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"Dexia's Funeral Will Be Announced On Sunday" As "Weakest Link" Slovakia Prepares To Bury The Euro
A few days ago we mocked the market's naive belief that a loose union of 17 different countries and hundreds of separate political organizations, each torn by thousands of unique interests and lobby groups, can all agree unanimously in the pursuit of the common monetary (read: banker) good, over that of their own people. Yet that did not stop stocks from enacting the second weekly massive short covering squeeze, in 3 weeks, purely on hype, rumors, innuendo and lies. And just like the last time the market soared by nearly double digits in a few short days, only to plunge when hopes of a quick resolution were mercilessly dashed, Monday has all the makings of another epic risk off day. Because while all it takes is a rumor (of a plan for a plan) to start a squeeze, we are about to get some very nasty actual events which will demand immediate and forceful intervention by the powers that be, something which Europe (and the US) has proven is virtually impossible. The events in question are, as Reuters reports, that i) "Dexia's Funeral Will Be Announced On Sunday" and, as Bloomberg reports, that ii) Slovakia’s ruling Freedom and Solidarity party won’t back the overhaul of the European bailout mechanism after Prime Minister Iveta Radicova rejected the party’s conditions for approval, a lawmaker said. Said otherwise, bonds are currently thanking their lucky stars the bond market is closed because not only will Europe have to deal with the headline risk that the weakest link in Europe, the tiny country of Slovakia, can scuttle the entire second Greek rescue operation, and thus, lead to the expulsion of Greece from the eurozone following its bankruptcy, but this will have to take place as Europe fights the stem the contagion resulting from the collapse and nationalization of the first Greek bank, which nobody, nobody, could have foreseen.
First, on Dexia via Reuters:
France and Belgium are expected to finalise plans this weekend to break up Dexia, which helps finance hundreds of towns in both countries and became the first European bank to fall victim to the euro zone crisis.
Dexia, whose board is likely to meet on Sunday, was forced to seek government help earlier this week after a liquidity crunch hobbled the lender and sent its shares into a tailspin.
The bank's implosion has added to investors' worries about the solidity of European banks and has coincided with increased European Union talk about coordinated action to recapitalise banks across the continent.
The burden of bailing out Dexia also prompted Moody's to warn Belgium late on Friday that its credit rating could fall.
The ratings agency also cited the prospect of higher funding costs and weak economic growth as reasons for putting Belgium's Aa1 government bond ratings on review for possible downgrade.
France and Belgium have guaranteed Dexia's financing, paving the way for a new rescue for the bank, which is struggling to wind down billions of euros in toxic assets accumulated during an overambitious expansion plan.
But there were signs that the details of the rescue were proving troublesome, as a Dexia board meeting originally scheduled for Saturday slipped back to Sunday.
Still, a source close to the talks was confident the bank's future would be determined before the opening of markets on Monday morning.
"The need to rescue Dexia is symbolic of the uncertainty that characterises the banking sector," said Eric Galiegue, president of Valquant, an independent research firm. "Who would have imagined that a bank so linked with European construction would end up being dismantled?"
"Dexia's funeral will be announced on Sunday," the source said.
Summarizing the above: nobody has any clue what the proper response here is nor how the market will react.
And as for the second key event just unveiled...
Slovakia’s ruling Freedom and Solidarity party won’t back the overhaul of the European bailout mechanism after Prime Minister Iveta Radicova rejected the party’s conditions for approval, a lawmaker said.
The party, known as SaS, insists its three coalition partners agree to two conditions before it will back the enhancement of the euro region’s bailout fund, the European Financial Stability Facility, in a parliamentary vote Oct. 11, said Jozef Kollar, head of SaS’s parliamentary caucus. “If the solutions we have put forward aren’t accepted then we will not vote for the EFSF,” Kollar said in a debate on state Slovak Radio today.
Slovakia and Malta are the only countries that haven’t yet ratified the key element in the European Union’s plan to prevent the region’s debt crisis from spreading. The Slovak row risks sinking the EU plan, which needs the unanimous consent of all 17 euro members to come into force.
