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Global Systemic Risk Near Record Highs Prompts ESRB Warning

Tyler Durden's picture


We have been pointing to the incessant rise in the risk of the Financial Stability Board's most systemically important entities for weeks now. It appears the European Systemic Risk Board has, according to Dow Jones, issued its first warning to governments, urging them to prepare capital injections for some European banks.

The ESRB urged governments to prepare capital injections for banks which failed or came close to failing the bank stress tests earlier this year. Europe remains, marginally, the weakest region from the perspective of financial risk but we note how the Asian region was initially unharmed but as 2011 has developed, risk has spread contagiously into that region's financial system also.


And while many would argue that CDS are more 'hysterical', we point to the increasing separation between the 'haves' and 'have-nots' in Europe, as EUR Libor components continue to disperse.

It seems the market is 'sorting' the French and Swiss bank funding issues out itself...


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Tue, 09/20/2011 - 10:23 | 1688597 HelluvaEngineer
HelluvaEngineer's picture

and futures explode!

Tue, 09/20/2011 - 10:31 | 1688628 HoofHearted
HoofHearted's picture

Because here comes QE6. They are setting this up WAY too obviously. Any fool can see what is going to happen here. And look at the bid that gold and silver have caught...

Tue, 09/20/2011 - 10:35 | 1688643 GeneMarchbanks
GeneMarchbanks's picture

NFLX is flashing a bu-  wait what?

Tue, 09/20/2011 - 10:38 | 1688660 rubearish10
rubearish10's picture

Huge unwind of Long NFLX and Short AAPL, hee hee.

Tue, 09/20/2011 - 12:22 | 1689129 ffart
ffart's picture


Tue, 09/20/2011 - 10:40 | 1688670 fuu
fuu's picture

Did Ben start the printers early?

Tue, 09/20/2011 - 10:52 | 1688718 HoofHearted
HoofHearted's picture

From marketwatch front page (since, er, corrected)

Reviving 'Operation Twist'
Aiming to depress benchmark rates for corporate and consumer loans, the Federal Reserve's expected to revive a 1960s-era practice of managing its portfolio to shitt maturities toward longer-dated debt.

Notice what the Fed is doing on maturities? I thought that this is what Greece was doing on bondholders. And the EFSF seems to think this is what several banks will be doing too. Couldn't resist this one...

Tue, 09/20/2011 - 12:02 | 1689029 Spirit Of Truth
Spirit Of Truth's picture

As long as the Fed is doing SOMETHING, then investors know the water is warm and safe.

You see, this is all about faith in the "visible hand" of central planners/printers.  As long as that faith holds up, the system keeps afloat.

Credit means: Belief or confidence in the truth of something.

So really what this all comes down to is collective belief and confidence in what are increasingly far-fetched lies. TPTB hate places like ZH where the truth is examined day in and day out by little people who are supposed to be mimdless believers.  We are a threat to the lies the world is supposed to believe.

Tue, 09/20/2011 - 14:02 | 1689507 myne
myne's picture

What happens when the fed is the only bank and the only investor left?

Ie, they own ALL debt and ALL stocks.

How bad will the inflation be then?

Tue, 09/20/2011 - 12:21 | 1689125 I am more equal...
I am more equal than others's picture

Ben "The Benjamins" Bernaked - printing marathon - mo money, mo money, mo money - circulation, momentum, prosperity.  It would be funny if it were a sitcom with the Waylans...unfortunately the academic has no sense of humor and because he inhaled in college has a distorted sense of history. 

Tue, 09/20/2011 - 11:19 | 1688869 SilverRhino
SilverRhino's picture

Bought the fucking dip yesterday.   Picked up a lot (well for me) of silver PROOF coins ( silver dollars 1986-2007) for melt + 10% yesterday.   Didnt argue with the guy's price and both walked away thinking we'd sort of taken the other guy.    Good business :-)

Tue, 09/20/2011 - 10:35 | 1688644 Racer
Racer's picture

Yes on such fantastically bad news of course it will

Tue, 09/20/2011 - 10:59 | 1688754 Cognitive Dissonance
Cognitive Dissonance's picture

Mr. Sulu.

Arm all Photon Torpedoes and prepare to fire on my mark.



