Euro downgrades and looting

Remember when I wrote that I thought the EU was repositioning for the next big event?

Here’s a small time line of scattered events.

Over the last few months, it turns out, ECB bail outs and loans just have not been enough for either Greece or Ireland.  Not surprising in the case of Ireland where every time anyone moves, they trip over another can of undeclared bad debts. But not to worry, Ireland and Greece have been printing up new debts for their people to pay off, in the form of inky, stinky Euro bonds at a frightening pace.  70 billion so far and likely to rise to 100 billion.  This means that though the ECB disdains actual printing, or so they say, it has been forced to do so because the Irish and Greek central banks are doing a bang-up job of conjuring Euro debt out of thin air.

Then a few days ago we had the news of the Danes test driving the new rules for allowing senior bond holders to ‘share’ in the losses of a bank default.

Moody’s promptly said said it would look again at all European bank ratings precisely because it was reviewing their stability in light of the greater willingness of European nations to ‘share’ some of the losses with bond holders.

Wednesday night European bank’s emergency overnight borrowing from the ECB suddenly shot up, from an average of 1 billion that had held since Christmas, to 15.5 billion euros.

Thursday, Reuters says Portugal is now going to have to accept its own IMF/EU bail out as early as April, because it does not believe it’s banks will survive if it does not.

Then later on Thursday,  waiting until the closing bell on Wall Street today, Moody’s the rating agency just released the headline that it was downgrading the subordinated debt of 23 German banks. Remember, once the senior bonds holders are in line for loses then the subordinated debt holders are burned.

So what do we have?  Seems to me we have Greece and Ireland drowning and printing up debt in a last ditch attempt to make sure no one in the countries survives to tell the tale. The Danes decided they were NOT going to suffer the same fate and had a word with their bond holders. That frightened the hell out of the bond holders. Moody’s realized its bank and debt ratings, which were based almost exclusively on the belief that no matter how insolvent a bank was,  no bank would be allowed to fail and no bond holder would be expected to have his lunch interrupted.

When Moody’s realized this might not be true they announced the re-assessment.  Was this a worry to the banks?  Well suddenly someone, or several someones, felt the need to borrow 15 billion from the ECB rather than each other, at the expensive overnight rate.  We can assume some of the someones were Portuguese. And some might even have been German.  The German banks likely to be among the 23 facing debt downgrades will be some of the Landesbanks and Commerzbank.

What will happen now? Well the IMF vulture is circling.  Last Friday the IMF, ECB and EU had a meeting with  Greece and said publicly that the Greek government should “recalibrate its assets”.  Which they explained meant Greece should now sell some of its assets  to pay off its debts.  In other words sell things that belong to the Greek people to pay off the debts of Greek bankers in order to save French and German banks.

Ireland already had this same advice, so did Hungary and in the UK the Tory boys were all set to sell off every woodland they could get their hands on.  A pattern here?

The European Banks are NOT healed. The governments who have been  bankrupting their people to save their banker friends are running in to trouble. Too much debt and still the banks are not solvent.  The decision to  ‘share’ the losses with some bond holders is now rippling out.  We will see downgrades in France and elsewhere in the next week.

One thing that would help the banks is if their friends in government could  get all sorts of assets in to their hands for fire sale prices.  Such assets would bolster the banks in ways far more immediate than  making a few good loans.  Banking takes time to make a return. Looting is wonderfully quick.

We are heading for another event.  Ireland, Greece and Portugal are on point. The pressure on the ‘core’ nation banks will grow.  That will put pressure on the  politicians to speed up the looting and or bring forward another cash injection.

26 thoughts on “Euro downgrades and looting”

  1. Seems to me, the World now has an international oligarchy made up of bankers & the like,( perhaps it has had for a while, but it's only this crisis that has exposed it ) which sits above & reduces most countries so called leaders to mere puppets. I remember the news which stated that Lord Ashcroft was angry with Cameron for agreeing to do the TV debate, making me wonder, who's in charge there ?
    Maybe I am naive, but I don't understand these people, why do they need/want so much ? Is it because it buys them power, have they no empathy or shame & don't they realise that they are driving the same runaway train that we are all on ?
    The movies koyaanisquatsi & powaquatsi had a big effect on me, but it's only now that I am beginning to understand the mechanisms involved.
    I apologise if I am waffling & getting off the point.

