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"currently prohibited by EU rules"
When EU bailed out Greece, Greece got almost nothing, while Deutsche Bank and other big banks that over-lent to Greece (behind the fraud advised to Greece by Goldman Sacks) got nearly all of it.
Deutche Bank's chief economist calls for a bail out -- currently prohibited by EU rules -- for Italian banks:
https://mishtalk.com/2016/07/10/deut...llion-bailout/David Folkerts-Landau, chief economist at Deutsche Bank, says “Europe is Seriously Ill”, and EU banks need a €150 billion bailout program.
Via translation from Die Walt: German Bank Chief Economist Calls for €150 Billion Bank Bailout.
Europe risks a new banking crisis says David Folkerts-Landau, chief economist at Deutsche Bank. He suggests a huge EU bailout program. Private creditors should not participate.
Rules prohibit state aid. However, bail-ins are not politically feasible because it would take out a lot of private savers in Italy, and possibly even trigger an onslaught of creditors and customers of the banks. “Strictly to keep to the rules would cause greater harm than they suspend them” said Folkerts-Landau.
The decline in bank stocks is only the symptom of a much larger problem, namely a fatal combination of low growth, high debt and a proximity to dangerous deflation. “Europe is seriously ill and needs to address very quickly the existing problems, or face an accident,” said the chief economist.
"currently prohibited by EU rules"
When EU bailed out Greece, Greece got almost nothing, while Deutsche Bank and other big banks that over-lent to Greece (behind the fraud advised to Greece by Goldman Sacks) got nearly all of it.
that was a bail in: Greek citizens got squeezed, the EU paid nothing, reckless lenders were made whole.
the great boutons is quick to mock, slow to grasp details
attempts to allay fear and anxiety often have the opposite effect:
https://www.theguardian.com/business...overnment-helpChristine Lagarde, managing director of the International Monetary Fund which has ranked Deutsche Bank as the world’s riskiest bank, said state help was not needed. Speaking to CNBC, Lagarde said: “I don’t see that particular ins ution as ... at a stage where state intervention is absolutely called for at the moment. I would hope that the right measures are taken internally so that the whole financial sector in Germany is solid and that systemic players [are] strengthened.”
Deutsche Bank in BIG trouble
Commerz Bank laying off 10K
no vote rocks Italy, imperils bank bailout:
http://wolfstreet.com/2016/12/04/ita...-for-taxpayersThe largest 14 Italian banks – not counting the myriad of smaller banks – are sitting on €286 billion of “non-performing exposure,” as the ECB calls it. These loans, debt securities, and off-balance sheet items won’t be repaid. Banks still carry this toxic waste as assets on their books, and writing off this toxic waste and cleaning up their books would crush the banks’ capital officially – though in reality, it got crushed long ago – and take down the banks.
So banks have to find new capital to clean up the horrendous mess, but new capital has become scarce, given the horrendous mess.
The most urgent case is Italy’s third largest bank, Monte dei Paschi. It has already raised new capital twice in recent years, only to re-collapse. The third time is not going to be the charm, investors have decided. They’ve lost their appe e for losing even more money on this morass.
of course, the mgmt of Monte de Paschi have made out like wolves.
BigFinance is a ing corrupt den of thieves, everywhere.
"The Best Way To Rob A Bank Is To Own One" -- Bill Black
and Trash/Repugs will roll back, kill CFPB, unleash pay day lenders, reduce capital reserves, ignore used-car sub-prime dealer/lenders, to allow BigFinance to fleece the citizen sheep even more
something like 6M car owners, a lot of the sub-prime borrowers/dealer-financed, are behind 90 days or more.
Varoufakis:
https://yanisvaroufakis.eu/2016/12/0...-4th-dec-2016/What we’re forgetting is that in Europe we have created a very interesting beast. A very large economy, featuring a supposedly independent central bank, but in reality we have created an economy where there is a central bank without a government to have its back, and governments without a central bank.”
“We ended up with a massive crisis without a central bank where we could park our bad assets, and the very quaint illusion that a banking crisis, yielding gigantic losses, could be overcome through austerity.
“Allow me to put forward a working hypothesis,” he said, explaining that it has to do with the way in which surpluses and deficits are recycled.
“Between 1950 and 1971 it was a very boring time for bankers but an interesting time for humanity, the golden era for capitalism.
“The US took parts of its own surplus and recycled it in Europe and Japan.
“At the end of the US surplus, when it shifted to a deficit position, they blew up the system they had created because they realised it wasn’t working, unlike the Europeans, who will do anything to hang on to an unsustainable system.
“The US did something quite remarkable – they turned their deficit into a source of strength. They entered a deficit position but didn’t tighten belts; they hit the accelerator and increased their deficit. But that deficit was remarkably important for the rest of the global economy. It operated like a vacuum cleaner, sucking into US territory the net exports of Germany, Netherlands, Japan and later China.
