Diesel Boom, Or Is It Dijsselbloem, And Spain vs France | Exploring Markets

Diesel Boom, Or Is It Dijsselbloem, And Spain vs France

The news was Cyprus.

Now its panic in Europe, and it comes from a man named Dijsselbloem, some say Diesel Boom.

He's been quoted saying: "If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?'" said Dijsselbloem in the interview. "If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders."

Based on that quote, the thought now is that Dijsselbloem and European Financiers will do what they've done in Cyprus to the entire continent if a similar situation unfolds. Meaning they will tax depositors with over 100,000 Euro to re-capitalize a bank in any of the other European countries. The media is in a frenzy about this. Here is a chart from Google trends; note the massive spike because that 's where we are:

Consider this random fact: today France played Spain in a World Cup qualifier. Some 80,000 tickets were sold at an average price of 100 Euro.

Also consider why Dijsselbloem would say what he said. Maybe he does not want other banks even hinting at capitalization problems? Perhaps to push banks to approach the private markets first and foremost? Or to re-structure with bondholders first? This is getting tiring if you have not noticed (via Wikipedia):

EU memberTime spanIMF[5][179]
(billion €)
World Bank[179]
(billion €)
EIB /EBRD
(billion €)
Bilateral[5]
(billion €)
BoP[179]
(billion €)
GLF[180]
(billion €)
EFSM[5]
(billion €)
EFSF[5]
(billion €)
ESM[5]
(billion €)
Bailout in total
(billion €)
Cyprus1Apr.2013-Dec.2015part of 10-------part of 10101
Greece2May 2010-Mar.201648.1(20.1+19.8+8.2)----52.9-144.6-245.62
Hungary3Nov.2008-Oct.20109.1 out of 12.51.0--5.5 out of 6.5----15.6 out of 20.03
Ireland4Nov.2010-Dec.201322.5--4.8--22.517.7-67.54
Latvia5Dec.2008-Dec.20111.1 out of 1.70.40.10.0 out of 2.22.9 out of 3.1----4.5 out of 7.55
PortugalMay 2011-May 201426-----2626-78
Romania I6May 2009-June 201112.6 out of 13.61.01.0-5.0----19.6 out of 20.66
Romania II7Mar 2011-Mar 20130.0 out of 3.7---0.0 out of 1.4----0.0 out of 5.17
Spain I8July 2012-Dec.2013--------41.4 out of 10041.4 out of 1008
Spain II9Perhaps in 2013(considered)-------(considered)(considered)9
Total paymentNov.2008-Mar.2016119.42.41.14.813.452.948.5188.341.4482.2


The key here is find the signal, and ignore the noise.

Hopefully this blog turns out to be the signal, and not the noise demonstrated by Google Trends above.