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In Europe, It's All About The Bank (Run)

Tyler Durden's picture





 

The word 'encumbrance' has received a lot of headlines in the last few months - and rightfully so - after we pointed out the impact that LTROs had in subordinating senior creditors of European banks. As Morgan Stanley points out, this is a considerable problem for bondholders as 'in a wind-down scenario, senior unsecured holders have recourse to fewer assets and hence face a higher loss given default (LGD)'. In understanding just how bad things are for European banks, it is important to focus on 'how much loss-absorbing capital there is beneath you in the bank’s liability stack, as this is the capital that will take losses before senior creditors in the event of a bail-in' which means looking at Deposits as well as encumbrance.

Last night we showed the Loan-to-Deposit ratios for various banks across Europe and Morgan Stanley takes up the offensive noting that the encumbrance effect from depositor preference changes (i.e. withdrawal) is the real threat. While the relative size of the deposit bases of the dozen or so banks that are analyzed below is stunning (with MS estimating best-case recovery in a bank default at around 80% and worst-case a total loss - implying of course that equity is entirely worthless - which we largely knew) and what is very apparent from the pictorial representations of banks’ liability structures is that rather than encumbrance from covered bonds/LTRO etc. the bigger issue for encumbrance of senior unsecured investors is the potential threat from depositor 'runs'.

The key is that all the hope of another LTRO is limited by collateral as policy-makers are well aware that, in a world where failing banks are to be resolved through resolution frameworks and senior creditors are to take losses to shield taxpayers’ funds, banks may not have enough ‘bail-in-able’ debt, given their growing reliance on secured funding sources.

 

With deposits increasingly impaired - and/or the potential for contagious bank runs if we see Grexit, Europe's problem is 'all about the bank runs' now and we were told yesterday how far off that is.

We would suspect though that was Greece to leave then the move to a Euro-wide deposit scheme - and its implicit exchange of sovereignty for monetary support - would evolve quicker; but the crisis has to come first for European leaders to do anything other than talk.

or as Jefferies' David Zervos recently noted:

"Once mom and pop in the rest of EMU see the Greek banks shuttered, there will be a southern European run. The imbalances in Target2 will shift massively against Germany and their only chance will be to cave in and accept mutual liability bond issuance and deposit insurance.

 

Basically, we are on the fast track to a Europe with a pan mutual socialized downside, backed by the Germans and ultimately the ECB. It will be a bumpy ride, and we will lose the Greeks and maybe some others along the way. But a smaller, more sound, more stable, more fiscally profligate and more socialist Europe is coming quickly to the global capital markets. And its about freakin' time!"

Deposits and Encumbered/Secured Assets...

 

Source: Morgan Stanley

 


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Thu, 05/24/2012 - 13:48 | Link to Comment SourNStout
SourNStout's picture

The Run is already in progress

Italy & Spain are waiting in the wings to do the same

Audit---Expose---End it

Thu, 05/24/2012 - 13:50 | Link to Comment Ahmeexnal
Ahmeexnal's picture
EU Demands ID Chip for all European Citizens

Prisonplanet.com
May 24, 2012

The European Union is now moving to create a mandatory electronic ID system for all EU citizens that would be implemented across Europe to standardize business both online and in person, authenticating users via a common ‘electronic signature.’ A single authenticating ID would guard access to the Internet, online data and most commerce. It is nothing short of an attempt to phase in a Mark of the Beast system, and a prominent Bilderberg attendee is behind the scheme.

Thu, 05/24/2012 - 13:53 | Link to Comment midgetrannyporn
midgetrannyporn's picture

I pity the fool who tries to give me a chip. [/Mr. T]

Thu, 05/24/2012 - 14:09 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

is this theReturn0'theSerialJunkster?

here is some serial music for trolling zH during the running of the bullshit:

Music Video - "Da Do Run Run" - The Crystals - 1963 - YouTube

even the charts are erect in this market, boys&girls (& both)

here is a saminal piece which mentions the mighty tylerD, the acutely acute turdF, and is about one of our fave bankster hideouts, the jpMorgue, too!  plus, this explains how the tail wags the doggy in the (how much?) derivatives window where zombies cavort in their dances of: death to you and yours, financially

USTBond Tower of Babel Teeters
By: Jim Willie CB

Thu, 05/24/2012 - 17:29 | Link to Comment TJ00
TJ00's picture

Just don't drink the what Face gives you, otherwise you'll end up in a foreign country with an implanted chip.

Thu, 05/24/2012 - 13:55 | Link to Comment SourNStout
SourNStout's picture

It's a Brave New World

US passports have RFID chips within the jackets now. Had no idea until I received my new one the other day...

