Barroso's Reveals "Deus Ex Recapitalization" - Complete Talking Point Dud

Tyler Durden's picture

The market was looking forward to Barroso's disclosure of more details of just what the Euro bank recap plan would look like. The answer: a complete dud.

  • Barroso says fully coordinated approach to European bank recapitalisation should be based on reassessment by supervisors of capital needs
  • Barroso says supervisors should use temporarily significant higher capital ratio of highest quality capital
  • Barroso says if government support is not available recapitalisation should be funded by a loan from the EFSF
  • Barroso says banks should first use private sources of capital, then government support if necessary
  • Barroso says sixth tranche of aid for Greece must be disbursed
  • Barroso says pending recapitalisation, these banks should be prevented from paying out dividends or bonuses
  • Barroso says the EU should agree on second financing package for Greece with adequate public and private financing
  • Barroso says launch of European stability mechanism must be accelerated to mid-2012 and mid-2013
  • Barroso says calls for integrated governance system combining ESM and EU budget rules

This is all great, the problem is these are regurgitated talking points, pardon talking promises if not talking rumors. There is nothing new here about what the deus ex recapitalizacia will look like. Perhaps it is because there is no deus ex, and it is all just more smoke and mirrors as we have claimed from day one?

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GeneMarchbanks's picture

Was there mention of Russians buying Spanish debt? That was a good one.

No half-life at all.

covert's picture

the people refuse to learn and consequently, keep going broke over and over.


TheSheepWolf's picture

Just wondering what is "adequate public financing"... 

GeneMarchbanks's picture

A second ago you had no avatar, now you have a magnificent one. My compliments.

As for 'adequete public financing' that means: "Hey go fetch the lube"

IQ 145's picture

Adequate public financing is nice crisp paper with lovely colorful inks printed on it. It works until it doesn't; but that's what it is.

mossme89's picture

Clearly this is a bullish sign for the markets. BUY BUY BUY!!!

mossme89's picture

Obviously I was being sarcastic. I have some physical myself, but I'd still be weary of buying more PM's, unless you plan on holding for the long term. If another recession hits (or worse) or the Euro goes under, there will likely be massive deflation, possibly worse than 2008. That would cause PM prices to drop, at least temporarily before the Fed starts the printing presses again.

TheSheepWolf's picture

I know... ;-) but it was a good oportunity to remind everyone to get rid of fiat...

mossme89's picture

True, and I am bullish PM's long-term, just in the short term, we could see Silver back in the low $20's and Gold back under $1500. But it's good to buy physical on any dip if you're planning on holding long-term. In 5 years, gold should easily be above $3000 and Silver above $100.

Curtis LeMay's picture

LMAO, who elected him, eh?

Guys, euroland is done for.


Smithovsky's picture

We're going to come down so hard once US opens in a few minutes.  

joq's picture

Bizarro Barroso talking nonsense again. This man is dangerous. Rarely do I see so much crap out of one single mouth.

Kokulakai's picture

"Highest Quality Capital" = Sovereign Debt?

Fips_OnTheSpot's picture

Read that as: all your gold are belong to us. But indeed, I was wondering what he's babbling about. Either it's E1bn or not. Where's the Quality-Mark on my FRN?

eigenvalue's picture

But promises keep indices up. Therefore details are negligible

Archimedes's picture

Wow! Tiny little Greece is in the Drivers Seat! All of Europe knows if Greece defaults Europe implodes. So they will continue getting free money until they drain the host like a parasite. Awesome!



IQ 145's picture

Funny, isn't it? If you owe the Bank$1000; you have a problem. If you owe the Bank $10,000,000; the Bank has a problem. Seems to be true.

Dick Darlington's picture

Picked up this gem today:


I would dearly recommend to buy France cds with both hands. Weak sovereign with weak megabanks = toxic cocktail.

spanish inquisition's picture

"Yeah, well we are doing stuff and we have some ideas that are good. We think we know the direction we are going, well we really are pretty sure. The only thing I know is that we have to release the 6th tranche. Then, I will tell you more....Yes , yes that is it.. release the 6th tranche and I will tell you more...nothing more will be said until the 6th tranche is released"

Lord Welligton's picture

Barroso says sixth tranche of aid for Greece must be disbursed

Or more correctly ........

Barroso says sixth tranche of aid for Greece must be disbursed regardless of reality

Quintus's picture

Regardless of reality

Or the rules and targets that they oh-so-carefully negotiated with the Greeks to ensure that taxpayer's money would only be handed over if the Greeks kept their side of the bargain.

As far as I can see, the Greeks are playing a bad hand very. very well.  They can promise everything, do nothing, and STILL get the cash.  I think everyone knows this, but there's nothing they can do about it if they want to keep the stupid Euro alive.

How the Irish must be regretting that they just bent over with a smile and took everything the Troika forced up them.  They could have done the same thing as Greece and held the Eurocrats hostage, handing over money for years with the threat of default if the money stops flowing.


Lord Welligton's picture

Or the rules and targets


Though the reality I speak of is that Greece cannot possibly pay back its debt.

They also have the great disadvantage of not actually having an economy worth talking about.

Ireland in that respect is in a much better position.

There was of course absolutely no reason for the State to assume banking liabilities on behalf of the Citizen other than the ECB insisted and the politicians caved.

I have no doubt that Greece will default.

It is no a zombie State and will be dispatched when it is convenient for France and Germany.


oogs66's picture

all pretense is out the window....they are desperate and will ensure everyone goes down together when it finally snaps

youngman's picture

Little Bob Pisani in my pants was extoling the virtues of all this hope in Europe.....he is such a water carrier....but it does amaze me how people or hft´s buy into this crap......

slaughterer's picture

Details do not matter.  It is the willingness to plan that counts.  /sarc.

lynnybee's picture

BARROSO, BARROSO, BARROSO .......... Dr. Faber was right when he said that governments have grown like a cancer.     Just cut the FEDERAL GOVERNMENT by at least 75% & likewise over there in Europe & we'll all be a lot better off !     

broke433's picture

Markets are going down. They are disappointed.

lizzy36's picture

My translation: Barosso says "we euro intellectual douches are full of shit and just want to remain in power".

My take away: Time for the EU to update their talking points.


All is chosen's picture

The Portuguese used to refer to him as the hurricane: very noisy; goes on for too long; leaves one big mess.

slaughterer's picture

My wager: tjhe eventual Slovakia YES will be a "sell the news" moment.  Even the EUR pair trades will go down. 

Scalaris's picture

"Barroso says pending recapitalisation, these banks should be prevented from paying out dividends or bonuses"

Let's not get all crazy around here, that Bentley ain't gonnna pay itself.

el-greco's picture

Barroso says

Frankly i didn't understand a word of what was in my speech, but never mind; fuel my plane, call my fellow commissioners, LET'S HAVE ANOTHER MEETING!!!!! oh and by the way, the EU commissioners need more money to better manage the Eurozone. We should have a bigger share of the VAT, prime ministers presidents and chancellors; you should really consider raising VAT a little more next year!