SaS is calling for the creation of an inter-party committee that would have a right to veto individual EFSF disbursements. It is also demanding that Slovakia doesn’t participate in the European Stability Mechanism, a permanent rescue vehicle set to come into force in 2013. SaS will negotiate “until the last minute” with its coalition partners, according to a statement posted on the party’s web site today.
Smer, the largest opposition party, has said it won’t support the EFSF overhaul unless the government steps down.
For those who are still confused, here is what is going on:
The bailout plan that was proposed in July, and was supposed to be operational by the start of September, has still not been ratified, and now the smallest European country is holding the entire continent, its currency, and frankly the Fed, which will have to step in and bailout Europe, hostage.
In the meantime, the first actual core bank casuality is about to go 6 feet under, and unleash a falling house of cards of unpredictable consequences, which will likely make the "fear and loathing" chart presented previously double in a very short time.
And in this environment, where the decisionmakers in Europe are objectively about 2 years behind the curve, are paralyzed into inactivity and torn asunder by warring political parties, the market actually believes that some actual "solid" policy intervention can about to take place?
...
Oh yes, "Dexia is fine"... The stress test (the second one) said so.
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Used your link again.
Not working.
My Lord
please rest assured that over here we all feel your vibe
http://www.youtube.com/watch?v=tHDX9qb2-BQ&feature=related
Lots of malware lately- got a few little sniffles on my machine, and they caused all kinds of irritating DNS failures. Lots of script kiddies playing at being revolutionaries right now, and possible some real players who want your connection for DoS attacks and brute force cracking.
Check your active processes, and shut off anything that shouldn't be there, then clean your registry. If you don't know how to do that, find a good scanner. Malwarebytes Anti-malware has a solid reputation.
(Works from Ireland for me.)
My tube is fine. Your tube is having problem?
They would not be doing this unless the Germans were behind it.
Go Red at your leisure.
This is the end.
Perhaps, or mayhap this is simply more games to delay.
Perhaps?
Games can be played for some time.
Then the children must grow up.
No doubt we would all like to be children with loving parents that let us play for eternity.
But reality comes knocking.
The Euro should have been aborted before birth.
I'm just observing that the end has been called for many many times, and yet here we are.
Personally I need a few more months to get things in place, so I hope this is not quite yet the end. :)
Apologies.
Bit of a rant there.
Not you.
But yes.
Get your shit together.
Just make it faster than you thought you should.
Yes and yes to Lord and Motley. Get it together quickly!
I'm trying damnit. :P
The delays are not my own, I'm trying to get through government bureaucracy and we all know how that goes.
Slovaks will decide as they please...
skutocne revolucie je, ze nie, aby vziaz bohatym a davaju chudobnym, ale nie aby bohati aj nadalej kradnut z chudobnych
Janosik
http://www.youtube.com/watch?v=S_j7i_ZVfxw
Well, it's not like they're gonna get invaded again.
Maybe Angie promised a feel of them white as snow up top the Matterhorney never touched by male human hands soft jigglie upper thighs?
Lots of Russian and Ukranian money in Slovakia Jostling for influence also. Its a nice place, beutiful scenery (admitedly a lot of awful communist era towns) and some very beautiful women.
As patient zero hating the zenter of global banking practice time and warmup is over...I say let the games begin!
... lekko zboczyc z drogi
sorry guys
czn you spare 1:13 of your life?
sound faster than light (with a cowbell):
http://www.youtube.com/watch?v=RETyTfCJc2k&feature=related
Markopolos is going after the bank of New York for stealing money from retirement accounts and pension funds
Good old Harry states that the bank of new york is going down. Go get em Harry !
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/10/8_Harry_M._Markopolos.html
What if there is a global financial meltdown and nobody notices?
Like if we all say fuck it to the system, decide not to participate in their game, turn around and create our own viable system and left TPTB scratching thier asses saying, "What the fuck just happened?" Ya, I could go for that.
and the rumors of Bundesbank printing DMs just won't go away. Germany has a contingency plan, and the Slovakia vote might just trigger it.
The headline news in Belgium at the moment is that they are announcing a government after 400 some-odd days without one.
Dexia is second place news. At least according to Le Soir ( www.lesoir.be )
Belgium has been without a government for 400 days....
