At 50x Leverage And 2% Tier 1 Capital, Is SocGen Truly A Paragon Of Balance Sheet Invincibility?

`` SocGen is back at the leverage it had back in 2007 at just over 50x. As a reminder, not even Lehman was this bad when it blew up (and that excludes the beneficial boost from Repo 105). In other words, SocGen has a Tier ratio of 2.0%... a number which the bureaucrats at Basel will have no choice but tell the bank must go up. And go up it will... assuming SocGen can issue €84 billion in new capital to pad its equity (on €19 billion of market cap... mmhmmm). Of course, in order to raise capital, SocGen would have to admit that the market was, in fact, correct in its assessment that the bank was undercapitalized, which would then send the stock even lower, and so forth, chicken or egg style''