Oct 28

When Stress Tests Fail – Italian Banks Are Collapsing (ZeroHedge, Oct 27, 2014):

Despite the ban on short-sales – which has never worked in the past to do anything but instil fear in traders’ holding long positions – Italian banks are in free-fall following the utter failure of Draghi’s stress tests to encourage confidence in the European banking system.

  • INTESA, UBI, UNICREDIT, MONTE PASCHI SUSPENDED IN MILAN, LIMIT DOWN

Given the post-“whatever-it-takes” world of domestic sovereign bond-buying, it is no surprise that Italian govvie risk is jumping higher and the FTSEMIB is plunging.

“A relief rally would not be justified,” said Michael Woischneck, a portfolio manager at Lampe Asset Management in Dusseldorf, Germany. “There are still a lot of problems to fix, and Italian banks still have a lot of work to do. Even for the banks that passed, what is there to be relieved about? They still have to find a business model and figure out how to get unanswered questions that a stress test just cannot answer.”

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Aug 26

Market crash ‘could hit within weeks’, warn bankers (Telegraph, Aug 24, 2011):

A more severe crash than the one triggered by the collapse of Lehman Brothers could be on the way, according to alarm signals in the credit markets.

Insurance on the debt of several major European banks has now hit historic levels, higher even than those recorded during financial crisis caused by the US financial group’s implosion nearly three years ago.

Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS were trading at 343.54 basis points, meaning the annual cost to insure £10m of the state-backed lender’s bonds against default is now £343,540.

The cost of insuring RBS bonds is now higher than before the taxpayer was forced to step in and rescue the bank in October 2008, and shows the recent dramatic downturn in sentiment among credit investors towards banks.

Continue reading »

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Aug 04

The War Against The Rating Agencies Begins: Italy Prosecutor Seizes Moody’s, S&P Documents (ZeroHedge, Aug 4, 2011)

And so the war against the rating agencies is now official as a floundering Europe does anything in its power to scapegoat anyone and everyone, starting with its natural sworn enemy of course, the rating agencies.

According to Reuters,

Italian prosecutors have seized documents at the offices of credit rating agencies Moody’s and Standard & Poor’s in a probe over Suspected “anomalous” Fluctuations in Italian share prices, a prosecutor said on Thursday.

Ah yes, it is Moody’s fault that Unicredit, Intesa, Fiat and pretty much all other Italian companies now close limit down at least once a day. Either way, this is sure to end well. We will bring you more as we see it.

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Aug 01

The Vespa Has Crashed Into The Mountain: Italy Burning (ZeroHedge, Aug 1, 2011):

Italy undergoing a slow motion crash, with bank after bank getting halted, first Intesa, then Monte Paschi, and most recently, main bank Unicredit.

The FTSEMIB is now down a whopping 5.5% from intraday highs, led by the financial sector which may or may not last the week absent another EFSF expansion as we have speculated before.

Of course, should that happen, Italy becomes a liability and not a funder, meaning the proportional obligations of Germany and France will surge, just as we explained two weeks ago.

And more bad news: the spread between the 10 year Italy – Bund just hit an all time wide of 349, +16 bps on the session, as Italy CDS are now trading 328, +12, and Spain is 9 bps wider to 374.

Time for bailout #3, this time to rescue Italy, then Belgium and Spain, then France and the UK, until finally the Fourth Reich, in the darkness, shall bind them.

General Italy

And just the country’s top (and we use that term loosely) banks:

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