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Friday, January 06, 2012

THE CASE FOR EURO 2012




If the Euro fails Willem Buiter, the Chief Economist for Citigroup says the world's GDP will go down by 10%. Unemployment would go over 20% in the west. There are several nations will too much debt to restructure. France and Italy have too much debt to refinance – 180 billion euros each nation. Central banks in Switzerland, Greece, England and Ireland are preparing for a EURO collapse. >>




Europe using US as model to fix debt crisis: Analyst
The European nations are going to be raising taxes to pay for all these quantitative easing measures. The people in the EU are scared and not happy. We are hearing of a food tax, emissions tax, transactions tax and all sort of creative taxation. Doom and gloom.
CNBC still think the EU is going to break up. They think the member states need a much weaker currency to make it. I agree. The ECB quantitative easing is going to cheapen the EURO. They are still building a house on sand.
For Europe, Only Way Out Is to Break Up: Kyle Bass
Chairman of the US Joint Chiefs of Staff General Martin Dempsey said the EU faces potential breakup and civil unrest. I believe him.
US General: EU may face Breakup, Unrest
Endangered Bank List in EU – The ones at the bottom of the list are the worst off. The percentage exposure as a percentage of Common Equity is the most meaningful indicator. It shows you that they owe many times more than they are worth.
Royal Bank of Scotland - Exposure: $146.42 billion
Market Cap: $60.96 billion
Common Equity: $83.58 billion
Exposure as % of Common Equity: 175%
Landesbank Berlin - Exposure: $13.11 billion
Market Cap: $5.60 billion
Common Equity: $7.31 billion
Exposure as % of Common Equity: 179%
Barclays UK – Exposure $123 billion
Market Cap: $43.91 billion
Common Equity: $65.510 billion
Exposure as % of Common Equity: 189%
Landesbank Baden – Wurttemberg – Exposure $32.05 billion
Market Cap: $11.27 billion
Common Equity: $13.94 billion
Exposure as % of Common Debt: 230%
DZ Bank (German) – exposure $25.69 billion.
Common Equity: $10.34 billion
Exposure as % of Common Equity: 239%
KBC Bank Belgium – Exposure $39.70 billion
Market Cap: $9.05 billion
Common Equity: $16.09 billion
Exposure as % of Equity: 247%
Credit Agricole (France) – exposure $192.06 billion
Market Cap: $29.97 billion
Common Equity: $65.50 billion
Exposure as % of Common Equity: 293%

Deutsche Bank – Exposure $140.61 billion
Market Cap: $49.73 billion
Common Equity: $43.02 billion
Exposure as % of Common Equity: 327%
BNP Parobas (France) – Exposure $280.96 billion
Market Cap: $79.91 billion
Common Equity: $78.43 billion
Exposure as % of Common Equity: 358%
Commerzbank (Germany) – Exposure 67.38 billion
Market Cap: $18.45 billion
Common Equity: $14.60 billion
Exposure as % of Common Equity: 462%
Dexis (Beligium ) - Exposure $132.95 billion
Market Cap: $5.229 billion
Common Equity: $10.34 billion
Exposure as % of Common Equity: 552%
Banco Santander (Spain) – Exposure $567.20 billion
Market Cap: $92.08 billion
Common Equity: $59.51 billion
Exposure as % of Common Equity: 953%
Unicredit (Italy ) - Exposure $541.54 billion
Market Cap: $34.41 billion
Common Equity: $50.59 billion
Exposure as % of Common Equity: 1,070%
Bank of Ireland – Exposure $102.43 billion
Market Cap: $1.39 billion
Common Equity: $7.40 billion
Exposure as % of Common Equity: 1,385%
BBVA (Spain) – Exposure $552.90 billion
Market Cap: $52.80 billion
Common Equity: $35.39 billion
Exposure as % of Common Equity: 1,566%
EFG Eurobank Ergasias (Greece) – Exposure $76.01 billion
Market Cap: $2.07 billion
Common Equity: $4.74 billion
Exposure as % of Common Equity: 1,601%
Intesa Sanpolo Group (Italy) - Exposure $607.03 billion
Market Cap: $51.06 billion
Common Equity: $37.07 billion
Exposure as % of Common Equity: 1,638%
BancoPopular Espanol (Spain) – Exposure $182.94 billion
Market Cap: $6.91 billion
Common Equity: $9.49 billion
Exposure as % of Common Equity: 1,927%
Banca MPS (Italy) - Exposure $290.98
Market Cap: $7.96 billion
Common Equity: $6.24 billion
Exposure as % of Common Equity: 4,666%

Allied Irish Banks (Ireland) – Exposure $129.02
Market Cap: $2.00 billion
Common Equity: $0.387 billion
Exposure as % of Common Equity: 33,352%
To get a more complete look at how upside down the European banks are look at the chart below. The shortfall column show you how upside down the bank is.
 Banks individual results

Country
Bank Bank code Shortfall
millions Euro
Austria   
  FMA
  OENB

ERSTE GROUP BANK AG
RAIFFEISEN ZENTRALBANK
ÖSTERREICH AG

ÖESTERREICHISCHE VOLKSBANK AG(1)
AT001
AT002

AT003
743
2,127

1,053
Belgium
DEXIA(2)
KBC BANK
BE004
BE005
6,313
0
Cyprus
MARFIN POPULAR BANK PUBLIC CO LTD
BANK OF CYPRUS PUBLIC CO LTD
CY006
CY007
1,971
1,560
Denmark
Danish FSA (Finanstilsynet)

DANSKE BANK
JYSKE BANK
SYDBANK
NYKREDIT
DK008
DK009
DK010
DK011
0
0
0
0
Finland
OP-POHJOLA GROUP FI012
0
France
BNP PARIBAS
CREDIT AGRICOLE
BPCE
SOCIETE GENERALE
FR013
FR014
FR015
FR016
1,476
0
3,717
2,131
Germany
  BuBa
  BaFin

