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The Latest Incarnation Of The European CDO Cubed Bailout "Swiss Army Knife": A Multi-Trillion Insurance Policy

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Tue, 10/11/2011 - 14:24 | 1761827 GeneMarchbanks
GeneMarchbanks's picture

Can't keep up with the rumor derivatives market, eh Tyler?

Wait a second, is this the AIG 'business' model?

Tue, 10/11/2011 - 14:26 | 1761879 Mike2756
Mike2756's picture

That's what i thought, how can they lose?

Tue, 10/11/2011 - 14:32 | 1761895 LawsofPhysics
LawsofPhysics's picture

My god, this is AIG x1000 plus the ultimate in mark to myth accounting.  Can this get any more foolish?  So long as it allows me to purchase more assets of real value, I am willing to bet yes.  Thanks Tyler.

Tue, 10/11/2011 - 14:35 | 1761902 SheepDog-One
SheepDog-One's picture

I think it gets real dangerous when the Maniacal Monetizers see all theyre doing is allowing the peasantry time to stockpile more pitchforks and ropes.

Tue, 10/11/2011 - 15:37 | 1762172 NoClueSneaker
NoClueSneaker's picture

There is enough beer & pig claws in Bavaria. "Monetizers" mentioned in the newest mega-ponzi vision all sit in München, respective Bavaria. Same as american occupation forces headquarters for Middle East & Africa.

Münchener Rück ( Warren Buffet ), Allianz-Pimco, Siemens, Deutsche Telekom, Hypo RE ( german Countrywide ), all the shit protected with the "law & order" mind set of the Junker/brownshirts.

Pretty much the same bunch of degenerated idiots as 120 years ago, when TPTB created the anihilation machine.

Prosit !

Tue, 10/11/2011 - 14:41 | 1761926 Chris Jusset
Chris Jusset's picture

This is a hybrid model combining the best of AIG and ENRON ...

Tue, 10/11/2011 - 14:15 | 1761829 Smithovsky
Smithovsky's picture

Where's the diagram?

Tue, 10/11/2011 - 14:31 | 1761893 tarsubil
tarsubil's picture

Yeah, is this some kind of bust? Yes, it is very impressive.

Tue, 10/11/2011 - 14:17 | 1761839 Ray745
Ray745's picture

Let's become the equity tranche of a CDO^2, woohoo!!!  Germany has already said they won't do this, as all it does is make the liklihood of losing their portion of the EFSF guarantee way more likely.

Tue, 10/11/2011 - 14:43 | 1761927 monkeyshine
monkeyshine's picture

LOL, gotta love it. The Germans are afraid of losing their first in line creditor position.  What does that say about their real feelings?  Or their real motives?  

Tue, 10/11/2011 - 14:18 | 1761842 rambler6421
rambler6421's picture

Confetti bitchez!

Tue, 10/11/2011 - 14:18 | 1761845 Lord Welligton
Lord Welligton's picture

Jesus, I give up.


Tue, 10/11/2011 - 14:39 | 1761913 wandstrasse
wandstrasse's picture

I cannot give up, because I have not even tried.

Tue, 10/11/2011 - 14:39 | 1761916 kito
kito's picture

im really getting the sense this is going to be a long haul.....

Tue, 10/11/2011 - 14:43 | 1761930 tim73
tim73's picture

Jesus does not like quitters :) And the wine is free btw.

Tue, 10/11/2011 - 14:19 | 1761848 Mongo
Mongo's picture

credimus in debitum - In debt we trust

Tue, 10/11/2011 - 14:19 | 1761850 Fips_OnTheSpot
Fips_OnTheSpot's picture

'seed money' - lol.

..and of course the details are "in works"



Tue, 10/11/2011 - 14:20 | 1761852 buzzsaw99
buzzsaw99's picture

yeah, pimpco would like that.

Tue, 10/11/2011 - 14:20 | 1761853 agent default
agent default's picture

CDO^3? Sounds like one hell of deal.  Where do I sign up?

