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Postcards From Sweden
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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Most excellent, me lady.
Only commitment needed is for One Day at a Time.
Let's see if we can make this "chat" monster work.
:)
I'd seen that you'd left some comments several weeks ago and when I went to read them, they all disappeared. LOL Me=Luddite
And I do remember the promise that at the right time, I'll spill the beans about just what Palahniuk was writing about in Fight Club....closer than you think to the "us's", you, me and the rest of us who were talking about "that" one fateful evening seemingly so long ago.
Congratulations.
Keep coming back.
teary eye
It's all good, they are shrinking their balance sheet
Bankomat! Freudian slip? Where the banks "launder" your dirty money for you, for a fee of course.
Fuck my extended warranty I purchased for my Klubbo coffe table IKEA is probably useless now.
At least I still have a jar of Lingonberry jam left.
12 to 15 people in an atm line is normal? I havent been over the atlantic in a few years, but that seems a little much.
http://youtu.be/6t0MixbZUMM
On pay day, great weather, Ozzy concert and Scandinavia's biggest horse race in town... Yes, I would say that is pretty normal.
Don't forget the bank run...
Those people are all getting money to buy Guy Fawkes costumes.
Pray, you're not the sucka at the end of the line...
Talk about being anxious!
The dude in blue needs a zweihander.
He would appear to be advertising his stomach...
And all the people in line behind him are whispering about that "fat fucking Yank" gonna be stealing all their KronerBonerEuroDuros or whateverthefuck they traffic in these days before its their turn.
May they all get a shit stack of Confederate Dollars and be done with the Imaginary Nash Equilibrium
Keep those confederate dollars knukles, the South is going to rise again !!!
... But perhaps not the south(ern) EU.
hey, hulk!
check out this paste from dNoland's WEEKLYSUMMARY
Bloomberg (Dara Doyle and Jeff Black): “The first rule of ELA is you don’t talk about ELA" LOL!!!
The European Central Bank is trying to limit the flow of information about so-called Emergency Liquidity Assistance, which is increasingly being tapped by distressed euro-region financial institutions as the debt crisis worsens. Focus on the program intensified last week after news leaked that the ECB moved some Greek banks out of its regular refinancing operations and onto ELA until they are sufficiently capitalized… ‘The lack of transparency is a double-edged sword,’ said David Owen, chief European economist at Jefferies Securities International… ‘On the one hand, it increases uncertainty, but at the same time we do not necessarily want to know how bad things are as it can add fuel to the fire.”
rUshittingMoi? this guy is EUwhachamacallitCouncillMaterial, BiCheZ!
Its for our (investors) own good Slewie !!! Don't that make you feel better ???
They clearly have no clue how they look. Is there such a thing as like "dystopic dissonance?" I mean WTF!?!
"It is ebb and flow, tidal gravity! It is ecological balance! You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels."
"It is the international system of currency which determines the totality of life on this planet."
"You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today"
"We no longer live in a world of nations and ideologies. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that... perfect world... in which there's no war or famine, oppression or brutality. One vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock. All necessities provided, all anxieties tranquilized, all boredom amused."
Then why is the government 40% of the GDP.
The Greatest Movie Action Scene of All Time
Sorry guys, but that is *not* a line waiting to get into a branch. That is a line at an ATM. It's the branch at Sturegatan 38 in Stockholm. Check it out on Google street view. You'll see that the line stops right in front of the machine. You can't tell from this photo but the branch is just off a busy shopping street and right next to a lovely park.
This is very strange! Almost noone in Sweden uses cash! You can pay everything (yes really everything ) with credit card. Bakeries & taxis included! When I worked there I did not use the ATM for months!
Bank entrance or ATM. No matter. It's the line and the sentiment it portrays that's imortant.
If it is an ATM, wonder how many times its been refilled?
Being a suede. this don´t seems like a "bank run" by the 1%. Sooner a a lot of young folks getting cash for a day out in the summer in Stockholm.
Many small café´s and small restaurants don´t here accept carde for smaller ammounts, as they are charged an extra fee from the banks, so cash is king.
"Bankomat = ATM", but normally you just need a small amount of chash to pay for coffey, icecram or beer.
So from Sweden...no bank run yet...just wanna get some beer.....
siolle
edited:"bad spelling, sorry"
np on the spelling -- now I want to be suede, too.
Good speilling wrong country.
Crash is the new king
I'm from Sweden and old enough to remember the last housing bubble here back in 1991. Have an older friend who couldnt pay their mortage for their new built home, was forced to sell and still pays off on that debt.
