BREAKING…..Eurobanks ‘heavily exposed to Detroit and other US cities’

What always makes me laugh in a vaguely nervous way is when I hear soundbites/watch videos/read interviews with the Wanksters, where they claim that all their derivative debts “are netted”.

Let me explain something here. Not even Lloyd Blankfein with a direct feed from Jehovah has the faintest bloody clue whether his 103 times leveraged Goldin Sacks is netted with a Chinese takeaway or an Aussie saltwater crocodile.

In the last 24 hours, it has begun to be apparent that several eurozone banks have large exposures to the Detroit collapse, through complex certificates of participation. The startlingly unlovely UBS sold such certificates over a long period – up to a total of around one and a half billion dollars. Most of this sub-sub prime bogpaper ended up with European banks, all of whom of course knew what they were doing. Not.

One particular trail involves Hypo-Real Estate, stranded with $200m of this bollocks via Irish subsidiary Depfa, as well as Dexia. The last of these, says the Wall Street Journal, is the proud owner of ‘essentially worthless paper’. The complex technical structures of this Andrex investment also include an interest rate swap for new improved bamboozlement among all those suckers who bought it.

As most general and specialist US media are now confidently predicting at least another dozen or so Detroits in short order, I’d imagine that almost anything could happen from here on. It would be acidically ironic, would it not, if these cockups led to the collapse of a major in Europe. Then two side-by-side arguments could continue far into the future, about (1) whose fault was it globally – the EU or the US? and (2) whose fault was it in the US – Democrats or Republicans? It wuzz dem pesky Democrat europhiles, honest injun. Or dem Republican isolationist neoliberals, sure was. Well, one of the two anyway.

If one keeps things elegantly simple, they work better. If you deliberately make them complex, they fail the purchaser….but as ever, give the vendor umpteen ways to avoid prison.

Hence the global complication. The madness goes on.

Earlier at The Slog: Why do Governments employ so many crooks?

31 thoughts on “BREAKING…..Eurobanks ‘heavily exposed to Detroit and other US cities’

  1. The Detroit foul up will end up with another bail -in, the pensioners. It seems almost inevitable that the pensions and health benefits of former employees will be eventually cut, probably severely, and act as a template for all the other state, municipal and corporate restructurings that will be needed in the US and elsewhere.

    • And who do you think is more deserving of cuts?
      People who lent money to detroit, or people who awarded themselves money from detroit?

      • A fine haircut for the bankers AND the ‘public servants’.
        Depositors will be gone when this one hits.

      • Fine bring the revolution on! Hopefully, we can have a repeat of the Civil War. The FEMA camps are ready and the Administration will distract attention by starting WWIII. They have just quietly changed the nuclear strategy that they can nuke anyone, anywhere, any time, No more waiting to be struck first.

  2. Pingback: John Ward – Breaking … Eurobanks ‘Heavily Exposed To Detroit And Other US Cities’ – 25 July 2013 | Lucas 2012 Infos

  3. Reblogged this on Machholz's Blog and commented:
    This bank is no longer under Irish regulation and even when it was the Irish authorities were incompetent to say the least or better dare I say they were looking the other way as they wined and dined the Hot moneymen all over Dublin. The moneymen in the IFSC are still in control and they have X politicians as front men like John Bruton who recently was calling for less regulation can you belive?.
    We here in Ireland are true surfs and debt slaves servicing faceless bondholders gambling debts !
    This Den of toxic hot-money (IFSC)should be closed down and the operators should all be in Jail for laundering money !
    http://www.irisheconomy.ie/index.php/2012/06/25/depfa-bank-collapse-and-the-irish-taxpayer/

  4. This bank is no longer under Irish regulation and even when it was the Irish authorities were incompetent to say the least or better dare I say they were looking the other way as they wined and dined the Hot moneymen all over Dublin. The moneymen in the IFSC are still in control and they have X politicians as front men like John Bruton who recently was calling for less regulation can you belive?.
    We here in Ireland are true surfs and debt slaves servicing faceless bondholders gambling debts !
    This Den of toxic hot-money (IFSC)should be closed down and the operators should all be in Jail for laundering money !

  5. Poor Obama, cities collapsing and a war to start….What’s a chap to do?
    On a more serious note I can’t believe that the exposure was a surprise to anyone in the know, there’s a bigger picture somewhere, this is all quite deliberate methinks. What has Geli to gain from this? Can’t believe she didn’t know what was going on. I mean, major US city goes t*ts up and there seems to be more to follow and it all seems ‘matter of fact’ Does this not seem strange to anybody?