Tue, 09/20/2011 - 11:08 | 1688805 TheFourthStooge-ing
TheFourthStooge-ing's picture

It does seem like this is about the time that the war card gets put into play.


Tue, 09/20/2011 - 11:16 | 1688845 Cognitive Dissonance
Cognitive Dissonance's picture

I've noticed that China is increasingly being portrayed as the next evil empire by the lap dog MSM press.

I even saw an article over the weekend discussing bringing back the draft. Conditioning the public maybe?

Tue, 09/20/2011 - 11:22 | 1688889 SheepDog-One
SheepDog-One's picture

'Conditioning the fuktard sheeple american public'...why even bother wasting the time? May as well just pull the FEMA busses up to the Walmart right now....hell put a 'free food inside' sign up theyll fight each other for a place in the forced labor camps.

'Condition the sheeple'....hell its like putting on a Ghillie suit to go dig for about overkill.

Tue, 09/20/2011 - 10:38 | 1688663 scatterbrains
scatterbrains's picture

oh that's just Greenspan tweeding his buddies the good news he's hearing from inside.

Tue, 09/20/2011 - 10:48 | 1688679 vast-dom
vast-dom's picture

.........and......the markets are.........up! WTF!!!!???!!!! This has gone too too too FAR!


FUCK QE HOPIUM TOMORROW -- IT DOES NOTHING TO 1 out of 6 below poverty, poor manufacturing, foodstamps, $kaMs, bankruptcies, foreclosures, Netflix, toxic assets, entire Eurozone, FuckYouShima, zombie banking sector, etc etc etc so I guess it's all BULL(SHIT)ISH indefinitely.

Tue, 09/20/2011 - 10:48 | 1688703 scatterbrains
scatterbrains's picture

Since we all know the market has been rigged since 08 at a minimum I wouldn't be surprised if the Bernank takes advantage of all the front running momo buying and cleaves some greedy little fingers off at the palms so as to set up for when he really needs to print down the road.


Tue, 09/20/2011 - 10:53 | 1688719 vast-dom
vast-dom's picture

scatter we may both be wrong, but i am thinking that Bernank et. al may just goose this skittish motherfucker by abstaining in order to unleash the orgy next time around. "we didn't have a choice" is always better gambit when critics are preemptively crawling up your asses.......shit is gonna get real serious over next few days........

Tue, 09/20/2011 - 11:10 | 1688814 SheepDog-One
SheepDog-One's picture

vast-dom yea I think Bernanke does nothing, way too much teetering on the edge to 'printfest' like everyone believes...its hardly early 2009 anymore! 'Kick the can' for Ben tomorrow will be '3 strikes', and people will start seeing the free money spigot is not going to get turned back on EVER.

Tue, 09/20/2011 - 11:05 | 1688782 spiral galaxy
spiral galaxy's picture

Tis true!!! All manipulation all the time.  For the previlaged few at the expense of many.  However, it seems if you play the market the complete, counterintuative opposite what should be logical it could be profitable (think FAS).  Nonetheless, I'm finding that just sitting on cash on the sidelines is both entertaining and $$ prudent. :-)

Tue, 09/20/2011 - 11:25 | 1688896 Snidley Whipsnae
Snidley Whipsnae's picture

"IT DOES NOTHING TO 1 out of 6 below poverty, poor manufacturing, foodstamps, $kaMs, bankruptcies, foreclosures, Netflix, toxic assets, entire Eurozone, FuckYouShima, zombie banking sector"

Vast-Dom... You have enumerated many things that no longer matter to the TPTB...

All that matters now are bank balance sheets, bank bonuses, and the ability of banks to hide off balance sheet much of their rot.

Main St biz, US Citizens and their jobs, bk, underwater mortgages, and anything that does not directly impact the fund raising efforts of politicians no longer matter.

This is not a government for the people and by the people...

This is a government for the bankers by the bankers...

The only possibility for change is complete financial melt down of the current system or real hunger among the former middle class.

Tue, 09/20/2011 - 10:43 | 1688685 John Law Lives
John Law Lives's picture

Queue the crack pellets...

