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Airbus Parent Warns French Banks Having Further Liquidity Issues

Tyler Durden's picture




 

A few weeks ago it was Siemens pulling money out of French banks, then it was the Chinese, now it is EADS' (Airbus parent European Aeronautic Defence & Space) turn to warn about French bank liquidity. From Dow Jones: "French banks are experiencing difficulties providing financing for aircraft purchases by airlines, a market that is largely dominated by dollar transactions, Louis Gallois, chief executive of European Aeronautic Defence & Space Co. (EAD.FR, EADSY), said Monday. "French banks clearly have problems financing aircraft purchases," he said, speaking on the sidelines of an event to launch a new French think-tank to promote the French industry. Mr. Gallois's comments come as French banks have indicated that they were planning to cut back on dollar financing, as raising dollars has become increasingly difficult." Not like any of this will come as news to anyone who does not get their news from the mainstream media, but it is something different to see it in practice. Net result: we now finally see why companies are hoarding so much cash on their books - in lieu of an insolvent banking system, they are all becoming their own vendor and customer financing providers! Luckily, a government subsidized EADS is not as insolvent as its peer banks: "EADS is cash rich, and is not faced with any problem when it comes to buying parts in dollars, he said. "We aren't experiencing any dollar shortage," he said, adding that "we know how to deal with it."

More:

EADS has a large cash cushion of some EUR12 billion that it can dip into if necessary to help customer airlines of its Airbus division if they experience financing difficulties. But Gallois said this facility will be used sparingly. "We're not bankers," he said, noting that in the financial crisis of 2008 and 2009 the company had set a ceiling for such financing aid of EUR1 billion but this had never been reached. At that time, state-backed export credit financing agencies stepped in to ease the financing crunch, helping to finance about one-third of Airbus deliveries during that period, compared to about one-fifth at present.

 

"We are prepared to make an effort as regards financing our sales, but only in a reasonable way," he said. "We can increase our efforts, but there are limits that we can't cross," he went on.

 

Rival plane maker Boeing Co (BA) recently called on cash-rich Middle East banks and investors to plug a potential financing shortfall of its aircraft as European banks reel from the region's sovereign debt crisis.

 

Dubai-based Emirates Airline's president Tim Clark told Dow Jones in late September that some French banks that have long helped fund its huge aircraft investment program are showing signs of retreating in the face of the region's sovereign debt crisis.

 

Recent speculation about a possible liquidity crunch at some big French banks traditionally involved in aircraft finance--something that the banks and others have denied--has raised questions over their near-term role in the sector.

His assessment of the economy?

"We're in a very unstable financial situation," he went on. "I hope decisions can be taken soon (by euro-zone policy makers) as uncertainty generates fears and speculation."

And with that out of the way, the panicked short squeeze may continue for the 5th day in a row.

h/t London Dude Trader

 

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Mon, 10/10/2011 - 15:58 | 1758820 SMG
SMG's picture

This can only mean one thing.........BULLISH!!!

PS. got burned on my shorts today, oh well maybe in a few weeks.

 

Mon, 10/10/2011 - 16:02 | 1758842 Michael
Michael's picture

I should have warned you. The stock market is so predictable. They took the bait hook, line, and sinker.

You know the saying, the bigger they are the harder they fall?

Pricing in reality is such a bummer.

Mon, 10/10/2011 - 16:49 | 1759023 doggings
doggings's picture

you warned us only yesterday, of a prediction made a few weeks back, that today was to be THE Black Monday to end all black Mondays did you not? 

might wanna rethink your psychic career amigo.

Mon, 10/10/2011 - 18:34 | 1759282 gmrpeabody
gmrpeabody's picture

And his make-up.

Tue, 10/11/2011 - 00:12 | 1760050 rocker
rocker's picture

We need William to stick a bugle up Bernanke's ass and blow them the money. That is what will happen.

Mon, 10/10/2011 - 16:04 | 1758852 Deadpool
Deadpool's picture

never short on a bank/bond market holiday. you fucked up...if you're being honest.

Mon, 10/10/2011 - 16:18 | 1758922 max2205
max2205's picture

ben will fix the dollar shortage...pronto

Mon, 10/10/2011 - 22:51 | 1759788 trav7777
trav7777's picture

what this underscores really is how stupid and unnecessary the ENTIRE banking system is.

