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Dexia Nationalization Imminent?

Tyler Durden's picture


Back on Friday, when we closed out the Dexia long sub CDS trade, we said "We expect a partial or complete nationalization to be announced imminently, which in addition to all other side effects, would lead in a Bear Stearnsing of all accrued profit." Sure enough, here is the Sunday Times on the very topic... And while a nationalization of Dexia, which now appears a matter of hours if not days, will be bad for anyone still long the bank's CDS (it should trade down to pari with Belgium tomorrow, just as Bear CDS trades in line with JPM), it is pretty horrifying for SovX and Eurocore CDS in general, now that a bank which holds assets amounting to 180% of Belgium's GDP, is about to be nationalized by the very same country. Anyone who is still not long Belgium CDS, this is probably your last chance to get on that particular train. Of course, if one is waiting patiently in line at a Dexia ATM machine, one is forgiven.

Source: Sunday Times.


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Sun, 10/02/2011 - 19:11 | 1731628 TradingJoe
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Hah, by 9:30 Monday morning it'll all be good :()))))))
We all know how this is going to end...?! JPM got WM and BS, I wonder who's gonna get what's left and still valuable of Dexia?!?!?
And so on with the rest of the "stress tested" UTTERLY BROKE "financial institutions", :()))))!

Sun, 10/02/2011 - 20:17 | 1731820 gangland
gangland's picture

excerpting suskind's new book here until i cant

Mon, 10/03/2011 - 08:02 | 1732573 MisterMousePotato
MisterMousePotato's picture

Isn't Belgium currently without a government now for about a year? Just who, then, is supposed to 'nationalize' Dexia?

Sun, 10/02/2011 - 19:04 | 1731630 Racer
Racer's picture

Futures soar on this amazingly.. bad or is it good .... news ... who cares... soar futures, it is the middle of the night and that's what always happens, so GO....BUY  BUY BUY

edit: wow... wish I had bought the futures on that comment instead of commenting LOL! But get involved in trading this farce of a 'market' ... no... what's the point, it is all a big CON

Sun, 10/02/2011 - 19:19 | 1731667 Cliff Claven Cheers
Cliff Claven Cheers's picture

The EUR is trading up as we speak. Must not be that big of deal.

Sun, 10/02/2011 - 19:38 | 1731716 Edward Fiatski
Edward Fiatski's picture

No volume.

Sun, 10/02/2011 - 19:56 | 1731770 CapitalistRock
CapitalistRock's picture

Bank nationalizations imply printed money to keep them solvent, hence assets will tend to rise as fiat currency holders will tend to take it up the ass again.

Sun, 10/02/2011 - 20:32 | 1731852 disabledvet
disabledvet's picture

Yeessssss. That's what Ms. Pillsbury told me after depositing the "cool 240 million."

With those exact words even! Who knew she could use such....VULGARITIES!

(It's very exciting really...

Sun, 10/02/2011 - 19:01 | 1731632 hondamikesd
hondamikesd's picture

My international finance professor asked the class why Belgium was involved in BIS talks, as he didn't know of any largish banks in Belgium. I suggested Dexia, at which point he gave me a quizzical look and stated, "never heard of them".

I feel that that situation will be rectified soon :).

Sun, 10/02/2011 - 20:02 | 1731784 CapitalistRock
CapitalistRock's picture

You did say he is a professor, correct?

Sun, 10/02/2011 - 20:34 | 1731862 hondamikesd
hondamikesd's picture

Yeah, legal prof. Used to do intl. securities law out of HK and London before "retiring" to academia a few years ago. I was somewhat suprised but he gets a small pass for being "back office" 

Sun, 10/02/2011 - 19:05 | 1731637 Edward Fiatski
Edward Fiatski's picture

Ho Ho Ho. I visited a Dexia bank branch when I was passing thru Belgium, Veurne - small town, great architecture. I hope the guy that helped me out there finds decent work for himself post facto.

Sun, 10/02/2011 - 19:06 | 1731644 chump666
chump666's picture

F*cking bearish.  Stocks got like three days of rallies, that's it.  EU/banks/Greece/Turmoil/Credit/liquidity crunch + China crash now happening in real tim = major selling.

 If a European bank is bailed out within the above unfolding FUBAR, liquidation trade will be back on...full force.

