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European Nash Equilibrium Collapses - Bank Bailout Stigma Is Back At The Worst Possible Time

Tyler Durden's picture




 

In all the excitement over the December 21 LTRO, Europe forgot one small thing: since it is the functional equivalent of banks using the Discount Window (and at 3 years at that, not overnight), it implies that a recipient bank is in a near-death condition. As such, the incentive for good banks to dump on bad ones is huge, which means that everyone must agree to be stigmatized equally, or else a split occurs whereby the market praises the "good banks" and punishes the "bad ones" (think Lehman). As a reminder, this is what Hank Paulson did back in 2008 when he forced all recently converted Bank Holding Companies to accept bail outs, whether they needed them or not, something that Jamie Dimon takes every opportunity to remind us of nowadays saying he never needed the money but that it was shoved down his throat. Be that as it may, the reason why there has been no borrowings on the Fed's discount window in years, in addition to the $1.6 trillion in excess fungible reserves floating in the system, is that banks know that even the faintest hint they are resorting to Fed largesse is equivalent to signing one's death sentence, and in many ways is the reason why the Fed keeps pumping cash into the system via QE instead of overnight borrowings. Yet what happened in Europe, when a few hundred banks borrowed just shy of €500 billion is in no way different than a mass bailout via a discount window. Still, over the past month, Europe which was on the edge equally and ratably, and in which every bank was known to be insolvent, has managed to stage a modest recovery, and now we are back to that most precarious of states - where there is explicit stigma associated with bailout fund usage. And unfortunately, it could not have come at a worse time for the struggling continent: with a new "firewall" LTRO on deck in three weeks, one which may be trillions of euros in size, ostensibly merely to shore up bank capital ahead of a Greek default, suddenly the question of who is solvent and who is insolvent is back with a vengeance, as the precarious Nash equilibrium of the past month collapses, and suddenly a two-tier banking system forms - the banks which the market will not short, and those which it will go after with a vengeance.

The WSJ has more on this very subtle but so very critical shift in the European bailout game theory equilibrium:

A group of top European banks is disclosing that they didn't borrow money under the European Central Bank's bank-lending program, fearful of being perceived as bailout recipients.

 

The broad participation in the program, known as the Long-Term Refinancing Operation, fueled a sense of euphoria among many bank executives and investors that the worst of the Continent's two-year banking crisis was over. In a second batch of loans in late February, analysts expect the ECB to distribute as much as €1 trillion in additional funds, partly because the central bank is making it easier for banks to borrow.

 

But some bankers and observers are starting to warn about unexpected fallout from the ECB's loan program. A top concern among banks is that the receipt of central-bank lifelines could subject them to potential political or regulatory interference and sully their ability to declare themselves free of any outside help. That sentiment has the potential to damp demand for future ECB loans, at least among the Continent's strongest banks.

In other words, the market is finally waking up that the LTRO, more than merely carrying the upside of a mechanism preserving the status quo for a brief period of time, also has the downside of implicit stigma associated with any and every bank that is found to use it. And the punchline here is that the second a European "Jamie Dimon" emerges and starts touting their lack of need to use LTRO cash, the whole plan collapses. It appears that Deutsche Bank, the bank whose assets are 80% of German GDP, is just that equilibrium collapse factor.

It isn't yet clear how many banks declined to borrow but the list includes Deutsche Bank AG and Barclays PLC. While the ECB doesn't divulge which banks borrowed, most companies are expected to disclose the information as they release annual results this month.

 

"The fact that we have never taken any money from the government has made us, from a reputation point of view, so attractive with so many clients in the world that we would be very reluctant to give that up," said Josef Ackermann, Deutsche Bank's chief executive, explaining to analysts last week why the German lender didn't borrow from the ECB.

 

Mr. Ackermann said Deutsche Bank still is scarred from its experience borrowing from the Federal Reserve in the first phase of the financial crisis in 2008. U.S. regulators encouraged banks to borrow under the cloak of promised confidentiality, but when the banks' identities were subsequently disclosed by the Fed, the recipients were dubbed bailout recipients. "We learned a lesson," Mr. Ackermann said.

 

Other bank executives privately have voiced similar opinions. Some of that sentiment is likely to surface publicly in coming weeks as banks report annual results and executives face questions from investors about whether they borrowed from the ECB.

