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With Dexia Done, Here Is Who Is Next: A Visual Euro Bank Liquidity Vs Funding Exposure Matrix

Tyler Durden's picture


Now that the FT is reporting that as part of the ongoing emergency talks to rescue an expiring Dexia, one of the proposals is a spin off of a Dexia "bad bank" - something which worked for UBS, which is still a partial protectorate of Switzerland, but will most certainly not work for governmentless Belgium, the question is "who is next" Luckily, we have the following handy summary, courtesy of Reuters' Peter Thal Larsen who has pulled a chart from an Espirito Santo report, showing a 2-D matrix of liquidity (i.e. liquid assets as a % of wholesale funding assets), versus reliance on wholesale funding - the one component in European interbank markets which is now completely dead. Needless to say red is bad. And if one thinks that Dexia is about to file, then it may be last rites time for Soc Gen, BNP, Raiffeisen, and DnB Nor.


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Mon, 10/03/2011 - 12:48 | 1733554 thunderchief
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Mon, 10/03/2011 - 12:49 | 1733561 speconomist
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Mon, 10/03/2011 - 13:20 | 1733696 thunderchief
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This Euro crisis thing may work all the way through election season.  What a deal for the USA!

Mon, 10/03/2011 - 15:08 | 1734085 falak pema
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not good for sarkozy

Mon, 10/03/2011 - 12:50 | 1733559 speconomist
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Dexia to spin off a worse bank? The bad one already exists.

Mon, 10/03/2011 - 14:52 | 1734035 True.North
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Agreed, I don't like that phrasing. It implies there is a good bank.

Mon, 10/03/2011 - 12:50 | 1733566 slewie the pi-rat
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call the priest, tyler!

Mon, 10/03/2011 - 12:54 | 1733587 slewie the pi-rat
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repent from counterparty risk now, BiCheZ!

let the zombies D-I-E!!!

Mon, 10/03/2011 - 13:26 | 1733721 DoChenRollingBearing
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Good point slewie!  Verte pour toi!

Get some cash OUT of the banks!  

Gold > FRNs > electrons in the bank.

Mon, 10/03/2011 - 13:30 | 1733739 Spirit Of Truth
Mon, 10/03/2011 - 13:30 | 1733740 slewie the pi-rat
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cash, gold, silver, food, supplies, roller bearings...all good!

Mon, 10/03/2011 - 13:50 | 1733825 DoChenRollingBearing
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Ha ha!  My kind of comment!

Mon, 10/03/2011 - 14:47 | 1734022 Eally Ucked
Eally Ucked's picture

Just imagine that they can allow Greece to go down and recapitalize banks let's say to the tune of 75%. Still much better than US. Then the next domino falls and they do the same, and so on, still better than US. Then you take in to consideration monthly trade balance for both Europe and US - who is in better position you think?

Mon, 10/03/2011 - 12:53 | 1733573 GeneMarchbanks
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BNP/SocGen vs BAC/MS who's worse off, Frenchie or Yankee?

Mon, 10/03/2011 - 13:27 | 1733726 DoChenRollingBearing
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Hmm...  In six months we will probably know!

Mon, 10/03/2011 - 13:31 | 1733745 Mauibrad
Mauibrad's picture

Frenchie.  Cool chart, Tyler.

Mon, 10/03/2011 - 15:54 | 1734268 falak pema
falak pema's picture

marie antoinette or bonnie parker...

Mon, 10/03/2011 - 12:54 | 1733586 spiral_eyes
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everything will be okay if we print a lot more money bitchez!

worked for zimbabwe.

Mon, 10/03/2011 - 12:59 | 1733612 slewie the pi-rat
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bob chapman put it so well, yest:

  In the recent G-7 meeting in Marseilles, France, the members couldn’t identify the problems, much less analysis and solutions. The only cogent comment of value from their point of view was the banks would be bailed out no matter what the cost. So what else is new? We noticed there was little or no reporting on the conference, probably because they accomplished nothing. Of course, they were all for economic growth, strong financial markets and accommodative monetary policy.  This lack of success was in part the reason of the plunge in the stock markets that followed. That is the state of world leadership.

[paste from International Forecaster October 2011 (#1) - Gold, Silver, Economy + More]

Mon, 10/03/2011 - 13:41 | 1733783 zorba THE GREEK
zorba THE GREEK's picture

Thanks for the link SLEWIE. Bob does put it in prospective.

Mon, 10/03/2011 - 13:01 | 1733619 Nozza
Nozza's picture

These people round here wear beaten down eyes
Sunk in smoke dried faces they're so resigned to what their fate is

That was Dexia's wasn't it? Back in the 80's



Mon, 10/03/2011 - 13:01 | 1733620 kito
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Well well, we may see all the european biggies go down BEFORE the fall of greece

Mon, 10/03/2011 - 13:44 | 1733794 zorba THE GREEK
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Greece has fought many battles in the last 3000 years. This one's not gone to beat them.