Sun, 10/02/2011 - 19:23 | 1731677 Yen Cross
Yen Cross's picture

F...king +1. Chump 666! That euro gap was a gimmee! Keep it ( EFFERVESant) ...    SP/ intended!  You are a good poster!



Sun, 10/02/2011 - 19:44 | 1731741 chump666
chump666's picture

 Thanks.  I gotta eat too y'know!

Thinking 3days of selling (start week) on US/EZ markets, Asia will be down most of the week.  So you should have some nice gap down trades going on.  And that is gap down on major indexes and risk trades (FX - except the AUD hahaha...till the Aussie housing markets implode!)

Sun, 10/02/2011 - 19:06 | 1731646 Fips_OnTheSpot
Fips_OnTheSpot's picture

Yet another "trigger event"?

Sun, 10/02/2011 - 19:08 | 1731648 winter is coming
winter is coming's picture

Winter is Coming

Sun, 10/02/2011 - 19:10 | 1731650 Ahmeexnal
Ahmeexnal's picture


Sun, 10/02/2011 - 19:21 | 1731671 ISEEIT
ISEEIT's picture


My motto.


Fade. Always Fade.........

It's what you do this week.


Sun, 10/02/2011 - 19:12 | 1731655 DoChenRollingBearing
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Sudden Debt, where aRE YOU BUDDY?

Sun, 10/02/2011 - 19:28 | 1731686 Hulk
Hulk's picture

He's in line...

Sun, 10/02/2011 - 19:34 | 1731708 Edward Fiatski
Edward Fiatski's picture


Mon, 10/03/2011 - 02:49 | 1732379 Sudden Debt
Sudden Debt's picture

My company has been taken over and I need to suck up to the new boss so I haven't had that much time to visit ZH these last weeks :)

I do follow up my friend :)




Everybody focusses a bit to much on just Dexia. KBC is in the same kind of shit.

And thus we are ready to lose 4X GDP and more on those 2 banks like predicted months ago.

The government is also still liable for the saving accounts of the citizens for up to 250K per person.

X 7

There's also a massive bank run happening on Dexia because almost everybody knows that they should run from it.


Mon, 10/03/2011 - 07:04 | 1732494 nah
nah's picture

run bitches

Sun, 10/02/2011 - 19:12 | 1731656 TradingJoe
TradingJoe's picture


Sun, 10/02/2011 - 19:12 | 1731657 agrotera
agrotera's picture

Stephen King is HSBC's chief economist twin to his brother Stephen 1 ? famous novilist-- they both have a common job, tell tales of horror except in Stephen 2's case, his horror stories are all sweet smelling garbage packaged as reality. 

Sun, 10/02/2011 - 20:37 | 1731863 disabledvet
disabledvet's picture

trust me "i've had the voice over." it wasn't cool then and now that the facts back me up...actually it's kind of cool now--in a Freddy Kreuger kinda way.

Sun, 10/02/2011 - 19:23 | 1731676 Tsar Pointless
Tsar Pointless's picture

I am shocked at the number of people - otherwise sensible, rational people - who continue to hold the belief that the stock market should always reflect reality.

That's not possible, because reality doesn't even reflect real reality.

For realz, bitchez!

Sun, 10/02/2011 - 22:47 | 1732117 bill1102inf
bill1102inf's picture


Sun, 10/02/2011 - 22:47 | 1732118 bill1102inf
bill1102inf's picture


Sun, 10/02/2011 - 19:23 | 1731678 buzzsaw99
buzzsaw99's picture


Sun, 10/02/2011 - 19:26 | 1731682 r101958
r101958's picture

Time for the usual Monday morning melt up.

Sun, 10/02/2011 - 19:28 | 1731685 lolmao500
lolmao500's picture

Anyone who is still not long Belgium CDS, this is probably your last chance to get on that particular train.


And how do we do that?

Mon, 10/03/2011 - 02:00 | 1732352 Kiwi Pete
Kiwi Pete's picture

i like it when the baby pukes. We've all been there baby!

Sun, 10/02/2011 - 19:32 | 1731696 achmachat
achmachat's picture

if you owe Dexia half a million Euros, and they get nationalized, is that a
- good thing?
- bad thing?
- won't affect me?

