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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HelluvaEngineer's picture

and futures explode!

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...

GeneMarchbanks's picture

NFLX is flashing a bu-  wait what?

rubearish10's picture

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

ffart's picture


fuu's picture

Did Ben start the printers early?

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...

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.

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?

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. 

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 :-)

Racer's picture

Yes on such fantastically bad news of course it will

Cognitive Dissonance's picture

Mr. Sulu.

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



TheFourthStooge-ing's picture

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


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?

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.

scatterbrains's picture

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

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.

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.


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........

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.

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. :-)

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.

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.

Smiley's picture


hognutz's picture

Git yer Beans and Bullets reddy!!!

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.)


SheepDog-One's picture

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

Falcon15's picture

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

stoneman sacked's picture

Nothing to worry !

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

Spitzer's picture

Dollars will be printed, not Euros but dollars.

disabledvet's picture

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

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.

Dr. Richard Head's picture

I was thinking forty-teen gazillion. 

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!

disabledvet's picture

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

TradingJoe's picture

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

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.


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?

SheepDog-One's picture

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

equity_momo's picture

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

Dr. Richard Head's picture

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

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...?

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!!!

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.