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 Post subject: The contagion spreads
PostPosted: Mon Sep 29, 2008 12:49 am 
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The story was moving so fast at the time of writing that different newspapers and agencies were telling different stories.

The latest, however, is that the Belgian-Dutch banking and insurance company Fortis is to be partially nationalised, with the governments of Netherlands, Belgium and Luxembourg taking over substantial parts of it.

View full article here

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 Post subject: Re: The contagion spreads
PostPosted: Mon Sep 29, 2008 3:08 am 

Joined: Sun Jul 03, 2005 11:11 am
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Watch for the ECB taking on debt. Like it did with the Spanish banks.
This can only be honoured by National banks in the euro which have credibility left.
Hang on to your wallets Germany (and don't accept any euros without a K ;) )

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 Post subject: Re: The contagion spreads
PostPosted: Mon Sep 29, 2008 10:34 am 

Joined: Mon Aug 01, 2005 8:47 pm
Posts: 4434
Quote:
Hang on to your wallets Germany


Deutsche bank is leveraged at over 50 times and has liabilities = to @ 80 % of German GDP, Fortis was only 33 times leveraged......Barclays is over 60 times and has liabilities of @ 1.3 trillion, ie: greater than UK GDP!!!!!!!.

If you want to sleep don't read this

I'm sure it will do wonders for European integration/unity, if a German bank needs help and problems arise, because the Spaniards have already cleaned the ECB out.......


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 Post subject: Re: The contagion spreads
PostPosted: Tue Sep 30, 2008 3:14 am 

Joined: Mon Jan 14, 2008 1:36 am
Posts: 513
it's not how leveraged a bank is, it is the quality of its debt


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 Post subject: Re: The contagion spreads
PostPosted: Tue Sep 30, 2008 10:36 am 

Joined: Mon Aug 01, 2005 8:47 pm
Posts: 4434
Quote:
it's not how leveraged a bank is, it is the quality of its debt


Strictly speaking correct.....but in times like these, even the best names can have problems and at 50 times, you only need a 2 % loss on yr portfolio to wipe you out. 50 times is not prudent banking at any time and haveing gone that far, it's highly unlikely their book is of high quality either.


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 Post subject: Re: The contagion spreads
PostPosted: Tue Sep 30, 2008 11:09 am 

Joined: Sun Jul 03, 2005 11:11 am
Posts: 6700
Quote:
because the Spaniards have already cleaned the ECB out.......


As I understand it the ECB has no reserves to draw on. The debt it took on from the Spanish seems to be unsecured against anything other than its own PR, because 'No-one will let the Euro collapse, will they?'. I do not see how the ECB can get through this without expropriating National funds because, to keep the euro united, National banks themselves will need support... from other National Banks...
Nobody is making a big enough noise about the cause of the European problems.
A whole lot of countries which had property prices commensurate with the 10% + average mortgage rates for their currency suddenly had a mandated euro interest rate imposed at below 6%, nearly doubling the value of property throughout the land. With a launch pad like that it is no wonder that the markets of Ireland, Spain, Italy and Greece way overshot their realistic value, and would have done even if the US hadn't been screwing its own market by regulatory imposition.

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 Post subject: Re: The contagion spreads
PostPosted: Tue Sep 30, 2008 11:50 am 

Joined: Mon Aug 01, 2005 8:47 pm
Posts: 4434
The ECB's reserves are it's member banks/countries reserves, so Germany is in the hole technically, if the ECB wastes money propping up basket cases.

ECB Reserves

This is an untested area and liable to throw up all sorts of problems, if the situation gets worse.


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