Chillin' out till it needs to be funded
As per the Fed’s latest directives, banks filing their annual statements with the SEC next week onwards will post details of each and every Europe exposure divvied up as Spovereign and Corporate Exposures as well as by country in each case. The New York Times estimates the exposures to be upwards of $80 bln but hedged by between $30 – $50 bln by CDS purchases. JP Morgan Chairman and CEO JAime Dimon last week suggested their outstanding exposure was $15 bln.
NY Times’ Dealbook report suggests that someone like Bank of America could still be exposed to 88% of its Europe portfolio’s losses even as the 17th Hellenic Summit games since 2010 this week in Brussels and the rise of Portugal 10 Y yields to above 17% signify the
market expects the Greeks not accepting the Budget commish for the overseeing of the next bailout of $130 bln, the Portugese needing another $65 -75 bln as early as next week and the Euro’s completing its week above $1.30 looking rosy yet as the ESM gets signed at the 17th Euro summit later today/tomorrow
Meanwhile Gingrich’s Florida comeback has reached within 5 points of the Romney vote ahead of tomorrows polling even as most big banks have bankrolled the Republican campaigns alone nearly $400,000 each incl Goldman Sachs wo filed a statement of $387k in support reported last week
The net reported exposures discussed in Dealbook show they are more or less unchanged since September or have retraced back after having reduced in Oct-December some,
Net Exposure means that CDS protection of 47% in the case of Citi and 12.5% in the Case of Bank Am for example is already factored in. Thus the gross exposure only half of as suspected upwards of $40 bln for Ban of America
Five large American banks, including JPMorgan Chase and Goldman Sachs, have more than $80 billion of exposure to Italy, Spain, Portugal, Ireland and Greece, the most economically stressed nations in the euro currency zone, according to a New York Times analysis of the banks’ financial disclosures.
The NY Times report claims $602 bln of CDS protection has been written on PIIGS. With CDS spreads 90% for Greece and 17% for Portugal, most of the payouts have already happed as collateral in the case of Greece