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by Phoenix Capital Research
By the look of things, Europe’s banking system is breaking down again.
Bankia’s shareholders have received a nasty new year’s surprise. They may lose most of their investments or even all of them says the Spanish bank rescue fund in its latest report.
According to FROB, the Fund for Orderly Bank Restructuring, Bankia has a negative value of 4.2 billion euros, and its parent group BFA is 10.4 bn in the red.
Valuation [...] From Zerohedge: Over the past several days there had been concerns that even if Greece managed to roll its maturing €5 billion in Bills with a new Bill issuance (which it did earlier today), it would be unable to actuallyobtain cash for this worthless paper, through a repo with the European Central Bank. The reason being that last week the ECB allowed a temporary extension in Greek ELA collateral eligibility to expire, [...] The former boss of a Greek bank has admitted transferring €8m of personal funds to buy London property months before his stricken bank was broken up by the government. Theodoros Pantalakis, former chief executive of Agricultural Bank (ATEbank), exported the funds last year as the bank headed for insolvency. The banker defended his actions saying that he had declared the transfer at the time and had paid tax on it. Mr Pantalakis [...] AFP - Greece on Monday said it was reviving efforts to conclude an accord with Switzerland in order to tax Greek bank account holders there, as central bank data showed a large outflow of deposits abroad. “The Swiss government has been asked to reactivate the process to sign an accord between the two countries on the taxation of deposits and other instruments maintained by Greek citizens in Swiss banks,” the finance ministry [...] Jefferies Read more: http://www.businessinsider.com/chart-greece-deposits-2012-6#ixzz1yBL94OM2 http://www.bbc.co.uk/news/business/ Zero Hedge Yesterday, we did an update of the Greek bank jog, when noting that between €100-€500 million per day was being withdrawn from Greek banks based on Kathimerini reports. 24 hours later the jog has become a trot with the most recent estimate from Reuters now estimated at nearly double: “Combined daily deposit outflows from the major Greek banks have reached 500-800 million euros over the past few days, with the [...] Five days ahead of the Greek parliamentary re-vote, the media propaganda machine has gone mute due to the moratorium on the RAND() known as popular polling: forgotten are the days when Syriza’ popularity rating would swing from -100 to +100 in the span of hours, Diebold notwithstanding. Which leaves the media machine just one tactic: updates on the economic collapse as a tacit suggestion of what may happen if situation [...] Reuters If Greece left the euro, living standards would plummet, incomes would be slashed by more than half, and inflation and unemployment would skyrocket, the National Bank of Greece warned on Tuesday. In a report released ahead of an election on June 17 that may determine whether the country stays in the single currency, the country’s biggest bank said the risk of Athens exiting the euro was no longer just a theoretical possibility, warning [...] via NYT: AS problems mount in the euro zone, it’s increasingly evident that we’ve been witnessing an institutional failure of monumental proportions. What is to be done about Greece? Simply keeping it in the euro zone won’t help much, even if it’s possible. The continuing crisis has sapped confidence in banks not only in Greece, but also in Spain, Italy, Portugal and Ireland, though to varying degrees. Unless there are explicit guarantees [...] by Tyler Durden We have spent a considerable amount of time in the last week or two explaining just why depositor withdrawals (or bank runs) are the death knell for the Euro experiment. We first described the ‘run on banks and governments’ on the basis of the potential for overnight loss of ‘fungibility’ back in December but the escalation last week in Greece (and the contagion to Spain’s Bankia) signals things are shifting to 11 on [...] by Tyler Durden
We have already provided much cold, hard, clinical facts on the hypothetical Greek EMU exit on countless occasions before. Yet Jefferies’ David Zervos has done it with such a peculiar flair which we have not encountered before, that we felt compelled to share with it readers. Zervos’ flair shines particularly when analyzing what happens at T-0, i.e., June 16, i.e., the day before Greek election day, i.e., the last [...]
