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Europe's Stigmatized Banks On The Verge Of Crucifixion
Back in the middle of March, when all was sunshine and unicorns in the post-LTRO world of recovery and another sustainable recovery, we were vociferous in our noting that nothing has been fixed and LTRO3 is not coming. Sure enough, here we are a few weeks later and the encumbering stigma that we were the first to point out (and call Draghi out on) is now wider than at any time since the LTRO program began with the banks that took LTRO loans now trading wide of pre-LTRO levels (fully stigmatized despite all that extra liquidity). Today saw the Stigma spread between LTRO and non-LTRO banks jump its most in 2 months to over 160bps (its highest in almost six months). There is however a troubling conundrum facing the ECB. The banks that need another LTRO (or liquidity) no longer have performing collateral to pledge and other banks that would like liquidity will not take it since they now understand the encumbrance and stigma that is attached to that decision. The ECB is snookered (and so is it any wonder that Draghi is playing for time) and perhaps this is why we are seeing the EUR leak lower against the USD as markets anticipate some more direct monetization mandate-busting action by the ECB (shifting the Fed/ECB balance and implicitly the flow between the two that we have also pointed out as critical). Either way, there is no LTRO3 coming anytime soon and together with this morning's jumps in liquidity funding costs, the vicious circles are ramping up again in Europe.
The LTRO Stigma jumped the most in over two months today (lower pane) and reaches up to near six-month highs - almost entirely removing any LTRO benefit completely...money well spent it seems...
And LTRO-encumbered banks are at their widest since LTRO began - while those that chose the tougher path of self-reliance remain considerably better rated by the market...

Our LTRO Stigma has proved to be one of the clearest ways to show the stress in Europe as we echo our thoughts from 2 months ago:
When one understands that the heart of Europe's problem is the rapid "vaporization" of all money good assets, everything falls into place: from the ECB's response, to Europe's propensity for infinite rehypothecation, to the rapidly deteriorating financial system.
Only this time there can be no quick collateral-type response as money-good assets are few and far between. We suspect it won't be long before the Fed comes to their rescue with extensions of the FX swap lines - but just how much of that ECB balance sheet does the Fed really want to take on as collateral when it is also nothing more than a giant CDO balanced on the dross assets of Europe's banking system (especially when one considers that ECB margin calls remain negligible in the face of asset impairments everywhere).
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Now I lay me down to sleep,
I pray the Lord my bank to keep,
If it should die before I wake,
I pray the Lord my bank to take.
And take the central bankers while you're at it Lord.
You cannot petition the lord (Blankfein) with prayer.
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The rusty blade is dull and jagged, but cleans easily. Our guillotine often has to be dropped twice since the first drop only gashes the bank of the fucktard banker's neck.
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I would like to subscribe to your newsletter.
I'd like to meet his tailor.
BLA BLA...BLA BLA.... BTFD BIATCHEZ!
Nice tits!
Boob job -- not real.
Real -- just not natural.
BTFD in gold and silver.
And his hair was perfect!
Warren Zevon lives on.
Werewolves of London?
Ah-oooooooooooo!
"Better stay from him, he'll rip yer lungs out, Jim!"
http://www.youtube.com/watch?feature=player_detailpage&v=FVsTeUxqWDA
Would your startup be interested in an inventor/designer?
I am designing a room that is a complete glass inclosure and is hermetically sealed. An offender will be placed in this room for all to see and there will be ports into the room allowing people to deposit flatulence into the room, pumping methane only in, while slowly decreasing the remaining oxygen available to the occupant.
Dear Temporalist,
While your creative talent is admirable, we have decided to pass on your proposed death machine by farts.
The overall idea is a brilliant one but for the reasons listed below we will not have an interest in adding this product to our line.
1 - We hold to the Buffett mantra of KISS. Your machine is very technical and we don't invest in products we do not understand. We prefer baseball bats and pitch forks.
2 - While the ultimate result of your product will result in the death of said douche bag banker, it is our opinion the scum offender will enjoy the process since most of his life has been spent sucking ass.