 

Thu, 05/24/2012 - 21:55 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I bought a sleeve a couple of years ago that blocks the chip signal.  That might be useful in the future, that bomb in the Paris garbage can won't go off around me because the trigger received a US passport chip signal...

Thu, 05/24/2012 - 15:59 | Link to Comment TBT or not TBT
TBT or not TBT's picture

Have a microwave oven handy?

Thu, 05/24/2012 - 14:06 | Link to Comment Vince Clortho
Vince Clortho's picture

Do you have any sources for the electronic ID system plans?

Fri, 05/25/2012 - 05:34 | Link to Comment Archduke
Archduke's picture

they've been floating around the idea of epidermic barcodes as well.

 

http://www.bbc.com/future/story/20120522-barcode-everyone-at-birth

 

you have to put this in a European context -sic the last time bar codes were used-

to understand how this is posutring and will never ever happen in the EU/eurozone.

 

It does send a dangerous right-wing signal, though.

 

 

 

Thu, 05/24/2012 - 21:50 | Link to Comment Buck Johnson
Buck Johnson's picture

Spain is a complete mess, they are about to implode.  And once Greece breaks, all hell breaks out. 

Thu, 05/24/2012 - 13:49 | Link to Comment SilverTree
SilverTree's picture

All into Gold.

Thu, 05/24/2012 - 13:59 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Doubtful.  They will convert to USD, Swiss Francs, or some other currency they believe is trustworthy.  Sorta "out of the fryin' pan..."

Thu, 05/24/2012 - 15:08 | Link to Comment BlandJoe24
BlandJoe24's picture

I've heard that there is not even remotely enough physical gold to act as a global reserve currency, and so - at least in the near-medium term - some fiat currency will remain the reserve/safe harbor.  Thoughts?

Thu, 05/24/2012 - 15:16 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

There is plenty of gold.  You just have to pay the price.  That will be true in the future as well, but the price is likely going MUCH higher!

fofoa.blogspot.com

Thu, 05/24/2012 - 14:01 | Link to Comment Winston Churchill
Winston Churchill's picture

Don't think it's quite time to go full in.

Holding 50% in PMs.(lost in a gardening accident).

50%cash in basket of currencies(no euros).

No other paper,out of all stocks, bonds etc.

Will probably miss the PM low,but trying to time anything

in this 'market' is for the birds.

Thu, 05/24/2012 - 14:11 | Link to Comment mayhem_korner
mayhem_korner's picture

No other paper...

 

Consider some holdings in "toilet".

Thu, 05/24/2012 - 14:17 | Link to Comment Max Fischer
Max Fischer's picture

 

 

 

All into Gold....

With gold ~$400 off its highs and silver firmly in a bear market, how/why do you idiots convince yourselves that everyone is running into precioius metals?  Like malfunctioning robots, the PM lemming brigade pukes up this garbage all day, every day and yet there's absolutely NO proof to back it up.  The charts clearly demonstrate that you're wrong.  

The actual facts suggest that everyone is fleeing into US debt for safety.... which is the EXACT OPPOSITE of everything you morons have predicted. 

MF



 

Thu, 05/24/2012 - 14:22 | Link to Comment Paul Atreides
Paul Atreides's picture

That's why central banks are buying massive amounts of gold across the world and the Federal Reserve bought 64% of USTs and 80%+ of long USTs in 2011. Sounds to me like your a bit dillusional....

Thu, 05/24/2012 - 14:27 | Link to Comment Max Fischer
Max Fischer's picture

 

 

Looks to me that the market is in perfect agreement with the Fed's decision to buy bonds.  Here, in 2012, US debt continues to be the safe haven of choice. Each debt auction sets new world records.  

Secondly, even if a few select central banks bought gold to balance their reserves, the price has still fallen by ~$400 in the past year.  As faith in the Euro continues to erode, gold can barely catch a bid.... even with central bank purchases.  Clearly, there are more sellers than buyers. 

MF

Thu, 05/24/2012 - 14:47 | Link to Comment Paul Atreides
Paul Atreides's picture

Looks to me that the market is in perfect agreement with the Fed's decision to buy bonds.  Here, in 2012, US debt continues to be the safe haven of choice. Each debt auction sets new world records.  - Records for what? Lowest yields? Here please let me pay you to store my money in a massive bubble.

Secondly, even if a few select central banks bought gold to balance their reserves, the price has still fallen by ~$400 in the past year. - An Excellent chance to accumulate for us little folk before the contagien from the EU spreads worldwide. Those naked shorts that keep getting dumped on the comex are worthless, people are selling the crappy paper gold before the music stops pushing down the spot price and quietly accumulating physical on the side.

