9/14/2011 - Big banks in France being downgraded by Moody over PIIGS debt holdings

So it begins.
SO IT BEGINS: SOCGEN DEBT, DEPOSIT RATINGS CUT BY ONE NOTCH TO Aa3 BY MOODY'S, OUTLOOK NEGATIVE 

Moody's downgrades long-term ratings to Aa3 on normalised systemic support, Outlook negative, BFSR remains on review to consider impact of funding challenges on credit profile


However, a conclusion with a negative outlook on the BFSR would lead to a renewed negative outlook on the long-term ratings. Given this possibility, we are maintaining our negative outlook on the long-term ratings during the review of the BFSR.


However, during the review, Moody's concerns about the structural challenges to banks' funding and liquidity profiles increased, in light of worsening of refinancing conditions, and have prompted an extension of the review. The continuing review will focus directly on these funding and liquidity challenges for SocGen which, given the current environment, could become long-term constraints to the performance of its franchise.

Funny how Moodys (controlled by Buffet) downgrades France's banks but doesn't downgrade Swiss banks (which are very much exposed to Greek debt)... nor downgrades America's banks (which are a total joke)...


Anyway, with that, SAY BYE BYE to the ``Euro bonds`` project... the ONLY way they can pull it now is if they put THE ENTIRE EUROPEAN DEBT ON GERMANY... if Merkel is treasonous enough to do that... WHEN, NOT IF it all collapses, Germany will get hit by the largest depression in history. Yes, worse than post-WW1. And you know only bad things can happen with that.


This might be the beginning of Europe's Lehman brothers... except it's several big banks... and several countries...


The bailout needed will be huge... and I mean, FREAKING HUGE... that is... if they have the money in time...


Jefferies Describes The Endgame: Europe Is Finished

"The bottom line is that it looks like a Lehman like event is about to be unleashed on Europe WITHOUT an effective TARP like structure fully in place. Now maybe, just maybe, they can do what the US did and build one on the fly - wiping out a few institutions and then using an expanded EFSF/Eurobond structure to prevent systemic collapse. But politically that is increasingly feeling like a long shot. Rather it looks like we will get 17 TARPs - one for each country. That is going to require a US style socialization of each banking system - with many WAMUs, Wachovias, AIGs and IndyMacs along the way. The road map for Europe is still 2008 in the US, with the end game a country by country socialization of their commercial banks. The fact is that the Germans are NOT going to pay for pan European structure to recap French and Italian banks - even though it is probably a more cost effective solution for both the German banks and taxpayers....Expect a massive policy response in Europe and a move towards financial market nationlaization that will make the US experience look like a walk in the park. "

edit on 14-9-2011 by Vitchilo because: (no reason given)

Leverage of EU banks : 69X... leverage of US banks : 22X... Capital of EU banks : 1.4% Capital of US banks : 4.5% so kaboooooooooooooooom. The toxic waste those banks have is way bigger than the EU economy.


Update : Credit Agricole, Expectedly, Joins SocGen On The Moody's Downgrade Path 

Moody's downgrades long-term ratings to Aa2 on Greek exposures, ratings
remain on review to consider impact of funding challenges on Credit Profile


Meanwhile, the Aa3 long-term debt and deposit ratings on Credit Agricole
Corporate and Investment Bank remain on review

Yep,the End begins...with this,when Greece goes finally bankrupt (which is a matter of Days,at most),French Banks go down too,which was/is expected...and since many Banks sold Bonds to each other in the last few Weeks,we can expect a Chain-Reaction,and the Dominoes start to fall faster and faster with Banks going down left and right...

Now,lets see if those Rumours about a (long planned) Currency Reform this Week(end) in Germany are true or not...

Asia is not taking this well. Tomorrow may be a real long day for Western markets. So many people have shared their views about a brief climb (we had it in the markets here recently) just before the last drop. I wonder if we aren't seeing the start of that at this point.

The question is, will any collapse of those heavily exposed Eurozone banks bring on an event worse than Lehman? Because if it does, tell me with the debt that sovereigns are now buried neck deep in, how will world governments contain the fallout this time round?

The question is, will any collapse of those heavily exposed Eurozone banks bring on an event worse than Lehman? Because if it does, tell me with the debt that sovereigns are now buried neck deep in, how will world governments contain the fallout this time round?

SocGen Shares Plummet On No News

Apparently the market finally woke up: seconds ago SocGen shares, completely out of nowhere, just took a massive spike lower, tumbling a good 8% on no news. There is a goal seeked version that attributes the move to remarks by Noyer discussing French bank stability may have caused this but this makes little to no sense, as they were supposed to be favorable for banks. It appears like a major block was dumped as someone realized they have had enough with the rollercoaster. Now the question is: "why?"

Austria Fails To Ratify EFSF Expansion, EURUSD Plunges

Yup, Europe is open, and the suiciding has started early.

AUSTRIAN PARLIAMENT COMMITTEE DOESN'T APPROVE EFSF UPGRADE
AUSTRIAN PARLIAMENT COMMITTEE NEEDED 2/3 MAJORITY

As a reminder all countries need to ratify the EFSF, even the weakest links, or else no bailout. 

Game Over?

Greece will default....VERY Soon.

The Eurozone will collapse as we know it. This will be damaging for the U.K. as plenty of our banks are exosed to Greek, Irish, Portugal & Italian debt.

This could be quite, annoyingly devastating.