France general government gross debt and % of GDP

1999  58.9 %

2000  57.3 %

2001  56.9 %

2002  58.8 %

2003  62.9 %

2004  64.9 %

2005  66.4 %

2006  63.7 %

2007  64.2 %

2008  68.2 %

2009  79.0 %

2010  82.3 %

Interesting to note that the 2008 financial crisis following Lehman’s collapse often used to justify the excess of debt in the eurozone as governments chose to sharply increase public spending to respond to the banking crisis is only responsible for 10.8% of the debt. Now should u attribute the jump from 68.2 in 2008 to 79 in 2009 to the response to market stress in the first semester of 2009 and only that which is questionable, the obligation for the gross general gov debt to remain under 60% of GDP was not respected for a very long time, actually since the 2003 budget adopted late 2002.

Homework :

Reuters Breakingviews has done a stress test of its own on eurozone banks with the same official data the EU stress test used. It allows u to view the results according to the level of hair cut and tier 1 capital ratio u think suitable, hair cuts provided are marked to market 10/12/2011 for 5 years bonds.

http://graphics.thomsonreuters.com/11/07/BV_STRSTST0711_VF.html

Example :

Capital tier 1 ratio at 9%, Greece  hair cut at 50%, other sovereigns marked to market as of 10/12 leaves France’s banks with a capital shortfall of 40.5 billions. BPCE shortfall 12.3 billions, SocGen 12.3, BNP 12.1, CA 3.6 (Not included Greece Subs).

Loved it, great tool for simulations. Note that the impact on state debt is assuming the taxpayer picks the entire bill.

Have fun and enjoy.

what about it?

The email just says we’re among the most ill spirited people on earth but no details so far. It says that for the post that says we can’t wait for the academic discourse from the ISDA related to a capital loss of 50% on loans not being a credit event and if the bilateral loans in Europe had won an envied rank in the Guinness Book of Records for the worst lending decision in history, the academic analysis of a capital loss on a loan not being a credit event has surely as well reach the worse bad will academic justification of recklessness in history…

Didn’t think it was very offensive given the circumstances, I mean these guys can insult our minds but can’t stand a joke, that’s just too much.

The taxpayer is in for more and the final number isn’t known yet, the spillover effects of bond writedowns on the banking system is yet to be seen…. As it was posted days ago, I would expect more contraction.

That’s what I meant, specially when u have a financial institution engaged in both a Greek debt holding onto which accepting a volunteer loss could be easily interpreted as a mean to escape honoring CDSs the same institution sold to protect against a Greek default. Clearly the loss acceptance will be perceived as the main and only motivation to artificially disguise the default into something else, that’s why I think it won’t work.

Now, pay a premium of up to 25% to access a better paper and a higher return overtime with a better guarantee with the EFSF kicking in to guarantee the interest payments also eligible as collateral with the ECB in a swap on a Greek initiative to manage its debt is to me a different case. It is key that the premium makes sense financially, is it paid to escape an obligation and contracts or is this decision an act that itself generates an added value, if it does, crushing CDSs isn’t the ultimate target?

Seen this one, What Happens If Europe Crushes the Swap Market?

I don’t believe it is possible to get away CDS triggering because a loss is qualified of voluntary, it doesn’t make any sense. I can’t imagine any court going there. It has all the characteristics of an abuse and will result into court decisions whether or not the conditions economic and financial leading to a default are or not fulfilled? How can it be justified to accept voluntarily a loss nearing 50% off the inability for the debtor to fully honor his part of the contract which characterizes the default? Whether or not some parties volunteer the losses doesn’t have the ability to change the true nature of the inability for one party at the contract to fulfill its obligations?

Am I clear? I mean if u had to judge it?

