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Citigroup Has The Best Summary Of Europe's Fiasco Yet: "Losses Are Unquantifiable"

Tyler Durden's picture


Feel like every day Europe is juggling hot potatoes? You are not alone. As the following graphic summary from Citi's Matt King (whose insight into Europe, liquidity conduits, shadow banking and a comprehensive picture of modern financial "innovation" has rapidly become second to none) shows, the hot potatoes are getting hotter by the minute, and are flying ever faster and higher. But the kicker: King has the best punchline on Europe we have yet encountered: "Losses are unquantifiable" Q.E.D.

Passing The Potato

Europe - and no less most of the developed world - is caught in a self-reinforcing deleveraging process.

They are caught in a vicious triangle.


Asset Prices Are Overbaked

Asset prices are reconnecting with the real world, but the debts are hard to eliminate.

When Asset values drop, the debts remain!


Chipping Away - Deleveraging has Barely Started

Shifting from Private to Public balance sheets - Creating new risky assets.

Merely shifting from one pocket to the other creates MORE problems


But Who Will Buy The 'Hot Potatoes'?

Required Premium is greater than the Sustainable Premium; and Spain and Italy (among others) are getting uncomfortably close to the the cliff...

Individual Rationality May Be Collectively Disastrous


...Which leaves question of: Going Concern or Gone Concern? for Spain - but this is far more than a Periphery Problem.


Losses Are Unquantifiable - And Highly Profitable!


Source: Citi


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Wed, 08/29/2012 - 20:07 | 2748340 fonzannoon
fonzannoon's picture

If the market has not priced any of this in by now then maybe it just won't. Maybe the market remains this place where the few remaining people play around until they run out of money and disappear too.

Wed, 08/29/2012 - 20:49 | 2748414 old naughty
old naughty's picture


Aren't the accountants supposed to work ot?

"...few remaining people play around..."

Should fewer and fewer students join the ranks of accountants; lawyers; doctors; ugh, heck, engineers (sorry folks, THAT'S ALL!)...

Thu, 08/30/2012 - 00:25 | 2748744 Muppet of the U...
Muppet of the Universe's picture

Just remember, according to zero hedge you shouldn't be trading or trying to create a profit to use to protect yourself.  You should have a duffle bag of gold around your shoulders, one hand wrapped around a bag of beans and the other clutching a benelli.  ZH you MF'ers are fucking crazy.  I cna understand, picking up pennies in front of a steam roller is bone headed, but to pretend ppl shouldn't trade the market?  LOL get fucked.


& the losses ni europe are totally quantifiable.  The answer is 1.618 quintillion.

Thu, 08/30/2012 - 03:29 | 2748865 StychoKiller
StychoKiller's picture

When the killbot(s) offer you a claw to consumate yer trade(s), count yer fingers, if any are left...

Thu, 08/30/2012 - 05:40 | 2748957 AldousHuxley
AldousHuxley's picture

"unquantifiable" = mark to fantasy accounting


mark to market that shit and see most western banks go BK.




Thu, 08/30/2012 - 06:27 | 2748992 gold-is-not-dead
gold-is-not-dead's picture

Of course it's unquantifiable. Kim Stolz still didn't send them her invoice. :)

Thu, 08/30/2012 - 08:54 | 2749145 goldfish1
goldfish1's picture

"Losses Are Unquantifiable"

Of course it's quantifiable.

Quantifying it means exposing the whole rotten underbelly of the beast for the world to see.

That's the part he doesn't want to be quantifiable becasue then who's going to buy the beast?

Thu, 08/30/2012 - 00:25 | 2748745 LMAOLORI
Wed, 08/29/2012 - 20:09 | 2748343 Brother Sebastian
Brother Sebastian's picture

America's losses, unlike Europe's, are quantifiable.  But who cares.  Benny-boy and Timmy-kins can always create more money out of thin air.  But they're not worried.  As the wise prophet once said, "Everybody lies, but it doesn't matter since nobody listens."

