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Deutsche Bank Warns France May Be Put On Downgrade Review Before Year End

Tyler Durden's picture


First we have Credit Suisse saying 66 European banks will fail the 3rd stress test, and will need hundreds of billions in fresh capital, something the market ignored entirely last week but may want to reevaluate now that the idiocy appears to have subsided. And now, inexplicably, we have Deutsche Bank warning that France may well be put on downgrade review by year end. "We highlight in this note that the French corporate sector is already financially stretched, with poor profitability and large borrowing requirements. We consider that the deterioration in economic conditions is now creating a distinct risk that France could be put under “negative watch” by the rating agencies before the end of this year. We think that France has the wherewithal to react to such an outcome and could avoid an outright downgrade by taking corrective measures quickly, but this naturally would be a very sensitive political decision a few months before a major election." Why either Credit Suisse or Deutsche Bank would jeopardize their own existence by telling the truth, we have no idea. If either of these two banks believe they can survive a vigilante attack on French spreads, and the subsequent shift of contagion to none other than Germany, we wish them all the best. Yet that is precisely what will likely happen, especially now that the market can no longer pull the trick it did for the past two weeks, and stick its head deep in the sand of complete factual avoidance.

Full note from DB below:



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Mon, 10/17/2011 - 15:54 | 1782615 socratesplus
socratesplus's picture

et tu. brutus?

Mon, 10/17/2011 - 16:00 | 1782638 Ahmeexnal
Ahmeexnal's picture

With friends like Douche Bank, who needs enemies!?!?

Mon, 10/17/2011 - 16:15 | 1782695 ZerOhead
ZerOhead's picture

Frenche Bank Double-dares And Warns Germany May Be Put On Downgrade Review Before Year End.

And so the plot thickens...

Mon, 10/17/2011 - 16:14 | 1782697 gojam
gojam's picture

Except it looks like Germany maybe exiting the Euro.

Read This -

It's by Dr Pippa Malmgren a Senior Advisor to UBS and it's effectively an apocalyptic scenario.

Germany is insulating itself.

Weakened Euro will continue.

Mon, 10/17/2011 - 16:40 | 1782809 Ahmeexnal
Ahmeexnal's picture

Some people never change.
Maybe they do need to receive the Carthage treatment.

Mon, 10/17/2011 - 16:46 | 1782834 koperniuk666
koperniuk666's picture

Interesting to note if true.

I have long held that we should play the board as we see it not as we would wish it to be. Ie there will be more lies, blame and printing  - same old, same old.

But an exit from the Euro by Germany would be a stroke of genius and the best outcome for the WHOLE world ( Even us...)

A chaotic break up of EZ would be messy. an exit by PIGS would be impossible to manage ( printing new notes in secret, runs on banks etc)

But if FRG leaves - their notes could be separated in due course and exchanged for a new (NB _ STRONGER currency~)

The rest would be left to rot as toilet paper....

Note that you can identify who issues your Euro notes on;


Mon, 10/17/2011 - 16:53 | 1782850 gojam
gojam's picture

It makes perfect sense. All the dots are joined.

It looks like the Merkozy "Secret Plan".

Should be a lot of upheaval this week.

Here is her Wiki page. She seems to check out

Mon, 10/17/2011 - 17:17 | 1782984 koperniuk666
koperniuk666's picture

If you think either of those parties (Merkozy)  has the integrity to act correctly or the intelligence to "plan' anything then you do not have a clue about government. 

It is the blind leading the blind. Ugly people going from one expedient stop gap to the next. Can you not see the FEAR on Merkels face?  Out of depth and nearly out of TIME.

I worked in government for 20 years.  These people are self serving, vain, incompetent cretins of the first order. And they don't give fuck about YOU.

Thanks for the Malmgren link.


Mon, 10/17/2011 - 17:32 | 1783049 gojam
gojam's picture

No Probs,

If you look though you'll see that "secret plan" is in speech marks.

Mon, 10/17/2011 - 15:55 | 1782617 DoChenRollingBearing
DoChenRollingBearing's picture

It's not just PIIGS anymore!

Here it comes, bitchez!

Mon, 10/17/2011 - 16:02 | 1782647 kito
kito's picture

they are all of the porcine persuasion

Mon, 10/17/2011 - 17:35 | 1783072 M.B. Drapier
M.B. Drapier's picture

Introducing ... the FIB PIGS.

Mon, 10/17/2011 - 15:56 | 1782625 PicassoInActions
PicassoInActions's picture

Germans wants euro to be cheaper, they are export country. They will play this all the way till weekend. Then we hear positive lies and we get back near 1.40. This game have a precise  schedule.

Mon, 10/17/2011 - 15:56 | 1782626 chaartist
chaartist's picture

Good Bye ESFS expansions...and also the ESFS leveraging

Mon, 10/17/2011 - 15:59 | 1782631 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

 "Iran's Ahmadinejad says US assassination plot accusations meant to cause rift with Saudi Arabia and divert attention from economic woes"

- This man is a pure truth machine, next he'll be telling us 9/11 was an inside job...