We already posted a full run down from JPM on what the immediate costs from a Greek EMU exit would be (starting at €400 billion and going higher), but one point that bears repeating is just how much borrowing capacity Greece has under the ELA in the aftermath of today’s news that the ECB is leaving Greek banks to fend for themselves until such time as the Greek recapitalization payment is wired [...] The problem with bank runs is that once they start, they don’t stop. And while the world was conveniently distracted by events in Greece, debating whether or not people were withdrawing money in droves (they were), the real bank run happened elsewhere, namely in Spain, where just nationalized bank Bankia moments ago plunged 30% and was halted following an El Mundo report that “customers had withdrawn €1 billion over the [...] by Michael
Money is being pulled out of Greek banks at an alarming rate, and if something dramatic is not done quickly Greek banks are going to start dropping like flies. As I detailed yesterday, people do not want to be stuck with euros in Greek banks when Greece leaves the euro and converts back to the drachma. The fear is that all existing euros in Greek banks would be converted over [...] Source: UBS Financial Markets Greek ATM Lines And Expiration Bluffing Send Stocks South – Tuesday’s trading turned strange even before the market had opened in New York. An oversold condition and decent data at 8:30 had U.S. futures bubbling on the upside early on. Suddenly, around 9:00 EDT, lightening seemed to strike. Futures tanked and European markets went into a freefall. “What just happened” was the cry that echoed across the floor. The trigger was the [...] Stocks faded in the final hour of trading Tuesday to finish lower following news that Greek depositors withdrew 700 million euros from the nation’s banking system and after Greece’s leaders failed to agree on a coalition government. The S&P 500 closed at 3-month lows, while the Dow logged its ninth loss in the last 10 sessions. Major averages are on pace for their biggest monthly losses since last September. http://www.cnbc.com/id/47428134 http://www.ibtimes.com/articles/341400/20120515/grexit-bank-run-prospects-continue-weigh-euro.htm Michael Snyder The bank runs that we are watching right now in Greece are shocking, but they are only just the beginning. Since May 6th, nearly one billion dollars has been withdrawn from Greek banks. For a small nation like Greece, that is an absolutely catastrophic number. At this point, the entire Greek banking system is in danger of collapsing. If you had money in a Greek bank, why [...] While the long-term decline in bank deposits over the past 3 years has been well documented both on Zero Hedge and elsewhere, it is the most recent, acute post-election phase that has not gotten much coverage. Minutes ago Bloomberg sent out a notice that things in Greece may be on the verge of the final collapse. From Bloomberg: “Anxious Greeks have withdrawn as much as 700 million euros ($893 million) from the nation’s banks [...] Just when you thought you’d seen the worst, its gets worsterer. While US equities are oscillating in a broad range trying to ignore the Eurocalypse, European asset markets had one of the worst days of the year today across the board. Spanish and Italian bond spreads are 40bps wider this week alone (adding 15-20bps today) and Portugal (sorry Stevie) are 52bps wider this week as our prediction that a compressed basis would [...] On the news that Greece is heading for new elections, this is the reaction of Greek banks stocks. businessinsider Greek bank stocks basically just behave like broader European markets, except in an extremely high-beta exaggerated manner.
Today Europe is getting smoked. So Greek bank stocks are getting killed. Piraeus Bank is off 10.5%. National Bank of Greece is down 4%. Alpha Bank is down 5.7%. Anyway, in addition to the political problems, the country is quickly running out of cash again. Dow Jones FX Trader cites a news report saying that PM Papademos has warned that the country [...] Just headlines: Fitch Cuts Outlook On UK Rating To Negative Amid Elevated Debt (Reuters) – Cash deposits to cover the declining value of guarantees posted against European Central Bank loans rose to their highest level ever last week, balance sheet data showed on Tuesday. Deposits related to margin calls – money that banks place at the ECB after the market value of their collateral value declines – ticked up to 17.3 billion euros at the end of last week from 17.1 billion the week [...] The first details of the Greek bond deal are leaking out via Reuters, and we now learn the reason for the Greek bond sell off in recent days: UNDER GREEK DEBT SWAP, PRIVATE SECTOR WILL GET 3% COUPON ON BONDS FROM 2012-20, 3.75% COUPON FROM 2021 ONWARDS [2021... LOL] The front pages of three Greek newspapers in Athens on Thursday, depicting German Finance Minister Wolfgang Schaeuble, from left to right, Dimokratia “In the gas chamber,” Eleftheros Typos ”Schaeuble’s Junta” and Ta Nea ”What the Germans want”. Photo: AP From Telegraph: The regime of drastic cuts has tipped the economy into a violent downward spiral. They thought that private industry would muddle through as the state went through the austerity mincer. What the [...] All Greek bank accounts will be frozen, with emergency measures detailed to prevent the flight of capital. Mac Slavo That a default in Europe is coming has never been the question. For the astute observer the only thing at issue is how and when it will happen. While the mainstream financial media and government officials have tried to spin this story as one that involves only Greek debt, the fact [...] kingworldnews.com With gold at $1,725 and silver near $34, today King World News interviewed James Turk out of Spain. Turk told King World News that even though the markets are quiet, the reality is we are getting very close to a “buying panic.” Turk also stated that deflation is not in the cards. Here is what Turk had to say about the situation: “We’re seeing a lot of smoke and mirrors here [...] From Spiegel.de: Many Greeks are draining their savings accounts because they are out of work, face rising taxes or are afraid the country will be forced to leave the euro zone. By withdrawing money, they are forcing banks to scale back their lending – and are inadvertently making the recession even worse. Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. “In September and [...] Just headlines: Spanish jobless rate soars to near 15-year high |
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