Wed, 08/29/2012 - 20:35 | 2748383 AlphaDawg
AlphaDawg's picture

The exponential growth of the defecit will expose all, when the people realise the money has lost its value through printing

or we dont print, which would be hell on earth in a very short period of time

Its all very simple really

They WILL PRINT, they always do if they can

Wed, 08/29/2012 - 21:55 | 2748531 Lewshine
Lewshine's picture

My point as well AD. "Exponential Unquantifiable", it doesn't matter, you can string digits end to end to Mars and back. Ben and his hoard will continue to micro-manage anything of value that can either help or hinder "the cause" - And what is his cause? It's simply two fold; 1. His sole purpose is to further enrich and strengthen, through public and clandestine unification operations, the world's fiscal power elites. 2. Use their own assets; the world banking system, the international media outlets, and all economic market resources available to him to further his overlords absolute control of: A. The Industrial military complex  B. Technological & Agricultural Sciences C. All Currencies, international & domestic. With this, they own the deed to the earth...And that day is fast approaching, and well beyond stopping this side of divine intervention.

Thu, 08/30/2012 - 08:56 | 2749153 goldfish1
goldfish1's picture

divine intervention indeed

the bigger they are...

Wed, 08/29/2012 - 20:41 | 2748400 sunaJ
sunaJ's picture

Sure it's quantifiable. 60 trillion. See? Easy.

Wed, 08/29/2012 - 20:44 | 2748401 sunaJ
sunaJ's picture

It's incomprehensible.

Wed, 08/29/2012 - 20:52 | 2748412 Kassandra
Kassandra's picture

But oh, so reprehensible...

Wed, 08/29/2012 - 21:01 | 2748437 mick_richfield
mick_richfield's picture

It's indefensible !

Wed, 08/29/2012 - 22:11 | 2748559 Whiner
Whiner's picture

And... Nonsensical!

Wed, 08/29/2012 - 22:43 | 2748619 Tunga
Tunga's picture

Some would say whimsical.

Wed, 08/29/2012 - 23:24 | 2748685 TideFighter
TideFighter's picture

Did we just have a SuperTramp moment?

Thu, 08/30/2012 - 00:38 | 2748757 i_fly_me
i_fly_me's picture

Well ... all the world's asleep.

Thu, 08/30/2012 - 15:44 | 2750421 Tunga
Tunga's picture

...and it would be comical


if the sums weren't so astronomical.



Wed, 08/29/2012 - 20:09 | 2748344 Freddie
Freddie's picture

Citigroup is an expert in unquantifiable losses.  Shitty bank has lost tens, if not hundreds of billions.  Scum bank like BAC and Wells.

Wed, 08/29/2012 - 21:08 | 2748448 prains
prains's picture

must be run by muslims, frieddie

Thu, 08/30/2012 - 00:01 | 2748727 kito
kito's picture

and tyler continues to churn out posts giving these socialist economists air time........................

Wed, 08/29/2012 - 20:10 | 2748346 Fix It Again Timmy
Fix It Again Timmy's picture

Well, isn't that special.....?

Wed, 08/29/2012 - 20:12 | 2748348 SILVERGEDDON

Put all the big banks in a deep frier for Thanksgiving. It's what America does with turkies.

Wed, 08/29/2012 - 20:12 | 2748349 LawsofPhysics
LawsofPhysics's picture

Can't be quatified or won't be quantified? Jubileeeee, bitchez!

Wed, 08/29/2012 - 20:29 | 2748369 fonzannoon
fonzannoon's picture

Quiet night on here. I am drinkin a beer toiling around. Here is what I am listening to. If anyone has a song out there I am all ears.

Wed, 08/29/2012 - 20:46 | 2748404 fonzannoon
fonzannoon's picture

awesome knukles.

