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Fitch Downgrades 8 Global Banks Including BNP, SocGen, BofA, Deutsche, And Morgan Stanley

Tyler Durden's picture




 

Every day after close it is one endless downgrade parade in which any of the permutations of rating agencies and either European sovereigns or banks get up and start playing musical chairs with each other. Then proceed to sit down for the overnight session. One of these days all the chairs will have been pulled. The banks cut in some capacity, either via long-term IDR or viability rating, are Bank of America, Barclays, BNP, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, and Societe Generale. Now we know that even creditors do not want to trigger any ratings downgrade covenants because it would offset what is likely a terminal margin call, but at some point someone will need to do through the various bond docs and find out just who (ahem Bank of America) will need to post far far higher collateral as a result of all these relentless downgrades.

From Fitch

FITCH DOWNGRADES VIABILITY RATINGS OF EIGHT GLOBAL TRADING AND UNIVERSAL BANKS
 
Fitch Ratings-New York-15 December 2011: Fitch Ratings has today taken rating actions on nine global trading and universal banks (GTUBs). The actions complete its assessment of the GTUBs, carried out in conjunction with a broad review of the ratings for the largest banking institutions in the world. Fitch has downgraded eight issuers' Viability Ratings (VRs) and affirmed one, removing them from Rating Watch Negative where they were placed on Oct. 13, 2011.
 
For a list of key rating actions refer to the end of this release. Full lists of rating actions affecting each bank are published today in separate comments on the affected banks.
 
The impact of VR downgrades on the banks' Issuer Default Ratings (IDRs) has depended to some extent on the level of their Support Rating Floors. IDRs are the higher of the VR and Support Rating Floor.
 
The VR downgrades reflected challenges faced by the sector as a whole, rather than negative developments in idiosyncratic fundamental creditworthiness.
However, Fitch differentiates among the peer group, in relation to its business mix, capitalisation, liquidity strength and market position.
 
The actions were motivated by Fitch's view that the GTUBs' business models are particularly sensitive to the increased challenges the financial markets face.
These challenges result from both economic developments as well as a myriad of regulatory changes. Fitch incorporated the significant progress it sees the banks have made in building up capital and liquidity buffers to resist market challenges, which has kept the VR downgrades to one or two notches.
 
Nonetheless, Fitch continues to be of the opinion that, however well-managed, the structural aspects of their funding, earnings, and leverage, predispose GTUBs to vulnerability to market sentiment and confidence, particularly during periods of exogenous financial stress. Furthermore, the complexity of their business models and exposure to fat tail risk make it more difficult to assess the size of loss that could emerge rapidly from unexpected events.
 
Over time market conditions are likely to ease, but Fitch expects market volatility to remain above historical averages and economic growth in developed markets to remain subdued for a prolonged period. This makes many business lines in securities operations more difficult, due to lower activity and higher funding costs.
 
While regulation enhances creditworthiness of banks generally by forcing them to hold higher capital and liquidity and curbing risk-taking in some areas, it also restricts earnings potential and increases costs, which encourages increasing the scale required to remain efficient and will likely reduce the number of market participants.
 
Reshaping business models to address the challenges they are currently facing will be an ongoing focus for GTUBs over the coming two years. It remains uncertain which of the GTUBs will emerge as the strongest once the new regulations are fully implemented and business appropriately adjusted, although Fitch views leading market positions across various products and geographies as a good indicator, especially if backed by substantial core capital.
 
Leading commercial banking or wealth management franchises are also an important consideration for Fitch's ratings of universal banks. For many of these banks, higher weighting of securities businesses on earnings and risk profiles is a negative factor in their ratings, and establishment of a more balanced business mix could be a positive ratings driver.
 
Fitch believes the GTUBs are much better placed to deal with difficult market conditions today than in 2008. Capitalization and liquidity are improved and vulnerabilities reduced. The rating actions taken were based on Fitch's assessment of creditworthiness against the relatively high rating levels that the GTUBs previously had.
 
The GTUBs have been improving liquidity, which has been a particular area of focus for the group. These banks ensure that they have significant liquid reserves in order to be able to meet obligations even if funding markets were to close for a significant period of several months. Although Fitch views such measures positively, the liquidity position would be less of a defense against any 'bank specific' concerns, should they arise, because a sound liquidity profile is expected of all the GTUBs.
 
