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Dexia Bailout On Verge Of Collapse, Threatens To Take France AAA Rating Down With It

Tyler Durden's picture


Having followed the fortunes of the beleaguered Belgian bank from before it appeared on anyone's worksheets, we are hardly surprised that the EU Commission charged with confirming the good-bank / bad-bank restructuring is concerned at the deal that Belgium has with the French (and Luxembourg) government to backstop/finance Dexia's debt. Belgium's De Standaard (and two other European newspapers) today suggests the Belgians fear the EUR90bn deal is 'not feasible' as it stands (with a Belgium 60.5%, France 36.5%, and Luxembourg 3% weighting). Given the change in market conditions the commission, according to the article, is concerned at the ability of each country to finance its respective guarantee (most obviously Belgium) and therefore can renegotiate the October bailout deal. Belgian FinMin Reynders would not confirm the renegotiations but was evidently waiting on the commission's 'comments or additions'. The French are obviously not-amused and of course, any increase in the size of France's guarantee will further impact its ability to maintain the much-vaunted AAA rating.




The initial bailout deal was profitably traded via our suggestion of DEX-Belgium compression and as the orange oval shows risk was very rapidly transferred from DEXCL (Dexia's CDS level compressed - green arrow) onto the balance sheet of Belgium (red arrow showing how Belgium CDS underperformed France CDS).

The last week or two has seen systemic concerns creep into all of the spreads involved  - though notably the spread between Belgium and France has been relatively stable around 110bps. Idiosyncratically DEXCL has decompressed notably as chatter about the deal's collapse grows louder.

We suspect that there will be some renegotation that pushes more pain to bondholders in return for France shouldering more of the burden and so a DEXCL decompression vs Belgium-France compression trade makes some sense (as a risk-transfer trade) but cost of carry is high. Perhaps the simplest way (and cheapest) is outright short France credit.

From De Standaard: Dexia Rescue Plan Is Not Feasible (Via Google Translate)

BRUSSELS - Belgium asks France to renegotiate the bailout Dexia Holding, also on the distribution of the state guarantee of 90 billion. The euro crisis plan unfeasible.From our editors coup de théâtre in the Dexia case. While President Jean-Luc Dehaene again yesterday for the special Dexia commission appeared to a clarification of the trap and the dismantling of Dexia shows an important part of the Belgian-French agreement of October 9 obsolete. In particular, the rescue plan that Belgium France and Luxembourg have agreed in early October for Dexia Holding (the rest couch, red), stands on the slope. And this includes the much-discussed state guarantee of 90 billion to finance the remaining banks - especially the more massive historical bond portfolio and the unsold subsidiaries of Dexia behind. Belgium dropped by France to convince the majority (60.5 percent) of the financing of the remaining bank Dexia is a Belgian guarantee to cover.


This guarantee, Dexia to enable the next year to 54 billion euros from the Belgian bond market to pick up. This would come in direct competition with Belgium itself, that money needs to get his debt and deficit financing. The Belgian bond market is quickly drying up. This makes it impossible for the coming years tens of billions of Dexia to retrieve. Specialists estimate that for Dexia 'only' room for 20 to 25 billion euros from the Market. Since the agreement Dexia Belgium mistrust of financial markets, allowing long-term rates has increased dramatically: the beginning of October is 3.6 percent in Belgium paid ten-year loan, now it is 4.9 percent. And that has consequences for the rest of the financing bank.


"Dexia becomes intolerable as it is such high interest rates on the market to pay, insiders warn. French resort Belgium, France and the European Commission has therefore already stated that the bailout Dexia Holding need re-negotiation. As a possible way a new agreement in which the French, backed by Belgium, one additional share of the funding to take on. Much time is not. For the euro crisis threatens not only Belgium in need of money to bring the whole bailout for Dexia falters. Dexia Holding should not only pay high long-term market, it needs also a costly fee for the state guarantee.


Total (financing) costs of the massive bond portfolio in the rest thereby threaten the bank proceeds to beat. Allowing the remaining banks are structurally unprofitable. All parties involved are treated with the hands in the hair. "What now?" The remaining bank fail let go is not an option, it reads. The consequences for Dexia Bank Belgium (DBB) could not be foreseen. "The Belgian state bank to the rest Dexia bank an overdraft - no guarantees, so - given 20 to 25 billion euros, and then that money completely lost."


The only solution that Belgium sees that France itself the majority of The money the rest of Dexia bank needs from the French bond market gets. Belgium would be the part that France collects on behalf of our country, with guarantees covering. But the French are not designed for jumping. They believe that Belgium commits perjury. Paris itself is under great pressure. The credit agency Moody's yesterday put pressure on France once again by openly to question the sustainability of the French AAA credit rating. In addition, in the spring French presidential elections. Dexia Belgium ruin.

It seems that Belgium is 'pulling a Greece' - knowing that it has all the leverage and France has much larger exposure to the problem - once again the unintended consequence of capitalism wiothout failure is writ large.


Chart: Bloomberg


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Tue, 11/22/2011 - 21:00 | 1904879 Temporalist
Temporalist's picture

When you own other people's shit, it doesn't stink any less.

Tue, 11/22/2011 - 21:05 | 1904901 surf0766
surf0766's picture

quote of the day. thanks for the laugh

Tue, 11/22/2011 - 23:52 | 1905494 tiger7905
tiger7905's picture

Sprott buying $1.5 billion in silver.

Tue, 11/22/2011 - 23:55 | 1905503 trav7777
trav7777's picture

sounds like 15 million silverbugz about to get fleeced

Wed, 11/23/2011 - 00:28 | 1905606 TruthInSunshine
TruthInSunshine's picture

Stay calm everyone, because The Bernanke & Gang are really Johnny On The Spot, having just issued their final rules on U.S. Bank stress tests today, and also reviewing capital requirements of said institutions.

I'm very glad that they're acting so urgently with the very real possibility that these banks may have uber exposure to Euro Zone liabilities, and given that EU counterparties of said banks may be on the cusp of hyper-implosion within hours/days/weeks.

