Saturday, October 8, 2011

Dexia bank; Europe Bear Stearns Moment?

Before the demise of Lehman Brothers plunged the global financial system into a temporary state of anarchy in the Fall of 2008, the collapse of Bear Stearns fired a warning shot across the bow of the world.

If past is prelude, are the troubles of Franco-Belgian bank Dexia about to lead to a repeat the Lehman moment of 2008?

Dexia plays a significant role in the $2.9 trillion global municipal debt market. The bank backstops debt on the state and local government level across the world and across America, including New York City issued bonds.

Noting that just 3 years ago the Federal Reserve was spending more money propping up Dexia than any other bank in the world, this interview notes that Dexia is now so laden with toxic loans and derivatives and has such a stunning lack of transparency that the “market has lost complete faith.”

If the meltdown of ’08 taught us anything it’s that faith is what banks can least afford to lose in a crisis. This is an explosive issue in Europe definately worth watching this weekend.

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  1. What is your take on Occupy Vancouver?

    It looks as though it is going to be big.

  2. Personally?

    I doubt even 5% of those who will be in attendance even know what the Federal Reserve is.

    It will give the 'professional' protesters in Vancouver something to do.

    I would like to believe something great will come from it, but Vancouver will not be galvanized until after our bubble collapses.

  3. I find this blog far from "fringy" but if I start talking about silver or real estate or politics in any way that does not align with whatever the msm is spewing at that moment I get the blank slightly pitiful stares normally reserved for the homeless and masturbating primates...

    I agree less than 5% will know what the Fed is but even less in the general population would have a clue.