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Erste Group Reveals Stunner: Reports Billions In Previously Undisclosed Underwater Sovereign CDS; Who Is Next? And How Much More Is Out There?

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Mon, 10/10/2011 - 14:42 | 1758417 Deadpool
Deadpool's picture

cockroach theory. Where there is one there is always many many more.

Ya know, "hundreds of billions of CDS on sovereigns that have since soared to stratospheric levels." is not a European invention. This is a Wall Street (read Goldman Sachs) invention. they really did steal the world.

Mon, 10/10/2011 - 14:43 | 1758456 Cassandra Syndrome
Cassandra Syndrome's picture

Do you not think you are being unfair on Cockroaches using them in this analogy?!

Mon, 10/10/2011 - 15:04 | 1758560 slewie the pi-rat
slewie the pi-rat's picture

take a cockroach to lunch, BiCheZ!

Mon, 10/10/2011 - 15:10 | 1758590 fuu
fuu's picture

la cucalmuerzo!

Mon, 10/10/2011 - 15:24 | 1758670 GetZeeGold
GetZeeGold's picture



In other announcements.....the new spokesman for the EU is Gomer Pyle.




Mon, 10/10/2011 - 15:35 | 1758726 DoChenRollingBearing
DoChenRollingBearing's picture

Beat me to it!


Also, @ fuu,

Yum, may I have dozen please?  "Para llevar a la casa."

Mon, 10/10/2011 - 15:45 | 1758769 fuu
fuu's picture

Cene en sólo!

Mon, 10/10/2011 - 16:26 | 1758941 unclebill
unclebill's picture

hmmmm. I should have been a bankster...and make millions

Mon, 10/10/2011 - 14:46 | 1758471 GeneMarchbanks
GeneMarchbanks's picture

We already know that all Euro banks have tons of off-balance sheet horseshit. The timing of their 'announcements' is the only wildcard. It's always an accidental discovery.

I hope these motherfuckers burn along with all fiat.

Mon, 10/10/2011 - 17:00 | 1759061 dracos_ghost
dracos_ghost's picture

In all seriousness, is there a possibility that these banks are burning the red-headed step children off their books before Basel III really starts to impact them.

Mon, 10/10/2011 - 17:27 | 1759140 vocational tainee
vocational tainee's picture

That is why, we should make tabula rasa..

Mon, 10/10/2011 - 21:37 | 1759640 criticaster
criticaster's picture

Someone obviously got spilt up from the Occupy Wall Street demo...

Goldman did not invent CDSs. They were first offered up by bankers in trust and subsequently by JP Morgan. Originally they were intended as big-ticket risk control for multinational corporates and were supposed to come with the same due dilligence as any insurance policy. JP Morgan and later Citi, were particularly instrumental in deploying them for more general puposes including mortgage securitisation. Of course, by the time CDSs blew the financial system up 'everybody was at it', but it was not Goldmann that invented them.

Lets at least try to get our facts straight.


Mon, 10/10/2011 - 14:38 | 1758423 papaswamp
papaswamp's picture

Loads of 'Come to Jesus' moments bitchez as banksters now run to get bailed by the sheeple.

Mon, 10/10/2011 - 14:52 | 1758481 GeneMarchbanks
GeneMarchbanks's picture

Were you the dude who called this earlier today? Somebody came out earlier and said watch Austria and Eastern Europe. Whoever it was, kudos.

Mon, 10/10/2011 - 14:52 | 1758498 Deadpool
Deadpool's picture

GE wrote that stuff.

Mon, 10/10/2011 - 15:23 | 1758667 papaswamp
papaswamp's picture

In relation to Bulgaria I think I said something....which makes me wonder if something in Bulgaria has gone pop. Was a day or 2 ago though wasn't it? Too much vino and I forget.

Mon, 10/10/2011 - 15:31 | 1758715 GeneMarchbanks
GeneMarchbanks's picture

'Dick Darlington

Vote up!

Vote down!


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'

Congrats Dick Darlington, call of the week.

