Giant bank fails! Biggest since debt crisis! Next, expect another failed bailout!
Martin D. Weiss, Ph.D.
It’s the biggest bank failure since the debt crisis of 2008-2009.
It’s so big, in fact, that its assets are actually LARGER than the total GDP of the country where it’s domiciled.
And this kind of failure is precisely what we’ve been warning you about in our new blockbuster video.
In this video, not only do I tell what’s going to happen next, but I also name the 10 giant U.S. banks that are most vulnerable to this banking crisis.
I urge you to click here to watch it now. With this huge new bank failure hitting the news today, it’s more urgent than ever.
The bank that just failed is Dexia, and the country is Belgium. But if you don’t live in Belgium ... and you think that fact makes this failure less relevant to your banks or to your investments, consider these shocking facts:
Shocking fact #1. Dexia was the world’s largest lender to municipal governments in the U.S. and overseas. So as the bank’s various pieces are chopped up and sold off to other institutions, it’s naturally going to be a lot tougher for municipalities to get financing.
Result: More belt tightening and job cuts at local governments everywhere.
Shocking fact #2. Dexia was one of many large banks that actually PASSED Europe’s official “stress tests” just three months ago.
And yet it’s the first to go down!? What does that tell us about the OTHER, even larger banks that supposedly passed the tests?
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I’m talking about giant banks loaded with bad loans like ...
The big disconnect: The official stress tests let these banks lie through their teeth about their huge loans to Greece, Ireland, Portugal and other PIIGS countries. Those loans are worth as little as 40 cents on the dollar on the market. And yet, in the recent stress tests, the banks were allowed to value them at 100 cents on the dollar! Result: They also lied about their capital and their solvency! This absurd — and deliberate — oversight by the banking regulators is widely known; and they’ve already been raked over the coals for it. What’s not widely known is ... Shocking fact #3. It wasn’t recognition of the bad PIIIGS loans that sunk Dexia. Even today, as Dexia is being split up and sold off, it’s STILL carrying those loans at full value on its books! So what did sink Dexia? It was a bank run — the sudden and mass withdrawal of its funding. Moreover, the run on Dexia’s funds was not by consumers lining up on the street to pull out their deposits. Rather, it was by so-called “wholesale funding” sources — other big banks and institutional investors who can pull out hundreds of millions of euros and dollars with a simple click of the mouse. What makes this truly shocking is that nearly ALL large banks in Europe — including many that supposedly passed the stress tests with flying colors — also depend very heavily on these same funding sources: On average, they get nearly HALF of their money from these here-today-gone-tomorrow funding sources. That’s far MORE than they get from ordinary deposits. Even Moody’s admits: “Until this problem is corrected, ‘fixing’ European banking is merely applying band-aids.” And guess what! The promises made last night by France and Germany — to “recapitalize the banks” — do NOT fix this problem! If anything, if France and Germany throw more good money after bad into saving these banks, it will merely sink their own finances, invite more ratings downgrades, cause bigger losses in sovereign bonds, and dig a deeper hole in the banks’ capital. Shocking fact #4. Some of the largest U.S. banks, including Bank of America and JPMorgan Chase, are equally vulnerable, according to our analysis. They’re loaded with toxic assets of their own. And to make matters worse, they have placed big bets with European banks. I name them in my video. Plus I give you a 6-step plan for protection and profit from this crisis. Click here, and it will begin playing on your screen right away. Just bear in mind that the crisis is hitting right now. So time for protective action is running out. Good luck and God bless! Martin |
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Oct. 10, 2011