Companies that have good business models have REAL cash to lend.  Banks do nothing but run ponzis to try to find parasitic vig for their donothing executives.  A worthless industry that creates no value.

A government lender like FNM and FRE didn't go bankrupt faster than major private banks, therefore there's no point in having any of this in the hands of confettiers.  Just do what Friedman said and have a computer print it.

The notion that anyone has to struggle to find a currency that is conjured from thin fucking air is absurd.

Tue, 10/11/2011 - 03:51 | 1760301 BorisTheBlade
BorisTheBlade's picture

A worthless industry that creates no value.

It does, in fact, extract value from the economy first through fees and interest, subsequently through sucking the bailouts - capital that could be allocated elsewhere to create some actual productivity. There is no whatsoever need for centralized money printing either, except for concentration of power.

Mon, 10/10/2011 - 21:53 | 1759673 tsx500
tsx500's picture

northbound til 1240-1260 , then all-in on SH

Mon, 10/10/2011 - 15:59 | 1758821 SheepDog-One
SheepDog-One's picture

Theres no problem here, we've just discovered a new miracle...the printing press! 

You just hit the button and the bank is FLUSH with plenty of cash and the stawks go up too! And its all FREE no one has to pay ever!

Mon, 10/10/2011 - 16:45 | 1759004 Tijuana Donkey Show
Tijuana Donkey Show's picture

The serfs pay.....

Mon, 10/10/2011 - 15:58 | 1758823 DrSpamm
DrSpamm's picture

where is EADS 12 billion?

Mon, 10/10/2011 - 16:34 | 1758969 Lord Welligton
Lord Welligton's picture

Damn good point.

French banks ?!?!?!

Who are waiting to get it back from an insolvent Greece.

Mon, 10/10/2011 - 16:44 | 1759002 Lord Welligton
Lord Welligton's picture

They don't of course have €12bn cash.

They have an entry on the balance sheet of a French bank.

Mon, 10/10/2011 - 15:59 | 1758828 vote_libertaria...
vote_libertarian_party's picture

Well that explains the spike up into the close...

 

More disaster = buy buy buy more

Mon, 10/10/2011 - 16:00 | 1758830 GeneMarchbanks
GeneMarchbanks's picture

Sarkozy just sharted on Merkel.

Mon, 10/10/2011 - 16:01 | 1758833 RobotTrader
RobotTrader's picture

Virtually every hedge fund that is in cash or who is heavily short is going to have to buy the market tomorrow morning.

Performance anxiety.

Mon, 10/10/2011 - 16:02 | 1758844 SheepDog-One
SheepDog-One's picture

Hedge funds are getting cornholed big time, theyll never break ever for the year. If they panic and buy futures overnite, theyll be crushed yet again tomorrow.

Mon, 10/10/2011 - 16:50 | 1759027 jdelano
jdelano's picture

come on robo--that's just plain stupid.  Any HF manager who has stuck with short positions thus far is not going to relinquish them at the top of the trading range.  If anything they will add.  Any weak shorts were blown out several hundred points ago....

Mon, 10/10/2011 - 18:43 | 1759297 Quantum Nucleonics
Quantum Nucleonics's picture

Or... credit markets will re-open tomorrow and slap some sense into the equity babies.

Tue, 10/11/2011 - 08:18 | 1760510 LongSoupLine
LongSoupLine's picture

textbook troll ramblings...way to keep your predictablity at a preschool/CNBS level robo.

Mon, 10/10/2011 - 16:02 | 1758846 Deadpool
Deadpool's picture

France having a seat at the save the capitalist banks table is a farce.

Mon, 10/10/2011 - 17:33 | 1759152 vocational tainee
vocational tainee's picture

fishes,leaving the pond?

Mon, 10/10/2011 - 16:03 | 1758848 papaswamp
papaswamp's picture

So instead they dump it into the ECB who then pumps liquidity into the banks? WTF?

Mon, 10/10/2011 - 16:06 | 1758862 Deadpool
Deadpool's picture

...who hand it over to the US Fed that bailed them out in '08. this is Euro tax payers repaying US Fed. eyes wide open.