Thanks for

Wed, 11/23/2011 - 00:29 | 1905613 Oh regional Indian
Oh regional Indian's picture

That is the strangest correlation I've heard. Paper BUgs or Physical bugs?

Pretty interesting though. But Silver aside.... the plan is pretty obvious now. Hurt a bank. A big bank in trouble always puts a few smaller ones in a death spiral.

From there to a Greece/Italy style take-over is a few weeks work. France is definitly a FFFFpiG. But it's nto going down either. Not France, not Italy. Too big to Fail.

More important, WHY has Belgium not had a government for so long? What is it intended to be?



Wed, 11/23/2011 - 06:03 | 1905955 zhandax
zhandax's picture

More important, WHY has Belgium not had a government for so long? What is it intended to be?

ORI, isn't it apparent?  The prettiest pig ever to have lipstick applied by a central banking cabal; or in more popular parlance, the Death Star, from which Dearth Blankfein will strip the remainder of the wealth from the far-reaching provinces to shower the local hookers with gifts.

Wed, 11/23/2011 - 07:11 | 1905993 Oh regional Indian
Oh regional Indian's picture

Fascinating, eh Zhandax? Heart of the EU cannot have a government. It's a tell, for sure. 


Wed, 11/23/2011 - 08:25 | 1906093 dark pools of soros
dark pools of soros's picture

a puppet can not be the puppet master - Oz dines on mussels

Wed, 11/23/2011 - 06:18 | 1905962 QuietCorday
QuietCorday's picture

My understanding was that the political situation in Belgium was down to a largely unreported schism between the Flemish (Dutch-speaking) and the Walloons (French-speaking), mostly down to significant cultural differences, the insane institutions created to support these differences in the different regions, and economies of Flanders and Wallonia moving at entirely different speeds -- and the fact that economically-successful Flanders does not like having to pay for struggling Wallonia, nor does it like its left-leaning policies that are funded on its dime.

Belgium will, most probably, undergo some sort of partition in the next few decades; they are a perfect example of how the concept of multi-culturalism simply does not work.

This is all rather interesting in light of the current EU fiasco. If Belgium, a founding member of the EU and the host to the HQ, cannot keep a simple dia-cultural geographical space functioning within one political entity, then how the hell is the EU ever going to manage Euro-federalism or any kind of transferunion?

Wed, 11/23/2011 - 06:56 | 1905985 Scalaris
Scalaris's picture

Awkward irony.

Wed, 11/23/2011 - 07:14 | 1905996 Oh regional Indian
Oh regional Indian's picture

Thanks Quiet and that surely is the reason the people have. Or have been given. But, given that it si the permenant home of the EU HQ, makes my Spsenses tingle. Wicked designs and all!


Wed, 11/23/2011 - 09:04 | 1906205 Archduke
Archduke's picture

The Wallon / Flemish divide underwent an inversion with the rise of the Germand and Dutch economies.

Historically it was the aristocrats and bourgeois who spoke French; the farmers and workers spoke Flemish.


Much like ireland, the european institution is changing all that.  The powerhouse of Brussels (the city)

is now 10% expats, who bring in the lion's share of the wealth and are making local politics irrelevant.

though it is telling that expats are charged the most in taxes, up to an enormous 57%, which seems

like a clear violation of european directives of fairness and equality for all residents.


But that's Belgium for you.  Fairness has never been part of the equation.  In fact they actively created

artificial class and caste distinctions in The Congo and Rwanda in the colonial days.  It's a wee little

kingdom producing a smidgen of energy, steel, and exporting blood diamonds and small arms worldwide.

Oh, and it runs a small financial laundering and tax evasion scheme on the side ala luxemburg/liechtenstein.

Dexia for example was basically created to allow Belgian savings caisses and credits to speculate in the

eurozone big leagues.  It's thus up to the Belgian crown to nationalize and patch the problem if it blows up.


Like a lot of old europe, it's sitting on old wealth and does not produce or participate enough in the modern

economy and is thus due for a dowsizing or rather rightsizing.  I put Italy, Austria, Nederlands in that list too.

That's basically the essence of the european problem: class warfare, with old aristocrats hanging on to

the vestiges of accumulated but unproductive wealth, artifically skewing it against the productive areas.

To fix this there needs to be more integration, more migration, less protectionism, more restructuring.


I believe in the virtue of waste as health indicator, much like the fanciful plumage of the birds of paradise.

in geopolitical matters, this waste is manifest in maintaining a costly ostentatious military.  You can clearly

see that the credible european states are Great Britain and France.  Coupled with Germany (banned to do so)

as an economic powerhouse this comprises the core of europe.  everything else is due for a downsize.

Time to sell some looted art and heritage buildings and head back to more productive work.



Wed, 11/23/2011 - 04:38 | 1905899 joshua10
joshua10's picture

As the wider equity market declines, PM prices will follow for while until the supply/demand metrics correct. I can only hope silver would decline so I can back my truck up to my dealer and load up! Silver supply is tightening and with countries like China subsidizing the gold and silver purchases to it's citizens as it prepares for the next leg down, it doesn't take a rocket scientist to figure out that any decline in PM prices will be very temporary.

Tue, 11/22/2011 - 21:38 | 1904965 vast-dom
vast-dom's picture

Good! Let the ZOMBIE BANK starve rather than throwing more QE-stylee-human-flesh chum at it!


You can't make a human out of a zombie, but zombies are exclusively made out of humans. It's called DENATURING or some such thing.


France at AA is generous.

Tue, 11/22/2011 - 22:18 | 1905113 jeff montanye
jeff montanye's picture

  thanks for a great post.  p.s.  now that i think about it, that rating was much vaulted wasn't it?  too bad the signatures were in disappearing ink.

Tue, 11/22/2011 - 22:49 | 1905280 sitenine
sitenine's picture

Pathetic, that every shoe has dropped, the writing is all over the wall (floor and ceiling too), and I can't hear my self think over the fat women singing, but central banks are still trying to 'keep it together'.

