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

Tyler Durden's picture

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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.

Cassandra Syndrome's picture

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

GetZeeGold's picture



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




DoChenRollingBearing's picture

Beat me to it!


Also, @ fuu,

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

unclebill's picture

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

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.

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.

vocational tainee's picture

That is why, we should make tabula rasa..

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.


papaswamp's picture

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

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.

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.

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.

GetZeeGold's picture



I'll give you a green for that Dick.



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.

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? 

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

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. 

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.  

Smithovsky's picture

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

Smithovsky's picture

so another 5% up tomorrow?  

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).

papaswamp's picture

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

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!

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.

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.

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.

Dugald's picture

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

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.

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

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. 

abugarance's picture

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

PaperBear's picture

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

This is a completely asinine situation.

SheepDog-One's picture

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

ouchtouch's picture

I think you mean a $trillion platinum coin.

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.

DoChenRollingBearing's picture

@ SheepDog

No, the trillion dollar bill is NEXT week!

Montecarlo's picture

Hey - this is bullish for metals!

BurningFuld's picture

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

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."