Tue, 09/20/2011 - 11:20 | 1688871 Belarus
Belarus's picture

Of course futures exploded for the ponzi makers. The real trade: buy physical silver. Why? Well....we have the "urgent" warning that ctrl + p will need to stand ready to save BNP, SocGen, etc....then we have the Berank today and tomorrow (I've said it ad nasuea and will say it again: he always will lose just never on the week all eyes are on him) and we have his own self mandated wealth effect of stocks in jeoporday for the year with the real ecoomy sucking eggs and soon to be more so with QE3.....and if there is no QE3? Watch all this get unwound.

Silver has been leaking lower for over a week....if everything, queing Tepper, has been getting ramped because another LSAP, expect Silver to come from behind to take a signficant lead over paper stocks. MBI is also looking good for those wanting to play the ponzi game for quick turnaround into metals.

Tue, 09/20/2011 - 10:24 | 1688600 Smiley
Smiley's picture


Tue, 09/20/2011 - 10:29 | 1688620 hognutz
hognutz's picture

Git yer Beans and Bullets reddy!!!

Tue, 09/20/2011 - 10:34 | 1688637 Loose-Tools
Loose-Tools's picture

But, beans give me gas.

Tue, 09/20/2011 - 10:35 | 1688646 GeneMarchbanks
GeneMarchbanks's picture

peas, he meant peas

Tue, 09/20/2011 - 11:17 | 1688855 criticaster
criticaster's picture

Print Beans Bitchez...

Tue, 09/20/2011 - 10:52 | 1688723 TheFourthStooge-ing
TheFourthStooge-ing's picture

But, beans give me gas.

No, beans give you a valuable energy commodity, which happens to be the business model of a company that the DOE has formed a new investment partnership with: Methyndra. (The Meth in Methyndra stands for methane, not methamphetamine, at least not yet.)


Tue, 09/20/2011 - 11:19 | 1688868 SheepDog-One
SheepDog-One's picture

Who run Bartertown? ME run Bartertown, control methane...control Bartertown....Embargo ON!

Tue, 09/20/2011 - 10:40 | 1688673 Falcon15
Falcon15's picture

Beans, bullets, and band-aids, with a side stack of phyzz.

Tue, 09/20/2011 - 10:30 | 1688627 stoneman sacked
stoneman sacked's picture

Nothing to worry !

There is no problem that cannot be solved through fiscal stimulus and monetary easing

Tue, 09/20/2011 - 10:32 | 1688631 Spitzer
Spitzer's picture

Dollars will be printed, not Euros but dollars.

Tue, 09/20/2011 - 10:32 | 1688633 GeneMarchbanks
GeneMarchbanks's picture

Chimerica wins!

Tue, 09/20/2011 - 11:25 | 1688894 disabledvet
disabledvet's picture

Chimerical indeed. And would you like some hocus-pocus with that? Throw in a little eye of newt?

Tue, 09/20/2011 - 10:35 | 1688641 Dr. Engali
Dr. Engali's picture

Ben is going to have to print eleventy trillion dollars to get us out of this one. Can't wait to see the gold chart when that happens.

Tue, 09/20/2011 - 10:54 | 1688731 Dr. Richard Head
Dr. Richard Head's picture

I was thinking forty-teen gazillion. 

Tue, 09/20/2011 - 11:07 | 1688794 SheepDog-One
SheepDog-One's picture

Or the stock charts when Ben falls far short of pleasing the free money Gods on Wall St.

I'd laugh if he did announce some huge multi-trillion BS, lets see gas spike to $5 quick...hell go for it Ben! At least make this stupid show INTERESTING for once! This is like watching retards play in a mud puddle for 2 years!

Tue, 09/20/2011 - 11:27 | 1688906 disabledvet
disabledvet's picture

Or the debt charts. High yield has already imploded. It would be logical to assume government is next.

Tue, 09/20/2011 - 10:36 | 1688648 TradingJoe
TradingJoe's picture

Ben is going to print shit until he is allowed to! If he prints now, it's ALL TOAST from here!

Tue, 09/20/2011 - 10:46 | 1688697 TheFourthStooge-ing
TheFourthStooge-ing's picture

Ben is going to print shit until he is allowed to! If he prints now, it's ALL TOAST from here!