English banks are also suddenly scrambling to portray themselves as healthy:

In the U.K., the Financial Services Authority informally encouraged the banks to tap the ECB loan program, although the regulator also made clear that the decision was up to the individual banks, according to executives with several British banks. The goal of the FSA, shared by other European regulators, was to promote broad use of the facility and reduce any stigma associated with borrowing, said people familiar with the matter.

 

A number of top British banks, including Barclays, Standard Chartered PLC and Lloyds Banking Group PLC, opted not to borrow from the ECB, according to people familiar with the matter.

Beyond the implicit, there are explicit risks associated with being bailed out:

"Those heavily reliant on ECB funding run risks of interference as a price for continued support. This may come to be seen as a form of nationalization," said Simon Samuels, a European banking analyst at Barclays Capital. He said bank executives are likely to worry that regulators will view their dependence on ECB funds as a sign of a broken business model and will pressure them to restructure operations.

 

Such concerns are peripheral for banks that potentially were going to have trouble refinancing maturing debt at nonpunitive prices. Virtually every major French, Spanish and Italian bank borrowed billions of euros from the ECB, according to bank disclosures and people familiar with the matter. Among those was Banco Bilbao Vizcaya Argentaria SA, Spain's second-largest lender by assets, which borrowed €11 billion, the bank's president told analysts last week.

 

Some healthy banks also pounced on the opportunity for inexpensive three-year funding. HSBC Holdings PLC was among those that borrowed even though it didn't need the money, according to people familiar with the matter. Any profits the British bank reaps from investing the borrowed funds will be segregated from HSBC's bonus pool, one person said.

Yet all these considerations pale before the reality that any banks that borrows even €1 on February 29 will suddenly be perceived as a lower-tier performer, when faced with banks that parade with their "fortress balance sheet." And as everyone knows, bail outs only work when everyone agrees to be bailed out. Otherwise, it is a shortcut to collapse. Because the last thing Intesa and UniCredit and STD and a whole lot of not so healthy banks will want on March 1 and onward is to be put in the "bailout recipient" category when so many others clearly no longer need the cash...

It appears that European banks, in their vain attempts for short-term capital gains, may have just sealed the fate of the entire financial sector.

 

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Tue, 02/07/2012 - 09:10 | 2133446 Eugend66
Eugend66's picture

GREAT article !!

Tue, 02/07/2012 - 09:14 | 2133450 gojam
gojam's picture

It starts with a collapse of the 'Nash Equilibrium' and ends with a 'Hobbesian Trap'

Tue, 02/07/2012 - 09:16 | 2133458 VanillAnalyst
VanillAnalyst's picture

Kind of bleak for a Tuesday morning, can't we focus on the upside? It's going to be super cheap to vacation in Europe!

Tue, 02/07/2012 - 09:23 | 2133473 ratso
ratso's picture

He meant "stigma" not "stigmata" - no signs of sainthood here.

Tue, 02/07/2012 - 10:02 | 2133567 Oh regional Indian
Oh regional Indian's picture

Actually stigma/Stigmata are both moot.

Because Good Bank, or the very existance there-of is an Oxy-Moron. it's a lesser of eevil's game in the banking world.

And of course banks will be tier-ized, look at how many names have vanished, swallowed. This is a set up for sizing the fish so the big one's may swallow. It's happening here in india by the way. There is a huge mushrooming of NBFC's (non Banking Financial Corporations), Gold Loan companies, easy loan subsidiaries of every money-house you can think of...

And then, once the hard work is done, getting money out of local hands by locally trusted people, the next level moves in. Simple.

This will only ratchet up the consolidation process of banks, which is inevitable. There are too many financial cockroaches int he world.

ori

shattering-midass-curse-gold-de-spell-ed/

Tue, 02/07/2012 - 10:10 | 2133582 ratso
ratso's picture

Banks may become "financial cockaroaches" (nice turn of phrase) , however, they are not inherently evil - just amoral.

Tue, 02/07/2012 - 10:11 | 2133585 RiverRoad
RiverRoad's picture

You bet "there are too many financial cockroaches" out there.  Everybody and their uncle was running around getting bank charters trying to start up a bank in the hopes of getting it "bought out" by a bigger bank and making crazy loans to keep it going 'til then.  Let 'em fold; the sooner the better.  They sure shut down everyone else who can't pay their bills.

