WHAT!!! IF PIGGS could fly: DAXIA BANK MIGHT BE SOLVENT!!

[bimetalaupt]

SORRY ECB: THIS REPORT IS PURE WORM FOOD DELIVERED BY .........

FRANKFURT (Reuters) - Roughly one in five of the euro zone's top lenders failed landmark health checks at the end of last year but most have since repaired their finances, the European Central Bank said on Sunday.

Painting a brighter picture than had been expected, the ECB found the biggest problems in Italy, Cyprus and Greece but concluded that banks' capital holes had since chiefly been plugged, leaving only a modest 10 billion euros to be raised.

Italy faces the biggest challenge with nine of its banks falling short and two still needing to raise funds.

The test, designed to mark a clean start before the ECB takes on supervision of the banks next month, said Monte dei Paschi had the largest capital hole to fill at 2.1 billion euros.

The exercise provides  (NOTHING)....

STILL DIGGING IN THE WORM PIT FOR FACTS.

........

The ECB will not immediately force lenders with overvalued assets to take remedial action but they will have to hold more capital eventually, leaving less room to expand, lend or pay dividends

Just a thought,

BiMetalAuPt

finance.yahoo.com/news/25-european-banks-fail-stress-112858335.html

[bimetalaupt]

LOOKS LIKE WSJ HAS THE SAME NUMBERS!!

In contrast to previous stress tests, the ECB this time around also reviewed the quality of bank assets, such as mortgages, corporate loans and other investments, to determine whether they were accurately valued. That process resulted in banks being forced to reduce the value of their assets by a total of €47.5 billion, the ECB said. The central bank also identified an extra €135.9 billion of troubled assets, known as nonperforming exposures, sitting on the balance sheets of the eurozone banks

The European Central Bank and the European Banking Authority on Sunday unveiled the results of a nearly yearlong effort to assess the finances of 150 banks, identifying 12 that still need to come up with a total of €9.5 billion ($12.04 billion) in extra capital. A total of 25 banks technically flunked the “stress tests,” facing a cumulative shortfall of €24.6 billion, but most have already taken steps to solve their problems.

ADDING

9.5+47.5+135.9= (AT1.30 $/EURO) 250.77 BILLION USD

Just a thought,

BiMetalAuPt

[bimetalaupt]

FYI:FROM CENTRAL BANK NEWS!

Central Bank News
CentralBankNews.info - A trusted and authoritative source on global monetary policy

Central Bank News Link List - Oct 26, 2014 - EU stress tests show how capital rules give room to hide

Here's today's Central Bank News' link list, click here if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.
EU stress tests show how capital rules give room to hide (Bloomberg)
ECB fails 25 banks in health check but problems largely solved (Reuters)
US Fed to enter new ‘normal’ with expected QE stimulus end (AFP)
BOE McCafferty sets out case for bank rate hike (MNI)
Merkel hints that euro-area nations may have room for investment (Bloomberg)
Senior Japan official calls for Abe to delay sales-tax hike (Reuters)
Global oil decline of $25 will cause GCC 8% drop in revenue-Lagarde (KUNA)
Investors push back bets on BOE rate increases as growth slows (Bloomberg)
On brink of recession: Israel central bank tough decision on QE (Albawaba)
BSP seen to resume tightening cycle in Q2 next year – Barclays (Business World)
The conflict between Germany and the ECB that threatens Europe (Upshot/NYT)
Tax cuts likely China’s next measure to stimulate housing (Want China Times)
IMF modifies rule for setting SDR interest rates (IMF)
Sri Lanka’s move towards inflation targeting (The Nation)
N.Ferguson: The return of volatility is mainly about monetary policy (WSJ)
Growing risks of liquidity trap in Korea (Korea Times)


www.CentralBankNews.info

www.centralbanknews.info/

Just a thought,

BiMetalAuPt

[Aman A.K.A. Ahamburger]

Great stuff !

Yes, it sure seems like these results were as bad as any of them.. How about this?

Stress tests move eurozone toward banking union

As a result, the total stock of bad loans across all 130 banks rose by 18%, with increases ranging by country from 7% to 116%.

2013 was when the EU was "recovering". The econ news for 2014 has been recession, right?

When piggs fly indeed!!

Worse yet - amid capital flight the big news is that the war chest has been depleted to the tune of stimulus measures...

What next after China’s foreign-reserve fall?

In other words - as we previously discussed - China ether burns their reserves; or they let the bubble burst, send in the troops, move towards democracy, and start all over again. How is communism's track record again?

[bimetalaupt]

Yes?: and I have a bridge I will sell you at a great price: only 125%f its value!! Daxia is carrying government bonds at 200% of market : etc....

Two Belgian banks fail ECB test, but no new measures requiredOct 26 (Reuters) - Franco-Belgian lender Dexia and AXA Bank Europe both failed the European Central Bank's stress test, but Belgium's national bank said on Sunday that neither would have to take extra measures to boost their capital.

Belgium's central bank said that Dexia, deemed to have a capital shortfall of 339.4 million euros ($430.0 million) at the end of 2013, benefited from state guarantees and had also sold assets since so no further action was required.

AXA Bank Europe, the Belgian banking arm of French insurance group AXA, also showed up a shortfall of 200.2 million euros. However, it has sold non-core activities and raised capital this year.

"At this stage the bank meets the requirements set by the ECB and is no longer obliged to take any additional measures to strengthen its solvency position," Belgium's central bank said. (1 US dollar = 0.7893 euro) (Reporting By Philip Blenkinsop;

www.reuters.com/article/2014/10/26/eu-banks-belgium-idUSB5N0MH00R20141026

[bimetalaupt]

The PR campaign for Daxia Bad Bank sound like the 1931 Promo white wash PR released to pretend Creditanstalt in Vienna was solvent.  Again I have a Bridge for sale.