The Bernank will fire up the manure spreaders (printers), and, yes, indeed, it's all toast from here. Expect Timmy Jeethner to explain why shit on toast is good for the economy and Michelle Obama to proclaim the nutritional benefits of grilled shit sandwiches.


Tue, 09/20/2011 - 10:51 | 1688715 Dr. Richard Head
Dr. Richard Head's picture

Looks like the first acre of farm land to feel this manure is in Houston -

Wonder why it is hitting here the hardest first?

Tue, 09/20/2011 - 11:17 | 1688849 SheepDog-One
SheepDog-One's picture

'Isn't' I think he meant to put in there.

Tue, 09/20/2011 - 10:36 | 1688654 equity_momo
equity_momo's picture

Fuck it time for a drink. Cocktail hour somewhere. You cant print cocktails.

Tue, 09/20/2011 - 11:12 | 1688826 Dr. Richard Head
Dr. Richard Head's picture

Print me another one Bernanke - sounds like a good Buffet tune...Jimmy that is, not Warren.

Tue, 09/20/2011 - 10:40 | 1688672 Tense INDIAN
Tense INDIAN's picture

can someone share some thought.....its increasingly looking like trading is done by just ONE ENTITY with ALGOS(machines) can all the markets of the world ...futures , Global indices, Oil......all rise at the same time ....almost at the very same second......what the FUCK...?

Tue, 09/20/2011 - 10:42 | 1688681 dasein211
dasein211's picture

Its easy to see the wall... No Tsunami of money coming here from europe and asia. Nobody wants to be in europe and asia is looking mighty shaky. I think short to intermediate term this works for the US. Fundamentally the US sucks ass and will be crushed by its own debt weight but not before europe and asia. This allows benny to print and not have to worry about treasury rates spiking in the intermediate future. Reggie was right on the money. The only question is how orderly will the greek default be? And how much more inflation can the system handle? The higher we push it the worse the rest of the world will be. And my best guess is this migjt be bens last stand. If this QE doesnt work the the system comes down just in time for 2012! And now ben HAS to do it before greece officially defaults which means that no matter the amount it could be run over by the deleveraging train anyway!!!

Tue, 09/20/2011 - 11:04 | 1688773 SheepDog-One
SheepDog-One's picture

Asia will never be crushed because they have an unarmed people that the govt doesnt mind at all to kill or starve. There are no EBT cards in China.

Tue, 09/20/2011 - 12:18 | 1689107 pods
pods's picture

They DO have plastic.  But it is in their rice and not their wallets.


Tue, 09/20/2011 - 12:27 | 1689149 ffart
ffart's picture

I think these guys would like to have a word with you.

Tue, 09/20/2011 - 12:26 | 1689147 Panafrican Funk...
Panafrican Funktron Robot's picture

I think Ben actually has to wait until a Greek default or another event of some type (S&P below 1K, negative 3Q GDP print, etc.) in order to build the political cover to turn on the spigots.  

Tue, 09/20/2011 - 10:43 | 1688686 Gandalf6900
Gandalf6900's picture


Tue, 09/20/2011 - 10:50 | 1688716 d00daa
d00daa's picture

what dip??  all i see are birinyi-style erections on every fucking chart i'm looking at.

Tue, 09/20/2011 - 10:54 | 1688732 HoofHearted
HoofHearted's picture

Ready for this? With this shit out there, there's a dip in FAZ!!!!

Holy shit, this is one fucked up world.

Tue, 09/20/2011 - 11:00 | 1688760 SheepDog-One
SheepDog-One's picture

Dip? No you see certain Western World implosion obviously calls for a +100 DOW pop...get with the program man.

Tue, 09/20/2011 - 10:46 | 1688695 msmith
msmith's picture

Yep, just more money.  Just keep printing.  What is there to discuss.  S&P bearish

Tue, 09/20/2011 - 10:46 | 1688696 Mr.Sono
Mr.Sono's picture

rock the boat

Tue, 09/20/2011 - 10:49 | 1688708 mayhem_korner
mayhem_korner's picture

Jenga tower wobbling.

Tue, 09/20/2011 - 10:49 | 1688709 LongSoupLine
LongSoupLine's picture

Well, looks like yet another night of iPads with gravy for the kids to eat.