I can only think of 2 buy recommendations at the moment, PM (make god damn sure you take delivery!) and FAZ.

Please assume crash positions.

Tue, 11/22/2011 - 22:51 | 1905289 vast-dom
vast-dom's picture

FAZ is certainly the move.

Tue, 11/22/2011 - 23:41 | 1905464 OldPhart
OldPhart's picture

My most recent buy, today, was a Smith & Wesson .45 ACP, Model 1911.  It will be fondled as often as my silver.

Wed, 11/23/2011 - 04:52 | 1905906 fockewulf190
fockewulf190's picture

You could get it silver plated and ask Max Keiser to engrave his signature on it.

Wed, 11/23/2011 - 04:34 | 1905897 Incubus
Incubus's picture

atlas shrugged, but bernanke took over; atlas was too much of a bitch.  You think bernanke is at his limits?  He can prop up the solar system if he wanted to.  Now, who wants to bail out Uranus?

Tue, 11/22/2011 - 22:40 | 1905230 knukles
knukles's picture

(voice of Mr. Ed the Talking Horse)

Fr AA nce

Tue, 11/22/2011 - 23:42 | 1905467 OldPhart
OldPhart's picture

Do the kids get this?

Wed, 11/23/2011 - 00:08 | 1905542 UP Forester
UP Forester's picture


Wed, 11/23/2011 - 01:16 | 1905712 Taffy Lewis
Taffy Lewis's picture

Have you ever heard of a talking horse?

Wed, 11/23/2011 - 05:31 | 1905936 UP Forester
UP Forester's picture

He's talking his way right into the glue factory.

Wed, 11/23/2011 - 03:01 | 1905846 bank guy in Brussels
bank guy in Brussels's picture

Thanks for the reminder of the great Mister Ed! Hadn't recalled the famous song in a long time:

A horse is a horse, of course, of course,
And no one can talk to a horse of course
That is, of course, unless the horse is the famous Mister Ed

Go right to the source and ask the horse
He'll give you the answer that you'll endorse
He's always on a steady course
Talk to Mr Ed

People yakkity yak a streak and waste your time of day
But Mr Ed will never speak unless he has something to say
A horse is a horse, of course, of course
And this one'll talk till his voice is hoarse

You never heard of a talking horse?
Well listen to this:

"I am Mister Ed!"


Tue, 11/22/2011 - 21:32 | 1904967 Buck Johnson
Buck Johnson's picture

They finally figured out that when you owe a bank 100,000 euros it's your problem.  But if you owe a bank 100 million euros, it's the banks problem.

Tue, 11/22/2011 - 22:20 | 1905138 AldousHuxley
AldousHuxley's picture

when banks owe 100 billion euros to each other, then you have world economic crisis

Tue, 11/22/2011 - 22:48 | 1905275 Piranhanoia
Piranhanoia's picture

Shouldn't you multiply that by at least 100?  They repurchased crap that didn't exist for the last several years. 

Tue, 11/22/2011 - 23:00 | 1905334 iDealMeat
iDealMeat's picture

+ synthetic CDO

Wed, 11/23/2011 - 07:20 | 1906001 pufferfish
pufferfish's picture

"They finally figured out that when you owe a bank 100,000 euros it's your problem.  But if you owe a bank 100 million euros, it's also your problem."

Just a little amendment there...

Wed, 11/23/2011 - 08:03 | 1906060 JungleJim
JungleJim's picture

And .... If a bank owes you anything it's your problem.

Tue, 11/22/2011 - 22:09 | 1905103 phungus_mungus
phungus_mungus's picture

Has anything the EU tried been even remotely sucessfull? 

Seems allt he plans get touted inth e press as the end of the financial crisis, only to come back to the headlines days and weeks later as they all come unspooled...

Who are they trying to fool? 


Wed, 11/23/2011 - 00:07 | 1905538 WonderDawg
WonderDawg's picture

Everyone. Themselves, included.

Tue, 11/22/2011 - 23:36 | 1905450 ISEEIT
ISEEIT's picture

Yep. And don't ya get it yet? This is a human failure. Label it as 'systemic' if you prefer but the fact is that this is precisely what has always, and WILL always happen when power is placed in the hands of to few.

The very concept of world government and specifically consolidation ( taxation) at our Federal level ought to be the turn off of the century. 

Stupid, misinformed, and ignorant 'illene' Loves to rally for more of this suicidal bullshit. Leftist bullshit leads to lower standards of living 'on a long enough timeline'.


Call it 'science', call it math, call it whatever you prefer. The FACT is that freedom FROM government benifits individual humans.

It's not rocket science.

It's truth.

Wed, 11/23/2011 - 04:29 | 1905895 joshua10
joshua10's picture

Smartest thing I've read in a long time.

Tue, 11/22/2011 - 21:04 | 1904890 Racer
Racer's picture

Euro SOARS on anticipation of another hopium wedgie of cash


(yes that makes as much sense as the reality!)

Tue, 11/22/2011 - 21:02 | 1904894 Vlad
Vlad's picture

I'm certainly glad our Dexia 11/04/11 RON paper reached maturity.

Tue, 11/22/2011 - 21:06 | 1904906 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

You can only polish a turd so much. Someone will bite it another day.

Tue, 11/22/2011 - 21:12 | 1904923 SHEEPFUKKER

Adieu France.

Tue, 11/22/2011 - 23:43 | 1905469 Tommy5454
Tommy5454's picture

Don't worry, Bove says our banks will be fine in the stress test. Sooooooo, sell everything? He's like Costanza, if every instinct he has is wrong, then the opposite must be right.


Tue, 11/22/2011 - 21:14 | 1904926 Whoa Dammit
Whoa Dammit's picture

King Albert II  Go and tell your master that we have been charged by God with a sacred quest. If he will give us food and shelter for the night he can join us in our quest for the Holy Grail.
Taunting French Guard  Well I'll ask him, but I don't think he'll be very keen. Ah, he's already got one, you see!
King Albert II What?
Sir Gallahad  He says they've already got one!
King Albert II  Are you sure he's got one?
Taunting French Guard  Oh yes. It's very nice!

