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Dexia Common Stock Reopens For Trading, Collapses

Submitted by Tyler Durden on 10/10/2011 09:01 -0400

As expected from any company that gets Bear Stearns'd (as we had predicted regarding said Bear Stearnsing), even as the CDS is now rapidly on its way to pari status with Belgium (and potentially could trade inside due to the implicit French support of the now insolvent bank), the stock, after two days of halts, has reopened with a "slightly bearish" bias, down 30% and plunging. Considering that there is no more common equity value left in the name, the stock will rapidly become an HFT whipping boy, and a penny-stock darling. For reference see FNM/FRE after their respectively nationalization (which sent the market soaring when it was announced back in August 2008... briefly).

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Mon, 10/10/2011 - 09:03 | 1757027 Money 4 Nothing

Good thing they "fixed" the problem! sheeew!

Mon, 10/10/2011 - 09:07 | 1757040 Crisismode

NO RECESSION FOR U.S. AS FORECASTS IMPROVE

http://www.bloomberg.com/news/2011-10-09/no-recession-for-u-s-as-economi...

Anybody know how to get some of that great stuff Bloomie is smoking?

Mon, 10/10/2011 - 09:25 | 1757050 BlackholeDivestment

...just intercept the White House mail from NIH. Lol. http://www.youtube.com/watch?v=GDHVi3h6ZXw&feature=relmfu

Mon, 10/10/2011 - 09:11 | 1757053 flacon

"Despite transitory issues with Dexia, it's stock remains at a robust 70% value."

Mon, 10/10/2011 - 09:17 | 1757063 SheepDog-One

"NO U.S. recession forecast, Directly to Depression Hell instead" There, fixed it.

Mon, 10/10/2011 - 09:19 | 1757078 mlbs

In other news the centralization of debt, and destruction of middle-class wealth is still right on track.

Mon, 10/10/2011 - 09:53 | 1757205 Don Birnam

Of course - all fixed. Why else allow it to trade on the open market again, monsieur ?

Alas, even Dexy's sold out in the end, "rehabilitating" the image and going Ivy League...

http://www.dexys.org/sitebuildercontent/sitebuilderpictures/.pond/dont_s...

Mon, 10/10/2011 - 09:04 | 1757031 Esso

Creamer sez: BUY, BUY, BUY!

Mon, 10/10/2011 - 09:13 | 1757057 Problem Is

Clown Contrarian Indicator...

Mon, 10/10/2011 - 09:07 | 1757034 LetThemEatRand

"slightly bearish bias, down 30% and plunging"

Someone at CNBC just made a mental note to add this one to their favorite phrases including, "less bad," and "gold is in a bubble." Of course they would have added the word "only" between "bias" and "down," and the "plunging" reference would have been removed. Perhaps also an observation that it is less bad than was predicted by a top analyst at Goldman.

Mon, 10/10/2011 - 09:13 | 1757058 knukles

Plunging must remain in effect as it describes Amanda Drury's clevage/blouse/sweater arrangements.
I like to rub the lump in my prostse watching her with the sound off.
I like Jarts

Mon, 10/10/2011 - 09:20 | 1757083 LetThemEatRand

Kernen: "This just out. Dexia has reopened with a slightly bearish bias. Taking a closer look, it appears the news is not as bad as predicted by at least one Goldman analyst yesterday. It's down only 30%. So that helps explain why futures are up strongly this morning. Amanda, that's a lovely sweater. I understand you have the former CEO of GE up next to talk about the gold bubble...."

Mon, 10/10/2011 - 09:21 | 1757085 PhD

Absolutely!

According to the best models money can buy a 90% reduction in the stock price was to be expected. However, as the stock price currently stands on 0,61 rather than the expected 0,085, a 641% increase from the lows as predicted by models, this proves that the actions by government is working which explains the strong bullish sentiment in the market.

It’s all good. Buy while you still can, it’s all fixed now!

