Dexia, a major Belgian-French bank with $715 billion in assets was already bailed out in 2008. It received: $4 billion from the Belgian government, $4 billion from the French government, and $500 million from the Luxembourg government. Peanuts compared to what else it received:

— $30 billion in secret money from our very own Fed (disclosed in 2010 when the Fed lost the Bloomberg lawsuit). This, because Dexia had an office in New York.

— $200 billion in guarantees for its liabilities held by other institutions and counterparties, bonds, and other debt issues. 60.5% of it was guaranteed by Belgium, 36.5% by France, and 3% by Luxembourg.

It’s now a penny stock. Consumers are yanking their money out despite rhetoric from central banks and governments that they will guarantee all accounts. Various authorities are pondering right now how to break it up. They might spin off the huge pile of crappy assets into a “bad bank.” Salable assets will be disposed of at big losses. And taxpayers in Belgium, France, and Luxembourg will have to pull out their wallets because when it’s all said and done, this is going to be costly.

The irony: Dexia passed the much ballyhooed “stress tests” in July with flying colors. The European Banking Authority examined its books and came to the conclusion that it was the 12th safest bank of the 91 banks it examined.

Which makes you wonder when exactly banks number 13 – 91 will collapse.

The collapse of a large bank three months after passing a stress test confirms that the stress test was pure BS. Its only purpose was to “calm the markets” (that is, prop up stock and bond prices) by pulling a bag over our collective heads.

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