EU BANKS RE-CAP WITH A SHELL GAME

There is no end to the bad judgement of the EU and regulators, in this following article, basically the banks which have come under increasing scrutiny here in the US for marking level 1 assets (those with a market value) to level 2 assets (those that derive their value from the bank's internal models). This is an accounting gimmick to make underperforming assets look better then their market prices by marking them to an even better looking model and investors in the US have picked up on it in recent financial company earnings and those companies have been seeing some downside as a result.

In the EU, as we have talked about many times, banks must raise their core capital ratios in preparation for a meltdown, we have talked about why they don't want to do it, how they have sold all asset in a bid to not have to issue shares and now they are engaging in the same shell games that US banks have been using, by revaluing assets through models to make their core capital ratios look better. The end result is they may "look" better, but ZERO has changed and they are just as dangerous or even more dangerous as a result.

Here's the article

It's just another sloppy European wall paper job to try to cover an ugly reality that is ever increasingly becoming more unmanageable as reality sets in, THERE ARE NO QUICK FIXES, THERE ARE NO FIXES THAT WON'T INVOLVE A LOT OF PAIN, but that hasn't stopped the EU from engaging in these meaningless charades to try to prop up the EU for another day.

It became all too clear when the EU took a multi-year problem and found a quick fix in 4 days (something that had eluded them for years until the G20 gave them an ultimatum) and they called it "leveraging the EFSF" to over $1 trillion dollars, unfortunately for them, everyone sees through this garbage and that is why they have had a difficult time credibly raising even $3 billion Euros of the 1 trillion Euros needed.

I think one of their main problems can be found in their advisors, the same group of US Investment banks that started this entire problem through sub-prime in the US.

It's absolutely petrifying to think of the global ramifications as they move forward or backwards as the case may be.