Here's Who Just Got Their A$$ Saved By The Huge Euro Bailout

So Europe announced its gigantic bailout last night, consisting of a fund worth nearly $1 trillion, alongside ECB quantitative easing.

Stocks are going nuts. Dow futures are up nearly 400 points.

But the real winning market is the CAC-40, the French index. It’s up 9%. That’s because French banks were among the most exposed to Greece, and now they just got their butts saved.

French banks represent over 25% of claims. That's why the CAC-40 is up 9%.

Source: Citigroup

Banks: Swiss banks represent over 20% of claims.

Source: Citigroup

German banks represent close to 15% of claims. Germany's market is rallying big.

Source: Citigroup

U.S. banks represent just above 5% of claims.

Source: Citigroup

U.K. banks represent about 3% of claims

Source: Citigroup

Basically, this is European problem.

Citi: 80% of Greek debt claims are on European banks. This is a European problem.

Overall, this is great for the risk trade.

JP Morgan: There will be a flight to US treasuries and yields will fall there as a result of renewed risk aversion. This will widen spreads on high grade corporate bonds as a result.

Insurance: Several insurance companies have the potential for contagion risk. They're all saved.

Morgan Stanley: There are only a few businesses heavily exposed to one of Greece, Spain, or Portugal, but they include MapFre and Fortis.

Insurance: Fortis has significant exposure to Greece, Portugal, and Italy

Morgan Stanley: 39% of Fortis' tangible book value is exposed in Greece, 25% in Portugal, and 69% in Italy.

Insurance: MapFre has notable exposure to Spain

Morgan Stanley: MapFre has 4 billion Euros of exposure to Spanish government bonds.

Insurance: Potential contagion risks for giants

Morgan Stanley: While not over exposed to Greece or any of the PIIGs, several of the insurance giants have positions in each country which could become difficult if crisis was to spread throughout the debt troubled states after a Greek default or rescue. This is, however, unlikely.

Euro: Greece was driving down the value of the Euro. Today it's surging.

Morgan Stanley: Short the Euro against the Dollar, as the US moves towards a more stringent economic policy and the Euro zone experiences several potential bailouts.

ECB: No rate hikes likely for a long time, with potential inflationary risks as a result

Morgan Stanley: With the German economy stalled and threats like Greece existing on the periphery an ECB rate hike is now increasingly unlikely, perhaps for the whole of 2010.

Bulgaria and Romania would get slammed by a pullback in Greek lending.

Morgan Stanley: Bulgaria and Romania rely on Greek banks for a large amount of lending, much of which will be cut back in a Greek collapse due to a reliance on government loans. Reliance will shift towards local deposits as a source of lending, and those economies are weak already.

Macedonia, and Albania would have been hit, too.

Morgan Stanley: When the Greek economy slides, foreign workers from Albania and Bulgaria may lose jobs and stop sending home remittances. Also, FDI to Macedonia (7% of its GDP) and Bulgaria (8% of GDP) will decrease.

Extreme Tail Risk: Complete Greek Bank retrenchment crushes Central Eastern Europe

Morgan Stanley: Extreme tail risk scenario points to complete retrenchment by Greek banks from all Central Eastern European markets which results in their loan books not being rolled over to their local subsidiaries.

Could spark a credit crisis in countries like Romania and Bulgaria, where 25% and 45% of the respective country's loans come from.

Other countries will have a much harder time entering the Euro.

Morgan Stanley: The Greek crisis will make the EMU much more concerned about who they let into the Euro zone in the future. They will start to check more economic criteria, such as external imbalances and budget positions.

Meanwhile, other countries dependent on the IMF are now in more trouble.

Wells Fargo: If IMF has to act on Greece and its neighbours, particularly Spain, its could be hindered in acting in other crisis around the world as it will use up too much of its capital.

Wonder how Greece got here? Check out how bad the country's pension system is

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