on a small, human scale, definitely
but if you have let's say one billion Other People's Money to manage, it becomes relative, and you start just to spread it to non-trustworthy things
Not Linear, Binary.
True/False, On/Off, Ya Trust em/Ya Don't Trust em.
I tend to view things as trinary. I believe the universe is trinary in nature. Existence. Nonexistence. Anti existence.
Let me be as clear as I can be on the following five points:
You
ain't
seen
nothin'
yet
Always fun to watch one of the CDS mousetraps go off in a room full of them.
Yes indeed +1 for that.
And of course there is a Youtube video for that. Amazing. Great analogy for the CDS setup today...
https://www.youtube.com/watch?v=-zX-gz1lRt0
Lifted from explanations about nuclear chain reactions, but appropriate just the same. ;)
Where else in the U.S. is this story being reported? Control collateral damage by suppressing the story.
The only things being discussed in the media I can see are a dress that changes colors, of course 'ISIS constant panic', and some guy waiting for God to tell him to run for prezdent.
Don't blame the lame stream media for suppressing stories that show the horrific reality that is the worlds economy.
Their business model dictates this. In order to gererate revenue, they must sell add space. Kinda hard to sell advertising if everyone knew the world was balanced on a razors edge.
Besides, as I am sure you well know, not one in a thousand will believe the truth even when you show them with annotated facts.
The fantasy that we exist in is made possible by mass willful ignorance.
Bad banks??? forsooth. There is no such creature.
Just think of all the multi trillion holes in Wall St banks just waiting to be 'discovered' for overnite haircuts (Corzining) some weekend.
Banks are no more a storage facility for valued assets than a dumpster.
we all know 'worse is coming' - question is, will we all live to see it?
New all fucking time highs everything is fucking awesome. ... bullish everything. Tax revenue at record levels. This mother fucker is just getting started. Buy now.
12/2014
The hits keep coming. Add Austria to the list of countries that want their gold back.
Austria's gold repatriation consideration follows news of a possible Belgian gold repatriation, a recent gold repatriation request by France's National Front to the Bank of France and the Dutch repatriation of their gold from the New York Fed last month.
These recent gold repatriation actions follow similar repatriation requests from countries holding gold outside their borders including Germany, Switzerland (pursuant to a populist referendum Save Our Swiss Gold) and Venezuela (repatriation completed).
In reflection, it took 6 years to take all of these assets to zero.
Longer than you would have originally thought in 2009. Amazing how long they can drag this stuff out, isn't it.
No, it isn't.
An argument isn't just the automatic gainsaying of what the other person says.
The whole Syria proxy war is dirty. Serena Shim had proof and they killed her.
New Anonymous op as White House still ignores murder of American reporter Serena Shim in Turkey
bullish
Austriarity anyone?
Chicken Little.
"senior debt is getting a massive haircut"
Bald, skin head. No amount of Rogain fixes what's coming.
Open-air brain cooling.
You would think an accounting firm might be a little liable here.....????
Depends how many lies they were told by the execs.
Sorry to spoil your enthusiasm but HETA is not a "major bank" at all - its not even a bank anymore. As such it has zero systemic importance - its Austrian business has long been sold, along with the banking licence, to an Indian investor and its subsidiaries in SEE, which by and large are not that bad, are currently up for sale. The big Austrian banks do not hold any significant positions in HETA liabilities. HETA is just the (most) toxic remains resulting from at least in part fraudulent business practices. What remains extremely questionable from a legal point of view is the position of the finance ministry to ignore the guarantees given by the region Carinthia.
Hummm according to Bloomberg it is some sort of zombie financial entity with bondholders / counterparties, to wit:
" Heta’s bondholders include funds managed by Pacific Investment Management Co., Deutsche Bank AG and UBS AG, according to data compiled by Bloomberg. "
http://www.bloomberg.com/news/articles/2015-03-01/austria-on-track-to-ba...
Just a few billion here and few billion there in notes. And Gawd knows how many billions notational of CDS'ess written on said notes...