Mon, 10/03/2011 - 13:01 | 1733622 s2man
s2man's picture

Should I go long Banco Santander?

Mon, 10/03/2011 - 13:17 | 1733677 swissaustrian
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No, they´ll experience spanish contagion. Once the other spanish banks got bailed out, yes.

Mon, 10/03/2011 - 13:30 | 1733738 DoChenRollingBearing
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I too have doubts about that matrix / diagram above.  Contagion...  2011's new buzzword?

Or would that be Jubilee...?

Mon, 10/03/2011 - 13:43 | 1733787 jomama
jomama's picture

no-one expects the spanish contagion!

Mon, 10/03/2011 - 14:21 | 1733950 smiler03
smiler03's picture

I've started a one man run on Santander

Mon, 10/03/2011 - 13:14 | 1733666 john39
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have to take anything from Alex Jones with a bag of salt...  afterall, he was the guy who claimed that Muslims control hollywood...   i really wonder who would put him up to making such a dumb statement...

Mon, 10/03/2011 - 17:12 | 1734638 LongOfTooth
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The Jews?


Mon, 10/03/2011 - 19:10 | 1734992 CharlieSDT
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That's a pretty idiotic article.  A tax on financial transactions would hur the middle class?  Retarded assertion.  It might slow down the HFT a bit though.

Mon, 10/03/2011 - 13:08 | 1733642 Cone of Uncertainty
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BAC soon to take out the $2.53 all time low, probably in a week or so, once the bank run is completed.

Mon, 10/03/2011 - 13:08 | 1733643 PulauHantu29
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"First Rats off the Ship swim the Farthest."

I think it was Gandhi said that.

Mon, 10/03/2011 - 13:32 | 1733749 DoChenRollingBearing
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"First bearings off the ship roll the farthest."


(asssuming ship is still in port, LOL...)

Mon, 10/03/2011 - 13:09 | 1733646 achmachat
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What do you mean with "Dexia is done"?

I just paid a whole bunch of bills using my Dexia account.

Mon, 10/03/2011 - 13:11 | 1733650 Cone of Uncertainty
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Shit bitch, wait until you have to pay the piper.

Mon, 10/03/2011 - 13:40 | 1733780 Panafrican Funk...
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There's a crapton of deposits in BAC too, doesn't mean it's not going under.

Mon, 10/03/2011 - 13:13 | 1733653 doomz78
doomz78's picture

is there a short selling  ban on the euro and usa banks right now? 

Mon, 10/03/2011 - 13:11 | 1733654 monopoly
monopoly's picture

Gold day high but miners struggling. FAZ looking good. 0

Mon, 10/03/2011 - 13:19 | 1733686 swissaustrian
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The gold/stocks correlation turned negative today... Seems like the gold market has been cleared of all the short term specs and now the strong hands rule again...

Mon, 10/03/2011 - 13:33 | 1733754 DoChenRollingBearing
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grips harder...

Mon, 10/03/2011 - 13:33 | 1733759 Clint Liquor
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Silver has decoupled from the industrial metals to move with Gold. Good sign for the holders of sludge.

Mon, 10/03/2011 - 13:15 | 1733670 monopoly
monopoly's picture

And look at the high on bonds. Soon will be paying US to keep our money.

Mon, 10/03/2011 - 13:17 | 1733678 comrade rally monkey
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CLF just had a 1mm shares print thru 40 bucks---- 9 dollars lower than bid!!
call nanex!

Mon, 10/03/2011 - 13:50 | 1733824 Panafrican Funk...
Panafrican Funktron Robot's picture

Definitely feeling sorry for those institutional bag holders on this one.  If one ever needs any proof that fundamentals are completely broken, look no farther than CLF.  Now comp it to CRM.  Or AMZN.  Lollers abound.  

Mon, 10/03/2011 - 13:21 | 1733704 Peter K
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Bring out your dead! The Chairsatan is pulling the lines as we speak.

Mon, 10/03/2011 - 13:22 | 1733707 DoChenRollingBearing
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Excellent article Tyler Durden!  Please continue to keep us informed about Europe.  Very important to me.  Also, I agree with many that whither Europe goes, we will soon follow here.