Mon, 10/10/2011 - 09:06 | 1757035 CashCowEquity

dookia stock

Mon, 10/10/2011 - 09:14 | 1757062 knukles

Dropped quick as Snooki's undies.

Mon, 10/10/2011 - 10:10 | 1757271 Jay Gould Esq.

Nonsequitur, Knuckles.

Never wears 'em.

Mon, 10/10/2011 - 09:10 | 1757037 Money 4 Nothing

Will it turn into a Buy Buy like Netflix?

Mon, 10/10/2011 - 09:06 | 1757038 Dick Darlington

Transitory soft patch, investors should shrug it off as meaningless.

Mon, 10/10/2011 - 09:07 | 1757042 SheepDog-One

AW thats a shame.

Mon, 10/10/2011 - 09:08 | 1757043 BlackholeDivestment

...and Im gone, and I'm older than movies, like a dead man walking. http://www.youtube.com/watch?v=n22ImOPXOnw

Mon, 10/10/2011 - 09:08 | 1757044 Josh Randall

Mulligan

Mon, 10/10/2011 - 09:09 | 1757047 fuu

I believe Robo would classify this as a generational bottom.

Mon, 10/10/2011 - 09:09 | 1757048 fwchiro

Buy the dip? /sarc

Mon, 10/10/2011 - 09:16 | 1757068 Cassandra Syndrome

It does look rather oversold.

Mon, 10/10/2011 - 09:18 | 1757077 SheepDog-One

Funny how nothing is ever 'overbought' though.

Mon, 10/10/2011 - 09:53 | 1757204 BorisTheBlade

Buy with two hands, this dead cat is supposed to bounce unless it breaks the floor on its way down.

Mon, 10/10/2011 - 09:10 | 1757049 Mike2756

Who gets Lehman'd?

Mon, 10/10/2011 - 09:10 | 1757051 spankfish

There is a problem with the banks? Fuck, I must have pulled a Rip Van Winkle. Somebody tell me I'm dreaming!

Mon, 10/10/2011 - 09:21 | 1757088 SheepDog-One

They can yap all weekend about their infusions and plans, but when it comes to market open, theyre back to being on their own. 'Baffle em with bullshit' economic model only goes so far.

Mon, 10/10/2011 - 09:11 | 1757054 Problem Is

+5... Classic:

"HFT whipping boy..."

Mon, 10/10/2011 - 09:16 | 1757069 ZeroPoint

Trade it like AIG. Wait for it to drop to 2 euros, you buy 50 shares. Watch the EU inject capital, sell it @ 5. Take your spouse out for a nice steak dinner. Profit!!!!

Mon, 10/10/2011 - 09:16 | 1757071 SheepDog-One

Tyler summed it up in an earlier article- Eurozone now has everyone totaly baffled with bullshit.

But it wont last long.

Mon, 10/10/2011 - 09:18 | 1757073 virgilcaine

We shall be red by 10 am ac ross the board.

Mon, 10/10/2011 - 09:24 | 1757095 oogs66

without merkel and sarkozy i wouldn't get the chance to cover shorts and reset them higher on the announcement and cover on the lack of any details :)

Mon, 10/10/2011 - 09:18 | 1757075 Miss Expectations

I wanted to put this somewhere. Here is as good as any. 9 seconds of "you get nothing"

http://www.youtube.com/watch?v=M5QGkOGZubQ&NR=1

Mon, 10/10/2011 - 09:19 | 1757080 Dick Darlington

Austrian "jewel" Erste Group Bank Ag (EBS AV on bbg) getting hammered today after announcing losses in it's Eastern Europe operations and markdowns of it's PIIGS holdings.

Mon, 10/10/2011 - 09:23 | 1757089 johngoes

Reuters - Dexia agrees to rescue deal

I never thought of being nationalized as being rescued for some reason. It's as if the financial media is desparate to put a positive spin on this to contain/limit contaigion.