  2. Golem XIV - Thoughts

    Morning SteveFinn,

    Thank you for commenting. I remember that Ashcroft tantrum as well and wondered the same thing. Please don't apologise. You're not waffling.

  3. Bonjour Golem!

    Well, we've been wondering together for years when the hell it'd come to the boil…

    Interesting opinion and info from Nils at the Guardian here, with my link to extensive quoting from the FT for those not free-registered there. I expect WhistleblowerIRL will be interested in the liquidity coverage ratio stuff.

    Stevie– it's nothing new in history,that (for us) incredible stupidity and greed of those with power, but globalisation has amplified it as never before.

  4. I hate to sound like a doom monger, but. I am experiencing a de ja vue moment similar to my first inhalation ;), total disconnect.We have been told that there is a fire in the house, indeed we can feel the increasing temperature and see some charred embers ready tore-ignite into a raging inferno. We have been told to note the exits and be prepared to leave the building in an orderly manner. The time is upon us to individually slip out without being noticed. I hope to see some of you outside.

  5. Golem XIV - Thoughts

    Bonjour Dave,

    WhistleblowerIRl's case illuminates the reality behind the bank's clap trap.

    He worked for UniCredit as Risk manager. He found and repoerted that the bank routinely did not have enough capital holdings/liquidiy to cover its liabilities at the end of each day. The law in Ireland said if you were short even 1% you had to contact the regulator and a serious inquisition would start. Unicredit were missing by1900% ROUTINELY.

    This is not an accounting nicety. It meant one of Europe's larget banks, a trillion euro bank, could not cover potential calls which if not met would lead to a serious cash emergency. The kind of emergency which can see banks brought to their knees. Unicredit brushed the problem aside and so did the Irish regualator.

    That teh banks are already undermining the pathetically small tightening in the silk regulations taht inconveneinece them is proof positive of their greed and our government's cowardice and capture.

    Another blow out will result and the banks will fully expect to be bailed out at our expense yet again.

  6. Hello Dave,

    Thank you for alerting me to the Guardian article. As my comments there are being pre-moderated, i'm not sure when/if my latest one will be published. Either way, I would like to share that comment with Golem's readers, so please see my comment below.

    Golem,

    Thank you for persevering.

  7. Here is the link again to the Guardian article:
    http://www.guardian.co.uk/business/2011/feb/17/bank-liquidity-being-diluted

    Here is my comment:

    PART 1

    As my own case shows, banks treat red traffic lights as mere recommendations, they certainly do not feel compelled to adhere to them if this is inconvenient. Why should they?!? After all, the regulators don't see the need to enforce them either.

    @slackrabbit

    You are right in pointing out that some banks were operating well beneath the required liquidity ratios. So what?!? The regulators in the UK & Ireland don't seem to have a problem with that. The banks had a party, and now we, the taxpayers, are paying for it. The political classes are conveniently acting on behalf of the banks, while telling us that they are acting in our best interests.

    I resigned from my position as UniCredit Ireland's Risk Manager as I did not want to incriminate myself. Apart for stipulating required liquidity ratios, the Irish Financial Regulator's Liquidity Requirements also stipulated a possible penalty of 5 years in prison for the bank executives responsible for breaches of liquidity requirements. The requirements also threaten proceedings against the responsible officers at the regulating bodies, but let us not for a minute even think that this might happen. It's just the law. Patrick Neary, the former Irish regulator was sent home with a substantial pension for his efforts.

    In September 2008, a year after I resigned, the entire Irish banking system had to be bailed-out by the government. The reason – it had run completely dry of liquidity. Has anyone been punished? certainly not, the Financial Regulator simply re-issued the regulations in 2009. The preamble to the new regulations makes reference to a Banking Act of 1942, but NEVER mentions that these regulations were in force in 2007.

  8. PART 2

    The recent affair of the 'Fitzpatrick Tapes' were the final nail in the ruling Fianna Fail party's coffin. Sean Fitzpatrick, the ex-boss of Anglo-Irish bank, sent a very clear message to the politicians that he would take them down with him, if he was to be taken into police custody for anything more than the 24 hours he spent with them, at his convenience, immediately after St. Patrick's day last year. The police were considerate enough to wait until our national day was over, in order not to inconvenience him. Rest assured, nothing too embarrassing will be revealed about Anglo-Irish, as their new boss is Alan Dukes – a Fianna Gael man. Fianna Fail has made sure that Pandora's box that is Anglo-Irish will be kept neatly closed when Fianna Gael come to power. The endorsement that the Wall Street Journal gave Fianna Gael over the last week was just what they all wanted.