Wed, 08/29/2012 - 21:08 | 2748449 4horse
4horse's picture




hollywood infected
your brain
you really wanted kissin in the rain

0 0 0 0 0 0ohhh

i've been living in the movies
seen puking american dreams

i'm obsessed
with the mess
that's america

i'm obsessed
with the mess
that's america




Wed, 08/29/2012 - 20:55 | 2748421 Hulk
Wed, 08/29/2012 - 21:32 | 2748417 Enceladus
Enceladus's picture

Cheap whiskey here


Feelin' a wee bit rebellious

or this


O, father dear I oftimes hear you speak of Erin's Isle
Her lofty scenes, her valleys green, her mountains rude and wild
They say it is a lovely land wherein a prince might dwell
So why did you abandon it, the reason to me tell
My son, I loved my native land with energy and pride
Till a blight came over all my crops and my sheep and cattle died
The rents and taxes were to pay and I could not them redeem
And that's the cruel reason why I left old Skibbereen
'Tis well I do remember that bleak November (/December) day
When the bailiff and the landlord came to drive us all away
They set the roof on fire with their cursed English spleen
And that's another reason why I left old Skibbereen
Your mother, too, God rest her soul, lay on the snowy ground
She fainted in her anguishing seeing the desolation round
She never rose, but passed away from life to immortal dreams
And that's another reason why I left old Skibbereen
Then sadly I recall the days of gloomy forty-eight.
I rose in vengeance with the boys to battle again' fate.
We were hunted through the mountains as traitors to the queen,
And that, my boy, is the reason why I left old Skibbereen.
Oh you were only two years old and feeble was your frame
I could not leave you with my friends for you bore your father's name
So I wrapped you in my cóta mór at the dead of night unseen
And I heaved a sigh and I said goodbye to dear old Skibbereen
well father dear, the day will come when on vengeance we will call
And Irishmen both stout and tall will rally unto the call
I'll be the man to lead the van beneath the flag of green
And loud and high we'll raise the cry, "Revenge for Skibbereen!"
Wed, 08/29/2012 - 21:03 | 2748440 the misanthrope
the misanthrope's picture

miles davis - kind of blue

Wed, 08/29/2012 - 20:30 | 2748372 JLee2027
JLee2027's picture

Same as the short position in Silver when it goes pop. Unquantifiable except that JP Morgan and the US Fed will be both be instantly out of business.


Wed, 08/29/2012 - 20:32 | 2748373 Beam Me Up Scotty
Beam Me Up Scotty's picture

Dick Bove:

Ignore the fiscal cliff, S&P to 1555

Wed, 08/29/2012 - 20:46 | 2748406 azzhatter
azzhatter's picture

I saw that assclown Bove on with Kudblow. He still had some of Jamie's jizz on his cheeks. He needs a better makeup/cleanup man

Wed, 08/29/2012 - 20:33 | 2748375 nmewn
nmewn's picture

So, just what is the "euro-citizen" obligation to this mountain of unpayable debt anyways?

I'm constantly treated (really just as to what some retarded Keynesian MSM mouthpiece says "my obligation" is here in the US...which for the record is zero for me (outside of US currency destruction).

Just a question ;-)

Wed, 08/29/2012 - 21:54 | 2748529 hannah
hannah's picture

well the last 'euro-citizen obligation' was called war reparations and that guy named...aaaah...hibler or hitner..oh..hitler made it everyone elses obligation.

Wed, 08/29/2012 - 20:46 | 2748405 Darkness
Darkness's picture

Full note link?

Wed, 08/29/2012 - 20:46 | 2748407 Pejorative Requiem
Pejorative Requiem's picture

Unquantifiable isn't so bad. Try figuring out the Fed's balance sheet. Here's a new rally cry for Ben's next put: "We can live with unquantifiable for an undetermined number of years!"

Wed, 08/29/2012 - 20:48 | 2748410 XRAYD
XRAYD's picture

OK, there is one easy answer. We take over Spain (like Puerto Rico) first and then they can apply for statehood.  We are all bi-lingual anyway!

Wed, 08/29/2012 - 21:56 | 2748535 hannah
hannah's picture

spain hates americans.....i know several people that 'their life long dream' was to visit spain. they came back bitching about how the spanosh treated them like dirt....

Wed, 08/29/2012 - 22:54 | 2748632 slewie the pi-rat
slewie the pi-rat's picture

my son studied for a year in barcelona during high school;  he had zero complaints!]  time back, tho

now?  after 2008, maybe not so wunnerful

they went with the 'american model' didn't they?

