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

Tyler Durden's picture


As regular readers may recall, back on June 14, before it became an even bigger pariah in the thoroughly discredited rating agency space due to its refusal to downgrade the US, Moody's placed French megabanks SocGen, BNP and Credit Agricole on downgrade review, which means that at some point in the future the rating agency would have to cut the banks' rating from its existing Aa1-2, to Aa3 or even a single A. It is true that when it comes to downgrade reviews the rating agencies are notorious for being as unpredictable in their timing as they are conflicted in their rating: for example even though Belgium was supposed to be downgraded months ago due to the fact that it continues to be the longest running modern anarchy, nothing has occurred, as political interests are obviously pushing the raters to do as paying clients request, not as reality demands. Alas, for France, which is very sensitive to any inkling it may have a less than sterling rating (due to its sovereign AAA requirement without which the EFSF/ESM falls apart), the luck may have run out. Bloomberg reports that the abovementioned banks "may have their credit ratings cut by Moody’s Investors Service as soon as next week because of their Greek holdings, two people with knowledge of the matter said.  

Bloomberg continues: "Cuts are expected next week as the review period concludes, said the people, who declined to be identified because the matter is confidential." Needless to say, this event will come at what is possibly the worst time for Europe, which is already scrambling on all fronts to protect itself from a financial and sovereign implosion courtesy of risk contagion and general insolvency. The point is that while the French banks will likely receive the implicit support of the G-7 which is meeting in Marseilles as we type, the ramifications are that an even weaker financial system will case the French sovereign rating in an even weaker light, and a cut to the country's AAA rating will hence be inevitable. When that happens, Europe will have no choice but to completely redo its entire bailout struture, as a French downgrade will throw the EFSF-CDO mechanism, and the European bailout crusade, in terminal flux.

From Bloomberg:

Credit Agricole spokeswoman Anne-Sophie Gentil declined to comment, as did BNP Paribas spokesman Antoine Sire. Societe Generale spokeswoman Laetitia Maurel said she couldn’t immediately comment. Voicemail messages left on the mobile and office lines of Moody’s chief European spokesman Daniel Piels today, outside of working hours, weren’t immediately answered.


Societe Generale has dropped 55 percent in Paris trading since June 15, while Credit Agricole tumbled 45 percent and BNP Paribas has declined 42 percent. The Bloomberg Europe Banks and Financial Services Index of 46 companies fell 30 percent in the same period.


The reviews of Credit Agricole and BNP Paribas are unlikely to lead to downgrades of more than one level, Moody’s said when it put the banks under review. Societe Generale’s debt and deposit ratings may be cut as much as two grades because of the “uplift it receives from systemic support, which is currently higher than average for the French banking system,” the rating company said at the time.


Credit Agricole’s main risk arises from its Greek subsidiary Emporiki Bank of Greece SA, which was downgraded earlier this month, Moody’s said in June. Societe Generale, France’s second-largest bank by market value, faces risks from its stake in General Bank of Greece. Credit Agricole is France’s third-largest bank. BNP Paribas doesn’t have a local unit in Greece and is instead at risk from direct holdings of Greek government debt, Moody’s said.

And since in finance it is always about relative value, or lack thereof, we remind readers that yesterday we speculated that Credit Agricole, whose 3M USD Libor fixing soared to the highest of all BBA member banks, may soon become the next most prominent target of shorts (after Dexia of course, which is in for a rollercoaster of its own in the coming week).

Sure enough, the imminent downgrade provides an explanation why the bank scrambled to procure last capital funding before the funding doors shut. Alas, what matters far more is what the market response will be. Unfortunately for the bank, it will hardly be favorable; and with shorting already illegal, there is very little that European authorities can do reactively to pretend they still have any semblance of control over this slow motion train wreck.


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Sun, 09/11/2011 - 00:08 | 1655681 DeadFred
DeadFred's picture

The impetus for a rally is record short positions and low volume. One of my primary rules is to listen for the lie then go opposite. Last Monday someone jokingly posted a link to Cramer and I read him tweeting about how ugly it was going to be. I thought "Oh, my puts are going to lose money"... and Tuesday a rally appeared out of nowhere. The question is whether the news will be bad enough to get the volume up. I'm betting (literally) that the volume will be there but the uniform gloom is scaring me. Maybe I'll go check out Cramer and see what not to do.

Sun, 09/11/2011 - 05:32 | 1655845 Snidley Whipsnae
Snidley Whipsnae's picture

" I can't imagine what the impetus for a rally here could be."

You are confusing trading equities today with trading equities 40 years ago.

No imputus from real traders is required today. Central banks, TBTF banks, govs, and PPTs provide the spark and then the HFTs take over.

...and, since most of the news consumed by traders is also manufactured by CBs, TBTF banks and governments, incentives and disinsentives can be made available on a moments notice.

...a can of bull shit repellent used to be enough to guard us against an occasional small shit storm... today, each individual needs a box car full of bull shit repellent every day because blizzards of bull shit are arriving in continuous waves.

Sun, 09/11/2011 - 11:28 | 1656101 disabledvet
disabledvet's picture

That's easy. "I'm with Exxon/Mobil and i've decided to "buy Norway." I mean INVEST! INVEST! in Norway./p>

Sun, 09/11/2011 - 07:46 | 1655889 Smiddywesson
Smiddywesson's picture

I can't imagine what the impetus for a rally here could be.


We haven't needed one for quite some time, but if you need an impetus for a rally, let's call him Ben.