    Kathleen Barrington of the Sunday Business Post has been working relentlessly to reveal the antics of Fianna Fail and Anglo-Irish. Barrington has been demanding to know if the depositors who were protected by the last-minute sale of Anglo-Irish Vienna to one of its clients – Valartis, a Swiss private bank, are the same people who owe millions to the now-nationalised Anglo in Dublin, or to NAMA, our farcical bad bank. Both Anglo and the Finance Ministry have declined to answer the question, citing confidentiality. The fact is that Barrington was not asking for names, just for confirmation that our tax money, as well as that of the ECB & IMF (and the helpful UK treasury for that matter), was not being used to bail-out people who are sitting on millions in secret Austrian accounts.

    Only last Sunday, Barrington wrote about documents that she acquired which show the pressures brought by banks (namely Anglo-Irish and Depfa) on the Ministry of Finance. Surprisingly enough, her story was scooped by Simon Carswell in the Irish Times just the day before. There was one major difference – Carswell's article was far more conducive to Ministry of Finance. So much for the independence of our national broadsheet.

    As a final note, I should point out that the chairman of UniCredit Ireland's board of directors at the time of my resignation was an ex Fainna Fail member of parliament. Would that explain the Financial Regulator's lack of appetite to enforce liquidity requirements at UniCredit?

    For links to articles about my story as well as the protocols of the debates about it at the Irish senate, the Irish parliament, and more recently – the Austrian parliament, please visit my blog. It also includes links to the Liquidity Regulations – old (but not enforced) and new (maybe enforced).
    http://whistleblowerirl.blogspot.com/

    All of Kathleen Barrington's articles can be found on her blog at:
    http://kathleenbarrington.blogspot.com/

    Village magazine's cover story of its Dec-Jan edition was dedicated to the UniCredit Ireland:
    http://www.villagemagazine.ie/index.php/2010/12/still-waiting-for-the-truth-from-the-regulator/

  9. Well I have been through the Kathleen Barrington blog and how can anyone not conclude that there has to be some kind of criminal judicial process applied to some of these players.

    Much of the problem, at root, is related to the way the the financial industry and the system of representation have become intertwined in technocratic collusion, verging on conspiracy.

    I sense, however, that the supermajor players-American and EU political and financial interests, will dictate the degree to which the judicial system is applied to generate any sense of justice prevailing.
    i.e not at all.

    Short of a genuine revolution in the west, I cannot see how any of this can be resolved.

    Essentially there is no accountability in the so called democratic process in the west and until that basic fault is remedied there can be no real progress.

    I get the feeling that this dishonourable process will stumble on and on, with occasional outbursts of sound and fury, and will eventually just become part of the panoply of what is called 'history'. A book in the future may record that the great Irish finance scandal led to revolution and the development of a new democratic model- or it will record that the crisis led to the second great emigration and depopulation of Ireland and the collapse of the country's governmental system and eventually leading to its incorporation into the governance of Great Britain and 'All; Ireland – under a mandate of the UN and ratified by the EU and a referendum of the remaining demoralised Irish population, largely made up of pensioners and the infirm.

    Could Ireland become the European Tunisia? Maybe -but certainly not yet. and the likely election of fianna gael looks like a disaster in the making- just more of the same craven accountability free democracy.

    I would suggest that the degree to which western democracy is non-compliant with the principles of democracy is not much different to that of North Africa and the Middle East, despite the differences in appearances, more just a question of subtlety and delicacy.

    In a sense the political classes and the (two) party systems have become 'democracy avoiding' although not actually democracy evading, applying the same distinction that we appply to taxation.

    We need to start to create the conditions where democracy cannot be abused or avoided without penalty, and where democracy and all its corollaries and related values and institutions are complied with.

    p.s good work with the blogging, David. It is appreciated.

  10. Revolution seems fashionable again just now. People seem to be learning that the government *does* listen when enough people complain. It is difficult to imagine our police or army shooting peaceful protesters dead in the streets. Democracy isn't just about electing a government – it is also about keeping them in check once they are elected.