Mon, 10/10/2011 - 19:50 | 1759445 zorba THE GREEK
zorba THE GREEK's picture

On that note, I am going to pump some liquidity into the bowl.

Mon, 10/10/2011 - 16:03 | 1758850 Dick Darlington
Dick Darlington's picture

Where is CHRISTIAN NOYER? We need NOYER to SAVE THE DAY!

Mon, 10/10/2011 - 16:05 | 1758860 SheepDog-One
SheepDog-One's picture

What gets me is they have no humility at all, just blatant daily robbery they dont care how obviously criminal it is to everyone now. Which means to me theyve priced in the permanent death of markets, and theyre now just used as a vehicle to steal. 300 point up days? Youve got to be kidding me! Oh well, they do not care about appearances at all.

Mon, 10/10/2011 - 16:08 | 1758870 Deadpool
Deadpool's picture

desperation in plain sight. Germany does not want to bail out the US Fed, but they have weak partners so they will. Just kicking and screaming as they buy time.

Mon, 10/10/2011 - 16:10 | 1758880 Dick Darlington
Dick Darlington's picture

And on top of all that shit, these almost daily last 30 min pimp jobs like today... It's like standing on an expensive wooden table and pissing on the faces of the people who are sitting on the other side of the table. At the same time politicians are talking abt "how the need to restore CONfidence" on the markets... Wow, just fookin wow...

Mon, 10/10/2011 - 16:07 | 1758866 CH1
CH1's picture

I thought Benny was providing all the dollars anyone wanted.

Does this mean he's holding out on Airbus? Do the banksters own Boeing?

Mon, 10/10/2011 - 16:08 | 1758869 SeverinSlade
SeverinSlade's picture

With the rate of money printing that is (and will have to) go on, how much longer until Bernanke announces the new $1,000 and $10,000 dollar bills?  Seriously, it takes a lot of Benjamins to make one trillion dollars.

Mon, 10/10/2011 - 16:12 | 1758891 s2man
s2man's picture

No need to print new money; You just revalue the existing currency.

Mon, 10/10/2011 - 16:25 | 1758937 SeverinSlade
SeverinSlade's picture

Was just making a point, but yes, no need to actually physically print money seeing as its so much easier to just create digital FRNs.

Mon, 10/10/2011 - 16:08 | 1758873 alien-IQ
alien-IQ's picture

so....I guess this assures a 50 handle move up in the /ES tomorrow?

or is a move up of that magnitude reserved for the day Greece actually defaults?

it's so hard to keep track of what's best for the ponzi.

Mon, 10/10/2011 - 16:11 | 1758883 dr.charlemagne
dr.charlemagne's picture

OK, so China is landing hard, insolvent Euro banks can't find any dollars, the Eurocrats have a secret plan, thus, the Euro is saved and rallies over 2% on the dollar, UDX tanks, and US stocks, gold and silver have a great day. What? I guess i am kinda putting it together but still lots of head scratching. Obviously today was all about relative currency valuations but can someone (other than that anti-libertarian dolt) put it in clear prose for me?

Mon, 10/10/2011 - 16:14 | 1758902 alien-IQ
alien-IQ's picture

my advice to you (and anybody else for that matter)would be:

1) don't search for logic for there is none

2) drink...heavily.

Mon, 10/10/2011 - 16:24 | 1758936 DoChenRollingBearing
DoChenRollingBearing's picture

3) Buy gold.

4) drink...heavily.

Mon, 10/10/2011 - 16:39 | 1758987 dr.charlemagne
dr.charlemagne's picture

buy gold............check

buy silver..........check

drink heavily.......check

don't try to sort it out logically..........ummm, wrong personality type

Tue, 10/11/2011 - 04:10 | 1760310 BorisTheBlade
BorisTheBlade's picture

When the building collapses, what kind of logic could be applicable in explaining movement of its parts relative to each other? They may go up and down ONLY relative to one another, they all go down relative to the ground. Any logical explanation of this would be a futile attempt to rationalize chaos.

Drink more, leave the building.

Mon, 10/10/2011 - 20:18 | 1759487 disabledvet
disabledvet's picture

"blurf."