Here is a neat little table with official stats from SCB(Statistic Central Bureau).
http://www.scb.se/Pages/TableAndChart____74160.aspx
Red line = houses, Grey line = leisure homes, Yellow line = condos, Blue dotted line = cpi
Bubble back in -91 looks like a zit compared to this bubble...
Well at least one word is the same in Swedish as in English: POP!
Wrong,two:ABBA!
Amazing how banksters can fool most people into making the same financial mistake (participating in a bubble) over and over. The end result is always the same - people wind up broke and/or debt slaves. Human nature, I guess.
Very interesting chart. Thanks.
Nobody looks in a state of panic. They seem like a pretty relaxed bunch.
Have you ever seen the way they drink over there? The Danes and Swedes make the Irish look like teetotallers.
Dont forget thats how we conquered the hole world,with our Mjød,toxic mushrooms and other wonder stuffs,and then of the England and go Beserk,and institute The Danelagen,the English havnt Forgotten this one:London Bridge is burning down,they still look for some lost Danes!
Agreed, but the Finns and Russians outdrink us any day the week...
A Finnish cocktail umbrella drink:
http://eddiesofta.blogg.se/images/2010/finskdrink_78839147.jpg
This thread is missing hot Swedish women...
Young Swedes lining up for their monthly welfare check?
Judging by the crowd, a queue to purchase tickets to a Viking Death Metal concert?
Queue to purchase Diablo 3?
Doesn't look like a bank run. Most young people in Sweden, as elsewhere, have no money.
Your all wrong,they stand in line for the usual Booseline,at the "Systembolaget=Liquerstore,the states,its a free controled contry"to get some, Snaps, for the Surstrømings,Herings that only go down with hard liquer.
Aint life wonderfull,in the free world!
What is better than to drink on a boat ride in the archipelago?
M.S.
that dude in the front of the line with the blue t shirt on is classic.
New law just announced in Stockholm "Effektiv omedelbart kommer alla pengar på deposition som denna dag beskattas 90% vid tillbakadragande, med banken agerar som agent för beskattning av myndigheterna."
There, that ought to stop those unpatriotic Swedes from grabbing the bank's money.
Dude, those people are Ozzy Osbourne-fans heading to his concert nearby. He was performing yesterday in Stockholm. That's why there are so many in line. And that's why they look like they do. Never seen a line like that in Sweden for a ATM. We pay with credit cards. At a concert there are somtimes no possibility to pay with credit cards for beer or food.
Forget about a swedish bank run.
No wonder!
HAHAHAHAHAHAHA !
very funny!
Zerohedge frontruns agencies and institutions.
Funny that (my guess) you americans make fun of the only person in the picture that looks like an average american.
Americans are known(in europe) for always wearing to short trousers and to big jackets or pre bleacht baggy jeans and t-shirts with way to much grafik.
me! me! i'm one too!
welcome to zH, toy-boy
you talkin to me?
Ha ha ha ha ha ha
So he says Americans are the only ones who (distainful comments) when his own countrymen are lined up getting cash to go to an Ozzie Osbourne concert.
Like, WTF?
Dude, Ozzy is a limey, an inselaffen, a redcoat.
He did run for president of the USA once, though.
Once every four years, that is.
Oh fuck me!
I'd thought he was handicapped due to the drugs.
So sorry for the insult, Ozzie.
Ya' beedin' wanker.
I'd still bone that poor cow wifie yours, mate.
Perhaps he's an American tourist who lost his Hawaian shirt.
What most people in Sweden don't realize is that technically, they don't even own their appartments. They own a share in an association with a right to use a particular flat. Should the association go into bankruptcy, the bank and other creditors will be full owners of the physical property while you are left with a worthless claim in the bankrupted association. Any loans you might have taken with the share as collateral will of course still be yours and yours only.
Add to that the exposure of Swedish banks to the Baltic countries, and you realize what a wonderful short this will be, just as in 2008.
Yes in Sweden it may be best in the cities to rent. At least one can often rent flats even in Östermalm for a few hundred dollars a month - if one is enough of a pragmatist not to mind the cramped quarters.
M.S.
Oddly enough, yahoo news has a story: "Single Women Wonder Where All The Single Men Are Hiding"
That guy, 5th from the back....is that.....is that.....IS THAT CONZINE?
