In today's MSM front pages:

EU Seen Agreeing on Project Bonds—Not Eurobonds - of course not! 17 different nations, 17 different cultures, 17 different sets of federal laws (not to mention local municipality legislation), 17 different economies, 17 different banking systems... It's this lack of homogeneity that brought the Euro concept to its knees in the first place. Why throw good money (what would have went into Eurobonds) after bad (what went into a flawed Euro concept) to justify flushing it with awful (the multiple bailout mechanisms/default losses, ECB balance sheet bloat)? Reference A Summary and Related Thoughts on the IMF’s “Strategies for Fiscal Consolidation in the Post-Crisis 

Germany Sells 2-Year, 0% Bonds Amid Greek Anxiety - Bubble, bubble, toil and trouble! It's as simple as that. Why lend money at risk for no return? Reference The Biggest Threat To The 2012 Economy Is??? Not What Wall Street Is Telling You... where I explained in explicit detail the risk this view of Germany causes the entire European continent and the UK! As a matter of fact, a follow up opinion of the subscription research illustrated subject company (an insurer) in this write-up will be the topic of my next post. After all, we can't let GS and JPM blow up the world by themselves, can we?

Roubini Strategist: High Yields Are Europe's New Normal This is a no brainer. How about high rate volatility as well as all of the financial entity fun that that will ensue? Here's a better question. What happens to real estate values as interest rates increase? Yep! You heard it here first... Watch As Near Free Money To Banks Fails To Prevent Nuclear Winter In European Real Estate. As a matter of fact, We're At Step 2 Of The Global Real Estate Compression!

Of course, after pondering that query, must become more investigatory - What happens to bank mortgages as CRE values plunge? So, Can Europe Nationalize All Of Its Troubled Banks? 

CNBC reports Banks No Longer 'Float Above Their Countries': Deutsche - Banks' countries of origin have become important again. No shit, Sherlock!!!

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I warned heavily last year about the connection between higher interest rates and falling real estate in Europe...

Reggie Middleton as the Keynote Speaker at the ING Real Estate Valuation Seminar in Amsterdam

Bank of England to Print Money if Economy Worsens - Well, you know I've always said The UK Can't Be In A Double Dip Recession If It Never Truly Left The First Recession, Can It?

As we clearly articulated two years ago, when it was alleged that recession was over, in the subscriber (click here to subscribe) document  UK Public Finances March 2010:

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UK Retail Sales Slide at Fastest Pace in 2 Years in April - Well of course. Don't these guys read the BoomBust??? The Greatest Risk To Retail Commercial Real Estate Is? Sovereign Debt! Macro Headwinds! Popping Bubbles! Busted Banks! No, It's The Internet! and Prepare For CRE Crash And Burn Marks At A Shopping Mall Near You

'Nuff said! Subscribers, as (not if, but as) this breaks, these are the companies trading at the valuations that are most shortable/profitable in my opinion... Relevant downloads for subscribers only! Click here to subscribe...

US CRE

• US REIT Fire Sale Scenario Analysis
   US REIT Foreclosure Scenario Analysis
•  US REIT Sample Property Valuation
•  US REIT Cashflows and Debt Preliminary Analysis

European Insurance

•  Insurer Report_122511 - Professional/Institutional edition
•  Insurer Report_122511 -Retail edition

European CRE (this one is a bit dated)

•   Debt Analysis, Blog Subscriber Edition
•  Preliminary Download

European banking

Haircuts, Derivative Risks and Valuation

And the cat that was already let out of the bag...

BNP Exposures - Professional Subscriber Download Version

BNP Exposures - Retail Subscriber Download Version

BNP Exposures - Free Public Download Version

 French Bank Run Forensic Thoughts - Addendum and Update

 Follow me...

On Monday, 23 April 2012 I posted "It's Official & As I Foretold Years Ago, Greece Is Now In A True Depression As Reality Hits Greek Banks", roughly 2 years after penning 

How Greece Killed Its Own Banks!. Well, guess what!? The Wall Street Journal’s report, “Greek Depositors Withdrew $898 Million From Banks Monday”:

Greek depositors withdrew €700 million ($898 million) from the country's banks on Monday, fueling fears of a bank run amid the growing political disarray.

