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UBS Kills Latest European Bailout Proposal: "Why A 50% Haircut On Greek Debt Will Not Work"

Tyler Durden's picture


UBS' Stephane Deo has rapidly become of one of the most vocal, and luckily most erudite, critics of the veritable rumor-a-palooza that Europe has become: a continent that is now desperately throwing anything and everything at the wall in hopes it will stick and generate another intraday EURUSD short covering squeeze to perpetuate the illusion that Europe is viable for at least one more day. His note today effectively puts an end to the most current approach whereby Greece will see a 50% haircut on its debt (the 21% haircut proposal from July 21 is now dead and buried as we had suggested back then). With that, he forces Europe back to the drawing table to come up with a plan that is endorsed by the market, with just 9 short days until the Eurogroup Summit on October 23 at which point kicking the can into the future will no longer be tolerated and the market will finally judge Europe not for promises, rumors, lies, innuendo and hyperbole, not necessarily in that order, but on actual decisions and policies. Alas, if the 50% haircut idea, which is now proposed by Germany (in diametrical contrast to a month ago), and staunchly opposed by France whose banks, unlike Deutsche Bank, have not been able to dispose of legacy exposure, is killed before it is even implemented, look for a spike in panic in Europe which will now have to redo everything from scratch.

As to why Herman Van Rompuy should be panicking, here is Deo's summary:

For more than a year we have argued that Greece will not be able to avoid a default. In this piece, we look at how this could be done. We think a 50% haircut makes little sense: if we take into account the lenders that cannot participate in the haircut (IMF, bilateral loans) and the bank recapitalisation it would trigger in Greece, we find that a 50% haircut would actually reduce the stock of debt by only 22%. Rather, we think a large restructuring of the debt (i.e. a “super PSI”) is the solution. It would reduce the financial needs of Greece, postponing for decades the redemption of bonds. It would also cut the deficit if coupon payments were reduced sufficiently. This would come with manageable needs for bank recapitalisation. Finally, such a step would remove the need to default, or rather, it would be akin to the default we expect.

He continues:

why a 50% haircut does not work At the time of writing, Greece has total debts of €346.4bn. About a third of this debt is in public hands (34.8% is attributable to the IMF, ECB and European governments), roughly another third is in Greek hands (28.8%, essentially for banks) with the remainder (36.4%) held by non-Greek private investors.

The problem with the above is that some of the debt cannot be included in a haircut. This is almost certainly true in the case of the IMF debt. It has been suggested that the IMF debt could actually be included in the restructuring, but this would be unprecedented and we attach a very low probability to such a decision. Similarly, the bilateral loans are de jure pari passu, but we think it is nevertheless difficult to envisage a haircut on that part of the debt.


More debatable is the ECB case: the ECB has not been party to public-sector involvement (PSI), as it was a “voluntary” exercise and the ECB did not volunteer. However, in the case of a coercive default, it would be legally difficult for the ECB not to participate. Hence, in Chart 6 below, we provide two simulations: one with ECB participation and the other without ECB participation. In the case of ECB participation, if we assume the ECB holds €55bn in Greek bonds, and has purchased these bonds at an average of around €¢70, it would mean that a 50% haircut would leave the ECB with a loss of about €11bn.


Last, while the Greek banks would naturally be subjected to any haircut, the difficulty is that they are undercapitalised. According to our equity analysts, Greek banks currently have a core tier 1 ratio of around 8% (Marfin Popular Bank – 8.6%, National Bank of Greece – 8.5%, Alpha Bank – 8%, EFG Eurobank Ergasias – 6.4% and Piraeus Bank – 7.2%). This means that any haircut affecting their debt portfolio would push their capital lower and trigger the need for a recapitalisation. Consequently, every euro saved by the government on its debt via the haircut would be injected into the Greek banks. This is equivalent to having the Greek debt in Greek banks excluded from the haircut.



In short, as shown in the above chart, a 50% haircut effectively equates to a 22% reduction in existing debt once the banks have been recapitalised. This is far from enough. Or, to put it another way, to achieve an actual 50% reduction in the debt, Greece would need to implement a 100% haircut, i.e. repudiate its debt totally.

And just when it seemed that the rumor mill would be a little calmer for the next week...