Sun, 09/11/2011 - 11:31 | 1656112 disabledvet
disabledvet's picture

We like driving fast and taking chances.  Look:  here's a rally for ya'
comes with a cool soundtrack, too.

Sat, 09/10/2011 - 19:16 | 1655276 Campagnolo
Campagnolo's picture

I am long Gold and Silver more than ever now

Sat, 09/10/2011 - 19:19 | 1655285 Campagnolo
Campagnolo's picture

physical all the way

Sat, 09/10/2011 - 20:29 | 1655410 DoChenRollingBearing
DoChenRollingBearing's picture

Yes and yes.  Physical all the way.

+ $1850 and green

Sat, 09/10/2011 - 23:27 | 1655624 snowball777
snowball777's picture

I guess I'm just contrarian, but I expect another massive dip before the end; call it a final opportunity to cover and perform a once in a lifetime act of fiat alchemy.

Sat, 09/10/2011 - 23:42 | 1655644 DoChenRollingBearing
DoChenRollingBearing's picture

Maybe the big dip you foresee will be FOFOA's notion of Robert Prechter's 15 minutes of fame?  Paper gold goes down to (say) $500, Prechter gets quality time on TV to crow that was right all along...  Except there's no physical to buy. ref his article "The Shoeshine Boy".

Tyler put up that very article here at ZH!  To my knowledge ZH has only put up ONE of his articles.


But, bearings are not good at predicting the future, they just roll where they are guided.

Sun, 09/11/2011 - 00:11 | 1655685 DeadFred
DeadFred's picture

Can you re-tool your machines to produce crystal balls? That might help.

Sun, 09/11/2011 - 00:50 | 1655733 snowball777
snowball777's picture

By 'massive', I mean back to the 1200 range, purely as a result of liquidations on the part of leveraged pinheads. You may be right about the scarcity of phys though, in which case I'll just have to transmute into other useful tangibles on the cheap.

Sun, 09/11/2011 - 01:14 | 1655754 Yen Cross
Yen Cross's picture

Good God you have hope! Cal  and Street Smart! You can placate a trade...>

Sat, 09/10/2011 - 19:37 | 1655327 scatterbrains
scatterbrains's picture

If it is a controlled take down of the market as some are speculating then you can best believe the no#1 fed target will be the paper gold market.  I'm hoping for a chance to add if it happens.

Sat, 09/10/2011 - 23:08 | 1655596 Campagnolo
Campagnolo's picture

sure FED will target paper gold market along with the rest of world markets, but after that just image how quick fiat paper holders will run to PM' that point, PM's price are going to be secondary 

Sat, 09/10/2011 - 20:07 | 1655371 Captain Benny
Captain Benny's picture

When all the banks are swimming together, they're often found pushing eachother's head underwater in order for their fat ass to stay afloat.  Eventually one will drown.

Sat, 09/10/2011 - 19:27 | 1655302 ParaZite
ParaZite's picture

Risk pouring like waterfalls, humm...

Sat, 09/10/2011 - 19:27 | 1655306 infinity8
infinity8's picture

laissez les bon temps rouler!

Sat, 09/10/2011 - 19:36 | 1655326 Landrew
Landrew's picture

Not French, maybe que la fête commence.

Sun, 09/11/2011 - 06:44 | 1655862 old naughty
old naughty's picture

Not English (UK+US), not BRICS...may be Japanese.

Just as #1, #2, #3 melt thru the bottom?

Sat, 09/10/2011 - 19:28 | 1655309 Lord Welligton
Lord Welligton's picture

S&P downgrades the USA.

Moodys downgrades France.


Gunboat Diplomancy.

Sat, 09/10/2011 - 19:46 | 1655343 Herman Strandsc...
Herman Strandschnecke's picture

In England we say 'Schadenfreude'

Sat, 09/10/2011 - 20:19 | 1655390 Die Weiße Rose
Die Weiße Rose's picture

'Schadenfreude' is German.

in England you say: 'bugger thy Neighbour'


Sat, 09/10/2011 - 20:31 | 1655411 DoChenRollingBearing
DoChenRollingBearing's picture

Schadenfreude IS a word that is catching on here in America.

Sat, 09/10/2011 - 20:55 | 1655422 knukles
knukles's picture

Been a favorite of mine for years. 
The exquisite pleasure drawn from anothers suffering.
Very Germanic.... kinda cultural, if you will.

Sat, 09/10/2011 - 22:16 | 1655538 nmewn
nmewn's picture

Sticky wicket what? ;-)

Sat, 09/10/2011 - 23:36 | 1655637 snowball777
snowball777's picture

Except, in the states, they think it's Sade and Freud

Sat, 09/10/2011 - 23:44 | 1655649 DoChenRollingBearing
DoChenRollingBearing's picture

I would NOT have guessed you were a Mark Steyn reader (see his new book After America)!

Sun, 09/11/2011 - 00:55 | 1655739 snowball777
snowball777's picture

Same target for criticism, but a different vantage point entirely.

Sun, 09/11/2011 - 01:40 | 1655767 Die Weiße Rose
Die Weiße Rose's picture

must be the Zeitgeist

Sun, 09/11/2011 - 11:35 | 1656127 disabledvet
disabledvet's picture

I prefer "Phd."

Sat, 09/10/2011 - 19:35 | 1655323 Zgangsta
Zgangsta's picture

"Parabolic" bubbles always come crashing down, right?

Here is the real bubble.  It's not gold.

Sat, 09/10/2011 - 20:10 | 1655379 Captain Benny
Captain Benny's picture

Is it strange that I expect the population bubble to pop as well?  Within 20 years.

