We’ll see how critical Mrs Merkel (why do I want to keep writing Mrs Merton?) will be of the Irish bailout when there’s a run on German banks.
Run, Lola, Run.
I’d say Anglo and Irish Nationwide are opening Berlin branches as we speak
From the Bloomberg piece mr_anderson kindly posted above:
Holy shitholes batman, that’s some heap of junk bank. And this is a bank that lends to government and presumably received treasuries in return? Where have they been lending to? Zimbabwe? Pakistan? Ireland?
Read their annual report for 2007 and some of the shit begins to emerge:
depfa.com/media/reports/DEPF … report.pdf
Muni bonds and student loans!
But apart from that, I can’t find much that is outlandish. But then I am not a forensic accountant! Perhaps Mr. Pill can case a beady over them and see something dodgy?
Okay, I can’t wait any longer:
It was obviously only a Hypo-thetical rescue…
tries not to let door hit him on the way out
Wahey, ECB emergency rate cut Monday! Maybe.
When’s the Fed due? I begin to believe the co-ordinated cuts theory (let the banks keep the cost of funding the same, pocket the extra margin). Cut the cost of government debt.
rescure plan is being pulled according to bloomberg…
thats one big bank.
but its not the asset quality of banks at the moment (although this was an issue for some investment banks) but its a question of liquidity…
Look at dexia, super good balance sheet, no dodgy suprime but they are almost gone too…
and fortis are supposedly low risk too…madness i tell you…
Last week a bailout to the order of E36b by the German govt and a consortium of commercial banks was agreed. The commercial banks walked away this morning for no specified reason. The rumor is that HRE needs much more than the agreed and much sooner to stay above the water line. This is apparently caused by HRE’s subsidiary, Dublin based DEPFA - lender to governments and municipalities, which entirely depended on the wholesale money market (now frozen) to finance $220b per annum mostly on short-term revolving loan basis. HRE now needs to shore up DEPFA’s finances but since HRE is a mortgage lender (2nd in Germany) one can guess that they are not exactly swimming in cash.
This is going to be a big one either way it pans out.
| 05 Oct 2008 | 08:05 AM ET
FRANKFURT, Oct 5 (Reuters) - The Irish government is considering providing liquidity assistance to Hypo Real Estate’s Irish unit Depfa Bank, Hypo Real Estate spokesman Hans Obermeier said on Sunday. A 35 billion euro ($48.50 billion) German government-led rescue plan for Hypo Real Estate fell apart on Saturday as German banks and insurers withdrew their support for the bailout but talks were continuing on Sunday to revive the rescue. Obermeier said the liquidity situation at HRE had worsened over the past week – especially at Depfa – because of talk about winding down the lender.
The Berlin government has since made clear that no such move was planned. The spokesman dismissed speculation that HRE could need up to 100 billion euros in liquidity as “absurd” from today’s perspective. (Reporting by Christian Kraemer) ($1=.7216 Euro) Keywords: HYPOREALESTATE/IRISH tf.TFN-Europe_newsdesk@thomson.com vjt COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved.
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There must be a fly on the wall,
I do not get this. Is this a bank investing in c10 year life bond maturities funded by huge amounts of short term credit. If so and the bank is saved there is alot of stupid management to fire.
government backed…ie no credit risk…supposedly i assume
looking at hypo on bloomberg, seems their massive share price early this year is got to do with some CDO exposure…seems they said they didn’t have any and then a week later marked down 400m from Hypo side, according to the ould bloomberg…
“Oh those CDOs”
AP is reporting a 50 bn euro deal has been reached with the banks in Germany to bail out Hypo according to tickerforum.
IFSC-based Depfa to be auctioned off by parent HRE - → independent.ie/business/iris … 28082.html