Full report



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Fri, 10/14/2011 - 12:20 | 1774097 Fips_OnTheSpot
Fips_OnTheSpot's picture


Fri, 10/14/2011 - 12:25 | 1774118 jdelano
jdelano's picture

question now is--will market pump at 3:58 be powerful enough to close above 1220?  If so, I'm fucked.  If not, market is fucked as three fails is a charm rule says market drops 4% by wednesday.   

Fri, 10/14/2011 - 12:32 | 1774165 Belarus
Belarus's picture

It's so sad that you just know the mysterious power hour will return as it always does that mystifies human action. 

Fri, 10/14/2011 - 12:40 | 1774207 jdelano
jdelano's picture

right now, spiking levitation on hardly any uptick in volume.  I'd give away 25% of my total portfolio to someone with the knowledge and ambition to expose the people behind the horseshit in this market.  

Fri, 10/14/2011 - 12:47 | 1774236 broke433
broke433's picture

Don't short indexes during earnings. Buy aapl for a quick profit before earnings and wait a couple weeks when earnings are almost over to short again.

Fri, 10/14/2011 - 12:54 | 1774265 jdelano
jdelano's picture

we'll see.  Lot of hedge funds lined up to defend the hell out of 1220-1230.  

Fri, 10/14/2011 - 13:04 | 1774305 broke433
broke433's picture

Yeah but I don't think you would get the kind of drop we have had the last couple months. The EU situation has successfully been kicked to at least next Friday. I think a good time to short would be a day after the summit when earnings are almost over and everyone will start to talk about how Europe has no chance of survival again.

Fri, 10/14/2011 - 13:13 | 1774350 jdelano
jdelano's picture

u might be right.  ah well.  Hopefully for me the Tylers will expose some exploding credit bomb or G-PAp will come out over the weekend and say fuck it, on second thought, we're done with this crap.  Greece is out bitchez.   

Fri, 10/14/2011 - 13:05 | 1774316 LeonardoFibonacci
LeonardoFibonacci's picture

Markets will rise another 15% because of this

Fri, 10/14/2011 - 13:15 | 1774353 jdelano
jdelano's picture

Next time keep it to a reasonable 3-5%.  Hyperbole undermines your credibility.

Fri, 10/14/2011 - 13:33 | 1774426 L G Butz PhD
L G Butz PhD's picture

Actually, making predictions undermines your credibility.

Fri, 10/14/2011 - 13:19 | 1774367 Belarus
Belarus's picture

Something occured to me: the market turned on an absolute dime a week and a half ago and the market has skyrocketed virtually everyday since. Think about this: it turned on a dime for no reason at all. But, no, it didn't. It turned because the HFT ramp boys, the 1% powers that be, saw something happening from out of the woodworks.

What was it? It was Occupy Wall Street. Think about this, the 1% are the banks and the politicians. Isn't it ironic that EXACTLY when OWS was starting to gain some credibility as a viable revoluation that the stock market very suddently turned and skyrocketed skyward? No, there is no coinincidence.

This rise is a desperation fling.....had the market kept tanking the 1% knew that had the market kept droping like a rock OWS would already be 100% bigger than it is...the market rocket has been a total and utter depseration move to keep tbhe 401k'rs etc. on the sidelines of the OWS movement.....

I mean we've got the population getting out and protesting, almost no sane person  in the world is buying stocks today, and yet ramp after ramp after ramp after in-human ramp during power hour (it's coming again today folks) occurs. Why is that? Don't tell me it's a sticksave in Europe. It's not: Gold and Silver has SEVERELY underperformed equities during this miracle ramp which makes no sense, because the only way to save Europe is for the ECB to print money. If the market believed that's what the outcome was going to be, which then is the reason stocks have skyrocketed, then why the fuck are PM's getting their asses handed to them in comparision?

Nope. This entire move is based on a total manufactored attempt to keep some of the plebs happy.  


Fri, 10/14/2011 - 15:05 | 1774822 nope-1004
nope-1004's picture

Agreed, but don't just limit your analysis to when OWS started.  This ponzi has been stoked since Oct '87.  OWS is just a little more timely and one can connect the dots easier.

That's why I firmly don't believe that the market needs to sink for more QE.  The ponzi brokers and white collar criminalized fraud agents don't want this thing to fall, moreso next year when there is an election.  So the computerized ramp will continue.