“American policy ensured that the rest of the world not only sent their net exports to America but sent 70% of their excess money to Wall Street. They recycled other people’s capital. From 1950 to 2008 Europe did not have to perform macroeconomic stabilization, Washington was doing it for us.
“But Europeans never understood that we were lacking both the intellectual and economic expertise and the political mechanism by which to do that for ourselves. The tragedy of 2008 is that the breakdown led to the end of America’s capacity to recycle global surpluses.
“Great incongruity between very high savings and very low investment, creates deflationary forces, and deflationary forces breed political monsters today, just like it did in the period between 1930-1933.
“Our perfect storm is due to a political failure. It is the establishment politicians’ fault. It’s our fault, for not forcing politics to shape up.”
"It’s our fault, for not forcing politics to shape up."
How naive. Check the Princeton study on oligarchy.
The US oligarchy doesn't GAF about the us of "our fault".
The entire political class has been corrupted by money, with much tranks the VRWC SCOTUS' "money is speech/corporations are people" bull , that "us" simply can't outbid.
AEP: the IMF bollixed it up
https://www.telegraph.co.uk/business...ses-for-the-i/The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory.
This is the lacerating verdict of the IMF’s top watchdog on the fund’s tangled political role in the eurozone debt crisis, the most damaging episode in the history of the Bretton Woods ins utions.
It describes a “culture of complacency”, prone to “superficial and mechanistic” analysis, and traces a shocking breakdown in the governance of the IMF, leaving it unclear who is ultimately in charge of this extremely powerful organisation.
The report said the whole approach to the eurozone was characterised by “groupthink” and intellectual capture. They had no fall-back plans on how to tackle a systemic crisis in the eurozone – or how to deal with the politics of a multinational currency union – because they had ruled out any possibility that it could happen.
Yikes.
Italy and EU standing off over Italy's budget deficit:
https://wolfstreet.com/2018/10/07/it...wdown-with-eu/The government has set a public deficit target for next year of 2.4% of GDP, three times higher than the previous government’s pledge. It’s a big ask for a country that already boasts a debt-to-GDP ratio of 131%, the second highest in Europe behind Greece. To justify its ambitious “anti-poverty” spending plans, proposed tax cuts, and pension reforms, the government claims that Italy’s economic growth will outperform EU forecasts.
Brussels is having none of it. EU Commission President Jean Claude Juncker urged Italy’s Economy Minister Giovanni Tria to desist. “After having really been able to cope with the Greek crisis, we’ll end up in the same crisis in Italy,” he said. “One such crisis has been enough… If Italy wants further special treatment, that would mean the end of the euro. So you have to be very strict.”
It is this outsized exposure of Italian banks to Italian debt that makes any sudden deterioration in the value of Italian bonds so dangerous. The banking sector hold around 18% of all of the nation’s public debt. It’s the reason why, as investors abandon Italian bonds en masse, the shares of Italy’s banks are also nose-diving, with the stock of recently rescued Monte dei Paschi di Siena leading the way down having lost more than half its value year-to-date.
The chart below shows how the FTSE Italy Banks Index has plunged 29% since early May (black line), while the Italian government 10-year yield (red line) has nearly doubled from 1.8% to 3.4%, practically in tandem:
In other words, the dreaded “Doom Loop”– the vicious cycle between over-indebted governments in the Eurozone and the weak banks that funded them, which the ECB’s QE program was supposed to put an end to — is back in full flow.
4th largest Eurozone economy
and Pootin's Russia is smaller
yeah, the Russian menace is overhyped
what could go wrong?
http://www.spiegel.de/international/...a-1233781.htmlThe European Union executive would have to reject Italy's draft budget for 2019 in its current form, Budget Commissioner Günther Oettinger told DER SPIEGEL on Wednesday.
"The assumption has been confirmed that Italy's draft budget for 2019 is not consistent with existing EU obligations," Oettinger said. European Commissioner for Economic and Financial Affairs Pierre Moscovici is expected to lead talks on the issue in Rome this week. The commission is expected to send a formal letter with its assessment to the Italian government within the next two weeks.
shockingly ignorant. the EU has claimed the future income of Greece as far as the eye can see.
pensions to decimate, public properties like airports, national parks and seaports to privatize, and money to be squeezed off in perpetually austerian budgets to service the debt to Germany and northern Europe.
Last edited by Winehole23; 10-24-2018 at 02:41 AM.
the European Commission, an unelected body, has just told Italy's government it must change its budget.
https://www.bbc.com/news/world-europe-45954022the country now has three weeks to submit a new, draft budget to Brussels.
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