Europe’s Banks Are Still Drowning in Bad Loans

Submitted by Pater Tenebrarum  –  The Acting Man Blog

A “Major Concern”

The European Banking Authority EBA, which (we guess) is fighting for its survival after the ECB has become the sole supervisor of Europe’s “systemically relevant” banks, has recently issued a comprehensive report on the European banking system (this included the unintended revelation that its employees have yet to master the intricacies of Exel).

As an aside, we have little doubt that this bureaucracy will survive. Has there ever been a case of an EU bureaucracy not surviving and thriving? We don’t recall one off the cuff, but perhaps we are mistaken. We’re sure some reason will be found to preserve this particular zombie sinecure as well.


eba_2Hey guys! We’re still issuing reports! See how important it is to keep us well-funded?


Among the things the EBA’s report apprises us of, is that European banks continue to be submerged in bad loans, in spite of all the bailouts and extend & pretend schemes that have been implemented in recent years. AsReuters reports:


“The scale of bad loans held by banks in the European Union is “a major concern” and more than double the level in the United States, despite an improvement in recent years, the EU’s banking regulator said on Tuesday.

Non-performing loans (NPL) across Europe’s major banks averaged 5.6 percent at the end of June, down from 6.1 percent at the start of the year. But that compares with an average of less than 3 percent in the United States and even lower in Asia, according to the European Banking Authority (EBA).

The total of NPLs across Europe is about 1 trillion euros ($1.1 trillion), equivalent to the size of Spain’s annual gross domestic product (GDP) and 7.3 percent of the EU’s GDP.

Tuesday’s figures were the first time detailed data on NPLs, defined as a loan that is more than 90 days overdue or where problems are spotted earlier, have been released in Europe. The EBA data covered 105 banks, spanning 20 EU countries and Norway.

Some 16.7 percent of loans at banks in Italy were designated as NPLs, equivalent to 17.1 percent of the country’s GDP. Spain’s banks had an average NPL ratio of 7.1 percent, or 15.8 percent of its GDP. Banks in Cyprus fared even worse, with half of their loans classified as bad, followed by Slovenia (28.4 percent), Ireland (21.5 percent) and Hungary (18.9 percent).

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The Only Way to Make Real Money in the Markets

Submitted by William Bonner, Chairman – Bonner & Partners

Knave or Fool?

WATERFORD, Ireland – Markets were calm on Monday. Investors wanted to panic, as usual, but didn’t know what direction to take.

We’re not sure either. On the one hand, the world economy is slowing down. On the other, Mario Draghi has announced again that he – not willing buyers and sellers – will determine consumer prices.


DraghiMario Draghi, the monetary crank currently heading the ECB. We are not dispensing this insult (or let us better say: this objective description) of the man willy-nilly. The hoary inflationism he propagates was unmasked as the hallmark of monetary crankery more than a century ago already. Somehow it has become the “economic orthodoxy” of the centrally planned fiat money system and the welfare states that are hosting it.

Photo credit: Picture Alliance / DPA


And he wants to see them go higher. No kidding. Bloomberg:


“European Central Bank President Mario Draghi set the scene for further stimulus in two weeks’ time, saying the institution will do what’s necessary to reach its inflation goal rapidly. The euro fell.

‘If we decide that the current trajectory of our policy is not sufficient to achieve that objective, we will do what we must to raise inflation as quickly as possible,’ Draghi said in a speech in Frankfurt on Friday.”


1-HICPFinally, the purchasing power of the euro actually appears to be stable. According to Mr. Draghi and his fellowbien pensants at the ECB, this is absolutely terrible and needs to be corrected by creating even more money from thin air – click to enlarge. Continue reading

Coming of Age: China’s Yuan To Join SDR Basket As IMF Reserve Currency

Submitted by Mark O’Byrne  –  GoldCore

Christine Lagarde and the IMF Executive Board recently announced their intention to include the Chinese renminbi (RMB) in the Special Drawing Rights’ (SDR) valuation formula.  This would bring the Chinese currency into an exclusive group – alongsidethe US dollar, the euro, the British pound and the Japanese yen – of 5 global currencies that make up the IMF’s own reserve currency.

So, what will this promotion really mean for the yuan?

GoldCore: Bank teller counts Yuan
A bank teller counts out Yuan

In market terms, not a whole lot it would seem.

The inclusion of the RMB in the SDR basket will not significantly increase demand for the currency. It is simply an acknowledgment that the Chinese currency has fulfilled two of the IMF criteria for inclusion; that it was “widely used” and that it was “freely usable”.