Watching gold and silver makes me laugh.  Not only does the beat down occur EVERY 2am EST time, but it occurs as soon as legs start to appear under PM"s to rocket them higher.

See, no inflation.  Viola!!


Fri, 10/14/2011 - 13:04 | 1774307 kaa1016
kaa1016's picture

I'm with you 100% on this. We know these assholes will ramp this market higher in the last 30 minutes, especially if people with common sense try to sell the market at days end.


Fri, 10/14/2011 - 14:57 | 1774769 Nobody For President
Nobody For President's picture


I've been watching that fucking ramp and talking (screaming sometimes) at my monitor - Belaraus may be right, but I tend to the thought that it is the short squeeze from hell/bear market rally before the fall, and the HTFs will, some great day soon, short the crap out of all this *stuff* and start ramping down the last witching hour.

I suspect it will be on a Monday, not a Friday.

I'm probably wrong about this.

But the betting pool is: Ramp up or Down today? Once upon an organic time, you could sort of predict, on a not-much-news day really, that Friday would be a ramp down - taking some profits for the week and not wanting to be long over an uncertain time this weekend.

 This Friday?

I think the you-know-whos are gonna ramp it up - one, hopefully, last squeeze before reality bites.

But I'm probably wrong about this, too. Actually, I hope to hell I'm wrong about this. I can afford to keep losing on the short side, but I really, really don't like it!


And - on a side note - does anybody besides me find it strange/surreal/words fail me that "Paid For By Obama For President" advertisements are on this site? I mean, I'm looking at one Right Now! WTF?

I'm an old fart, and I honest to God don't understand *anything* any more. If I ever get back even (and I will), think I'll put it all in cash, silver (more liquid in the boonies), and guns...I'm off the grid on a 43 acre, out in the boonies homestead, all built now. Can probably get by.



Fri, 10/14/2011 - 16:05 | 1775044 Nobody For President
Nobody For President's picture

Well, Fuck Me. I was right - ramped up. The last 10 minutes were hilarious. (NOT)

So I won on the office pool, and lost on the Market.

Thank God It Is Friday!

I'm gonna go fly - fuck this shit.

Fri, 10/14/2011 - 13:53 | 1774433 Randall Cabot
Randall Cabot's picture

Low volume, relatively steady trading pattern strongly supports a shocking END-OF-DAY RAMP.

Fri, 10/14/2011 - 20:41 | 1775865 zorba THE GREEK
zorba THE GREEK's picture

The ultimate solution for Greece would be for banks to take a 200% haircut on Greek debt.

That would mean that whatever amount Greece owed a given bank, that bank would now owe

Greece. First it would punish the banks for making such obvious bad loans to Greece, and secondly

it would give Greece enough money to keep their excessive lifestyles going for another 10+ years.

Greece could use the money to buy shares in the banks to recapitalize them and in turn Greece could

use their bank shares as collateral to get low interest loans from the IMF and the ECB. 

It's a win/win situation. Ms Deo is not the only erudite expert on the Greek debt problem.

Fri, 10/14/2011 - 12:49 | 1774243 Long-John-Silver
Long-John-Silver's picture

with vampires

Fri, 10/14/2011 - 14:19 | 1774607 slaughterer
slaughterer's picture
Barroso sounds like he needs the money yesterday. EU's Barroso says any decision on EFSF or on banks at Oct 23rd summit should take effect immediately
Fri, 10/14/2011 - 12:22 | 1774102 bigdumbnugly
bigdumbnugly's picture

is chart 5 a representation of the broken yo-yo this has all become?

Fri, 10/14/2011 - 12:28 | 1774130 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Looks like a peace sign.


Ban the bomb...ban the bailouts.

Fri, 10/14/2011 - 12:52 | 1774256 machineh
machineh's picture

There's LEVERAGE for you -- via the non-participating participants.

But -- OOPS!! -- it's leverage in the wrong direction.

A total wipeout 100% default buys only a 50% haircut -- CRAP! 

Maybe Greece should just give up on its banks ... let a new banking industry arise from scratch.

Fri, 10/14/2011 - 13:04 | 1774304 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

And here I thought they might do what you propose one and a half years ago.