No, I just don’t get it. I know the guy was leaving the ECB but he was right about that, losses that near 50% may result in Greece to be unable to access markets for a very long time. Plus the opposition to swap a large part of the debt into perpetuals is very short sighted and poorly motivated with ideology not taking into account that perpetuals aren’t perpetual? It is perpetual until the next boom when funds start to sell to go after riskier assets for higher returns, pensioners asking for less security and higher payouts, there is demand today for perpetuals EFSF interest payments insured, at least, I believe there is, sell and when times are better and funds sell for better returns, buy on the market and restructure the debt. Had a good laugh about it (banks losses as I hated their lousy jobs with the public) but not worth the consequences. These guys are just…. crony banking lead to the result on display right now and guess what they say, let’s do more! Stunning.

I just assume the shareholders aren’t invited to the party and ahead there will be a lot of court action because I don’t see may be I will but right now I don’t, what’s the motive for the losses, the French president and German chancellor told me to do it?

might be my reading isn’t good enough… this where it may be http://www.rijksoverheid.nl/documenten-en-publicaties mind having a look, urs is fluent, u’ll be faster than I m.

no, Brazil has made it clear, EU die hard.

For how much are the french in when it comes to bilateral, do u have the number?

Banks Clash With Lawmakers on Greek Rescue

According to the report Jean-Claude, European leaders are looking at losses for the private investor to near 50 to 60%. So, how is it going to play out with the bilateral loans as well as with the notes the ECB bought because so far there are absolutely no sign of anything in the French medias…?

According Evolution securities (a Bloomberg Report can’t access the link from here, go to Business Week) the bilateral loans Greece has received from the region’s govs have the same level of seniority as the nation’s bonds…qualifying it the worst bit of lending history incredibly embarrassing, one for the Guinness Book of records for the worst lending decisions ever, two, to lose almost 40 billions euros of taxpayer’s money in 18 months…assuming the ECB losses will paid by? overtime.

The all thing getting us here, the losses on these loans to reach 100 euros for every man, woman and child of the nations using the common currency of the haircut isn’t voluntary.

Data compiled by Bloomberg is a bit better and reaches 96 euros per head off the consequences if CDS are triggered.

And it is better instead of saying that Europe may head to unknown territories if an agreement cannot be reached to be honest about the financial situation regarding the bilateral loans, the ECB losses as well as the consequences for the banks and financial companies the public is dealing with should Greece default and the CDS to be triggered. To wait and hope for the best will not help. If some management have clearly endangered their institutions they should be exposed, fired and replaced as quickly and swiftly as possible making sure all necessary measures will be taken diligently.

I know he said that about democracy but the true victory of Democracy it is when the french presidency understands that the sovereign character of Euskadi needs a voice of its own, an Euskal expression reflecting its rich culture and legit aspirations.

Sailing to Euskadi, it is a bit late in the season?

When I read it http://www.lejpb.com/paperezkoa/20111012/296445/fr/Reactions-serie-pour-communique-virtuel-d%E2%80%99ETA  I wasn’t sure it would come true that soon. “El Pais citait hier un parlementaire basque du PP affirmant que si ETA “laissait les armes” le candidat du parti à la présidence du gouvernement (et actuel favori) Mariano Rajoy ferait “ce qui doit se faire”.” Does it mean the guys and ladies may be home for Christmas, I’d think it leaves very little time to make it possible?

Dramatisation... So some say, here. Nonetheless, number 1, it is ok to oppose any increase of the EFSF leverage when motivated by the fact that it is a moral hazard to ask the Finns, the Dutch and some others to pay for debts they did not contract, number 2 it is ok to oppose it as well for those of u that see in the leverage the danger of a modern times permanent Versailles treaty and wish to oppose it considering that the hold up of savings in northern europe as well as the risk to see those economies to be drawn into turmoil because of the crazy level of debt southern europe has accumulated represents a political threat to stability. - do agree with that. Can't say there is no back minded idea of let's slow these competitive economies with a load of debt so they won't get too much ahead of us and buried under a debt blanket part of their competitiveness will be devoted for our benefits... I oppose that as well, think it is dangerous and wrong. Those who made mistakes must deal with it just like we all do.
Deplorable said Jean-Claude, well, it is true leadership does not appear at its best but what else can be done when u have some leaders carelessly engaged in spending spree betting they will be able to get onboard a ship some others will be paddling because that's their nature...
Do u support that? I don't.