Finance Minister not concerned after Dexia hiccup

The new Finance Minister Johan Van Overtveldt (N-VA) has reassured Belgian taxpayers about the Dexia bad bank. Mr Van Overtveldt said that the news that Dexia flunked an ECB stress test, will not have consequences for the Belgian state and its taxpayers. "We just have to continue the policies we had adopted towards Dexia so far." 

Dexia failed the stress test carried out by the European Central Bank, but does not require fresh capital. This is good news for the Belgian state that owns 50 per cent of the bad bank. No fresh capital is needed because the bad bank is in fact a bank that is being dismantled anyway.

Mr Overtveldt said that there is no reason to change the current policies. "The stress tests show that the restructuring programme for Dexia works. Apparently, the ECB approves the way in which we have been handling things so far", he told the VRT.

Despite the bad bank failing the test, the government will not take any new measures, he added. "This is not necessary. We just have to continue along the same path that we have taken until today. And of course, we have to keep a close eye on things

deredactie.be/cm/vrtnieuws.english/Economy/141027_Dexia_VanOvertveldt_English

."

FYI

www.creditwritedowns.com/2009/03/1931.html

 
The Creditanstalt

Just as in May 1873 and July 1914, with tension growing among Germany, France, and Britain, the crack, when it came, appeared in Austria. In the early spring of 1931, a Dutch bank wrote a polite letter to the Creditanstalt in Vienna saying that it was obliged to raise the charge on its acceptance credits from 0.25 percent a month to 0.375 percent. It was a timorous letter, says Beyen, not a prescient one, and the bank was somewhat surprised when the Creditanstalt chose to pay off the loan rather than renew at the higher rate. Three months later the Creditanstalt could have used the money.

The Austrian economy had been in disarray since the Treaty of St. Germain of 1920. Its finances had required League of Nations loan assistance, which entailed international supervision between 1922 and 1926…Industrial capital was consumed in the postwar inflation, and financial capital in the unsuccessful bear speculation against the French franc in 1924 that produced failures of the Allgemeine Industriebank, the Austro-Polnische Bank, and the Austro-Orientbank, as well as the private Union Bank owned by one Bosel, with grave difficulties for Kolmar& Co., Kettner, and the Brothers Nowak. Maerz calls this episode "the opening shot of a series of bank failures culminating in the breakdown of the Creditanstalt seven years later."…

In May 1931 losses were still at 140 million schillings, and capital at 125 million plus disclosed reserves of 40 million for a total of 165 million. Under Austrian law, if a bank lost half its capital it had to "turn in its balance sheet," or close down. In an effort to rescue the Creditanstalt, the government, the National Bank, and the House of Rothschild, the last with help of the Amsterdam branch, furnished 100 million, 30 million, and 22.5 million schillings, respectively. But the announcement of the support operation on May 11, 1931, started a run, partly foreign, partly Austrian…

By June 5 the credit [for the entire country] was exhausted and the Austrian National Bank requested another. Still under pressure, the bank raised its discount rate to 6 percent on June 8 and 7.5 percent on June 16. The new credit was arranged by the BIS, by June 14 this time, but subject to the condition that the Austrian government should obtain a two-to-three year loan abroad for 150 million schillings. At this point the French interposed the condition that the Austrian government should abandon the customs union with Germany. The Austrian government refused, and it fell…

The demise of the Creditanstalt and the Austrian government was followed by a run on Germany and an attack on Sterling, which was depreciated a massive 25 percent as a result. Afterwards, central banks began a run on the U.S. dollar, liquidating it for gold. The banks included the Bank of France, the National Bank of Belgium, the Netherlands Bank and the Swiss National Bank. The result was an immediate need to increase the interest rate in the U.S. from 1.5 to 3.5 percent.

These events triggered further panics and bank runs in the U.S.. Later, the U.S. dollar was depreciated and multiple bank holidays were called to contain the panic. The U.S. economy bottomed only in April 1933.

[Aman A.K.A. Ahamburger]

A bridge on the TX plains, what a deal!

Seems like some other economists aren't buying..

ECB stress tests vastly understate risk of deflation and leverage

Ignoring the deflation danger for the banking systems of southern Europe has reduced the latest stress test to another 'farce', says EU economist Philippe Legrain

The eurozone’s long-awaited stress test for banks has been overtaken by powerful deflationary forces and greatly understates the risk of high debt leverage in a crisis, a chorus of financial experts has warned.

George Magnus, senior advisor to UBS, said it was a “huge omission” for the European Central Bank to ignore the risk of deflation, given the profoundly corrosive effects that it can have on bank solvency. “Most of the eurozone periphery is already in deflation. They can’t just leave this out of their health check. It is a matter of basic due diligence,” he said.

The ECB’s most extreme “adverse scenario” included a drop in inflation to 1pc this year, but the rate has already fallen far below this to 0.3pc, or almost zero once tax effects are stripped out. Prices have fallen over the past six months in roughly half of the currency bloc, and the proportion of goods in the EMU price basket in deflation has jumped to 31pc.

[bimetalaupt]

Banks Face Basel Funding Rule to Avoid Dexia-Style Crisis

Banks face a push from global regulators to seek out more stable funding that won’t dry up in a crisis.

Starting in 2018, internationally active banks will be required to meet a so-called net-stable funding rule that will force them to take into account the maturity of their assets when making choices about their financing mix, the Basel Committee on Banking Supervision, which brings together regulators such as the U.S. Federal Reserve and Bank of England, said today in a statement on its website.

The rule will limit banks’ reliance on “volatile short-term borrowings to fund illiquid assets,” Stefan Ingves, governor of Sweden’s central bank and the Basel group’s chairman

www.bloomberg.com/news/2014-10-31/banks-face-basel-funding-rule-to-avoid-dexia-style-crisis.html

A++++,

YES, IT IS OVER BANK-HEAD HIGHWAY ON I20.  BACK TO BISIII: Banks need more $$$$$ teer1 to lend more to build bridges, better stronger highways and more miles of pavement on the international highway to Moosejaw.

