Art Cashin Exposes The Behind The Scenes Panic In Europe. Why ECB's LTRO Won't Stop Collateral Contagion. Via Gordon T Long of GordonTLong.com, How long can the European media keep the EU credit implosion a secret? The disgraced former IMF Director, Demonic Strauss Kahn said on Tuesday December 12th, 2011 that No 'Firewall' Exists and Europe Has 'Only Weeks'. Of course within minutes of this Financial Times news release which detailed his vent on EU leadership and the perilous situation in Europe, the article disappeared. The details of the European liquidity crisis are generally reported, but for some reason no media source wants to pull the pieces together so everyone can see the magnitude and futility of the crisis. A growing Collateral Contagion is being shrouded in the apparent belief that the solution to the European Financial and Banking crisis is a grand change in Treaty governance.
The LTRO bought the EU private banks some time. I would argue that the problem short term is a shortage of real collateral and that US dollar cash, versus 'encumbered' cash flow, is now king. 1. Europe's Cash-For-Trash LTRO-'Scam' And The Indentured Servitude Of The Citizenry. On Europe, Inflation, And Gold. Germany's Hidden Risk. Involuntary lending is what happens when your teenager figures out how to charge stuff to your credit card.
The kid promises to pay for the purchases but never gets around to it, so your involuntary loan keeps getting bigger. At some point it dawns on you that you might never get your money back. Something similar is happening in Europe, except the dysfunctional family consists of central bankers, with Germany’s Bundesbank in the role of aggrieved parent. The figures are hard to find, policymakers don’t like to talk about them, and the accounting is far from sexy. Expect to hear more about this issue as the glow from the Dec. 8-9 Brussels summit continues to dim and the stresses on Europe’s common currency intensify. The bottom line: Germany’s Bundesbank—BuBa for short—has quietly, automatically lent €495 billion to the European Central Bank via Target2. If the euro zone breaks into sorry little pieces, Germany could possibly lose its entire €495 billion claim. Here’s how it happened. Jeff Gundlach On Europe. Fed saves Europe's banks as ECB stands pat.
20 European Banks That Are Desperate For A Solution to The Euro Crisis. UPDATE: Now it looks like Commerzbank could be the next bank to fall in the crisis, which we found to have exposure to the PIIGS second only to Dexia of non-peripheral European banks in this exposure stress test. PREVIOUSLY: EU leaders are dithering over what they should do to stem the escalating eurozone crisis, and banks across Europe are praying that they will get their act together before it's too late. Economic conditions in core eurozone states like Germany have begun to take a hit, and signs that credit conditions are tightening for banks are everywhere. Banks with high exposures to the PIIGS (Portugal, Italy, Ireland, Greece, and Spain) would be the first to feel the heat of a sovereign default or euro exit.
We took a list of the largest European banks by assets and compared their market cap, common equity, and total exposure to PIIGS debt (thank you for the bank statistics, EBA!). How Europe Has Evolved From A Democracy To A Bankocracy And Why Austerity Will Lead To Chaos.