"Dexia's Funeral Will Be Announced On Sunday" As "Weakest Link" Slovakia Prepares To Bury The Euro

[stockholmer]

http://www.zerohedge.com/news/dexias-funeral-will-be-announced-sunday-weakest-link-slovenia-prepares-bury-euro

A few days ago we mocked the market's naive belief that a loose union of 17 different countries and hundreds of separate political organizations, each torn by thousands of unique interests and lobby groups, can all agree unanimously in the pursuit of the common monetary (read: banker) good, over that of their own people. Yet that did not stop stocks from enacting the second weekly massive short covering squeeze, in 3 weeks, purely on hype, rumors, innuendo and lies. And just like the last time the market soared by nearly double digits in a few short days, only to plunge when hopes of a quick resolution were mercilessly dashed, Monday has all the makings of another epic risk off day. Because while all it takes is a rumor (of a plan for a plan) to start a squeeze, we are about to get some very nasty actual events which will demand immediate and forceful intervention by the powers that be, something which Europe (and the US) has proven is virtually impossible. The events in question are, as Reuters reports, http://www.businessweek.com/news/2011-10-08/slovak-sas-party-won-t-back-efsf-after-compromise-rejected.html that i) "Dexia's Funeral Will Be Announced On Sunday" and, as Bloomberg reports, that ii) Slovakia’s ruling Freedom and Solidarity party won’t back the overhaul of the European bailout mechanism after Prime Minister Iveta Radicova rejected the party’s conditions for approval, a lawmaker said. Said otherwise, bonds are currently thanking their lucky stars the bond market is closed because not only will Europe have to deal with the headline risk that the weakest link in Europe, the tiny country of Slovakia, can scuttle the entire second Greek rescue operation, and thus, lead to the expulsion of Greece from the eurozone following its bankruptcy, but this will have to take place as Europe fights the stem the contagion resulting from the collapse and nationalization of the first Greek bank, which nobody, nobody, http://www.zerohedge.com/article/belgiums-dexia-about-be-first-greek-casualty could have foreseen.

First, on Dexia via Reuters: http://www.reuters.com/article/2011/10/08/dexia-idUSL5E7L805420111008

snip


And as for the second key event just unveiled... http://www.businessweek.com/news/2011-10-08/slovak-sas-party-won-t-back-efsf-after-compromise-rejected.html

Slovakia’s ruling Freedom and Solidarity party won’t back the overhaul of the European bailout mechanism after Prime Minister Iveta Radicova rejected the party’s conditions for approval, a lawmaker said. The party, known as SaS, insists its three coalition partners agree to two conditions before it will back the enhancement of the euro region’s bailout fund, the European Financial Stability Facility, in a parliamentary vote Oct. 11, said Jozef Kollar, head of SaS’s parliamentary caucus. “If the solutions we have put forward aren’t accepted then we will not vote for the EFSF,” Kollar said in a debate on state Slovak Radio today. Slovakia and Malta are the only countries that haven’t yet ratified the key element in the European Union’s plan to prevent the region’s debt crisis from spreading. The Slovak row risks sinking the EU plan, which needs the unanimous consent of all 17 euro members to come into force.

snip

[ArcticFox]

1. Slovakia probably can't afford it

I think they want them to put up 10 billion dollars. This from a relatively poor nation of about 5.5 million.

[tama]

2. Finland should have done it

This was the main issue in Finnish elections and majority of representatives had promised to oppose bailouts. People were betrayed so now it's up to Slovakia to pull the plug of the artificial respiratory machine of the brain dead system.

[stockholmer]

4. my neighboring Finns got leaned on HEAVILY by not just the ECB, but the BIS, US Fed,State Department

etc. They also insisted (and received) guarantees of hard collateral from the Greeks (land, gold, cuts of state businesses, etc).

Greece is going to soon either default or just explode into horrific violence, as the IMF now says they need to do even MORE brutal austerity programmes.

-----------------------------------

http://uk.reuters.com/article/2011/10/08/uk-eurozone-greece-imf-idUKTRE7972DU20111008

(Reuters) - Greece is at a crossroads and will need to implement "much stricter structural reforms" than seen so far, IMF mission chief to Greece Poul Thomsen was quoted as saying by a German paper on Saturday.

snip

Thomsen said he had never seen riots against austerity measures as intense as in Greece.

"People express their frustration sometimes in very unpleasant ways," he said. "That is one of the ugly aspects of my work. And the intensity of it here is new for me."

EU leaders will meet in Brussels on October 17-18 to discuss revising a July 21 deal to provide Greece with a second rescue package. They may ask investors to accept losses on their holdings of Greek debt even larger than the 21 percent write-down set out in the July deal.

[tama]

10. Hejssan där, Stockholm-bo!

The "guarantees" that Finnish government received are a cruel joke - they were offered to all euro-countries and no other than Finnish government would touch them with any-sized poleta. And the only reason Finnish government takes them is that social democrats made big fuzz about "guarantees" in the election campaign and try to save face. Nobody here in Finland takes the guarantees - or social democrats - seriously. Like it or not, it's the True Finns that speak for the nation in their strict opposition against the euro bailouts, as "leftist" parties in government keep throwing away all their credibility by concentrating on saving the banksters and capitalism as we know it. Kinda sad, but not surprising.

