Italy-Pregnant BlackRock Sees Write-Downs Of 75-80% For Greece, Portugal And Ireland

Tyler Durden's picture

There's that name again: BlackRock, the world's largest asset manager, and the firm that was forced to deny last Wednesday it is in any trouble courtesy of accumulating unknown amounts of Italian bonds (how about a nice little Cusip list there Rick Reider?), just made the news following a report in Reuters that the firm anticipates massive haircuts in 3 of the 5 PIIGS. From Reuters: "Debt restructuring in Greece, Portugal and Ireland with write-downs for private creditors of 75 percent to 80 percent are needed to help stop Europe's debt crisis turning into a global meltdown, said BlackRock, one of the world's largest asset managers. "Governments are falling, bond yields are zig-zagging by whole percentage points and markets around the world are locking up: the euro zone turmoil risks turning into a global crisis," BlackRock said in a research note on Monday." So, let's see: Greece, Portugal and Ireland... But not Italy of course? The country that has the second largest amount of debt in Europe is somehow excluded from a very conflicted BlackRock's "objective" analysis. Why is that? "BlackRock also said the European Central Bank should buy more bonds and that policymakers should provide more details on the rescue fund and implement fiscal discipline without hurting growth, according to the note." Is BlackRock betting the farm that the ECB will bail it out? That didn't work too well for MF... Seriously, Rick, some CUSIP level breakdown of your Italian exposure would be terrific. Even if it is at the "net" level. We can wait. So can the market.

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Azannoth's picture

And that's not mentioning 50% on Spain and Italy

markmotive's picture

According to Roubini (video) chaos in Europe could hit the world harder than Lehman Brothers

WonderDawg's picture

That's news? Uh, yeah, Mr. Roubini, Europe is a continent. Lehman was a broker. Slight difference, and I would say the bang will be bigger.

flacon's picture

Is the new CEO of ISDA going to declare that it is not a "Credit Event" when it happens - and then promptly resign?

LeBalance's picture

that's not Capt. Ob, that general Ob.

but he is spoonfeeding to MSM.

Hard1's picture

"...Blackrock also said ECB should buy more bonds".   Translation:   "Please rescue us...SOS ECB SOS"

ZeroPoint's picture

Absolutely. But not just any bonds, but buy the bonds Blackrock is holding.

DogSlime's picture

Still won't be considered a credit event, though, if previous form is anything to go by.

El Viejo's picture

Hey Banzai !

How about a poster similar to the old cigar smokin dogs at a poker table. Instead have all the heads of investment banks and hedge funds with the world's leaders standing behind slippin em aces.


Librarian's picture

This is actually a bit more difficult than you would think.

I was working on a photoshop with the same theme -- dogs with people's faces.  It was for something unrelated to your idea.  The eyes are no problem but I had a lot of problems making the mouth and noses look right.  I figured out that for how much time it would take on photoshop that it would be less expensive to hire an artist to do the half human-half dog faces and then to scan those and finish them up with photoshop.  My friend who had the idea didn't want to spend real funds for what was just a private joke between friends.  Of course, he didn't have any problem with asking me to spend my time on his idea.

It's a great idea, Old One.  I hope that someone runs with it.  I will then be delighted to right-click on it, steal it into my collection and then email it to all my friends! ;)

firstdivision's picture

Spanish spread is as wide as Italy, yet Spain hasn't been at the forefont the past few days. What gives?

Watson's picture

I agree, this is strange.

To me, Italy may have had an 'Entertainer' as Prime Minister, but that should not distract from the fact that (northern) Italy has a substantial manufacturing industry, exporting all over the world.
It has not had a real estate bust.

Spain does agriculture and tourism, and only a little manufacturing.
It has had the Mother of real estate busts.

Italy _may_ be illiquid rather than insolvent.

Spain is insolvent.

pendragon's picture

so they're short those 3 vs long btps?

Miss Expectations's picture

I think I'll have the Cusip Italiano.  Is fresh, no? 

Mactheknife's picture

Translation.."Trade in that worthless PIG debt for some nice Italian bonds we have and we'll throw in some great beachfront property in AZ." 

BurningFuld's picture

Are these guys retards?  Show of hands...who would buy a 10 year Italian Bond even at say 9%? You MUST hold to maturity of course.

Dapper Dan's picture


Officer, the reason I was speeding is my wife is at home and about to get pregnant and I want to be there!

If you thought that was funny read this below.

"BlackRock also said the European Central Bank should buy more bonds

Now that is fucking funny,

There are two kinds of funny:

Funny = nun with a flying habit.

Funny = nun with a $200 dollar a day habit.

RobD's picture

"write-downs for private creditor" 

So only private creditors get shanked?

mayhem_korner's picture



'member GM?  Pathology doesn't discriminate...

Won't matter much in the end.

FL_Conservative's picture

How shocking that Blackrock suggests that the PIG be scalped, but that the ECB should buy (Italian) bonds in the open market.  Hhhmmmmm.....not serving thyself first, are we????

ZeroPoint's picture

I am glad someone is moving the football down the field to 100% write off. That's where it's going anyway.


Tsar Pointless's picture

Up until now, it's been "three yards and a cloud of dust" for the offense.

Finally, somebody had the guts to throw the long bomb.

Now if somebody could just get into the end zone and end this stupid game.

defn8Dog's picture

ZH, it doesn't matter.   Joe LaVorgna just said the US market has de-coupled from Europe, the S&P is going to 1300 in the next month and a half and the Super Committee is a shoo-in to git 'er done.  End of story.

Caviar Emptor's picture

I said it last week: the world changed the minute Euro agreed to Greek haircuts. And MFG happened the same week, with news of client losses and no rescue. It wasn't TBTF

That signalled that the era of full bailouts and complete backstopping by the Fed (and its cousins) is over. And risk has suddenly re-surfaced as a reality after 3 years of fantasy

Watson's picture

I agree. QE3/bailouts et al are all finished. Keeping the wheels turning looked like a (politically) good thing back in 2008, but the terms were far too generous, bailing out fools and also allowing the more astute to make money hand over fist in a now restricted market.
The result is Obama knows that any further largesse guarantees he will not be reelected.
So when BAC implodes the checking accounts/250K FDIC will be honoured, but thats it.
The debt in the system needs to be reduced, not increased (or even inflated away).
And that is exactly what is going to happen...

Dapper Dan's picture

Todays stock tip from a poster at

An interesting economic side effect of the flooding in Bangkok is a developing shortage of disk drives that go into PCs. Bangkok is a hub for disk drive producers such as Western Digital. These plants will be off line for months or years because their factory floors were flooded, damaging their equipment.

The company I work for specializes in buying and selling hard-to-find electronic components. Our business in hard drives has spiked recently. Compounding the problem is that businesses like ours (including my own company) have been buying up any available drives on the after-market, which has eliminated the normal buffer in the supply chain.

This will raise the cost of PCs and laptops that use hard drives, which will create another economic ripple. Tablets and PCs that use solid-state drives will become more competitively priced compared to traditional PCs that use hard drives.

So, because it rained in Thailand, someone in the US will be getting a new tablet instead of a new laptop on Christmas morning.

radish juice's picture

Hmm! time pull funds from this brokerage house

winterswimmer's picture

A 99% haircut is fine. Jus' leave a few hairs in the middle, like a pseudo-Mohican...

winterswimmer's picture

But if we cut off the balls of Trichet, Papademos, G-Pap and Bernanke (amongst others) we MIGHT just keep our hair on, to a certain extent....