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Biggest credit crunch bankruptcies so far in US

Update: 1 November 2011.

Two years have passed since the first list was compiled here at Asymptotix. Now with MG Global Chapter 11 filing, we though it's time to update the list (including pre-credit crunch):

1) Lehman Brothers Holdings, September 2008: $691 billion in assets

2) Washington Mutual, September 2008: $327.9 billion

3) WorldCom, July 2002: $103.9 billion

4) General Motors, June 2009: $91 billion

5) CIT Group, November 2009: $80.4 billion

6) Enron, 2001: $65.5 billion

7) Conseco, 2002: $61.4 billion

Eurozone to ask banks to accept losses of up to 50% on their holdings of Greek debt

Reuters reported yesterday that to the October 23 EU summit, the banks will be asked to accept losses of up to 50% on their holdings of Greek debt. This is much larger haircut compared to the 21% loss financial institutions were asked to accept in July.

This page outlines issues of the Greek storm blowing a 'howlin monster' over Brussels ....


Dexia press release: Belgian, French and Luxembourg states provide strong support



ORIGINAL THINKING here: What is going on at Dexia? 

photo credit, Metro Station Merode, Etterbeek, Brussels (from a Flickr friend) 

The Belgian, French and Luxembourg states provide strong


Visual of the 5yr CDS for BoA, MS, Dexia, Soc Gen, Banco Popular and Unicredit

Credit default swaps are contracts designed to insure creditors against a bank (or indeed any company) going bust.

A CDS is a contract issued by big City firms or fund that guarantees the holder will be covered if a particular company defaults on its debts. It is basically a type of insurance used by large investing institutions.

Dutch USD 200 million Ponzi Scheme: Quality Investments - Four Dutch arrested - raids conducted in 7 countries

Four Dutch citizens have been arrested in a fraud probe on two continents into a company specialising in life insurance that took more than $200 million from investors, prosecutors said Wednesday.

During the last 24 hours, intelligence services and Dutch tax investigators and authorities in other countries had raided 27 locations in the Netherlands, Spain, Turkey, Dubai, Britain, Switzerland and the United States.

The 2 trillion euro plan to save the euro

The Telegraph reports that German and French authorities have begun work on a three-pronged strategy behind the scenes amid escalating fears that the eurozone’s sovereign debt crisis is spiralling out of control. Their aim is to build a “firebreak” around Greece, Portugal and Ireland to prevent the crisis spreading to Italy and Spain, countries considered “too big to bail”.

G20: Communiqué of Finance Ministers and Central Bank Governors of the G-20 Washington DC, USA, 22 September 2011


We, the Finance Ministers and Central Bank Governors of the G-20 are committed to a strong and coordinated international response to address the renewed challenges facing the global economy, notably heightened downside risks from sovereign stresses, financial system fragility, market turbulence, weak economic growth and unacceptably high unemployment.

Seoul's Jeil 2 Saving bank executive Jeong Gu-Haeng jumps to death from 6th floor

The head of a major South Korean savings bank was found dead Friday in an apparent suicide after investigators raided his office as part of a probe into illegal dealings at several banks, police said.

Jeong Gu-Haeng, president of Seoul's Jeil 2 Savings Bank, appeared to have jumped from his office on the sixth floor of the bank's Seoul headquarters, a police officer told AFP.

"It is true that he jumped to his death," the officer said, adding the scene had been sealed off.

SNB Swiss National Bank M0 data shows an increase over 111% from July to August 2011

Switzerland SNB M0 July August 2011

While M0 increased from 77.2 bn CHF to 163.4 bn CHF, M1 increased from 442 bn CHF to 464, M2 from 689 bn CHF to 713 bn CHF and M3 increased from 748 bn CHF in July to 762 bn CHF in August.

Roubini: 8 Urgent Steps to Prevent Depression

Nouriel RoubiniIn a worsening global economic climate, steps should be taken to avoid outright depression, said economist Nouriel Roubini, and among those steps are the postponement of austerity measures by nations able to do so and credit easing as well as quantitative easing.

