Sunday, January 20, 2008

More German Bailouts Under Way ... West LB Needs At Least € 2 billion

What a surprise...... Düsseldorf seems to be the capital of banking incompetence in Germany. West LB & IKB two of the biggest casualties have their headquarter located there. Unlike in the US we don´t need the Petro or Sovereign Wealth Fund Dollars. We have the German taxpayer on the hook once again for the West LB who is in different ways owned through several state or municipal entities ( see West LB Factsheet ). If you add Sachsen LB to the bailout list we are easily at amounts that exceed € 10 billion taxpayers money and this exposure is still rising......

Welch Überraschung........ Düsseldorf ist unzweifelhalft die Hauptstadt in Sachen deutscher Bankeninkompetenz. Neben der West LB hat auch die IKB haben dort Ihren Hauptsitz. Während die US Banken um Petro $ und Staatsfons buhlen muß können sich diese Institute der Hilfe des deutschen Steuerzahlers sicher sein. Wenn man jetzt die Sachsen LB hinzuzieht bewegen wir uns jetzt schon locker im zweistelligen Mrdbereich an fehlgeleiteter Steuergelder die der Inkompetenz, dem Größenwahn einiger Provinzbänker und einer komplett überforderten Aufsicht (Aufsichtsrat, Bafin, Ministerium usw) geschuldet sind. Dummerweise ist das noch lange nicht das Ende der Fahnenstange.....

The entire debacle is becoming a real joke when you review their slogan when it comes to the problem sector SIV/conduits that is causing the largest part ( on top of trading losses, bad debt etc ) of the problem ( see WestLB, HSH Nordbank Bail Out $15 Billion of SIVs )...."Premier Structured Finance House - Our Core business" ....

Das ganze wird schon fast wieder komisch wenn man sich den Slogan der gerade den problembehafteten Sektor in den Worten der Wets LB beschreibt ( siehe WestLB, HSH Nordbank Bail Out $15 Billion of SIVs ) "Premier Structured Finance House - Our Core Business"

On top of this the biggest Landesbank the LBBW is also eating losses of around € 1.7 billion related to subprime and SIV/conduits. But they are at least strong enough to survive this without new capital.

Die Meldung das die LBBW ebenfalls 1,7 Mrd an Abschreibungen im Zusammenhang mit Ihrem Ausflug in die schöne neue Welt der ausserbilanzlichen Zweckgemeinschaften & US Hypotheken verloren hat sollte zumindest am Rande erwähnt werden. Immer verkraften die das ohne neue Hilfe des Steuerzahlers. Bleibt zu hoffen das dies auch zukünftig so bleiben wird

Quote December West LB related to the SIV / Zitat Dezember West LB

“We are also convinced that the assets that Kestrel and Harrier have could be more highly valued, but that the market is not ready for that.”

WestLB Expects EU1 Billion Loss for 2007, Will Raise Capital Bloomberg

West LB’s “non-permanent” writedowns FT Alphaville

WestLB ringt um frisches Kapital FT

Der West LB droht ein Milliardenverlust FAZ

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Anonymous dan said...

another week, another couple billion. y'know, pretty soon this will start to add up to real money!

11:17 PM  
Blogger jmf said...

Moin Dan,


I really like the stat that it took Merrill Lynch just one quarter to wipe out 4 years of book value gains....

11:31 PM  
Anonymous Anonymous said...

Are the German bankers going to get record bonuses like their boneheaded American brothers?

(If I remember correctly, the average (mean) compensation at the U.S. investment banks is around $600,000... That includes the secretaries.)

11:34 PM  
Blogger jmf said...

Moin Anon,

definitely not!

I expect that almost every Landesbank will have to exit the investment banking in the near future.

The owners won´t tolerate this mess any longer.

But if they would have done their job (oversight in the board) they could have prevented at least the biggest mistakes.

The newspaper are speculating already that almost 30% of the staff has has to go.

11:41 PM  
Anonymous eh said...

We have the German taxpayer on the hook once again...

In Deutschland nennt man das 'Soziale Gerechtigkeit', oder so 'was.

Could be useful if we have a recession!

1:11 AM  
Blogger jmf said...

Moin Eh,

i think the public really don´t get the real picture. They don´t realize that so much of taxpayers money is need to keep this superfluous Landesbanken solvent

i have sold more short today in the some kind of panic selling and believe it or not went long the Nasgaq100 at around 1800

Tight SL as always

1:16 AM  
Anonymous eh said...


...went long the Nasgaq100 at around 1800

I understand the temptation. I was surprised by the big drop in Asia today (especially since US markets are closed), and am expecting another rally or two there. But look at INTC -- how many people thought it was a good buy when it dropped to under 20? On Friday it barely managed to avoid closing below 19. If AAPL earnings disappoint, IMO it is 'look out below' there. A lot of good companies are already getting killed -- zB CSCO.

I still have a few HB shorts, and have traded in/out of a few ETFs (SRS, SKF) -- aber es ist bisher nicht optimal gelaufen. Also DXESX, which I have been watching for a long time (I would really like to take a BIG position there, when the time is right).

2:49 AM  
Anonymous eh said...

Investors pour cash into emerging markets

Immer noch...?

2:59 AM  
Blogger jmf said...

Moin Eh,


What a slump. I can smell panic....

It´s funny how the market can ignore fundamentals for 12-24 month and than tries to adjust withing 4-6 weeks....

3:14 AM  
Blogger jmf said...

"Immer noch...?"

A bit outdated..... During the past few weeks the opposite is true....

What happened to the decoupling theory ?

Even if the economies can withstand the US slowdown (which i doubt) the equity markets cannot....

3:33 AM  
Anonymous Barley said...

2 things I have held since last June:
1. DOW drops to 9600 (or so)
2. China will drop like a stone once everybody realizes that everybody is really gambeling not investing.

A convenient enduring truth: Lets hang our dirty laundry after our bonus checks clear the Bank.

8:13 AM  
Anonymous Anonymous said...

Hello Immobilienblasen and friends

I notice your mention of the big SachsenLB bailout that occurred when their Dublin subsidary broke regulations and got into a lot of trouble. Could anyone point to a German person that was highly critical of the regulatory system in Dublin?

any help appreciated.

7:01 AM  
Blogger jmf said...

Moin Anon,

unfortunatley to my knowledge there was no one try to block that almost every German bank ( especially the state owned Landesbanken ) were offshoring business to Dublin.....

7:18 AM  

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