tag:blogger.com,1999:blog-4815867514277794362.post1010021460197911980..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: Iceland, Switzerland, Denmark, Sweden, Jordan and countries with banks that are too big to bail outJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-4815867514277794362.post-62447786666181394912008-11-19T09:24:00.000+11:002008-11-19T09:24:00.000+11:00Danske Bank IMHO is the HBOS of Denmark.As far as ...Danske Bank IMHO is the HBOS of Denmark.<BR/><BR/>As far as I am aware Danske Bank is the only bank/company that have a direct access to the FED via a 30bn USD CP line.<BR/><BR/>The Danish goverment has guaranteed all deposits in Denmark with the unintended consequences that investors would not buy the variable rate mortgage bonds (ARMS) coming up for renewal in December. <BR/><BR/>Solution, the goverment changed the discount factor for pensions funds to make more room for them to buy bonds.<BR/><BR/>On top of that household debt to disposable income in Denmark is 4.7x, the highest in the world (apart from Iceland now after the collapse of the currency)<BR/><BR/>Danske Bank is dealing with a solvency crisis not a liquidity crisis.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-39882038551295023752008-11-13T09:26:00.000+11:002008-11-13T09:26:00.000+11:00What about Spain? Big banks and a crappy economy.....What about Spain? Big banks and a crappy economy...elartistamadridistahttps://www.blogger.com/profile/13700628721348517769noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-36285108196432162082008-11-13T07:55:00.000+11:002008-11-13T07:55:00.000+11:00John- Can you go into a little more detail why yo...John- Can you go into a little more detail why you think American taxpayers will be stuck fixing UBS and/or Barclays rather than European taxpayers? We look like we have rather more than we can handle just dealing with US banks, car companies, etc. without trying to fix European banks as well.MattJhttps://www.blogger.com/profile/07521394649468155883noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-65752418254306469802008-11-13T06:39:00.000+11:002008-11-13T06:39:00.000+11:00I have looked at Belgium and Dexia. Dexia was onc...I have looked at Belgium and Dexia. Dexia was once a simple public finance bank. It then proceeded to to 50 acquisitions in quick succession. The one they are most famous for these days is FSA - an Ambac/MBIA competitor.<BR/><BR/>But the one I remember is Artesia. <BR/><BR/>I was once short Lernout and Hauspie - the software fraud. In the period before they blew up they borrowed money from Artesia (then a mutual) and a lesser amount from KBC. I played a five day short around KBC for pennies (when they declared the loss). But I desperately wanted to short Artesia - a bank I had previously never heard of.<BR/><BR/>Anyway - the reason I never heard of it was that it was a mutual and I could not short it. <BR/><BR/>It got itself into some hot water and sold itself to Dexia (effectively a bail out). <BR/><BR/>Dexia has a few things like that in it.<BR/><BR/>JJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-13177311043671679042008-11-13T05:22:00.000+11:002008-11-13T05:22:00.000+11:00John,The Swiss blog Zeitenwende picked this up age...John,<BR/><BR/>The Swiss blog Zeitenwende picked this up ages ago regarding UBS and Credit Suisse. The Swiss are rather anxious about all of this -- and angry that their banking industry is looking shabby. I translated their post into English in early October. Here it is:<BR/><BR/>http://www.creditwritedowns.com/2008/10/switzerland-politicians-need-to-act-now.html<BR/><BR/>The quote that is most relevant is this one:<BR/><BR/>UBS and CS are, on the one hand, too big to fail for Switzerland. However, Switzerland is also too small to save the big banks. Since the [Swiss] Confederation cannot draw upon sparring partners in the EU, it needs a different solution and my solution is: Pension funds!<BR/><BR/>By no means do I think the Swiss are out of the woods yet.<BR/><BR/>Cheers<BR/><BR/>EdwardEdward Harrisonhttps://www.blogger.com/profile/06078305973678479125noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-2472008004466564602008-11-13T04:06:00.000+11:002008-11-13T04:06:00.000+11:00John - big fan of the blog. As an aussie myself i ...John - big fan of the blog. As an aussie myself i find it refreshing to read rational insight rather than blathering bullishness from fellow countrymen.<BR/><BR/>Have you looked at Belgium and Dexia? Also, i think you give ING far too much credit. Their leverage to tangible equity is atrocious.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-87325851997452863952008-11-13T01:55:00.000+11:002008-11-13T01:55:00.000+11:00"Now do American taxpayers want to pick up UBS or ..."Now do American taxpayers want to pick up UBS or Barclays? I don’t think in the end they will have any choice."<BR/><BR/>Are we the lender of last resort for the world? Do countries see us as implicitly backing their banks up, or is this simply a particular set of banks?<BR/><BR/>Don the libertarian DemocratDonald Pretarihttps://www.blogger.com/profile/14493535232127084725noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-17110415562783364752008-11-12T22:24:00.000+11:002008-11-12T22:24:00.000+11:00Yes I have looked extensively at Danske Bank's ris...Yes I have looked extensively at Danske Bank's risks. Its a funny story - for a while maybe the best centralised systems/mathematical risk assessment retail bank in the world.<BR/><BR/>But they have (totally) stuffed up the systems with the Sampo acquisition - as some people on the blog have pointed out. Also they got a Baltic exposure and overpaid. That was a shockingly bad buy - just scary bad.<BR/><BR/>They also stuffed the timing up for the Irish bank - but they ran the systems well. In the scheme of things the US exposure is small. <BR/><BR/>The Danish Mortgage and property market scares me a little too. <BR/><BR/>I personally like the guys running it though... so it is a little hard for me to pick it apart. But yes - I am not that opposed to your observations on it.<BR/><BR/>J<BR/><BR/>PS. Can you please please email me.<BR/><BR/>JJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-78522026984734521062008-11-12T17:40:00.000+11:002008-11-12T17:40:00.000+11:00Have you at all looked at Danske's risks?1. Big US...Have you at all looked at Danske's risks?<BR/><BR/>1. Big USA Sub-prime exposure, 5M unsold homes.<BR/><BR/>2. Own currency with thin reserves<BR/><BR/>3. Small economy, comparatively<BR/><BR/>4. Leveraged and mortgage lending gone too far domestically<BR/><BR/>5. Ireland risk<BR/><BR/>6. East-Europe risk<BR/><BR/>7. Baltia risk<BR/><BR/>Yes, the numbers so far are good, but to quote Meredith Whitney:<BR/><BR/>"If I had trusted banks' own numbers on these, I would not have understood anything of what is to come."<BR/><BR/>Somebody needs to take a long and hard look at their tier 2 assets and beyond.<BR/><BR/>I'd be mildly surprised, if they come out of this unscathed.<BR/><BR/>And yes, I agree on Swedbank.Anonymousnoreply@blogger.com