RE boom/bust & the debt becomes unpayable

and they don't have the reserve currency...  so they depend on the politics and kindness of neighbors now

...not that the spaniards minded when they were financing and building, flipping and cashing any more than WE did;   of course

as i think about this today, it reminds me of guys who have had triple/qudruple by-pass surgery

after the surgery they get outa the hospital and they feel pretty good

then it hits them, usually;  and they don't feel so good for a while;  a long while;  and then they "recover" more fully

isn't this about what "we" are going thru?

we fail!  we bail!  we by-pass and everything becomes unquantifiable:  it is just yea or nay

so we don't die and we get thru the by-pass surgery and go home for a little QE1 and feel pretty damned good compared to before we went in

and then QE2 and reality sets in:  this sucks and we feel like shit on a stick

the doctors tell us:  do ZERO and just rest and heal and eventually you will begin to feel more like yourself again

meanwhile we can't do much at all and we really do need to rest.  and heal

the time scales are not alike but the processes do seem similar to me today

it is the heart and it is serious but we are expected to keep recovering and we still have our families and our friends and the fuking gooberment and 'centralized dieticians' too

lucky us!


Wed, 08/29/2012 - 20:49 | 2748413 SafelyGraze
SafelyGraze's picture

that's one of the great things about corporations, which can go extremely negative (debt) and have the negative counted as zero (bankruptcy).

your corporation has a thousand subsidiary corporations. all of them leverage their negligible assets for spectacular sums of borrowed cash. you use the cash to pay yourself (and your employees, but mostly yourself). then assign staggering debt to your subsidiaries, one by one, while keeping the other ones solvent. 

if you do this right, the ponzi lasts for decades as you keep borrowing cash against the subsidiaries still in the black, then shove the debt into yet another bad subsidiary that dies.

remember please to donate 0.01 percent of your final winnings to a charitable cause before you relocate to another country.

bless your heart, you captain of industry.

Wed, 08/29/2012 - 21:19 | 2748478 Its_the_economy...
Its_the_economy_stupid's picture

Thanks for the anchor.

Wed, 08/29/2012 - 21:28 | 2748492 Pejorative Requiem
Pejorative Requiem's picture

baaaaa...... nobody does thaaaat....

Wed, 08/29/2012 - 23:26 | 2748690 intric8
intric8's picture

Corzine? Is that you?

Wed, 08/29/2012 - 21:05 | 2748443 marco1324
marco1324's picture

C'mon 25% youth unemployment in Spain 50% in Greece they just dont want to work, it aint all that bad. Houses no one can truly afford in the UK C'mon thats not to bad either who needs a home. And Uk employment figures just released show a massive fall of 5900, even thou its because the government brought back the old enterprise allowance scheme to get ppl of the dole, no sign on, no hassle tactics.

Nope ignore the data people everythings fine just fine...oh look a shiny ball.

Wed, 08/29/2012 - 21:13 | 2748462 marco1324
marco1324's picture

I see a clinic full of cynics


Wed, 08/29/2012 - 21:53 | 2748528 Slightly Insane
Slightly Insane's picture

... juggleing potatoes,  no ..... those are "hand grenades" .... and the pins preventing the ignition of the fuses, well they're missing too .....

Wed, 08/29/2012 - 21:57 | 2748537 slewie the pi-rat
slewie the pi-rat's picture

unquantifiable yesterday, today and tomorrow

with zombie accounting, losses are not taken;  no m2m means "unquantifiable";  this is a "new convention"

legal too!

and as such is the basis of systemic stability itself

Wed, 08/29/2012 - 22:02 | 2748545 Zgangsta
Zgangsta's picture

Quite bullish news.  If the world of banking has taught me anything, it's that losses that aren't quantified don't exist!

Wed, 08/29/2012 - 22:21 | 2748576 ebworthen
ebworthen's picture

"Vicious Triangle"

"Unquantifiable Losses"

Yes...the bankers and plutocrats deserve that...all the way to the gallows and the guillotine!

Thu, 08/30/2012 - 00:07 | 2748733 slewie the pi-rat
slewie the pi-rat's picture

as usual :>  all of the above

Freddie Mercury Vs. Sid Vicious(Sex Pistols) 1977 - YouTube

plus ca change...