Mon, 10/17/2011 - 15:59 | 1782636 slewie the pi-rat
slewie the pi-rat's picture

what possesses a sandy-haired bankster to tell the truth?

Mon, 10/17/2011 - 16:00 | 1782640 Racer
Racer's picture

he is short big time

Mon, 10/17/2011 - 16:03 | 1782655 GeneMarchbanks
GeneMarchbanks's picture

Only threats to their own existence. Let the defecting begin!

Mon, 10/17/2011 - 16:20 | 1782730 buzzsaw99
buzzsaw99's picture

Let the defecating begin!

Mon, 10/17/2011 - 16:01 | 1782642 SheepDog-One
SheepDog-One's picture

'Before year end' means 'before Friday this week'. 

Mon, 10/17/2011 - 16:02 | 1782645 Pancho Villa
Pancho Villa's picture

France is the new Italy. And if they are not careful, Germany will be the new France.

Mon, 10/17/2011 - 16:02 | 1782652 junkyardjack
junkyardjack's picture

Dollars will soon be the new toilet paper

Mon, 10/17/2011 - 16:04 | 1782662 machineh
machineh's picture

Stocks will soon be the new Las Vegas houses.

Mon, 10/17/2011 - 16:07 | 1782676 GeneMarchbanks
GeneMarchbanks's picture

Bonds the new mushroom cloud.

Mon, 10/17/2011 - 16:26 | 1782752 wandstrasse
wandstrasse's picture

Guns will be the new firearms.

Mon, 10/17/2011 - 16:31 | 1782776 oogs66
oogs66's picture

they were the old mushroom cloud too

Mon, 10/17/2011 - 16:42 | 1782820 falak pema
falak pema's picture

But USA will remain USA and Mehico, Mehico. 

Mon, 10/17/2011 - 16:02 | 1782654 AngryGerman
AngryGerman's picture

Wir sind Deutsche. Wir machen keine Fehler. Suck this, Frenchies

Mon, 10/17/2011 - 16:30 | 1782770 wandstrasse
wandstrasse's picture

Wir sind Deutsche. Wir machen keine Fehler

DAS ist unser EINZIGER Fehler.

Mon, 10/17/2011 - 16:59 | 1782866 koperniuk666
koperniuk666's picture

Wahr.   War on two fronts was another notable occasion......


Oh and buying  BMI.


Did I forget Rover?

Or Lidl?



Mon, 10/17/2011 - 16:03 | 1782657 machineh
machineh's picture

France could be put under “negative watch” by the rating agencies before the end of this year.

What the hell are they waiting for? France is no AAA credit.

Mon, 10/17/2011 - 16:40 | 1782806 falak pema
falak pema's picture

France has more Bordo than it has gold. And so thinks Sarkozy, its my gold to sell to the Chinese. What he doesn't reaiize is that the Chinese prefer Vosne Romanee, not Chatto Laffitte. And he has less Vosne Romanée than even gold....So thats like having copper and thinking you have gold or platinum. Surprise, surprise.

Mon, 10/17/2011 - 16:58 | 1782886 koperniuk666
koperniuk666's picture

and it tastes like shit.

I had a bottle of that Romanee Conti once.

Bloody screw cap leaked all over the Ferrari carpets on the way back from Lidl.......



Mon, 10/17/2011 - 16:04 | 1782664 Arkaenun
Arkaenun's picture

"especially now that the market can no longer pull the trick it did for the past two weeks, and stick its head deep in the sand of complete factual avoidance."

Betting they still are able to find a way to do just that.

Mon, 10/17/2011 - 16:18 | 1782716 BlackholeDivestment
BlackholeDivestment's picture

...tricks are for kids, sealed in the black hole ...bitchez, but, this generation is ''all grown up'' now and they are all punk'd out and lost within the darkness of deception, lawlessness and pure evil. Frogs can't leap out of this quantum reality. Iran to the resque. Ah haa haa.

Mon, 10/17/2011 - 16:07 | 1782677 hungarianboy
hungarianboy's picture

I guess they're short the EURO :-)


Mon, 10/17/2011 - 16:10 | 1782689 tekhneek
tekhneek's picture

Let me guess?

"Lowered from AAAAAAAAAAAA^2 to AAAAAAAAAAA- with a chance for another A to be removed... and maybe even ANOTHER minus symbol perhaps even followed by an exclamation... before years end.... we really don't know why the hell we even bother. We're all insolvent. lulz."

Mon, 10/17/2011 - 16:29 | 1782763 Sequitur
Sequitur's picture

Dude I've commented on this a number of times. The ratings are so fucking stupid, a vapid use of "As" to avoid offending the rated (i.e. the companies that pay fees to the NRSROs).