    The only way that the Irish people can change the system is to get out there on the streets (peacefully) and demand change – no one else is going to do it for them.

  11. On the Guardian Business page there are reviews of the film Inside Job by … insiders.

    The only one not anonymous is an EX-insider —

    "An oversight by the film was to ignore how risk managers at many banks knowingly failed to voice their fears about the way their companies operated. A risk manager once told me that to raise an issue that undermined the bank's multi-billion-dollar profits would have been to "sign his own death warrant". This inability to challenge trading desks generating billions in phantom profits was endemic."

    http://www.guardian.co.uk/film/2011/feb/17/inside-job-financial-crisis-bankers-verdicts

  12. Moody's "realized" its bank and debt ratings, which were based almost exclusively on the belief that no matter how insolvent a bank was, no bank would be allowed to fail and no bond holder would be expected to have his lunch interrupted.

    Should that not read "reviewed" or such like?
    Please delete after correction.

  13. Hi David

    Really enjoyed your talk after the Inside Job film yesterday evening. I went home thinking desperately about how can we defend ourselves? How can we fight back against this corporate/ banking takeover – before it's too late?

    Can you please expand on what you were saying about moving our money out of the big banks? One idea you mentioned was forming unions of customers who would then have the power to make demands of the banks. Are these called Credit Unions? How would it work?

    Or was Eric Cantona's idea a good one – move your money – and could this be improved? I know it wasn't a huge success in France but it did get a lot of attention. Could we try the same thing here, but with who could front it? Are there any famous footballers in the UK with a social conscience?

  14. princesschipchops

    Has anyone seen this today on The Guardian? http://www.guardian.co.uk/business/2011/feb/18/barclays-bank-113m-corporation-tax

    Even I – a die hard cynic – was actually shocked by this. That they only paid one percent tax!

    Stevie – You said in your comment: ''have they no empathy or shame & don't they realise that they are driving the same runaway train that we are all on?''

    It would seem not. They really don't seem to have any. In the comments below the Guardian article an ex-Barclays employee tells how one of the managers thought it would be fun to name one of the projects Tolpuddle – because he thought what happened to them was great and should happen now!

    I read Affluenza a while ago by Oliver James – his thesis is that a lot of people working in senior positions in banks etc and traders and the like are actually sociopathic to some degree or other.

    One of the investment consultants I worked with in financial services had a bonus one quarter of twenty grand. Now this was more than the quotes team and phone teams, who provided us with help, earned all year. He went around the office showing everyone his pay slip! I s*** you not – he actually did that. Then he genuinely couldn't understand why his calls weren't being put through – why his clients quotes were always late, etc. It is a totally different scale, moneywise, to the big boys in London – but the same mindset.

    And the environment breeds it into you too. If you hit your target but your colleague hits it – plus ten percent – you're a failure. In most companies league tables are realeased company wide every month and will be read out in local sales team meetings. The pressure is endless, every day you get an update of your new business in – first thing every morning. Those who don't hit their targets can be sacked – I think they can sack you after only two quarters of not hitting them. If you fail any exams you're told to do – you can be sacked. My company tended not to do that and were pretty decent actually – but people I know in other companies say it is used all the time, so no one feels secure in any way.

    And remember this is nothing like the level of what goes on in the casino banks – where by all accounts it is ten times worse – and even those who do really well are berated for not being number one. This is not in anyway defending those individuals who acted fraudulently or with insane greed – just trying to say that it is both the people that work there and the very system itself, which is set up to create monsters, that are sick to the core.

  15. Hi David,

    I also really enjoyed the talk yesterday. The comments I heard from people as they left the cinema while I loitered outside smoking were very positive too. Well done. Hope the others go just as well.

    The Depositor's Union idea is great. However, it occured to me on the way home that the government would probably legislate to outlaw such organisations pretty swiftly if they ever came into being. I don't know much about the law but I imagine they could come up some kind of special circumstances style bill to nip the idea in the bud before it gained enough momentum. They'd do it under the guise of protecting the economy from another banking crisis and there'd be very little opposition in parliament.

    Maybe I'm talking rubbish but I see intent in the plans to 'reform' Westminster. I think it represents the completion of the project to hijack parliamentary democracy. All you hear about in the mainstream media is the change to the voting system and almost nothing about the plans to reduce by 50 the number of MPs sitting in the Commons. The number of MPs hasn't been that low since 1800 when the number was 558 corresponding to one MP for roughly every 18,800 people. If the number of MPs sitting now was 600 there would be on average 103,000 people represented by each MP.