Tue, 02/07/2012 - 09:28 | 2133483 FinHits
FinHits's picture

Personally I think any bank that does not use LTRO2 to replace repo funding with it is an idiot. Who cares about a "stigmata", when you are simply replacing one uncertain repo market to a certain (and cheap) one at the ECB.

I view the banks on the right side of this picture as screwing their shareholders and their national governments.

Every euro invested from LTRO will also push asset prices denominated in Euro up on nominal terms, whilst probably keeping their value in gold or USD terms constant. Good deal for Eurozone, as the LTRO will hence devalue Euro.

Tue, 02/07/2012 - 12:27 | 2134063 FinHits
FinHits's picture

Another point: the US, British and Swedish banks which don't have Eurozone legal entities governed by Eurozone central banks cannot to my knowledge even access the ECB LTRO.

Hence it makes sense for them to moan that it is somehow bad to use LTRO since they cannot get the advantage. 

 

Have another look of those logos on the right.....

Tue, 02/07/2012 - 09:31 | 2133486 tarsubil
tarsubil's picture

It should be. Who wants to take a sightseeing tour of burned out buildings and rubble?

Tue, 02/07/2012 - 09:35 | 2133491 gojam
gojam's picture

"Who wants to take a sightseeing tour of burned out buildings and rubble?"

Isn't that what Greek tourist attractions are anyway ?

Tue, 02/07/2012 - 09:57 | 2133553 tarsubil
tarsubil's picture

Good one. Yeah, but that is ancient rubble. Ancient rubble is much more picturesque than new rubble.

Tue, 02/07/2012 - 10:00 | 2133559 GetZeeGold
GetZeeGold's picture

 

 

Tis a great day for carnage lovers everywhere.

 

 

 

Tue, 02/07/2012 - 10:45 | 2133680 falak pema
falak pema's picture

r u from detroit?

Tue, 02/07/2012 - 10:58 | 2133721 TonyCoitus
TonyCoitus's picture

Detroit is on the rebound.  Clint Eastwood says so!

 

TC

Tue, 02/07/2012 - 11:14 | 2133765 DeadFred
DeadFred's picture

Seeing the sights in a flak jacket and gas mask will be a treat.

For the bad banks it wasn't much of a choice "Bankruptcy or stima, hmmm what should I choose?"  The way things looked at the time Europe wasn't that many hours away from taking the world down as it collapsed. Why did they wait so long to do such a simple thing as the LTRO? They needed Merkel's permission to print without printing? They're dumb? Or my favorite door number three, bringing the world to the scary brink served a purpose not yet seen. Going to the edge of the abyss then coming back is a great way to break down psychological barriers but barriers to what?

Why did they wait so long for the LTRO?

Tue, 02/07/2012 - 09:51 | 2133540 CPL
CPL's picture

For those looking for information both high level and the math behind a Hobbesian Trap

 

Here you go:

http://www.kellogg.northwestern.edu/faculty/baliga/htm/hobbesiantrap.pdf

Tue, 02/07/2012 - 10:02 | 2133569 GeneMarchbanks
GeneMarchbanks's picture

For those who think Hobbes was a sloppy Rousseau and game theory is a mindfuck at best, please see here:

http://www.amazon.com/RC-Bundle-Historicism-Routledge-Classics/dp/041527...

Tue, 02/07/2012 - 10:24 | 2133597 gojam
gojam's picture

Rousseau was an arse.

Hobbes's Leviathan contained some groundbreaking stuff including challenging Aristotle and without Hobbes there would have been no Locke.

PS, I'll grant you that the last book of Leviathan on religion is nonsense.

Tue, 02/07/2012 - 10:30 | 2133635 GeneMarchbanks
GeneMarchbanks's picture

When you combine theology, geometry, and history you're bound to end up with something false. A Puritan who lived into his 90s, that's all, sparing the fact that he was English.

Had no idea he fathered Locke thanks for that.

Tue, 02/07/2012 - 10:38 | 2133661 gojam
gojam's picture

"Had no idea he fathered Locke thanks for that."

lol. not biologically but intellectually.

The last book is the theological section and it is utter rubbish. Mind you Newton could be just as guilty of that, just the era I guess.

Tue, 02/07/2012 - 10:35 | 2133651 gojam
gojam's picture

Thanks CPL,

Hobbes and Thucydides, you're spoiling me.