[Prometheus Bound]

3. Some interesting facts about this dying company

- 49th largest company in the world
- Belgium's largest company
- 35,200 staff
- bailed out by France, Belgium and Luxemburg in 2008
- Its shares fell 90% in 2009
- lost 78 million Euros to Bernie Madoff
- lost €800 million in 2009 on counterparties (including Lehman Brothers, Icelandic banks, and Washington Mutual)
- posted a 4 billion-euro loss for the second quarter of 2011, the biggest in its history, after writing down the value of its Greek debt
- In 2008, since Dexia had a New York banking office they were eligible for various bailouts from the US Federal Reserve. At its peak Dexia had borrowed $58.5 billion
- On March 31, 2010 Bloomberg reported that Dexia was one of the largest borrowers from the discount window of the United States Federal Reserve, having outstanding loans of over $30 billion
http://en.wikipedia.org/wiki/Dexia

[stockholmer]

5. between the Fed loans that will never be paid back, and the CDS losses that US banks will take (and

then have the US taxpayers pay for), it's failure will cost Americans well nigh 100 or so billion dollars, at a minimum. The number one US bank to watch is Morgan Stanley, they are sitting horribly in FOREX/bond EU derivative exposure (98%+!!!). If MS goes down and is bailed out, you can take that 100 billion US taxpayer cost and triple it, maybe more.

[Prometheus Bound]

6. Yes, a bank that size will surely have Lehman-type reprocusions

[banned from Kos]

13. Dexia repaid the Fed loans - according to Bloomberg

Bloomberg = News Source

ZeroHedge = Whacky Blog

[Prometheus Bound]

14. I find it very hard to find that information.

It they had paid it off you would think all parties concerned would be happy to let it be known far and wide. But maybe they did and I can't find it cos it's too old.

[dd2003]

15. Completely untrue

ZH has had some very insightful and truthful revelations over the years... Their exposure of Goldman a couple years ago led to the NYSE changing trading rules. Bloomberg has become the talking piece with the financial times for the 1%. Tell me how ZH is a wacky blog with facts please...

[DeSwiss]

8. Criminals operating as a bank.

- I know, I know. The above statement is an oxymoron......

K&R







http://www.youtube.com/watch?v=g6bUUmelbyw">It All Goes Back In The Box

[DeSwiss]

7. ''The Mouse That Roared.'' - K&R n/t

[pampango]

9. Slovakia's Freedom and Solidarity party is a typical conservative Eurosceptic one.

"In the 2010 parliamentary election, the party emphasised that it had economic policies completely opposed to those of the left-wing Fico government..."

"Freedom and Solidarity believes in economic liberalisation, being led by the father of Slovakia's flat tax, and party prides itself on its economic expertise. ... The party cites a need to close the budget deficit, and advocates reforming the social insurance system."

"The party is eurosceptic, opposing the 'bureaucratic machinery' that it says that the EU represents. The party opposed the Treaty of Lisbon, EU economic harmonisation, and an increased EU budget. It is particularly wary of the European Union restricting the free market. The party opposed the ECB's bailout of Greece during the 2010 debt crisis, while Sulik has proposed drawing up plans to withdraw Slovakia from the Euro."

http://en.wikipedia.org/wiki/Freedom_and_Solidarity

It was not the left wing government which lost power last year that proposes to "bury the Euro" but the conservatives who now run the country. The right throughout Europe wants to weaken the EU (the Euro is the easiest target at the moment) and bring more nationalism to the continent. F&S opposes helping Greece and any other country that gets into trouble, but they want to "reform the social insurance system" within Slovakia, too. "My money is for me" is a pretty typical conservative point of view.

[tama]

11. Similar situation in Finland

and elsewhere. The sad fact is that the so called "left" in European countries has no credibility what so ever in opposing bankster bailouts and the peoples strong and wide opposition is being channeled only by nationalistic eurosceptic parties - and people demonstrating on the streets and occupying city squares.

The so called "left" act as besserwissers and preservers and prime defenders of status quo of capitalism as we know it, snort on "populism" without realizing that populism has lot to do with representing the popular will and wisdom with principled stand on the issues that matter most to the people. IMO the "left" can only blame themselves when oppostion to bankster bailouts gets channeled through populist and popular movements that have also xenophobic issues - and the unions share much of the blame of being hard with xenophobia and soft with banksters and capitalism as we know it.

[pampango]

12. Sorry you feel the left has no credibility and the "populist" right does.

I don't share your view that the "left" are "prime defenders of status quo of capitalism as we know it" ("and the unions share much of the blame") while the right "represents the popular will and wisdom with principled stand on the issues that matter most to the people."

Blaming the left and unions for bailouts and crediting the right for their "principled stands" is most often heard from the tea party.

Fortunately the recent election in Denmark brought a more liberal government to power and kicked out the conservative one that was supported by the far-right Danish Peoples Party which is anti-immigrant and anti-EU. At least the Danes don't seem to feel that the left has no credibility.