The Storm is Coming - I

     I intend addressing my opinions supported by facts (wherever possible) in a gradual manner as to build a story of what the future is going to look like. For those who are following what is happening in continental Europe here are some nuts and bolts issues. The exposure of European Banks to Greek Debt. Do not think billions is small change nowadays due to its substitution with figures that go in trillions. I am listing out banks which had exposure to Greek debt in a substantial quantum (all figures are in US dollars) 

Fortis $5 billion

Dexia $4 billion

Société Générale $5.2 billion

BNP Paribas $8 billion

ING $4.6 billion

Barclays $6 billion

Deutsche Bank $2.6 billion.

($35.4 billion in Greek bonds) data sourced from cnn money

Courtesy a dubious debt deal, it seems that the crisis has been averted.Well, I would say not really. The implicit assumption of Greek economy growing at certain rates and repaying the debt over a thirty year horizon seems to be a bit on the optimistic side (and that is an understatement). Spain and Italy are teetering on the precipice.

And now it seems that BofA's troubles from the acquisition of Countrywide are not over yet. In spite of the hammering received by BofA, Holy Dow moves to positive territory. The straws we are clutching appear to be quite strong. See above a nice graph i picked up from an econ blog called 'Angry Bear'. It depicts a remarkable similarity between Nikkei and Dow with a ten year lag. As the blogger comments 'seems to be a curious coincidence.See below another chart which compares the gross debt of AAA rated countries.



 A chart that shows personal savings rate of USA
 
These charts are telling us something. More about what my takeaway in subsequent posts.