There is a fantastic passage in Thucydides' History of the Peloponnesian War in book 3 under the Civil War in Corcyra. It begins - "So revolutions broke out in city after city, and where revolutions occured late the knowledge of what had happened previously in other places caused still more extravagances of revolutionary zeal" to the end of that chapter.

If anyone can be bothered to read it, you will never regret it. It's beautifully written and very relevant today.

Tue, 02/07/2012 - 09:15 | 2133456 Future Tense
Future Tense's picture

I agree, well put together article.  It's amazing to think that the European banks are already running mark to myth accounting which began with us back in 2009, and they are still getting crushed.  It is impossible to think about what the world would look like if any semblance of marking books to reality would occur.  I think the $1.6 trillion in reserves in the US would be wiped away instantly with home prices hitting a new lows.  It looks like home prices here are going even lower, which will continue to crush the legacy mortgage loans in Europe on top of their toxic sovereign bonds.  Here is a great comprehensive forecast on home prices looking ahead which is going to hurt balance sheets even more around the world.

http://www.ftense.com/2012/02/2012-real-estate-outlook-introduction.html

Tue, 02/07/2012 - 10:30 | 2133636 Sharks with las...
Sharks with laser beams's picture

Great story. Just shorted a chunk or EURUSD at my Armada forex account. This EURUSD will soon evaporate like MF Global client funds. 

Tue, 02/07/2012 - 10:39 | 2133662 4realmoney
4realmoney's picture

Ron Paul on Texas Straight Talk: Don't Trust Your Money to Obama Bureacrats!!

http://djia.tv/ron-paul/ron-paul-dont-entrust-your-financial-future-to-o...

Tue, 02/07/2012 - 09:12 | 2133452 Mae Kadoodie
Mae Kadoodie's picture

Where would Crosby & Stills be without Nash?

Tue, 02/07/2012 - 09:49 | 2133532 SheepDog-One
SheepDog-One's picture

Dont forget Young.

Tue, 02/07/2012 - 12:33 | 2134087 ParkAveFlasher
ParkAveFlasher's picture

Looks like the one Skynyrd (sp.) fan junked you.

Wed, 02/08/2012 - 00:27 | 2136848 stocktivity
stocktivity's picture

Young was the best of the 4

Tue, 02/07/2012 - 09:14 | 2133455 francis_sawyer
francis_sawyer's picture

the market is finally waking up that the LTRO, more than merely carrying the upside of a mechanism preserving the status quo for a brief period of time, also has the downside of implicit stigmata associated with any and every bank that is found to use it

Isn't that why they forced all the banks to take the TARP bailouts?

Tue, 02/07/2012 - 10:00 | 2133561 LawsofPhysics
LawsofPhysics's picture

You forgot your <sarc> tag, clearly it confused some people.  The only ony forcing that was done with TARP was by Paulson when he threatened CONgress and hence the taxpayer with "tanks in the streets".  Fuck Paulson and fuck the banks.  Banks need to be simply banks again and follow the 3:6:3 rule- 3% interest on savings, 6% interest on loans and get your fat ass on the golf course by 3:00 PM so you don't get greedy and fuck the whole system up.

Tue, 02/07/2012 - 10:32 | 2133640 francis_sawyer
francis_sawyer's picture

Yeah I've taken to NOT using SARC tags (hoping people would get it)... Silly me... Oh well... I deserve junks anyway for thinking HOPE was a strategy...

Tue, 02/07/2012 - 12:28 | 2134041 swani
swani's picture

Does anyone really believe that banks have to be forced to take free money and government guaratees?

This is the biggest crock of shit I have ever heard.

If the TBTF banks were made to price in their real derivative exposure which considering the fact that if one goes, so do the rest, they would all be considered insolvent.

They are the real subprime borrowers of the world and the only institutions that are able to create completely worthless paper instruments and make risk trillions of risk free returns on works of perverse imagination backed by the tax paying public. Without these trillions in subsidies from us, they would all go under. These banks are essentially our biggest welfare recipients and should be labeled and shamed as such by the politicians on both sides of the aisle. 

Unfortunately, we live in a Banana Republic and we all know what happens in a Banana Republic, the opposite of what should happen.