Does this mean any CDS plays with Dexia have to be unwound? Or does the "rescue" prevent calling CDS bets game-on?

Is there U.S. (TBTF) bank exposure to Dexia? (Will SKF jump?)

Mon, 10/10/2011 - 09:31 | 1757120 WonderDawg

Dexia agrees to rescue deal... Something just sounds wrong with that. Like a drowning man who refuses to grab the rope unless he's guaranteed to receive a steak dinner when he reaches the boat.

Mon, 10/10/2011 - 09:25 | 1757098 abugarance

Any idea who the the hell are the bitchez bidding the Neuro 2% up??

Mon, 10/10/2011 - 09:26 | 1757102 YesWeKahn

Tyler, that was a good one. Bear Stearns'd! LOL

This term will fit to the new American heritage dictionary.

What Greece will look like when it gets AIG'd?

Mon, 10/10/2011 - 09:27 | 1757108 eddiebe

Print,baby,print.

Mon, 10/10/2011 - 09:32 | 1757125 maddogs

So what happens to the other E.U. banks where Credit Default Swaps are to be considered valued at? In regards to this Bank I mean. How much of the CDS market is hinged here? How much inter-related CDSs in terms of Euro's are actually disclosed for this Bank?

Mon, 10/10/2011 - 09:34 | 1757135 nmewn

Whaaa?!?...equity is the first to get monkey hammered in an insolvent company?...who knew? ;-)

Mon, 10/10/2011 - 09:37 | 1757141 RubberMartyr

It's up 10% in the meantime.

Mon, 10/10/2011 - 09:51 | 1757199 ZeroPoint

The stock is now up 6 cents from yesterday's close. I also find it hilarious that the price is hovering around .85 cents, and yet the Ask is 5.52.

Mon, 10/10/2011 - 10:10 | 1757270 ivars

Based on this "analysis" : Greece debt and time squeeze ratio I could not come with any reason fro the squeeze as the intuitive one that Greece has used national debt money AFTER the crisis to accelerate increase in Athens General stock prices. They were way ahead of FED in creating "wealth effect".

Greeks have always been ingenious people with lot of ideas. Now, the consequence of doing it so fast and on such a scale using debt has accelerated timeline for Greece as compared to the USA and most other countries 3 times- -that is , their stock market was already in "recovery" in October 2009 while the rest of the Europe and USA reached that level with their SLOW stimulus in July 2011.

See here comparison between Greece and USA stock markets where the abnormally speedy recovery of Greece's indexes is obvious:

Greece stock markets recovered with amazing speed

To cut it short, there are not many European countries in dire shape, there is JUST GREECE and then others which can be graduated between themselves.

So the prediction: Given the facts that:

1) EUR/USD rate will grow till the end of October /middle November as predicted here to 1,40: EURUSD, then drop back to 1,32 which is the level with Greece already priced in; (BTW, on the chart the big letters should read EUR/USD, not USD/EUR- a typo.

2) There are new companies/countries in need for artificial life support ( Dexia comes first);

3) Merkel and Sarkozy have a plan TODAY for Europe debt situation but details will be worked out by the end of OCTOBER;

Greece will default, leave Eurozone and return to drachma (GRD) during H1 of November 2011.

Could not figure out drachma to EUR ratio easily at this moment, but I guess it will be around 1000GRD/EUR. Quite soon, as EUR problems expand even without Greece, in March 2012 exchange rate will be 700 GRD/EUR, then in July 2012, around 840 GRD/EUR, than again down to 620-700 GRD/EUR. From then on, most likely, GRD and EUR rate will be relatively stable untill 2013.

Mon, 10/10/2011 - 10:28 | 1757351 FranSix

Help me out here. Greece hasn't officially defaulted and they're nationalizing Dexia before hand?

Dexia Common Stock Reopens For Trading, Collapses

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