ezonecontagion3515“Who do you think you are kidding Mr Draghi/if you think contagion’s gone”

With three days to go before an ‘important’ Greec/eurogroupe meeting – and four days to go before British election voting booths close – the Bank for International Settlements has handed both Syriza and UKip a tactical nuke…if they’re willing to use it.

There was a knockout (in every sense of the word) chart on Twitter Sunday evening from @Edward_hugh which puts into sharp focus the Trojan efforts made by EU members to ensure they have nothing to fear from Greek default contagion. And yes, I have my foot to the floor on the iron pedal here. For your greater astonishment, I have added yellow and black asterisks to show some of the more horrifying exposures. Put together, they look like a flashers’ convention:

eudebtexposure3515ptnetJust get those French and German exposures to Spain and Italy. Marvel at the German and British exposures to Ireland. And in relative size terms cf the economy, look at the Dutch exposure to all of them.

Then ask yourself why French, German and Dutch Troikanauts are keen to dissuade debtors from being inspired by Greece…exposure to which is minimal by comparison.

Ah-haaa. Then wonder at the fact that the Chairman of the eurozone central bank is an Italian. Then observe (sorry, the asterisks wouldn’t fit) what will happen to Spain when Portugal and Italy go down the pan.

But worst of all, eyeball that British exposure to Ireland, Spain and Italy in terms of potential bank balance sheet shredding. It adds up to €260bn. Then work out that the majority of that is sitting in the nationalised RBS crock of unplumbed sh*t. And then ask yourself what the Chancellor of the Day is going to do about a Government-owned bank which will be palpably unable to cope with a shock like that. No wonder Bank of England boss Mark Carney is building stress-test model upon stress-test model.

Now of course, Nigel Farage, Yanis Varoufakis and Alexis Tsipras are already well aware of this situation. With all three of them running out of time, it might be to their advantage to start pressing their advantage…up to and including having their goalkeepers in the opposition penalty area at corners. And if they don’t (given this isn’t a Friendly) we might be entitled to ask why.

Meanwhile, I will end here by starting the day on a more cheery note. A Chinese banker who lost $484,000 for a bank by pulling an embezzlement scam has been shot dead by firing squad.

Most read at The Slog in the last five days: Wolfgang Schäuble – German liar, US spy


  1. I am led to believe that the next great financial crisis….aka….. BIG BANG will involve a MASS DEFAULT like a series of dominoes, making 2008 seem very mild. Apparently late 2015 building up to 2016/17.
    Cash is KING


  2. I suspect both UKIP and Syriza will ‘overlook’ this tactical nuke, then the question is why? There is so much that we are not privy to going on behind the scenes, we are just guessing with what little scraps of information that we are fed, why, for example would BIS give up this potential advantage to UKIP and Syriza? What advantage is it to them? What don’t we know? So many questions and so few truthful answers.


  3. Yes Bob, we are due a Minsky Moment is the next year or two. As Minsky pointed out, bull markets that rise steadily, on the back of increased leverage, are the most prone to sudden instability. Usually takes seven to eight years for the Ponzi phase of the cycle to pop.

    As for physical gold, Vlad and the Chinese are still backing up the truck. They know what’s coming.


  4. The relatively small amount for Greece if you look at it is backstopping the rest.
    If that goes serious questions will be asked on all the rest.


  5. Hang on a minute. That chart is over 5 years old! Is the present situation anything like that? Haven’t the Germans at least sloughed off their exposure?


  6. Indigo,Indigo,Indigo “What has Farage or UKIP got to do with Greece? Seriously,…. U..K..I..P.., it’s there in the name.
    If i need to inform you why? then you have no idea what UKip policies are,let alone how to achieve them!


  7. Farage has nothing to do with it other than supporting the economics that brought it about,but Ukip existence is based on getting it out of the EU & if it wasn’t for the fact that he supports the economic theory that created this mess,then has John says it would be very explosive & beneficial to that aim!


  8. The Big One is France’s exposure to Italy .. with 3 000 000 000 000 €€ debt an Italian Crisis will be instantly systemic .Italy is the country that will decide the fate of the Euro once they realise they can’t keep Greece in . JW you should look at car production output in France , Italy and Germany since 2000 . All you need to know is in those figures ;


  9. Well I’m pleased I took the time to read the piece to the end. Nice to see some accountability in the banking sector for once.
    John, I know you’re not convinced by UKIP. Allow me the indulgence of hoping you are wrong. (Please, please, pretty please!)


  10. This election is turning out to be the gift that just keeps on giving….

    ‘PIERS MORGAN: Should we let hypocritical clowns like Brand and Coogan tell us how to vote? Don’t make me laugh’.
    Piers Morgan, pillar of all things moral and just.

    It’s his kind that constantly remind me of just how fitting the term ‘Scumbag’ fits some people.


  11. As far as JW is concerned it’s “You might very well think that: I couldn’t possibly comment”


  12. Agreed but, unless they take everything we have there is no way the can balance the books. Who ever wins in whatever way in the UK, will introduce draconian measures as, that’s the only time they can get away with it.


  13. @ kfc
    “Agreed but, unless they take everything we have there is no way the can balance the books”
    Don’t worry, they won’t take everything you have. But that 100,000 Euro guarantee, ?.. forget it. They know that capital controls will scare the monkeys into flight, but each time you move money,.. they will shave it. But don’t worry, they will leave you enough to survive on.


  14. Totally agree with you there kfc , I am totally amazed at how Farage seems to be doing his damnedest to put off potential UKIP voters.


  15. Absolutely. And Littlejohn would rather vote for Savile than Miliband apparently!
    These lying media toadies would do anything to curry favour with the establishment.


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