So.... BULLISH then? I mean, if its not a bad thing, then an unexpected 8.5 billion Euro sucking-chest-wound must be a good thing?
!!!???
Let me guess the order of yours and everyone else's prepping list or at least the direst few.
1. Food and water
2. Guns and ammo and a good knife
3. TOILET PAPER/ TAMPONS
4. Fuel with lots of matches and lighters
5. Lots and lots and lots of alcohol
6. Condoms/BC
7. Something to smoke
8. Radio with batteries
9. First Aide Kit
10. Popcorn and porno mags
BTW- you'll be able to find just about any woman you want if you have an over abundant supply of tampons.
You: What do i get for ten tampons?
Her: Everyting you want!
You: Everything?
Her: Everything!
So, does this mean that Austrian Economics is a failure?
/s
Still trying to read this, another poorly written, ZH article. So far, what's going sounds more like a 'hair-cut' than a 'bail-in.' No need in bandying the term, 'bail-in,' about for no reason.
Now you see why European banksters are continually telling U.S. Regulators that there's no reason to have European banks audited to the same degree as New York Banks.There's one problem though because the Fed has given the ECB swap lines so the Fed now has a dirty hand in this deal.Either the Fed is naive or just plain stupid enough to trust European Banks.
Herdee, that swap between the FED and the ECB? it's years it has been reversed. what kind of America's Banks First e-pamphlet have you been reading? further, the article here is about a "bad bank"
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dude, how much tequilla was it today?
Criminals wising up.
Local news reported $4M in gold was stolen in an armed robbery aloong I-95 in North Carolina.
I think it might be time to start shorting for a trade. We needed a banking crisis/panic to start the tumble. We have that crisis, and at the same time a crap economy, what looks like a blow off stock top, and the end of advertised QE. No reason to be in stocks anymore. Everything else has already telegraphed a complete collapse. The S&P should probably return to 1900 and test the trend at a minimum. I guess we shall see how real this market is.
Take a look at XLF puts... Jan '16 or Jan '17.... out-of-the money (22/23 strike?). I believe they trade cheaper than equivalently out-of-the-money puts for SPY or other indexes because of the low vol in financial sector.
Perfect tool to buy "insurance" for a collapse similar to 2008-2009. Plus, I believe there is little doubt that financials will get destroyed regardless of exactly what form the catastrophe takes.
If you look at where XLF traded in 2009, they got down below 10 and stayed there for 3-4 months..!!
The Jan '16 22.00 strike puts are 0.76-0.80 right now. You can buy 100 contracts for $8,000 or less. If you got a crash and XLF goes to $10, you'll make $120,000 (less $8,000 paid and less cap gains taxes). The Jan '17s 22-strikes are 1.55-1.67. The expiry really depends on your expectations.
You can use this for a directional bet against the market (really need a crash to capitalize) or just use it to hedge against your 401k, real estate, or any other risk assets that will suffer WHEN we have another crash.
I started putting on the puts as a hedge against my unhedgeable equity risk for shares my company pays me with that I can't short directly, nor can I sell.
Food for thought... as shorting this market is the right call, but the question of timing and how much higher it can go before turning straight south still make me nervous. I personally like trades where I can easily quantify my risk....
Tyler, small Typo:
Austria's bank bank
Austria's bad bank
Glad I didn't have to be the one to say 'Creditanstalt'.
Actually, starting the Dominos in Germany would be the most efficient way to get the ECB QE ball rolling.
We all know it is coming, because the Euro is structured such as to make it inevitable, and the world-wide banking system is structured to make its absence catastrophic.
Just think, once upon a time we let poorly structured industries bankrupt and restructure. But since they became the government lenders of last resort, banking has been exempt.
I am not sure whether highlighting the MORAL HAZARD has any use...as no one seems to understand the physical implications of a widespread resort to immorality.
The last one happened to Europe in the first millenia, and resulted in a reduction of European population from over 100 Million to less than 25 Million.
Yes. Moral collapse leads to population collapse.