Sat, 09/10/2011 - 19:40 | 1655331 uno
uno's picture

so the little weasel Mark Zandi calls out France, go get him Sarkozy (little W)

Sat, 09/10/2011 - 20:38 | 1655425 knukles
knukles's picture

Do weasels eat their own kind?

Sun, 09/11/2011 - 00:11 | 1655686 Hulk
Hulk's picture

They actually like chicken heads. They will kill an entire Henhouse and eat just the heads...fucking weasels.

Sun, 09/11/2011 - 02:00 | 1655775 Die Weiße Rose
Die Weiße Rose's picture

a bit like Mc Donalds -

They kill off an entire Paddock of Cows and then eat just the Arseholes...

Sat, 09/10/2011 - 19:41 | 1655334 djsmps
djsmps's picture

Is this the same Moody's whose Mark Zandi thinks the Obama Jobs plan will add 2 percentage points to GDP growth next year, add 1.9 million jobs, and cut the unemployment rate by a percentage point?

Sat, 09/10/2011 - 20:58 | 1655429 TwelfthVulture
TwelfthVulture's picture

The one and only. 

The same Mark Zandi who predicted in 2008 that the Bush stimulus ($150B) would add 1.5% points to GDP, lower unemployment by 0.5 points, and add 700K jobs by mid-2009.

The same Mark Zandi who predicted in 2009 with the first Obongo stimulus ($825B) "that GDP returns to its prerecession peak by the end of 2010—reasonable goals.", peak unemployment at 9.01%, lower the unemployment rate to 7.84% this year (2011) and 5.85% next year (2012) and add 4M jobs by the end of 2010.

The same Mark Zandi who now predicts that Obongo's newest stimulus ($450B) will add 2% to GDP, and add 1.9 million jobs and cut unemployment by 1%.

The same.  The very same.

Really?  What are the odds that Mark can be wrong three times in a row?


[ht Don Surber,, "Are you smarter than a Moody's analyst?," September 9, 2011]

Sat, 09/10/2011 - 21:06 | 1655476 djsmps
djsmps's picture

I had a feeling it was the same agency. Quite honestly, I'm not sure if I trust this forecast.

Sat, 09/10/2011 - 19:41 | 1655336 The Deleuzian
The Deleuzian's picture

Agreed!  See all of you ZHer's in Boulder, Vegas doesn't have any water and how would you find it without electicity!!

Sun, 09/11/2011 - 12:34 | 1656383 DosZap
DosZap's picture

The Deleuzian,@ 19:41,

Home, condo sales, and Town homes are selling way up in Vegas.

Major purchasing in several other markets also,WELL over last years #'s.

 The age old axiom of " Buy when the blood is on the streets".

Except this time I fear it may be real blood.before this "Feces Parade" is finished.

Sat, 09/10/2011 - 19:51 | 1655337 buzzsaw99
buzzsaw99's picture

Your mother was a hamster and your father smelt of elderberries...

Sat, 09/10/2011 - 19:44 | 1655340 pappyhlace
pappyhlace's picture

people prepare yourselves for the next coming months...

if you make the right moves going down and coming back up, i should see you guys on a beach somewhere in 2013 reading zerohedge while sipping on a mojito

oh and silver bitches as usual



Sat, 09/10/2011 - 20:32 | 1655414 DoChenRollingBearing
DoChenRollingBearing's picture

I hope to see you there!

Sat, 09/10/2011 - 22:09 | 1655528 X.inf.capt
X.inf.capt's picture

BEACHES, hell, well be lucky survive this....

Sat, 09/10/2011 - 22:45 | 1655572 Praetor
Praetor's picture

Well someone has to live to tell the epic tale of ZH and its brave warriors slaying dipshit trolls and banksters.

Sat, 09/10/2011 - 19:51 | 1655352 Manzilla
Manzilla's picture

Buh-bye Frenchie!

Sat, 09/10/2011 - 19:53 | 1655356 scratch_and_sniff
scratch_and_sniff's picture

so it has either been purposefully leaked, or its BS. I find it hard to believe that it is both true, and was leaked "off record" (to bloomberg!!) Two words; salt and pinches.

Sat, 09/10/2011 - 20:09 | 1655373 Lord Welligton
Lord Welligton's picture

It can only be true or false.

like everything else these days it is a binary proposition.

There are no longer "fundamentals".

Were are all at the Zoo feeding the Algos Ones and Zeros.

Sat, 09/10/2011 - 20:40 | 1655427 knukles
knukles's picture

Grandpa, please tell me again about those things called fundamentals that people used to believe in a long time ago.

Sat, 09/10/2011 - 20:00 | 1655363 ISEEIT
ISEEIT's picture

So I guess this is double important? No, I'm not criticizing Tyler. Just saying sumpin' is up. I'm hair trigger ready for the dumb ass bulls to masturbate this sort of shit to the ceiling though. If recent history can be viewed as a guide, down is up. Alice would find this rabbit hole even more odd than the last. I can't even trust the fucking news flow any more because as we all know; when it is important, "you must lie". So it is ALL important at global elite collapse time, therefore one must assume that all are lies. We need to observe prior to acting rather than act and then observe.

What a fucking web.

Sat, 09/10/2011 - 20:06 | 1655370 Lord Welligton
Lord Welligton's picture

Except for one thing.

The markets are closed.

By the time they open again it will either be true or false.


This is politics.