Fitch notes that the exact specification of various metrics, along with any adjustments made, can influence the relative ranking of the various GTUBs. These metrics can also vary significantly over time, can be backward looking and make it more important to take a more balanced, forward view of creditworthiness.
Fitch's focus in evaluating the banks has been on those that have the best positions in diversified the product areas that are viewed as having the lowest risk.
 
The following highlights Fitch's ratings actions:
 
Bank of America Corporation
 
--Long-term IDR downgraded to 'A' from 'A+';
 
--Short-term IDR downgraded to 'F1' from 'F1+';
 
--Viability Rating downgraded to 'bbb+' from 'a-'.
 
Barclays plc
 
--Long-term IDR downgraded to 'A' from 'AA-';
 
--Short-term IDR downgraded to 'F1' from 'F1+';
 
--Viability Rating downgraded to 'a' from 'aa-'.
 
BNP Paribas
 
--Long-term IDR downgraded to 'A+' from 'AA-';
 
--Short-term IDR affirmed at 'F1+';
 
--Viability Rating downgraded to 'a+' from 'aa-'.
 
Credit Suisse AG
 
--Long-term IDR downgraded to 'A' from 'AA-';
 
--Short-term IDR downgraded to 'F1' from 'F1+';
 
--Viability Rating downgraded to 'a' from 'aa-'.
 
Deutsche Bank AG
 
--Long-term IDR downgraded to 'A' from 'AA-';
 
--Short-term IDR downgraded to 'F1' from 'F1+';
 
--Viability Rating downgraded to 'a' from 'aa-'.
 
The Goldman Sachs Group, Inc.
 
--Long-term IDR downgraded to 'A' from 'A+';
 
--Short-term IDR downgraded to 'F1' from 'F1+';
 
--Viability Rating downgraded to 'a' from 'a+'.
 
Morgan Stanley
 
--Long-term IDR affirmed at 'A';
 
--Short-term IDR affirmed at 'F1';
 
--Viability Rating downgraded to 'a-' from 'a'.
 
Societe Generale
 
--Long-term IDR affirmed at 'A+';
 
--Short-term IDR affirmed at 'F1+';
 
--Viability Rating downgraded to 'a-' from 'a+'.
 
UBS AG
 
--Long-term IDR affirmed at 'A';
 
--Short-term IDR affirmed at 'F1';
 
--Viability Rating affirmed at 'a-'.
 
On Oct. 13, 2011 UBS AG's IDR was downgraded to 'A' from 'A+' due to a downgrade of its Support Rating Floor and its Viability Rating remained on Rating Watch Negative. Bank of America's VR was placed on Rating Watch Negative on Oct. 13, 2011.
 
The report 'Global Trading and Universal Bank Review: Resilience Increased but Challenges Remain' and the individual company rating action commentaries referenced above are available on 'www.fitchratings.com' and provide more specific details regarding each individual bank affected by today's actions.

 

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Thu, 12/15/2011 - 17:16 | 1984851 Strut
Strut's picture

BoA under $5 Bitchez!

Thu, 12/15/2011 - 17:18 | 1984863 ucsbcanuck
ucsbcanuck's picture

As much as I would like to see that - don't hold your breath.

Thu, 12/15/2011 - 17:30 | 1984942 WonderDawg
WonderDawg's picture

What about Citi? Fuck, they need downgrading, too. My puts are waiting...

Thu, 12/15/2011 - 17:38 | 1984996 Comay Mierda
Comay Mierda's picture

today is opposite day, as is everyday in this market for the last 4 months, so normally this would be pretty bad, but spx will probably rally on this

Thu, 12/15/2011 - 17:40 | 1985017 Fukushima Sam
Fukushima Sam's picture

What about the JP Morgue?  I'm really disappointed they were not included!

Thu, 12/15/2011 - 18:03 | 1985134 CClarity
CClarity's picture

Why no Spanish banks or Italian banks?  And where the hell is Commerzbank?

Thu, 12/15/2011 - 18:30 | 1985231 Strut
Strut's picture

S&P nailed 10 Spanish banks today. hasta la vista!