Monty Python & The Holy Grail (except the king was Arthur, not Belgium's Albert II)

Tue, 11/22/2011 - 21:23 | 1904944 Spastica Rex
Spastica Rex's picture

Monty Python +1

Holy Grail +1

Originality +1

Sorry, only +1 button.

Tue, 11/22/2011 - 23:22 | 1905400 UP Forester
UP Forester's picture

Q: What is your name?

A:  Sarkozy.


Q:  What is your quest?

A:  Sta-beel-i-tee of ze Euro and of ze bahnks.


Q:  What is your favorite color?

A:  Yellow.  No, blue, um.... GREEN!   AAAAaaaaahhhh!

Wed, 11/23/2011 - 00:03 | 1905528 unununium
unununium's picture

In other news, Van Rompuy dismissed these developments as "only a flesh wound."

Tue, 11/22/2011 - 21:17 | 1904933 Maximilien Robe...
Maximilien Robespierre's picture

Tahrir Square rages on:

For some reason, I think they're beyond worrying about pepper spray and I can't seem to locate the peoples library anywhere.


Tue, 11/22/2011 - 21:24 | 1904948 Spastica Rex
Spastica Rex's picture

I wonder if they're having a general assembly meeting tomorrow and what's on the agenda. 

Tue, 11/22/2011 - 21:25 | 1904954 SHEEPFUKKER

I'll take Tahrir Square for 100$ please Alex to block. 

Tue, 11/22/2011 - 21:19 | 1904936 chump666
chump666's picture

Just need China to do their bullsh*t PMI fudge get a smallish rally so I can fix a index short.  Looks like this market is getting ready to have it's guts fall out. 

Tue, 11/22/2011 - 21:19 | 1904937 Carlyle Groupie
Carlyle Groupie's picture

ES just dumped. 1168

Tue, 11/22/2011 - 21:45 | 1905006 Withdrawn Sanction
Withdrawn Sanction's picture


Stand still, this is going to hurt a bit.

Tue, 11/22/2011 - 21:47 | 1905011 Mike2756
Mike2756's picture

NDX taking out 2200 for the final time?

Tue, 11/22/2011 - 21:47 | 1905013 PaperBugsBurn
PaperBugsBurn's picture

I wrote you a comment and tgat bitch Tyler erased it.

A SECRET booklet describing Barack Obama's Australian schedule down to the minute, as well as the breakdown of his security convoy and the mobile numbers of dozens of senior US and Australian officials, was found by the Herald lying on a Canberra street yesterday morning.
The loss, a significant and hugely embarrassing security slip-up, will leave a sour final note to what was an otherwise positive two days for the Gillard government.
The booklet, Overall Program and Orders of Arrangements, for the US President's visit, was found by this reporter in a gutter about 100 metres from the entrance to Parliament House.

Tue, 11/22/2011 - 21:55 | 1905040 Carlyle Groupie
Carlyle Groupie's picture

The article does not make any assumptions as to the ownership of the booklet.

I think it's Mossad, hunting for opportunities to engineer a false flag on Iran.

What do you think?

Tue, 11/22/2011 - 22:30 | 1905182 john39
john39's picture

but obummer is a mossad asset...

Tue, 11/22/2011 - 22:32 | 1905190 disabledvet
disabledvet's picture

"we're all mossad assets now."

Tue, 11/22/2011 - 22:42 | 1905243 ReactionToClose...
ReactionToClosedMinds's picture

and when Israel is gone ... who will you argue is conspiracist-in-chief then?  And I ain't no 'Rothschild' ..... keep doing Putin's work  .....

Wed, 11/23/2011 - 03:23 | 1905853 bank guy in Brussels
bank guy in Brussels's picture

Most well-off Israelis have obtained EU passports for themselves and their families, as they do not expect Israel to survive past about 2020 or so. Many can obtain these thanks to ancestors born in Europe. Many Jews don't hesitate to even get a German passport, as their ticket out of Israel when the time comes.

A large number of the Russian-speakers who had a Jewish ancestor, who emigrated to Israel in the 1990s, have already gone back to Russia or their other home countries.

Some of the poorer Israelis who have EU citizenship come to Europe to get health care and social benefits they can't get in Israel, a very unequal society, America style, big gulf between rich and poor, middle class getting destroyed.

If you read radical Israeli journalists like Barry Chamish (who nearly was murdered inside Israel), they speak of scandals that the 'Holocaust lawsuit settlement monies' held by the large organisations, are not trickling down to the actual World War II survivors in Israel, many of whom still live in great poverty.

Such radical Jewish and Israeli journalists also present a view that the ultimate purpose of Israel is really that of long-term destruction of spiritual Judaism, as a joint project of Western oligarchs and atheist Jews. The theory is that Israel helps harm Judaism, partly by helping to drag the name of Jews through the mud via the misconduct of the Israeli state.

This was the prediction of non-Zionist Jewish leaders long ago as they tried to fight the rise of Zionism from within Judaism. Actually, before 1930, most Jews were non-Zionist. Most of the Jews killed during World War II were religious and intrinsically non-Zionist Jews.

According to non-Zionist Jews, the Israeli state clearly violates many of the traditional rules of Judaism (Never seize land from anyone; never try to establish a Jewish political state without God's approval; avoid doing things that make non-Jews dislike Jews.)

Here in Belgium we have a great many Jews in Antwerp who are non-Zionist, and there are many in New York City as well. But you don't see them much in the media. They tend to stay quiet - traditional Jews don't try to 'convert' anyone - and feel it's somewhat hopeless now to try to express their position to the wider world.

Tue, 11/22/2011 - 22:44 | 1905252 knukles
knukles's picture

Isn't that all a little optimistic?
I mean, who wants to claim any part of this shit?

(chirping Moon Cricket)

Wed, 11/23/2011 - 02:21 | 1905815 SokPOTUS
SokPOTUS's picture

Now, *that's* thinking outside the box!