Just a thought,

BiMetalAuPt

[Aman A.K.A. Ahamburger]

... Moose Jaw? Nice one. Al C. just built tunnels...

I'm pretty sure it's nothing but a black hole now, right? I mean, they can recapitalize all they want but it goes nowhere... As of September they started recapitalizing the banks in Europe, right?

They swore up and down that it would create economic growth.. In reality.. EU Cuts Growth Outlook as Inflation Seen Below ECB Forecast

Back when we were talking about it 3 years ago the ECB should have been funding the ESM. The result would have been something similar to the Feds successful QE programs. Higher asset prices give the wealthy - who make up the majority of discretionary spending - money to spend. The economy thaws, money trickles down, more people go back to work and start spending money and the economy keeps thawing. Capital projects go back online because of higher asset prices, people get jobs...

At least we can still have the international highway from TX to SK and AB..

God bless,

[bimetalaupt]

MOOSE JAW KNOW FOR STORING LIQUID ASSETS IN OLD STEAM TUNNELS!!..ALSO SMALL DISTIERIES IN THE HILLS!!  SOO LINES AND RETIRED RR WORKERS!! 

[Aman A.K.A. Ahamburger]

Haha, yep! It's a RR hub, there is also a NATO flight training school, and is home to the Snowbirds!! The geothermal spa is also nice as well!

Moose Jaw

The intersection of the Moose Jaw River and Thunder Creek was chosen and registered in 1881 as a site for a division point for the Canadian Pacific Railway, whose construction was significant in Confederation of Canada. The water supply there was significant for steam locomotives. Settlement began there in 1882 and the city was incorporated in 1903.[4] The railways played an important role in the early development of Moose Jaw, with the city having both a Canadian Pacific Railway Station and a Canadian National Railway Station. A dam was built on the river in 1883 to create a year-round water supply.

Tunnels of Moose Jaw

A network of underground tunnels connecting buildings in downtown Moose Jaw was constructed beginning around 1908. They were originally built as an underground steam system that was abandoned. The tunnels were used to hide Chinese railway workers escaping persecution during the Yellow Peril or unable to pay the government-imposed head tax. Entire families lived in the tunnels and worked at above-ground businesses in exchange for food and supplies. The tunnels became a hub of renewed activity in the 1920s for rum-running during Prohibition in the United States. They were reported to have warehoused illegal alcohol that was then shipped to the U.S. via the Soo Line Railroad. The tunnels were also used for gambling and prostitution, all without interference from the corrupt police chief.[5] There has long been anecdotal evidence that American mobster Al Capone had visited Moose Jaw or at least had interests in the bootlegging operations. Although no written or photographic proof exists of Capone's presence, several firsthand accounts from people in Moose Jaw who claim to have met him have been documented.[6] Capone's grandniece also confirmed that he had been in Moose Jaw prior to his 1931 conviction for tax evasion.[7] In the 21st century, the city capitalized on this notoriety to restore the tunnel network into the Tunnels of Moose Jaw, a tourist attraction that opened in June 2000.[8]

[bimetalaupt]

A++++,

Just like West Texas: The RR had about 25 miles of water max on float land.  Steam is a pig on water: The clog Traction units to the top of Pikes Peak took water  after SOAG Hill.  The whole trip is only 10 miles long but a clime of about 25K feet. 

So the Soo meets CP at Moose Jaw: Just like Abilene, TX.  The T&P( now UP)ran north of Steamboat Mt to avoid long clime to Buffalo Gap.  There is a South to North RR that leaves Abilene and heads south to Buffalo Gap that is the only way to get the huge Wind Turbines to the Farm.  

There were several Jewish  Families that were in the Wholesale Food and Drug business in Abilene, TX that had a two way Trade  with I understand family in the East.  Problem was transferring money safely from one side to the other.  Banks were not sound and it took longer to ship cash West Or East.  So they shipped food to Abilene, TX and kerosene East.  They would  balance the books annually. 

Just a thought,

Bruce  

[Aman A.K.A. Ahamburger]

No doubt steam engines used water. All those water towers that used to run along side the tracks... I didn't realize you only got about 25 miles though... Can you imagine being the guy having to clean the traction lines out?? Lol...

The SOO line is actually owned by CP.. It's only a level I line though.. Is that what the line South to the farm is from Abilene? The mill is big, but not necessarily insanely heavy I guess.

How times have changed hey? Easier to ship money in hard assets and square up once a year just because of RR theft.. It's going to be cool to see some of this stuff.

Hope you had a good weekend!

God bless,

[bimetalaupt]

Nov 10, 2014 0:18:28 GMT -5 Aman A.K.A. Ahamburger said:

No doubt steam engines used water. All those water towers that used to run along side the tracks... I didn't realize you only got about 25 miles though... Can you imagine being the guy having to clean the traction lines out?? Lol...

The SOO line is actually owned by CP.. It's only a level I line though.. Is that what the line South to the farm is from Abilene? The mill is big, but not necessarily insanely heavy I guess.

How times have changed hey? Easier to ship money in hard assets and square up once a year just because of RR theft.. It's going to be cool to see some of this stuff.

Hope you had a good weekend!