Lucky bastards.
http://www.infowars.com/the-deutsche-mark-is-coming-and-germany-will-still-lead-the-european-super-state/
Analyses of video for "Goldman Sachs rules the world"
http://www.youtube.com/watch?v=3eVIbS-U2Gk
The lonely American walking toward the dustbin of history,,, What has become of us?????
http://www.youtube.com/watch?v=6usNr2zhI94
I can't wait for Steve Liesman's take:
"Slovakia? Not a problem, they're small like Greece, and besides, the FED can step in and fund the EFSF and the markets are going to SOAR. Then with QE3 we'll be back to DOW 14,500 before you know it."
And my dick tastes like chicken. Er....
(Santelli in background rolling eyes)
Gold priced in Euros
http://stockcharts.com/h-sc/ui?s=GLD:FXE&p=D&yr=3&mn=0&dy=0&id=p72649252059
The key is this:
If the Euro collapses, will gold collapse, just not as fast, and actually rise in Euros?
Or does gold get taken out back and shot, and go down faster than the Euro?
We'll find out on Monday.
And the reason you think any of the tripe you spew is in any way meaningful?
Ego, desire to be center of attention, to be liked, poeple pleasing, false pride, troll, dumber than a box of rocks? Have I missed any?
I've been telling you all to just use Robot's pumps as dumps. Buy some long term puts on all his recommendations as they ALL crater. Keep em coming Robot!
Robo... closer to the mark, but not there yet.
Try, if the euro/dollar collapses what happens to the price of gold and how does this affect the balance sheet of the ECB and the FEd respectively.
Sharp as a sack of wet sponges, a few fries short of a Happy Meal, sharp as a marble.
I would argue "what happens to the price of gold should Greece collapse" is what matters since what is in competition with gold is yield. With yields criminally low in the USA of course gold must soar. Should Greece be our domino then the rush for yield is on and there is an incentive to now sell the gold...both to prevent catastrophe (raise cash as a government) and to take advantage of a high interest rate environment (for yield hungy investors.)
Vet... I think if Greece goes, fear trumps everything else in the gold trade and gold will rise in price.
All hail Slovakia!
If they are the catalyst that causes the Euro to come apart, they will be remembered as heros for a long time to come.
Perhaps, its naieve, but the Euro's demise would put an end to the leading systemic problems that are currently plagueing the world's economy. I, therefore, expect a large and long-lasting bounce if that occurs.
The question of gold is, "If countries exit the Euro, do they also abrogate their agreements on the amount of gold their central banks can sell? I think the answer is, "Yes." That means the price of gold could crash.
The fun part will be watching how the rest of the Euro Zone forces Slovakia to capitulate.
That's an easy one......they get a big fat financial bribe for their vote. Or put another way for their extortion.
still holding short pos? hold'em. Asia will tank on their opening.last weeks meltup was a false break out, Fridays close the S&P broke supports while the Dow was in lala land. Commodities will start selling again.
Volatility trade is back on...full force.
They'll spin this in some way that makes markets go up.
"Uncertainty leaves the market, Warren Buffet says it's time to buy!"
Oh, here we go, from Fidelity "Some investors view the response to Dexia's woes as a test of European governments' ability to take decisive action to rescue banks if the euro zone debt crisis worsens."
Reading financial news is funnier than watching Louis CK.
Jeeze, you panic too easily. The Germans can cover Solvakia's contribution with some kid of quid pro quo. France can tender Dexia's bad bank to the Fed in return for 150% of the book value of equity in fiatsos. Can kicking takes imagination.
"squid pro quo" actualy.
I'm still confused. Conditions, conditions, conditions. Gotta respect Iveta Radicova PM of Slovakia. Prime Minister or PM activiste.
LOL chit-loads of folks...
Pretty much every serious economist in the UK, Germany and the US knew the euro was hopelessly flawed back in the 1990's - before it was even introduced.
I look forward with great pleasure and reborn hope for Europeans at its demise.
Dexia?
What happened to the ysl?
Hang on Slovie, Slovie hang on!!!
http://www.youtube.com/watch?v=hGuPc01Dn7c
Bank of France Governor Christian Noyer as quoted by Bloomberg: “I’m extremely confident” in French banks because “we know them very well. We know their balance sheets, their risk assessments. We know they have no toxic assets.”