Tue, 11/22/2011 - 21:20 | 1904938 putbuyer
putbuyer's picture

I hope this does affect the price of chocolate. Damn! I gotta tell my mom

Tue, 11/22/2011 - 21:21 | 1904941 rambler6421
rambler6421's picture

I thought Dexia was already bailed out.

Wed, 11/23/2011 - 01:19 | 1905717 Tom Green Swedish
Tom Green Swedish's picture

I think we better open a probe into this.

Tue, 11/22/2011 - 21:22 | 1904942 oogs66
oogs66's picture

what a tangled web we weave when we first try to deceive

Tue, 11/22/2011 - 21:23 | 1904945 nmewn
nmewn's picture

"Belgians fear the EUR90bn deal is 'not feasible' as it stands (with a Belgium 60.5%, France 36.5%, and Luxembourg 3% weighting)."


Da carnivores, are a comin hooomah, ta rooosta!

Tue, 11/22/2011 - 21:24 | 1904946 westboundnup
westboundnup's picture

"Why don't you tell me what it's all about?"

- Michelle Pfeiffer

Coolio's Gangsters' Paradise

Tue, 11/22/2011 - 21:25 | 1904952 traderjoe
traderjoe's picture

"Perhaps the simplest way (and cheapest) is outright short France credit" - Original

"Perhaps the simplest way (and cheapest) is to buy some physical precious metals" - Corrected. 

There, fixed it for ya. 

Tue, 11/22/2011 - 21:27 | 1904956 AgShaman
AgShaman's picture

How is it that this qualifies as newsworthy?

Dexia was dumb enough to get "burned" by Bernie Madoff

Should we be shocked dat dey has gots problems wit their Casino Bill?

Tue, 11/22/2011 - 22:03 | 1905072 disabledvet
disabledvet's picture

Because our US Federal Reserve bailed out Dexia the first time they looked like they were going to blow up the world. What happens if they can still blow up the world the second time around?

Tue, 11/22/2011 - 22:55 | 1905308 AgShaman
AgShaman's picture

To answer your to respectfully disagree with your notion that the construct that they've engineered is a broken, but repairable one.

If that's what you believe....then so be it and I won't try to dissuade you from abandoning your beliefs.

I'm simply saying that their ponzi construct is broken and beyond repair. I hope the people of this planet will realize that this game has been run on them for centuries and that it's degraded to a point where the only viable option is for it to "blow up"..."burn down"....however you wanna term it.

The Puppeteers seek to massage and manage things to salvage their monopoly on their "human farming".....they bring us both, catastrophic Deflation and Inflation in order to corner the market on their monopoly. The "Tax Exempt Foundations" and Corporations are their enablers....manipulating the minds of their livestock with fear based propaganda.

The traders that come here feel they are above this and clever. They are busy with infighting like clueless economists about what's next on the horizon....Deflation?...maybe Inflation? It's just plain silly. It reminds me of the left/right political arguements where Democrats and Republicans feel it important to "hash out" the issues.

The Slave Masters have us all locked into our Stockholm Syndrome....believing that they will rescue us always from maddening volatilty....and bring us sticky prices and price stability. Of Course behind the scenes they are conjuring ways to instigate this roller coaster madness. They want you to "want" them...They need you to "need" them. If people can't wake up to this....the umbilical cord will remain forever....and your slavery is the byproduct

It looks as silly as pre-teens pledging their vampire allegiance to "Team Edward" and "Team Jacob" passes the time perhaps, but generates no substantial outcome of any value.

Save the Banks? I think not....the banking cartel must be killed

No, I think I've got it needs to blow up and burn down.

Wed, 11/23/2011 - 00:26 | 1905601 lincolnsteffens
lincolnsteffens's picture

"it needs to blow up and burn down."

Not to argue over semantics but "I think the only way to remove the yoke of tyranny from us is to do what we can to help our neighbor while it burns and after it finishes burning down."

There is little chance it wont blow up. Better set pen to paper and start writing a narrative entitled HOW STUPIDITY AND GREED RUINED PROSPERITY. If you don't write it the historians will screw it up.

Tue, 11/22/2011 - 21:29 | 1904961 JPM Hater001
JPM Hater001's picture

This just in: Collapse delayed due to Thanksgiving.

Tue, 11/22/2011 - 21:49 | 1905016 Mike2756
Mike2756's picture

They can't get the unions on board, maybe they can have some effect anyway?

Tue, 11/22/2011 - 21:31 | 1904963 lizzy36
lizzy36's picture

The power of Zerohedge.

ES_F on low of session.

Tue, 11/22/2011 - 21:31 | 1904966 RobotTrader
RobotTrader's picture

New highs on USDX and Treasuries tomorrow.

The Thirst for our paper is unquenchable.

Because the U.S. Consumer cannot be stopped.

Tue, 11/22/2011 - 21:34 | 1904973 nmewn
nmewn's picture

"Because the U.S. Consumer cannot be stopped."


Tue, 11/22/2011 - 22:27 | 1905166 Money 4 Nothing
Money 4 Nothing's picture

You can have a jobless recovery, did you get the memo?

Wed, 11/23/2011 - 00:09 | 1905545 Dirtt
Dirtt's picture

True.  But the patterns are there.  Robo is right in regards to the money flow.

The power of ZIRP is diminishing.  Trade accordingly. I hate this shit too.  EBT Day here is a spectacle. And I can tell you that FLOTUS and her anti-obesity thingy is a farce when you see what kind of shit the EBTers are buying.

Tue, 11/22/2011 - 21:36 | 1904979 AgShaman
AgShaman's picture

TaTaTaTa....True Dat!

I can hardly wait for all the "un-washed mass consumers" to trample themselves on Black Friday

The Paper Rocks On!

Tue, 11/22/2011 - 21:37 | 1904982 Carlyle Groupie
Carlyle Groupie's picture


Retail sales will not disappoint this season.

Tue, 11/22/2011 - 21:47 | 1905012 Withdrawn Sanction
Withdrawn Sanction's picture

Retail sales will not disappoint this season.