DEUTSCHE BANK AG
COMMERZBANK AG
LANDESBANK BADEN-WÜRTTEMBERG
DZ BANK AG DT. ZENTRAL-GENOSSENSCHAFTSBANK
BAYERISCHE LANDESBANK
NORDDEUTSCHE LANDESBANK -GZ-
HYPO REAL ESTATE HOLDING AG,
MÜNCHEN

WESTLB AG, DÜSSELDORF
HSH NORDBANK AG, HAMBURG
LANDESBANK HESSEN-THÜRINGEN GZ, FRANKFURT
LANDESBANK BERLIN AG
DEKABANK DEUTSCHE GIROZENTRALE, FRANKFURT
WGZ BANK AG WESTDT. GENO.
ZENTRALBK, DDF
DE017
DE018
DE019
DE020

DE021
DE022
DE023

DE024
DE025
DE026

DE027
DE028

DE029
3,239
5,305
0
353

0
2,489
0

224
0
1,497

0
0

0
Hungary
OTP BANK NYRT. HU036
0
Ireland
ALLIED IRISH BANKS PLC
BANK OF IRELAND
IRISH LIFE AND PERMANENT
IE037
IE038
IE039
0
0
0
Italy
INTESA SANPAOLO S.p.A
UNICREDIT S.p.A
BANCA MONTE DEI PASCHI
DI SIENA S.p.A

BANCO POPOLARE - S.C.
UNIONE DI BANCHE ITALIANE SCPA (UBI BANCA)
IT040
IT041
IT042

IT043
IT044
0
7,974
3,267

2,731
1,393
Luxembourg
BANQUE ET CAISSE D'EPARGNE DE L'ETAT LU045
0
Malta
BANK OF VALLETTA (BOV) MT046
0
Netherlands
ING BANK NV
RABOBANK NEDERLAND
ABN AMRO BANK NV
SNS BANK NV
NL047
NL048
NL049
NL050
0
0
0
159
Norway(3)
DNB NOR BANK ASA NO051
1,520
Poland
POWSZECHNA KASA OSZCZĘDNOŚCI BANK POLSKI S.A. (PKO BANK POLSKI) PL052
0
Portugal
CAIXA GERAL DE DEPÓSITOS, SA
BANCO COMERCIAL PORTUGUÊS, SA (BCP OR MILLENNIUM BCP)
ESPÍRITO SANTO FINANCIAL GROUP, SA (ESFG)
BANCO BPI, SA
PT053
PT054

PT055

PT056
1,834
2,130

1,597

1,389
Slovenia
NOVA LJUBLJANSKA BANKA D.D.
(NLB d.d.)

NOVA KREDITNA BANKA MARIBOR D.D. (NKBM d.d.)
SI057

SI058
320

0
Spain
BANCO SANTANDER S.A.
BANCO BILBAO VIZCAYA ARGENTARIA S.A. (BBVA)
BFA-BANKIA
CAJA DE AHORROS Y PENSIONES DE BARCELONA
BANCO POPULAR ESPAÑOL, S.A.
ES059
ES060

ES061
ES062

ES064
15,302
6,329

1,329
630

2,581
Sweden
NORDEA BANK AB (PUBL)
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL) (SEB)
SVENSKA HANDELSBANKEN AB (PUBL)
SWEDBANK AB (PUBL)
SE084
SE085

SE086
SE087
0
0

0
0
UK
ROYAL BANK OF SCOTLAND GROUP plc
HSBC HOLDINGS plc
BARCLAYS plc
LLOYDS BANKING GROUP plc
GB088
GB089
GB090
GB091
0
0
0
0
Implications – First off do not be banking in the EU at this time. If you have bank accounts there close them and pull out your funds. Avoid staying in Euros. Some are thinking the UK pound will do well. Perhaps briefly for psychological reasons with amateur investors but they are seriously messed up economically. The EU problems will reach out and hurt the USA to some extent. The EU clearly intends to tax their people out of economic existence. Of course declaring the debt void and defaulting would hurt the 1% and the 99% would thrive. Of course they prefer to extort taxes out of the 99%. Never miss a chance to do the most evil thing is the way they work. It is a good time to leave the EU and also the USA. Feel free to inquire for options regarding residencies, citizenship and banking.
Currencies – What you will see in the very short term is the USD rise in value. The USA will do all they can do to drive the value of the USD down after a brief period. The idea is to be in USD short term and hit it right and go out of the USD. The best thing to do is to go into local currencies in part at least. Avoid any currency tied to the USD like HK dollar and Swiss Franc. Avoid any dollarized nations. Stay out of European currencies. Think about how you are going to get access to your money if the IBAN and SWIFT systems are down for the count. Get ready for a real storm ahead, nothing like what you have seen in past. Things are not comforting in the middle east are they?
Gold & Silver – We are going into uncharted waters. Metals may start to climb fast as people jump out of fiat money. The EU crisis will affect much of the world mostly Europe, Russia, China and North America. If you have metals stored in Europe be careful. Civil unrest is probably going to become a real concern there. The storage facilities could be at risk if riots get extreme. The EU doesn't have much of a military. The other risk is talk of all these additional taxes in the EU. They might tax the gold nicely. Then there is the risk of confiscation. Now that the EU and USA are both desperate the concern of a forced buyback is magnified.
New Rules – The rules are changing faster and faster now aren';t they. Do not follow the crowd. People did that with the Swiss Banks didn't they. Feel free to call or Skype us with questions. We are at a point where the economic deterioration will begin accelerating to a much more rapid pace. You will need to astute, watching and listening to keep what you have. This is the reality.

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