As faith in the Euro continues to erode, gold can barely catch a bid.... even with central bank purchases.  Clearly, there are more sellers than buyers. - If it is clear to you then please share your data with us, I would like to see evidence of more sellers then buyers. Can you also provide evidence that the US can actually pay off $16 trillion in debt and $119 Trillion in unfunded liabilities? Thats some data all of ZH would really like to see....

Thu, 05/24/2012 - 17:03 | Link to Comment Max Fischer
Max Fischer's picture

 

 

I would like to see evidence of more sellers then buyers......

*LOL*

Ummmm..... what do you think a decline from $1900+ to ~1550 means?  Your "proof" is right in front of your face.

Can you also provide evidence that the US can actually pay off $16 trillion in debt and $119 Trillion in unfunded liabilities?

If a person making $60,000 a year takes out a $200,000 30 year mortgage, is he bankrupt?  

MF 

 

Thu, 05/24/2012 - 18:10 | Link to Comment fuu
fuu's picture

In every sale there is a buyer and a seller...

Sat, 05/26/2012 - 09:57 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

"If a person making $60,000 a year takes out a $200,000 30 year mortgage, is he bankrupt? "

Some are. Those numbers aren't enough to say one way or another.

1900 is a fair price but in terms of monetary risk it was a bit early, grabbing gold bullion as insurance vs that risk. For others it was a great time to use GLD Puts and I did.

Thu, 05/24/2012 - 14:47 | Link to Comment fuu
fuu's picture

Keep pimping that bubble hypocrite boy.

Thu, 05/24/2012 - 14:35 | Link to Comment i_call_you_my_base
i_call_you_my_base's picture

Actually, many people here predict the flee to US debt prior to massive printing which will then cause that to faulter as well. Also, who cares about six months out? Seems like most people here are planning for three or more years into the future. And unless you believe long-term deflation is in the cards, there is not much to argue against.

Thu, 05/24/2012 - 15:29 | Link to Comment BlandJoe24
BlandJoe24's picture

Six months of deflation out could be very significat for your three-four years out return.  If in the next six months the dollar continues to rally while  price of gold continues to decline, then buying much more gold with fewer dollars six months from now will be that much more appreciated years down the line when deflation lifts and hyperinflation kicks in ....

But, more importantly, there is a possibility of severe near-medium term deflation.  And then not many people will be worrying about what they can do to invest for long-term gains, they'll be worrying about immediate basic needs.  And in that case cash in king, and hard assets - even gold - will be sold as needed just for survival. 

It doesn't take three-four years to get hungry.... It may be most prudent to build up cash reserves, food/etc. reserves, and community interconnectedness reserves first, and only add gold if you have all that handled and have extra for long term investment. 

Thu, 05/24/2012 - 14:40 | Link to Comment unununium
unununium's picture

This is 1979, kapish?  Only difference is the CPI is doctored now.  Enjoy your bonds.

Thu, 05/24/2012 - 16:02 | Link to Comment TBT or not TBT
TBT or not TBT's picture

What was the ratio of total debt to GDP in 1979?     Vs Today?

This is not 1979.   We have debt deflation, and a dearth of credit out there.

Thu, 05/24/2012 - 14:46 | Link to Comment snakeboat
snakeboat's picture

You and MDB are precious.

Thu, 05/24/2012 - 15:16 | Link to Comment RoadKill
RoadKill's picture

Most of the PM bugs on here can't even give you a rationale explanation of why they own gold.

They think gold should go up in every possible scenario.  If the Fed and ECB print - gold should go up because of inflation.  If a country declares bankrupcy and/or its banks go tits up - gold should go up because of fear.

Greece, Portugal, Spain and Italy declaring bankrupcy is BAD for PMs.  Bankruns are BAD for PMs.  A dissolution of the Euro is BAD for PMs.  A bear market in stocks is BAD for PMs.  Record low interest rates are BAD for PMs.

What is good for PMs?  US monetizing its debt rather then cutting spending.  The Euro staying togeather and the ECB hitting cntl-P.

If you own gold you have to realize you are betting on INFLATION.  You are betting that central banks will continue debasing their currencies rather then accepting defaults, reorganization and deflation.  BTW stocks will go up just as much as PMs in this scenario.  And levered longs will go to the freaking moon because the value of your equities will go up with inflation and the debt side won't.  The best model is to run a levered long hedge fund.  2/20 is based on NOMINAL returns.  If the market goes up 1000% a year due to Weimar-ization then the richest people in the world will be the heads of the big hedge funds and they will have 10x more money then a Bill Gates.  And the worst investment in this scenario is Debt.  The RECORD LOW levels of interest rates on UST indicates a lot of people don't think inflation is the key concern right now.