Hey Frenchy - you can kiss your AAA rating au revoir. Only without the revoir part, because France will never rise again. Great cheese and wine, but no guts and no principles.
Monumental stupidity.
France is a sort of special case where banking asset risk is concerned. Outside of apartments in Paris French real estate is really cheap, I mean dirt fucking cheap. You can get a really nice 15,000 square foot chateau with moat and hectares of pasture and forest in the country for less than one of the better houses in Medford where I live, http://www.sifex.co.uk/PropertyFullDetail.asp?propid=19547
But, they also lent to the euro club Med states in huge volume, and they made loans in the hundreds of billions, trillions, to EU nations that are not yet part of the EZ, like Hungary which has a floating forint for currency. House prices go down, business slows and commercial real estate proves to have been a big bubble and viola, those loans seem on paper to be performing because they get a check every month but when they convert to euro they have taken a huge haircut already. Those mortgages and loans in non EZ nations that were denominiated in euro to start with are almost universally non performing. And then a lot of loans were denominated in CHF to mitigate the difference between national currencies and the euro, as had always been the case during the introduction of the euro, easing the arbitrage and speculative pressures. But the CHF has itself found it necessary to impose capital restrictions and is so over appreciated now that they recently tried and failed to cool the Swiss franc.
Internally French finance and solvency is actually better than Germany if you ask me, it is the external issues that have them as deep in the shit hole as we are that matters.
Fuck you, yank. You lazyasses are the ones without no guts and no principles. Your elite has been assraping you for years now and you do what to resist? "Maybe a little bit soap my boss, please?". Some of you are so pathetic, like tea party idiots, that they support every assraping policy against themselves, issued by the elite.
Then you guys believe in American exceptionalism like a fucking retarded kid, finishing last in a Cooper test but still getting a "participant" trophy. Yeah, you are so special...
guts n principles are an PURE american tradition iconised by WS..Right?
BTW : The french rugby team ate 'roast beef' on Saturday. They'll be playing the brilliant young welsh team next week.
So, French flair for 'guts n basic good rugby principles' can sometimes surprise the most skeptical amongst us.
Take note : Americanspirit, of coca cola and macdonalds culture. Learn from Rugby, a sport you can't tar with your 'ra, ra, USA' brush for not having guts n principles. Even if you undertand shit all about its rules.
And this coming from an American.......how typical!
Hmmm... This ending finally? Soon? I think not.
We will eventually get to the Greek announcement that they have recovered/found the burial horde of Alexander the Great. Europe will fall all over themselves to extend orders of magnitude more debt to the Greeks, which will take months to work its way through the global financial bullshit processor to finally be churned out as bunk, and the realization that it's now 107 times more worse than before but...
Greece announces that their nascent space program has successfully captured and is returning to low earth orbit a chunk of planetary core material from the asteroid belt that is insanely rich in all precious and platinum group metals... Europe, and the US, will fall all over themselves to extend orders of magnitude more debt to the Greeks, and it takes months to work its way through the global financial bullshit processor until finally it is realized that Greece couldn't loft a softball across home plate (but not before paper PM's and PGM's are destroyed in a monstrous financial gotterdamerung). Everyyone realizes that the financial condition of the world is tribulational. The notional value of global financial derivatives is now equal to the number of atoms contained within our solar system out to the Oort cloud but...
Greece announces, with France in tow, that Greek scientists have perfected easily contained hot fusion, cured cancer, proven the existence of God, and found how to convert material human existence to a higher plane of pure energy. Lather, Rinse, Repeat...
Brilliant Axenolith !!! Thanks for the giggles!!!
Meanwhile the property tax has hit some snags, but they're totally expecting some real progress soon.