Thu, 12/15/2011 - 21:08 | 1985703 Hard1
Hard1's picture

Bofa after hours rallying!!!! I jus't don't get how did the algos process this piece of news.

Thu, 12/15/2011 - 21:26 | 1985747 Strut
Strut's picture

PPT player... 

 

 

On top of the downgrade, Lehman (Talk about a zombie bank) just sued BoA over Archstone, somewhere in the neighborhood of 5B. I guess this is just chump-change nowadays??? Totally bullish.

 

Thu, 12/15/2011 - 22:49 | 1985886 I did it by Occident
I did it by Occident's picture

It's just SkyNet messing with our heads.  It makes perfect sense for BAC to go up when downgraded, right?  :)

Fri, 12/16/2011 - 08:27 | 1986385 dcb
dcb's picture

yup, almost always close oput shorts thursday. don't mind a rebuy at the close friday, I almost always buy close thorsday as well.

Thu, 12/15/2011 - 23:02 | 1985902 J 457
J 457's picture

All we need is one day Rodney.

Missed it by that much...

 

Thu, 12/15/2011 - 17:29 | 1984937 willien1derland
willien1derland's picture

Great post!...Your Avatar will require me to extend my pyschiatrist sessions for another 6 months! I feel empathy for the Corn Dog....

Thu, 12/15/2011 - 21:44 | 1985774 Abitdodgie
Abitdodgie's picture

You know I never noticed the corn dog untill you said something.

Thu, 12/15/2011 - 22:52 | 1985894 I did it by Occident
I did it by Occident's picture

LONG Pfizer (makers of Zoloft), bitchez!  and of course by LONG I mean a pun on the Corn dog.  :)

Thu, 12/15/2011 - 22:28 | 1985871 Wixard
Wixard's picture

Not so sure. They won't risk a bank catastrophe. 

We have LOTS of ink. 

 

Go long green ink!

 

We see 5.50 before 4.50. 

 

Thu, 12/15/2011 - 22:55 | 1985896 I did it by Occident
I did it by Occident's picture

maybe 3.00, then 5.50 after the ink.  Then 0.00 after that at some point.

Thu, 12/15/2011 - 17:16 | 1984853 i love cholas
i love cholas's picture

cool

Thu, 12/15/2011 - 17:20 | 1984858 GeneMarchbanks
GeneMarchbanks's picture

'The banks cut are Bank of America, Barclays, BNP, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Societe Generale, UBS.'

3 US

2 French

2 Swiss

1 German

1 British = 9

Thu, 12/15/2011 - 17:22 | 1984882 SeverinSlade
SeverinSlade's picture

Bullish because it's only 1 German bank.  And Fitch could have slashed ratings much more.  BTFD!  [/sarc]

Thu, 12/15/2011 - 17:25 | 1984913 moonman
moonman's picture

It says 8 global. They must not consider one of these global

 

Thu, 12/15/2011 - 17:27 | 1984928 GeneMarchbanks
GeneMarchbanks's picture

Good point.

BAC ain't global...

Fri, 12/16/2011 - 08:31 | 1986390 jeff montanye
jeff montanye's picture

i think the eight refers to downgrades.  ubs's ratings were kept the same (affirmed).

Thu, 12/15/2011 - 17:44 | 1985041 machineh
machineh's picture

How do the two French banks -- BNP Paribas and Societe Generale -- merit a rating one notch above the others?

Paging Reggie Middleton! 

Thu, 12/15/2011 - 18:03 | 1985136 TheEmperor
TheEmperor's picture

8 is correct...UBS was not downgraded, but affirmed.

 

Thu, 12/15/2011 - 21:05 | 1985695 Raisuli
Raisuli's picture

I think that UBS was affirmed and not cut, so 8 out of 9 were cut as stated in the piece. No?

Thu, 12/15/2011 - 17:19 | 1984867 PaperBear
PaperBear's picture

BOOM.

Thu, 12/15/2011 - 17:57 | 1985114 kito
kito's picture

you must mean BOOM to the upside for stocks. ah and dow is up 60 points...market just doesnt give a shit anymore. this isnt anything that the market isnt aware of............there is never a crisis till there is a crisis, and right now there isnt a crisis..............

Thu, 12/15/2011 - 17:20 | 1984870 SHEEPFUKKER
SHEEPFUKKER's picture

Uncle Warren? React. 