NAR: August Existing-Home Sales Rise Despite Headwinds, Up Strongly from a Year Ago

Washington, DC, September 21, 2011

Existing-home sales increased in August, even with ongoing tight credit and appraisal problems, along with regional disruptions created by Hurricane Irene, according to the National Association of Realtors®. Monthly gains were seen in all regions.

IMF Global Financial Stability Report - September 2011: Europe bank's exposure to the eurozone debt crisis increased to €300bn


Europe bank's exposure to the eurozone debt crisis has increased to €300bn (£263bn).

Cumulative spillovers from high spread euro area sovereigns to the EU banking system - 300 bn euros

The epicenter of sovereign risk has been Greece, which generated the first of four waves of spillover to European banks. The analysis suggests that, first, spillovers on European bank exposures to the Greek sovereign have amounted to almost €60 billion (Figure 1.17). Second, as sovereign risks spread to other governments, the spillovers to banks have mounted. If the sovereign stresses in Ireland and Portugal are included, the total spillover rises to €80 billion. Third, the governments in Belgium, Italy, and Spain have also come under market pressure; incorporating credit risks from these sovereigns into the analysis further raises the total estimated spillover, to about €200 billion. Fourth, bank asset prices in the high-spread euro area have fallen in concert with sovereign stresses, leading to a rise in the credit risk of interbank exposures; including those exposures increases the total estimated spillover to €300 billion overall. Although these numbers are based on market assessments of credit risk, which may reflect a degree of overshooting, the underlying problems that they highlight are real.

What the FED is going on today? Operation Twist to revive economy?

An increasingly divided Federal Reserve faces stubbornly high unemployment and emerging threats of inflation as its exclusive group of policymakers gathers this week.

They’re likely to do the twist.

Make that Operation Twist, or at least a revamped version of the 1960s Fed effort that got its name from the popular 1960 dance tune by Chubby Checker. The strategy was largely considered a failure at the time but has gained new traction in these difficult times.

IMF World Economic Outlook September 2011: Weak and Bumpy Global Recovery Ahead

  • Global growth forecast to moderate to 4 percent in 2011 and 2012

  • Advanced economies facing anemic growth of only 1.6 percent in 2011

  • Multiple shocks combined with insufficient rebalancing stalling recovery

The global economic recovery is slowing, with world growth projected at 4 percent in both 2011 and 2012, down from over 5 percent in 2010, the IMF said in its latest forecast.

And even this lowered projection counts on a lot going well.

The IMF foresaw a slowdown this year after strong growth in 2010 as fiscal stimulus packages in response to the crisis wound down. But a barrage of economic shocks in 2011 combined with other factors for a worse than anticipated outcome.

“The global economy is in a dangerous new phase. Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing,” the IMF said in its September 2011 World Economic Outlook (WEO).

Bob M. Traa the IMF man in Greece

Mr. Traa is a national of the Netherlands and has been with the IMF for 25 years. He holds a PhD in economics.

Not everyone believes cutting the IOER is the right move for the FED this week

There are expectations across the market that a stimulus measure the Federal Reserve might announce this week will end up hurting investors in the very economy it's trying to revive.

Some market participants expect the Fed, in its two-day policy meeting starting Tuesday, to try bolstering the economy by announcing a reduction or complete elimination of the interest it pays banks for storing excess cash at the central bank. Goldman Sachs said there's a 50% chance this will happen.

The goal is to push banks to start lending and get the economy flowing.

ICMB and CEPR group of economists recommendations on USA, Europe and Japan

ICMB and CEPR has published a report Public Debt: Nuts, Bolts and Worries.



The thirteenth

Lloyds finance director Tim Tookey set to resign

Tim Tookey, the finance director of Lloyds Banking Group, is resigning from Britain’s biggest high-street lender, after falling out with the bank’s new chief executive, António Horta-Osório. Friends Life, the UK life assurance company created by Clive Cowdery’s Resolution consolidation group, will announce on Monday that Mr Tookey is joining as chief financial officer. This according to FT.

FSA, Swiss Regulator Launch Joint UBS Probe

The City regulator and its Swiss counterpart are to launch a joint probe into the alleged rogue trades which have cost UBS an estimated £1.3bn. The Financial Services Authority and Finma will announce the joint investigation shortly.

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