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."


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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SMG's picture

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

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


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.

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.

rocker's picture

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

Deadpool's picture

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

max2205's picture

ben will fix the dollar shortage...pronto

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.

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.

tsx500's picture

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

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!

DrSpamm's picture

where is EADS 12 billion?

Lord Welligton's picture

Damn good point.

French banks ?!?!?!

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

Lord Welligton's picture

They don't of course have €12bn cash.

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

vote_libertarian_party's picture

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


More disaster = buy buy buy more

GeneMarchbanks's picture

Sarkozy just sharted on Merkel.

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.

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.

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....

Quantum Nucleonics's picture

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

LongSoupLine's picture

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

Deadpool's picture

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

papaswamp's picture

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

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.

zorba THE GREEK's picture

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

Dick Darlington's picture


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.

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.

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...

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?

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.

s2man's picture

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

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.

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.

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?

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.

DoChenRollingBearing's picture

3) Buy gold.

4) drink...heavily.

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

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.

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.

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.

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.

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.   

gmrpeabody's picture

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

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.

SwingForce's picture

IYR kicking ass too: yields 4.23% despite all else 

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