Tuesday, January 22, 2008

More bad news from Germany’s embattled banking sector

WestLB to Post EU1 Billion Loss, Will Raise Capital

A few billion Euro here, a few billion Euro there, pretty soon your currency is in the toilet. I will repeat: The Euro is a sham
When ClubMed comes clean, we'll be getting over 2 Euro to the Sterling.


Jan. 21 (Bloomberg) -- WestLB AG, the German state-owned bank reeling from subprime investments and bad trades, said it had a full-year loss of about 1 billion euros ($1.45 billion) and may set aside the same amount for further writedowns. The state of North Rhine-Westphalia and the Westphalia-Lippe and Rhineland savings banks associations, which own a majority of the Dusseldorf-based lender, will cover the loss and possible further writedowns of up to 1 billion euros, WestLB said today.

Posted by lvmreader @ 02:03 AM (938 views)
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13 thoughts on “More bad news from Germany’s embattled banking sector

  • When can we expect the major cracks to start showing in this unified Europe? When will Germany realise it was better off with the Deutchmark and Italy was better off with the lira and France was better of with the Franc and………………………………………………………? The inability to manipulate their own currency exchange rates to suit individual needs will begin to really hurt individual economies. Europe is not the USA, the Euro will work in say 100 yeras or so, but will the EU survive that long?

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  • planning4acrash says:

    Remember that the idea of fiddling inflation figures, using CPI instead of RPI, was borrowed from the EU. We took this on at a later stage and are less affected.

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  • The final bill will be £80bn for the Northern Crock, and that is just one… so I should wait before speaking

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  • planning4acrash says:

    How about all the German banks exposed? There are a few skeletons around in quite a few closets.

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  • @Bystander.
    Are the European countries able to pull out of the Euro and return to their previous currencies if they wanted to?

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  • The implosion of the Euro will happen – when the French and the German politicians dont hinge it to their egos – sometime in the 25th century then!! Its political not economic, otherwise they would never of done it because of the very reason that bystander states. If all countries had the same general attitude, if all countries had the same culture and if they all spoke the same language AND there was 100% mobility of labour, and if there were all at the same place in the economic cycle when they joined then it might JUST have worked. Frankly we are closer to the states in terms of our cycle than the germans (the small “g” is on purpose). We have enough trouble with the Welsh and the Scots – no offence su but dont get even me started on Scottish voting on Reality TV shows ;-).

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  • Swissy is the sensible currency – but dont put it in UBS ;-).

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  • Europe and euroland will take a hit like the rest of the world. all this doomsday stuff about countries heading back to their old currencies at the first whiff of crisis is nonsense. Come live in France, Germany, Italy to understand that the man in the street isn’t out brandishing placards demanding the return of the Franc or Lira. They are worried about housing and jobs like most other people on the planet.
    Going back to old currencies would leave these economies even more exposed to the currency traders and hedge-funds in the event of a big crisis. We saw this in the 90’s. All these scare stories are fantasies imagined by the fierce anti-euro lobby in the UK and elsewhere. Thankfully not a lot of people pay attention to them.
    The euro will still be here in 50 years time. Get used to it.

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  • No offence taken, Techieman, but it’s no me who’s phoning in those votes! 😉

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  • su – there have been rumblings in Germany, France, Sapin and Ireland and especially in Italy, as it is struggling , and I mean really struggling, with the strength of the Euro. Italy relys pretty heavily on exports. Airbus is loving this high euro as well, and is quoted to be losing 1Bln euros for every 10cent change in the euro/dollar exchange rate (Bloomberg). When the banks start revealling their own collateral damages around euroland then it might get quite heated at the ECB. Just my thought mind.

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  • When I lived in Germany I remember some of the German people grumbling about joining the Euro. I don’t think the people got to vote whether they wanted it or not. Is the Euro really essential to peace in Europe?

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  • @ Bystander. Careful, you’re basically saying that if the euro had not been formed, that the banks of European countries would be slashing interest rates to promote growth. We all know what that causes!

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  • @Lem

    Standby for an announcement from the ECB?

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