Record low yeilds in UST/Bunds, the dramatic sell off in European and Emerging equities, Greece's coming bankrupcy and the bank runs in every Mediterranean country indicate we are headed for DEFLATION.  Deflation is VERY bad for PMs.  Its also bad for stocks and people who owe money.  The best investment in this scenario is to be a lender in VERY high quality debt that gets paid back.  Actually the best investment is TZA, SMDD, FAZ etc...

 

However a replay of the Great Dr

Thu, 05/24/2012 - 15:22 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Gold was one of the BEST performers in the deflation of the 1930s Great Depression.

Thu, 05/24/2012 - 18:52 | Link to Comment blunderdog
blunderdog's picture

   If you own gold you have to realize you are betting on INFLATION.  You are betting that central banks will continue debasing their currencies rather then accepting defaults, reorganization and deflation.

So what's wrong with that? 

   The RECORD LOW levels of interest rates on UST indicates a lot of people don't think inflation is the key concern right now.

Uh, no.  That conclusion is not warranted.  It COULD mean "a lot" of people aren't worried about inflation, that's a POSSIBLE interpretation.  I think it's a real stretch of imagination.

It could instead mean that bond buyers have access to effectively unlimited amounts of money and are concerned that the banking system is at risk of collapse without guaranteed government intervention and backstopping. 

And by "bond buyers" I refer to banks.

Fri, 05/25/2012 - 00:58 | Link to Comment Burnbright
Burnbright's picture

Gold and Silver go up in periods of economic uncertainty. The reason Gold and silver will continue to increase in value is because bureaucrats control the ebb and flow of capital in the economy. People are uncertain about future taxes, liabilities, and restrictions burdening businesses. 

The more the government tries to bleed people dry and break laws in favor of corporate interests the more ordinary people will go to the one thing that is the Achilles heel of all governments today, and that is without a doubt using real money over fiat paper. 

So really it isn't that "gold bugs" see gold and silver going up in all situations. If the rule of law existed even remotely then Gold and silver would tank. The problem is I do not see things ending well no matter what happens because of WHO is in control and what they are doing. 

 

Your problem with understanding the reasons for owning gold and what to react to in terms of inflation and deflation are all in your understanding of money. You can not apply supply and demand logic to economies running on fiat currency and capital controls being enforced. It simply does not operate the same way.

Thu, 05/31/2012 - 20:33 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Gold is insurance, not a bet. Gold is a store of value more than any investment.

Got positive interest rates? Got positive rates exceeding the rate of inflation today? Got positive rates, above inflation and no printing of money? If yes SELL GOLD, hold income-yielding assets measured in the fiat currency/ies of choice, if NO buy GOLD.

It's that simple.

Thu, 05/24/2012 - 15:21 | Link to Comment Ricky Bobby
Ricky Bobby's picture

"Max Fischer" such an appropriate Bolshevik name.

Thu, 05/24/2012 - 16:05 | Link to Comment Fukushima Sam
Fukushima Sam's picture

Hot digital money, dude.  Hot digital money...

Thu, 05/24/2012 - 21:56 | Link to Comment NoClueSneaker
NoClueSneaker's picture

Hmmm, me has no clue, but I think u'd like to suck sum cocks.

So, bite me gently, I'll pretend yo my femme fatale ....

 

* 2K, respectivly 60-70$ /Oz. in 3... 2... 1...

Sat, 05/26/2012 - 09:59 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Gold has to hold under 800 for more than 12 months solid to be in a bear market. Not happening. Every gold price above 1300 is FIRMLY bull-market. 1560 is a fairly hefty price for gold and 1900 was early but is easily happening again.

End-2012 target for gold is 2400 to 2700 / oz based on the math, ROC forward-rolling for 277-week, 52-week & also looking at the exponential trend curve for all the lowest prices of each year for the last 10 years in gold.

Your nonsense is flatly still nonsense. And not nearly as funny as MillionFecesBonus.

Thu, 05/24/2012 - 13:52 | Link to Comment barliman
barliman's picture

 

Chill the fuck out!

The French and the Italians have GOT this ....

/s

Waiting for an article on the spill over effect of European bank runs onto the Feds currency swaps.

barliman

Thu, 05/24/2012 - 14:03 | Link to Comment BeetleBailey
BeetleBailey's picture

.....as am I barliman.

Spot on.

The Greeks are one thing.

The French and Italians? The shit's gonna get really real.