With deposits falling, Greek banks become even more dependent on the European Central Bank to meet their funding needs, exposing the central bank to potentially huge losses if Greece leaves the euro area.

Greek President Karolos Papoulias told the country's political leaders that bank withdrawals plus buy orders received by Greek banks for German bunds totaled some €800 million on Monday, a transcript of his comments said. A central bank official confirmed the figures.

Wait until a 2nd Greek default (virtually guaranteed as we supplied user downloadable models to see for yourself, the same model used to forecast the 1st default) mirrors history. Of the 181 yrs as a sovereign nation after gaining independence, Greece been in default 58 of them. Don't believe me! Check your history, or just read more BoomBustBlog - Sophisticated Ignorance Or Just A Very, Very Short Term Memory? Foolish Talk of German Bailouts Once Again...

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Greece's default will hit an already bank NPA laden Spain quite hard: The Spain Pain Will Not Wane: Continuing the Contagion Saga and ditto with Italy "As We Assured Clients Two Years Ago, Italy's Riding The Broken Promise Express To Restructuring". Once Italy gets hit, the true bank runs will start as socialist France (the so-called half of the EU anchor) loses control of its bankinsg system. Reference "As The French Bank Runs....": 

Saturday, 23 July 2011 The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run Occurs!: I detail how I see modern bank runs unfolding

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Thursday, 28 July 2011  The Mechanics Behind Setting Up A Potential European Bank Run Trade and European Bank Run Trading Supplement

I identify specific bank run candidates and offer illustrative trade setups to capture alpha from such an event. The options quoted were unfortunately unavailable to American investors, and enjoyed a literal explosion in gamma and implied volatility. Not to fear, fruits of those juicy premiums were able to be tasted elsewhere as plain vanilla shorts and even single stock futures threw off insane profits.

Wednesday, 03 August 2011 France, As Most Susceptble To Contagion, Will See Its Banks Suffer

In case the hint was strong enough, I explicitly state that although the sell side and the media are looking at Greece sparking Italy, it is France and french banks in particular that risk bringing the Franco-Italia make-believe capitalism session, aka the French leveraged Italian sector of the Euro ponzi scheme down, on its head.

I then provide a deep dive of the French bank we feel is most at risk. Let it be known that every banked remotely referenced by this research has been halved (at a mininal) in share price! Most are down ~10% of more today, alone!

•  French Bank Run Forensic Thoughts - Retail Valuation Note - For retail subscribers
•  Bank Run Liquidity Candidate Forensic Opinion - A full forensic note for professional and institutional subscribers

I also provided a very informative document for public consumption which clearly detailed exactly how this French bank collapse thing is likely to go down:  French Bank Run Forensic Thoughts - pubic preview for Blog - A freebie, to illustrate what all of you non-subscribers are missing!

So, What's the Next Shoe To Drop? Read on...

For those who claim I may be Euro bashing, rest assured - I am not. Just a week or two later, I released research on a big US bank that will quite possibly catch Franco-Italiano Ponzi Collapse fever, with the pro document containing all types of juicy details. This is the next big thing, for when (not if, but when) European banks blow up, it WILL affect us stateside! Subscribers, be sure to be prepared. Puts are already quite costly, but there are other methods if you haven't taken your positions when the research was first released. For those who wish to subscribe, click here.

•  Contagion Forensic Review - Retail
•  Contagion Forensic Review - Professional

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And now that BoomBustBlog foretold reality comes to bite UK ass, as reported by Reuters/CNBC: Inflation-Wary Bank of England to Halt Money-Printing Press

The Bank of England looks set to call a halt to its asset-buying program, despite the economy having slipped into recession and renewed risks rising from the euro zone debt crisis, as UK inflation remains stubbornly high. 

Uh Oh!!! In case the gravity of this situation is not weighing on any of you blokes yet, the UK has to step back into a gun fight but cannot fire any more shots due to the fact that it has already hit too many innocent bystanders...

Ending its program of quantitative easing, or QE, may make life more difficult for Britain's Conservative-led ruling coalition, which was battered in local elections last week and relies on loose monetary policy to soften the pain of austerity measures aimed at cutting the country's huge public borrowing.