Fri, 10/14/2011 - 12:56 | 1774267 bigdumbnugly
bigdumbnugly's picture

lol.  you in marketing LH?

maybe they can be convinced to use that as the new national greek logo.

harmony and understanding, sympathy and trust abounding.   

...well, maybe not so much trust abounding

Fri, 10/14/2011 - 13:02 | 1774294 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

harmony and understanding, sympathy and trust abounding.   


The deeper into the rabbit hole the system goes, the crazier the propaganda.....

I wonder what Obama's '12 campaign slogan will be?

Shut up and HOPE, damn it!

Fri, 10/14/2011 - 14:18 | 1774588 bigdumbnugly
bigdumbnugly's picture

or how about...


eat your peas

'cause u gotta appease

p - pp - pthf - p - pp - pthf

bend over please

and just pay those fees

p - pp - pthf - p -pp - pthf


(best rap i can do in text, lol).

Fri, 10/14/2011 - 12:22 | 1774106 BORT
BORT's picture

Check out the news from Iceland.  Which volcano erupts first:  Katla or Debt

Fri, 10/14/2011 - 12:25 | 1774117 Fips_OnTheSpot
Fips_OnTheSpot's picture

better watch El Hierro - very grumpy below sealevel

Fri, 10/14/2011 - 13:20 | 1774371 Enceladus
Enceladus's picture

Watch em all here.



Space Weather / Coronal Mass Ejections

Nuke News

Fri, 10/14/2011 - 12:33 | 1774175 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The financiers and policy makers are praying they can have an excuse for a collapsed market, be it Mother Nature or war.

Fri, 10/14/2011 - 13:25 | 1774392 Jeff Lebowski
Jeff Lebowski's picture

I couldn't agree more.

Fri, 10/14/2011 - 12:24 | 1774111 Hansel
Hansel's picture

If 50% isn't enough and a "large restructuring" would be better for Greece, just go all the way for the 100% cut.  What is sovereign debt backed by?

Fri, 10/14/2011 - 12:25 | 1774123 Fips_OnTheSpot
Fips_OnTheSpot's picture

go back where "credit" comes from.. latin "credere" - which means 'trust'. There ya go.

Fri, 10/14/2011 - 12:28 | 1774141 jdelano
jdelano's picture

was a typo.  it's really from currere.  "To run"

Fri, 10/14/2011 - 12:36 | 1774183 Fips_OnTheSpot
Fips_OnTheSpot's picture

Wah, another monitor cleanup session :)

Fri, 10/14/2011 - 13:13 | 1774349 slaughterer
slaughterer's picture

Could also be attributed to "credo" (blind belief).

Fri, 10/14/2011 - 15:00 | 1774782 Nobody For President
Nobody For President's picture

Cracked me up! Thanks! I needed that.

Fri, 10/14/2011 - 12:31 | 1774157 dracos_ghost
dracos_ghost's picture

Since we have fractional banking authoring "credit", isn't it OK to have fractional trust. For that matter, can't Greece pay back in fractional remittance and resolve their debt with something like 4 Euros.

Fri, 10/14/2011 - 12:29 | 1774144 maxmad
maxmad's picture

 What is sovereign debt backed by?


The blood of the elites!  The Elites can't take a "haircut"!!!

Fri, 10/14/2011 - 12:51 | 1774251 Long-John-Silver
Long-John-Silver's picture

What is sovereign debt backed by?


Nothing, just like Gold. /sarc

Fri, 10/14/2011 - 12:25 | 1774114 GeneMarchbanks
GeneMarchbanks's picture

Friday afternoon release an accident? I think not. It matters not, the 'market' has no sense whatsoever of... well... anything.

Fri, 10/14/2011 - 12:24 | 1774115 qussl3
qussl3's picture

Great analysis.

What an epic clusterfuck.

Fri, 10/14/2011 - 12:27 | 1774129 abugarance
abugarance's picture

geithner has it all sorted thanks to a blankfein haircut double squared's all been taken care of


Fri, 10/14/2011 - 12:29 | 1774143 Segestan
Segestan's picture

Time to Break out..' Bazooka Gold' .....say to 50,000?. Problems solved?

Fri, 10/14/2011 - 12:31 | 1774155 user2011
user2011's picture

Remember the 500 million + ambassy we are building in Afghan ?     I think it could be a mineral ore refining facilities.

