Wednesday, November 30, 2011

The European bank failure hype from Forbes

Nigam Arora, a contributor to Forbes Online, wrote the following today: 
Forbes: It appears that a big European bank got close to failure last night. European banks, especially French banks, rely heavily on funding in the wholesale money markets. It appears that a major bank was having difficulty funding its immediate liquidity needs.

"It appears" Mr. Arora?  This certainly started a buzz in the market.  Arora continues: "The cavalry was called in and has come to the successful rescue."

And where exactly are you hearing about this supposed bank failure?  Maybe you can tell us how a 50 bp reduction in dollar borrowing rate would have averted a European bank failure?

Just because you are an engineer and a nuclear physicist, are we supposed to take your word for it? Absolutely no evidence of such an event has been provided in the article.  So congratulations Mr. Arora.  You get the Sober Look Hype Award.

We are doing well with the Hype Awards - two already this week, and that doesn't even count the La Stampa fiasco.
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