Therein lies the problem, no? Did they truly try to stimulate the eonomy or did they attempt to overdose on cheap, irresponsible liquidity to save the extant oligarchy?

But after buying 325 billion pounds of government debt with newly created money, 50 billion pounds of which has been purchased in the last three months, the bank is likely to judge that its policy stance is already supportive enough.

You don't need to be an economist to understand the utter foolishness, the circular logic supported folly of the aforementioned statement - "But after buying 325 billion pounds of government debt with newly created money, 50 billion pounds of which has been purchased in the last three months".  So, an allegedly fiscally responsible regime leading one of the most powerful countries in the world lends money to itself in order to get some money (What the f@ck!!!), but must print fresh new money in order to afford to buy the money that it just lent itself in order to use the money it just let itself to pay some important bills, you know the thing that it needed the money for in the first place.

Well, what the hell are you staring at your screen for?  Don't you get it? Apparently, you must either be a politician or a economist to get it, actually. The UK obviously have the best suited guys for the job leading the way!

Policymakers, most prominently deputy BoE governor Paul Tucker, have also indicated that inflation may not fall as fast as forecast below the bank's 2 percent target after it rose for the first time in six months in March, touching 3.5 percent, the highest rate in the Group of Seven major advanced economies.

Only five of the 58 economists polled by Reuters expect the central bank to announce further asset buying when it publishes its decision at 11:00 a.m. GMT.

The minutes of the Monetary Policy Committee's (MPC) April meeting showed that inflation worries had become more dominant, and that long-standing quantitative easing advocate Adam Posen had dropped his vote for more QE.

Bank of England Governor Mervyn King has also said that the economy looks set to recover slowly and steadily later this year while inflation is too high.

 As clearly stated in the BoomBustBlog susbscriber document:  UK Public Finances March 2010

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Vulture_Fights_Jackle_in_bubbleBelieve it or not, we actually have a mini-bubble within this bubble crash as vulture investors fight for the scraps disgorged by indebted sovereigns and over-leveraged banks. The time is not ripe just yet and I plan to allow the carrion feeders to price destruct amongst themselves as I await the coming interest rate storm which will truly bring about a once in a lifetime wealth creation opportunity.

Arguably, more millionaire money was made during the Great Depression than at any time in history. Well, if that's true then it looks as if history may be poised to repeat itself. The question is, who will be ready? I will discuss this live on RT's Capital Account show today at 4:30. 

Executive Summary

Asset sales by European sovereign nations, central and private banks have made global investors and speculators scour for cheap assets that have the potential to yield higher than average risk adjusted. However, the search process is not that easy, as sellers are adopting a ‘wait and see’ policy assisted by the European Central Bank’s facilitation of (extremely) cheap financing and liquidity measures. The market now witnesses by too many buyers chasing too few distressed assets. Hence the speculation about future returns has actually caused a mini-bubble in distressed asset prices. Professional subscribers should download the full version 

Asset sale by sovereigns is can be seen in the sale of stakes in government owned infrastructure assets and corporations. However, the approach adopted to dispose of these assets is to make partial sales in tranches in order to participate in any benefits of valuation recovery.

Professional and institutional subscribers should download the full version of this document ( The BoomBustBlog Pan-European Distressed Asset Acquisition Initiative) which outlines investment opportunities in the following nation/banks: UK, Portugal, Italy, Cyprus, Greece, Ireland and Spain.  Our initiative runs the gamut from whole companies and equities, to real estate, infrastructure assets, rare earth and hard tangible assets to IP.

Dispositions by Europeans banks have consisted mostly of foreign assets outside of Europe. Most of these assets had the potential for high returns but are being offered at prices reflecting the perception that future investment performance would be robust. This is why there is so much interest in the private equity and asset management space in scanning for strong deals among those assets. However, the competition among these entities to buy quality assets at reasonable valuations has created a micro bubble of sorts, the type that make profitable vulture investing a very difficult proposition.