Sat, 09/10/2011 - 20:42 | 1655430 ISEEIT
ISEEIT's picture

Doesn't matter. The markets never close. Only a pause in play. The market is still active its just that we can't see the score for a short time.

Sat, 09/10/2011 - 20:47 | 1655443 ISEEIT
ISEEIT's picture

So I thought a bit more and realize that you were right in what you said. It is not a market. It is politics. Just looters trying desperately to maintain a fiction of their creation.

Sat, 09/10/2011 - 20:51 | 1655445 knukles
knukles's picture

Ah, but to the esoteria of the matter.
But should we say existentialism as we're considering the future of La France!
By the time markets open it may have been neither confirmed or remain unconfirmed and as such, the matter of true or false remains elusive should anybody care to pursue such to its infinte non-conclusion.  Further, one may not know whether it is indeed true or false other than by inference whicih might then be debated as real or unreal amongst differing realities assumed by differeing real or ureal persons, thus concludiong with nobody knowing the difference. 
or having recognized a conclusion.
Or maybe even give a shit, because nothing to be revealed is in any way "New" information to the Sample Set.
Indeed, the solution set to this situation may be summed up between "Outcome" and "Happy" as the null set within a Venn Diagriam.


Sat, 09/10/2011 - 21:03 | 1655470 TwelfthVulture
TwelfthVulture's picture

How very derrida of you.

Sun, 09/11/2011 - 06:53 | 1655865 MsCreant
MsCreant's picture

Maybe or maybe not, it could be both or neither, or something else, if you know the différance.

Sat, 09/10/2011 - 21:23 | 1655493 Lord Welligton
Lord Welligton's picture

Too complicated for me.

I am just a simple soul.


I will of course accept that there are unknown unknowns.

Sat, 09/10/2011 - 22:13 | 1655533 nmewn
nmewn's picture

Dammit knukles!'ve rearranged my crystals again!


Sat, 09/10/2011 - 22:22 | 1655547 infinity8
infinity8's picture

who's on first and LaGarde's on deck

Sat, 09/10/2011 - 20:44 | 1655436 LongBallsShortBrains
LongBallsShortBrains's picture

If nothing happens on 9/11, that would be enough to get a short squeeze started on the following rally.

Just like dips in gold.

A betterr position entry opportunity for shorts.

Sat, 09/10/2011 - 20:04 | 1655366 Lord Welligton
Lord Welligton's picture

So Moodys downgraes France.

What are the G7 going to say now?


At about this time I'd say they're having a bit of a bargy.

Sat, 09/10/2011 - 20:06 | 1655369 mt paul
mt paul's picture

deja poo

and the rotating occilator 

Sat, 09/10/2011 - 20:11 | 1655381 The Deleuzian
The Deleuzian's picture

Ya!  when you're forced to second-guess your second-guess you better go long cow-tapults!!

Sat, 09/10/2011 - 20:14 | 1655387 virgilcaine
virgilcaine's picture

Who cares about EU banking collapse..ND vs Mich  nightgame 114,000 attending millions watching.

Sat, 09/10/2011 - 20:25 | 1655404 caerus
caerus's picture

meanwhile, the horns have their hands full with the football juggernaut that is byu

Sun, 09/11/2011 - 00:20 | 1655694 scatterbrains
scatterbrains's picture

I don't think I can watch another N.D. game after that cluster_uck... maybe in a year *sigh*

Sat, 09/10/2011 - 20:15 | 1655389 AC_Doctor
AC_Doctor's picture

Looks like APMEX, Gainesville Coins and Tulving will have a very, very busy week, especially with QEIII just 10 days away...

Sat, 09/10/2011 - 20:21 | 1655395 JLee2027
JLee2027's picture

Tyler, DUPLICATE story posted

Sat, 09/10/2011 - 20:25 | 1655403 bugs_
bugs_'s picture

mon dieu! we have call from Deep Shah on line one!

Sat, 09/10/2011 - 20:33 | 1655416 disabledvet
disabledvet's picture

There is no "redo" of a bailout structure. It get's destroyed. It's obvious now that the IMF 100's of billions is in play to prevent contagion from spreading to the USA as TARP was used to prevent the collapse of Wall Street from impacting the basic functioning of government and the war on terror. These are truly dramatic and epochal events unfolding and those who have been on "the wrong side of America" are now going to pay an ultimate price. Having argued persistently about "knock on effects" (comparing Europe to a game of billiards and quoting what had been said of the USA after WWI as "they played pool with the planets") we know have something akin to "follow on effects" of an implosion of the entire European Union bailout structure. Greece's bankruptcy has been a foregone conclusion for months. Why "it's" been allowed to "go along" for this long is no one can agree how the "new structure" is to exist. Basically..."there is no new structure"--a financial "nuclear baby" if you will--is being born. We've seen the consequences to Brazil, Mexico, Argentina and Russia of default. They are permanent and lasting. The hole in blown open from this set of double d's however is of an order of magnitude that simply dwarfs all that has come before it. Miraculously Federal largesse is capable of a proactive response--and that is exactly what we will do if what appears to be the financial equivalent of a singularity is in actuality the case.

sounds kinda serious! i wonder if you can reverse engineer it!

Sat, 09/10/2011 - 22:00 | 1655520 richard in norway
richard in norway's picture

it's been allowed to go on so long so that the greeks can take the rap for the next crash, and the bankers are off the hook

Sat, 09/10/2011 - 20:44 | 1655434 oobrien
oobrien's picture

Good Citizens of Metropolis!

It is now officially time to shit in your hats.

Good luck.  And God bless you all.  