Thank you for your interest in our company and good luck with your invention.
Sincerely,
Chief
You are just brutal. :)
Thanks!
Well there is a simplified version. A pit that people can dump feces and urine into. This can potentially provide a week or longer of crowd participation and television coverage.
I cannot claim a patent on that one however it is similar to my own idea of the Port-O-Potty Of Death.
As you can tell I am a prolific creator and you'd be missing out on my unique talents if you passed me over for someone like Dick Cheney.
Please forward a contract. Despite the obvious similarity to sucking ass, this might work since the mob could also throw stones when they tire of the stench. We want this in our mix!
If one adds a bungee cord to the legs it can also be the Cesspool Pinata Dunk Tank.
So many options, so little time.
I would like to show you some of my designs of an old 2x4 with a rusty nail in it. I have worked up a few prototypes for demonstration.
Ah the creative process is flowing today!
Do you have designs with multiple nails? Also do you know of any process that allows for a person to actually be skinned alive?
I know that is an old saying, but is it really possible?
Yes you can skin someone alive with rusty cheese graters.
Temporalist...!!!!
I am so glad you did not take no for an answer! You just got promoted to senior design manager!
Let me go to the lab and see what I can do. My boards are all hand picked and sourced from vacant construction sites nationwide. The nails are source from the same sites with metal detectors, then we age them in standing water for a minimum of 6 months to ensure the same quality every time. As for the skinning tool, I believe they are fairly common. It is called the Gillette Fusion Razor - 5 BLADES
Might I suggest:
Pit of Komono Dragons.
You just can't go wrong with the classics.
"You cannot petition the lord (Blankfein) with prayer."
Very good point. Best way to summon him is with bloody muppet chum.
This is more like a stigmata with blood leaking out from several points...
Bring in the Inquisition...
There are also some incantations with which to conjure banksters.
Say the words:
IPO
Market maker
Synthetic derivative
You'll need a pentagram too.
Long voodoo dolls.
Doors
Riders on the Storm?
People Are Strange
http://www.youtube.com/watch?v=Sq9oR9x171w
When The Music's Over
http://www.youtube.com/watch?v=5gTpvcSVWFU&feature=related
Nice!
Spanish Caravan...
http://www.youtube.com/watch?v=AibBR-Jwg4g
LOL! ... should of thought of that one
http://www.youtube.com/watch?feature=player_detailpage&v=5qRJIBtbc2c
The NATO Summit is in two weeks, with the ECB playing for time. If you wanted to hit reset, and needed a button, and needed as few as possible to see the button and you pressing it, what would the button look like?
Which events have utterly changed the dynamics in the past 100 years? Were they pleasant?
Spain's housing bubble is killing their banks and economy.
Spain’s Pain Continues to Accelerate – Banks, Housing, Bad Loans, Unemployment, Nosediving GDP – Time for More Sangria!
http://confoundedinterest.wordpress.com/2012/05/09/spains-pain-continues-to-accelerate-banks-housing-bad-loans-unemployment-nosediving-gdp-time-for-more-sangria/
I think people have this backwards, a bit. It isn't a housing bubble that kills the banks... it's the banks that kill housing through the creation of bubbles. It's a symptom of a monetary system that is detached from reality. People need to look at the cause... not symptoms.
Fiat + Fractional Reserve banking + Usury = Debt based global ponzi... it "felt" fine to most when everything was inflating, though in reality... people were basically just keeping their heads above water... but deleveraging will be a bitch (likely won't happen as WWIII will destroy us first)
Why the hate on sunshine and unicorns? Ben "The Bearded" Bernank is the phdwizard that makes them possible. Stop hating.
What a day... time to bring out the deer!?!
Been a long time since the deer made an appearance. I miss him.
Next up ALL Banks of America
Frontline just made a movie about this. Didn't you see it?
They said this was just a big mistake and no one knew anything was wrong until everyone's money was all gone.
The banker people worked hard to do what was right but couldn't figure it out...like this carpenter did.
THE MONEY AND WHERE IT CAME FROM
chunga hauls the mail again.
