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The Run On SocGen Begins? Bank Down 17% On Rumors It Is On The Verge
Following earlier news that French CDS hit a record high on a rumor of an imminent French downgrade, the bloodbath in financials, first started in Italy, with 3 consecutive halts in Intesa causing endless headaches for Italin investors, the red tide has now shifted over to France, where SocGen, three years after fooling the Chairsatan that the world was ending and pushing him to cut rates by an unprecedented 0.75% on what was a trader error, now succeeded in getting the chairsatan to extend ZIRP for two years... And still that is not helping. SocGen was down 17%21% as recently as minutes ago, on a repeat rumor that SocGen is indeed on the verge of insolvency, and that it participated in an extraordinary meeting convened by Sarkozy this morning. We are following the story and will let you know if we see any halt in the relentless selling of the bank which is rapidly becoming the next Lehman. Elsewgere, BNP was down over 8%10%, and Credit Agricole about -7.5%9.2%. "If credit default swaps on France are under attack that’s not a good sign,” said Yves Marcais, a sales trader at Global Equities in Paris. “That means that France is under attack and that’s worrisome. French banks hold a lot of French bonds." Translated: another vicious and quite toxic catch 22, stemming from the blow out in French CDS. When will they ever learn?
It is no. 2 French bank behind BNP Paribas and the no. 8 bank in the european zone ahead of Credit Suisse...
Société Générale is the 3rd largest Corporate and Investment bank in the Eurozone by net banking income and the 6th largest French company by market capitalization. It employs 120,000 people, of which 75,000 in Europe, and maintains a presence in 80 countries.
European shares extend losses, French banks plunge
SocGen fell more than 21 percent at one point to as low as 20.16 euros, its weakest since March 2009.
FTSE takes another hit as Bank slashes economic forecast and Fed warning triggers Dow Jones slump
Fear returned to the financial markets today as fresh concerns about the US debt crisis and fears over UK recovery helped to wipe out recent recovery signs.
In London, the FTSE 100 Index fell more thaan 4 per cent, erasing earlier gains, while the Dow Jones Industrial Average in the US was down by more than 2.5 per cent.
The turmoil came as the Bank of England warned that the UK economy's recovery could be derailed by global instability.
The Bank cut its 2011 growth forecast for the UK to about 1.4 per cent, from 1.8 per cent, because the economy faces 'persistent headwinds' from the slowdown affecting Europe and the U.S.
Originally posted by jtma508
So no actual bank run but rather a decline in their equities? Should change the title perhaps.
Originally posted by loam
I think the punctuation in both titles speaks for itself.
Originally posted by earthling42
Some fun to lighten the day, The Long Johns
Reuters has just broken news that at least one bank in Asia, and five other in process, has cut credit lines to major French lenders "as worries about the exposure of French banks to peripheral euro zone debt mounts, banking sources told Reuters on Thursday." Why is this worrying? Because as is by now well-known, the PBoC has been as aggressive a buyer in the primary market of European market as most European banks, which as is well-known immediately turn and pledge said debt as collateral to the ECB for 100 cents on the euro, and the fact that its proxies are now quietly withdrawing from the European market as lenders of last resort, is probably far worse news than a rumor that the S&P may cut France.
The French stock market fell 11 percent last week on the rumours, while doubts persist about the health of the Spanish and Italian economies and the future of the single currency.
Successive EU bailouts have dented Merkel’s approval ratings.
In her absence, Economy Minister Philip Rösler has proposed a euro zone stability council to monitor the economic health of its seventeen members.
Rösler now wants to present his ideas at an EU level.
But those final decisions will ultimately be taken by Merkel and Sarkozy.
The two leaders will meet in Paris aiming to produce “joint proposals” on how to improve euro zone governance and help its indebted economies.