Would pick irresponsible to characterised the behaviour but don't make mistakes I mean they r already busy trying to escape critics through rating agencies reports shouldn't be made public. And a discourse political over the wrong it is to trtust rating agencies to run the world.... With Superdevil I have guessed .... Ahahaha no kidding I expected someone to say look rating agencies are just a tool evaluating at least to the economic and fiancial consequences of public or corporate policies and alert taxpayers and investors... That's all they do and want to do. But it didn't happened....
What r u up to and have u managed to get through?

Just wonder, can u rerun it with a portion of the debt holdings turned into perpetuals at least for the amount that can evaluated of the eurozone and EU pension revenue needs?
For ur last bit, don't but doubt the same guys responsible for the shameful natixis IPO hard sell will be willing to act differently when it comes to transparency regarding the buget falls and economic scenarios. Most are careless right now just busy trying to screw whoever tgey can to eliminate competition.

In the two stress SP scenarios the french debt is downgraded which in turn will threaten the german debt rating. If the french debt downgrade is very likely a done deal, do u know how they reach the 6% number for the french banks tier 1? So far medias have been very discreet onSP scenarios as well as politicians on the likelihood of those? Have german medias been more talkative about it?

This guy is a joke. Mr We don't need an authorisation, responsible for a lot of the problems the eurozone faces, his now notorious incompetence for not inquiring appropriately a countless shameful IPOs that have taken place and thousands of people life time savings mainly in France, responsible for the Dexia's mess and total recklessness of a regulation busy inconsistently trying to reject its own carelessness onto Hedge funds, Super Devil and other fantasm of all sorts must be immediately fired. His most recent outing is irresponsible and can only lead to more turmoil, hide to the public or investors the financial situation of some states that engaged themselves in crazy public spending whose results are a financial disaster will not be helped that way and hoping to dodge the Public as well as investors says a lot of the morals of this guy. Sack this nutcase and now!

Don't know where from the Guardian has got it but first German Officials have denied, second the unconstitutional character of such an increase as well as the overwhelming majority throughout the eurozone opposing any more liabilities guarantee a lot of court action should any stupid crazy spending spree gains some attraction among euro leaders. As far as taspayers are concerned, the Greek example made clear crazy public spending and debt level only lead to catastrophe and hardship... Among Andre the carpenter, Vaclav the plumber, Arsen the engineer the new model as far as debt and public spending are concerned is Luxemburg and for taxes Switzerland.

I don’t know yet and that is speculation…. What u have now for sure is can’t see Germany going into some leverage process undoubtedly leading one way or the other to more uncertainty and scrutiny over its own rating drowning simultaneously The Netherlands…. Tough but I feel it like that, Germany going into a win or break exam for everybody with a limit for assistance to the candidates at the euro eligible survivor game the Karlsruhe Court recently defined. Ultimately, should northern Europe because it is not just Germany should compromise their own finances knowing they will be unable because of demographics to impose on a future federal union if any a higher sense of fiscal responsibility?

That’s how I interpret Angela’s Press deputy statement about next sunday, u wanted the euro, u had it, u did very poor with it, u wanna keep it, don’t ask me, it is ur decision ur problem and until u have made up ur minds and gone along the path we followed to make our public finances sound and healthy, please do not stand begging, do what’s necessary.

Just meant it is rather strange to be surprised by a rising euro scepticism when ur clueless to serve EU citizens interests, that's all. Don't know about that, too early but for sure if the load of sovereign junk paper on europe banks books can't find renewed value through perpetuals always used at time of crisis there will be more capital destroyed and if so recession will feed itself. Anyway, where ru with the numbers?

Think my next customer may be Italy, have u read Barroso's interview? Was stunned, the guy is trying to sell more Europe to solve the crisis... When this entire bureaucracy incuding the strasburg parliament has proves to be unable since 2008 to put together the slightest investigation commission and or any legislation to protect the consumer running stocks and loans hard sell, Europe has a countless number of victims of financial malpractices to say the least, individual investors ruined(natixis hard sell catastrophe) indebted cities and institutions, do u think they did put together a Dodd Franck thing to reach an appropriate legislation, no. Useless is the conclusion the average EU citizens reach of an overpaid tax exempted bureaucrats and frankly can't tell they are entirely wrong when the only registered success when regulation is involved is the launch of a full scale investigation over the color of the diesel petrol colour used to propel narrow boats onto the UK canals on sundays...
Did u get hold of the Greek budget?