    The reduction in the number of Members is calculated in my opinion to reduce representation at parliament and make it easier to pass the laws demanded by the elite. Those laws will inevitably be designed to protect the wealth that was sucked up during the bubble by ensuring that we pay off the resultant debts with our taxes and our national assets. They'll be designed to turn the UK into the same kind of haven for corrupt banking and low-tax corporate HQing that Ireland was. All in the name of making the UK more 'competitive' but really just to rinse us of our last pennies and last traces of self-respect.

    The race to the bottom has begun. The lawmakers will keep us on that path indefinitely unless we have our own 'Cairo moment'. In my opinion it should be our objective to find ways to make that happen as soon as possible.

    I haven't read Affluenza, Princesschipchops, but I'm quite ready to back the author's hypothesis about a lot of top bankers and traders being sociopaths. In fact I'd go as far as to say it's a requisite for many of those jobs.

  16. Dear G, there were a couple of issues that came up in the post-film discussion yesterday which I'm not sure people have thought through properly (but I didn't want to interrupt) so I have posted the actual answers on my blog here

  17. Just parking this 'reminder' here, on a Too BigToFail that was Too Big to Regulate … LINK

    —————————

    An attempt by Barclays to suppress details of its allegedly massive tax avoidance schemes two years ago ended in farce. The high street bank went to court in the middle of the night to gag the Guardian but was outmanoeuvred by free-spirited souls on the internet.

    It showed the legal system struggling to keep documents secret even after they were freely available on the web.

    The story emerged in March 2009 when a whistleblower leaked internal Barclays memos to the Liberal Democrat MP Vince Cable.

    The memos – passed on to the newspaper – described how a 2007 scheme called Project Knight proposed to save tax by manipulating loans totalling more than $16bn (£9.8bn), through a web of firms in the Cayman Islands, Luxembourg and the United States.

    The memos also quoted advice from lawyers on how to blunt any challenges from HM Revenue & Customs. The whistleblower alleged: "It is a commonly held view that no agency in the US or the UK has the resources or the commitment to challenge [Barclays]."

    Freshfields, Barclays' lawyers, toiled into the night to compel the Guardian to remove the documents from the website. Geraldine Proudler, a solicitor acting for the Guardian, was woken by a high court judge telephoning at 2am and asked to justify their publication. At 2.31am, Mr Justice Ouseley, over the phone, ordered that the documents be removed from the website, by which time 127 people had read them.

    Later that day, Barclays went to court to argue that the documents should be permanently removed, accusing the Guardian of "vigilante journalism" by publishing the documents to "the entire country" rather than merely to regulators.

    The Guardian documents disclosed seven tax avoidance schemes operated by Barclays. Many of them were devised by structured capital markets boss Michael Keeley. They involved more than £20bn of loans typically shuttled between entities in Luxembourg and the Caymans, designed to generate hundreds of millions of pounds of tax reliefs, the proceeds frequently shared with US banks.."

    ——————————

    Dastards !

  18. JamieGriffiths – I don't think you are talking rubbish – I share your deep concern about the attempts to reform parliament. As for this: ''If the number of MPs sitting now was 600 there would be on average 103,000 people represented by each MP.'' Makes you think!

  19. It seems to me that there is a general attitude that happiness is achieved from material gain, I have seen fairly decent people within organisations being encouraged & sometimes forced to sell something of themselves, in order to get on. The more of a sociopath you are probably helps in this regard. I remember one particular person whose personality gradually worsened after he made one decision to toe the line, he is doing very well now, but the light that was there has now diminished. Perhaps this is why sociopaths & flunkeys tend to end up at the top, whatever the organisation. I watched " The Lives Of Others " recently, to me it seemed to illustrate the fact that once you make certain decisions, it's very hard to go back, & for some people there was never a step over the line.