Tue, 10/11/2011 - 14:21 | 1761856 Seasmoke
Seasmoke's picture

this is so GROSS

Tue, 10/11/2011 - 14:22 | 1761862 Fips_OnTheSpot
Fips_OnTheSpot's picture

bilateral grossing?

Tue, 10/11/2011 - 14:23 | 1761864 Aunty Christ
Aunty Christ's picture

A European AMBAC...brilliant


Tue, 10/11/2011 - 14:23 | 1761865 Archimedes
Archimedes's picture

Man these Bankers, Brokers, Fund Managers and Politicians have no shame. They will stop at nothing to protect their Oligarchy. The only way this ends is in Blood. French Revolution 2.0 to commence in the next few years.

Tue, 10/11/2011 - 14:43 | 1761934 Chris Jusset
Chris Jusset's picture

They will stop at nothing to screw the taxpayers.  There's no end to this bullshit:


It is no wonder Allianz is pushing hard for the world's taxpayers to bail it out. Only instead of a recycling cash, this time the EFSF will become Fed-Lite, "insuring" trillions in debt.

Tue, 10/11/2011 - 14:24 | 1761866 boiltherich
boiltherich's picture

"Only instead of a recycling cash, this time the EFSF will become Fed-Lite, "insuring" trillions in debt."

In other words more leverage.  And if there ever is a call on that insurance policy more leverage yet. 

Tue, 10/11/2011 - 14:29 | 1761887 SheepDog-One
SheepDog-One's picture

In other words, by Friday they'll need another new bailout plan?

Tue, 10/11/2011 - 14:42 | 1761928 Poetic injustice
Poetic injustice's picture

No, by Friday they need fresh rumour.

Tue, 10/11/2011 - 14:25 | 1761869 Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

So when Allianz fails who bails it out?

Procrastination bitchez!

Tue, 10/11/2011 - 14:52 | 1761958 JPM Hater001
JPM Hater001's picture

Wait- I know the answer to this one.

The Golden Valley Country Club.

They cant afford to lose that many members.

Tue, 10/11/2011 - 14:25 | 1761871 SheepDog-One
SheepDog-One's picture

The only point is to tightly chain the entire Eurozone together as 1 for orderly non troublesome takedown.

Tue, 10/11/2011 - 14:25 | 1761872 Catequil
Catequil's picture

"seed money" and then "money grows on trees" ? hehehe :)

this is f**king leverage workaround... cure debt with more debt, and leverage with more leverage?

madness!!! I WELCOME the Fragmentation as opposed to Globalisation, if that will get us rid of the status quo!!!!!!!!

Tue, 10/11/2011 - 14:26 | 1761875 traditionalfunds
traditionalfunds's picture

Surprise.  Surprise. The squid lives.

Paul Achleitner -- After working at the consulting firm Bain & Company and the investment bank Goldman Sachs , where he was a managing director of the Germany subsidiary, in 2000, he joined the Management Board of Allianz AG

Tue, 10/11/2011 - 14:27 | 1761880 Dick Darlington
Dick Darlington's picture

Hahahaa, so now the INSOLVENT EUROPEAN BANKS AND INSURERS will make the decisions how the Lisbon Treaty breaking, tax payer robbing CDO will use it's "funds". It's getting beyond ridiculous, twilight zone type of utter bull shit!

No wonder the european political utopia and the captains of the Titanic are so fookin lost in the sea of debt and insolvency... Bankers and insurers have made BAD BETS and now they tell out in the open how they should be bailed out. Wow, just fookin wow.

Someone, anyone, please pull the fookin plug before these insolvent idiots will make the problems 3 trillion bigger than they are now.

Tue, 10/11/2011 - 14:27 | 1761883 SheepDog-One
SheepDog-One's picture

I dont think anyone is buying it, this is the last dying gasp.

Multi trillion dollar insurance policy where the bankrupt backstop the bankrupt billionaires losses...uh yea so who pays for that?

Like Patton said 'nuts'.

