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Moody's Downgrade Of French Banks Imminent, Risk Waterfall To Follow?

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Sat, 09/10/2011 - 18:56 | 1655224 equity_momo
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We're gonna need a bigger popcorn bowl.

Sat, 09/10/2011 - 19:00 | 1655237 cossack55
cossack55's picture

....and a little more butter. Watch that sodium though.

Sat, 09/10/2011 - 19:14 | 1655267 Sudden Debt
Sudden Debt's picture

Indeed, a lot of investors will get a hart attack next week... RIP...

Sat, 09/10/2011 - 20:09 | 1655377 LeBalance
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one must take care with the rascally English Languish:


[hahrt] Show IPA noun, plural harts, ( especially collectively ) hart.
a male deer, commonly of the red deer, Cervus elaphus,  especially after its fifth year. (http://dictionary.reference.com/browse/hart) /smile/

Sat, 09/10/2011 - 20:27 | 1655406 knukles
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Like when I have a Deer Sized Harton?

Sat, 09/10/2011 - 20:57 | 1655463 markmotive
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Risk off for everything not nailed down.

I'm waiting patiently for gold to hit peak gold-to-S&P 500 ratio (originally hit in early 1980s) before going long risk assets.


Sat, 09/10/2011 - 21:26 | 1655497 Market Efficien...
Market Efficiency Romantic's picture

as long as gold does not hit the real ratio to fiat currencies, fiat creators will be tempted to confuse their crash by manipulating gold and other reserves, as the gold price has become popular and increasingly creates a de-facto standard among people. Such price confusion is a logical strategic move. Due to its emancipation from gold-backing and as long as the real ratio is not hit, fiat has the power to confuse about its doomedness. Inception becomes reality or the perfect example for the tail wagging the dog.

Sun, 09/11/2011 - 03:41 | 1655804 chinaguy
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Moody's only leaked in advance so they can sell (not downgrading) to the highest bidder(s).

Sun, 09/11/2011 - 11:08 | 1656062 disabledvet
disabledvet's picture

Wasn't it Moody's who downgraded the US but not Europe...and just in time for the biggest rally in treasuries since the early 80's?

Sun, 09/11/2011 - 11:20 | 1656079 MsCreant
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S&P did it and it got their head exec. fired and demands that they go in front of congress and explain themselves (accusations of frontrunning it). 

Sun, 09/11/2011 - 06:47 | 1655863 Smiddywesson
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If you are saying TPTB are likely to become even more interventionalist in the gold markets, I agree.  They have no choice.

Sun, 09/11/2011 - 10:27 | 1656006 Marco
Marco's picture

TPTB own more gold than anyone ... their private banks might be short PMs ... but the private banks are set up to fall with everything else in the collapse. They will retreat to their private islands, gated communities and resorts in friendly oil based dictatorships as chaos rampages through the world ... but the collapse will not make them poor and it will certainly not reduce the percentage of true wealth they control (including gold).


This fantasy that the collapse will wipe out TPTB is complete lunacy. It won't do a damn thing about wealth distribution, it's just going to crater productivity. They'll still wash down caviar and truffels with champaign, it will be the poor that suffer. Some of us might be able to hitch a ride with PM investment, but the only people guarantueed to not lose are TPTB ... except in a true revolution. That's why they are TPTB.

Sun, 09/11/2011 - 10:44 | 1656020 TruthInSunshine
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Who could've seen this coming? (/sarc)

Surely not these guys:


Sat, 09/10/2011 - 20:28 | 1655409 rocker
rocker's picture

Maybe it was just a typo. I do it all the time. And no, I don't proof read everything.

This is ZH, the point is what matters. Eh.  LOL  Just look at the makets. Less than Perfection.