  20. @ Stevie FInn,

    I have seen similar pressures on people at work and the incredible thing I think is how far it can spin out to other staff members/stakeholders and then out of control just from that one step taken by one person in 'management'.
    But I don't think it is just within employment that these decisions happen. I think most of us guilty of putting consumption/material wealth above pretty much all other values when we shop too.
    I don't think those decision are just about what we decide to do – but about what we decide to ignore – aren't we all really a bit sociopathic in our consumption habits? We might not personally make the decision which are truly sociopathic, but when we know they have been taken aren't we just as sociopathic in deciding to ignore it./support it with our hardearned cash?
    As employees and as consumers we tend to shrug our shoulders and say 'what can I do, I don't make the rules, I can't change anything all by myself? We let immediate concerns (those in the here and now. concerning our nearest & dearest) outweigh everything else.
    Many of us would put our child's desire to have the toy they crave above any ethical considerations about how that toy was made. We shut our minds to stories of child labour being used by factories making Disney products and focus only on the fact that our daughter/niece/godchild will beam the cutest smile when she gets that Disney princess whatever. And similarly in another 'reality' the risk manager wanting his child to keep up with her peers knows that he's going to need his salary if little Tamara is going to go to that expensive private school with all her bestest friends. So faced with the decision of integrity vs his job security he tells himself he's only being a good father, reads a handy newspaper article decrying state schools to bolster his stance and chooses.. job security.
    I'm pretty sure the textile worker working unpaid overtime because some stripey top HAS to be on the High Street shelves by Monday probably thinks much the same way about the average Western consumer as we do about the financial oligarchs.
    But as we have done with the people in the third world the financial oligarch tells himself that our poverty renders us slightly less human than him, that we can't possibly have the complex yet crystal clear needs and desires he experiences because we're surely blunted by all that muck and ordinariness.

    SO while I'm all for having the entire staff of Goldman Sachs and most of the central bankers in Europe hung drawn and quatered I don't think we can call for that without taking a good hard look at own ourselves. If we try to build a better world for oursleves on a stinking pile of hypocrisy we end up as – 'Merica i.e utterly schizo

  21. I think you are quite right Rebecca, life is so complex & difficult we can't help having to compromise, & very few of us want to live like Gandhi. The vast majority of people have very little choice as they are just trying to survive. I, relatively wealthy compared to most people on this planet would love to be able to be more ethical in my choices, but within the system I am living in & my past reactions to it, which have led me to where I am today, I simply cannot. I think it's part of the reason why the "Big Society" idea is utter crap. I would love, probably like thousands of others to go & do some voluntary work, but because I have to work a minimum 60hr week to build up a business, which will provide me with some employment, I cannot do that either. I know that we all share some of the burden of guilt, but I think it's still a question of choice, you either try & do what you can or you don't.
    The people with real power of choice, for the most part, choose to sit on top of a system that is designed to subjugate, by removing choice from the vast majority of their fellow men, by the use of an economic treadmill from which they suck out most of the profits.
    These peoples actions will probably result in millions of deaths through the associated effects of the way they conduct their business, but unlike Hitler / Stalin etc, they are mainly nameless. Yes the Germans share some collective blame for the horrors of the 2nd world war, but the real blame lies with Hitler & his henchmen & they had to be stopped.
    I think what we can do is use the power of information, mainly through the internet & blogs like this to try & inform people of what the powers that be would prefer them & us not to know, I think it's a way we could possibly hold these people to account, if enough people get involved that is. I know that most of the stuff I post falls on deaf ears, but you know what they say about throwing enough mud.
    I am amazed about what I am now learning & how the previously untouchable are now constantly being tripped up by unwelcome revelations & information.

  22. Golem XIV - Thoughts

    Mark,

    Great to see you the other night at the film and Q&A. Thanks for the clarifying post. I take your point about the power of teh government to give the bank whatever it needed to make up for money taken out by depositors. BUT do you not think that such a situation achieves almost the desired effect in that it forces the governmetn to be seen to be using tax money to twart the will of the 'free amrket'?

    I cannot help (and maybe I'm just too hopeful by far) but think that to provoke such a stand off would do the job in itself.

    What do you think?

  23. G: "Do you not think that such a situation achieves almost the desired effect in that it forces the government to be seen to be using tax money to twart the will of the 'free market'?"

    Nope.

    I don't think most people – whether nominally left wing or right wing – are too bothered about free markets. Anybody in his right mind knows that governments trample on the notion of free markets all the time (and that they use taxpayers' money to bail out banks and prop up house prices) and hand out a small part of the spoils to special interest groups, i.e. homeowners think they are getting a good deal because the value of their houses are going up.

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