Mon, 10/10/2011 - 16:11 | 1758887 SheepDog-One
SheepDog-One's picture

Just another 3% market day! All is well, nothing to see here, tomorrow will probably be 3% down, its all the new normal, youre more bankrupt by the day while bankers are 1 step closer to their 1,000 years of darkness, meanwhile degenerate gamblers think you can 'trade it'....good luck rubes.

Mon, 10/10/2011 - 16:21 | 1758929 Sequitur
Sequitur's picture

Bleh I don't think it can be traded. As I commented in another post, for us folks who like conservative investing (munis, utilities, dividends in solid companies) these fucking crooks make it impossible to earn an honest buck. HFT, frontrunners, insider trading, quintuple short ETFs so bank delta desk can skin the rubes -- just blow it up and get on with the housecleaning already.

Mon, 10/10/2011 - 16:28 | 1758948 DoChenRollingBearing
DoChenRollingBearing's picture

"...these fucking crooks make it impossible to earn an honest buck."

Yes.  Where can an honest investor go?  Buy bonds?  Please.  Stocks?  So much manipulation...  Real estate?  Ugh.

Cash, gold and lead.

Mon, 10/10/2011 - 16:55 | 1759048 jdelano
jdelano's picture

Guys--it is easily tradeable.  Just go full retard, don't think, try to use logic, or guage the merits of headlines and it works out great.  Trading range 1080-1220.  Initiate puts at 1180.  If you're early, add at 1220.  Wait for crash, hold out for minimum 20% gain if you don't have the nerve to ride all the way down.  Cash out a little richer.  When you see 1100, go long......  wash rinse repeat.   

Mon, 10/10/2011 - 18:42 | 1759294 gmrpeabody
gmrpeabody's picture

Well..., it works till it don't I guess.

Mon, 10/10/2011 - 16:13 | 1758888 RobotTrader
RobotTrader's picture

SPY closed above 21-day and 50-day EMA, and at the HOD near the top end of the trading range.

First time the market has displayed a positive technical sign since the market topped out this spring.

Mon, 10/10/2011 - 16:29 | 1758954 DoChenRollingBearing
DoChenRollingBearing's picture

We'll keep watching it RT.

Mon, 10/10/2011 - 16:46 | 1758998 SwingForce
SwingForce's picture

IYR kicking ass too: yields 4.23% despite all else

https://docs.google.com/spreadsheet/ccc?key=0An-C4NLkRQu7dDBFZGZEdTViOENrcnU5Ukd0YzZ1VlE&hl=en_US#gid=0 

Make a copy and rename it, a gift for anyone here at ZH.

Mon, 10/10/2011 - 17:05 | 1759074 DoChenRollingBearing
DoChenRollingBearing's picture

Nice stuff SwingForce.  I am trying to learn to do more in the cloud as well.

Mon, 10/10/2011 - 23:03 | 1759836 trav7777
trav7777's picture

MS's Live cloud will let you do real Office docs

Mon, 10/10/2011 - 23:56 | 1760000 DoChenRollingBearing
DoChenRollingBearing's picture

MS Access?  Last time I looked it was no.  I use Access all the time monitoring sales of our bearing company in Peru.

Mon, 10/10/2011 - 17:03 | 1759072 oddjob
oddjob's picture

Just a hunch, IYR will be down >50% in 6 months or less.

Mon, 10/10/2011 - 16:58 | 1759056 jdelano
jdelano's picture

Yup--which reminds me of when S&P broke 1100 and everybody thought it was going to drop like a rock from there....  Longs primed for a totally unexpected reversal and good deep fucking all the way back down the staircase....bend over Robo, here it comes...

Mon, 10/10/2011 - 22:17 | 1759712 Esso
Esso's picture

Didn't you hear? RoboTarder is ZH's own version of the Goldman Sackers. Never on the wrong side of a trade. Always buys at the lows, and always sells at the peak. Every. Single. Time. Has never been out of the money.

Mon, 10/10/2011 - 18:33 | 1759278 Everybodys All ...
Everybodys All American's picture

July and August were displaying positive signals as well and we know how that ended. Low volume and no conviction in a bear market rally is what we are seeing right now. I would be very careful buying into this market right here and especially no need to buy with both hands because you could easily get your head handed to you. To me the market looks like it is setting up for another chance to get short. Fundamentals are putrid at best and earnings are going to either miss or guide lower. Financials are still looking frightful. I'm willing to get short again the moment we get the reversal out of Europe. After all the market is being driven by how the dollar trades.

