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Dexia Nationalization Imminent?

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Ah-hm.... How can Stephen King believe that there will be hyperinflation in the peripheral countries of the Eurozone? Surely, the common currency and free movement across borders mean that hyperinflation would blight all or none?

Weird statement - or a statement reported weirdly - IMHO.

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Yes.

They lent money. A loan made is an asset on a bank balance sheet.

Exactly.....hmm

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Yes.

They lent money. A loan made is an asset on a bank balance sheet.

It's a shame they never had that money in the first place... the miracles of fractional-reserve banking...

(they don't make loans, they give credit !!! = create money out of thin air)

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Ah-hm.... How can Stephen King believe that there will be hyperinflation in the peripheral countries of the Eurozone? Surely, the common currency and free movement across borders mean that hyperinflation would blight all or none?

Weird statement - or a statement reported weirdly - IMHO.

I think that is the first time I have heard a high profile banker talking about the threat of hyperinflation. That's pretty interesting in itself.

I also think he is implying that the countries who will be forced out of the Euro will face hyperinflation, as their new currencies will plummet in value compared to the Euro. As people don't want to hold a plummeting money, they will try to get rid of it, reducing demand further, thus decreasing its value - it's hot potato time!

Additionally, if it looks like the Euro is failing due to a domino rally of failing banks, people may also bail on the Euro too, choosing hard assets rather than vaporous bank promises. This could lead to the same conclusion as above.

When people start to lose faith in a currency, history shows that it is curtains for it pretty quickly.

TBH, now that we have the Internet, electronic payments which can occur without banks and such, the free market could relatively quickly find a number of competing replacements, if it is allowed to. The transition will be painful for many with paper wealth who haven't taken actions to prepare for the above though.

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Printy Printy!

And probably this time they'll take the same step as Mervyn King did and put in provisions to do everything from this point in secret.

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It's a shame they never had that money in the first place... the miracles of fractional-reserve banking...

(they don't make loans, they give credit !!! = create money out of thin air)

Don't start.

Too late.

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I'm surprised Dexia hasn't been in the headlights before now.

I read somewhere that, in terms of percentage to total assets, Dexia has the highest individual exposure to Greece with 33%. Commerzbank was second with 26%.

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I'm surprised Dexia hasn't been in the headlights before now.

I read somewhere that, in terms of percentage to total assets, Dexia has the highest individual exposure to Greece with 33%. Commerzbank was second with 26%.

Frightening if true. I read somewhere that the assets of Dexia are about 180% of Belgium GDP, and that that the national debt of Belgium is 100% of GDP (let me know if I am wrong).

So the Greek bonds on the books of Dexia are about 60% of Belgium GDP. How are they going to make good on that? We are not looking at a 10% haircut for creditors here, Greece isnt going to be able to pay a penny on its debts, the best that the creditors can hope for is that the debts are transferred elsewhere. And if we get a period of negative growth, which seems likely, just how on earth is Belgium going to cope, a nation without a government, that wants to split itself in two.

Dexia and Belgium must have creditors too. They arent going to get paid.

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Frightening if true. I read somewhere that the assets of Dexia are about 180% of Belgium GDP, and that that the national debt of Belgium is 100% of GDP (let me know if I am wrong).

So the Greek bonds on the books of Dexia are about 60% of Belgium GDP. How are they going to make good on that? We are not looking at a 10% haircut for creditors here, Greece isnt going to be able to pay a penny on its debts, the best that the creditors can hope for is that the debts are transferred elsewhere. And if we get a period of negative growth, which seems likely, just how on earth is Belgium going to cope, a nation without a government, that wants to split itself in two.

Dexia and Belgium must have creditors too. They arent going to get paid.

A slave doesn't need to search for a new slave master; he can just be free.

Belgium sounds like a domino which is waiting to fall, but many have forgotten about. They're either going to draw an even more illegal bond up (100 years or such such f*ckwittery) to thieve from the future children, grandchildren, great grandchildren and great, great grandchildren or they're going to have to admit that they are bust too.

And so castles made of sand, fall in the sea, eventually.

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http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8803585/Moodys-threat-to-downgrade-Dexia-as-officials-meet.html

The threat to downgrade Dexia comes as French and German government officials are meeting to discuss the bank’s financial situation with speculation mounting the business could be broken up.