Fri, 10/14/2011 - 12:32 | 1774158 Quinvarius
Quinvarius's picture

I think it is important to remember that from a sovereign perspective, all this debt is just a charade to allow money printing with the illusion of that money actually has a purpose or a backing.  The money printing will not stop no matter what. 

And anyone who thinks the Euro is going to crash has no clue about FX markets.  FX is completely rigged by central bankers.  There is no economic push or pull on paper garbage money.  The exchange rates are set by interventions.  On a gold standard, economic events effect currency because gold changes hands to settle accounts.  On a fiat standard, exchange rates are set to adjust economic activity.  The price of paper is the tool, not the outcome.

Fri, 10/14/2011 - 12:36 | 1774185 Going Loco
Going Loco's picture

Quinvarius - "FX is completely rigged by central bankers."

Well it is until it isn't. Just ask Norman Lamont (British Chancellor at the time Soros killed the pound).

Fri, 10/14/2011 - 13:02 | 1774258 Quinvarius
Quinvarius's picture

I have heard that Soros rumor, but after examining the timeline, it is clear that Soros was operating on inside knowledge of coming government actions, as he always does.  He didn't kill the pound.  He knew the British government was about to take an action that would devalue the pound.  Can I prove it?  No.  But in the end, it was an offical policy to devalue that caused the drop.

If you had never heard the rumor that Soros killed the pound with his vast network, and just looked at the event timeline, you would come to only one conclusion.  He paid for information and influence.

The above gives you a good feel for all political mumbo jumbo that was going on.  And notice, that final decision to make sure the Pound was pulled out of the ERM was done in a secret last minute meeting between a few insiders, just after it was publicly stated the pound would be strengthened by raising interest rates.  Soros would have been destroyed except for the last minute hi-jacking.  I have no doubt he paid well for that.

Fri, 10/14/2011 - 12:34 | 1774171 Voodoo-economist
Voodoo-economist's picture

to be perfectly honest, this bank only has underperformers left. Id put their sell side research where it belongs: into the next toilet.

Fri, 10/14/2011 - 12:35 | 1774180 Dick Darlington
Dick Darlington's picture

I wish this would be the way to go for the fine little country. Majority of the people want it, only the eurofanatic Prime Minister and his minions want to dance on the deck of Titanic and be the last one to turn out the lights.

Fri, 10/14/2011 - 12:38 | 1774198 carbonmutant
carbonmutant's picture

Foreign riot police now operating in Greece.

They are called the European Gendarmerie Force (Eurogendfor) . They are based in Italy but funded and staffed by six signatory nations who are France, Italy, Holland, Spain, Portugal and Romania.

The Gendarmerie are specifically set up to deal with riots and civil unrest and as the treaty spells out they are to be

…exclusively comprising elements of police forces with military status

Fri, 10/14/2011 - 15:16 | 1774863 Nobody For President
Nobody For President's picture

Tyler - you should follow this like flys on poop. As a former Infantry Officer who did a little riot control (Watts - a long time ago), I find this VERY interesting. This is increasing the speed of the fan that the stuff is hitting in Greece by a substantial margin. 

My prediction: Mistakes will be made by troops (oops, police force) that do not speak the native language. Lethal force will occur. The fan speed will ratchet to 'Extreme".

I hope to God I'm wrong about this.

Fri, 10/14/2011 - 13:43 | 1774199 LawsofPhysics
LawsofPhysics's picture

Everyone must recognize that the kleptocratz ultimately want a debt-for-equity swap.  This allows them to go into countries and finish the rape of anything of value.

The debt is a FRAUD, period.  No way any of this doesn't get bloody.

Fri, 10/14/2011 - 12:41 | 1774217 agent default
agent default's picture

Meanwhile,the 1 year bond is hitting 170%

Can we stop this kick the can exercise now?  It's getting silly.

Fri, 10/14/2011 - 13:18 | 1774364 hambone
hambone's picture

Quit your's only 169.335.

Fri, 10/14/2011 - 12:41 | 1774219 spanish inquisition
spanish inquisition's picture

I am thinking they have run out of ideas and know that they are idiots. So in desparation, start spamming out ideas and let the market do analysis overnight.

Market Conclusion: They have run out of ideas and are confimed idiots.