Sun, 09/11/2011 - 05:20 | 1655480 Ratscam
Ratscam's picture

riots in zurich, cause unknown, as of now,
looking for athens, meeting any westhern town.
edit 11 AM: no biggy just an illegal party with 1500 people that became quite violent. the real deal will show after the euro has crashed

Sat, 09/10/2011 - 21:16 | 1655485 nmewn
nmewn's picture

"Maybe it was just a typo."
Yeah, no big deal. He's Belgian, he does pretty damn good...lol.
Besides, I have a sticky "C" key...anything an happen ;-)

Sun, 09/11/2011 - 06:29 | 1655856 Motley Fool
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Perhaps it was intentional. The deer in headlights picture comes to mind. :P

Sat, 09/10/2011 - 20:34 | 1655419 LetThemEatRand
LetThemEatRand's picture

I think the missing letter was an 's', not an 'e.'

"Indeed, a lot of investors will get a shart attack next week... RIP..."

Sun, 09/11/2011 - 10:20 | 1656000 bentaxle
bentaxle's picture

"F" maybe?

Sun, 09/11/2011 - 11:00 | 1656049 New_Meat
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WaPo's reason to exist: The famous "change one letter" contest.

e.g.: http://www.washingtonpost.com/wp-dyn/content/article/2010/05/28/AR201005...

Sun, 09/11/2011 - 12:01 | 1656239 Ursa Major
Ursa Major's picture

Is that the one frozen in the headlights?

Sat, 09/10/2011 - 20:49 | 1655450 macholatte
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Belgium was supposed to be downgraded months ago due to the fact that it continues to be the longest running modern anarchy,


So how is Belgium doing?

Riots? Bloodshed? Starvation? Flesh eating zombies in the streets? Mad Max?

The meticulous care with which Belgian cooks select their foods can best be illustrated by a walk through a Belgian supermarket, where even every-day items like butter and cream are carefully labeled with the proud producer's name, where an incredible array of exquisitely garnished cold meats, pates, sausages, salads, and prepared appetizers delight the eye, and where varieties of canned, packaged, and bottled goods line up in colorful profusion unparalleled elsewhere. Advertisements proudly proclaim:

"Butter from Namur" ... "Asparagus from Malines" ... "Pork and pork products from Pietron" ... "Walnuts from Bastogne" ... "Strawberries from Wepion."



Sun, 09/11/2011 - 07:23 | 1655878 oogs66
oogs66's picture

shows what a country can do without a government

Sun, 09/11/2011 - 07:56 | 1655896 Bendromeda Strain
Bendromeda Strain's picture

Big deal, Japan does that. They just slip the word "not" in there.

Sun, 09/11/2011 - 11:23 | 1656084 Byte Me
Byte Me's picture


YEAH -- we're having it real tough over here in Belgium.

PS -- you forgot all the beer and chocolate. Nearly a year without be.gov too, Tough times for sure...

Sat, 09/10/2011 - 23:09 | 1655599 Yen Cross
Yen Cross's picture

Those Brits have their austerity package lock, stock and barrel! I'll be playing those GBP trades over the next few months.

 Great post S/D as always!

Sun, 09/11/2011 - 05:49 | 1655848 Snidley Whipsnae
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European bankers are just as greedy as US Bankers... US bankers offered time bombs that looked like 'sure fire money making CDOs/MBS, etc' to the European bankers and the greedy European fools took them onto their books.

The time delay fuses have set the synthetic garbage held on European banks balance sheets off and the mission of taking down the Euro fiat currency is almost accomplished.

While military warfare is usually sporadic, economic warfare is continuous... and there are no rules.

Next time Europe decides to construct a currency to compete with the dollar they should do due dilligence on factors they are vulnerable to... For instance: No one is more succeptable to a scam than a scammer... The European banker scammers got caught in a scam perpetrated by US banker scammers...all is fair in economic warfare.


Sun, 09/11/2011 - 06:31 | 1655858 jhm
jhm's picture

Well, Snidley, it is not precisely that the US is without problems. Let's wait and see. In german there is a saying: "Nicht zu früh freuen" - that is not to crow too soon. Or: "Wer im Glaushaus sitzt, sollte nicht mit Steinen werfen" - talk about the pot calling the kettle black. ;-) Never underestimate historical memory and experience ...