Thu, 12/15/2011 - 17:24 | 1984904 Temporalist
Temporalist's picture

Warren is singing the Mr. Bubbles song with Erin...he's distracted at the moment.

Thu, 12/15/2011 - 17:34 | 1984974 Hippocratic Oaf
Hippocratic Oaf's picture

Becky Quick is washing his taint

Thu, 12/15/2011 - 17:24 | 1984905 GeneMarchbanks
GeneMarchbanks's picture

He did. Check the Depends.

Thu, 12/15/2011 - 17:21 | 1984876 slaughterer
slaughterer's picture

No large effect whatsoever on AH and futures.  I think this actually might take the relief off financials for the moment.  

Thu, 12/15/2011 - 17:21 | 1984878 Scalaris
Scalaris's picture

 

All we need now is for Blackrock to come up with a statement saying that Greece has decided to embrace the Drachma afterall, and we are all set.

My money is on S&P for its next downgrade bonanza and I'm thinking sovereign downgrade instead of banks and maybe on Sunday, just to make for a giddy beginning of the week.

Thu, 12/15/2011 - 17:22 | 1984884 ziggy59
ziggy59's picture

Controlled financial demolition...

Thu, 12/15/2011 - 17:26 | 1984922 sabra1
sabra1's picture

only controlled 'cause they waited 'till market close!

Thu, 12/15/2011 - 17:23 | 1984889 Temporalist
Temporalist's picture

Fitch: "Our arms are getting tired from this circle jerk."

Thu, 12/15/2011 - 17:23 | 1984891 sabra1
sabra1's picture

mommy, is my piggybank safe with uncle corzine? WELL! DAMN IT MOTHER! IS IT SAFE OR NOT, BITCH?

Thu, 12/15/2011 - 17:35 | 1984977 Sudden Debt
Sudden Debt's picture

Mommy's doing "uncle" Corzine right now to get your money back dear, just a few more rides.

 

Thu, 12/15/2011 - 17:25 | 1984910 stocktivity
stocktivity's picture

oops...make that 10

Thu, 12/15/2011 - 17:26 | 1984895 hedgeless_horseman
hedgeless_horseman's picture

 

 

...and find out just who (ahem Bank of America) will need to post far far higher collateral as a result of all these relentless downgrades.

There is that word, again!  Why can't the banks just rehypothecate some more collateral from that Gerald Celente guy? 

Thu, 12/15/2011 - 17:27 | 1984923 GeneMarchbanks
GeneMarchbanks's picture

You think they've been... uh... er... you know... commingling? No! I meant hyper-hypothecating?

Thu, 12/15/2011 - 17:51 | 1984976 hedgeless_horseman
hedgeless_horseman's picture

 

 

Read in the post where Fitch refers to it as,

"...reshaping business models to address the challenges..." 

We can call it re-hypo-co-collateral-mingling, or just agree to use the colloquialism, "clusterfucking."

Thu, 12/15/2011 - 19:15 | 1985384 blu
blu's picture

Genius

Thu, 12/15/2011 - 17:24 | 1984902 willien1derland
willien1derland's picture

Fitch gets a SET baby - and to think the MIGHTY GOLDMAN SACHS GROUP's credit rating is almost identical to BoA is choice - Remember BoA 'purchased' Toxicwide Tanning Salons (aka Countrywide Financial) - Take that BlankenSTEIN...The light in the distance just might be the Villagers descending upon your Castle!

Thu, 12/15/2011 - 17:24 | 1984906 The Reich
The Reich's picture

World Domino Dooms Day coming at the soonest!!

Thu, 12/15/2011 - 17:25 | 1984914 midgetrannyporn
midgetrannyporn's picture

This is different. They usually wait until after the bankruptcy to downgrade.

Thu, 12/15/2011 - 17:26 | 1984921 Raskolnikoff
Raskolnikoff's picture

It's so meaningless anymore, the few things remaining about capitalism and those left to grade and evaluate the system and give useful commentary are irrelevant, the government and the big boys behind them pulling the strings now are in charge and will decide what is kosher now and everyone else has no choice but to fall in line and like it. 

Thu, 12/15/2011 - 17:28 | 1984930 monopoly
monopoly's picture

Getting very tired of all this. And we are just starting.