The people on the photo seem to have lined up at an ATM machine belonging to a branch office of Svenska Handelsbanken (SHB). I have never seen a line this long in front of a Swedish ATM machine (”Bankomat” or ”Minuten” if the ATM machine belongs to Swedbank). So I don´t think that an insufficient number of ATM machines is the problem in Sweden. [By the way, it seems as if the first ATM Machines that were linked online to a remote computer were introduced in Sweden in 1968 by the company Metior, see http://sv.wikipedia.org/wiki/Minuten_(uttagsautomat) .]
As far as I know, the problem with the Swedish banks is that they have lent too much money to people who barely can afford their homes in the Stockholm region. This may also to some extent be a problem in other parts of the country, but not to the same degree. In other parts of the country, people will probably be able to pay their mortgages even if interest rates will double. But they will probably consume a lot less of other things than housing if interest rates will return to normal levels. And that will probably reduce aggregate demand in the economy substantially.
I reckon that percentage of the population which will go bankrupt if interest rates return to normal levels will be somewhat higher in the Stockholm region than in other parts of the country. Housing is two or three times as expensive in Stockholm compared to normal, medium-size towns in Sweden, but the home owners in Stockholm don´t make two or three times as much money. However, since there is a chronic under-supply of housing in Stockholm I guess that housing prices will not drop as sharply as they did 20 years ago, when interest rates spiked due to the peg to the Ecu (the forerunner of the euro). Furthermore, the chronic under-supply of housing in some regions has made people feel more affluent than they really are which has increased spending and aggregate demand in the economy. This is a phenomenon similar to what we have seen in other parts of the world. However, there are no true equivalents to the American sub-prime loans in the housing market.
I have not checked out the rumours about too much currency exposure for some Swedish banks. If there is some truth in these rumours I guess that Swedish banks would not benefit from too much depreciation of the Swedish krona.
sauna time!i got a some really good shit, maynard
slewie the pi-rat:
Sauna was invented in Finland and is a lot more popular there. Furthermore, sauna is usually called "bastu" in Sweden. But I have seen that Swedish hotels sometimes use the word "sauna" rather than "bastu", probably because foreigners are more familiar with the word sauna. I once heard that a foreigner thought that a "bastu" was some kind of large, perverted kind of Swedish toilet.
Sweden and Norway...surprising to me (a little). Getting out of hand. This is like the "Plague".
oh, angela...!
where are you???
We are ALL in deep doo doo!
If I were Swedish. Det är alltid vinter här.
Svenska version of Electric Daisyland tickets for sale, €500 each.
link?
You all should definitely turn your attention to Norway. That housing bubble is going to be the mother of all housing bubbles when it bursts. It may even beat the one they had in Japan.
Thanks for the " heads up" Burning Betty. I have always wondered what is going on with those North Sea /Crude producers.
The Krona (Sweden)/Krone(Norway) trade has been parabolic<>
It appears there is a man with black pants standing at what looks like the entrance to the bank. If so, this line could be alot longer than thought.
Perhaps the bank is giving away autographed photos of Julian Assange?
(Edit: Oops, seems it is an ATM, according to some comments above that I missed. My bad. )
I heard ABBA is playing one night in Sweden. They are lining up to get tickets. :)
It's SOP for Swedes to line up at banks and ATMs on payday. When over half your income goes to taxes, you're strapped for cash by the end of the month.
The personal tax rate in Sweden isn't that high for 99% of residents. Americans lose more income than Swedes year on year to inflation - unless they are smart enough to invest properly.
Investment in Sweden also equals starting a business. Easy to do here and most persons I know here in Sweden have a business on the side as corporate taxes here are far lower than for instance within the U.S.
M.S.
here and I guess in other northern european countries we dont feel the pain like they do in the south, but sure if enough people would not be able to pay their mortages our banks would be in serious trouble as well.
Maybe they stage the last bank run just for the history books. Sweden is abolishing paper and coins. Soon plastic only.
http://www.dailymail.co.uk/news/article-2117643/Sweden-Country-cashless-...
Everyone was getting cash for the drunken celebration after Loreen won Eurovision. Hic.
haha, guys you really prooved why dont-move-a-afee-paper-stuffed-desk-n-GOOG-analysis is ALWAYS off ...it is just a question of how much, and in this case you are more or less in level with N Korea's last misile. But, funny way to make a good point though!
Cheers ;-)))))))))))
The 25th of the month is pay day in Sweden. This article was published on the 26th.
The man at the front of the line likely is a tourist.
M.S.