Your carpenter friend is pretty smart.
Ahh.
That's just an illuminati conspiracy theory. With all these onerous regulations nothing like that could be allowed to happen.
LOL!
No worries. Just a liquidity problem caused by those Anglo-Saxon bankers. Merkel will explain it all to us later how fundamentally we are fine.
Poor Jutes, just as important as the Anglo's and the Saxon's but history has forgotten them.
The swirling vicious circles have coalesced into an ominous black hole, from which no bank can escape.
Jean-Clodhopper Trichet prolly considers himself lucky to have slunk out of the ECB before the asteroid-sized turds began breaking off the fan blades.
I can only dream of what is going on in a Spanish bank right now......lines of people deposing their money....I don´t think so.....lines of people trying to take their money out...I think so...
The new accounts guy must be bored as shit....
the ATM restocker is working overtime I bet
Don't worry. They will soon pass a law like other euro countries limiting cash withdrawls if they haven't done so already. Wouldn't want to have a bank run!
You see, the people that own the bonds are going bat shit, they're thinking "hey, we're losing all our damn money and christmas is around the corner, and I ain't gonna have no money to buy my son the GI Joe with the kung fu grip, ok, and my wife ain't gonna want to make love to me cause i ain't got no money," right, so they sitting there and they're panicing, they're screaming sell sell cause they don't want to lose all their money ... they out there panicing now.. I can feel it.
+1 for the GI Joe with the Kung Fu grip!
How about Kung Fu grip and life-like hair.
I will have to ask Aunt Bunny.
1) Stop forgetting the lesson of 2011. They will do ANYTHING to keep the balls in the air. If the Greek 2nd place winner who is causing trouble is a problem, he'll be removed. This upheaval is NOTHING. We're losing only a few % off the S&P. We aren't even negative YTD.
2) You can't make money betting on either direction. Just buy some 10 yr Ts and hope you get out of them before they disintegrate. Don't think that means there is something else that won't disintegrate. There is nothing that won't. But bonds are where people hide. 1.79%. It just hit 1.79%. Bondholders have about a 30% profit since August.
3) Only oil destroys all this. Forget oil's price. This is about oil's quantity. Oil is the one thing that can't be printed. Destruction caused by insufficient quantity is forever, and they know it.
'If the Greek 2nd place winner who is causing trouble is a problem, he'll be removed.'
Or more simply, CO-OPTED.
aka bought off.
reminds me of this great article:
Time line of a bank collapse
1. The Board issues a statement accusing bloggers of spreading both irresponsible and factually incorrect rumours as the bank is sound and has no need of new capital.
2. The Bank issues a statement of confidence in its management.
3. The Bank tries to raise more private capital in spite of it having no need for it.
4. If this does not work the relevant government(s) express(es) complete confidence in the bank and tell us that it has a sound management structure and business model. Indeed the bank had only recently been giving the government advice as to how to run the public-sector more efficiently.
5. The relevant government(s) tell us that they are stepping in to help the bank but the problems are both minor and short-term and are of no public concern.
6. The relevant government(s) tell us that the bank needs taxpayer support but through clever use of special purpose vehicles there will be no cost and indeed a profit is virtually certain.
7.Part-nationalisation of the bank is announced and taxpayers are told that a profit will result from this sound and wise investment.
8. Full nationalisation is announced to the sound of teeth being pulled without any anaesthetic.
9. Debt costs of the relevant sovereign nation or nations rise.
10. Consequently that nation finds that its credit rating is downgraded.
11. It is announced that due to difficult financial times public spending needs to be trimmed and taxes such as Value Added Tax need to be raised. It is also announced that nobody could possibly have forseen this and that nobody is to blame apart from some irresponsible rumour mongers who are the equivalent of terrorists. A new law is mooted to help stop such financial terrorism from ever happening again.
12. Some members of the press inform us that bank directors were both “able and skilled” and that none of the blame can possibly be put down to them as they get a new highly paid job elsewhere.