Sale of Sovereign Assets

Faced with mounting debt burdens, many European nations are under tremendous pressure to cut fiscal deficits

by establishing and expanding austerity measures and reducing interest expenses. These nations include not only those faced with accelerating debt repayment obligations such as Greece, Italy, Spain, etc., but also some of the relatively better positioned countries – namely the United Kingdom and France.

In a bid to reduce accelerating debt burdens, many of these nations are selling their sovereign assets. We will probably see an even greater pool of sovereign asset sales as the futility of serially forced austerity drives the EU into a deep recession.

Even the Greek situation is just getting started, contrary to popular belief and the upcoming distress is not just CRE and RE assets that are available via fire sale, as clearly outlined two years ago in our subscriber (click here to subscribe) report 

 Greece Public Finances Projections see pages 5 and 6 following... (click to enlarge)

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As a matter of fact, I warn those who do not subscribe to the BoomBust, this song is far, far from over... Beware The Overly Optimistic Greek Speculators As Icarus Comes Crashing Down To Earth!

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Greece is virtually guaranteed to re-default, with a structural imbalance that literally forbids the country from being able to service its debt, thereby chasing investors and bondholders with even remote access to a spreadsheet or calculator into the hills… Ne’er to return before the 720^th fortnight!

It’s not just in the periphery either. The core states have some stress coming their way.

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Investors seeking safety in Germany, the UK and France may truly be in for a rude awakening!

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Interest rate volatility, at a bare minimum, is a given – with the potential for stagflation being the base case scenario…

Those who wish to download the full article in PDF format can do so here: Reggie Middleton on Stagflation, Sovereign Debt and the Potential for bank Failure at the ING ACADEMY-v2.

Interestingly, Chinese corporations are increasingly interested in European assets. There have already been a number of indicators to prove that while China is not as attracted to European sovereign bonds, there’s material interest in buying infrastructure assets; and interest in perceived attractively valued corporations has increased over the recent past. Seeing profitable investment opportunities, private equity firms and global leading funds have also joined in. This has created a kind of rush to search for attractively valued assets that could yield attractive returns in the years ahead. The current scenarios, as such, have been of  a kind wherein too many buyers are chasing too few assets up for sale, particularly in view of the fact that countries like Italy, the United Kingdom and to a lesser extent Spain, can bargain with time - unlike Greece, to wait for fair valuation of assets before their disposal. This has created a market of buyers and sellers wherein prices for distressed assets are not being determined by fundamental valuation, but are influenced by speculation and demand-supply gap. In essence, what we have amidst this bursting of the sovereign credit bubble is a mini-distressed asset bubble.

Professional and institutional subscibers should download the full version of this document ( The BoomBustBlog Pan-European Distressed Asset Acquisition Initiative) which outlines investment opportunities in the following nation/banks: UK, Portigal, Italy, Cyprus, Greece, Ireland and Spain.  Our initiative runs the gamut from whole companies and eqiuities, to real estate, infrastructure assets, rare earth and hard tangible assets to IP.

Any who are interested in hearing more about this initiative can reach me via email or phone. All others are urged to follow me through my various social media assets:

ZeroHedge reports: S&P Cuts Spain to BBB+, Outlook Negative :

Adding insult to Bayern Munich injury, we just got S&P which did the impossible and cut Spain to BBB+ from A (outlook negative) not on Friday after hours. Kneejerk reaction is a 30 pip drop in EURUSD. Oh, and most amusing, those witches among men, Egan Jones, downgraded Spain from BBB to BBB-.... a week ago. Crush them, destroy them... How dare they be ahead of the pack as usual: after all their NRSRO application was missing a god damn comma.

Full release:

• • We believe that the Kingdom of Spain's budget trajectory will likely deteriorate against a background of economic contraction in contrast withour previous projections.
  • At the same time, we see an increasing likelihood that Spain's government will need to provide further fiscal support to the banking sector.
  • As a consequence, we believe there are heightened risks that Spain's net general government debt could rise further.
  • We are therefore lowering our long- and short-term sovereign credit ratings on Spain to 'BBB+/A-2' from 'A/A-1'.
  • The negative outlook on the long-term rating reflects our view of the significant risks to Spain's economic growth and budgetary performance, and the impact we believe this will likely have on the sovereign's creditworthiness.