Sun, 09/11/2011 - 07:14 | 1655872 Snidley Whipsnae
Snidley Whipsnae's picture

jhm... To the contrary, I am not 'crowing' about what is transpiring. I am simply pointing out what I believe has happened.

I certainly do not approve of a movement by US banks, in collusion with regulators, to create toxic time bombs aimed at wrecking a competing currency to the dollar.

The consequences of what the US has done to wreck the Euro are wide ranging and certainly effect 99% of the worlds population due to decreased purchasing power of various fiat currencies including the dollar. The damage caused can be seen in higher energy prices, higher food costs, political unrest, etc... and could easily spiral into global conflict.

I did not mean to give the impression that I approve or that I am gloating.

Color me a disapproving observer... but, what can individuals do? We go to the polls to cast our votes and there are no candidates that we approve of, no candidates that are not bought and paid for by bankers, no candidates that offer meaningful change.

So, I watch and make comments on events. I read an article and sometimes offer a different slant on what I believe is happening... Strictly my opinons...Disinformation is everywhere and I hope not to add to it. 

I believe European bankers were patsys for a scam perpetrated by US bankers... with prior approval and encouragement from the highest level...all in an attempt to prolong the life of the dollar as the world reserve currency and to eliminate competition to the dollar from all other currencies.


Sun, 09/11/2011 - 11:56 | 1656223 TwelfthVulture
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Snidley, very interesting.  Nice take on "recent" events.  Be careful with the red team blue team analysis though.  US bankers, Euro bankers.  All major TBTF banks are global these days.  Not saying your thesis, € v $, is wrong, just don't think there is such a thing anymore as a European bank, or a US bank, or an Asian bank.

Sun, 09/11/2011 - 19:08 | 1657759 Dingleberry
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Snidely is doing the simple (and usually correct) rationalization since time immemorial:  FOLLOW THE MOTHER FUCKING MONEY.  In other words:  WHO BENEFITS????  You can then deduce the wherefore's, why's, and how's.  

Mon, 09/12/2011 - 06:26 | 1658820 jhm
jhm's picture

Understood (great to read that!) and thank you for your answer, very much appreciated. Food for thought, always a gain for the brain. :-)

See, to watch this multitude of levels in this "game" i have a strange feeling that no matter how sophisticated the US bankers (and politicians) seem to be and no matter how utterly clever their preparations were (since a very long time) they will sooner or later lose their funny game. As will their european friends (minions) in the relevant positions everywhere in all european countries. And with all of them the whole western political and banking scam will fall in a way the world has not seen since the dragon wars.

Chaos is not a certainty, given historical experience with people in Europe in situations of dire crisis. I am realistic about human nature, but am hopeful, too. In the worst times when all expect the (human) beasts to rave and rape in the streets often the best comes out in people nonetheless very fast, against all odds.

Looking at Germany i would strongly advise to take Russia, China, India and Turkey into the game, especially the russians and the indians are far underestimated in the great game. The ages-old anglo-american nightmare is a eurasian bloc with the russians and the germans in it working together, with Poland and France at the russo-germanic coat-tails as partners in crime.

To prevent that eurasian nightmare ever happening the anglo-american (empire) has done and would do everything, including as to go so far to try to ruin the planet at all cost just to stay in their illusion of power. This is not the whole story, there are myriads of levels here to watch, but it is one major part of the whole drama. Well, known (and lesser known) human history stands like a giant rock against all these efforts (by the anglo-american "elite" and its minions) to keep control, no matter what. No winning game here, for none of the players.


Sun, 09/11/2011 - 11:13 | 1656071 disabledvet
Sun, 09/11/2011 - 07:01 | 1655869 Smiddywesson
Smiddywesson's picture

If that were so Snidley, and the whole CDO/MBS fiasco was a plot to take out the Euro, then why did the Fed secretly funnel all that money to shore up EU banks?  Why not just let them fail?  Why all the cooperation to massage gold prices lower while central banks buy up gold if the plan is for the USD to be the sole currency standing?  In that case, central banks wouldn't need the gold.  I don't buy it.  The system isn't solvable and the Fed and ECB intend to remain at the top of the new system.  The Fed can't go it alone, it needs the ECB to get its way.  