13. Former bank directors often leave the new job due to “unforseen difficulties”.
http://www.mindfulmoney.co.uk/wp/shaun-richards/belgium-and-dexia-are-now-trapped-in-an-unholy-embrace-where-the-biggest-loser-will-be-taxpayers/
Otherwise known as:
Ship hits iceberg
Passengers persuaded to stuff hole with bedding and mattresses
Captain abandons ship
Crew go looking for Captain
Passengers wonder how they will sleep on wet bedding and awaiting further instructions
Oh come on! You just direct the fire hoses (let's call them debt-hoses) into the forward compartment, to increase water pressure inside there, thus forcing the sea to go back outwards, the way that it came in.
This time is different!
Can I have my PhD now?
+1 Well done.
I might add:
14. Rinse. Repeat
EU-Bank Panic
ECB Fear Indicator: record
Banks deposited over 823 billion with the ECB
jumped 41 Billion on one day!
http://www.cds-info.com
Now watch the Fed go head first into the EU swaps sewer line. This rent-a-recovery scheme keeps unraveling. It always circles back to Japan.
I disagree. The Japanese just used the "tools" that the Keynesian central bankers provided them. They were taught and, as the Japanese do so well, emulated someone else's creation.
Here we go, the beginning of the end of the European Union and their pretty currency....
The ECB has the ultimate collateral sitting on its balance sheet. It just has to be repriced once; that will be enough for a lifetime.
"Stigmatized" you say? Is that PC for "Utterly and Totally Insolvent"?
US taxslaves, prepare to be screwed. Again. Because regardless of what the scumbags call the next zombie bank bailout, it's we who'll be paying the tab.
Not until after the election. IMF knows they wont get shit from the USA before november.
Wow crucifiction http://youtu.be/8EI7p2p1QJI?t=27s
Hitler finds out about the eurozone crisis:
http://www.youtube.com/watch?v=29F50dGbfM8
The simple fact is there is Huge Overcapacity in Banking and FIRE sector. These idiots manufactured these problems by looking for margin to pay for a vastly over-inflated Fixed Cost Base. They daisy-chained like crazies and set up SIVs and Shells to circumvent the rules of exposure and equity. The Puppet Politicians played along and have now spread what little Sovereign Equity remained far too thinly among basket case banks. They have underwritten FAKE Bond packages in some of these Synthetic CDOs and have propped up fantasy balance sheets because Banks failed to clean out the junk.
Now they have Commerzbank forced to pay 52 million in Bonuses despite losing 8 BILLION when Allianz SE persuaded Martin Blessing at Commerzbank to buy the Dresdner KLeinwort Benson bank from Allianz before it collapsed. German Taxpayers got to cover the Commerzbank losses and no doubt to pay the Banker Bonuses in London.
The CFO of Allianz who bought Dresdner Bank - Dr Paul Achleitner, formerly Goldman. His former Goldman colleague was Frau Blessing whose husband Martin runs Commerzbank. Achleitner advises Merkel and is now Chairman of the Supervisory Board at Deutsche Bank. Never mind, he did try to buy AIG when it was folding - Chris Flowers flew him to New York to do a deal
Massive malinvestment usually has SOME kind of upside.
Not so much when it all goes into financial scalping.
WE WANT BARRABAS!
For 30 pieces of silver I'll tell you everything you need to know...
Dont the banks now sell a bond to themselves then use said bond for collateral for an ECB loan? Plenty of collateral can be found that way lol
In Memory of May 9, THE DAY OF EUROPE :
HERE IS AN ARTICLE IN FRENCH ABOUT THE CRASH OF 1873 THAT OCCURRED ON MAY 9 TH.
BANK SHENANIGANS IS NOTHING NEW; SORRY FOR ARTICLE IN FRENCH BUT I'M SURE THERE IS A CORRESPONDING ONE IN ENGLISH; AS THE CRASH WHICH BEGAN IN VIENNA, WENT TO GERMANY, THEN FRANCE AND ENDED UP AT WS. ENJOY!
9 mai 1873. En Europe, aux USA, les Bourses plongent, la crise, le chômage... Déjà. - Le Point