How are you playing that little nugget of wisdom and how much are you betting on it?

Tue, 11/22/2011 - 22:01 | 1905061 WonderDawg
WonderDawg's picture

I've got March puts on XRT and Lulu, that's how I'm betting it.

Tue, 11/22/2011 - 22:02 | 1905066 Carlyle Groupie
Carlyle Groupie's picture

We operate on a different level here:

If I was to disclose any hard earned trade information it will be in on of my posts. Cloaked as a casual comment so follow along carefully and you will be handsomely rewarded.

Tue, 11/22/2011 - 23:39 | 1905459 fuu
fuu's picture

You have a very familiar writing style for a 5 week old account.

Tue, 11/22/2011 - 23:52 | 1905493 Carlyle Groupie
Carlyle Groupie's picture

Austerity for you, pay that Jew confetti back.

Wed, 11/23/2011 - 10:03 | 1906421 fuu
fuu's picture

You do know those are Trav's words right?

Tue, 11/22/2011 - 23:54 | 1905023 Carlyle Groupie
Carlyle Groupie's picture

Oh, and if ZH is doing the gift exchange this year for it's most valued contributors I'm looking for the following:
Color OD, Size XL.


I like when gifts just show up in the mail.

Tue, 11/22/2011 - 21:44 | 1905004 Landrew
Landrew's picture

What fracking world do you live in? The Fed buys half the fracking treasury auctions! Wake up Frackin numbskull. You have been on here to long not to understand this game of the Fed and Treasury dance of theives! Frack you!

Tue, 11/22/2011 - 22:02 | 1905069 lizzy36
lizzy36's picture

Like any addict they cannot stop.

Like any addict they will be forced to stop or the country will die.

American exceptionalism is not how many igadgets one has or how many Coach bags. 

Tue, 11/22/2011 - 22:48 | 1905276 knukles
knukles's picture

That's true.  It's how many simplex genital warts the cream covers.

Tue, 11/22/2011 - 22:05 | 1905086 disabledvet
disabledvet's picture

neither can Americans' hunger for a deal. Where the phuck is it? Why is it everytime we go and pay for something the only answer we get is "more"?

Tue, 11/22/2011 - 22:42 | 1905244 infinity8
infinity8's picture

I'm multi-tasking and tried to junk you, only to find that I already had.

Tue, 11/22/2011 - 22:52 | 1905293 Hulk
Hulk's picture

It is impossible to stop something once it has gone over a Cliff, Claven...

Wed, 11/23/2011 - 00:22 | 1905587 Milestones
Milestones's picture

Clever11 Can't quite place the place etc of the original character. Please?    Milestones

Wed, 11/23/2011 - 00:04 | 1905530 Dirtt
Dirtt's picture

The question on my mind is what is next.  TLT exhibited a pattern in the first half of Sept. which seemed to repeat in the last two weeks.  The only part of the pattern missing is the breakout to the 125ish level.

If this is indeed a stampede into US Treasuries then is the trade of the century - TBT - low fruit in the near future? The peaks and valleys don't last long.

Orders placed. The peril of shorting US Treasuries is greatly reduced if you are in the wake of a panic. And once that risk is mitigated, shut down the monitors and let nature take her course.

Tue, 11/22/2011 - 21:37 | 1904980 BlueStreet
BlueStreet's picture

Wonder how permabull Terranova will put a positive spin on this like he did the bank stress tests.  

Tue, 11/22/2011 - 21:37 | 1904984 evolutionx
evolutionx's picture

for those who didn' t see it:


Euro Collapse Explained in 3 Minutes

Reflections on Europes financial woes. Special subject: the economies of the European Community. Which debt is owed by whom? Who will pay the bill?

Tue, 11/22/2011 - 21:42 | 1905000 DonutBoy
DonutBoy's picture

Hmmm, how to re-cap the TBTF banks without a printing press. A snafu.

Meanwhile over in Iceland, the TBTF banks failed.  They could have printed but they didn't.  They could have made it sovereign debt but they didn't.    The fish are still being caught.

Tue, 11/22/2011 - 21:48 | 1905014 SHEEPFUKKER

Shaq-fu. This bankruptcy is a slam dunk. 

Tue, 11/22/2011 - 22:08 | 1905097 disabledvet
disabledvet's picture

"Our guns aren't firing very well today." Battle of Jutland. "Wall Street...we have a problem here."

Tue, 11/22/2011 - 21:42 | 1905001 Bolweevil
Bolweevil's picture

tres flambe mon banque

Freedom Fries!

Tue, 11/22/2011 - 21:46 | 1905010 SHEEPFUKKER

You like your fries laced in oil?

Tue, 11/22/2011 - 21:59 | 1905054 Bolweevil
Bolweevil's picture

Would you rather have nipples that secreted ketchup or a belly button that sharpened pencils?

Tue, 11/22/2011 - 23:27 | 1905415 UP Forester
UP Forester's picture

Toes that make strawberry jam.  To go with the butt crackers and Fromunda cheese.

Tue, 11/22/2011 - 21:46 | 1905007 Landrew
Landrew's picture

Isn't the word reached for Vaunted instead of Vaulted?

Tue, 11/22/2011 - 21:51 | 1905026 Withdrawn Sanction
Withdrawn Sanction's picture

Yes but "vaulted" sounds so much more in the French have never vaulted their credit rating.  Indeed, they've paraded it, abused it, and trashed it like to the 2-bit harlots they are (took lessons from the US strumpets in Congress).

Tue, 11/22/2011 - 21:49 | 1905019 infinity8
infinity8's picture

I can't stop laughing and drinkinggg.

Tue, 11/22/2011 - 21:57 | 1905047 infinity8
infinity8's picture

Serious question, totally O/T - was reading about Merck having to pay $950M to settle their Vioxx shit w/Dept. of "justice". Have wondered before - where the fuck does that $$ go? Googled and gaggled around DOJ website awhile and couldn't come up w/a clear answer. That shit needs to go in the kitty to help fix things but, . . .