As was clearly stated last Monday and warned two years ago on BoomBustBlog...

The Spain Pain Will Not Wane: Continuing the Contagion Saga:

In the general our analysis Spain public finances projections_033010, the first four (of 12) pages basically outline the gist of the Spanish problem today, to wit here are the first two:

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About those rating agencies... 

Of course, we all know how reliable and timely the rating agencies are, right? See Rating Agencies vs Reggie Middleton, Part 3 and the Interesting Documentary on the Power of Rating Agencies, with Reggie Middleton Excerpts

I am having my analysts work on the Spanish and Italian default/ bailout scenario now (we have worked up a scenario two years ago, but things are much worse now). Even a Citi analyst has chimed in to that effect. Let' not forget the Portuguese Liquidity Trap: Prime from the actions of Greece. As a matter of fact, it's evident that Greece Is Trying To Convince Portugal To Make FIRE Hot, hence I answered the inevitable question, So, What's The Next Step Towards The Eurocalypse??? 

Bloomberg reports U.K. Plunges Into Double-Dip Recession, as does CNBC, UK Back Into Recession in First 'Double Dip' Since 1970s:

Britain's economy slid into its second recession since the financial crisis after official data unexpectedly showed a fall in output in the first three months of 2012, piling pressure on the embattled coalition government.

My contention is that the UK has not fallen back into recession, but has never truly risen out of the last one. Accounting parlour tricks, financial engineering machinations and outright verbal sleight of hand (what some may call not telling the truth) has given the illusion of organic growth, but in reality and at best, it was simply buying $1.00 worth of growth with $1.20 worth of stimulus - or should I reference this in pounds.

As we clearly articulated two years ago, when it was alleged that recession was over, in the subscriber (click here to subscribe) document  UK Public Finances March 2010:

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Roughly two years ago, I penned a piece called How Greece Killed Its Own Banks! It outlined the end result of Greece attempting to hide sparse demand for its debt by forcing its banks to binge on it using excessive leverage. Of course, once you eat too much garbage, you start to stink, and eventually... Well, let's look at it from a visual perspective:

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 Greece and the ECB kicked the can down the road for two years, but as fate would have it... Reality rears its ugly head, as exemplified in today's MSM headline from CNBC: Record Losses at Greek Banks Show Pain of Bond Swap

Greece's top banks posted historic losses for 2011 on Friday, hit by a bond swap last month that blew holes in their balance sheets and nearly wiped out their capital base.

Together, National, Alpha, Eurobank and Piraeus, posted an aggregate loss of 28.2 billion euros ($37.3 billion), about 10 times their current market worth or 13 percent of the country's GDP .

The banks treated losses from last month's bond swap to cut the country's debts — part of a rescue package for Greece negotiated with the European Union and International Monetary Fund — as if they took place last year.

Inflicting real losses of about 74 percent on bondholders, Greece's debt swap proved a near fatal financial torpedo for lenders, crippling the sector's capital base.

From the big four banks, only Alpha spelled out clearly where this left its Core Tier 1 capital ratio. The other three reported where capital ratios would land after their use of standby funds provided by a capital backstop, the Hellenic financial Stability Fund (HFSF).

Alpha's core capital ratio (Tier 1) fell to 3 percent. Eurobank [EFG-FF  0.61    0.004 (+0.66%)   ], the country's second biggest, did not disclose the figure but said the hit left it with total equity of 875 million euros.

National Bank [NAG-FF  1.73    -0.02  (-1.14%)   ], the country's biggest lender with operations in Turkey, said its Core Tier 1 ratio would reach 6.3 percent, taking into account the use of a 6.9 billion euros standby facility provided by the HFSF fund.

Piraeus gave no Tier 1 figure but said tapping up to 5 billion euros of HFSF funds would boost its total capital adequacy ratio to 9.7 percent.

Greek bank shares have shed 74 percent in the last 12 months, underperforming the Greek stock market which is down 50 percent.

...Battered by a shrinking deposit base, rising loan impairments and unable to access wholesale funding markets, banks will need to fill the resulting capital shortfall and meet capital adequacy targets set by the central bank.