Thu, 12/15/2011 - 17:31 | 1984938 Duffminster
Duffminster's picture

So all the jaw boning about no more QE by Merkel, Ben and Draghi (Germany, Fed, ECB) are about as much hyperbole as was the outcome of the EU "super summit".   This article from metalaugmentor.com spells out some of the methods and motives behind the pre-emptive gold strike yesteray and is very detailed and one of the best I've read today.  Tyler, hope you can expand on it please. 

Charlatan Exposed: Negative Gold Lease Rates This series of downgrades could be the catalyst for the first link in the derivatives chain rehypothecation viral event. One would think that rather than jaw boning a "no new QE" position that the central banks would be doing pre-emptive QE promotion to prop up everything. Earlier today I wrote: "Despite the jawboning by Ben at the Fed and Draghi at the ECB about no immediate easing, the fact remains that they are the current sovereign debt "market" if you can call it that. It is a vacuous market and in an election year especially, with the prospect of having "End the Fed" candidates running the country in 2013 like Gingrich or Paul, the likelihood that more overt QE will not be catalyzed by the fact that the BRICs are seeing substantial GDP growth contraction, that austerity and completely un-repayable toxic debt backed currencies are under pressure and that the so called "super summit" in the EU basically resulted in a blank piece of paper that has changed Nothing, resulting in a contraction in EU growth and with negative real interest rates in the UK and US and likely elsewhere, gold remains the only money (not a fiat currency) which is not encumbered and backed only by toxic debt and the Fed will have to apply shock and awe levels of QE just to keep the S&P from falling to 800 and putting Gingrich in office." These downgrades may comprise the substance of what your previous post on the Australlian preparations for a mass meltdown may embody.

Duffminster Times

Thu, 12/15/2011 - 17:30 | 1984945 hungarianboy
hungarianboy's picture

Futures not impressed.

They need to downgrade when US opens 1 hour after Cash opened :-) And one before close.

And seperatly. Not 8 at once. :-)

Thu, 12/15/2011 - 17:31 | 1984948 blu
blu's picture

I thought "TBTF margin call" was already synonymous with "fire up the turbo printing presses" so I'm not really sure how these downgrades change anything on the ground.

Thu, 12/15/2011 - 17:31 | 1984950 srsly-wtf
srsly-wtf's picture

how will they spin this bullish?

Thu, 12/15/2011 - 19:22 | 1985407 Spastica Rex
Spastica Rex's picture

Gotta have free money for everybody?

Thu, 12/15/2011 - 17:33 | 1984963 falak pema
falak pema's picture

this is like watching the Miss Universe financial contest turning into the sleazy broads of broadway and 42nd hookers bar on parade, looking for usual suckers to rip off.  I feel like a gawker who was once a naive stalker of the best and hottest chicks in town. Yukky yuk yuk.

Thu, 12/15/2011 - 17:37 | 1984987 navy62802
navy62802's picture

Bump in futures!! Woohoo, downgrades!!

Fri, 12/16/2011 - 03:05 | 1986196 navy62802
navy62802's picture

Now, we have a considerable and sustained rise in futures! It's green across the board! Woohoo! More crack, please.

Thu, 12/15/2011 - 17:38 | 1984997 Rainman
Rainman's picture

When the whole class is flunking, it must be Professor Bernank's fault.

Thu, 12/15/2011 - 17:38 | 1984999 chunga
chunga's picture

What about the slobs at Wells Fargo?

URGENT FAX FROM RI SENATOR MOURA TO SENATOR JACK REED

Taxpayers hosed for hundreds of billions of fiats. Senator Moura has the temerity to demand accountability from TBTF. Shari Ruber (Wells Fargo Office of the President 515-324-9877) called the Senate President's office to complain.

Screw you!

Thu, 12/15/2011 - 17:55 | 1985099 flattrader
flattrader's picture

Damn, Sen. Moura!!!  You go girl!!!

She may get my first campaign contribution for 2012 whether she's up for reelection or not.

Thu, 12/15/2011 - 18:03 | 1985138 chunga
chunga's picture

She's a freshman...and has not been infected by the Pig-Men. I love you Senator Moura!