Tue, 11/22/2011 - 22:52 | 1905296 knukles
knukles's picture

US Treasury.
Nary a penny to the folks harmed, damaged, hurt, injured, fooled, robbed, beaten, stolen or been had.
Nope, straight to the General Fund for the Politicians to apply for the Good of the Free World or a crony's pocket.
In short, it disappears into the Leviathian.

Tue, 11/22/2011 - 22:57 | 1905322 infinity8
infinity8's picture

Super fucking duper!! That's what I figured but, where's the accounting for this slush fund? If the wrist-slaps get paid, we shouldn't be in such a shitty position, imho.

Tue, 11/22/2011 - 23:31 | 1905425 UP Forester
UP Forester's picture

Hey, hookers and blow and porn sites ain't cheap, ya know....

Wed, 11/23/2011 - 00:15 | 1905568 WonderDawg
WonderDawg's picture

Plenty of free porn. Leave it to the gubmint to figure out a way to spend money on porn.

Wed, 11/23/2011 - 00:55 | 1905667 catacl1sm
catacl1sm's picture

The really fucked up shit costs money.

Wed, 11/23/2011 - 00:24 | 1905596 Dapper Dan
Dapper Dan's picture

Another cof of cuppie for my friends!

Tue, 11/22/2011 - 21:50 | 1905024 surf0766
surf0766's picture

If they float a rumor at night and no one hears it, is it still a rumor?  It's not 3 PM

Tue, 11/22/2011 - 21:58 | 1905051 carbonmutant
carbonmutant's picture

Futures don't like the news...

Tue, 11/22/2011 - 22:05 | 1905085 Mike2756
Mike2756's picture

Depends on the source.

Tue, 11/22/2011 - 22:31 | 1905187 carbonmutant
carbonmutant's picture

Tue, 11/22/2011 - 21:59 | 1905056 Georgesblog
Georgesblog's picture

Liquidity getting a little tight? It seems that nobody wants to catch a bad hand on this deal. It looks like the bondholders are the patsies in this poker game.

Tue, 11/22/2011 - 22:00 | 1905058 merick
merick's picture

Is it just me or does the amount kind of tie off with the amount the IMF big pea shooter came up with earlier today?

Tue, 11/22/2011 - 22:01 | 1905060 max2205
max2205's picture

Lions eat their young

Tue, 11/22/2011 - 22:02 | 1905064 infinity8
infinity8's picture

Future's not looking so bright. . . gonna go make a pumpkin pie.

Tue, 11/22/2011 - 22:03 | 1905078 Lord Welligton
Lord Welligton's picture

Anglo Irish Bank ........... meet ....... Belgium.

When can a State not afford to bail out a bank?

When the bank is bigger than the State.

Welcome to hell Belgium.

Tue, 11/22/2011 - 22:11 | 1905107 disabledvet
disabledvet's picture

and France and Switzerland and Italy and Spain and Germany (maybe) and Ireland and England and Austria...did i miss anyone? At least on this one the USA can claim "exception to the rule."

Tue, 11/22/2011 - 22:32 | 1905191 M.B. Drapier
M.B. Drapier's picture

Except that the European Commission didn't spend too much time worrying whether Ireland could afford to bail out its banks...

Wed, 11/23/2011 - 00:14 | 1905567 Piranhanoia
Piranhanoia's picture

Or when the government doesn't exist?  I would imagine we will get the announcement of a well known squid taking over the government any day now.

Tue, 11/22/2011 - 22:09 | 1905080 earleflorida
earleflorida's picture

*Basel's I - II - **III [Cmte]

BIS [bilderberg] = a) IMF__b) WB  {yesterdays press release}

thankyou tyler

Tue, 11/22/2011 - 22:20 | 1905139 Rogier
Rogier's picture

This is very funny indeed.

Tue, 11/22/2011 - 22:20 | 1905141 disabledvet
disabledvet's picture

I really was fascinated by ZH's earlier article on "non-sterilized monetary actions" coming from the ECB. Pardon me for being my usual ignorant self but when I hear the term "non-sterilized" relative to a Central Bank that says to me "the debts still on the books and can become losses." Correct if i'm incorrect on that one. If this is true then "the value and nature of the currency is absolutely critical" given such activities since in theory..."if the currency collapsed it could blow up the Central Bank itself." In other words "does Dexia represent a direct threat to the ECB itself?" Do we know? Does it matter? There's so much hidden debt on so many banks' balance sheets within Europe (Ireland comes to mind insofar as "suprises" on that one) how can any country in Europe claim they are "living within the deficit rules"? From what i've heard the German "landesbanks" are the worst. But how do we even know? The answer of course is we don't...but we will find out...and "at the worst possible time" as well. The United States has been through dozens of these "things" ....but because our financial system resided in the same place it was never truly a "surprise" that threatened the existence of the state itself. amazingly that was true even in "the 2008 variant"...a financial collapse which corresponded with a war! that's why i look at Europe and it seems so obvious. the banks own the states...and now they're going to take the states down with them if this..."thing" isn't done right.

Tue, 11/22/2011 - 22:24 | 1905155 chump666
chump666's picture

AUD just got beaten to a pulp.  Somthing is up, risk aversion is kicking in hard.  DEXIA freaking out the market.  The ECB supported EUR is going down

Tue, 11/22/2011 - 22:30 | 1905180 Caviar Emptor
Caviar Emptor's picture

Second banking crisis in 3 years happening before our eyes: Dexia, Commerzbank, Jeffries...tip of a very big berg

Tue, 11/22/2011 - 22:44 | 1905254 chump666
chump666's picture

Yes!  And they weren't re-capped after 2008, same with Germany's banks.  Merkel must be losing her brain over this...EZ bank contagion + sovereign debt crisis.  This is so bad, worst than the US bank meltdown

Tue, 11/22/2011 - 22:54 | 1905307 knukles
knukles's picture

MF Global
Don't forget the theft!

Tue, 11/22/2011 - 22:29 | 1905177 chump666
chump666's picture

...and mad USD buying. 