Thu, 05/24/2012 - 14:05 | Link to Comment SheepDog-One
SheepDog-One's picture

'Overnite run on the banks' was how it all started in 2008.

Thu, 05/24/2012 - 15:23 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Bank runs: start early and often!

Thu, 05/24/2012 - 17:57 | Link to Comment Overflow-admin
Overflow-admin's picture

Actually I just took out 700CHF, just to have some cash in case of 'overnite' or 'deelight' bank runs... Not much but does that count? I do it pretty often ^^

Thu, 05/24/2012 - 13:53 | Link to Comment vast-dom
vast-dom's picture

bank runs are irrelevant since banks are no longer in the banking business; rather, they  are the instruments of central planning and vice-versa.

Thu, 05/24/2012 - 13:55 | Link to Comment SilverTree
SilverTree's picture

Bank runs are a true hint to the sentiment of the people "on-the-ground".

Thu, 05/24/2012 - 13:58 | Link to Comment SilverTree
SilverTree's picture

Why the junk?

 

My point is that bank runs are NOT irrelevant.

Thu, 05/24/2012 - 14:06 | Link to Comment Paul Atreides
Paul Atreides's picture

Seeing multi junkers just run down the comments last couple days, it's like a kid pressing all the red buttons on the elevator childish...

<---edit see! lol

Thu, 05/24/2012 - 14:08 | Link to Comment SilverTree
SilverTree's picture

Funny & true Paul.

 

I will conceded that bank runs may be irrelevant to some people on the top and the bottom of the "food-chain".

Thu, 05/24/2012 - 14:13 | Link to Comment Paul Atreides
Paul Atreides's picture

Totally on board with that, every real dollar/euro you take out takes away x10 their leverage due to the miracles of fractional reserve. It is why declaring a bank run or calling for a bank run is illegal in most countries, it is turning their debt slavery weapon against them.

Thu, 05/24/2012 - 14:18 | Link to Comment vast-dom
vast-dom's picture

paul: in reality this is all possible, but today we have a level of intervention such that we are dealing with trans-fractional banking, ZIRP, central buy-backs and shadow books. put even more simply: once upon a time there were interest rates on savings and consequent multiplier effects as function of said savings; today, it's an enitrely different story......

 

don't you dare fucking junk me /sarc off

Thu, 05/24/2012 - 14:32 | Link to Comment Simulacra10
Simulacra10's picture

I've seen it all now. An intellegent discussion on the zh comments section. Civil discourse bitchez!!!!

 

Thu, 05/24/2012 - 19:49 | Link to Comment old naughty
old naughty's picture

actually not if the elevator is dropping...

pressing all the buttons on a fast-falling elevators will help it slow down or stopped.

What are you saying? Oh, junkers=kids.

Let's see how many...

Thu, 05/24/2012 - 14:09 | Link to Comment skepticCarl
skepticCarl's picture

SilverTree, you were probably junked by someone who objected to your preposition "to" rather than "of", and by some gold-bug that thinks that you are dissing gold with your screen name.

Thu, 05/24/2012 - 14:15 | Link to Comment SilverTree
SilverTree's picture

Thanks, english is my second language and I love gold too.

Thu, 05/24/2012 - 13:53 | Link to Comment midgetrannyporn
midgetrannyporn's picture

Aand, it's gone!

Thu, 05/24/2012 - 13:55 | Link to Comment falak pema
falak pema's picture

glass steagall would avoid this crap, implement it fast! Also currently ECB backstops all banks in Eurozone to unlimited amounts.

Thu, 05/24/2012 - 14:15 | Link to Comment xtop23
xtop23's picture

Too late to hope that reimplementation of Glass-Steagall would pull us out of this tailspin.

It's far too late in the game for that.

Thu, 05/24/2012 - 14:26 | Link to Comment falak pema
falak pema's picture

I agree but there is a day after the storm. And we have to move on. 

Thu, 05/24/2012 - 14:49 | Link to Comment xtop23
xtop23's picture

 There will be no "moving on" until they've totally destroyed confidence in the current system and utterly decimated it.

 Then a new system will be rolled out that gives lip service to all of the changes that we know must be implemented for stability, only to be ignored yet again, when it is politically expedient.

Thu, 05/24/2012 - 19:51 | Link to Comment old naughty
old naughty's picture

which "storm" you are refering to?

I wouldn't count on Days to remain.

Thu, 05/24/2012 - 13:58 | Link to Comment Sweedumz
Sweedumz's picture

Two reports on European banks in three days and no Irish banks included? Come on Tyler, show the green PIIGSies some love.

Thu, 05/24/2012 - 14:01 | Link to Comment mt paul
mt paul's picture

mark it to zero

market to zero....

be here now..