God bless,

History[edit]

The other line is UP.  These track are now owned by a local firm

The Abilene and Southern Railway Company was founded on January 13, 1909, in Abilene, Texas by Morgan Jones. Jones proposed to construct 150 miles of railroad.[1] Construction work started soon and on April 23, 1909, the first official train ran the eight miles from Abilene to Iberis, Texas. From September 11 the same year, the road was operating from Abilene to Ballinger, Texas, a total of 54.75 miles, where a connection to a branch line of the Gulf, Colorado and Santa Fe Railway was established. Finally, on October 1, 1910, a railroad from Anson, Texas to Hamlin, Texas (17.41 miles) was opened. Plans for further extensions to Sonora and San Angelo, Texas were dropped soon thereafter. Between Abilene and Anson (24.62 miles), the Abilene&Southern used existing tracks built in 1907 by the Abilene and Northern Railway and meanwhile operated by the Colorado and Southern Railway. The total trackage used by the Abilene&Southern was 96.78 miles.

On April 25, 1927, the Texas and Pacific Railway was authorized by the Interstate Commerce Commission to buy the entire stock of the Abilene&Southern which continued to operate the road. The ICC allowed abandonment of the Anson–Hamlin track including the end of the trackage rights over the railroad from Abilene to Anson on January 9, 1937, and in February that year operations north of Abilene ceased. The stretch from Winters to Ballinger (16 miles) lost rail traffic in 1972 and was torn up. In 1976 the Texas&Pacific merged with the Missouri Pacific Railroad and the Abilene&Southern ceased to exist on November 1, 1978,[2] when it was also merged with the Missouri Pacific. The remaining railroad from Abilene to Winters was later abandoned.

[bimetalaupt]

Southern Switching Company ("SSC") is a shortline railroad located in Abilene, Texas. Interchanging with the Union Pacific in downtown Abilene, SSC operates 8.5 miles of railroad within the city of Abilene. SSC serves a variety of existing customers that are shipping and receiving commodities such as Grain, Feed, Fertilizers, Oil, Scrap, Corn Sweetener, and Lumber. SSC has solutions for your 'team track' or warehousing needs. Southern Switching Company is a member of the American Shortline and Regional Railroad Association and a part of the Ironhorse Resources, Inc. family of railroads and logistical services.

Wind Distribution: SSC plays a vital role in the growing wind energy business. Proximity to the fastest growing wind energy region in the country makes SSC a perfect location for transloading windmill components.

Shale Development: SSC is also located in close proximity the emergining Cline Shale. (See Map Here). SSC would be able to provide rail logistics to support the drilling industry with the ability to interchange 100+ car trains and provide catered manifest (single car) service to any industry that is located with SSC. (Frac Sand, Aggregate, Line Pipe, Casing or Drilling Pipe, Crude, Petroleum, Condensate, Gas Liquids , HCl, Barite, Bentonite, etc)

SSC is a subsidiary of Ironhorse Resources, Inc. and is a sister company to:
##Caney Fork & Western Railroad: A shortline railroad based out of McMinnville, TN
##Gardendale Railroad, Inc.: A shortline railroad based out of Gardendale, TX and located in the Eagle Ford Shale
##Mississippi Tennessee Railroad: A shortline railroad based out of Middleton, TN
##Rio Valley Switching Company: A shortline railroad based out of McAllen, TX.
##Santa Teresa Southern Railroad, LLC: A shortline railroad based out of Santa Teresa, NM
##Border Transload & Transfer, Inc.: A logistics solutions company operating in Las Cruces, NM and Donna, TX
##IHR Transport: An asset-based trucking company operating out of Donna & Houston, TX
##IHR Logistics, LLC: A truck brokerage company out of Houston, TX

[Aman A.K.A. Ahamburger]

The other line is UP. These track are now owned by a local firm

Lol, sorry about that. Late, and I must have been thinking about how all these rail lines are south of my location.

From the sounds of it between rail lines, wind power, and fracking there is a lot of that very solvent Texas farm bank money going to work? Helping out a company from Il?

WELCOME TO IRONHORSE RESOURCES, INC.

[bimetalaupt]

A++++,

I WENT BACK INTO THE HISTORY PART OF OUR CITY DEVELOPMENT AND FOUND SOME INTERESTING FACTS OF THE DISTRUBUTION SYSTEM FROM ABILENE AND HEAVY HORSES PULLED MOST OF THE HEAVY WAGONS : JUST LIKE IN WWI.  IN FACT MANY HEAVY HORSES FROM THIS AREA WERE SOLD TO FRANCE FOR PULLING AMO DURING WWI: FORT WORTH WAS KNOW AS THE HEAVY HORSE CAPITAL OF THE WORLD. 

The system for this was taken over by several local trucking firms. 

Just a thought,

BiMetalAuPt

[Aman A.K.A. Ahamburger]

,

Very . So the trucking company bought some horse power, eh? I'm gonna google that. Reminds me of how Ford and IBM were suppliers during WWII..

We were at a local craft fair tonight, well it's actually more of a trade show.. Got me thinking about soap again.. More on that later.

On the topic of WW3 and the banks of Europe/China.. I wonder what we'll supply this time around??

God bless,



Jordan’s King Abdullah: Battling ISIS Is ‘Our Third World War’

[bimetalaupt]

Dec 6, 2014 1:36:37 GMT -5 Aman A.K.A. Ahamburger said:

,

Very . So the trucking company bought some horse power, eh? I'm gonna google that. Reminds me of how Ford and IBM were suppliers during WWII..

We were at a local craft fair tonight, well it's actually more of a trade show.. Got me thinking about soap again.. More on that later.

On the topic of WW3 and the banks of Europe/China.. I wonder what we'll supply this time around??

God bless,



Jordan’s King Abdullah: Battling ISIS Is ‘Our Third World War’

A++++,
I missed a strong point. The RR was built before Trucks were invented.  Merchants Fast Fright had heavy horses in Abilene, TX to transport good from the Rail head to the warehouses. Also during that period in time there was a large Warehouse district near downturn for wholesale supply for the Chisum Trail .   During WWI Merchants FF made A KILLING SELLING OFF THEIR HEAVY HORSES  BY AUCTIONING THEM OFF. 