Tue, 11/22/2011 - 22:34 | 1905200 disabledvet
disabledvet's picture

but rather than commodities crashing as happened in 2008 those same commodities go UP in price! if that's sustained then that US dollar could rise SUBSTANTIALLY!

Tue, 11/22/2011 - 22:37 | 1905215 ReactionToClose...
ReactionToClosedMinds's picture

Dexia .... is thy name Creditanstaldt in another time, era and set of circumstances??   I hope not ...... and so should all of us ...

good work ZH ....

Tue, 11/22/2011 - 22:41 | 1905235 surf0766
surf0766's picture

Is that the bank that failed in 1932 that caused the real depression to set in? I was searching for that name.

Tue, 11/22/2011 - 23:11 | 1905312 ReactionToClose...
ReactionToClosedMinds's picture

history does not repeat but it can rhyme ...

Very few are aware that the dynamics surrounding Creditanstaldt is what led to Great Depression .... the EU mess (combined with the fact that, just like 1929 equity market crash, was precipitated by USA malfunctions destabilizing severely the western order of finance/capital markets)  ... sure is the kind of context a broad bank system collapse just might manifest itself within.    Andrew Mellon, Rbt Rubin, Alexander Hamilton, Douglas Dillon, Robert Brady, et al ...would be proverbial Dutch boys with their fingers in the dike when the behavioral psychology underpinnning capital markets make their breach into pure panic.  The modern era. maybe very unfortunately in a supremely ironic way, has done itself a disservice in that few humans will have been used to seeing such a thing - a true panic - when it starts unlike pre-World War I times,  And the Federal Reserve, AS CONSTRUCTED, might be shown to be either the Sorcerer's Apprentice or the man behind the curtain in the Wizard of Oz ... I hope the latter , if it comes to that, personally.


Lock & load brother ..... early 2012 may hold the key if something wicked this way comes ..... 

Tue, 11/22/2011 - 22:56 | 1905316 knukles
knukles's picture


Altho cause may not be effect, but was the very center of the malestrom, the poster boy.

Tue, 11/22/2011 - 23:05 | 1905354 ReactionToClose...
ReactionToClosedMinds's picture

agree as to 'cause/effect' discussion ... fluidity/dynamics et al have their way own way of releasing energy or letting off steam whne it starts ... cause/effect become intertwined maliciously .....

hope this does not come to pass .... won't be good for anybody really .... too many assumptions end up getting blown away one can act as there is no confidence to do so

Wed, 11/23/2011 - 02:22 | 1905812 Coldfire
Coldfire's picture

Talk about history rhyming. The ultimate successor to Creditanstalt, HVB, was taken over by Unicredit.

The Creditanstalt (sometimes Credit-Anstalt[1] or CA) was an Austrian bank. The Creditanstalt was based in Vienna, founded in 1855 as K. k. priv. Österreichische Credit-Anstalt für Handel und Gewerbe (approximately translated as: Imperial royal privileged Austrian Credit-Institute for Commerce and Industry) by the Rothschild family. Being very successful, it became the largest bank of Austria-Hungary. It declared bankruptcy on May 11, 1931. It has been said that this event resulted in a global financial crisis and ultimately the bank failures of the Great Depression.[2]:2–3 [3] The bank was ultimately rescued by the Oesterreichische Nationalbank and the Rothschilds and merged with the Wiener Bankverein, thus changing its name to Creditanstalt-Bankverein.

Following the Anschluss between Nazi Germany and Austria, Creditanstalt-Bankverein was targeted for both financial and racial reasons. In early March 1938 Nazis threw the bank's Jewish president, Franz Rothenberg, from a moving vehicle (an incident he survived) and later demanded compensation from the imprisoned Baron Louis Rothschild for losses suffered by the Austrian state when the bank collapsed. Creditanstalt-Bankverein was later taken over by Deutsche Bank.[4]

After World War II, the bank was nationalised and became mainly a commercial bank and highly involved in Austria's economy, holding stakes in important Austrian companies such as Wienerberger, Steyr-Daimler-Puch, Lenzing AG and Semperit.

In 1997, the state-owned shares were sold to Bank Austria (BA), resulting in a crisis in the ruling coalition between SPÖ and ÖVP, since Creditanstalt had to be considered part of the conservative sphere of influence, whereas BA with its roots as Vienna's Central Savings Bank (Zentralsparkasse) was considered standing politically left. The merger was not finished until 2002, with the creation of Bank Austria Creditanstalt, which became part of the German HypoVereinsbank (HVB) group. HVB has now been taken over by UniCredit.

Tue, 11/22/2011 - 22:40 | 1905228 chump666
chump666's picture

And China is F*cking up in real time,

*China Nov HSBC flash PMI estimate came in at a 32-mth low to 48 vs 51 final reading in Oct.

This is it now.  Meltdown

Tue, 11/22/2011 - 22:44 | 1905253 surf0766
surf0766's picture

Nice timing

Tue, 11/22/2011 - 22:47 | 1905261 chump666
chump666's picture

Wall Street will sink to hell on this + DEXIA + france + whole EZ (not just the EU now) meltdown.  Wow!

Tue, 11/22/2011 - 22:55 | 1905315 surf0766
surf0766's picture

Durable Goods better than expected +100. /s

Tue, 11/22/2011 - 22:42 | 1905241 alien-IQ
alien-IQ's picture

if the EUR/USD breaks below 1.3425 it's gonna be horrifying...or glorious...depends which side of the trade you're on:-)

it could quickly find it's way to the 1.31 neighborhood.

Tue, 11/22/2011 - 22:56 | 1905319 HD
HD's picture

The fact that the S&P is still holding just below 1200 is joke. I will enjoy every moment as it burns down...

Tue, 11/22/2011 - 23:05 | 1905352 electricgorilla
electricgorilla's picture

Where's John Law when you need him


Tue, 11/22/2011 - 23:19 | 1905390 AC_Doctor
AC_Doctor's picture

Bring on the S&P bank downgrades niggez...

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