Thu, 05/24/2012 - 14:25 | Link to Comment fuu
fuu's picture

Ram Dass?

Thu, 05/24/2012 - 15:12 | Link to Comment PlausibleDenial
PlausibleDenial's picture

Richard Alpert?? :)

Thu, 05/24/2012 - 14:02 | Link to Comment john_connor
john_connor's picture

Would a deposit guarantee matter if the citizens did not trust the guarantor or agree with the premise of an EU fiscal union?

Thu, 05/24/2012 - 14:03 | Link to Comment Bastiat009
Bastiat009's picture

This euro thing will habe taught me something: bank run = gold crash.

It's like saying eating a lot makes you thin so we'll see what happens next.

Thu, 05/24/2012 - 14:12 | Link to Comment SheepDog-One
SheepDog-One's picture

Billy Mays here, with 'FED AWAY©'! Miracle new diet pills lets you splurge all day living and eating like you just dont care and theres not a consequence ever in the world, and watch the pounds just MELT AWAY! And for a limited time only get a FREE bottle of "TIMMAYYY!!!©' which 1 pill daily gives you the physique of a Mr/Ms Universe! Guaranteed! (wink wink)

Thu, 05/24/2012 - 14:16 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

The imbalances in Target2 will shift massively against Germany and their only chance will be to cave in and accept mutual liability bond issuance and deposit insurance.  (dZervos)

or not, imo

oh, angela!  where are you?  L0L!!! 

Thu, 05/24/2012 - 14:10 | Link to Comment bnbdnb
bnbdnb's picture

When you eat lots of green grass.

Thu, 05/24/2012 - 14:14 | Link to Comment Joe The Plumber
Joe The Plumber's picture

Gold no doubt does crash. Then what happens next is up to sentiment and policy. Richard Russell is right that everyone loses in a collapse. The key is to lose as little as possible. When a complex economy undergoes retrenchment and devolution then you may have a lot of gold but the shit aint there to buy. What goods are available are produced less efficiently so you are worse off than before, but probably much better off than the average sheeple who didnt have gold

Thu, 05/24/2012 - 14:16 | Link to Comment Joe The Plumber
Joe The Plumber's picture

High quality pussy will be extremely cheap if that is any consolation

Thu, 05/24/2012 - 14:41 | Link to Comment xtop23
xtop23's picture

Why in the Hell would anyone junk you for that?

If I wasn't married, and I could buy a night with Allessandra Ambrosio ( pre motherhood of course ) for a couple of ASE's.....

Thu, 05/24/2012 - 22:06 | Link to Comment NoClueSneaker
NoClueSneaker's picture

FYI:

Low Quality Pussy = 10 €

Middle Class Pussy ( with the license, "Bockschein" ) = 50-70 €

High Class Pussy = 150 - 250 € ..,..

=======================

Wilkommen nach Hamburg .... :-P

Never seen such discount in the last Q of the century.

 

 

Thu, 05/24/2012 - 14:19 | Link to Comment jimmyjames
jimmyjames's picture

This euro thing will habe taught me something: bank run = gold crash.

***********

Why do you equate the EUR as somehow being connected to the world POG?

Both are simply competing currencies and gold decoupled from the EUR and the USD long ago and if you pull up a monthly gold price chart-the proof is staring you in the face-

http://bit.ly/xdModk

 

Thu, 05/24/2012 - 14:40 | Link to Comment Bastiat009
Bastiat009's picture

You may not be aware of it just yet, but we are in 2012, nearly 6 months into it actually.

Thu, 05/24/2012 - 14:49 | Link to Comment jimmyjames
jimmyjames's picture

You may not be aware of it just yet, but we are in 2012, nearly 6 months into it actually.

*************

That's it?

Thanks for explaining it all-

Thu, 05/24/2012 - 14:32 | Link to Comment Doubleguns
Doubleguns's picture

Could it be that some are looking for the final event in the bank runs is the banks selling lots of gold to pay off debts. Just a question cuz I too can not figure this out.

Thu, 05/24/2012 - 14:05 | Link to Comment zerotohero
zerotohero's picture

Heck I started removing cash from the bank months ago - just in case. I wasn't making anything on it sitting there anyway.

Thu, 05/24/2012 - 14:06 | Link to Comment skepticCarl
skepticCarl's picture

"When you see a line forming in front of your bank, get in it."  attributed to Mohamed El-Erain of PIMCO

Thu, 05/24/2012 - 14:12 | Link to Comment zerotohero
zerotohero's picture

Heck I started removing cash from the bank months ago - just in case. I wasn't making anything on it sitting there anyway.