Dexia & Depfa. It took the freedom of information act to extract this excel spreadsheet. Check link below and then lick it’s link. It has it all.
http://www.zerohedge.com/article/excel-breakdown-all-discount-window-users-between-march-2008-2009
Dexia's failure is kind of a big deal. Page 174 of its 2010 annual report (Section 9.1 - Details of Derivatives Held for Trading) reveals that Dexia had the obligation to deliver about EUR945 billion of derivatives and the right to receive about EUR926 billion worth. Adding a multijurisdictional bankruptcy to the netting mix is sure not to disappoint Dexia's host of actual and perceived (because who are they, exactly?) counterparties. Then again, that's assuming ISDA protocols will not be shining through just as brightly as they are doing in the smaller (and three years and counting) Lehman bankruptcy. Tower of Basel redux.
"...we are about to get some very nasty actual events which will demand immediate and forceful intervention by the powers that be, something which Europe (and the US) has proven is virtually impossible."
Yes? Impossible like the over 16 trillion in US grants, loans, and backstops via the Fed alone not to mention actual stimulus since 2008? We thought that was impossible, or would have had they not been secret. Is there some magic about the ire of the German population over bailouts I do not know about? As if they get pissed off so the Euro cannot be saved by massive bailing or tricksy accounting? By the way, we have OCCUPY WALL STREET and no results, the Germans will do what Merkel tells them they must, she is one toothbrush moustache away from dictatorship anyway. All those photos of her hugging Sarkozy, she is giving him orders. The Irish finance ministry has seen a lot come and go but to work there you now have to know how to speak German.
If it seems impossible it is simply a lack of imagination on your part. You are just in denial about what a small cog you really are in this world.
Actually EU is trying to solve the problems the old hard way, demanding bond buyers and bank shareholders to share the burden. Instead of just printing money to the same crooked banksters for 2nd round of speculation like USA and UK did. UK started also printing money recently again, even when inflation is already at 5 percent! So we should follow your stupid policies too?
http://www.dexia.com/EN/journalist/press_releases/Documents/CP_%20201110...
Beginning of exclusive negotiations for the disposal of Dexia Banque Internationale à Luxembourg
Dexia confirms having entered into exclusive negotiations with an international group of investors in which
the State of Luxembourg will participate for the disposal of Dexia Banque Internationale à Luxembourg.
The Board of Directors of the Dexia group will take a decision on a potential offer by the end of the exclusive
period.
"the French with their harry women and small dicks who know the least seem to complain the most"
Glad to see we STILL have a few intellectuals here at ZH. I thought all the intelligent people had left this board when the bullies came in en masse. Obviously I was wrong... (sarcastic tone)
"I happened to have lived in Switzerland, and happen to know all of the countries in Europe, but that is because I lived there fucker"
Let me guess... You are a CIA analyst, that's why you lived in so many of these cities? You surely have the intellectual capabilities to be one... (sarcastic tone pt.II)
Just heard on belgian tv news that "dismantling Dexia now and nationalize it partly will be a good opportunity for governement to make money when it (the rest of the bank) will be sold back to a private group in a few year" ! So, don't worry belgian people, it's gonna smooth and painless, you'll even like it... Ooh gee... Can't hear that shit anymore...
There are so many "Dexias" not even on the radar at this point, it boggles the mind to think of where Europe / European banking will be in a month.
Are not all Western banks in the same boat? Is Dexia any worse than BofA?
According to "De Tijd" a Belgian newspaper, there is a deal between France and Begium regarding Dexia.
http://www.tijd.be/
High frequency trading coming the next trading day... its the new blitzkrieg. I have been thinking, the European Union looks like a Treaty of Versailles that they placed around there own necks.
Hayek's Road to Serfdom comes to mind in all this... one problem though, Salma Hayek keeps poping up in my head. Damn those hot Latin women!
That is the classic pattern of stimulation/inflation and collapse. It is a confidence game in the dictionary definition of the word. I'd post the link to "The Real Weapon of Mass Destruction: POVERTY", but everyone still finds it, all by themselves. My comments in "Crash Course" are much more current. While I'm writing an update on "Real Weapon", I'll leave you with that. We have to follow the money trail and root this infection out of the hole with an analytical screwdriver.
http://georgesblogforum.wordpress.com/2011/10/06/crash-course/
. . . which nobody, nobody, could have foreseen.
My name is Nobody . . . http://www.youtube.com/watch?v=BfLqaPHZpuU
Theres an agreement at the government level now between France Belgium and Luxemburg, Belgium guarantees 100 billion euro or 63% of the shares of dexia Belgium.