Sun, 10/02/2011 - 19:42 | 1731731 Unprepared
Unprepared's picture

 - all of the above

Sun, 10/02/2011 - 19:33 | 1731706 BurningFuld
BurningFuld's picture

Damn. My money was on UBS. But it's not official yet right. So I still have a chance.

Sun, 10/02/2011 - 19:39 | 1731722 rambler6421
rambler6421's picture

Precious Metals Bitchez!

Sun, 10/02/2011 - 19:40 | 1731723 ratso
ratso's picture

Don't be s sure that much if anything of value will be left of Dexia.

Sun, 10/02/2011 - 19:41 | 1731727 tom a taxpayer
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Katie bar the door!

Sun, 10/02/2011 - 19:44 | 1731740 hondamikesd
hondamikesd's picture

O/T but: anybody buy from these guys/know where I can get a similar product?

I really like the hand poured look, it'd be perfect for my office.

Sun, 10/02/2011 - 20:10 | 1731809 Esso
Sun, 10/02/2011 - 20:36 | 1731868 hondamikesd
hondamikesd's picture

+1, thanks! Those are lovely, though a 1,000 oz.'er might have to wait until after my copper puts come through :)

Sun, 10/02/2011 - 21:43 | 1731999 traderjoe
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I would never order from nwt mint again.

Sun, 10/02/2011 - 21:54 | 1732014 hondamikesd
hondamikesd's picture

I haven't used them. Bad experience?

Sun, 10/02/2011 - 21:12 | 1731931 ziggy59
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beautiful hand poured bars 1 oz. and up.. comparative prices and great service imo.

Sun, 10/02/2011 - 21:19 | 1731954 hondamikesd
hondamikesd's picture

+1 Thanks Ziggy, those look damn good as well!

Sun, 10/02/2011 - 19:55 | 1731767 Seasmoke
Seasmoke's picture

did business in USA last year with a Belgium corporation who was in receivership.....they couldnt make a decision without it going thru so much red tape , nothing ever got completed....the ceo of american operation left in early spring as the writing was on the wall .........all of Belgium is a financial ticking time bomb

Sun, 10/02/2011 - 20:06 | 1731799 Natethegreat
Natethegreat's picture




Sun, 10/02/2011 - 21:20 | 1731892 slewie the pi-rat
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that newspaper article went on @ the last column of the first pg and following, about britain doing QE "if not now, in novemeber" of 50-100 Bil. pounds

print to go

the explanation is utter bullshit:  to boost demand in the economy if the strength of the recovery did not improve

read that again!  L0L!!!

coupla weeks ago i posted how the brits had just learned that the financial song & dance run-down they had received about libya last summer, as they were voting to stay the course and keep bombing the shit outa the place w/ pilots living in italian hotels, well, the costs were understated by a factor of 7X and they just got the rest of the bill!

the US hasn't said too much about the costs, but was last reported building onto an already-functioning airbase west of tunisia and using surveillance and ordinance drones to re-con the sahara and maybe even look for the moQ; or stray camels...

so, britain is tapioca, and is ready to run the presses.  i'm sure that the avant garde of banksterism must have considered not reporting all their shenanigans on the books for public consumption, altho we know how committed to transparency they are, especially the bullion banksters at the crimex and their london cohorts...

with the new "security conscious" FED, and the SHTF in the big EZ, these fukers are way too smart to tell us they're printing $5 Tril in paper b4 christmas.  people might lose confidence.  i think they'll just keep putting out the fires...

...which leads to:  what if the people in belgium aren't freaking brain-dead, and don't want to nationalize the damned bank?   huh?  

m. poirot to the white courtesy phone...

Sun, 10/02/2011 - 20:53 | 1731897 Market Efficien...
Market Efficiency Romantic's picture

wow, just heard from a colleague that a number of Deutsche Bank and Postbank (DBK subsidiary) ATM did not provide cash over the weekend. Additionally, on Staurday (not being booked at banks before Monday), at retail stores in Germany, most debit cards did not work properly and could not be debited.

Technical problems can cause isolated failures, but to me, that looks like preventive measures in case of a sudden Greek default and eventual European bank run, as the banks could not really react promptly over the weekend.

Sun, 10/02/2011 - 21:14 | 1731938 ziggy59
ziggy59's picture

could they (ATM) have simply run out of cash?