WWIII WE CAN SELL OF FOOD!! AT A HIGH $$$$$$ PREMIUM.  PRICED BEANS LATELY?ISIS HAS ONLY WAR MATERIAL THEY TOOK.

JUST A THOUGHT.

[Aman A.K.A. Ahamburger]

,

I hear ya. Im not read up on the players around here, but I know it was the same - from train to cart. It's pretty cool how originally trucking companies were run on sheer horse power. Auctioned for horse meat?

We were at the WDM for the Festival of Trees two Friday's ago. There have an old steam train in there to sit in. Talk about a turbine! In fact, in moose jaw you can take a course to operate one. www.wdm.ca/trainingcourses.htm

Food, weapons and fuel, eh? Like horses were fuel in 1, and cheese wiz was invented for 2..

From what I understand the I.S. is in the farming business as well now. They took hold of Australian research, fields and machinery.. I guess will see on that point. However, I have huge doubts that the I.S only has weapons they stole. I'm thinking the Saudis and other Arab nations are supplying via Turkey and Yemen.

I mean just think, Boko Haram and Islamic State fighters in Libya are getting their arms from somewhere, right?

On the insolvency front. European banks miss out on global revival Since we know banks in the East - China - are also insolvent, that means the global banking industry is once again insolvent, no?

God bless,

[bimetalaupt]

A++++,

Real debate in Bari, Italy: who made the pasta? This is worst then then 'fake' wine: it was real good but fake made with grape casting, alcohol , wood chips and water?

Did it taste better then BARILLA?

BiMetalAuPt

1,400 kg of ?Made in Italy? pasta seized in Bari

(ANSA) - Bari, February 19 - Members of the State Forestry Corps on Thursday seized roughly 1,400 kg of 'fake' pasta from an alleged producer based in the southern city of Bari and reported the owner for commercial fraud.
The packaging displayed two Italian flags and the words "Pasta produced using durum wheat from Puglia", while the officers of the forestry corps believe it was made using durum wheat from Mexico, the United States and Canada. In addition, the pasta was not produced by the company in question but by another Bari producer and sold for double the purchase price.
During the inspection the forestry agents also found pasta without the requisite information concerning its production and expiry date.

John Helmer: Poland’s Lobby for Ukraine Enjoyed Kolomoisky Bank Link (Updated)
Posted on February 11, 2015 by Yves Smith



Yves here. Helmer’s deep dives into Ukraine’s corruption are a cross between Graham Greene underworldliness with a contemporary veneer of financial wheeling and dealing, plus lots of think tank laundered influence peddling. For those not up on the dramatis personae in Ukraine, Igor (also spelled Ihor) Kolomoisky is one of the wealthiest men in Ukraine.

By John Helmer, the longest continuously serving foreign correspondent in Russia, and the only western journalist to direct his own bureau independent of single national or commercial ties. Helmer has also been a professor of political science, and an advisor to government heads in Greece, the United States, and Asia. He is the first and only member of a US presidential administration (Jimmy Carter) to establish himself in Russia. Originally published at Dances with BiMetal

PLEASE NOTE: DAXIA BANK IS AND HAS BEEN A LARGE LENDER TO: RUSSIA, POLAND,UKRAINE, GREECE AND ITALY.  MOST KNOWN FOR CORRUPTION.  TALKING SO LONG ABOUT THE BLACK SWANS FLYING IN DEATH FORMATION: AKA PHASES DELAY FORMATION....... DEATH BY GOVERNMENTAL SPENDING AND OVER TAXATION TO PAY OFF THE BONDS: QE3.EU!!  

[Aman A.K.A. Ahamburger]

Who in their right mind would want to forge pasta?? How much margin could there possibly be??

It's hard to be a head of the curve in an instant gratification, 24h Newsworld. At least QE3 is keeping the EU markets going?

Libya, is in deep deep trouble.. War on the shores of Europe and there's excitement because of a debt extension in Greece...

The world is going to change in ways we can't imagine right now, I'm glad that Im going to be working with robots and reclamation.

God bless,

A++++

[Aman A.K.A. Ahamburger]

,

Part of your what if study? Or more like Putin's plan is working?

How hard is it going to be for Putin to march if.. Ukraine looks ready to default? God bless,

[Aman A.K.A. Ahamburger]

Are we starting to see the effects of QE ver. EU start to kick in?

German rescue fund takes over Duesselhyp bank after Heta problems

Germany's deposit protection fund is planning to take over the property lender Duesseldorfer Hypothekenbank AG (DuesselHyp), which has run into problems due to its exposure to Austrian lender Hypo Alpe Adria's "bad bank" Heta.

The German banking association BdB, which runs the fund, is, however, not planning to wind down the bank, but wants to continue its operations.

"The deposit protection fund is granting a guarantee for the Heta bonds to eliminate the immediate risks. The goal is a complete takeover of Duesseldorfer Hypothekenbank," the BdB said in a statement on Sunday.

Regulators this month took control of Heta and imposed a debt moratorium until May 2016 after an outside audit found writedown needs that blew a hole of up to 7.6 billion euros in its balance sheet. This leaves holders of Heta debt in limbo and facing the prospect of losses.

[bimetalaupt]

Mar 15, 2015 21:12:57 GMT -5 Aman A.K.A. Ahamburger said:

Are we starting to see the effects of QE ver. EU start to kick in?

German rescue fund takes over Duesselhyp bank after Heta problems

Germany's deposit protection fund is planning to take over the property lender Duesseldorfer Hypothekenbank AG (DuesselHyp), which has run into problems due to its exposure to Austrian lender Hypo Alpe Adria's "bad bank" Heta.

The German banking association BdB, which runs the fund, is, however, not planning to wind down the bank, but wants to continue its operations.