Fundamentally in Europe the backstop of these banks by Europe means someone is going to have to give up their AAA rating to save the system. Do you really think France or Germany is willing? I do not.

Mon, 10/10/2011 - 16:14 | 1758899 s2man
s2man's picture

They were about 15 minutes late on the 3pm pump-up.  Had me scared for a minute.

Mon, 10/10/2011 - 16:18 | 1758903 Belrev
Belrev's picture

French banks? How about German, Swiss, Brtish and Austrian banks?

My friends working at those countries' well known financial entities have over the past several weeks shared with me observations of a a curious phenomenon that raised their concerns about their own places of work. The vendor payments delayed going out till October 3 monday, instead of usual 28th of the month. Phone service cut off to international non-office locations to save expenses etc, etc. Petty stuff to make look balance sheets look better before the quarter end it seems, is not it. No I am not trying to spread panic. Just informing your guys like it is. The steam is about to blow off the lid of the pot.

Mon, 10/10/2011 - 16:25 | 1758938 Tao 4 the Show
Tao 4 the Show's picture

Interesting - thanks for sharing this. But off hand it would seem vendor expenses for a bank would be nothing compared to derivative losses if that is what they are experiencing. It would be like the wife trying to save on cheaper bacon to offset her husband's gambling addiction.

Mon, 10/10/2011 - 16:30 | 1758958 DoChenRollingBearing
DoChenRollingBearing's picture

Good news and commentary, green for you two.

Mon, 10/10/2011 - 20:23 | 1759498 disabledvet
disabledvet's picture

Vendor financing going into Christmas is no big deal? Really? You can't be serious. Of course this is big.

Mon, 10/10/2011 - 16:16 | 1758915 PulauHantu29
PulauHantu29's picture
Michael Lewis Explains Why America Is The New Third World

Joe Weisenthal  

 


http://www.businessinsider.com/michael-lewis-explains-why-america-is-the...

Mon, 10/10/2011 - 16:19 | 1758924 Sequitur
Sequitur's picture

Turn banks into utilities. Seriously. Cap pay at $1MM for the CEO. All banking problems will disappear overnight.

Only reason banks lever 50-to-1 and abuse FASB SPE/SIV rules is for their bullshit bonuses, none of which is deserved. Why did Enron get tens of billions in money from Wall Street? Banker bonuses and hidden commissions in the deals. Oh, why did Wall Street underwrite TRILLIONS in garbage RMBS and CMBS? Yep, banker bonuses.

A $20 million dollar bonus for hitting some computer keys and moving some money around, making journal entries? Are you fucking kidding me?

Mon, 10/10/2011 - 16:31 | 1758960 SeverinSlade
SeverinSlade's picture

Bonuses aren't the problem.  The problem is allowing investment and commercial banks to merge (thanks to the repeal of Glass-Stegall). 

Reinstate Glass-Stegall and let Wall Street give themselves as many bonuses as they want...Because in that environment, if GS goes belly up...they go belly up and don't need any taxpayer funded bailouts.

Mon, 10/10/2011 - 17:18 | 1759110 Lord Welligton
Lord Welligton's picture

You're right also.

Mon, 10/10/2011 - 16:56 | 1759053 Shameful
Shameful's picture

Bonuses aren't the problem, the TBTF idea is.  Who here wouldn't play roulette if the rules where keep all your winnings, and all losses were allocated to the other players at the table?  If they just got wiped out and bankrupted then no problem, the investors lose their money, and then investigations to fraud start up, and then the real fun begins.  Bonuses have little impact, it's the fact that they are in effect totally insulated from any and all risk.  When other parties have to take on the gamblers risk, the gambler will just bet bigger, I know I would.

Mon, 10/10/2011 - 17:19 | 1759114 Lord Welligton
Lord Welligton's picture

You're right also.

Mon, 10/10/2011 - 17:18 | 1759107 Lord Welligton
Lord Welligton's picture

You're right.

Mon, 10/10/2011 - 20:26 | 1759505 disabledvet
disabledvet's picture

Gold standard. Only way. Let the price appreciate say to 5,000 an ounce and start issuing a an actual currency and not some bullshit SDR backed by it.