I see this crisis as a tag team match led by the Fed and the ECB on one side, and any country stupid enough to follow them vs. all of the rest, led by China, and perhaps Russia.  Winner takes all.  

Guess who's going to win?  My money's on the Bernank

Sun, 09/11/2011 - 07:34 | 1655884 Snidley Whipsnae
Snidley Whipsnae's picture

Smiddywesson... I am as interested as anyone to see how this plays out.

I have presented a hypothesis that cannot be proven at this time. In time we will see if the dollar is still around when the Euro is extinct. The proof, if indeed there is any, will be in what currency is still standing when others have disappeared.

If you dig into how the Euro was structured you will see that it was a sound system, lacking only physical/fiscal union. The Euro was attacked at it's weakest point...is this an accident?

Another bomb that was planted in the EU was Greece. Greece was aided by Goldman Sucks in hiding off balance sheet it's true debt...which allowed Greece entry into the EU when it should have been denied. Was this an accident?

US based and European based multination banks were instrumental in spreading toxic derivative instruments throughout European economies. A housing bubble similar to the one in the US was spread to Europe... a toxic economic virus.

Iran set up a program to sell oil for Euros and they were invaded. Lybia wanted gold for oil and they are invaded. Any country that introduces a currency that competes with the dollar runs into 'bad luck'... Could this all be coincidence?

Were the swap lines that Benny opened with European Central Banks for saving the Euro or for saving multinational banks? European countries were settleing trade with China in Euros, leaving the dollar out of the loop and endangering the dollar as reserve currency...

Lot to consider here and I have barely scratched the surface...

Sun, 09/11/2011 - 09:24 | 1655956 JoBob
JoBob's picture

Interesting hypothesis, Snidley. The facts fit, so keep fleshing it out.

Sun, 09/11/2011 - 10:21 | 1656002 Max Hunter
Max Hunter's picture

The Euro was attacked at it's weakest point...is this an accident?

Without ouside influence, everything will travel the path of least resistance.

Sun, 09/11/2011 - 10:52 | 1656033 Léonard
Léonard's picture

People believe a world war is about to come but that war has already started and it is a silent war without apparent death, a financial-economic-cultural war, with the USA vs. Europe and the USA vs. the World.

Sun, 09/11/2011 - 09:15 | 1655942 jekyll island
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Woah!  The takdown of the euro was collateral damage caused by the law of unintended consequences.  Remember, CDO's were developed based on the theory of a Chinese national Ph.D quant, who developed a formula to allow them to do risk analysis of the piles of dogshit, errr, subprime mortgages they mixed in with regular mortgages based on CDS priced by the market.  It was hailed as a major breakthrough, all prior attempts failed due the large number of variables.  Clearly they were too smart for their own good and didn't test the algorithm against a falling market.   Greedy dumbasses.  Anyway, CDOs and CDSs, all these opaque derivatives are developed for one thing:  wealth transfer to the banks and Wall Street.  

So why did the Fed transfer all that FRN$ to the EU banks?  There are probably multiple reasons, but seeing as how they are all banks, I believe it was to protect the interests of their controllers.  The owners of the Fed most likely have multinational exposure and the collapse of EU banking system who have wounded them deeply.  Why should the banking elite suffer when they can transfer that pain to the taxpayers?  Isn't that why the Fed was developed in the first place?   It's about the money.  It's always about the money.  




Sun, 09/11/2011 - 15:32 | 1656985 I did it by Occident
I did it by Occident's picture

to keep with the military theme, the banks are sitting on non-IM (Insensitive Munitions) compliant stockpiles and they didn't read their quantity-distance tables correctly.  Thus when one gets set off, the rest of the magazine will go high-order via sympathetic detonation.  In other words, BOOM!