 

Tue, 02/07/2012 - 12:29 | 2134073 francis_sawyer
francis_sawyer's picture

If you were referring to me, then, as LawofPhysics said... you missed the <sarc> tag...

Of course what you say is true... "It's a crock of s***"...

~~~

I'm merely stating the FACT that that's how they did it before (with TARP)... IOW ~ 3 years ago they were worried about the same STIGMA (& that's how they handled it whether it was a crock of s*** or not)... If needed, that's probably what they'll do again & it will be a crock of s*** all over again...

So what else is new? (I'm running out of energy to be angry for every single crock of s*** that comes down the pipe... I'm trying to save myself for the big ones)...

Tue, 02/07/2012 - 09:17 | 2133459 Freegolder
Freegolder's picture
European Nash Equilibrium Collapses - Bank Bailout Stigmata Is Back At The Worst Possible Time

 

 

 

That's gotta hurt!!

 

http://en.wikipedia.org/wiki/Stigmata

Tue, 02/07/2012 - 09:17 | 2133460 DutchDude
DutchDude's picture

Basel-III is key i think. Banks will need 9% liquidity for that and my guess is that's where the ECB free lunch money is used for. I'm not sure which Dutch banks got some, i see ING passed, but one thing's for sure; they're not lending anything out to people of companies here!

For example: If you have a steady job, you can barely get 4x anual wage in mortgage. A midclass house costs at least 5x your anual wage and you need 106% of costprice to pay for tax en costs. Housing market is at a complete stop here... SHTF this year.

Tue, 02/07/2012 - 09:25 | 2133476 ExistentialSkeptic
ExistentialSkeptic's picture

AAAAAH!  

 

"stigmata" is used in this article where "stigma" is meant.  Did the author finish high school????????

Tue, 02/07/2012 - 09:27 | 2133482 The Axe
The Axe's picture

Hey Tyler,,your not the only one who sees the shit storm...check out the amount of insider selling the last two days vs overall NYSE volume...its the highest ratio EVER!

Tue, 02/07/2012 - 10:59 | 2133723 Putty
Putty's picture

Bart Simpson: This is the worst day of my life.
Homer Simpson: The worst day of your life *so far*.

Tue, 02/07/2012 - 09:29 | 2133484 Ostapuk Ivano
Ostapuk Ivano's picture

Not to get off topic but I think this applies to most of us here.

http://www.reuters.com/article/2012/02/07/us-usa-fbi-extremists-idUSTRE8...

The extremists may refuse to pay taxes, defy government environmental regulations and believe the United States went bankrupt by going off the gold standard.

Tue, 02/07/2012 - 09:56 | 2133550 yabyum
yabyum's picture

Osta, gotta call bullshit. I do not think there are a lot of ZHers who would take a shot at a cop, we would rather it be fixed in peacful terms. There may be a lot of Galt types, PMers, and don't forget Gun lovers on the Hedge, but we remain a bit more civil than what you think.

Tue, 02/07/2012 - 10:49 | 2133689 Ostapuk Ivano
Ostapuk Ivano's picture

I agree. I should of worded it better. My thought was that they might try to label such people in a negative light even if their intentions are not violent. What I got out of the article was if you question the system then you are a terrorist. Maybe I am wrong.

Tue, 02/07/2012 - 11:09 | 2133746 chubbar
chubbar's picture

I agree that there are not a lot of folks eager to take a shot at a cop, nor should they be. I think the FBI is missing the forest for the trees though. What is upsetting folks is the complete disregard of individuals and their dignity by both law enforcement and our politicians. To think that folks are going to be pushed and pushed without any pushback is insane. Look at these no-knock swat team raids over shit as inconsequential as dope for instance. How about the cops beating protesters or macing them, just crazy shit that is over the top from LEOs. What the FBI fails to take into account is how tired regular folks are of being abused by the system.

This scramble to suck ever more money from the average joe via stop light cams or fines for the smallest infraction. More and more complex tax laws that essentially NO ONE knows how to comply with. The average joe watches an asshole like Jon Corzine or any other major bank fleece account holders and NOTHING is done. The system tells them that the law only applies to the little guy and will be vigorously enforced. They will be beaten, stripped and jailed at the slightest whim of some pissant LEO and there is NO repercussion to the offending officer assuming it even makes it to court. Try video taping an arrest and you are beaten and your personal property destroyed. I mean what the fuck do the FBI and company THINK is going to happen when this is common place?