Tue, 09/20/2011 - 10:50 | 1688713 tmosley
tmosley's picture

They should just drink some bleach.

Tue, 09/20/2011 - 10:55 | 1688734 lizzy36
lizzy36's picture

All is good today.

AAPL to replace HPQ in DJI. rumor so far.

AAPL performance over last 2 days suggest anything but a rumor.

Phew AAPL to the rescue again.

Tue, 09/20/2011 - 11:05 | 1688779 Racer
Racer's picture

There will be no more indices only AAPL... they will all be exactly the same

Tue, 09/20/2011 - 11:15 | 1688834 SheepDog-One
SheepDog-One's picture

Just like 'Idiocracy'.

Tue, 09/20/2011 - 10:55 | 1688737 virgilcaine
virgilcaine's picture

The fed is out of tools.

Tue, 09/20/2011 - 10:58 | 1688750 tmosley
tmosley's picture

What, did they all resign?

Tue, 09/20/2011 - 11:03 | 1688768 Raymond Reason
Raymond Reason's picture

hahahahaha   good! 

Tue, 09/20/2011 - 10:59 | 1688757 mynhair
mynhair's picture

The Bernank quit?

Tue, 09/20/2011 - 11:00 | 1688763 Falcon15
Falcon15's picture

The Fed is all tools. Get them out. There, fixed it for you.

Tue, 09/20/2011 - 11:52 | 1688998 darteaus
darteaus's picture

The Fed is a tool of the cring-capitalist elite. They are not out of tools.

Tue, 09/20/2011 - 10:59 | 1688753 SheepDog-One
SheepDog-One's picture

Systemic collapse risk all time highs? Well obviously that calls for +100 DOW pop.

Tue, 09/20/2011 - 11:00 | 1688759 mynhair
mynhair's picture

There is no volume out there.  This sux.

Tue, 09/20/2011 - 11:02 | 1688767 SheepDog-One
SheepDog-One's picture

From here on out its just all trader bots responding to worst news=higher pumps...and anyone actually putting their money in there...well theres an App for that to immediately remove it.

Tue, 09/20/2011 - 11:37 | 1688950 disabledvet
disabledvet's picture

A pump and dump scheme with the media screaming "buy Apple" right up until the downturn. There's a lot to that. He'll hath no fury like a high yield debt investor scorned.

Tue, 09/20/2011 - 11:02 | 1688766 Racer
Racer's picture

Capital injections ... yeah more heroin for the dead bodies

And money that paid for the heroin now being stolen from unborn babies

Tue, 09/20/2011 - 11:04 | 1688777 walküre
walküre's picture

You know the trade has stalled when even paper gold does squat in the face of the coming hyper inflation!

Gold miners are screaming higher this morning.

That's about the only notable trend.

Tue, 09/20/2011 - 11:07 | 1688793 kurzdump
kurzdump's picture

Systemic collapse is already priced in. Algos are in "inverse-mode" today to bleed human traders white. Nothing to worry about.

Tue, 09/20/2011 - 11:13 | 1688829 SheepDog-One
SheepDog-One's picture

Squeezing the last of the shorts, another sign tomorrow is a big face plant....if the 'big boys' knew today what was coming tomorrow, and make no mistake, they do....then they would have let markets slide today to pile in short to hook them on tomorrow. But instead theyre doing all-out algo ramps today...for what? Another thing that does not fit with free money for all fest tomorrow.

Tue, 09/20/2011 - 11:28 | 1688908 LookingWithAmazement
LookingWithAmazement's picture

Indeed. No Armageddon. Said many times so.

Tue, 09/20/2011 - 11:14 | 1688817 SheepDog-One
SheepDog-One's picture

Fucking crackhead markets. Hey any of you out there still in this crap good luck to ya.

Tue, 09/20/2011 - 11:36 | 1688917 Coldfire
Coldfire's picture

As it slouched towards its demise, the Ponzeconomy became a jonesing junkie for fiat credit in ever increasing amounts. Sad and perhaps a little funny. But one thing was felt to be certain: things would be better after the revolution.

Tue, 09/20/2011 - 11:38 | 1688946 virgilcaine
virgilcaine's picture

Have to go with a "red on close today".. has to happen one day.   In the end humans run the machines and greed is alive as ever.

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