Parasite Guild Ramping Up Argentine Style Feeding Frenzy In Europe

A young man passes by posters on a wall against “vulture funds” in Buenos Aires on Wednesday. PHOTO: Getty Images

Banco Espirito Santo (BES) in Portugal suspended trading Friday and will likely default on its bonds. This is Portugal’s biggest commercial bank with roughly $100 billion in assets. Although belatedly ordered July 31 by the Bank of Portugal to raise capital and purge its management, BES was too systematically mismanaged to be bought by a giant and has dumped too many big losses on its recent, new-capital providers to be able to raise the suddenly needed $5 billion more.

The probable next step is either a bailout that consumes Portugal’s entire bank bailout fund, or the dreaded bail-in wake-up call. Additional fall out includes France’s Credit Agricole bank, which had more than $1 billion in BES stock as of a month ago.

Simultaneous with the failure of BES, the parasite guild vulture funds are getting a green light from the Obama administration and the U.S. Supreme Court to foreclose on the nation of Argentina. Incidentally, a prime target of the guildists/vultures in Argentina is the Vaca Muerta shale oil/gas reserve. This green light is the perfect set up for the guildists to continue accumulating on the cheap tens — if not hundreds — of billions of dollars of bad debt on the books of larger prey: Europe’s leading banks. Then, using their captured crony New York court systems, the idea is to forcibly collect at full face value —Argentina style. The stage has already been set by captured EU cronies to loot European bank depositors via bail ins.

It looks like Spain may be next in line. According to Spanish media, parasite guildist Paul Singer’s Elliott Management — the  lead vulture in the vulture-fund extortion in Argentina — is targeting Banco Santander (BS). Over the course of 2013, this parasite guildist bought up at least €1.3 billion in non-performing loans from BS, Europe’s largest bank, and associated Spanish financial institutions, such as Bankia. The total cost to Elliott was a mere €50 million, which is less than 4% of the face value of the loans. Elliott also purchased the Spanish “debt recovery” firm Gesif at the end of 2013. I have little doubt that the guildists have managed to bet on derivative shorts against current, highly inflated Spanish and Italian sovereign bonds, which yield less than 3%. And who is larded up with these on the long side?  Italian and Spanish banks using EU loans.

The parasite guildists are buying up large quantities of distressed debt, not only in Spain but across Europe in collusion with the bankrupt banks. Eurozone banks’ bad debt amounts to at least between $1.5 trillion and $2 trillion on their balance sheets. It is no coincidence that Europe is being intentionally further weakened economically by the rounds of sanctions now being imposed on Russia.

A smaller parasite guild project is Puerto Rico. Backed by the funds and “buyers of distressed debt,” Puerto Rico’s Democratic Gov. Alejandro Garcia Padilla pushed through debt restructuring (ei. bail-in) legislation that would force traditional municipal bond holders to take a “haircut” while protecting the vulture funds that purchased distressed general-obligation bonds and other categories of debt that can’t be restructured under the new law.