Postcards From Sweden

Tyler Durden's picture

There are those who claim that rating agencies are utterly irrelevant, incompetent, behind the curve and merely echo chambers of popular opinion. They are 100% right. There is, however, one critical function that rating agencies execute - they put into words what everyone else knows is fact, but are simply unwilling to recognize due to the systemic implications of admitting yet another lie: subprime, failed banks, Europe, etc. By the time a rating agency has finally opined on something in a way indicative of the truth, it is too late to stick one's head in the sand. Yesterday precisely this happened once more - from the WSJ: "Credit rating agency Moody's Investor Service Friday downgraded a range of major banks in Sweden and Norway, citing contagion risks from the European debt crisis. But observers said the cuts were less sweeping than feared and reflect the strength of Nordic banks versus their European peers, which risk sharper downgrades as Moody's continues a Europe-wide review that started earlier this month with cuts to 26 Italian lenders. In February Moody's placed various ratings of 114 financial institutions in 16 European countries on review for possible downgrades, highlighting the banks' vulnerability to the euro zone sovereign debt crisis. "We read this as a sign of the strength in relative terms of Swedish banks which are coping well," Swedish Central Bank Deputy Governor Per Jansson said. Moody's Friday downgraded the ratings for Sweden's Nordea Bank AB (NDA.SK) and Handelsbanken AB (SHB-B.SK) by one notch to Aa3, and for specialist agricultural lender Landshypotek AB by two notches to Baa2." Furthermore, as Zero Hedge reminded two days ago, when it comes to deposit backing, European banks are so levered from a loan-to-deposit ratio, that even the tiniest risk of deposit flight would result in immediate undecapitalization, and further outflows. Oddly, nowehere is this more evident than in various Scandivanian banks such as Danska, Handelsbanken (SHB), Swedbank, and Nordea, two of which were just downgraded by Moody's.

Visually this can be seen here.

Of course, to readers of Zero Hedge this is not news. Back in March this particular fringe blog explicitly warned, while everyone else kept silent that...

With banks such as Danske, SHB, Swebank, DnB, and Nordea literally at 200% Loan-to-Deposits, but most other European banks too, even the tiniest outflow in deposit cash (ala what is happening in the PIIGS) will send the system into yet another liquidity spasm. Only this time, since what little unencumbered assets remaining have already been pledged to the ECB, there will be no quick LTRO collateral-type fix this time.

Sadly, many preferred to continue sticking their heads in the sand. Until Moody's announcement made continuation of that avoidance behavior impossible. Which is why we present the following postcard we just got from Sweden. We can only hope this is a very isolated incident of people enjoying to wait in line for a few pieces of paper, completely devoid of any contextual reference. That, or they are all suddenly applying for a mortgage, or in the best case, merely enjoying the wonderful weather, just incidentally next to a branch of one of Sweden's largest banks.


Finally, for those who think we are picking on Sweden, here again, is the simple math presented visually two short days ago.

Deposits and Encumbered/Secured Assets...

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bank guy in Brussels's picture

Free smorgasbord with a new deposit

Transitory Disinflation's picture

I can see someone with their feet facing the wall.   This tells me it is a picture of an ATM line.

logically possible's picture

It appears to me, that person is standing in the door opening.

Prometheus418's picture

Bankomat google translates into ATM.

The Big Ching-aso's picture



Not to worry.  It's just an IKEA line for mattresses.

ihedgemyhedges's picture

That's why the dudes are there.....................not to get their money, but to pick up chix...............

sunaJ's picture



Well, it is Memorial Day weekend.

They don't celebrate Memorial Day?

Oh snap!

francis_sawyer's picture

How come nobody is texting anybody with a hand held phone?

mjcOH1's picture

Thor.   Diabeto.   They're easily confused.

Agent P's picture

What you can't see in the photo is the Apple store next to the bank...these are the early birds lining up for the iPhone three short months, they'll all be texting.

The Big Ching-aso's picture



In Sweden that's not a thong.   It's floss.

boiltherich's picture

There is an ATM but the building is a bank itself, notice above the window Svenska Handelsbanken in big gold letters all the way down the building, they don't do that for an ATM that already has it's own sign.  It is a busy area and there are 9 people in the line waiting to use the machine.  I have seen that many in NYC though it seems a lot, maybe they do not have as many machines there.  Still 10 people does not make a bank run.  If a couple customers in a row have complicated transactions or just never got the hang of ATM's (ever been behind someone that just took forever, making a deposit and checking the balance then doing a transfer and making a mortgage payment then withdrawing cash?) a line can build up fast.

Two other things struck me looking at that picture, they seem to be having better weather near the arctic circle than we are near the California state line/Oregon, and aside from the obese guy at the front of the line look at how slim and trim people there are.  Out of 18 people in the photo just ONE needs to shed poundage. 



boiltherich's picture

I almost forgot, Sweden has been trying to go cashless hasn't it?  If the ATM transactions are other than just a quick FASTCASH dip into checking for some pin money I can see how a line might form.

Ahmeexnal's picture

notice above the window Svenska Handelsbanken in big gold letters all the way down the building

Now that would REALLY explain the long line. They are all trying to extricate those GOLD LETTERS from the building!


ziggy59's picture

The hyper caloric dude is probably from the U.S.

