Spain’s Surging Bad Loans Cast New Doubts on Bank Cleanup

Spain’s surging bad loans are spurring doubt on whether the government can persuade investors that it can clean up the country’s banks without further damaging public finances.

Non-performing loans as a proportion of total lending jumped to 8.16 percent in February, the highest level since 1994, from less than 1 percent in 2007, according to Bank of Spain data published today. The ratio rose from 7.91 percent in January as 3.8 billion […]

What the actual debt is for all, and per capita?

So, here’s a formula: take $55 or so trillion of reported total debt (from the Fed’s Z-1 report), and $100 or so trillion of unfunded liabilities, and toss in a modest portion of the derivatives that are effectively debt (any thoughts on that one?), and divide by 300 million Americans – we get more than half a million per capita.  Anyone have some other suggestions for the formula to determine […]

Mark Grant Explains The Farce, The Hustle, And The Scam

Submitted by Mark Grant, author of Out of the Box and Onto Wall Street,

“All propaganda has to be popularand has to accommodate itself to the comprehension of the least intelligent ofthose whom it seeks to reach.”

                                                         -He that must not be named

When considering the financial condition of each and every country in the European Union there are certain facts that are left out and left out on […]

Germany’s true debt/GDP at 140%

From Mark Grant, Author of Out of the Box And Onto Wall Street

Germany: The Final Frontier

“It always looks darkest just before it gets totally black.”


Data Mining

Over the last several weeks I have tried to bring a more accurate picture of the debts of a number of nations to you. There has been no bias and the figures have stood on their own merit. […]

On Belgium’s 140% Debt/GDP

From Mark Grant, Author of “Out of the Box and onto Wall Street” 

Belgium – A Great Mistake Of Accuracy

“Only by interrogating the other passengers could I hope to see the light, but when I began to question them, the light, as Macbeth would have said, thickened.”

-Hercule Poirot, Murder on the Orient Express

I have now concluded a much more accurate debt to GDP ratio for Spain and […]

The Dexia Effect

From Mark Grant, author of the financial commentary: “Out of the Box”

The Dexia Effect

As the banks in Europe report out earnings; or the lack thereof in most cases, it becomes clear that the LTRO is helping with liquidity but not with solvency past some very short term point. This is always the case of course but it is beginning to hit home. The balance sheets for many European […]

Japanese Zombie Banks Perfected By Europeans

Peter Tchir notes that “If the Japanese created the ‘zombie’ banks, the Europeans are perfecting them.”

From Peter,

I haven’t found the bond details yet, but I guess there is no rush when you issue it to yourself and send it straight to the ECB.  I can’t imagine there was massive actual demand for this.  Portugal itself cannot issue bonds to the market.  Its 3 year debt yields more than 16%.  […]

The ECB claims they have 40 billion of Italian government bonds on their books from the LTRO. The banks say they pledged 40 billion of Italian government debt. The Italian government doesn’t acknowledge it as debt.

Italy Goes The Full Monti

Via Peter Tchir, of TF Market Advisors,

It was just a little footnote to the LTRO announcement. Just a little statement that 40 billion of the collateral received by the ECB was newly issued, newly guaranteed Italian debt.  The more I think about it, the more uncomfortable I get.

The ECB claims they have 40 billion of Italian government bonds on their books from the LTRO. […]

China’s debt/GDP ratio of 20-30% isn’t as attractive as it looks, writes Patrick Chovanec

Toss in contingent liabilities for the banks, local governments, and things like the railway system, and even optimists put the number at 90%. Pessimists put it at 200% or higher, Greek territory. Remember, Irish government finances were the envy of the world until its real estate boom went bust. In any case, “China’s fiscal resources are not as limitless as they seem.”

Earlier this week, I appeared on Bloomberg, and […]

Fitch: French rating at risk if crisis worsens

By Polya Lesova

LONDON (MarketWatch) — Fitch Ratings said on Wednesday that France’s triple-A credit rating would be at risk if a further intensification of the euro-zone crisis resulted in a much sharper economic downturn in France and a material increase in the risk of contingent liabilities. The ratings company also said that additional consolidation measures are likely to be necessary for France to achieve its 3% of gross domestic […]

Semi-annual OTC Derivatives Statistics (BIS)

(Extract from page 22 of BIS Quarterly Review, September 2011)

Stefan Avdijev

Recently, there has been a substantial amount of interest in the extent to which the category “guarantees extended” 1 of the BIS consolidated banking statistics on an ultimate risk basis could be used as a proxy for the credit default swap (CDS) exposures of various banking systems to individual countries. Several important caveats apply to such an approximation.

First, […]

MOODY’S warns France

(Reuters) – Moody’s warned on Monday it may slap a negative outlook on France’s Aaa credit rating in the next three months if the costs for helping to bail out banks and other euro zone members stretch its budget too much.

The warning comes as European Union leaders are discussing measures to protect the region’s financial system from an expected Greek debt default. Those measures should include injection of capital into […]