"The deposit protection fund is granting a guarantee for the Heta bonds to eliminate the immediate risks. The goal is a complete takeover of Duesseldorfer Hypothekenbank," the BdB said in a statement on Sunday.

Regulators this month took control of Heta and imposed a debt moratorium until May 2016 after an outside audit found writedown needs that blew a hole of up to 7.6 billion euros in its balance sheet. Lessons from the Credit-Anstalt CollapseThis leaves holders of Heta debt in limbo and facing the prospect of losses.

Lessons from the Credit-Anstalt Collapse
In May 1931, a Viennese bank named Credit-Anstalt failed. Founded by the famous Rothschild banking family in 1855, Credit-Anstalt was one of the most important financial institutions of the Austro-Hungarian Empire, and its failure came as a shock because it was considered impregnable. The bank not only made loans; it acquired ownership stakes in all kinds of companies throughout the sprawling empire, from sugar producers to the new automobile makers. Its headquarters city, Vienna, was a place of wealth and splendor, famous for its opera, balls, chocolate, psychoanalysis, and the extravagant architecture of the Ringstrasse. The fall of Credit-Anstalt—and the dominoes it helped topple across Continental Europe and the confidence it shredded as far away as the U.S.—wasn't just the failure of a bank: It was a failure of civilization.
Once again, Europe's banking system, and by extension its social fabric, is threatened by bad loans. What had been slow-moving fiscal disasters in Greece, Ireland, and Portugal have gathered speed in recent weeks despite rescue packages designed to calm markets and prevent spreading the contagion to Spain, Belgium, and beyond. Portugal's 10-year borrowing costs hit a record 9.3 percent on Apr. 20, up from 7.4 percent just a month before, even as authorities met in Lisbon on an €80 billion ($116 billion) financing package. The higher that creditors drive up interest rates, the more unaffordable the debt becomes—creating the conditions for the very failure they fear. "All of the rescue packages don't really ensure that we can escape this adverse feedback loop that these countries are being trapped in," Christoph Rieger, head of fixed-income strategy at Frankfurt-based Commerzbank (CRZBY), told Bloomberg Television on Apr. 19.

With weak banking systems still resisting aggressive treatment, it's worth revisiting Credit-Anstalt to plumb for any applicable lessons. Long before 1931, Credit-Anstalt had begun to develop cracks that were invisible to the public. When the Austro-Hungarian Empire broke up after World War I, the bank continued to do business throughout the old empire without recognizing that the world had changed. Suddenly, more knowledgeable local lenders were getting the best deals, leaving Credit-Anstalt with the loans no one else would touch, says Aurel Schubert, an Austrian economist who wrote a 1991 book on the episode called The Credit-Anstalt Crisis of 1931. (There's a modern analogy in Greek banks' unwise loans in Bulgaria, Romania, and Serbia.)

The hyperinflation of 1921-23 that made the price of a beer rise to 4 billion marks badly damaged the finances of Credit-Anstalt as well as Austria itself. The nation was propped up by a 1923 loan from the League of Nations, the predecessor of the U.N. A Dutch citizen was appointed by the League to supervise the Austrian budget. He devised plans to raise taxes while cutting government jobs, pay, and pensions, the same prescription being urged on the weak members of the euro zone today. But Austria continued to stumble.

Bank regulation, meanwhile, was thin and getting thinner: Regulators began to demand a balance sheet just once a year, instead of every six months, says Schubert. As weaker banks failed, Credit-Anstalt took them over at regulators' insistence, becoming more bloated and less profitable with every merger. And the weakening of the economy was damaging lenders' ability to repay.

www.bloomberg.com/bw/magazine/content/11_18/b4226012481756.htm

[Aman A.K.A. Ahamburger]

And now....

Commerzbank latest victim of failed lender Hypo

-The fallout from the collapse of an Austrian bank is rippling across Europe, with a succession of banks warning that they face potentially large losses.

Commerzbank AG said Wednesday that it is bracing for losses on its EUR400 million ($423 million) exposure to the remnants of failed Austrian lender Hypo-Alpe-Adria International Group AG. Several other German banks, as well as a now-defunct Belgian lender, said recently that they, too, were likely to incur losses.

[bimetalaupt]

BRUSSELS, March 10 (Reuters) - Belgian bank Belfius has sharply reduced the risky assets inherited from its former parent Dexia and was likely to remain state owned for the next two years, its chairman said on Tuesday.

Belfius is the successor to the Belgian banking arm of stricken group Dexia which was bailed out by Belgium, France and Luxembourg in 2011. It financed Dexia's short term liquidity needs of about 56 billion euros ($60.2 billion) at the time it was nationalised.

It has since greatly reduced this exposure and said Dexia, which lives on as a portfolio of bonds and loans being wound down, had completely weaned itself off Belfius financing in February 2015.

Belfius said its net profit from its banking and insurance business increased by four percent to 462 million euros ($497 million) in 2014, after using 118 million euros to make provisions for a legacy portfolio of bonds and loan guarantees.

While Belfius will not pay a dividend to its owner, the positive results are good news for the government, which hopes to one day recover a 4 billion euro investment made in 2011.

The state finances of France and Belgium are heavily exposed to Dexia as they guarantee its borrowings of about 70 billion euros, with Belgium responsible for just over half.

A sale of Belfius was not an issue for the immediate future and it would likely remain state-owned in the next two years, Chairman Jos Clijsters told reporters, though he added that this decision was ultimately one the government had to take.

"I don't think it's in anyone's interest to go too quickly," Clijsters told reporters at the group's headquarters in central Brussels.

Apart from cutting its financing ties with Dexia, Belfius reduced its bonds portfolio to 9.5 billion euros in 2014 from 12.4 billion euros in 2013 and slashed its loan guarantees by 300 million euros to 6.5 billion euros.