That's got nothing to do but I don't mind a hand for the following, have seen a new stock listed on NY Euronext will also be listed on Budapest and is on hold for Warsaw. What are the legislations in place in these countries to protect investors? This particular company isn't the problem but the type of sale can make a bad name for shares and almost none countries have a legislation such as the investor protection act.

I have adjusted a bit the numbers following the ECB, the hair cut would be at 25%, the perpetuals would reach 30%, two series, one bridged for 5 years with interests capitalised, the alternative would be 3 series of 10% of the actual debt, one bridged for 3 years, the second bridged for 5 years, the third kicking in now. The expected capital gains would leave the private investor with a loss under 20%. The EFSF guarantee on the interest payments should allow the paper to reach inv grade, allowing collateral eligibility, and to elect for most of the pension funds of at least the eurozone, inflation+margin interest payments made quarterly or monthly to attract investors allowing the swap beneficiaries (Greek debt holders) to be able to resell easily, just wonder how to pick the market maker?
With these numbers, I ll be the first client. Did u manage to have the Greek budget numbers for a simulation? Does it fit reasonable? How to test in a short period of time the pension funds managers worldwide the taste for a product such as this one? Saving a lot of capital for the EFSF, what's ur evaluation of the guarantee cost and how much capital it may freeze? - m looking to extend it looking at the needs for pensions.

If rated investment grade and it should if perpetuals interest payments are EFSF guaranteed? What are the chances to look at a success knowing the pension funds needs of perpetual TIPS+margin?

I know Euskal Herria, guess what, I was curious about this spelling mistake I keep making and browsed back to find out. That’s how I caught the thing Euskadi, sail to, Helly Hansen, sailing gear, HH then I go Heuskal Herria with 2 Hs. Amazing. I have to do something about it.

What about the margin? 250 basis points look to me a maximum given the circumstances and can the contract specify an early window after let’s say 50 years which sounds a fair deal for the issuer once more given the circumstances? What rating can be expected?

I will as soon as I m done. Just keep in mind those numbers are OECDs little outdated it can't have changed a lot. Will do and post as soon as I m done. Just wondering if the Dexia guy stating the bank management received instructions from the french gov to act against ther best interests of the shareholders, I was stunned. Responsible for these instructions Lagarde at the time finance minister drives me to be cautious as she has had some bitter fight with some lobbies but if it happened to be true well crony banking will have set a new record in bankrupcy... What r u up to?

My numbers are a bit outdated ... ( Would appreciate some new if possible) but never mind the combined exposures/Tier one capital to Greece, Spain and Italy comes up to 36% had reported OECD so even if banks have done a lot to overcome the weaknesses showed when Lehman went down, I doubt the we don't need capital can stand an uncontrolled default spreading. It is true no capital need as long as there is no default.

It isn't accounted for but it does affect the outlook.

I m just awaiting for Fitch don't know yet for how much they r in for. Bloomberg today reports Belgium is buying the retail business but Dexia's balance sheet was 518 billions june the 30th more than the Greek banking system, larger than the combined financial institutions bailed out in Ireland... I expect a review soon at least a change of the outlook but I m afraid it will be more than just that....

Not much from the Press Conference in Berlin and EU Commission Barroso reiterated, a Greek default would trigger a larger crisis. That's why if u can get the ECB holding as well as the cross border holdings public and private, it would facilitate.

After looking at the cross border exposures I just doubt of a possible controlled Greek default. What I need now is the ECB position, for how much the central bank has bought of thE Greek debt first, then Portugal, Italian, Spain and Ireland. If I admit I support the principle that it is unacceptable, it may be an opportunity and just what's needed.
Can u help?