They face a core Tier 1 target of 9 percent by end-September.

... With the economy mired in recession...

I think its fair to say "depression' at this point. The destruction of the banking system is what pushed the US over the edge in the early 1900s, and it had a lot more going for it than Greece does.

... and unemployment at a record 21.8 percent, asset quality deteriorated, meaning banks' non-performing loans rose further — by 130 basis points to 12.9 percent of Alpha's loan book. Eurobank's bad debt provisions rose 4.7 percent last year.

Relevant BoomBustBlog research:

Greece Public Finances Projections

Banks exposed to Central and Eastern Europe

Greek Banking Fundamental Tear Sheet

Those who follow me know that I have warned of this ad nauseum, through a variety of venues and media, focusing particularly on the destructive damage the bank collapses will bring, again...

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This will be exacerbated by a re-default of the Greek debt that was designed to bail out the defaulted Greek debt. Why will this happen? Greece has severe, rigid structural problems that simply cannot (and will not) be solved by throwing indebted liquidity at it. As a matter of fact, the additional debt simply exacerbates the problem - significantly! This was detailed in the post Beware The Overly Optimistic Greek Speculators As Icarus Comes Crashing Down To Earth!

This situation will simply get worse, considerably worse. I demonstrated in the post The Ugly Truth About The Greek Situation That'sToo Difficult Broadcast Through Mainstream Media that anyone who purchased the last set of bailout bonds from Greece will simply lose their money as well (that's right, just like those who purchased the previous set) since Greece is still running deep in structural problems and can't afford the interest nor the principal on its borrowing. It's really that simple. 

Unlike as portrayed in the media, Greece is not a standout profligate child, but simply a microcosm of what is to come to a good portion of Europe. Just scan today's headlines for evidence of such.... German Manufacturing Shrinks Fastest Since 2009

Of course it did. Germany is a net export nation whose trading partners are dancing between hard landings, serial recessions, and outright depression! Exactly how does one expect this song to be sung? Let me count the ways for you, as Germany is currently the undeserved linchpin to what's left of EU fiscal integrity. Reference The Biggest Threat To The 2012 Economy Is??? Not What Wall Street Is Telling You...

A little more than a year ago I introduced the concept of the "Economic Circle of Life" in the post Do Black Swans Really Matter? Not As Much as the Circle of Life ... In said post, I posited the interference from the concerted efforts of the global central bank price fixing cartel has done significantly more damage than it has good - to wit: 

And in today's news... Rescue Plan Falters

Europe's bold program to defuse its financial crisis by cash into banks is running out of steam. 

Go figure! Today's MSM commentary also features Print More Money? Central Banks May Have No Choice.

But wasn't this a a cause of much of the liquidity trap problem in the first place? Reference Portuguese Liquidity Trap: When You Add Too Liquidity to FIRE it Burns! The BofE agrees with this postulation, reference BoE Warns Inflation Could Run Into Medium Term. Of course, I have commentary on these guys as well... BoomBustBlog analysis: Subscription only -  UK Public Finances March 2010

The only bright side to this is what I posted earlier today... 

The EurAsian Global Distressed Asset Acquisition Initiative: 

I'm still quite bearish on banks/sovereigns, but as history dictates the greatest wealth has been created during the greatest dislocations, not during the greatest bull markets as popular opinion would lead many to believe. Think of the robber barons after the Great Depression...

Elsewhere in today's news... 

Spain Issues $3.2 Billion in Bonds, Demand Solid. Of course, this headline fails to convey one very key fact, and that is the borrowing Costs Rise For Spain:

Spain's 10-year borrowing costs increased at its debt auction, reflecting concerns about its ability to cut its budget deficit amid rising unemployment and falling economic output. 5:26 AM

I went through this in explicit detail just 3 days ago in the post The Spain Pain Will Not Wane: Continuing the Contagion Saga. It is a highly suggested read. I have also warned on Spain thoroughly in the past. It has BIG problems firmly nestled in its property, banking and financial systems. Big Problems... Elsewhere in today's MSM fodder: Spanish Banks' Bad Loans Highest Since Oct. 1994

BoomBustBlog analysis:

• As If On Cue After My Step By Step Illustration Of A Spanish Default, Spanish Yields Climb at Auction As Pressure Continues Thursday, December 16th, 2010

• Will Spain Default? The Answer Is Not Hard To Determine If You Take An Objective Look At The Numbers And Recent History! Monday, December 13th, 2010

• Subscribers only -  Spanish Banking Macro Discussion Note

Click here for the Pan-European Debt Crisis series archives or here for my latest on the topic.