As a major provider of lending to French and Belgium local governments Dexia is seen as a vital part of the countries’ banking systems and one option understood to be under discussion would be hive off the business as a standalone unit.

.....

A new bailout would mark the second time in three years the bank has had to be rescued by the French and Belgium taxpayer.

....

The latest worries rest on the bank’s exposure to Greek and Italian local government borrowers, with concern growing it will be hit by new losses if the authorities are unable to repay their debts or force haircuts on the value of the loans.

So it's only the second rescue.....

Luckily the local Belgium and French authorities are good for it??

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Ah-hm.... How can Stephen King believe that there will be hyperinflation in the peripheral countries of the Eurozone? Surely, the common currency and free movement across borders mean that hyperinflation would blight all or none?

Weird statement - or a statement reported weirdly - IMHO.

If it collapses. i.e. their debts denominated in euros will be too big.

This is the argument for the piggies/peripherals remaining in the euro and Germany exiting instead. i.e. The piggy debts remain in euros and they can devalue whilst the German banks have to write off their losses on euro debts as the new DM revalues up. Since they're going to have to account for the losses they've already incurred by suppressing the DM for the last decade anyway, this seems like the best solution. Germany exit.

But he works for a bank, thus he's in favour of socialised bailouts.

Edited by Red Knight

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If it collapses. i.e. their debts denominated in euros will be too big.

This is the argument for the piggies/peripherals remaining in the euro and Germany exiting instead. i.e. The piggy debts remain in euros and they can devalue whilst the German banks have to write off their losses on euro debts as the new DM revalues up. Since they're going to have to account for the losses they've already incurred by suppressing the DM for the last decade anyway, this seems like the best solution. Germany exit.

But he works for a bank, thus he's in favour of socialised bailouts.

Indeed, I can smell the stench of banker scaremongering. I can only assume HSBC would lose a fair bit of money if Dexia went down.

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Belgium sounds like a domino which is waiting to fall, but many have forgotten about.

Belgium doesn't have a lot of spare capacity for bank debt.

A couple of years ago, if you remember, it had to nationalise Fortis.

Dexia was already in trouble then. Apparently it is a Franco-Belgian bank and the French Government is a shareholder, so that could help to defray some costs.

link

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I can only assume HSBC would lose a fair bit of money if Dexia went down.

I have the feeling that Dexia are sometimes (often?) the bank used by other financial corporations... so, while they might not have a massive retail presence, they underpin many financial corporations' assets unbeknown to the individual investors. I don't know if HSBC use them - but it wouldn't be a great surprise to me if they did - or, at least, if some of HSBC's big debtors are dependent on Dexia.

I think this makes Dexia a bank to watch...

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Belgium doesn't have a lot of spare capacity for bank debt.

A couple of years ago, if you remember, it had to nationalise Fortis.

Dexia was already in trouble then. Apparently it is a Franco-Belgian bank and the French Government is a shareholder, so that could help to defray some costs.

link

It also had to nationalise KBC which is/was also rather large.

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Belgium sounds like a domino which is waiting to fall, but many have forgotten about. They're either going to draw an even more illegal bond up (100 years or such such f*ckwittery) to thieve from the future children, grandchildren, great grandchildren and great, great grandchildren or they're going to have to admit that they are bust too.

Incidentally, "Belgium" may not last much longer; for years the Flemish and the Walloon have been engaged in a Frank Exchange of Views.

If "Belgium" splits and no longer exists, what would happen to its debts? Serious question BTW.

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Do you know if they underwrite any ETFs? I mean it was only when AIGP went to zero in 2008 that people who thought they were safe discovered they had nada..

Sorry... I don't "know" any specifics. All I'm aware of is that they were among a relatively small group of banks actively courting such sorts of business in recent years... State Street being another. I've no idea who actually uses them.

Edited by A.steve

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Incidentally, "Belgium" may not last much longer; for years the Flemish and the Walloon have been engaged in a Frank Exchange of Views.

If "Belgium" splits and no longer exists, what would happen to its debts? Serious question BTW.

If it no longer exists, then unless other parties are willing to take on the debt, I would say it would be a default. Who knows though? It's an interesting question!

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  • 331 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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