"A part of our commercial result was used to clean up our past," Clijsters told reporters.

Belfius increased its common equity tier 1 ratio to 13.2 percent from 11.5 percent in 2013 based on fully loaded Basel III capital rules. ($1 = 0.9303 euros) (Editing by Keith Weir)

www.reuters.com/article/2015/03/10/belfius-banque-results-idUSL5N0WC1Z620150310
The end is near for Dexia Bank..Pore Solvert debt needed tier 1 capital because it was not risk free
Just a thought,
BiMetalAuPt

[bimetalaupt]

Commercial Banking News
Belfius Bank ends financing ties with Dexia
BBR Staff Writer Published 11 March 2015

Belgian state-owned bank Belfius has ended financing ties with its former parent company Dexia, which was bailed out in 2011.

Financing

Belfius chairman Jos Clijsters told Reuters that the bank has cut down the risky assets that were inherited from Dexia with plans to remain state-owned for the next two years.

Belgium, France and Luxembourg bailed out Dexia in 2011 and Belfius financed its short term liquidity needs of about €56bn ($60.2bn) during its nationalisation phase.

According to the news agency, in February 2015 Dexia had completely weaned itself off Belfius financing.

In 2014, the net profit of the Belgian bank from its banking and insurance business rose to €462m ($497m) by 4%, after utilising €118m to make provisions for a portfolio of bonds as well as loan guarantees.

Belfius' announcement to drop paying a dividend to Dexia is said to be positive news for the government, which hopes to recover investment of about €4bn that was made in 2011.

Following the collapse, Dexia's Belgian bank was acquired by the Belgian government, which renamed it Belfius.

The French portions of the bank were acquired with support from the French government, while other Dexia businesses were sold off.

With headquarters in Saint-Josse-ten-Noode, Brussels, Franco-Belgian financial institution Dexia was active in public finance and provided retail and commercial banking services to individuals and SMEs, asset management, and insurance.

The bank received taxpayer bailouts for €6bn in 2008, and it became the first big casualty of the 2011 European sovereign debt crisis.

Image: Belfius reduces risky assets inherited from Dexia to remain state-owned. Photo: courtesy of patrisyu/ FreeDigitalPhotos.net

commercialbanking.banking-business-review.com/news/belfius-bank-ends-financing-ties-with-dexia-110315-4529059

[Aman A.K.A. Ahamburger]

I just love how all this stuff is going on while everyone is worried about the FED..

German Banking Association Bails Out Real-Estate Lender

Germany’s private-banking association has jumped in to save real-estate lender Duesseldorfer Hypothekenbank AG from collapse, in the latest sign of how Austria’s decision to halt debt repayments from Heta Asset Resolution is reverberating through Europe’s financial system.

“The private bank association’s deposit insurance is providing a guarantee and shields [the bank from losses on] Heta bonds in order to remove acute risks. The goal is to take over Duesseldorfer Hypothekenbank,” the association, known as BdB, said.

BdB’s move means the planned sale of the real-estate lender, known as Duesselhyp, by U.S. financial investor Lone Star to a consortium of investors won’t go through.

It also represents the second time the BdB is rescuing Duesselhyp, after a first bailout in 2008.

Ratings firm Fitch last week said such an event could occur after Austria’s Financial Market Authority announced it would halt debt repayments from nationalized Heta, the wind-down vehicle established to sort out the unwanted assets of defunct lender Hypo Alpe Adria.

The regulator previously discovered a €7.6 billion ($7.98 billion) capital gap on €18 billion in assets.

Fitch said the German banking sector stands to lose up to 10% of its net profit this year following Austria’s decision, adding that Duesselhyp will need fresh capital to avoid failure.

[bimetalaupt]

The EU banking game is more and more kick the can as seen in this small real estate German lender that has no capital left. This problem was caused directly by Daxia failure  in 2008..That was 7 years ago and still not solved.  Now Daxia bank failure is taking down  the German bank Duesselhyp that was seized by BDB of Germany's Bafin.

Just a thought,

BiMetalAuPt

Why Has Germany Bailed Out A Tiny Bank?

The first German bank has died from Austrian contagion. Duesseldorfer Hypothekenbank AG (“Duesselhyp”), a tiny mortgage lender, has been seized by the Bundesverband Deutsche Banken (BDB), Germany’s association of private banks. According to Reuters,


“The BDB had hammered out a deal over the weekend with financial market watchdog Bafin, the Bundesbank and resolution authority FMSA to provide a guarantee for DuesselHyp’s holdings of around 350 million euros ($370 million) in Heta bonds that are subject to a debt moratorium imposed by Austrian financial regulators.

Duesselhyp’s core tier1 (CT1) capital of 233m euros was not enough to allow it to continue trading after the expected 50% haircut on its holdings of senior unsecured HAA/Heta bonds. Under German law, Lone Star, the private equity group that owned Duesselhyp, was not obliged to contribute more capital, and the planned sale of Duesselhyp to Attestor Capital could not proceed. The BDB’s seizure of Duesselhyp is therefore understandable: the alternative was disorderly collapse.

But it is not immediately clear why the BDB opted to bail out Duesselhyp rather than forcing bail-in of its creditors. After all, Germany has already adopted the European Bank Resolution & Recovery Directive (EBRRD). True, Duesselhyp is tiny: bailing it out could be done entirely from existing funding without recourse to taxpayers. But bailing out a tiny, over-leveraged and under-capitalized bank seems contrary to the spirit if not the law of the EBRRD. So why did the BDB do it?

