World economy talk

[uls]

Deustche Bank's CEO Dr. Josef Ackermann on European banks...



News Headlines

So he is saying without some accounting magic, these banks are FAIL! so Europe has some ZOMBIE BANKS? Kinda like the one in the US in 2008. Should be dead, but are still living so they are UNDEAD!

di nila mark-to-market ang value ng mga bonds na yan. hold to maturity sila so they value those bonds at face value

if they mark-to-market those bonds (like some bonds are trading at 50% face value in the secondary market) a lot of eurozone banks' will be insolvent

[uls]

Greece 2 yr yield

50%!

[uls]

[tidus1203]

US markets is closed... But hell in European stock markets...

The DAX in Germany is down more than 5.50%

France CAC Quarante is down 5%

London's FTSE100 is down 3.7%

Total massacre in Europe...

[Monseratto]

Everything else is bloody red.

The cost of insuring against default on European sovereign debt surged to record highs on concern the region's debt crisis is worsening.

Credit-default swaps on Greece soared 100 basis points to 2,450, according to CMA. Contracts on Italy jumped 24.5 basis points to a record 427, Portugal climbed 33 to 1,013 and Spain rose 17 to 409, while Germany increased 4 to 83 and France was up 13.5 at an all-time high of 185.

[tidus1203]

Buti na lang I got rid of it when it was dancing in the 1.45 area... But I exchanged it for CAD so mas mababa nakuha ko since CAD>USD!

[Monseratto]

What's this?

http://streetlightblog.blogspot.com/...satlantic.html\

And now, the flip side of the story presented yesterday, in which ECB data seems to indicate that monetary financial institutions (MFIs) in Europe have been moving their deposits out of European banks. Where is that money going?

It looks like much of it is being placed with US banks instead. The following chart shows the total deposits at domestically chartered commercial banks in the US. (All data is from the Federal Reserve Board, through August 17, 2011.)

Clearly, something is going on -- the recent rise in deposits with US banks has been dramatic, with an above-trend increase in deposits of approximately $500 billion over the past 6 months.

Who is responsible for this sudden inflow of deposits into the US banking system? The answer is non-US banks, as illustrated in the following picture, which shows the cash assets of domestically chartered banks alongside the cash assets of foreign-owned banks in the US.

The cash assets (i.e. bank deposits) that foreign banks are keeping in the US banking system has risen sharply over the past 6 months -- not coincidentally, by about $500 billion. Meanwhile, domestic US banks have started showing some similar tendency toward accumulating cash, but only to the tune of approximately $150 billion, and only over the past 2 months.

Recall from yesterday's post that MFIs in Europe have drained their bank accounts at European banks by about €700 billion over the past year and half, which at current exchange rates is approximately $1 trillion. It seems that much of that money has recently found its way into the bank accounts that European MFIs keep in US banks. And conversely, it seems likely that the large inflow of cash deposits held at US banks this year is largely from European banks.

Putting it all together yields a compelling story: European banks are shifting their cash assets out of European banks and putting much of them into US banks. (An interesting question is what European MFIs have done with the remaining money they've withdrawn from the European banking system... but that's a story for another day.) This has happened at a significant rate, with a net transatlantic flow from European to US banks that probably totals close to half a trillion dollars in just six months.

If you're wondering exactly who has been the first to lose confidence in the European banking system, look no further. It seems that at the forefront is the European banking system itself.

Data released by the US Federal Reserve on Friday indicated that unnamed foreign banks transferred cash into the country's banking system over the summer, while separate data from the ECB that shows that European banks have been withdrawing their cash from the European banking system.

[Ry_Tower]

What's this?

The Street Light: Europe's Banking System: The Transatlantic Cash Flow

Nak nang.... natakot sa sariling multo! tsk tsk tsk

[uls]

let's go back to page 1 of this thread (July 2010)

uls:

European banks are in bad shape

they're all highly dependent on the ECB now

they'll collapse without the help of the ECB

uls:

the fear is -- if EU countries default on their debt, the banks holding the debt will suffer massive losses and could collapse

they haven't fixed anything

[uls]

brent