Think it would be great if u could forward widely these two links, first one is articles about Slovakia, second is SAS adress to send support for the right of Slovakia and eventually others to control the messy and incompetent euro bureaucracy responsible for the worst crisis since WW2.

http://eupolitics.einnews.com/news/freedom-and-solidarity

http://www.strana-sas.sk/

Send support here : Kontakt na správu webu support@strana-sas.sk

Below from the BIS latest quarterly review,

Fitch Ratings reports that the 10 largest prime MMMFs cut back their European bank holdings by 20% (approximately $79 billion) between end-May and end-July, and by 97% vis-à-vis banks from Italy and Spain, to protect themselves against banks facing write-downs on their holdings of debt issued by their home sovereign.

Is it what u r looking for?

Don’t think so, phone calls and the arm twisting are for tomorrow and the pressure will run high on Bratislava… and it is rather awkward to watch the little support they get for what is a very legit fight for their interests and absolute right to ask for a way to control the evolution of their liabilities through the EFSF given the abilities the euro bureaucracy has demonstrated in risk management and regulation of the financial sector… they were in charge of….

Cross border exposures for now if u have some.

Alright I did instead can u get us the updated numbers?

Well I agree with that but how? Take the example of the famous eurobonds... U had an all bench of dummies running around and jumping up and down, with a euro area gross liability at 96.5 per cent of GDPn how long do u bet it is going to take before the dam thing is shorted big time and what would be the rating to start with... Now as long as we have so few people paying interest to what's going on and willing to force politicians to act responsibly... Frankly... Don't know.

Given the circumstances this is what made say the demands are very reasonable. The general gov gross financial liabilities per cent of nominal GDP are at the end of 2012 for Belgium 100.4, France 100, Greece 159.3, Ireland 125.6, Italy 128.4, Portugal 115.8 (eurozone countries with a gross liability exceeding 100 per cent of GDP) Slovakia has undoubtedly a right to take every step to protect its interests, - can't say anything different.

These r the numbers as known prior to any growing need due to a recession, for the period 2009 -2012 the budget financing needs were 671 billions vs the EFSF 440 billions (780 if including the IMF and EU funds) leaving very little to recap banks now if taking 2009-2013 the budget needs are at 904 billions leaving nothing to recap banks... U can't be doing both. The number excluding Italy is 537 billions.

These r the numbers as known prior to any growing need due to a recession, for the period 2009 -2012 the budget financing needs were 671 billions vs the EFSF 440 billions (780 if including the IMF and EU funds) leaving very little to recap banks now if taking 2009-2013 the budget needs are at 904 billions leaving nothing to recap banks... U can't be doing both.

At this hour I doubt he can be reached but not along ago talks were still on despite the reported deadlock after the PM refused to satisfy some quite reasonable demand the Freedom and Solidarity party made, two of which were, one, an inter-party committee with able to veto any individual EFSF disbursement, two, the country doesn't participate in the SPV. As I told u last week, it sounds to me reasonable once the numbers are known, right now if the EFSF is used to recap the banks then the budgets projected needs for the eurozone countries the OECD put up in a note a few months ago will not be funded once revised in the midst of a recession.
What do u have ur side?

Slovaks and Dutch, hang on to ur wallet, Sarky's morals are around is what the post was about I have guessed while not asbsolutely sure> Let's make it clear, we r not impressed at all, the only and first moral existing obligation there is was to make sure no gov of any country uses the confort of low interest rates the eurozone provided to end up cripled under debts getting its nation in economic hardship for years to come. A complete failure. And today? If there still is a moral obligation that is to make sure no one else get into the fast debt train to bankrupcy, in that regard, the arm twisting of Slovakia and the Netherlands looks suspicious to me. If some countries are willing to quote save Greece end quote by moral virtue or economic interests, they should do it and the quicker the better without doing dirty politics at the same time>

There is for these countries no financial obligation to get onboard Slovakia or the Netherlands, the idea to get them on board to create a situation in which they won't be able anytime later when the need for more bailouts will kick in and the need to increase the fund an obligation to jump off the train is udderly wrong and can only lead to a catastrophy.