Mon, 10/10/2011 - 16:40 | 1758992 SwingForce
SwingForce's picture

Margin-up those Tbonds, bitchez! Let the stock divs pay the interest:

http://www.youtube.com/watch?v=UI2FolId6CA

Mon, 10/10/2011 - 16:48 | 1759014 kahunabear
kahunabear's picture

Amazing how many raging bulls, who say we are way oversold, pop out of the woodwork after a 10% rally in a few days. Where were they last Tuesday?

Mon, 10/10/2011 - 18:11 | 1759237 Farcical Aquati...
Farcical Aquatic Ceremony's picture

In their mother's basement, trolling under a different handle about how the market was about to crash.

Mon, 10/10/2011 - 20:29 | 1759512 disabledvet
disabledvet's picture

Saying you should buy and hold Dunkin donuts for 60 years. And yes that was from mom's basement. Where I keep my pet elephant.

Mon, 10/10/2011 - 17:39 | 1759162 Mitzibitzi
Mitzibitzi's picture

You're right in that EADS probably don't have 12bn cash. But they probably DO have 12bn in gold, silver, aluminum, copper, etc. You imagine for a minute that a major aerospace / defence contractor doesn't have physical on hand?

Mon, 10/10/2011 - 17:56 | 1759213 CashCowEquity
CashCowEquity's picture

121 spx points in 6 days....looks normal to me

:-/

Mon, 10/10/2011 - 18:47 | 1759306 Kina
Kina's picture

A French revolution against French banksters. Fridays in the town square, live guillotine executions for your pleasure. I'm sure the German people could put the Fallbeil back into production for them. Bring own knitting.

 

 

Mon, 10/10/2011 - 18:53 | 1759328 americanspirit
americanspirit's picture

EADS has the K-Mart plan for aircraft buyers ready to go - it's called Layaway.

Mon, 10/10/2011 - 18:55 | 1759331 Quantum Nucleonics
Quantum Nucleonics's picture

12 billion euros sounds like a lot, and maybe it is if your selling ipods or something, but not when you are financing A380's.  Per month production rates...

40+ A320's x $50M = $2 billion

10 A330's x $200M = $2 billion

2 A380's x $300M = $600M

That's $4.6 large just from their main production lines.  Add in capex on the A350, all the cash their burning on the A400 disaster, A320 re-engine work, and Poof, they've burned through that those 12 bills before the end of the year.

Mon, 10/10/2011 - 18:57 | 1759340 Kina
Kina's picture

10% rally in a few days.

 

Wow. Things must be really humming along. Rainbows, sparkles and elephant stamps for all, strong GDP growth, free oil and bread. Eternal peace and prosperity is here. Must be time to buy, buy, buy...

 

Hey Bernanke, how large do you think you can blow this balloon?

 

 

Mon, 10/10/2011 - 22:24 | 1759725 Money 4 Nothing
Money 4 Nothing's picture

In my best Bernanki voice.. uh hum... "Till it pops Senator"

Mon, 10/10/2011 - 20:32 | 1759526 disabledvet
disabledvet's picture

Wait 'till the European Space Agency is on the block. Right up there with the "super-collider." BEACH VOLLEYBALL ON THE MOON!

Mon, 10/10/2011 - 21:43 | 1759660 slewie the pi-rat
slewie the pi-rat's picture

"...psssst!
...wanna borrow 400 million?"

Mon, 10/10/2011 - 21:43 | 1759662 bugs_
bugs_'s picture

French banks might have a center fuel tank problem.

Mon, 10/10/2011 - 21:51 | 1759670 LongSoupLine
LongSoupLine's picture

Dear French banks,

Le Fuc You!

Love,

EADS

Mon, 10/10/2011 - 22:22 | 1759723 Money 4 Nothing
Money 4 Nothing's picture

Do I smell another downgrade? Or do they even matter anymore?

Mon, 10/10/2011 - 22:54 | 1759802 ThirdCoastSurfer
ThirdCoastSurfer's picture

With the huge amount of ex-patriot savings in overseas markets, when is the perfect time to pass a resolution allowing repatriation and thus mutually assured destruction? 

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