Thu, 12/15/2011 - 17:40 | 1985015 lizzy36
lizzy36's picture

Paging Dick Bove....Another buy of the century day coming up (last one was 6 weeks ago)?

Thu, 12/15/2011 - 17:42 | 1985024 machineh
machineh's picture

'GTUBs'? Sounds like a euphemism for bloody gut-buckets!

Thu, 12/15/2011 - 17:45 | 1985046 Gamma735
Gamma735's picture

Tomorrow, I am going to hide in Kyle Bass' ranch.    Maybe he will hire me to gaurd it for him.

Thu, 12/15/2011 - 17:46 | 1985051 DutchR
DutchR's picture

They just downgraded believe, not faith or hope.

 

Thu, 12/15/2011 - 17:49 | 1985061 JustObserving
JustObserving's picture

8 of the largest banks in the world downgraded.  There are $707 trillion in unregulated derivatives like credit default swaps.  These banks are probably responsible for at least $300 trillion of those unregulated derivatives.  Forget sovereign debt problems .. it is insolvent bank problems now.  Bernanke handed out $29 trillion in 2008.  Get ready to hand out $50 trillion now.

Got gold?  No..... you sold today??

Too bad.

 

Thu, 12/15/2011 - 17:50 | 1985067 Caviar Emptor
Caviar Emptor's picture

I dunno...once upon a time this woulda been shocking and woulda provoked a huge sell, even a crash. 

Today this will have about the same effect as all of us yelling "Bad, Bad Bank!" all together out the window. 

Downgrades mean nothing when the backstop is the fountain of eternal bank youth...ie the Fed as lender of last, first and only resort. The man behind the curtain says not to worry, all debts will be paid and settled...eventually and one way or another. Promise. 

Thu, 12/15/2011 - 17:51 | 1985083 slewie the pi-rat
slewie the pi-rat's picture

world markets will probably gap up 2% tomorrow now that this downgrade news is out...

L0L!!!

the squid is about to issue a buy recommendation on its own stock; when their debt gets downgraded, they will book a ton of income!

will the morgue get it soon as the fallout from The MFGlobal Silver Caper leads our darling blythe to ask:  is orange a good color for me?

 

Thu, 12/15/2011 - 17:54 | 1985094 the not so migh...
the not so mighty maximiza's picture

Awsome!!!!!!  Its a buy signal!!!!!!!!! 

Thu, 12/15/2011 - 17:57 | 1985115 jtmo3
jtmo3's picture

Lemme see a show of hands for anyone here that thinks this matters anymore.

Thu, 12/15/2011 - 17:58 | 1985118 JLee2027
JLee2027's picture

Doom is right around the corner.  Lehman was A+ when it went under. 

"Today's rating action follows the collapse in market confidence in the firm, and Lehman's announcement that it was filing for Chapter 11 bankruptcy...."

Fitch cut its long-term and short-term issuer default ratings on Lehman Brothers Holdings and other subsidiaries to default or "D", its senior debt to CCC from A+, and its subordinated debt and preferred stock to C from A.

http://www.reuters.com/article/2008/09/15/lehman-moodys-idUSLF2328620080915

Thu, 12/15/2011 - 18:00 | 1985127 Scalaris
Scalaris's picture

If we could only have a 20th EU summit this year - I feel that it would be the lucky one.

Thu, 12/15/2011 - 18:05 | 1985144 flyonmywall
flyonmywall's picture

The musical chairs downgrade circle jerk? Who was it that said "While the music's playing, we'll keep dancing?"  Oh yeah...wasn't it Angelo "Fake Tan" Mozilo?

Can't wait for Act III....

 

Thu, 12/15/2011 - 18:17 | 1985183 Darkness
Darkness's picture

BofA CEO Brian Moynihan: "Oh please don't downgrade me, my stock is already trading at nothing per share, I don't know how much lower it can go!!"

Thu, 12/15/2011 - 18:18 | 1985184 Dr. Acula
Dr. Acula's picture

BofA remains safe. It takes like 5 seconds for the Fed Reserve to create 1 quadrillion dollars.

It will take a lot more suffering, collapse in the divison of labor, and disintegration of civilization before the mass of boiling frogs do anything about this de facto socialism.

 

Thu, 12/15/2011 - 18:27 | 1985211 cbaba
cbaba's picture

They are lowering the ratings to save their own ass. The Meltdown is coming soon and when it happens it will look so funny for Fitch to have very high rating for insolvent banks.