Tue, 10/11/2011 - 15:15 | 1762061 F22
F22's picture

Couldn't agree more, but it was actually Brigadier General Anthony C. McCauliffe.

'nuts' indeed....

Tue, 10/11/2011 - 14:30 | 1761889 Lord Welligton
Lord Welligton's picture

Greece to run out of fuel?


Absolutely no chance of economic growth.

No chance of reapying any debt.

Where does that leave the EFSF?

Tue, 10/11/2011 - 14:33 | 1761897 SheepDog-One
SheepDog-One's picture

Well, at worst theres always more opportunity for 'carrot and stick' market driving rumors again....really its the best thing theyve got.

Tue, 10/11/2011 - 14:41 | 1761923 Lord Welligton
Lord Welligton's picture

market driving rumors again....really its the best thing theyve got.

I had thought that deep in the background a grand plan was being hatched.

They would come out one day and stun the world.

Now I am convinced that they are a bunch of headless chickens who just realised that the chicken coop is on fire.

Tue, 10/11/2011 - 14:34 | 1761899 LawsofPhysics
LawsofPhysics's picture

There they go again, talking about "seeds" without any soil.

Tue, 10/11/2011 - 14:35 | 1761903 Caviar Emptor
Caviar Emptor's picture

It's all ok: an Iranian terror plot was just uncovered in the US. We're saved! We can have another war now that Libya is winding down. 

Tue, 10/11/2011 - 15:41 | 1762201 Schmuck Raker
Schmuck Raker's picture

Just the TSA padding for their next budget request.

Tue, 10/11/2011 - 14:39 | 1761906 tim73
tim73's picture

What it is with politicians today? How the fuck they are so imbeciles, stupid parrots, implementing every stupid policy they can think of. "Yeah, give banks more free money! That should do it!". Mindbogglingly stupid!

Where are the roosevelts and churchills of today? If space aliens lands next to your house, just don't point to our current leaders, please. JUST DON'T DO IT! Try to convince them to leave asap because this Planet Stuck On Stupid is not worth the trouble.

Tue, 10/11/2011 - 14:38 | 1761908 hambone
hambone's picture

Of course this is going to the solution (for now) - don't fight the inevitable...debt was always going to beget more debt.  C'mon, everybody on ZH should know by now that the Keynesian / Ponzi experiment will be taken from the ridiculous to the ludirous to the fanciful to the magical to the nexus of fairy tales...and still when all games seem played, all future demand seems pulled, all possible confidence lost...expect more.

Tue, 10/11/2011 - 14:38 | 1761909 kahunabear
kahunabear's picture

Just believe!

Tue, 10/11/2011 - 14:46 | 1761944 Chris Jusset
Chris Jusset's picture

Have faith!

Tue, 10/11/2011 - 14:39 | 1761915 Forgiven
Forgiven's picture

A successful entrepreneur friend once told me, "Beware of affirmations."  With that in mind, I have to wonder why Allianz would want to insert itself into EFSF mix?  Could they be the Black Swan?  Do they have more to lose than gain if EFSF expansion doesn't happen?  Is their ass somehow in the wringer?

Tue, 10/11/2011 - 14:44 | 1761935 Dick Darlington
Dick Darlington's picture

Pimco parent, Allianz, which has trillions in fixed income exposure all over the world, so it is no wonder it is pushing hard for the world's taxpayers to bail it out.


I think that should answer your question. Add all the insolvent banks, especially the French banks which DON'T NEED MORE CAPITAL, to the soup and you have confirmation.

Tue, 10/11/2011 - 14:44 | 1761937 Lord Welligton
Lord Welligton's picture


While all the attention has been on the banks having to write down sovereign debt we have heard nothing from the insurance and pensions industries.

They are most likely marking sovereign debt to maturity in some asset/liability matching model.

Tue, 10/11/2011 - 14:51 | 1761954 Jim in MN
Jim in MN's picture

As ZH broke last night, it is even worse: potentially pervasive, concealed sovereign debt derivatives which 'aren't supposed to exist':



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