Sat, 09/10/2011 - 20:46 | 1655437 centerline
centerline's picture

blah...  the contagion is loose.  Time is running short for basic preparations.  Who knows what is around the corner.  But, rest assured that it is not good for the blind followers and system dependant.

Sat, 09/10/2011 - 21:33 | 1655500 disabledvet
disabledvet's picture

i would argue "untrue" and in fact what is precisely needed are you're so called "blind" followers and in particular those that are "system dependent." they are the one's that saved us from the catastrophe that was Wall Street in 2008 and they are going to do the same on a scale so large as to boggle the mind.

Sun, 09/11/2011 - 01:42 | 1655576 X.inf.capt
X.inf.capt's picture

i would also add that most of us are prepared (at least on ZH) at least mentally for whats coming. thats why were here, right now, trying to get information, and trying to determine the 'triggering event' which will have each of us put our individual SHTF plan into action. thats why well make it. survival is 90% mental, if you are determined to survive (i.e. not give up), odds say youll make it, just remember, sometimes shit happens.....

Sat, 09/10/2011 - 20:48 | 1655447 monopoly
monopoly's picture

Well, since we were down 300 Friday we should be up 200 Monday. Unless France hollers out "Surprise"!!

Sat, 09/10/2011 - 20:50 | 1655452 monopoly
monopoly's picture

I am still laughing from the first post that we will need a "bigger popcorn bowl". Perfect, just perfect.

Sat, 09/10/2011 - 20:57 | 1655461 ISEEIT
ISEEIT's picture

Better than even odds that they will pull an evil rabbit out of the hat and force a rally. Gotta know at this point that desperate times lead to desperate measures. I'm 50/50 that the EUR goes now to 1.20 or lower in order to justify a power consolidation move (crisis) or they hit for the fence and try to keep obama in office. America needs to go down for this shit to work. Eur crisis now would sacrifice obama and comprimise their certainty. Gotta watch to know.

Sat, 09/10/2011 - 21:19 | 1655488 The Deleuzian
The Deleuzian's picture

I seriously doubt the banksters can crash gold down 30% or whatever this time around.  Too much smart money is wise to their plot.  My guess is worst case scenario:  Were talking hours/days not weeks/months!!!  Atleast for the shinny stuff....

Gold:  maybe 5-7%

Silver  Maybe the higher 30's

S&P  way more! certainly back to 3 digits

I find all that was forgotten in boy scouts as a youngin' coming back into focus.  There's way too many people out there that can no longer take care of themselves!  This plays right into the banksters lap! Sad!!

But whenever I start feeling sad, I always remind myself that I'd much rather be pissed off and mad! than sad!!

The instincts work much better and much more can get done for yourself and loved ones when mad!!!

Motivation=emotion and there's no motivation in sad nor is their any room or time to the 'don't get mad get even'.. That ship sailed long ago...



Sat, 09/10/2011 - 22:47 | 1655573 myne
myne's picture

It'd probably help their cause if they didn't, like, you know, do it at the same freaking time(s) every day!

If I had accounts in those time zones, I'd seriously consider opening shorts just before 6 on that clock.

Sat, 09/10/2011 - 21:24 | 1655494 oobrien
oobrien's picture

Good citizens of Metropolis!

My balls itch.

I really need a shower.

Sat, 09/10/2011 - 21:25 | 1655495 frugartarian
frugartarian's picture

I know, lets just print some euros. It will work for sure

Sat, 09/10/2011 - 21:35 | 1655501 TwelfthVulture
TwelfthVulture's picture

It didn't work last time, but what the hell, maybe it WILL work this time.

Sat, 09/10/2011 - 21:39 | 1655507 disabledvet
disabledvet's picture

again should what appear to be happening be actually happening (and we will know come Monday) the fact that it is happening on the anniversary of 9/11 should not be considered a coincidence.

Sat, 09/10/2011 - 21:59 | 1655519's picture

Who cares if the pompous ass French are down graded....and a French Banker to boot....PLEASE.......

Sat, 09/10/2011 - 22:10 | 1655529 gwar5
gwar5's picture

Smells like Operation Perfumed Shitpants is about to go down on the EU elites.

Greece is finally defaulting and the banks holding their bonds will get their (overdue) downgrades, and we will see who is naked as the tide goes out.  Everyone else, gird loins for the collateral damage as the EU says good-bye the hard way.




Sat, 09/10/2011 - 22:19 | 1655544 PulauHantu29
PulauHantu29's picture

Trickle Down Economics always makes me feel warm and cuddly.

Sat, 09/10/2011 - 22:24 | 1655549 Moneyswirth
Moneyswirth's picture

That "trickle down" is affectionately known as a golden shower.  As good a metaphor as any to what's going on right in the markets right now.

Sat, 09/10/2011 - 22:27 | 1655555 pettolicious
pettolicious's picture

Almost as cool as the trickle up poverty that is being imposed upon the masses.   As if you/we have a choice anyway.

Sat, 09/10/2011 - 22:33 | 1655561 holdbuysell
holdbuysell's picture

Who will be the Time Person of the Year?


I vote the Inanimate Carbon Rod.


Sun, 09/11/2011 - 11:42 | 1656163 disabledvet
disabledvet's picture

Either Fight Club in it's entirety or Sudden Debt.

Sat, 09/10/2011 - 22:59 | 1655584 Yen Cross
Yen Cross's picture

I caught The CHF blow up last week Via ( Euro and Usd). I Got long Aud on the spike down, Ref: the Greek downgrade and ECB chairman resignation.  I also see the G-7 dogging a { uniform} intervention. So the yen will stay ( Pathetically over valued). Hence the eur/jpy lows! 