“The reason for there to be little effect is just that reserve currencies, SDRs, even central bank foreign exchange reserves, just aren’t all that important these days. There’ll be a little more demand for yuan than there otherwise would have been…”  Tim Worstall, Forbes

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Guest Column From George Abert, Formerly Of Air Force Intelligence

Submitted by Dr. Paul Craig Roberts – Institute for Public Economy

Guest Column From George Abert, Formerly Of Air Force Intelligence

Why did Turkey shoot down a Russian Air Force jet?

Turkey is so militarily inferior to Russia that it is unlikely Turkey would commit an act of war against Russia without encouragement from Washington. We might think that Turkey would feel shielded by NATO, but it is doubtful that many European members of NATO would risk nuclear annihiliation by going to war with Russia in order to save Turkey from the consequences of such a reckless and irresponsible act as shooting down a Russian military aircraft and lying about it. Turkey has issued no apology and no believable explanation. Unless Erdogan has lost his mind, Washington is behind the shootdown, and the reason is Washington’s desperation to decode the new Russian technology that gives Russian forces total control over a battlefield, whether on land, sea, or air.

When the Russians deployed their forces to Syria they also deployed some new stealth technology. So far as I know they’ve only used this technology in Syria twice, once during their first sortie and one other time when some Israeli Air Force jets entered what they knew was Russian operational airspace.

As noted, the first use of this stealth technology was during the first Russian sortie. In accordance with protocols agreed to beforehand with Israel and the US, the Russians informed the US of their intent to launch a sortie. They did so an hour prior to the launch. When they did they also employed a new stealth technology. The technology effectively blinded both the US and Israel. None of the radars worked and most, if not all, satellite coverage was lost or compromised as well. But there’s more.

About a week after Putin’s UN General Assembly address the Israelis launched a sortie into Syria which flew into airspace that was under Russian operational control. Russian air controllers warned the Israelis that they had violated Russian controlled airspace. When the Israelis ignored the Russian air controllers, the stealth technology was employed a second time. The Israeli aircraft are equipped with two radars, one for fire acquisition and the other for fire control. Both are advanced and employ frequency-skipping technology to avoid being jammed. Both radars were effectively jammed. These aircraft have multiple telemetry data-links to their base. These were shut down. The only communications channel left was the high-frequency AM band normally used by civilian air traffic controllers. After the stealth technology was turned on and it was clear to the Russians that the Israelis knew they had been shut down, the Russian air traffic controllers used this AM band to tell the Israelis to scram. The Israelis complied.

Whatever this technology is, it’s a game changer and I’m certain that breaking this technology has been given an extremely high priority.

So why did Turkey shoot down the Russian jet?

I suspect somebody wants the Russians to start using this stealth technology more often, often enough for its weaknesses to be exposed. Shooting down that Russian jet might just get the Russians motivated to do that.

If I’m correct I bet every Raven and ELINT specialist in the business has been deployed to that theater of operations to hack this one! One can only imagine how many resources are being amassed.

Here is an alternative view from Alexander Mercouris, who sees the incident as a blunder made by an out-of-control President Erdogan of Turkey. Mercouris writes that the reckless and irresponsible act has turned NATO against Erdogan and that even Obama is disturbed.

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth


• The $400 Billion Ripoff That Could Destroy The Greek Bailout (CNBC)
• Good News, Holiday Shoppers: Retailers Are Desperate (MarketWatch)
• China’s Stocks Sink Most in Three Months as Broker Probes Widen (Bloomberg)
• China October Industrial Profits Fall For Fifth Straight Month (Reuters)
• China’s Stock-Market Regulator is Investigating Citic Securities (WSJ)
• Japan Spending Slumps Even As Unemployment Hits 20-Year Low (Reuters)
• Japan Prime Minister Debuts New Social Programs to Help Economy (WSJ)
• Japan’s Debt Trap Won’t Fix Itself (Bloomberg)
• Bad Saudi PR Fuels Riyal Devaluation Talk (Reuters)
• EU Warns 12 Eurozone Nations Including Germany Over Imbalances (Bloomberg)
• Portugal’s Anti-Austerity Left Take Power In Watershed Moment For Euro (AEP)
• VW’s Emissions Scandal Exposes Far Deeper Problems In Europe (Bloomberg)
• ‘Classic Ponzi Scheme’: Sydney House Prices Are 12 Times The Annual Income (SMH)
• Biggest Overhaul Of Chinese Armed Forces In Six Decades (Bloomberg)
• Hollande, Putin Propose Closing Turkey-Syria Border (AFP)
• Russia Raiding Turkish Firms And Sending Imports Back (Al Jazeera)
• Turkish Journalists Charged Over Claim Secret Services Armed Syrian Rebels (AFP)
• Refugee Influx Threatens Fall Of EU, Warns Dutch PM (FT)
• After Uproar, German Town Warms To Refugees Who Took Over Church (Reuters)
• Stranded Migrants Try To Storm Into Macedonia, Tear Down Fence (Reuters)