Category Archives: Banking
We’re told the large (systemically important) US banks have manageable exposure to Europe once all the long and short positions are netted with Credit Default Swaps. Supposedly the net exposure to PIIGS sovereign debt is $16B for Citi, and $2.5B for Goldman Sachs. That’s NET exposure. What’s the gross exposure? If Goldman has $50B (I have no idea, this is just an example) in PIIGS […] Read the rest of this entry
This is unreal. Early this morning central bankers made a surprise coordinated move to stop the banking system melt-down in Europe from worsening there, and from spreading beyond Europe. The debt-fueled financial system contagion has been slowly steam-rolling everything in its path. It had reached the point where banks in Europe could not stop it, were not lending to each other, and the ECB was unwilling/unable […] Read the rest of this entry
Financial system contagion continues to spread and slowly spiral out of control. Interest rates demanded by bond buyers, and implied interest rates from credit default swaps (CDSs) are higher across the board. It doesn’t matter whether you’re a PIIGS country, BIGPIGS country, or anywhere else in the Eurozone. The Brits must be downright gleeful they have access to cheaper money than Germany does […] Read the rest of this entry
The Fed announced another (the 3rd) stress test of US banks. This time the test will include scenarios with a deep recession in Europe, and 13% unemployment in the US. Plus -importantly- the results will be made public! This is going to force banks to clean up their balance sheets even faster: sell assets (good, bad, or ugly); raise capital via new share offerings; […] Read the rest of this entry
Today, the IMF stepped into the fray to arrest the creeping financial system melt-down in Europe. The ECB refuses to ramp-up lending to its own, so the IMF is putting everyone’s money at stake instead. Let’s see…. European banks are being supported/ bailed out by their national governments. These national governments are being further bailed out by the supranational entity- the European Central Bank (ECB). The ECB is hitting […] Read the rest of this entry
NAPFA