Thu, 05/24/2012 - 14:18 | Link to Comment Marco
Marco's picture

First Tyler tells us deposit insurance is impossible and asspulls some 3x loan to deposit ratio difference between the US and the EU (which might very well be true, but was not backed up by the graph he posted with the assertion ... still waiting for the explanation where the number came from).

Now he's quoting people as being inline with his reasoning who see the deposit insurance as inevitable ... sooooo ... which is it Tyler? :)

Personally I hope Eurozone wide deposit insurance will be one of the corner stones of Eurozone can kicking ... and I think we can kick the can awful far because of our external trade balance (ala Japan). I'm not in a hurry for the global economic meltdown.

Thu, 05/24/2012 - 14:19 | Link to Comment Joe The Plumber
Joe The Plumber's picture

It is impossible to fully insure systemic risk.

Tyler is discussing actual recovery should bank assets be sold off to satisfy depositor claims

Actual recovery can never be 100 percent in a systemic bank collapse. Hence insurance is a mirage

Thu, 05/24/2012 - 14:31 | Link to Comment Marco
Marco's picture

Risk denominated in a given currency can always be fully insured if you own the printing press for that currency (of course the printing will usually take a detour through QE, like it did in Japan). With an external trade balance the risk of hyperinflation isn't really a big thing either (which is why it worked for Japan, the US has a slightly different way to make it work ... lots of guns).

Thu, 05/24/2012 - 14:19 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

tyler is out looking for angela, himself, i think!  L0L!!!

Thu, 05/24/2012 - 14:17 | Link to Comment littleguy
littleguy's picture

When are the bankers going to jail?

I'm just really worried that we won't have enough jail places...

Thu, 05/24/2012 - 14:18 | Link to Comment shovelhead
shovelhead's picture

Hmmm,

Bank runs...No wonder the Morgue seemed unhappy to cash out my Maritime Fund last week.

Guess they hate to see a muppet go un-Corzined.

Thu, 05/24/2012 - 14:24 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

avoid the counterparty lubbers and bilge bunnies, mate, and enjoy the cruise on yer americanMaid

Thu, 05/24/2012 - 14:44 | Link to Comment shovelhead
shovelhead's picture

Aye Matey,

Monster boxes are on the SS Minnow fer ballast.

Thu, 05/24/2012 - 15:17 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

L0L

i hope that isn't what you christened yer canoe

Thu, 05/24/2012 - 14:25 | Link to Comment KandiRaverHipster
KandiRaverHipster's picture

so i don't understand.  who are the senior creditors now?  who's getting paid first in the event anyone gets paid? 

Thu, 05/24/2012 - 14:34 | Link to Comment Doubleguns
Doubleguns's picture

The bankers bonus' are senior.

Thu, 05/24/2012 - 14:37 | Link to Comment AmenRa
AmenRa's picture

I prefer Greave or Greaving (Greece leaving) to Grexit. Rolls of the tongue better. My 0.02

 

I get the feeling that Greece will leave the euro when the US markets are closed (long weekend, holiday, etc).

Thu, 05/24/2012 - 17:25 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

Don't Greeve for me, Argentina. 

Thu, 05/24/2012 - 14:46 | Link to Comment Bastiat009
Bastiat009's picture

Didn't stock markets across Europe went up thanks to banks today?

Thu, 05/24/2012 - 14:48 | Link to Comment Estrella
Estrella's picture

Ahhh... I see the problem:

 

"more fiscally profligate and more socialist Europe"

Thu, 05/24/2012 - 14:51 | Link to Comment Clashfan
Clashfan's picture

Oh well. Life's rough in Gangsterville.

http://www.youtube.com/watch?v=3lVKQ2C9Fow

 

Thu, 05/24/2012 - 14:54 | Link to Comment geewhiz190
geewhiz190's picture

meanwhile, while this crowd bickers about gold, the dollar continues to rally. as far as using central bank's gold buying as a reason to be long gold-they're the same crowd that  dumped years ago pretty much right at the lows. i wonder how many members of the gold-only crowd realize they could have doubled their money in some of the home building stocks in the last 10 months ?  politics and emotion don't help much when deciding which side of the market to be on.

Thu, 05/24/2012 - 15:29 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

i've been writing about the dollar regularly, g_w_0

every day of my life the touts cry:  "i wonder how many (< ? >) realize they coulda doubled their money in [< ? >] over X amount of time?"

then don't forget the politics and emotion, too, when generalizing, and speaking negatively about "this crowd"

but thank you for also pointing out that the dollar continues to rally and pretending it is "news" here.  come back soon!