    The fun trade is cable and gbp/jpy? or aud/chf?  ( FWIW)...

Sat, 09/10/2011 - 23:09 | 1655597 oobrien
oobrien's picture

Good citizens of Metropolis!

I am currently scratching my sweaty nuts.

On top of that, I desperately need to shit.

Thanks for letting me share.

Sat, 09/10/2011 - 23:37 | 1655627 tictawk
tictawk's picture

The monetary system is a LIE. It is a DEBT based FIAT currency that is levered via fractional reserve lending. "DEBT" by definition is cash we DO NOT HAVE.  So there IS a finite amount of fiat based debt that can be created before it all IMPLODES in a DEFLATIONARY black hole (default). We are witnessing the Fed desperately trying to inflate with no success because assets have ALREADY been inflated (by Fed pumping policies) over the decades and now its time to reconcile the debt that underpins those asset values. The balloon has burst and everything the Fed does is just a desperate attempt in inflate a busted balloon. Given 1) no growth or lack thereof 2) surplus production 3) demographics and 4) abundance of cheap labor, leveraged assets in the US will have to collapse in value. That is the hard truth. This debt collapse will squeeze more and more people and businesses into default as the debt unwinds. We are sliding down the slippery slope of hope.

Sat, 09/10/2011 - 23:34 | 1655635 Comrade de Chaos
Comrade de Chaos's picture

French Reaction :


Reut - France says believes the yuan is undervalued.


a hahahaha

Sat, 09/10/2011 - 23:45 | 1655653 Yen Cross
Yen Cross's picture

That was the best quote of the thread! YUAN undervalued?  I'm glad you have a sense of humor! +1

Sat, 09/10/2011 - 23:52 | 1655662 zorba THE GREEK
zorba THE GREEK's picture

I don't care what is going down in Euroland, I've got 1000 oz gold and 20,000 oz silver and 40 oz platinum.

Bring it on, bitches.

Sun, 09/11/2011 - 03:18 | 1655795 The Deleuzian
The Deleuzian's picture

What's your address!!!

Sun, 09/11/2011 - 00:01 | 1655668 Lazlo Toth
Sun, 09/11/2011 - 00:49 | 1655729 tom a taxpayer
tom a taxpayer's picture

Thanks for the link. At that website, the YouTube video "London Riots now in Bern, Switzerland" is hilarious.

Sun, 09/11/2011 - 00:01 | 1655669 BlackholeDivestment
Sun, 09/11/2011 - 02:05 | 1655674 caerus
caerus's picture

i can get no remedy against this consumption of the purse: 

borrowing only lingers and lingers it out, but the disease is incurable


Sun, 09/11/2011 - 00:13 | 1655688 BlackholeDivestment
BlackholeDivestment's picture, here I sit in D.C., full moon rising, comet Elenin has just reached it's closest point to the Sun, Europe is imploding, it's the ten year anniversary of 911 and Chairsatan is still in power. Well, at least nobody has blown up a city ...yet.

Sun, 09/11/2011 - 00:25 | 1655695 Yen Cross
Yen Cross's picture

The " Bulletin of Atomic Scientists"  The ? DOOMSDAY clock...   Nice work<

Sun, 09/11/2011 - 00:24 | 1655699 Yen Cross
Yen Cross's picture

Red Book .gov

Another good one!

Sun, 09/11/2011 - 00:28 | 1655707 RiverRoad
RiverRoad's picture

Could it be that our friends the World's Banksters are bringing BOTH Greece and the democracy it spawned down for the final count here?  Quite a coincidence if so and one heck of an epic occurance.  Perhaps the next world government paradigm adopted will be that of China's with it's art of the practical "can do."  Can't help wonderin'....

Sun, 09/11/2011 - 00:32 | 1655713 Kash
Kash's picture

Friday, Societe Generale -10.58%


Sun, 09/11/2011 - 00:41 | 1655720 The Heart
The Heart's picture

Ten years after…have we learned anything?

Here is an excellent video by AE for 9/11 truth:

Pass this around folks and especially send it to those who still think some clown in a cave and 19 guys with box cutters outsmarted our 400 billion dollar NORAD defense system.

Also, a big question to ask them is, if fires bring down buildings at the speed of gravity, why doesn’t my BBQ or fireplace grill come crashing down at the speed of gravity when lit and on fire for hours and hours?

Who was responsible for 9/11?

Sun, 09/11/2011 - 02:10 | 1655777 walküre
walküre's picture

Conclusion. The world won't end as long as they are in charge as Armageddon is NOT in their best interest. Neither is Belzebub nor the so called End of Days. Good prophecy to keep us in check though.

The world is NOT safer since 9/11 by any stretch of the imagination. The world hasn't been safe for at least 2000 years.

Keep your cool...

Sun, 09/11/2011 - 11:34 | 1656124 zeusman
zeusman's picture

Probably because your BBQ was built for heat and fire you F'n...   