Fri, 10/14/2011 - 12:49 | 1774245 topcallingtroll
topcallingtroll's picture

Can someone explain why it makes sense to germany to allow a 50 percent or 100 percent haircut but then continue to loan money to rhe greeks via efsf or ecb?

Why would they insist on continuing to throw good money after bad once greece defaults?

Fri, 10/14/2011 - 12:56 | 1774273 Dick Darlington
Dick Darlington's picture

That's what these eurofanatics do. They have a deadborn dream, utopia, Shangri La, if u will, that they want to preserve. The goal of these eurofanatics is to strip sovereign nations from their economical and political powers and transfer them into Brussels Central Communistic Byroo, into the hands of a small unelected elite politicians.

Funny thing is that in many nations, like Germany, THE PEOPLE are against this kind of lunacy but still these eurofanatics keep pushing forward.

Fri, 10/14/2011 - 13:32 | 1774419 ThisTimeIsDifferent
ThisTimeIsDifferent's picture

Because the outlook for a Greek recovery improves after the haircut.

A 50% haircut will definitely work - just like it works with any failed enterprise in a free market.

That UBS and Deutsche Bank are now squealing is actually an excellent sign!

European politicians finally realize that they have been manipulated by the bankster press and their endless "Greek tragedy".

The game is about the transfer of risk from the investment community to the German, Dutch, and Austrian taxpayers.

UBS and Deutsche Bank have begun to realize that they are about to loose this game and that they will be cut down to size.

What a GREAT day for the people!

Mon, 10/17/2011 - 06:11 | 1780632 Stylianos Kyriacou
Stylianos Kyriacou's picture

Spot on 

Fri, 10/14/2011 - 12:51 | 1774249 junkyardjack
junkyardjack's picture

UBS, stop being a hater it doesn't look good on you

Fri, 10/14/2011 - 12:53 | 1774260 broke433
broke433's picture

Tylers should save all this doom and gloom as it has absolutely no effect during earnings and release it all at once after it is over. Ratings agencies learned so they downgrade anything and everything and it has absolutely zero affect in markets.

Fri, 10/14/2011 - 12:54 | 1774262 maddogs
maddogs's picture

UBS has some of the highest exposure. Why some spec as going around UDS was on board with this I've no Idea. But then, maybe everyone will wait for the IMF/U.S. Federal reserve to "Bailout again", the players keep pointing fingers.. I think some internal stress testing in ongoing and there are no solutions that won't take out, anyone whom loses on the next round of liquidity input should that go belly up afterwards.

No one wants to take their "Medicine" here at this point, lololol.

Fri, 10/14/2011 - 13:02 | 1774296 Dick Darlington
Dick Darlington's picture

Germany not going swallow the 3 trillion leveraged suicide pill?

Fri, 10/14/2011 - 13:04 | 1774306 Iam Rich
Iam Rich's picture

Haircut is probably closer to 150% from this point forward.  We kick in another 50% and then proceed to watch Greece default on it all.

Fri, 10/14/2011 - 13:05 | 1774315 slewie the pi-rat
slewie the pi-rat's picture


rubik's EU cube = getting  

  • promises,
  • rumors,
  • lies,
  • innuendo  and
  •  hyperbole


in the winning order

Fri, 10/14/2011 - 13:07 | 1774321 vote_libertaria...
vote_libertarian_party's picture

What about derivatives?  No bailouts for those entities that sold derivatives?


Hedge funds = no bailout?


Banks = yes bailout on derivatives sold???



Fri, 10/14/2011 - 13:11 | 1774340 falak pema
falak pema's picture

well, its time to call the greek haircut ....crew cut!...fixed it.

Fri, 10/14/2011 - 13:20 | 1774372 PaperBear
PaperBear's picture

A 50% write down to me sounds like a decapitation not a haircut.

Fri, 10/14/2011 - 13:21 | 1774374 PaperBear
PaperBear's picture

YouTube Bulletin by TVZNETonline
YouTube Bulletin by TVZNETonline

Sat, 10/15/2011 - 13:42 | 1777184 matrix2012
matrix2012's picture

What happened there now? Will the CRIMINAL WARMONGER NATO together with its backed forces do the mass slaughtering in SIRTE and other areas? The world today is so crazy, in absolute insanity... the lies and deceptions are just so naked... may people in the center parts regain their awareness and point their fingers to the right mastermind.. starting from New York and London to the rest parts of America and Europe!

