EU Officials Admit Lagarde Was Right on EU Banks

Tyler Durden's picture

Just a headline for now but Reuters is citing sources that EU officials are set to discuss how to recapitalize weak banks today. Just a week after fuming over Christine Lagarde's brutal honesty, it seems once again that the market has pushed the ignorant into action. It certainly didn't do anything to help Unicredit (which is halted now) and more broadly the performance of the short-sale-ban-list names of banks in France and Spain:

Chart courtesy of Bloomberg

From the recent Goldman Sachs 'State of the Markets', we remind that there is the potential for a EUR3.5tn to EUR5.5tn shortfall in long-term funding under Basel III (EUR1.8tn for the Top 16 banks alone) and EUR1tn shortfall in bank capital under Basel III across the EUR banking sector. And one last snippet - Germany ~33x and France ~25x have the largest asset leverage (compared to ~13x for the US).

<sarcasm>We look forward to the next stress test which will tell us unequivocally which banks are the weak ones </sarcasm>

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DefiantSurf's picture

and yet another shocker...too funny


Tijuana Donkey Show's picture

It's the pinky action that makes the shocker unique....

Pool Shark's picture



Don't worry; they'll find the Euro bailout money... somewhere...

DefiantSurf's picture

I love that clip...too funny

macholatte's picture

Yes. Very Good.  Thanks.

Racer's picture

"how to capitalise weak banks"

Translation: How can we squeeze more money from pensioners and poor people to give to us deserving bankers

SheepDog-One's picture

Thousands, even millions or billions of people can die we dont care, as long as us phony banksters are kept ultra rich!

Theyre at the end of their rope here where world war is the only option.

Esso's picture

Yeah, looks like it. Shit, that's gonna suck.

GFORCE's picture

So Ackermann was wrong? Or just thinking of his bonus?

Snidley Whipsnae's picture

Avoid the rush... Go long physical now... Fiat to be printed to oblivion...

SheepDog-One's picture

Go long metals and dont forget the auto-loading kind either.

LawsofPhysics's picture

I agree Snidley and would only add that this includes anything of physical value from PMs to a fishing pole.

Lord Welligton's picture

They are preparing for the inevitable Greek default and consequent fallout.

Central Wanker's picture

Reverse bank robbery in the making...

mendigo's picture

perfectly put

think Social D - "end of the world as we know it, and I feel fine"

lizzy36's picture

It would seem like the EU has decided to go with Lagardes Euro 200B vs Goldmans Euro 1T.

Lesser of the two evils.

slewie the pi-rat's picture

i had the same thought, lizzie

200B is a joke, tho

maybe tyler's headline was sarking, too?

Jendrzejczyk's picture

...and the world just keeps getting scarier.

"Turkey says it is "totally suspending" all trade and military ties with Israel as relations between the two countries continue to worsen.

Turkish Prime Minister Recep Tayyip Erdogan announced the freeze Tuesday, a day after Turkey ordered all senior Israeli diplomats to leave the country by Wednesday."

SheepDog-One's picture

Really, buy our bonds! Hey we're good for it! 

dcb's picture

This is code. the answer is ewasy. run the press, insure deposit, let the bondholders and equity holders take the loss. what this means is:

must figure out a way to keep bond and equiy holders whole.

SheepDog-One's picture

Another ZH contributor talking about the media non-reporting of the ship sinking....dont worry about the financial media theyre the trailing indicator and will do whatever it takes to keep people (401K pensioners) from piling into the 'sell' pen.

LawsofPhysics's picture

What wait, is there really anyone still left in the buy and hold pen?  I thought we all left the building a while back?

Stumpy's picture

I personnally buy and (try to) hold core assets, while trading satellites positions. Let's see what it will do...

Moneyswirth's picture

Wait a minute.  They said a few weeks ago that the banks were "fine"!  I guess when you're sunbathing on the island of Sardinia you don't want to be bothered with the impedning collapse of your Eurozone pipe dream.  Now that holiday is over, it's austerity time.


j0nx's picture

Here's an idea: what about recapitalizing the people and letting the banks fail you fucks? Why people stand for this shit as it happens time after time is sooo beyond me. Bah Bah.

DefiantSurf's picture

while your proposal sounds good on paper (no pun intended) it wouldn't help the overall structural issue of unbacked currencies

j0nx's picture

Yeah I know but the fact that they never mention it is what pisses me the fuck off. It's always we gotta bail out the banks and somehow the money is found to do that time after time but never anything for the people. A few foodstamps or 99 weeks of UE benefits if you are one of the lucky 10% that can actually qualify for that shit. If not then you get DICK except for debasement of your currency, stangnant wages, expensive food and gas and an under water home in a neighborhood FILLED with illegal alien floppers with no possibility of reaching par within the current decade. Yet we all sit around and piss and moan and take it so whatever...

DefiantSurf's picture

Wow, don't candy coat it, tell us how you really feel!


j0nx's picture

I thought I just did?

BurningFuld's picture

You saw how the Egyptians and Libyans revolted and overthrew their governments because of the corruption and concentration of money at the top with just a few people? Guess what? It's happening to you right now!

Moneyswirth's picture

Yeah but we have American Idol, Dancing with the Stars, Jersey Shore and iPads to distract us, and Hot Pockets and McDonalds happy meals to keep us full!!

Instant Wealth's picture

I'll have 2 number 9's, a number 9 large, a number 6 with extra dip, a number 7, 2 number 45's, one with cheese, and a large soda.

-Big Smoke-

Bicycle Repairman's picture

"I's gonna be a hygene technician.  Jes' another steppin' stone to greatness!!!"

- OG Loc AKA Jeffery

eurusdog's picture

At only 13x leverage for the US, might we just be the best looking pig in the room?

topcallingtroll's picture

EU officials arent ignorant. They were liars.

Lying in furtherance of monetary and fiacal policy may produce short term gains, but eventually results in lack of confidence and loss of control.

Dumb socialist central planners. I am so ready for socialism and the lying bureaucrats who support it to implode upon its own contradictions.

Tax eaters beware! We are gunning for you!

macholatte's picture

EU officials arent ignorant. They were liars.

Quite a bit of both.

The mantra is this: don't speak the truth because the people can't handle it and all hell will break loose and you don't want to be responsible for harming innocent lives (or any of a hundred variations of that theme).

At the end of the day, the people CAN handle the truth and simply choose to do nothing about it, as has been demonstrated time and time again. So it is indeed silly to lie about what's happening. There are no consequences.


AustrianEconomist's picture

The end of the great debt experiment is nearing and everything is pointing towards a big credit crash coming up. The world’s monetary system needs to be backed by gold in order to move forward with a sound financial system that does not allow banks create money out of thin air. Money should not be based on debt, but on sound intrinsic value.

Check out the latest from the Capital Research Institute (CRI): The Debt End Game