The politicians are just as bad. How many rights do we have to give up to satisfy this group of asshats? What the hell are they afraid of that they strip us of due process and feel they need the ability to call in the army for LEO duty? Why can't they be straight with us about their goals instead of couching their actions in bullshit like "fighting terrorism"? Why don't they take a fucking poll and ask the average joe who he is more afraid of, the swat team kicking in their door in the middle of the night or some idiot from Afghanistan doing the same? Are these fucktards for real? Do they really believe that someone of average intelliigence can look at their actions and deem them sane or reasonable? The politicans are absolutely out of their minds!

I predict that eventually this is going to hit critical mass and it'll be blamed on the internet or some such idiocy, when in fact it's the actual actions of the folks like the police, FBI and politicians who are now whining about folks trying to stand up for their dignity.

Tue, 02/07/2012 - 10:22 | 2133609 pods
pods's picture

Too bad that Reuters didn't quote Trafficant's speech in Congress?

pods

Tue, 02/07/2012 - 09:35 | 2133493 orangedrinkandchips
orangedrinkandchips's picture

Pile on the rabbit!

Pile on the rabbit!

 

Of course bullies will go after the weak ones....like lions on the plains in Africa....weak and sick ones....IT'S CALLED NATURE AND IT'S 100% NATUAL AND HEALTHY!

 

 

let nature take it's course......or not.

Tue, 02/07/2012 - 09:36 | 2133495 LiquidityandLunacy
LiquidityandLunacy's picture

More like the KEVIN NASH EQUILIBRIUM.... PAINNNNNNNNNNNNNNNNNNNNN

Tue, 02/07/2012 - 09:39 | 2133502 eddiebe
eddiebe's picture

What we need is Re re hypotecation, or better yet re hypotecation squared.

Tue, 02/07/2012 - 09:42 | 2133508 been there done that
been there done that's picture

once everyone finds out.......

"and we're just the guys to do it".

Jim Belushi in Animal House

Tue, 02/07/2012 - 09:42 | 2133510 CreativeDestructor
CreativeDestructor's picture

""Baaaaaa"" that's what sheep sound like when they are herded, risk-on monkeys will learn soon.

MF Global trade they did is gonna hurt soon, and that includes central european banks too.

Tue, 02/07/2012 - 09:51 | 2133538 SheepDog-One
SheepDog-One's picture

The funny part is all this micro-analysis and tea leaf readings one morning will be totaly worthless, it will all just unhinge the trap door and down we go into the abyss.

Tue, 02/07/2012 - 10:43 | 2133674 kaiserhoff
kaiserhoff's picture

tick, tick, tick,...;)

Tue, 02/07/2012 - 09:51 | 2133539 WarriorClass
WarriorClass's picture


This is the solution:

 


The Alchemy of Number Theory. 

 

http://www.youtube.com/watch?v=N5syRnaXwpg&feature=youtu.be

 

 

Tue, 02/07/2012 - 10:18 | 2133593 mushioov
mushioov's picture

There is that word "god" again... You were so close; math, physics, biology... everything the universe consists of.

Why, why do you add the word "god"?

I have to give you -1 for that. Without "god" I might've even bought your book because it sounds interesting.

Without religions we would be roaming the galaxy by now.

Tue, 02/07/2012 - 09:54 | 2133545 LawsofPhysics
LawsofPhysics's picture

Could we see a similar list for American banks?  Thanks.

Tue, 02/07/2012 - 10:11 | 2133584 valley chick
valley chick's picture

LawsofPhysics...wouldn't there be US exposure too?  This is like a bad game of Jenga. 

Tue, 02/07/2012 - 10:02 | 2133560 falak pema
falak pema's picture

Banksta Oligarchy now taking separate routes in separate life boats from Titanic Eurohole?

 

BTW : Those Anglo Banksta Oligarchs not on Euro hand out benefit directly from BOE print pump. You can bet your ass on that!!!

So "holier than thou" smells of fish n chips, and stale ones to boot!

Tue, 02/07/2012 - 10:01 | 2133565 eddiebe
eddiebe's picture

Love that Nash.

Tue, 02/07/2012 - 10:04 | 2133572 RiverRoad
RiverRoad's picture