Sun, 10/02/2011 - 21:40 | 1731995 Market Efficien...
Market Efficiency Romantic's picture

As I said, isolated machines or events, yes, but the accumulation of events or number of ATMs of different branches of a bank or subsidiaries seems highly unlikely. Around major local events, ATMs sometimes run out of cash, apart from that the availabilty of cash over the weekend through ATMs is calculated pretty comfortably.

Mon, 10/03/2011 - 04:38 | 1732436 schadenfreude
schadenfreude's picture

I had no problems to withdraw money over the weekend at an ATM in Germany. But I do not have an account with DB or Postbank, so it should be either technical or bank specific.

Sun, 10/02/2011 - 21:13 | 1731934 Cliff Claven Cheers
Cliff Claven Cheers's picture

The EUR/USD just broke out of the technical pattern of Greek Tits Up on th one minute chart. It appears to be in the right arm pit at this time.


Sun, 10/02/2011 - 23:14 | 1732172 slewie the pi-rat
slewie the pi-rat's picture

is that to amputational log-base 2?

doctor copper wants to know...

Sun, 10/02/2011 - 21:19 | 1731956 max2205
max2205's picture

Before u mail this cut the letters out and paste them on a white piece of paper. Make sure they are crooked and not all the same size

Sun, 10/02/2011 - 22:49 | 1732122 bill1102inf
bill1102inf's picture

You did get short right????

Sun, 10/02/2011 - 22:50 | 1732125 SpeakerFTD
SpeakerFTD's picture

Can someone who understands the Fed flows, to the extent they are visible, clue me in here....

Dexia borrowed money from the Fed's discount window in 2008.  A record $31B.  At the end of this last March, it claimed to have no outstanding balance at the Fed...

Another key bit...

Dexia received billions of euros in capital and funding guarantees fromFrance, Belgium and Luxembourg during the credit crunch.

Ok, so here are some questions for those who understand these fund flows better than me...

Do ZHers think the Fed still has direct exposure to Dexia?   If it does, would the Fed then basically own Belgian bonds?  

If Belgium is a creditor, what does that mean if it is nationalized?   

How fucked is France?

Sun, 10/02/2011 - 23:29 | 1732195 slewie the pi-rat
slewie the pi-rat's picture

flow w/ the go, BiCheZ!

i have no idea about these great questions, but imo, the FED is holding great gobs of greasy grimey gopher guts, but has a longer timeline than many if not most...

as we pause for station identification, the planet begins to grasp the meaning of the word: cash

for the forseeable future, i'll no longer answer all questions: "maybe"

i'm going to:  "fucked"  for everything.  fuk it! 

Mon, 10/03/2011 - 03:03 | 1732389 Dick Darlington
Dick Darlington's picture

 Oct. 3 (Bloomberg) -- Moody’s Investors Service said it placed on review for downgrade the standalone bank financial strength ratings, the long-term deposit and senior debt ratings
and the short-term ratings of Dexia Group’s three main operating entities.

Mon, 10/03/2011 - 03:35 | 1732411 tom a taxpayer
tom a taxpayer's picture

Just in time for European markets opening.

Maybe Dexia will topple Belgium. Maybe Belgium will make a last minute spurt and beat Greece to the default finish line. Maybe the final collapse of the European Disunion will be triggered by Brussels, capital of the EU. Poetic justice.

Mon, 10/03/2011 - 04:37 | 1732435 hondamikesd
hondamikesd's picture

If we're going to crash hard on news it's going to be something like this. With everyone focused on Greece their default won't do, it'll have to be something that's "seemingly" out of left field to the average investor. e.g. Belgium going down before Greece.

Mon, 10/03/2011 - 04:15 | 1732427 Fips_OnTheSpot
Fips_OnTheSpot's picture

"placed on review" - now? Hm, so the downrate is to be expected in 3 months or what?

Reality could overtake Muudiehs here.

Mon, 10/03/2011 - 07:01 | 1732490 nah
nah's picture

i dont know seems risky

Mon, 11/14/2011 - 06:30 | 1875009 dida
dida's picture

I think this is a good thing the fact that they want to help this country, but I hope that their help will not lead to a bad situation. Calcul RCA

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