Thu, 05/24/2012 - 16:21 | Link to Comment geewhiz190
geewhiz190's picture

be back? this is too funny for words, why leave? this crowd is just a wellspring of insight and imagination.

Thu, 05/24/2012 - 16:25 | Link to Comment geewhiz190
geewhiz190's picture

dollar rally news? for some reason it seems to make this crowd angry that the dollar is appreciating. to me, it will just make the next trip to europe that much more affordable, assuming it continues.

Thu, 05/24/2012 - 20:39 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

yup

i think i was blogging about how cheap europa would be last friday...

things "seem" to make "this crowd" subject to your opinion?

how long have you been like this? 

you're not saying anything original;  people here are aware of the fx and dollar stuff;  it comes up all the time

i hope you're ok;  are you sure you know where you are, son?

Thu, 05/24/2012 - 14:57 | Link to Comment steve from virginia
steve from virginia's picture

 

First of all:

The key is that all the hope of another LTRO is limited by collateral ... blah, blah, blah ... blah blah-blah ... given their growing reliance on secured funding sources. 

 

Thank you. The foregoing applies to ALL monetary operations not just LTROs: includes QE, discount window facilities and the rest of the central banks' alphabet soup of hand-waving, jerk-offing nonsense.

Second: the issue is worth of assets. Clearly there is near-zero capital at any of these banks, they are all over-leveraged. Asset impairment adversely effects capital, senior liabilities ... given enough impairment the depositors are also wiped out. No wonder they are fleeing in droves.

Yes, Virginia, debt does equal wealth.

Deposit insurance (guarantees) won't work as they are subject to paradox of thrift: if one or two banks fail the guarantee is affordable by the system. When the system itself breaks and all banks fail so does the guarantor who is a dependency of the failed banks!

There are good reasons to own non-currency assets and ongoing system failure is one of them: 'gold bitchez'.

Thu, 05/24/2012 - 15:14 | Link to Comment carbonmutant
carbonmutant's picture

Once deposit guarantees arrive they will need to be tested...

Thu, 05/24/2012 - 15:15 | Link to Comment mt paul
mt paul's picture

two investers are talking about bank runs 

the young one says..

maybe we should  run  down to the bank

and withdraw some of our savings ...

the older one says    no 

we should  walk down to the bank

and withdraw everything ...

Thu, 05/24/2012 - 15:29 | Link to Comment xperttrader
xperttrader's picture

meanwhile on eurovision tv, sign of the times from rasmc  euro neuro  http://www.youtube.com/watch?v=D6S-FNLv2jQ

Thu, 05/24/2012 - 15:31 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

tv?  what is that?

Thu, 05/24/2012 - 16:01 | Link to Comment xperttrader
xperttrader's picture

"give me chance to refinance" ... live version :http://www.youtube.com/watch?v=JHnqF5PLP2w

Thu, 05/24/2012 - 19:59 | Link to Comment old naughty
old naughty's picture

wow, you really miss the good-old-days, showing Kirk (not the Captain) as your avatar...at least he is waving a bigger sword (in Spartacus) than Gekko using paper to invade corporation.

Thu, 05/24/2012 - 15:52 | Link to Comment financial apoca...
financial apocalyptic contagion's picture

MAN I LOVE ZERO HEDGE!!

forewarned is forearmed

Thu, 05/24/2012 - 20:01 | Link to Comment old naughty
old naughty's picture

I love zero hedge too, but I don;t understand...

are you saying early warning is too fore-y (early)?

Thu, 05/24/2012 - 16:24 | Link to Comment AllAboutTheBenjamins
AllAboutTheBenjamins's picture

Dangit, I thought it was all about the Benjamins, err Euros.

Thu, 05/24/2012 - 16:41 | Link to Comment Babushka
Babushka's picture

...

Thu, 05/24/2012 - 16:58 | Link to Comment gina distrusts gov
gina distrusts gov's picture

Do something for nature

Feed the crows and ravens

mount your favorite bankster on a lamp pole

Thu, 05/24/2012 - 17:23 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

No one told you when to run

You missed the starting gun

Thu, 05/24/2012 - 21:11 | Link to Comment covert
covert's picture

europe has been through worse before, it's part of the cycle.

http://covert.ias3.com/expose/

 

Fri, 05/25/2012 - 05:25 | Link to Comment Zero Govt
Zero Govt's picture

Jefferies' David Zervos noted:  "..a smaller, more sound, more stable, more fiscally profligate and more socialist Europe is coming quickly to the global capital markets. And its about freakin' time!"

Even the finance industry is rammed with socialist scum in Europe ..like banking who have spnsored Commies (and every other idealistic politicised loon) for over a Century

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