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Hopeless Blind European Banks = Hopeless Blind ECB

As germany's situation worsens daily  (DB, VW-Porsche (€5bn loss!), TUI-Hapag-Lloyd, Conti-Schaeffler, HRW), we had the chance to have an inside look at the ECB vision of Europe's lending future, with its quaterly survey, published this morning.

It was well taken at first by the equity market because it is the first positive estimate : +1% for thext 3 months.
But if you compare the validity of previous surveys' forecasts against what actually occurred (ibelow, one column on the left), the picture does absolutely not look so sparkling !

They were caught going 4% to 32% too optimistic...

That is one the many exemples that justify why we never take into account, in our macro scenarii and asset allocations process, any "Sentiment Survey" (ISM and else...).
The following table details the bank lending survey results for loans to households from the ECB
                              July  April   Jan.    Oct.   July    April   Jan.    Oct.
                           2009   2009  2009  2008  2008 2008   2008  2007
                         ---- Demand for loans to Enterprises next 3 months ----
Net percentage      1%   -12%    -26%    -8%  -14%   -12%  -3%   +11%
                         ---- Demand for loans to Enterprises past 3 months ----
Net percentage     -29%  -33%   -40%   -26%  -16%  -17%   2%  

So let's hope european bankers took into accounts their previous mistakes, and that this positive forecast is really worth something. This time.

Or else, that will just be another Green Shoots back into the ground.

Disclosure : Long 20 years OAT 0% Coupons, EDF Corp 5 Years 4.5%.
This letter is not intended to provide tax, legal, insurance or investment advice, and nothing on this letter should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security.