Sun, 09/11/2011 - 10:46 | 1656024 Martin T
Martin T's picture


"European banks seems to be facing a US dollars funding problem as no investors is willing to lend (buy a CP/CD) with a duration over 1 week. That information, if confirmed, is of significant importance as it has major implications not only in the money market (the spread OIS/Libor is at the widest for almost 2 years and keeps on worsening- 1rst confirmation), but also FX basis market (the basis swap between currencies has been deteriorating significantly and stands at -60 bps versus -10 bps 4 months ago -2nd confirmation). IF the trend remains unchanged in the coming weeks, the casualties may be the following:

  • 1- a US dollar rally against most currencies as there is both a lack of US dollars in the funding market, but also because most of the players are short US dollars versus currencies with higher yields ( Haaa … the famous carry trade may suffer a blow, and unwinding positions may be costly and create dislocations).
  • 2- a leg down in the commodities universe (except for Gold) as a most of those are US $ denominated.
  • 3- a leg down on the equity market as the losses from a higher US dollar will have to be offset by some unwinding on liquid assets (Welcome margin calls !!!). In addition, a higher US dollar versus Euro means lower earnings for the US corporations (non-withstanding slower growth in Europe, a major trade partner for the USA).
  • 4- a worsening credit market as banks funding problems have a direct effect on the overall spectrum of the economy."
Sun, 09/11/2011 - 22:51 | 1658359 jackinrichmond
jackinrichmond's picture

if the same people that own the fed also own the european banks, why would they want to wage war on themselves ?

Sat, 09/10/2011 - 20:44 | 1655435 monopoly
monopoly's picture

That was great. lolol

Sun, 09/11/2011 - 07:52 | 1655891 Ben Bermonkey
Ben Bermonkey's picture

hahahah, check out this funny video of the Frenchman Chairsatan Trichet:


"Arithmetically, mathematically, it's not an esay job! Do you remember that?"

Sat, 09/10/2011 - 18:57 | 1655227 digalert
digalert's picture

"Que Sera Sera"

Sat, 09/10/2011 - 19:28 | 1655308 Sudden Debt
Sudden Debt's picture

The Future's not ours to see?



Sat, 09/10/2011 - 20:13 | 1655386 DoChenRollingBearing
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Yes we do Sudden!  ZeroHedge, the antidote to State Run Media shilling.  Without ZH I would not have learned so many things.

In less than 24 hours we will see how futures are reacting.  LOL.

YES, above comments re SPOT-ON about lots of popcorn!  Another interesting week ahead!

Sat, 09/10/2011 - 21:00 | 1655465 Manthong
Manthong's picture

Watch for a $60.00 spike down in gold.

That means that the downgrade will be announced 5 minutes later, just like with the SNB CHF peg.

Sun, 09/11/2011 - 07:15 | 1655873 Smiddywesson
Smiddywesson's picture

Yes, absolutely.  When TPTB are brash enough to crash gold in the overnight markets, seconds before the SNB announcement, we have arrived at a whole new plateau of price manipulation.  

TPTB didn't spend decades denying gold manipulation just to blow all their credibility on one currency move.  TPTB didn't want to do that, events forced them to do it.  (which of course undermines my previous post that the SNB coordinated the move, but being wrong is part of this game too).

The downgrades will no doubt be coordinated with the central banks, so the gold manipulation may not be as obvious to the public as the SNB event, but with gold prices sitting this close to the $2k level, they are going to have to be a lot more obvious about things from here on out.

I also think they will use a margin hike or two to defend the $2k level, otherwise, where do they use them next, $3k?

Sun, 09/11/2011 - 11:10 | 1656061 Manthong
Manthong's picture

Here’s where it gets interesting. They desperately do not want $2K breached.

What else would explain the waterfall drops that cannot possibly be profit motivated?

Everybody accepts “policy action” manipulation of interest rates.. why on earth would someone doubt “policy” is being carried out in any other area of the illusory “free Market”?

I hate this market but I am loving this action.

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