Financial, Real Estate, Stock Markets Trends and Current Affairs

As of late, I have been on a tear regarding the French banking system - having warned my paying subscribers at least a full quarter ago (and 50% in equity depreciation ago) that this was a house of cards ready to collapse. Well, now the chickens are coming home to roost and the sell side of Wall Street, the pop media, and the ratings agencies have all come around to this conclusion espoused in the BoomBustBllog archives, as was illustrated in the post As The French Bank Runs.... Of course, French bank management denies any and all financial and funding issues. As clearly ridiculed explained in This Is Why BoomBustBlog Is THE Place To Go For Hard Hitting Research: BoomBust BNP Parisbas?:

"Chief Executive Officer Frederic Oudea said in an interview with Bloomberg Television in New York that the bank’s exposure to European sovereign debt was “manageable” and that it could do without access to U.S. money-market funds.“For our bank, the exposure to sovereign debt is low, absolutely manageable,” Oudea said. “We have plenty of buffers of liquidity and we are adjusting to the reduction in the money- market fund exposure.”"

Note: For clarification, Oudea is the CEO of SocGen, but the the point remains as illustrated by a statement released by Bank of France governor Christophe Noyer, which said that French banks had no liquidity or solvency problems, and were recapitalizing.

Well, in the afore-linked piece, I published some choice tidbits from the Bank Run Liquidity Candidate Forensic Opinion - A full forensic note for professional and institutional subscribers (click here to subscribe), and otherwise known as BNP Paribas, First Thoughts, with interesting page titles such as the following...

BNP_Paribus_First_Thoughts_4_Page_04

Not even 24 hours later, what do we see in the pop financial media? BNP Paribas to Sell $95.4 Billion in Risk-Weighted Assets (CNBC) and BNP Paribas to Boost Capital Ratio, Cut U.S. Assets (Bloomberg).

(CNBC) France's top bank BNP Paribas announced a plan to sell 70 billion euros ($95.7 billion) of risk-weighted assets to help ease mounting investor fears about French bank leverage and funding, two days after smaller rival Societe Generale unveiled a similar plan.

So, who do you believe, bank CEOs or Reggie Middleton. Again borrowing from yesterday's post This Is Why BoomBustBlog Is THE Place To Go For Hard Hitting Research: BoomBust BNP Parisbas?, I offer a hint to those that may be in doubt by channeling my warnings of Bear Stearns in 2008, via Is this the Breaking of the Bear? (January 17, 2008) which I quote, "Bear Stearns is in Real trouble - Bear Stearns will soon be, if not already, in a fight for its life."

The forensic adjustments that led to a null economic book value in the case of Bear Stearns above are the same that need to be made to BNP Paribas, as illustrated from my post yesterday:

OK, I'll bite. Excactly how did BNP get to this €135 billion figure? Was it by using Lehman math? Methinks so, as clearly delineated in my resarch report on the very first page:

BNP_Paribus_First_Thoughts_4_Page_01BNP_Paribus_First_Thoughts_4_Page_01

Of course, and eerily, like Alan Schwartz (Bear Stearns then CEO), BNP Paribas CEO denies any problems and actually says the bank is handling its issues (that they don't have) rather well. Let's channel 2008 again for a moment, shall we?

Hey, Big Wall Street Bank Execs Always Tell the Truth When They're in Trouble, RIIIIGHT????

Here's more of Alan Schwartz lying on TV in March of 2008

I query thee, why sell $96 billion dollars of assets when there is NO liquidity problem? When I was a child I would often question my rather disciplinarian father's contradictory actions. He would then reply in his gruff, deep, masculine voice, 'Boy, do as I say not as I do!" Is BNP Paribas CEO channeling both the elder Middleton and Alan Schwartz of Bear Stearns' fame simultaneously?

On a separate, yet related note: Moody's Downgrades Credit Agricole, SocGen Ratings. BoomBustBloggers, you can't say you didn't see this coming...

A step by step tutorial on exactly how it will happen....

• The Mechanics Behind Setting Up A Potential European Bank Run Trade and European Bank Run Trading Supplement
• What Happens When That Juggler Gets Clumsy?
• Let's Walk The Path Of A Potential Pan-European Bank Run, Then Construct Trades To Profit From Such
• The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run Occurs!
• The Fuel Behind Institutional “Runs on the Bank” Burns Through Europe, Lehman-Style!
• Multiple Botched and Mismanaged Stress Test Have Created The Makings Of A Pan-European Bank Run 
• France, As Most Susceptible To Contagion, Will See Its Banks Suffer
• Observations Of French Markets From A Trader's Perspective
• On Your Mark, Get Set, (Bank) Run! The D…
• ECB As European Lender Of Last Resort = Institutional Purveyor Of A Pan-European Ponzi Scheme

Again, I believe the next big thing, for when (not if, but when) European banks blow up, is the reverberation through American banks and how it WILL affect us stateside! Subscribers, be sure to be prepared. Puts are already quite costly, but there are other methods if you haven't taken your positions when the research was first released. For those who wish to subscribe, click here.

•  Contagion Forensic Review - Retail
•  Contagion Forensic Review - Professional