Ahmeexnal's picture

You'd better schedule an appointment with your ophtalmologist. He does not look like a Cherokee, Apache, Mohawk, Hopi, Seminole.....

banksterhater's picture

Can't stop looking at those lines, alright.

ATM's picture

I shall now chamge my name to Bankomat.....

Tyler Durden's picture

Technically, it "could" be a street bathroom. Let's not ignore all possibilities here.

SheepRevolution's picture

I live in Sweden, and these kind of lines are not uncommon. The thing is that the banks over here are closing down more and more cash-machines, so there are fewer options from where people can take out their money.

Tyler Durden's picture

"so there are fewer options from where people can take out their money."

All good then. In the meantime, the Loan-to-Deposit ratio is unchanged at 220%. For those who care that is.

SheepRevolution's picture

Many in Sweden do actually care. The consequense of the Loan-to-Deposit ratio, as you mention, is that real estate prices in Sweden have skyrocketed the last 12 years. This is a very hot-topic over here and people are talking about the real-estate bubble 24/7. The entire swedish economy is driven by this cheap credit that has been and still is being pumped into the market (whatever that means these days...). The greek circus seem to have stalled the real-estate market, and with the problems in Spain, many who have bought real-estate with 300,000 - 1,000,000 USD in credit are beginning to get very worried. In Sweden, you can not write off your mortgage by simply handing over the house-key to the bank (as you can in the US if I am not mistaking). Here, you really are stuck with your debt. The real-estate crash in Sweden and Norway will be extremely severe.

Jack Burton's picture

My Father's sister sold her old family home in a village in Halland near the coast north of Halmstad.  This was 5 years ago, it was a very old and small cottage, but well kept. She sold at a price that was mindblowingly high! She now has enough money to live comfortably in a retirement apartment and travel, even if she lives to 95!

Real Estate in Sweden is a bubble, it is madness!

Jack Burton's picture

Must add that it was within walking distance of a very popular bathing beach. Anything near water, especially sand beach is worth a fortune!

SheepRevolution's picture

The small cottages are very expensive in Sweden along the entire west coast (as in Halmstad for example), and around Stockholm. They are used as "summerhouses" (sommarstuga in swedish), where many Swedes, Norwegians and Germans spend their summers. It's an old part of the swedish tradiition, and many dream about having these small cottages. For most foreigners, it looks very weird how someone could spend 100,000-200,000 USD on a super small house out in nowhere with zero connections, where you can only stay for about 2-4 months every year. And I happen' to agree...

three chord sloth's picture

Didn't Sweden just have a housing bubble (followed by the usual bank crisis) back in the early nineties? It seems a bit odd to dive right back into it again so soon.

SheepRevolution's picture

Correct, Sweden had an extremely severe housing-bubble in 1990-1992. Many still suffer from the crash today! Unfortunately, everyone born in the 1970's and 1980's were children/teenagers back then. They know very little about it, and it is these who have the biggest mortgages here in Sweden. Those born in the 1960', and especially 1940' and 50', have limited or no debt.

Roi's picture

Reson cited for the hight prices use to be rent controlls and building restrictions, leading to a shortage of homes for people. Though I also heard we have one of Europes highest rates of floor-space per person.

Cyrano de Bivouac's picture

Par for the course, the US  has a debacle in Vietnam and repeats in Iraq and Afghanistan.

guinea's picture

It's called Cape Cod to us foreigners. Yup we have them too. And it costs at least $500,000 (closer to beach goes over a million) for a small cape where you spend a couple of weeks a year and sit through 3 hours of traffic just to cross the bridge.  

Ahmeexnal's picture

Join the demoturd party, move up the ranks, get your dacha for free (allow Joe Sixpack and all his descendants the privilege of paying for it).


Al Gorerhythm's picture

What could possibly go wrong? Relax, have a homebrew.

The Big Ching-aso's picture



Hey it's Sweden.  Probably just another sex-shop walk-thru.

George the baby crusher's picture

Always refreshing with a little racial profiling. Dick!

The Big Ching-aso's picture



Put it this way, Pig Gonads.  When I was in Sweden I actually saw a billboard without bare boobs once.

knukles's picture

I didn't know being Swedish was a racial trait....

Next thing'll be if I one thinks Chihuahuas are ugly it'll be a racial slur.

slewie the pi-rat's picture

you mother may have been a chihuahua, but you are not ungly, k_nuk

Ahmeexnal's picture

I didn't know being Swedish was a racial trait....
Jesus. that parable from the hidden gospels?

THX 1178's picture

Swedish isn't a race is it? A nationality or culture perhaps...

sessinpo's picture

I thought they were named after the meatballs.

scatterbrains's picture

no it's the massages I think.

Ahmeexnal's picture

and I thought it was all about the svenska BJs!

knukles's picture

Well now that's really fucking encouraging.

Best get the cash cash in your paw paw real quick, grasshoppers

banksterhater's picture

How long are the PEOPLE going to let the BANKSTERS destroy every society, one by one, with their enginered Boom-Busts? Not til they get to them all before we get to THEM?

Australia, Canada & China fast joining your real estate bust.

Nothing like learning from the Ugly American.