Sun, 09/11/2011 - 00:54 | 1655734 radish juice
radish juice's picture


Sun, 09/11/2011 - 00:51 | 1655735 radish juice
radish juice's picture

On the topic of lack of  transaperancey and buyer beware:

In the summer last year (JUne 2010) Fidelity used to sumamrize their money market fund FDRXX as follows:

Holdings (FDRXX) Composition by Instrument (%)

 as of 04/30/2010  Press CTRL + Enter to view help

Asset-Backed 1.26 Finance (Auto) 0.77 Foreign Banks 63.92 U.S. Banks and Trusts 2.28 General Insurance 0.67 Finance Companies 1.09 Other Corporate Obligations 2.56 Government Securities 12.76 Repurchase Agreements 13.26 Other Money Market Investments




If you look at the fidelity's site for description of this fund today it shows the following in composition tab: (

Can you spot the difference? In summer 2010 FDRXX had signficant exposure to European banks in the 64% above. Today also they have signficant exposure to European banks, however, there were a bunch of articles on the net to this extent (Jim Grant from memory and Russ Winter from memory). Lo and behold their summary now does not break composition by US vs foreign now that the problems in Europe have festered so a causal buyer will miss this, unless they are willing to look into the prospectus and add lines to get a percentage.  So its transparency at its best be cheese! just thinking out loud. Ma be its nothing and my weekend paranoia :-)

Holdings (FDRXX) Composition by Instrument (%)

 as of 07/29/2011   Treasury Debt 11.14 Government Agency Debt 0.87 Asset Backed Commercial Paper 0.19 Financial Company Commercial Paper 13.58 Other Commercial Paper 1.72 Certificates of Deposit 52.16 Insurance Company Funding Agreements 0.15 Other Notes 4.67 Repurchase Agreements 15.82 Variable Rate Demand Notes 0.97 Other Municipal Debt 0.0 Investment Companies 0.0 Other Instruments 0.03 Net Other Assets




Sun, 09/11/2011 - 01:08 | 1655753 Yen Cross
Yen Cross's picture

THanks Raddish! Nice work! 

Sun, 09/11/2011 - 01:39 | 1655766 SilverDoctors
SilverDoctors's picture

Over 102 MILLION ounces of silver stored under WTC building 4 dissapeared after 911.

Sun, 09/11/2011 - 10:45 | 1656022 LongBallsShortBrains
LongBallsShortBrains's picture

Over 102 MILLION ounces of silver stored under WTC building 4 dissapeared BEFORE 911.

Fixed it for ya

Sun, 09/11/2011 - 01:56 | 1655774 Arkadaba
Arkadaba's picture

Sick of the coverage even in Canada. Penned a note to one friend who was in the towers that day - I know this time of year is hard for him.  

But jeez. Canadian PM declares day of service! (well I'm convinced he is in early Alzheimers especially given all the monarchy stuff lately).

Song that helps keep it in perspective at least for me:

Sun, 09/11/2011 - 02:15 | 1655778 Arkadaba
Arkadaba's picture

This one is pretty good too:

Sun, 09/11/2011 - 02:42 | 1655782 What_Me_Worry
What_Me_Worry's picture

<sarc>So I should go ahead and start that new small business catering to the service sector, then?</sarc>

Obv, I am just kidding.  I understand the only way to make money any more is to gamble.  Poor saps working for a living, I truly feel sorry for them every now and then.

It's Obamanomics, after all.

Sun, 09/11/2011 - 02:57 | 1655786 Ye Ye
Ye Ye's picture

Oh the difference between a currency user and a currency issuer is about to become very clear.

US downgrade = bond rally

French downgrade = bond rout (and US bond rally)

Sun, 09/11/2011 - 03:23 | 1655797 Roger Knights
Sun, 09/11/2011 - 04:47 | 1655830 thetrader
thetrader's picture

What about Spain? With the Econmy in free fall, unemployment at 23% etc, the country could get some well needed billions from the tax evaders....

Sun, 09/11/2011 - 05:33 | 1655846 falak pema
falak pema's picture

The whole financial world knows that ALL main french, dutch, Italian, spanish, greek banks are virtually nationalised like Citi and BofA were in 2008. We are THERE already. So the Moody downgrade only makes it official; what all banks world-wide know as insiders, in their day to day activities since a couple of months.

The whole financial system is private banking sector dry on both sides of the pond, and is living off the Central bank liquidities via FED & ECB. Both these institutions feel they have DIVINE rights to print, pump and dump fiats. No one can contest this, as the HFs and institutionals who run around in their crazy market speculative plays are feeding the ponzi beast, and making systemic risk worse, which means the inevitable down side will be worse for private sector as well, the day the market has to stop kicking the can and to net out. All those who are leveraged will then burn...

So all this charade is not the essential; the essential is Mega haircuts for banks who are then nationalised officially, debt forgiveness on sovereigns, risk asset melt down on bourses as we have never seen; then five years later, if we have managed to avoid WW3, we will try and boot-strap back a regulated, real economy where the financial role of speculative plays, in sterile non strategic sectors like FIRE economy, will be made to look pygmyish...The real challenge then will be population, food, water and energy paradigm changes...

Sun, 09/11/2011 - 06:50 | 1655864 props2009
props2009's picture

worthwhile reading: First time in my 16 years of trading history, I joined a signal service and am mighty impressed"

<a href=""> First time <a>

Sun, 09/11/2011 - 07:06 | 1655871 Roger Knights
Roger Knights's picture

Here's a great week-in-review summary that puts events in context:

And here's a great article recommending the tough choices the EU should make now. (E.g., sacrifice the bondholders.):

Sun, 09/11/2011 - 07:29 | 1655881 plocequ1
plocequ1's picture

Escaped prisioner Papillion says, " Im still here you bastards"

Sun, 09/11/2011 - 07:55 | 1655895 props2009
props2009's picture

YEN is basing and starting to move esp when the dollar is strong

Are we gonna see a big move in USD/JPY

Sun, 09/11/2011 - 08:38 | 1655913 TradingJoe
TradingJoe's picture

Just because we had a sell off on Friday does not mean we'll have a rally tomorrow, "things have changed" now :))! Make sure you don't get sucked into anything but sell off's, shor tthe shit out of everything, use options, no outright shots, margin hikes would come fast no matter your account equity, thisi sjust how they work!