Mon, 10/03/2011 - 13:26 | 1733722 slewie the pi-rat
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i'm catching up on my reading today, nomo gambling till tomorrow! 

we're having a light sprinking of CE 137 ~~~[:>(   ...i mean rain...   ~~~{:>)

john mauldin is in ireland; he published an interview with...himself!  but i liked this:  But first, in the interest of full disclosure, I want to briefly note to my readers that I have joined the board of Galectin Therapeutics (Ticker: GALT), a small biotech company with unique potential technologies. I get asked from time to time to join a biotech corporate board, but have so far not done so, and the exception is now GALT. (end paste)

then, he does a commercial for them!  then, he gets back to showing us how a Central Planner thinks and sees things! 

Mon, 10/03/2011 - 13:42 | 1733765 JR
JR's picture

The black hole approaches. Every Monday's report on more extensive financial risk only multiplies the size of the disaster ahead.

Mon, 10/03/2011 - 13:48 | 1733815 DoChenRollingBearing
DoChenRollingBearing's picture

Well put JR.  Green.

Would you happen to be the same JR as the one at my fave gold site?

Mon, 10/03/2011 - 20:19 | 1735237 JR
JR's picture

Thanks, RollingBear… but I’m a lone stone.  Interesting to know there’s another, however….

Mon, 10/03/2011 - 13:35 | 1733766 fredquimby
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Did California pay off those IOU's yet? 

Mon, 10/03/2011 - 13:45 | 1733802 americanspirit
americanspirit's picture

As Slim Pickins said while riding the bomb - YAAAAHHHHOOOOO!

Mon, 10/03/2011 - 13:53 | 1733834 AGORACOM
AGORACOM's picture





  • Surprised at Deutsche Bank hugging the line
  • France is F$#%!@
  • Greek banks don't even warrant a pin

George ... The Greek ... From Canada


Mon, 10/03/2011 - 13:58 | 1733861 slewie the pi-rat
slewie the pi-rat's picture

i liked the little footnoe about the liquidity coverage ratio @ Nordea being "outa the box" too "particularly high" for the scale of the boxes!

here's Nordea in today's news:  Romanian Central Bank Said to Sell Euros to Prop Currency - Businessweek

and in financing "lending in denmark" : UPDATE 1-Nordea lifts Danish lending rates by up to 0.5 pct pt | Reuters

here we have these banksters explaining (Paste):


Increased funding costs are a reflection of the widespread turmoil on financial markets and worries that more small Danish banks could become insolvent, which is a cost borne by the whole banking sector.

International funding markets froze up for all but the handful of biggest Danish banks and credit default swaps on Danish government debt widened after the collapse in June of small institution Fjordbank Mors.

Mon, 10/03/2011 - 14:26 | 1733968 Volaille de Bresse
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"C'est la lutte finale..."


Next : we'll pogrom the banksters and traders!

Mon, 10/03/2011 - 15:25 | 1734151 Buyemall
Buyemall's picture

santander is not looking bad at all

Mon, 10/03/2011 - 16:58 | 1734576 Kuri
Kuri's picture

Spanish gov will need a huuuuge amount of cash soon or later (remember the rotten Cajas?). Santander will plundge with the rest.

Mon, 10/03/2011 - 16:59 | 1734577 Kuri
Kuri's picture

Spanish gov will need a huuuuge amount of cash soon or later (remember the rotten Cajas?). Santander will plundge with the rest.

Mon, 10/03/2011 - 16:59 | 1734578 Kuri
Kuri's picture

Spanish gov will need a huuuuge amount of cash soon or later (remember the rotten Cajas?). Santander will plundge with the rest.

Mon, 10/03/2011 - 18:26 | 1734868 canuck
canuck's picture

OK all you fellow thespians out there, my first post:


The rumour about Germany printing Marks concentrated my mind today. Even if it's not true, I doubt not that it would be a good insurance policy for the Germans and any others wanting to jump on that bandwagon going forward. Chacun sa merde - insert arbitrary expletive - !


Mon, 10/03/2011 - 19:09 | 1734989 zorba THE GREEK
zorba THE GREEK's picture

Germany is printing D-Marks and has told printers to speed it up.

When you think about it, exiting EZ is the only rational move for Germany. If they stay, they will have to

bail out all the PIIGS and all the banks in Europe eventually. It would be impossible for them to do it.

If they exit, they could shore up their banks and brace for the crash. Without Germany, there would be much less resistance

for the ECB to monetize and bail out PIIGS and banks. It's the closest thing to a win/win for Europe.


Mon, 10/03/2011 - 19:35 | 1735090 Buck Johnson
Buck Johnson's picture

Talk about the blackswan event.  This is an election year (or start), and things are coming lose.  All sides are afraid of doing anything that will endanger their party, so their is no way that Obama can go to congress (especially since they don't like him) and ask for 750 billion dollars let alone as a bailout to the EU countries and banks.

Wed, 10/12/2011 - 14:36 | 1766622 karmete
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