    • @ kfc “What has Geli to gain from this?”
      Errr ! Not a lot actually ! As I understand it the entire Hypo-Real Estate group including Irish subsidiary Depfa, which it is trying to sell (same EU Bale Out rules as Lloyds branches and Co-op) is fully Nationalised and owned by the German taxpayer under their SoFFin fund (Sonderfonds Finanzmarktstabilisierung – Special Financial Market Stabilization Funds). It is also the second largest commercial property lender in Germany.

      One wonders how many more toxic German Financial Disasters Geli has been quietly “rescuing” behind the scenes ? She may not be seen as the ‘safe pair of hands’ that the German Electorate presently perceive, if a lot more of these crawl out of the woodwork.

      I do agree that the irony would be remarkable if it was US debt defaults that crashed the EZ Banks after all that Senate grumbling about Europe messin with their nice lil ole economy back home !

      • @GrahamD, You may well be right but, I don’t trust these scumbags, it would seem that not much happens ‘by accident’ there is always an ulterior motive, it’s just that’s it’s not always obvious. Geli is, the most powerful woman in Europe at present, and all depends on her the way things are, she, must be in the loop, and sure as eggs are eggs, nothing at the moment is going to upset her ‘re-election’ So, yes, she does have a vested interest, it’s where the ‘vested interest’ lies is the key to this.

  6. I knew it! It’s like a big stone thrown in the pond, the ripples are now coming across the Atlantic towards us! Who can tell what the ultimate consequences of this ponzi/malversation scheme will be?
    Something very unpleasant, I dare say, but for who?

  7. I recommend Julien Temple’s film ‘Requiem For Detroit’ to every Slogger as a fine piece of work and a warning of what is coming to an out of date metropolis near you too.

  8. You’re absolutely right, John. This is a “Lehman moment” and the banks are only now beginning to realize the carnage that must follow.

    Expect a “surprise” bailout of Detroit by the Federal Reserve and US Treasury when the extent of the fallout becomes clear. If there is one pattern that is now abundantly clear, it is that when the domino effect becomes apparent government will attempt to backstop.

  9. Now that gives a new meaning to the EU -USA free trade agreement,we get there toilet paper with deposits brown stuff all over them,now what did they get back in return,the reason they need Syria & Iran is there assets,never mind who’s in charge
    Anyone notice the death rate in Britain has risen sharply recently,no cause for alarm Hunt’s on the case

  10. I can’t believe RBS, the Co-Op, Lloyds, HSBC, Nationwide haven’t been mentioned.
    $3.9 trillion muni-bond market! They must be holding some of this manure. I mean, look at the yield!!

  11. Well, one thing we can all be assured of, there will be a massive can kicking exercise already taking shape. For these scumbags are going to make damn sure that they ain’t gonna suffer all the time that there is another sucker in line to take the sh*t for them. Oh, that would be us…

  12. ‘IMF fears Fed tapering could ‘reignite’ euro debt crisis
    The tapering of stimulus by the US Federal Reserve risks reigniting the eurozone debt crisis and pushing the weakest countries into a “debt-deflation spiral”, the International Monetary Fund has warned. ‘
    http://www.telegraph.co.uk/finance/economics/10202278/IMF-fears-Fed-tapering-could-reignite-euro-debt-crisis.html

    You gotta hand it to these guys, not much gets past them does it? Who would have thought that the ending of ‘free’ money would have such a knock on effect?
    It’s not hard to see why these people are at the top of their game is it?

  13. Pingback: At the End of the Day | The Slog. 3-D bollocks deconstruction

  14. Detroit is an odd one. As pointed out here:

    http://realitybloger.wordpress.com/2013/07/20/detroit-the-latest-bankruptcy-lie/

    Something smells really bad. Note:- “Thus, the obvious conspiracy of a government appealing to government to get government permission to default on its debt should not be lost on the reader;” [quote}

    Now to look at the 2012 Detroit CAFR: Link to pdf below. Note especially the Independent auditors letter of report.

    As an aside, looking at the pictures in the pdf of the officials I see no diversity nor multi culti. Every man jack of them is coloured. Perhaps that is representative, I really do not know, but my sister in law lived in Michigan and it was a mixed race area. Has mass immigration in the US gone even further than here? That is awful.

    Anyway, as you scroll through the pdf all you see is the term: Unaudited. I would surmise, perhaps unjustly, that all the civic funds have been diverted into shares. As with California last year when that state tried for bankruptcy, it was soon seen that Ca had a huge debit balance in its investment portfolio.

    Politicians are completely dishonest and one listens to them seriously at ones own risk.

    http://emma.msrb.org/EP731053-EP567459-EP968879.pdf

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