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A hundred billion here, a hundred billion there, and pretty soon you’re talking real money

Bloomberg reports:

EU Banks Need $166 Billion, Deutsche Bank Economist Tells Welt

Europe urgently needs a 150 billion-euro ($166 billion) bailout fund to recapitalize its beleaguered banks, particularly those in Italy, Deutsche Bank AG’s chief economist said in an interview with Welt am Sonntag.

“Europe is extremely sick and must start dealing with its problems extremely quickly, or else there may be an accident,” Deutsche Bank’s David Folkerts-Landau said, according to the newspaper.

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22 comments to A hundred billion here, a hundred billion there, and pretty soon you’re talking real money

  • PapayaSF

    Here’s an idea: Germany should bring in scores of thousands of poorly-educated Middle Eastern Muslims, liberally sprinkled with terror supporters. The extra costs of welfare, education, law enforcement, and counter-terror surveillance will have a stimulating effect on the economy, and thus help the banks!

    Right…?

  • Phil

    The really scary thing to me is that not only would the above statement not be recognized as parody/sarcasm in 99.9% of places you could post it on the interwebby thingy but it would pass for policy statement in 99.9% of the hallowed halls of academia and policy wonkery. We live in very scary times.

  • Phil

    The decimal point precision should of course indicate that those are actual figures, not made up interwebby thingies.

  • PapayaSF

    All it needs to be an op-ed is some added some boilerplate about Germany atoning for past racism, and how massive Third World immigration will teach Germans to embrace the inevitable multicultural future.

  • Mr Ed

    Isn’t this sum a mere $500 or so per capita for the Eurozone, all 338,000,000 or so people in it? So $2,000 for every family of four.

    This looks like a pitch for some welfare

    BlackRock Inc. Vice Chairman Philipp Hildebrand said earlier this month the European Commission should allow governments to take temporary equity stakes in their banks, similar to what the U.S. did with its Troubled Asset Relief Program during the 2008 crisis.

    Correction:

    BlackRock Inc. Vice Chairman Philipp Hildebrand said earlier this month the European Commission should allow governments to take temporary equity stakes in their banks, similar to what the U.S. did with its Worthless Asset Relief Program during the 2008 crisis.

  • Regional

    When Britain leaves the E.U. will Brittany and Normandy etc apply to join the U.K.?

  • Regional

    Mister Ed,
    Put it on the Credit Card.

  • Accidents? Would they involve open or broken windows on tall buildings?

  • Mr Ed

    Leslie,

    I was thinking that he was alluding to something more along the lines of an accidental attack on a radio station.

    Or some other pretext, updated, to do away with anything inconvenient.

  • Regional, July 10, 2016 at 8:49 pm: “Put it on the Credit Card.”

    I think the problem is they already have.

  • Cal

    Quick, let’s have a second referendum so we can stay in the EU.

  • Europe urgently needs a 150 billion-euro ($166 billion) bailout fund to recapitalize its beleaguered banks, particularly those in Italy, Deutsche Bank AG’s chief economist said in an interview with Welt am Sonntag.

    Presumably Deutsche Bank is saying this because it has massive secondary exposure to the Italian banks and shoring them up would help to save itself.

    Little more than corporate welfare really. Why should taxpayers across the European Union a single bent euro cent to prop up worthless banks that are happy to privatise profits but always want to socialise losses.

    Let ’em go bust as a warning to the others.

  • Laird

    Does any of this (banks in trouble, calls for a bailout) really surprise anyone?

    Here’s a modest proposal: Mark all those troubled assets to market (by holding a real auction, complete with a sale, for at least some of them so you can get a true mark, not some made-up number by the bankers or, worse, by their regulators), and let some of those banks fail. Oh, wait, banks can’t fail, can they?

  • Josh B

    Translation from the German:

    “Have you seen our stock price lately! Someone better do something quick or I may lose my phony baloney job!”

  • HGS

    “The decimal point precision should of course indicate that those are actual figures, not made up interwebby thingies.”

    I see your point, and raise you dot.

  • James C

    If they do a bail-out then I guess the Euro message is that it’s OK if the cypriots and greeks lose their savings, but not OK for the Germans and Italians to do the same.

    It’s all about equality in the EU.

  • Plamus

    For those of you not in finance, that’s a bogus number too, the actual number is higher. Loans to insolvent borrowers are valued at 40% of nominal values on Italian banks’ balance sheets. The market values were 30-35% 2 months ago. And let’s say that the market for that toxic sludge has not exactly been heating up in the last 2 months. The 150 billion Euro number above has a lot more “patch-them-over-and-then-a-miracle-happens-and-insolvent-borrowers-start-repaying” hooey in it that Deutsche Bank is letting on.

  • Plamus

    Leslie Bates, I read your comment as a reference to overdue defenestrations, and chuckled

  • Plamus

    For a more recent story (which probably should be slightly discounted for alarmism – it’s Zerohedge, after all) – click.

  • I say +1 to Laird’s modest proposal. They need to purge all the phoney assets from the system. Like Greece exiting the euro, doing it will be painful but not doing it will be worse.

  • llamas

    My first instinct, after having read ‘The Big Short’, would be to take a very close look at the activities of all the banks in question and figure out in exactly what way(s) (misrating, creation of complex ‘derivatives’ or just good old-fashioned fraud) they have come to this pass. Plamus has already suggested the true state of one of the issues.

    As Mr Ed notes, suggestions that governments take equity positions in banks, like the so-called TARP program in the US, are perhaps the worst-possible way to address these problems. When things have got this far, the only healthy cure involves a certain degree of pain, to be borne by most of the stakeholders. Governments are very-poorly positioned to apply such pain to either voters or donors. There’s a reason that President Obama is sometimes referred to as President Goldman-Sachs.

    Let ’em fail. Creative destruction is the only sure cure.

    llater,

    llamas

  • Paul Marks

    Using one evil “saving the Euro” to justify another evil – the bank bailouts.

    Such is establishment “economics”>

    When will this farce end.