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Airbus Parent Warns French Banks Having Further Liquidity Issues
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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This can only mean one thing.........BULLISH!!!
PS. got burned on my shorts today, oh well maybe in a few weeks.
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.
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.
And his make-up.
We need William to stick a bugle up Bernanke's ass and blow them the money. That is what will happen.
never short on a bank/bond market holiday. you fucked up...if you're being honest.
ben will fix the dollar shortage...pronto
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.
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.
northbound til 1240-1260 , then all-in on SH
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!
The serfs pay.....
where is EADS 12 billion?
Damn good point.
French banks ?!?!?!
Who are waiting to get it back from an insolvent Greece.
They don't of course have €12bn cash.
They have an entry on the balance sheet of a French bank.
Well that explains the spike up into the close...
More disaster = buy buy buy more
Sarkozy just sharted on Merkel.
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.
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.
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....
Or... credit markets will re-open tomorrow and slap some sense into the equity babies.
textbook troll ramblings...way to keep your predictablity at a preschool/CNBS level robo.
France having a seat at the save the capitalist banks table is a farce.
fishes,leaving the pond?
So instead they dump it into the ECB who then pumps liquidity into the banks? WTF?
...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.
On that note, I am going to pump some liquidity into the bowl.
Where is CHRISTIAN NOYER? We need NOYER to SAVE THE DAY!
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.
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.
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...
I thought Benny was providing all the dollars anyone wanted.
Does this mean he's holding out on Airbus? Do the banksters own Boeing?
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.
No need to print new money; You just revalue the existing currency.
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.
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.
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?
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.
3) Buy gold.
4) drink...heavily.
buy gold............check
buy silver..........check
drink heavily.......check
don't try to sort it out logically..........ummm, wrong personality type
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.
"blurf."
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.
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.
"...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.
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.
Well..., it works till it don't I guess.
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.
We'll keep watching it RT.
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.
Bonus, get a gmail account DOCS and copy & save
https://docs.google.com/spreadsheet/ccc?key=0An-C4NLkRQu7dEJ0cG00NGl6SExLV3otMkpCUjdQNHc&hl=en_US#gid=0
Nice stuff SwingForce. I am trying to learn to do more in the cloud as well.
MS's Live cloud will let you do real Office docs
MS Access? Last time I looked it was no. I use Access all the time monitoring sales of our bearing company in Peru.
Just a hunch, IYR will be down >50% in 6 months or less.
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...
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.
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.
They were about 15 minutes late on the 3pm pump-up. Had me scared for a minute.
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.
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.
Good news and commentary, green for you two.
Vendor financing going into Christmas is no big deal? Really? You can't be serious. Of course this is big.
Joe Weisenthal
http://www.businessinsider.com/michael-lewis-explains-why-america-is-the...
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?
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.
You're right also.
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.
You're right also.
You're right.
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.
Margin-up those Tbonds, bitchez! Let the stock divs pay the interest:
http://www.youtube.com/watch?v=UI2FolId6CA
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?
In their mother's basement, trolling under a different handle about how the market was about to crash.
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.
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?
121 spx points in 6 days....looks normal to me
:-/
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.
EADS has the K-Mart plan for aircraft buyers ready to go - it's called Layaway.
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.
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?
In my best Bernanki voice.. uh hum... "Till it pops Senator"
Wait 'till the European Space Agency is on the block. Right up there with the "super-collider." BEACH VOLLEYBALL ON THE MOON!
"...psssst!
...wanna borrow 400 million?"
French banks might have a center fuel tank problem.
Dear French banks,
Le Fuc You!
Love,
EADS
Do I smell another downgrade? Or do they even matter anymore?
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?