Look at this bullshit from S&P past ratings:


AAA   AA+   AA   AA-   A+   A   A-   BBB+   BBB   BBB-   BB+   BB   BB-   B+   B   B-   CCC   CC   R   SD

Mon, 10/17/2011 - 16:32 | 1782781 oogs66
oogs66's picture

Moody's is better.  It Baa1  Baa2 and Baa3   Ba1   they wanted even more a's

Mon, 10/17/2011 - 17:05 | 1782920 koperniuk666
koperniuk666's picture

Whats wrong with a simple  1- 15  score with

1 being 'as good as the UK' - (never defaulted)

to 15 - 'Don't make me laugh'

Perhaps we could rename 'Greece'  - "15" 

(Sadly Tyler doesn't do Greek fonts.......  I'm wasted around here.......)

Mon, 10/17/2011 - 16:11 | 1782694 broke433
broke433's picture

This is in retaliation to wanting banks to take bigger haircuts... It's mutha effin on

Mon, 10/17/2011 - 16:24 | 1782743 Nascent_Variable
Nascent_Variable's picture

If history has taught us anything, it is that France will unconditionally surrender to the German banks within a week or two and become their vassal state.

Mon, 10/17/2011 - 18:20 | 1783054 Ghordius
Ghordius's picture


Mon, 10/17/2011 - 16:17 | 1782703 Manthong
Manthong's picture

".. an acceleration in the resolution process of the Euro sovereign crisis"

Brought to you by the same guys who would prescribe a case of Smirnoff 100 to treat a cirrhosis of the liver patient.

Mon, 10/17/2011 - 16:14 | 1782705 Stroke
Stroke's picture

The European banks will pass the tests


and fail the stress

Mon, 10/17/2011 - 16:16 | 1782712 YesWeKahn
YesWeKahn's picture

Telling the truth you die, telling a lie you prosper.

Mon, 10/17/2011 - 16:19 | 1782727 wandstrasse
wandstrasse's picture

...66 European banks will fail the 3rd stress test, and..

'stress test' and 'fail' - this is a contradiction like 'water' and 'burn'.

Mon, 10/17/2011 - 16:27 | 1782744 falak pema
falak pema's picture

drowning by numbers? I thought that when the french central bank says we guarantee you to its private banks they CAN'T fail by definition. Or has the cursor moved and now we define failure by what the market says. Double language everywhere as we hear IMF chief declare, "First the french banks must look to capital from their private investors." How can they when all their private money is sitting in US bank accounts, all 1 trllion of it...These banks speak with forked tongue.

Mon, 10/17/2011 - 16:22 | 1782732 Dingleberry
Dingleberry's picture

Heeeeeere's REGGIE!!!!!!!!!!!!!!!

Mon, 10/17/2011 - 16:21 | 1782734 Sequitur
Sequitur's picture

Stupid fucking equity markets. Yep, I held my puts all through this recent runup. How foolish to stop out, putting faith in central bankers and politicians.

The candle has been lit, it's only a matter of time before the burning wick reaches the fuel . . . .

Mon, 10/17/2011 - 16:26 | 1782750 Hedge Fund of One
Hedge Fund of One's picture

Now wait a minute - Merkozy will certainly have something to say about that. I mean how can a German bank make judgments about fellow core EU members? 

Mon, 10/17/2011 - 16:27 | 1782756 AngryGerman
AngryGerman's picture

in the same way that it tells merkel what to say

Mon, 10/17/2011 - 16:26 | 1782754 Josh Randall
Josh Randall's picture

At least Max Keiser will be able to protest in his adopted hometown soon

Mon, 10/17/2011 - 16:29 | 1782768 KingdomKum
KingdomKum's picture

we few, we happy few, we band of silver holders  .  .  .  

Mon, 10/17/2011 - 16:40 | 1782810 Do You Speak Greek
Do You Speak Greek's picture


Add this one to the hopium-fueled names such as LNKD, CMG, LULU etc

Mon, 10/17/2011 - 18:25 | 1783202 M.B. Drapier
M.B. Drapier's picture

Why either Credit Suisse or Deutsche Bank would jeopardize their own existence by telling the truth, we have no idea.

I'll have a go: seems like another chicken match. "Recapitalise your own damn banks, France, and curtail your budget deficit too, or the unthinkable will happen, and don't think we'll back down just to prevent it." This comes just as the UK and US governments block more IMF money for Europe, and the German government refuses to allow EFSF money to be spent on French banks. And at just the most convenient moment CS and Deutsche come along to help turn up the heat, coincidentally at (afaics) the same time as the Handelsblatt happens to discover French banks. Of course, the French response is "So regrettable! Our mad Gallic pride will not allow us to back down even in the face of encroaching doom. And there's that election coming, too. You're going to have to help us out here."

Mon, 10/17/2011 - 19:05 | 1783403 Georgesblog
Georgesblog's picture

Fiat currency collapses all have the same end. They go to zero. They get devalued, recycled and get reissued. In the process, survival depends on recognizing the warning signs.

Mon, 10/17/2011 - 19:14 | 1783438 chump666
chump666's picture

ah awesome 'bank wars'. 

"We go down...damn sure you are coming with us"

ala BIG EZ bank haircuts coming.  I love it.


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