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” — Charles Mackay (1814-1889)

Fri, 10/14/2011 - 13:24 | 1774384 Dick Darlington
Dick Darlington's picture

Here we go again with the French banks WHO DON'T NEED CAPITAL:

Fri, 10/14/2011 - 13:49 | 1774505 Peter K
Peter K's picture

Forgot to mention in the synopsis that the capital of the ECB is 12bE, 6 of which was raised a few months back. It is also highly likely that 100% of the ECB capital is not paid up:)  This also needs to be worked into the equation.

Fri, 10/14/2011 - 13:49 | 1774510 greenfire
greenfire's picture

Soon enough the banks won't be dictating what level of haircut is acceptable for their bad bets made w/o due diligence.  The people will dictate to the banks that they just becam heavily regulated utilities. Enough of the 'innovative' financial products, already.  Mark to market.  Stop the fraud. End of story.

Fri, 10/14/2011 - 14:04 | 1774557 devo
devo's picture

Can someone explain what a super PSI is?

Fri, 10/14/2011 - 15:06 | 1774825 falun bong
falun bong's picture

Single currency worked in Europe a few times before: under Julius Caesar, Charlemagne, Napoleon, then Hitler. Don't think 17 whiners in a room (or not even in the same room) can agree how to have a single Euro the way Adolph could. Nigel Farage has it right. Slo-mo train wreck...then all of a sudden not-so-slo-mo

Fri, 10/14/2011 - 15:14 | 1774854 AldoHux_IV
AldoHux_IV's picture

The Troika is nothing more than a synthetic cdo on the EU experiment at this point, moreover this clearly illustrates why using more debt to solve a debt laden problem doesn't work because it becomes a black hole for any real or otherwise sense of the word capital.

The insolvency of institutions that are bailing out insolvent sovereign nations with debt is a fucking joke and unfortunately the punchline will be very painful.  The upside is that the probability of these institutions (e.g. Troika) will cease to exist-- choking on their own hubris and greed.

Fri, 10/14/2011 - 16:06 | 1775047 RoadKill
RoadKill's picture

After being uber bullish at SPX 1099, I've dumped all my UMDD and am ballz deep into SMDD as of it hitting 22.  Have an order in to increase my position 50% if we hit 20.  Theoretically I'd have enough firepower to double down 1 more time below that - but it would be uncomfortable.

Now we need to kill this Timmy G and Commrade O plot to throw hundreds of billions is US tax payer $ to the IMF to bail out Europe.

Aren't we supposed to be debating SEVERE spending cuts of our own to avoid a Greek Tragedy in the US?  If we have to find payfors to offset disaster aid for our own states - dont we have to find cuts for any $ to the IMF?

This ship is going down.  If we let it go now the price is 2-3 trillion Euros - of which maybe a few hundred billion hits the US.  If we get involved via the IMF with leverage - the cost will escallate 5x globally and 20x in the US.  Hell - maybe it means we need our own 50% debt forgiveness.

Abort this idea while the buns still in the oven.  Killing a child once its 2 years old is plain mean!

Fri, 10/14/2011 - 20:25 | 1775842 Blank Reg
Blank Reg's picture

Ok. I'm done reading this stuff. Same old stuff every day. I know everything I need to know. The end is nigh. Every dime I have is in silver. I'm going back to playing my computer games and wait for the crash. Best of luck to ya'all.

Fri, 10/14/2011 - 21:26 | 1775983 Buck Johnson
Buck Johnson's picture

It most certainly will be a bloodbath, and I don't believe that 348 billion dollar is all their debt either.  I think that the more they dig the more they need.  What will happen when Ireland is saying cut our debt by 50% or any other country. 

Sat, 10/15/2011 - 00:44 | 1776352 michigan independant
michigan independant's picture

As of 2009, Gramm had been promoted by UBS AG as a Vice Chairman of the Investment Bank division. UBS states that a Vice Chairman of a UBS division is "...appointed to support the business in their relationships with key clients."

His son Marshall Gramm is a professor of economics at Rhodes College, so if you hear his name nominated for economic adviser, start stockpiling canned food, gold, and bullets.

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