Wed, 08/29/2012 - 22:24 | 2748582 catch edge ghost
catch edge ghost's picture

Regulators Issue Notice Of Suspension Of Duty To File Reports Pursuant To Arithmetic.

As for palliatives in music-video format, try The Avalanches - Frontier Psychiatrist.

Wed, 08/29/2012 - 22:53 | 2748630 ArrestBobRubin
ArrestBobRubin's picture
The U.S. Is In Much Worse Shape Than Europe

"The golden truth is that once the election is over in the U.S., I fully expect that the global infatuation with the daily vicissitudes in Europe will shift to the catastrophic debt bubble in the U.S.  Especially since I fully expect that Congress will loosen up the laws and kick the "fiscal cliff" down the road some more. And this will be fully financed by the Fed with "open-ended" QE in the form of large-scale mortgage and Treasury bond purchases.  At that point I expect that our Asian financiers (China, Japan) will come realize that, while Europe is at least having conversations and making an attempt at solving its financial predicament, the U.S. is whistling in the dark as it heads down the path of collapse.

You need to move a large portion of your investment wealth into physical gold and silver, or you will be swept under the tide of George Santayana's prescient warning..."

Thu, 08/30/2012 - 01:12 | 2748779 AbbeBrel
AbbeBrel's picture

Nice study by the famous R&R about how sovereigns not only stiff foreign bondholders (very popular in-country) but also their own citizens (not so popular, but also not so well known per R&R).


Carmen M. Reinhart

Kenneth S. Rogoff


Thu, 08/30/2012 - 01:23 | 2748792 Joe A
Joe A's picture

Well, if it is not quantafiable then it doesn't exists. That is the way it is reflected in EU policy. Ignore, so it doesn't exist. Even if it did, it will go away by itself. US debt is perhaps quantifiable. That is handy cause then the US knows how much debt it can hustle to the rest of the world.

Thu, 08/30/2012 - 02:18 | 2748823 q99x2
q99x2's picture

Out of sight. Out of mind.

BTW. Arrest Citigroup.

Thu, 08/30/2012 - 02:54 | 2748847 Bastiat009
Bastiat009's picture

Citi, as a failed nationalized bank, is not qualified to talk about debt, especially in Europe. Most Americans still believe that the EU is one country.

Thu, 08/30/2012 - 03:20 | 2748861 resurger
resurger's picture

Buy the fucking Dream

Thu, 08/30/2012 - 04:12 | 2748891 PaperBear
PaperBear's picture

But didn’t JPM’s Jamie Dimon say that the eurozone fiasco would have only a limited effect on JPM ?

Thu, 08/30/2012 - 09:27 | 2748924 falak pema
falak pema's picture

The losses in first world financialista  web economy are unquantifiable because the Citi-Squiddy cabal has made it so.

Eurozone financial collapse is just a hors d'oeuvre of the whole shooting match. And Citi of dirty-titty should know. But Citi, as manipulative as ever in its desperation, now wants its surrogates in Europe to haul up the white flag. As if that would solve the problem.

The losses are unquantifiable 'cos TBTF won't do due diligience of derivative "body count", preferring going down Perdition Road of more fiat dopium, the smoke n mirrors of more shadow banking OTC/HFT/rehypoth/int rate fixing/asset levitation sleight of hand, like the papal fumes of old to settle their own internecine power  struggles in Eurozone, with bogey men of the desperate and damned sub-category all ready to be sacrificed on the bonfire of unfettered greed. Thanks to the collusion of CBs and political crony surrogates; all on the same page. A magnificent power conspiracy of our "free market" Oligarchical age, now out in the open like manifest destiny of those who were born to rule in the name of elitist "greed is good". A socio-economic construct as toxic as the Fukushima Mox pool cauldron of bubbling technological self destruction.

Its called waltzing on the Titanic!  If they think it won't spill over to imperial fiat Rome they haven't read history!

Nemesis is very much a figure of our times. And its bred on Hubris which is just doing fine tolling inexorably the bell of its own tipping chimes, running amok in the land of unbridled crimes.

The punch line here of course remains : Losses Are Unquantifiable - And Highly Profitable!

 Play on Oligopoly monopoly.

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