Societe Generale thread

[m22au]

Thought it might be useful to have a separate thread for discussing the woes of SocGen.

Here is a good article from Reggie Middleton:

http://boombustblog.com/BoomBustBlo...Be-Worse-And-Bank-Run-Can-t-Be-Ruled-Out.html

 

[ASusilovic]

Quote from m22au:

Thought it might be useful to have a separate thread for discussing the woes of SocGen.

Here is a good article from Reggie Middleton:

http://boombustblog.com/BoomBustBlo...Be-Worse-And-Bank-Run-Can-t-Be-Ruled-Out.html

Sorry, I respected your postings about the banking sector in the past. But the information in the link is VERY LOW QUALITY.

If, would, should, could, maybe...that´s all what it has to offer.

 

[m22au]

Quote from ASusilovic:

Sorry, I respected your postings about the banking sector in the past. But the information in the link is VERY LOW QUALITY.

If, would, should, could, maybe...that´s all what it has to offer.

Good point, but if nothing else it's useful in recognising that there are strong similarities between BSC / LEH and the current situation with SocGen.

 

[Daal]

I'd say there are a ton of differences between BSC/LEH and SocGen. For one they have full ECB support which the ibanks didn't had. Furthermore EUROTarp is already out there through the ESFS. Chance of SocGen failling is close to 0% as it gets

 

[m22au]

Quote from Daal:

I'd say there are a ton of differences between BSC/LEH and SocGen. For one they have full ECB support which the ibanks didn't had. Furthermore EUROTarp is already out there through the ESFS. Chance of SocGen failling is close to 0% as it gets

Agree that it's unlikely that SocGen will fail, because of government support.

But if the bank loses its sources of ST funding, and "requires" a bailout, then shareholders could see further losses.

 

[Daal]

Quote from m22au:

Agree that it's unlikely that SocGen will fail, because of government support.

But if the bank loses its sources of ST funding, and "requires" a bailout, then shareholders could see further losses.

I want to be more bearish and believe its 2008 all over again but why haven't the Greek banks been destroyed yet?Its the worse place in the world right now and the banks have not suffered runs other than a gradual deposit outflow. I can't help but to see all of this panic as a short-term bottom that should last for days if not weeks. If this happens they should call it the 'its 2008 again' bottom

 

[m22au]

Quote from Daal:

I want to be more bearish and believe its 2008 all over again but why haven't the Greek banks been destroyed yet?Its the worse place in the world right now and the banks have not suffered runs other than a gradual deposit outflow. I can't help but to see all of this panic as a short-term bottom that should last for days if not weeks. If this happens they should call it the 'its 2008 again' bottom

Agree that this could be a ST bottom that lasts for days. But that doesn't mean that the bottom won't be violated (or alternatively massive money printing) in the months ahead.

As for Greek banks, I asked the same question in May 2010
http://www.elitetrader.com/vb/showthread.php?s=&threadid=198211

and GoC provided a great response:

"Cmon mate, do you really think the average Greek account holder is a global macro trader or astute reader of the financial tea leaves? Look at Northern Rock, it was obviously insolvent for months before the bank run happened. Most Russians didn't withdraw capital in early 1998, most Argentines didn't in 2000-2001 etc.

"The authorities have a vested interest in keeping things quiet, and the man in the street just doesn't know about these things."

 

[Daal]

Isn't there at least 1 Greek bank with lots of wholesale funding?

 

[atticus]

Short gamma's a bitch!

 

[m22au]

Quote from Daal:

Isn't there at least 1 Greek bank with lots of wholesale funding?

Not sure about the mix of deposit / wholesale funding.

I covered most of my NBG short above $1.25 (oops) but I'll consider shorting it again if it gets back there.