Follow me!

Last month I penned the piece Abu Dhabi & the UAE Can Leverage PetroDollar profits to capitalize on the plight of EU nations, wherein I announced that I was putting together an initiative to capitalize on the inevitable deleveraging of European (and soon Asian) banks and sovereign (as well as quasi-sovereign) nations. Those insititions and UHNW individuals who are interested in said initiative should click through and read the article and contact me afterward as there has already been significant indications of interest. I already have my analysts going through a plethora of opportunities, identifying hard assets first, and financial assets with deep, deep discounts in mind (100%+ cash on cash return within one year, unlevered).

As fate, and an adherence to viewing things analytically, would have it the opportunities may come to bear sooner than expected - to wit: European Banks Could Deleverage by $2.6 Trillion: IMF

A drastic contraction of European bank balance sheets during the next 18 months could jeopardise financial stability and economic growth, according to the IMF. The FT reports.

This is simply a reiteration of my warnings from as far back as 14 months ago, proffered in explicit detail, simple reference Is Another Banking Crisis Inevitable? (Attention subscribers: The subscription document is available as well The Inevitability of Another Bank Crisis)

Banks NPAs to total loans

Source: IMF, Boombust research and analytics

Euro banks remain weak as compared to their US counterparts

Later on today I will post the first of several documents to professional/institutional subscribers detailing what I have in mind in this potential asset grab.

As with Greece, Spain, Portugal and Ireland, I warned thoroughly and quite early that Italy will deliver a rash of broken promises in regards to it public finances leading up to a probably restructuring. Today's MSM headlines simply confirm more of the same, just two years later...

Per CNBC: Italy to Miss Budget Deficit Targets, Debt to Rise: IMF 

Italy will miss its budget deficit targets in 2012 and 2013 and its public debt will rise in both years despite the government's austerity measures, the International Monetary Fund forecast on Tuesday. 

The IMF said in its Fiscal Monitor report that Italy's deficit would fall this year to 2.4 percent of output, well above Rome's 1.6 percent target, and would decline to 1.5 percent in 2013, when Italy is aiming to balance its budget.

The forecasts are a blow to Prime Minister Mario Monti, whose popularity is sliding and whose reform efforts are meeting rising criticism and resistance as the country's borrowing costs rise.

Italy's huge public debt, the second highest in the euro zone after Greece's as a proportion of GDP, will jump to 123.4 percent of gross domestic product this year, from 120.1 percent in 2011, and edge up to 123.8 percent in 2013, the IMF said.

Earlier on Thursday the IMF forecast the Italian economy would shrink by 1.9 percent this year and contract by 0.3 percent in 2013.

The Fund's forecast that Rome will significantly overshoot its balanced budget target next year will put pressure on Monti to adopt additional corrective measures, though the IMF itself has urged against this due to the weak economy.

Here are the first four pages of our subscriber research released in March 2010, sans the Italian crystal ball of course. Subscribers, please reference Italy public finances projection.

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We should all keep in mind that Contagion Should Be The MSM Word Du Jour, Not Bailouts and Definitely Not Greece! The following are what we consider to be the focal point of sovereign debt stress if things continue to kick off.

Subscribers reference:

•  Report_122511 - Professional/Institutional edition (Insurers, Insurance & Risk Management)
•  Report_122511 -Retail edition (Insurers, Insurance & Risk Management)

Bank Haircuts, Derivative Risks and Valuation10/20/2011

Bank report 170610 Professional & Institutional07/07/2010

Bank report 170610 Retail07/07/2010

Bank Holdings_Report_04August2008 - retail09/16/2008

 Bank Holdings_Report_04August2008 - pro09/16/2008