The reason is the nature of Duesselhyp’s liabilities. Duesselhyp is an issuer of Pfandbriefe, the super-safe covered bonds that are the bedrock of the German financial system. A look at Duesselhyp’s 2014 interim balance sheet shows that Pfandbriefe backed by public sector loans are by far the largest proportion of Duesselhyp’s liabilities: it has issued a rather smaller number of mortgage Pfandbriefe too. The remainder of Duesselhyp’s liabilities are institutional deposits (it has no retail deposits), which are covered by unlimited guarantees from the German deposit fund. In short, almost all of Duesselhyp’s liabilities are covered by explicit or implicit German government guarantees.




Unfortunately its asset base is not nearly so gold-plated. It has a large legacy portfolio of US mortgages and MBS, which it is gradually reducing. More than half of its real estate loan assets are cross-border, and over two-thirds are backed by commercial property. On the capital markets side, the portfolio is dominated by public sector loans, including Spanish, Portuguese and Italian sovereign debt. In short, Duesselhyp’s balance sheet is riskier than it should be. And it is also encumbered and illiquid. There is no easy way of recapitalizing it. Because all its deposits are guaranteed and all its bonds are covered, bailing in creditors to close the capital gap left by the HAA/Heta bond haircut would have been extremely expensive, involving claims on the German bank deposit insurance fund and calls on the Pfandbriefe cover pools. No wonder the BDB opted to bail it out rather than attempt to bail in creditors.




But this is not the first time Duesselhyp has been bailed out. It was previously seized by the BDB when it collapsed in the financial crisis. BDB sold it to Lone Star in 2010, but has now been forced to expropriate it again. To my mind this raises serious questions about the quality of Duesselhyp’s management: to misquote Oscar Wilde, one bailout could be considered unfortunate, but two looks very much like negligence.

There is some support for the negligence theory in Duesselhyp’s 2014 interim report and accounts (cited above). As might be expected after its previous bailout, Duesselhyp is progressively shrinking its balance sheet, divesting riskier assets (including public sector assets from distressed parts of the EU) and rebalancing away from public-sector lending towards (mainly) commercial real estate. In early 2014 it divested its Hungarian assets on grounds of political risk: but it failed even to consider the possibility of losses on its 348m euros worth of HAA/Heta bonds, despite the fact that Austria had already attempted to bail in 2.35bn euros worth of loans from the German Landesbank BayernLB. Despite an apparently robust CT1 capital ratio, a simple leverage calculation gives 2.1%, which suggests that the CT1 capital ratio was achieved by gaming risk weights, probably by taking into account explicit and implicit guarantees of its assets – including, presumably, the Carinthian guarantees on HAA/Heta bonds.

But it is hard to see how Duesselhyp could have protected itself from HAA/Heta bond losses anyway. It has been making losses for years and is seriously short of money. It lacks sufficient capital to provision against losses on its legacy portfolios. Presumably it just tries to divest them as quickly as possible and prays that nothing will go wrong in the meantime. This is hardly a prudent way to run a bank, though there seems to be little else it could do.

The truth is that Duesselhyp is a zombie. Its balance sheet is stuffed with risky legacy loans, it lacks the capital to expand new lending significantly and it is unable to protect itself from negative shocks. Surely it is time to convert it into a “bad bank” – an asset manager whose sole purpose is to eat itself?

Apparently not. The underlying issue is the supposedly risk-free nature of the Pfandbriefe. It is inconceivable that Pfandbriefe could ever default. Back in 2010, Tracy Alloway of FT Alphaville sarcastically observed that the gold-plated nature of the Pfandbriefe meant that their ratings could remain AAA even when their issuers were being systematically downgraded. The ratings agencies Moody’s and S&P attempted to link Pfandbriefe ratings to the ratings of their issuers, and received a dusty response from the German authorities.

To this day, the fiction remains. Suddeutsche Zeitung reports the real reason for the bailout of Duesselhyp (my emphasis):


“Düsselhyp funded primarily through Pfandbriefe – these are secured bonds, which are regarded as virtually risk free and are acquired with the insurers and pension funds. The financial industry wants to avoid casting doubt on the soundness of the mortgage bond market under any circumstances.

(translation by Google – original in German)

So we pretend that Pfandbriefe are backed by dedicated pools of assets, when in reality they are backed by unlimited guarantees from the German banking system as a whole and, as a last resort, from the German government. And similarly, we pretend that the issuers of Pfandbriefe are private sector banks bearing private sector risks, when in reality they would never be allowed to fail, as Hans-Joachim Duebel of the German financial consultancy Finpolconsult explains:





“Recent test cases confirm our expectation of strong support for European covered bonds. During the financial crisis, 19 European issuers defaulted on their senior unsecured or sub-debt, but covered bondholders never needed to rely exclusively on the cover pool. Instead, key operations were transferred to another existing bank, the bank continued to operate after resolution and toxic assets were either transferred to a bad bank or another solution was found. As a result, we think European authorities are very likely to take steps to ensure the continuity of covered bond payments when the bank supporting the covered bonds is in resolution, and we reflect this in our assessment of European covered bonds issued under special covered bond laws.

This creates a simply massive moral hazard problem. There is a clear incentive for market participants to overstate the risk to the financial system of allowing either Pfandbriefe or their issuers to default, thereby ensuring bailout if it all goes wrong. And consequently there is also clear incentive for Pfandbriefe issuers to stuff cover pools with higher-yielding, poorer-quality assets in the near-certain knowledge that they will never be called. Subprime Pfandbriefe, in fact. Of course this couldn’t possibly ever go wrong, now could it?

So tiny Duesselhyp must be bailed out to preserve the fiction that Pfandbriefe are risk-free, even though the degraded nature of their cover pools as a result of German bank adventures in exotic lending products and risky sovereign debt means that they manifestly are not. Both individually and collectively, Pfandbriefe issuers are “too important to fail”. Preserving the Pfandbriefe’s stainless character means keeping zombies alive.

www.forbes.com/sites/francescoppola/2015/03/20/why-has-germany-bailed-out-a-tiny-bank/