They tried everything to delay the inevitable but now the end is near, they had no other choice but to downgrade.. This means the end is coming soon...

Thu, 12/15/2011 - 18:34 | 1985247 RobD
RobD's picture

Looking at BACs chart and someone or something is not letting it go below $5.25 after hours. It is almost like there is some invisible hand holding it up...hmmm...wonder who that could be.

Thu, 12/15/2011 - 18:55 | 1985322 Dr. Acula
Dr. Acula's picture

>It is almost like there is some invisible hand holding it up

Well, it's not Adam Smith's invisible hand

 

Thu, 12/15/2011 - 19:27 | 1985422 Spastica Rex
Spastica Rex's picture

$5.20 is a hard limit, kind of like the speed of light is 299,792,458 metres per second. If you monkey around with that shit the whole universe will explode.

Thu, 12/15/2011 - 20:01 | 1985558 kito
kito's picture

youre on fire today spas

Thu, 12/15/2011 - 19:05 | 1985356 TideFighter
TideFighter's picture

I thought Benny could change it all in 15 minutes...

Thu, 12/15/2011 - 19:45 | 1985491 nmewn
nmewn's picture

Benny the Bitch, print bitch print...lol.

Thu, 12/15/2011 - 20:30 | 1985622 PulauHantu29
PulauHantu29's picture

"I had no idea this happened."

"I never gave persmission for this to happen."

"I had no intention of deception."

"Time for Congress to call Fitch to 'explain."'

 

Thu, 12/15/2011 - 21:33 | 1985757 BurningFuld
BurningFuld's picture

The Bernank has to hold out with printing until Europe cracks.  No money for you!

Thu, 12/15/2011 - 22:28 | 1985867 sudzee
sudzee's picture

Tomorrow may be a good day to make a withdrawel of enough physical cash to get you thru the next couple of weeks. There is only 1000.00 of physical cash per person available in the US. Plastic won't buy you shit if atms take a holiday.

Fri, 12/16/2011 - 00:39 | 1986037 JGambolputty
JGambolputty's picture

Plus 3 points to the TD editors, for showing the proper use of the serial comma in the header to this piece.  However, minus 3 for omitting the comma in the same header, preceding the word "Including".

Just so you know, we're reading this stuff really carefully.

Fri, 12/16/2011 - 08:38 | 1986397 johnnymustardseed
johnnymustardseed's picture

Everyone of these banks are Primary Dealers that can continue to borrow at less than one quarter of one percent from the FED. If that doesn't tell you the entire banking system is fucked nothing will.

Fri, 12/16/2011 - 11:33 | 1986855 dizzyfingers
dizzyfingers's picture

 

Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts
unelected.org

The first ever GAO(Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out. Ben Bernanke(pictured to the right), Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning.

What was revealed in the audit was startling:

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious - the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is "only" $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is "only" $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.

In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.

"This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else." - Bernie Sanders (I-VT)

When you have conservative Republican stalwarts like Jim DeMint(R-SC) and Ron Paul(R-TX) as well as self identified Democratic socialists like Bernie Sanders all fighting against the Federal Reserve, you know that it is no longer an issue of Right versus Left. When you have every single member of the Republican Party in Congress and progressive Congressmen like Dennis Kucinich sponsoring a bill to audit the Federal Reserve, you realize that the Federal Reserve is an entity onto itself, which has no oversight and no accountability.

Americans should be swelled with anger and outrage at the abysmal state of affairs when an unelected group of bankers can create money out of thin air and give it out to megabanks and supercorporations like Halloween candy. If the Federal Reserve and the bankers who control it believe that they can continue to devalue the savings of Americans and continue to destroy the US economy, they will have to face the realization that their trillion dollar printing presses will eventually plunder the world economy.

The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows..

Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and
many many more including banks in Belgium of all places

View the 266-page GAO audit of the Federal Reserve(July 21st, 2011): http://www.scribd.com/doc/60553686/GAO-Fed-Investigation

Source: http://www.gao.gov/products/GAO-11-696
FULL PDF on GAO server: http://www.gao.gov/new.items/d11696.pdf
Senator Sander’s Article: http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

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