Why the Big Banks Are Terrified of Le Pen Winning in France (but not BREXIT or Trump)
By Phoenix Capital Research
France holds the first round of its Presidential election this weekend.
The big worry for the markets is the fact that anti-Euro candidate Marin Le Pen could potentially win.
Now, the polls show Le Pen as having NO chance of becoming Prime Minister.
Of course, the polls also showed that BREXIT would not happen and Hillary Clinton had a 98% of becoming President.
We all know how those turned out.
“So what?” one might ask, “why would a Le Pen victory matter? Both BREXIT and Trump’s Presidential election ignited massive stock market rallies… why wouldn’t France leaving the Euro do the same?”
The big problem for EU members from is debt.
Yes, we all know that EU countries are saturated in debt… but the key issue here WHO owns this debt and WHAT it represents to them.
To citizens of a nation, sovereign debt represents payment of social entitlements in exchange for long-term debt servitude as a nation.
To politicians of a nation, sovereign debt represents a means of paying for welfare schemes promised on the campaign trail.
For banks… sovereign debt represents the senior-most collateral backstopping their massive derivatives portfolios.
The derivatives markets, the same markets that triggered the 2008 meltdown, were never properly dealt with.
Today, at the time