Mon, 10/10/2011 - 15:37 | 1758739 DoChenRollingBearing
DoChenRollingBearing's picture

Good eye, Gene, have a green!

Mon, 10/10/2011 - 18:26 | 1759265 GetZeeGold
GetZeeGold's picture



I'll give you a green for that Dick.



Mon, 10/10/2011 - 15:39 | 1758746 Paralympic Equity
Paralympic Equity's picture

I wrote a comment about it in the post on the Max Bank and the greek bank recap/aid. ATX was beaten up by this, Erste booked a big loss on goodwill writeoffs from eastern Europe, I expect more to come. Austrian banks have 300 bn € exposure to mortgage loans in eastern Europe, and most of them are pegd in EUR or CHF and it is a big pile os steaming shit. I am from a eastern Europe country.

Mon, 10/10/2011 - 16:40 | 1758993 papaswamp
papaswamp's picture

It is interesting that the whole eastern european aspect has been largely ignored....or perhaps by design kept out of the news because things could be substantially worsethan the larger 'realm' is aware? 

Tue, 10/11/2011 - 02:40 | 1760240 Paralympic Equity
Paralympic Equity's picture

Things are a lot worse than it is presented, a lot of mortgage dept is under water, and there is a lot of currency risk even with the big interventions by the SNB. It could became very ugly

Mon, 10/10/2011 - 14:39 | 1758424 macholatte
macholatte's picture

Very Bullish

Mon, 10/10/2011 - 15:38 | 1758741 DoChenRollingBearing
DoChenRollingBearing's picture

No doubt about it.

Mon, 10/10/2011 - 14:40 | 1758435 stormsailor
stormsailor's picture

yeah, there is a lot of "hidden" nasty out there.  i have gotten burned today already for 5k, but i believe i'll short again -20 /es this time from 1185. 

Mon, 10/10/2011 - 14:42 | 1758443 defn8Dog
defn8Dog's picture

Sorry... this story missed the bad-news-cutoff last week and is no longer admissable.  The market has put in its lows for the year.  Better luck with these sad, outlier stories, next summer.  

Mon, 10/10/2011 - 15:27 | 1758618 Smithovsky
Smithovsky's picture

didn't you get the memo? humor is only allowed on redES+greenGC days

Mon, 10/10/2011 - 14:42 | 1758446 Smithovsky
Smithovsky's picture

so another 5% up tomorrow?  

Mon, 10/10/2011 - 15:16 | 1758624 Manthong
Manthong's picture

Unless we can just get another 8.5% in the scheduled afternoon melt-up today to equal the stellar performance of Columbus Day 2008 (per previous thread).

Mon, 10/10/2011 - 15:25 | 1758679 papaswamp
papaswamp's picture

Up 2.2% ..then the down sessions will start again...

Mon, 10/10/2011 - 14:44 | 1758450 SheepDog-One
SheepDog-One's picture

HEY no problem! Europe is engineering a $6 trillion Euro leveraged super-fest....hell just borrow some from them! PLENTY to go around! The world is flush with CASH all is well!

Mon, 10/10/2011 - 15:28 | 1758696 plantigrade
plantigrade's picture

And if $6 trillion is not enough they can still be re-leveraged to 60.

Trees do grow to the sky in the land of unicorns.

Mon, 10/10/2011 - 16:35 | 1758974 Dr. Richard Head
Dr. Richard Head's picture

Fiat fuck fest - Fisting the public since 1913.

Mon, 10/10/2011 - 18:27 | 1759268 JayParamedic
JayParamedic's picture


Mon, 10/10/2011 - 14:43 | 1758452 kote
kote's picture

The EBA didn't have Dexia listed as the safest bank.  Intesa Sanpaulo listed Dexia as the safest out of the 21 "peers" it selected.

Mon, 10/10/2011 - 15:34 | 1758727 RockyRacoon
RockyRacoon's picture

Whew!  I can't wait to hear about the others.   Being the leper with the most fingers ain't that high an endorsement.

