FAST FIVE: Blain: European Banks Are The Most Successful Ponzi Scheme Of All Time
Or, to put it another way – Europe and its banks are now caught in such a co-dependency cycle, the only realistic choice for the ECB is to keep doing it and for investors to keep arbitraging it.
Buy European banks and buy Sovereign debt – Why.
Everyone is happy – Italian banks aren't looking as dodgy because they're not lending to Italians, but to the Government, and their stock prices go up- At the moment there is some Euro 722BN in outstanding Targeted Long Term Repos (TLTROS or Free Money) given by the ECB to banks across Europe.
If they ECB was to politely ask for the money back – it all matures by March 2021 – then goodbye European banking system.
I confidently predict someone at the ECB has already figured out the only way to shore up growth in Europe is to keep giving away yet more money to banks through TLTROs.