It is clear by now that the 21st will be a great dissapointment for all hopium junkies as the benster has no political green light to do anyhting, OT2 is alreaady priced in, so they say, QE3 is a no no becasue they have no money and canno print...yet! Only a huge sell off this coming week would make a stronger case for "easing", other then that it's wishfull thinking!

Unlike many, I don't belive gold will lose it's luster, even temporary, once sell of commences where do you want/can hide?! A correction if coming would only be short lived and shallow, a 2000USD print would inspire some profit taking since it would be a highly psychological mark!

My "guess" is we open slightly flat to down tomorrow with a strong chance, (more bad news) of accelerated selling as we move through the day, bulls have no more ammo for a controlled "holding the lines" until the 21st, and they well know that at current levels there won't be anything coming!

Stay short and be nimble! I also don't think a new "easing" will have the same effect as the last one on stocks, sure a big relief rally would have the power to rip ones face off but it may not last more then a feew weeks at best! All is broken and cannot be fixed with another shot in the arm, this needs major surgery for which nobody wants to take responsibility much less the PTB, it is totally against it since it would wipe them out!

Let's make some fiat for more PHYSICAL :))!


Good luck!

Sun, 09/11/2011 - 09:03 | 1655936 latizziforchizzi
latizziforchizzi's picture

I am watching the 9/11 Memorial on abc nes. The camera shot of Michelle Obama shows her whispering to the President saying, "Why do they have to fold that flag?" Is this ignorance, hate, or was she truly upset about this tragic day? I was not sure about it myself. The President appeared to have just smiled and nodded his head, as if he really didn't hear what she had just said to him. Did anyone else see this this morning? I DVR'd  it, and had to rewind it several times. I am not sure what to make about about her comments.

Sun, 09/11/2011 - 09:35 | 1655962 vast-dom
vast-dom's picture

I keep saying Bernank and his Fed need a mini-crash to pull off the next round. This may come this week. And then QE3 will dissipate super quick and then we get something much uglier than 2008. 


But WTF do I know?

Sun, 09/11/2011 - 10:27 | 1656008 props2009
props2009's picture


Sun, 09/11/2011 - 11:23 | 1656085 stpioc
stpioc's picture

There is just soooo much that can go wrong in the euro area (and in fact, much of it IS going wrong)

Sun, 09/11/2011 - 11:43 | 1656134 Curtis LeMay
Curtis LeMay's picture



European banks are facing increasing strains on their balance sheets because of the dramatic jump in the cost to borrow dollars, essential for some institutions as they need to repay loans in US currency.

The cost for European banks to swap euros into dollars has jumped fivefold since June, hitting the highest levels since December 2008, and raising the risk of insolvency in the region’s financial sector.

Strategists estimate European banks face a $500bn dollar funding gap – the sum they need to repay loans and obligations in the US currency over the coming months. The extra cost to swap euros into dollars, therefore, could make the difference between survival and bankruptcy for some institutions, strategists warn.

French banks, especially Société Générale, have been hit hard by a drying-up of US-based dollar liquidity, as money market funds have retreated from eurozone banks. That, in turn, has depressed their share prices, already jittery due to the lenders’ outsized Greek exposures.

The news comes as French banks brace themselves for a decision by Thursday over a potential downgrade by Moody’s, the credit rating agency. 

BNP ParibasCrédit Agricole and SocGen were put on review for a possible downgrade by the rating agency in June amid an intensifying eurozone debt crisis. Market pressure on them has since intensified, particularly through August.

The main reason for the spike in the cost of swapping euros for dollars is the overwhelming demand for the US currency due to its growing status as a haven in the face of rising worries of an imminent Greek default that could spark a deeper sovereign debt crisis. 

European banks, which need to borrow dollars to repay loans, face an extra premium of 103 basis points to swap euros into dollars for three-month loans – a dramatic jump since June when they only had to pay an extra 20bp.

Don Smith, economist at Icap, said: “More and more banks want dollars because of worries about the debt crisis in Europe. This leads to a vicious circle where the cost to swap dollars for euros rises and creates even more strains and potentially deeper problems for the financial sector.”

If bin Bernanke doesn't do QE3 here in the US...he's going to throw 100's of Billions to try and prop up a failed monetary experiment in euroland instead??

Sun, 09/11/2011 - 13:09 | 1656525 PulauHantu29
PulauHantu29's picture

But...but...but, MSM said, "Everything is fine" this morning on the Tube.

...more shovel ready jobs coming...

...more end to Iraq war stuff from Barry..... Nobel Peace Prize Winners in the wings....

...more bank reforms (with even larger Bonuses!)...

...China will lead the world out of depression...

...Everything is just Fine......see......fine.....

Sun, 09/11/2011 - 15:35 | 1657002 Grand Supercycle
Grand Supercycle's picture

Updated SP500 monthly chart at blog.

My long term indicators continue to warn of significant USD strength and AUD / NZD / EUR etc weakness and these signals have increased since 2009.

Unfortunately the March 2009 equity lows eventually will be breached.

Tue, 09/13/2011 - 22:10 | 1666034 moxia19
moxia19's picture

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