This has appeared (that word again) interminable…. Banking agreement, financial agreement, sovereign debt, bank runs, 17/27, ???
Mead writes as if America’s TBTF banks did not exist – let alone command more than half the assets of the world’s largest private economy. Mead:
“For European countries national oil companies, automobile companies and so on are “national champions” and their defense is seen as vital to the preservation of the independence of the country itself.”
Boeing? BAC-C-JPM? Goldman?
“The national regulatory body in those countries consciously works to support the big national banks and to nudge the banks to support national companies and to carry out other operations in support of government policy.”
So the Federal Reserve did not, and does not, intervene to repair the balance sheets of trillion-dollar American banks and bail out their shareholders? Really?
So we got debt mutualisation….ooops no we didn’t
• Well we got the bank deposit scheme….no we didn’t
• Well we have a banking union…eh no we are going to do a study after which we will hold a meeting maybe by the end of the year to discuss another meeting to refine our thought process.
• Well we gave the ESM a banking license….no we didn’t
• Well we leveraged the ESM…no we didn’t
• Well we put lots more new money in the pot…. No we didn’t. There is plenty to go around (Only if we are going to see a repeat of the wedding of Cana)
• Well we are on the way to Eurobonds (Talk to Angela on that one)
• Well we have a growth plan or more correctly a theoretical number with no plan specifics like…who pays for it
• Well we are going to lend money to Spanish banks with no subordination.
1. This money was already pledged weeks ago. We have just taken out the intermediary. Spanish Govt debt went up 10% and then down 10% in a space of weeks. Hip hip hooray.
2. How could there be subordination. You cannot lend money to banks and convert it into capital (Otherwise the LTRO would have massively recapitalized the banks) so it will have to be structured as Equity (Preferred or common) which could not subordinate anyway.
• Trust us….we have not misled you before….
• It’s the end of the month, end of the quarter, end of the half year. Be happy. We have saved the World….until at least Monday.
It seems to me that this just ties the Central Banks together tighter w/o actually controlling the fiscal policies of the individual states within the EU. If they can’t control the spending then all is for naught. Besides all the Banks together don’t have enough money to solve the crisis. It’s a solvency crisis not a liquidity crisis, anyway.
So… how much money do you suppose Merkel could be making off of these massive oscillations, if she were investing her money contrary to the terror / euphoria swings that she’s controlling?
Merkel, or German banks who were in on the act.
As usual, some very good, and very Germanoskeptic, questions from Jim.
(“Germanoskeptic” – did I coin a phrase? Whether I did or not, gotta say I love it.