Good.  Let 'em collapse.  Too many banks making too many crazy competitive loans caused this mess.  Other sectors consolidate when they screw up; why should bankers be any different. 

Tue, 02/07/2012 - 10:21 | 2133599 The Deleuzian
The Deleuzian's picture

That may be the very idea...The 'Good' banks will dump all their toxic waste onto the 'Bad' Banks...Consolidation continues until we get a couple 'Mega' banks that rule all...'The Leviathan Squid'... The ultimate inevitable result...

Tue, 02/07/2012 - 10:21 | 2133601 Dr. Engali
Dr. Engali's picture

 

Mr. Ackermann said Deutsche Bank still is scarred from its experience borrowing from the Federal Reserve in the first phase of the financial crisis in 2008.

If you think youy were sarred from the first phase wait until we hit the next phase. If Greece is causu=ing this much turmoil, wait until it works it's way up the food chain to the debt monster of the world.

Tue, 02/07/2012 - 10:28 | 2133626 overmedicatedun...
overmedicatedundersexed's picture

just want to up date the sheep: Romania's gov just fell..and the IMF says it's ok the Romanian people will accept the terms of austerity with or without gov..now tell me about who runs the world both here and there

Tue, 02/07/2012 - 10:31 | 2133638 valley chick
valley chick's picture

link please...

 

Tue, 02/07/2012 - 10:30 | 2133634 waterwitch
waterwitch's picture

Seems only fitting that this is a LEAP year.

Tue, 02/07/2012 - 10:39 | 2133664 rrrr
rrrr's picture

We need to stop thinking of this as an unintentional catastrophe and begin seeing it for what it is, a war of destruction that is deliberately being waged against us, the chief weapon of which is economic in nature.

Tue, 02/07/2012 - 10:46 | 2133682 Bansters-in-my-...
Bansters-in-my- feces's picture

Speaking of bankers,I see they gave gold and silver the early morning Bitch Slap again today...

Fuck You's Bankers......

Fuck You's PPT and the USA Exchange Stabilization Fund.

If youn don't about this fund is or what it does,take the time to learn.

Very disturbing.

Ps....Fuck yo timmy you little weasel.

Tue, 02/07/2012 - 10:49 | 2133690 Snakeeyes
Snakeeyes's picture

Watch the Chief Banker Bernanke talk to Senate Budget at 10am. What they SHOULD ask Bernnake.

http://confoundedinterest.wordpress.com/2012/02/07/bernankes-testimony-t...

 

Tue, 02/07/2012 - 10:53 | 2133702 RobotTrader
RobotTrader's picture

Need proof that absolutely nothing has changed?

 

Heh, my buddy Rasputin sums it up here.

http://www.wallstreetbear.com/board/view.php?topic=94279&post=342098

Tue, 02/07/2012 - 10:58 | 2133717 Tom.the.Bomb
Tom.the.Bomb's picture

As a first time poster and long time follower… I must take this opportunity to thank all contributors. Information is power, and honey, this crew is rightfully rocking the lemming boat like no other. Sign me up as a life member of zerohedge.com.

Tue, 02/07/2012 - 11:02 | 2133734 Gauthijm
Gauthijm's picture

"

Good one. Yeah, but that is ancient rubble. Ancient rubble is much more picturesque than new rubble."

 

Thread Winner!

:)

JMG

Tue, 02/07/2012 - 12:02 | 2133845 slewie the pi-rat
slewie the pi-rat's picture

tyler channeling hankyPanky w/ morningJoe

...priceless...

here is dougNoland in his weekly summary from last friday (paste): February 1 – Bloomberg (Jana Randow and Jeff Black): 

“The European Central Bank’s plan to accept more bank loans as collateral may not be used by all euro-region nations, threatening to fragment the rules applying to bank funding operations, said two euro-area officials with knowledge of the discussions.  The initiative is likely to be implemented on a voluntary basis by national central banks and several of them may opt out, said the officials…  Germany’s Bundesbank has indicated it may be among those to shun the measure, arguing the country’s banks don’t need to borrow more from the ECB…  ‘It contradicts the idea that all banks are treated equally in the euro area,’ said Klaus Baader, co-head of economic research at Societe Generale… ‘It creates a two-class society. Central banks that take part are therefore identifying themselves as ones that are dealing with a weak banking system.’”

PrudentBear/"priceInstability"

life's a BiCh, and then a bailout marries you!

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