Why you have to understand the short term funding stresses of French Banks to invest in a small company drilling for oil in Alberta

Why?  Because our world is f#$!d up.

Its all about the French banks these days.  And you can’t ignore it.

If 2008 taught me something, its that banks can fail even if it appears that they should not fail.  And that when banks fail the fall out cannot be predicted.  As FT Alphaville pointed out today:

No bank can exist when counterparties lose confidence and withdraw their funding – even if the loss of confidence is triggered for the wrong reasons.

Perception is reality when it comes to banking.  This is why, I think, it is so hard to stop the snowball once it starts rolling.

Unfortunately the snowball is already rolling.  Three charts from three european banks as provided by FT Alphaville:

Look, yesterday I made back all the losses that I have had over the past week and a half.  I am back to pre-banking crisis levels (though not to pre-debt ceiling crisis levels).  I’m not thrilled to giving that all back again because some French bank is going to blow up ala Lehman.  In my actual account I added a short to Bank of America yesterday.  Today I plan to sell a bit more of  some oil stocks, even though they will be my beloved ones (ARN.v and CEN.v) to raise even more cash.