Mon, 10/10/2011 - 15:39 | 1758747 DoChenRollingBearing
DoChenRollingBearing's picture

...the bearing snickers...

Mon, 10/10/2011 - 17:32 | 1759149 Dugald
Dugald's picture

Yuh!.. cheap bearings are always noisy...

Mon, 10/10/2011 - 16:04 | 1758854 kote
kote's picture

ZH got the facts wrong.  It hurts the credibility of the site and the message when that happens.  The message doesn't change whether or not Dexia was ranked at the top, so why give critics ammo with sloppy / false reporting?

Facts are important, especially for a site outside the MSM.

Mon, 10/10/2011 - 21:38 | 1759652 slewie the pi-rat
slewie the pi-rat's picture

yeah, but tyler put the Intesa Sanpaulo list over the weekend, so i think he just mis-spoke, altho you seem to be technically correct, imo, kote

like you, i do not consider the ideas to be too damaged or "changed" by the glitch, which i have removed here:

"And there you have it: the bogeyman that everyone has been warning about, yet nobody has seen, CDS written (as in sold) in bulk against other sovereigns and other banks which up until now were only mythical, as they, to quote the EBA (...[deleted dexia mention]...) simply did not exist. Oh, they exist all right, and what they do is create a toxic spiral of accentuating losses whenever the risk situation deteriorates, creating positive feedback loops of ever increasing losses until the next Dexia appears... and then the next... and the next. Expect the market to latch on to this dramatic revelation like a rabid pitbull once the hopium high from today's EURUSD short covering squeeze wears off."

but you are correct, i think, in worrying that someone might "report" what zH & tyler are saying, here, and "push" the glitch, just for the sake of confusing disinfo, to make it look like tyler is trying to pull something or "denigrate the EBA" or whatever

so, thanks; i missed that the first time; and yes, this is an important zH/durden call

Mon, 10/10/2011 - 14:43 | 1758454 rambler6421
rambler6421's picture

I heard on the CNBC today that the blogosphere is spreading all these rumors about I-banks like Morgan Stanley........must be a reference to Zerohedge.


Tyler, don't start all these rumors for all these banks!  CNBS (aka Pravda) won't like it. 

Mon, 10/10/2011 - 14:43 | 1758455 abugarance
abugarance's picture

totally irrelevant, the bank is already nationalised and besides Merkozy promised, all will be well, hush little one...

Mon, 10/10/2011 - 14:43 | 1758457 PaperBear
PaperBear's picture

Oh look what I just found down the back of the sofa.

This is a completely asinine situation.

Mon, 10/10/2011 - 14:45 | 1758467 SheepDog-One
SheepDog-One's picture

What did you find, another $1 trillion dollar bill? Hooray, the world is saved once again! 

Mon, 10/10/2011 - 14:54 | 1758506 ouchtouch
ouchtouch's picture

I think you mean a $trillion platinum coin.

Mon, 10/10/2011 - 15:06 | 1758565 Caggge
Caggge's picture

The banking industry needs to give out bonuses to retain their talent. The talent is the best and the brightest in the whole world. Yet, they manage their business this way. Whoops, I found another debt that will  bankrupt our bank if you don't bail us out. It is amazingly stupid to expect the same "talent" to solve the problem that caused the problem.

Mon, 10/10/2011 - 15:41 | 1758755 DoChenRollingBearing
DoChenRollingBearing's picture

@ SheepDog

No, the trillion dollar bill is NEXT week!

Mon, 10/10/2011 - 17:09 | 1759087 Montecarlo
Montecarlo's picture

Hey - this is bullish for metals!

Mon, 10/10/2011 - 15:52 | 1758807 BurningFuld
BurningFuld's picture

Erste had previously consulted with Tim Giethner regarding disclosure of the CDS's.

Mon, 10/10/2011 - 16:13 | 1758895 Greater Fool
Greater Fool's picture

No, no: It's actually more asinine than that.

The basic content of the press release is, "We just asked around a bit and found out that CDS are derivatives. Sorry, guys. Our bad."

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