The plan is now up for approval with the Dexia board. (wtf?!)
WHERE DID THEY GET THE MONEY? I mean, you just don't find that kind of cash laying around, right? When we find out we should also go there and get some.
It is amazing how relatively small countries can hold supposedly powerful nations hostage. No matter how light the domino, such as Greece, the first fall has a similar impact on the chain until weight and size no longer matter. Physical law rules the toppling, one at a time, regardless of the fearful gasps off in the distance.
Can we just get this over with! Crash.
"I happened to have lived in Switzerland, and happen to know all of the countries in Europe, but that is because I lived there fucker."
And I almost forgot... You spoke the language of these countries right? You didn't come over like a prick and demanded that **in their own country** the people you talked to spoke English to please dah mastah?
Btw how many foreign languages do you speak, genius? You may not hold in high regard the French but :
a) some of them are ZH regulars and they write "en Anglais"
b) they'll never bend over to guys like you. Get out of the handful of touristic streets of Paris where ppl speak "globish" and try to have the person in front of you speak Anglais. Your butt will be sore.
Wash, rinse and fleece the peasants.
Dexia: Man.. we were in the midst of a crisis back in 2008. As soon as the taxpayer's money started rolling in.. We decided to ignore our squeaky Radio Flyer wheels. We knew the Bank of International Settlements had are backs covered and their deep pockets would never allow us to collapse. It's all about balls to the walls and spend money like you stole it.
2008
2009 Dexia BIS paper trail.
http://www.bis.org/search/?q=dexia&adv=1
Date
Search results
22 Aug 2008
Dexia Comments on Principles for Sound Liquidity Risk Management and Supervision
19 Apr 2010
dexia.pdf
31 Jul 2009
An assessment of financial sector rescue programmes, July 2009
...– also needed to take action. The Dutch and French governments took part in the recapitalisations of Fortis and Dexia, respectively, in concerted actions with the governments of Belgium and Luxembourg. Phase two (1–16 October 2008):...
18 Mar 2010
Report and Recommendations of the Cross-border Bank Resolution Group - final report, March 2010
...................................................................................................................10 2. Dexia..................................................................................
17 Sep 2009
Report and Recommendations of the Cross-border Bank Resolution Group, September 2009
...................................................................................................................10 2. Dexia..................................................................................
24 Sep 2009
Time to buy or just buying time? The market reaction to bank rescue packages, September 2009
...such as Fortis in the Benelux countries (29 September), Bradford & Bingley in the United Kingdom (29 September), Dexia in France and Belgium (30 September), and Hypo Real Estate Bank in Germany (6 October). Despite these efforts, the...
27 Aug 2003
Markets for Bank Subordinated Debt and Equity in Basel Committee Member Countries
...DE 37 3.1 2,220 60 134,605 3,464 54,350 1,834 31 Abbey National UK 36 3.3 11,625 323 267,307 20,572 122,307 n.a. 32 Dexia BE 33 3.3 4,266 129 234,749 8,889 76,680 6,110 33 Lloyds TSB UK 32 2.9 11,781 368 275,746 60,286 158,259 n.a....
24 Dec 2010
The global crisis and financial intermediation in emerging market economies, December 2010
...Paribas (France) and the State Bank of India. In addition to those four branches, a subsidiary of the international Dexia group is operating in Israel. In January 2005, the Israeli Government sold 26% of the Israeli Discount Bank’s...
24 Dec 2010
Domestic bank intermediation: domestically owned versus foreign-owned banks in Israel
...Paribas (France) and the State Bank of India. In addition to those four branches, a subsidiary of the international Dexia group is operating in Israel. In January 2005, the Israeli Government sold 26% of the Israeli Discount Bank’s...
20 May 2003
Public Disclosures by Banks: Results of the 2001 Disclosure Survey - Basel Committee - May 2003
...became HBOS; the United States: First Union merged with Wachovia and took Wachovia's name. 8 Belgium: Dexia Banque was replaced by Dexia S.A. Japan: Fuji Bank was replaced by Mizuho Holdings. 9 Or in the 2000 and 2001 surveys as a...
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