Three years ago Europe’s and America’s banks were supposed to die in an horrific accident. Their own rampaging greed and corruption had finally caught up with them. But somehow they cheated death. They did it by selling the lives of others; the tax payers in their own nations and those of nations, like Greece and Ireland, whose leaders had long since sold their own rotten and threadbare souls and were now keen to sell the souls of others.
But Death doesn’t like to be cheated.
And so here we are with Death picking them off one by one: Ireland, Greece, Portugal, Spain. Who’s next? Italy?
Who would have seen Strauss-Kahn arrested on suspicion of Rape? One moment in the lap of luxury the next in Rikers Island trying not to end up in anyone else’s lap. Fate? I think so.
The Irish Celtic Tiger was the first to go. The whore master of Europe’s best little banker’s brothel, the IFSC (International Financial Services Centre) . Come to Dublin and do whatever you want. What could go wrong? Answer – almost everything. Anglo Irish began to puke up everything it had ever swallowed. Depfa and Hypo Real Estate broke out in pustules and blamed each other. While all over Ireland property and land developers began to choke and suffocate in a cloud of their own lies and unpaid bills.
The Taoiseach Bertie Ahern and his finance minister Brian Cowen saw Death coming for them. And tried to buy him off by selling the soul of Ireland’s future. €85 billion and counting which is what has been crammed into ‘saving the banks’ but which is more accurately described as saving their bond holding creditors and the foreign banks who lent to them. Ireland is being tortured to death. Water boarded with debt.
Then came Greece. €340 billion in national debt. €100 billion in ’emergency loans’ from the EU and IMF. Strapped to a table with tubes pumping blood into a bulging and livid vein. Being told it will help but not realizing that the blood coming in is being sucked straight back out from the other arm making its devious way to the intended recipient – the bloated, syphilitic, sick men of European banking. Greece is just there to wash the blood through. A “pass through” to protect the identity of the real recipients. Papandreous will enforce austerity and watch Greece wither.
Watching the grisly spectacle has been Jose Luis Zapatero. Who’s one contribution so far has been to blubber “Not me. I’m not like them. Spain isn’t Greece.” While doing as little as possible to recognize the undeclared debts being hidden away in the regions, municipalities and their pet Caja’s. No Spain isn’t Greece. It’s bigger. Will Spain be next, crushed under falling masonry in some obscure town?
Or will Italy go first? Giulio Tremonti, Italy’s Greenspan, suddenly finds that the ‘friend’ in whose apartment he has been living, is required to help the police with their enquiries. Will Tremonti go? Will Berlusconi fall from power before him? If either does will UniCredit suddenly find it has bad loans surfacing like the dead from unmarked graves all over Italy? Word has it that their American operation, Pioneer, which they tried to sell then suddenly decided not to, is floating like the Marie Celeste. Silent, ragged, becalmed. Not a soul on board.
There was a time when the strong thought they might survive by feeding Death with the weak. Give him Greece and maybe he’ll go away. But Death is as patient as he is voracious.
Now panic is not far beneath the surface of calm. Bloomberg today quotes Suki Mann, senior credit strategist at Societe Generale as saying,
“Greece appears beyond repair, Italy is on the brink and the chances are that the euro might be no more very soon.”
Herman von Rompoy and his boys and girls at the ECB and beginning to wonder if they have put themselves on Death’s list. If Greece defaults, will Portugal or Spain be pulled over after them? And if so will the ECB be inexorably after them? The ECB is stuffed with bad paper from all the debtor nations. If they go what will happen? Wil the ECB be downgraded? The ECB doesn’t want to find out. It wants Germany and France to pay for their own European experiment in bank blackmail.
But in Berlin Angela Merkel of Germany is closing the doors and windows. No one is to be allowed in or even near. She has seen how the film ends and doesn’t want to star in the final reel. Let America and the Fed default. Bernanke is there printing and praying. Let him die. Let China crash land, let the ECB bleed, but Germany will not go down.
Let Greece default. Today the ECB seems to have bent to Germany’s will and is saying it will consider a ‘temporary Greek default’. The yield on Greek two years bonds just went into orbit.
Perhaps even France will struggle as she drowns in the defaulted sovereign and corporate debts that BNP Paribas’, Credit Agricole and Societe General are nurturing like a cancer within them. But when Death calls no one wants to be next. One more breath, just one more. Take my friend. Just not me. Not yet.
One more European summit in which the defenceless will be sacrificed to protect the wealthy.
Re-aligned my centre of gravity, I know it's a big question, but what of the UK, in this sea of shite ?
Dear Golem,
Grudgingly, I would have to agree with your comments regarding what was allegedly the Celtic Tiger. However, I whole heartedly agree with your observation about the current state of affairs in Ireland as that in which "Ireland is being tortured to death. Water boarded with debt."
Our elected government and our Prime Minster especially, began with a show of strength in front of Angela Merkel, intended to impress us, gullible Irish folk. This soon turned into Fianna Fáil mark II, where Dublin takes its orders from Berlin. Anything else might result in Pandora's box being opened – an extremely embarrassing prospect to the authoties, banks and elected politicians both in Germany and its newly acquired vassal state of Ireland (Land Irland).
Call it Pandora's Box, or Death knocking at the door, it would seem that we are about to witness a crack, a knock, or a bang of colossal magnitude.
Regards,
WhistleblowerIRL
UniCredit Ireland's EX Risk-Manager
PS
For readers who might not be familiar with the source of the reference that Golem made above to the IFSC in Dublin:
David McWilliams, an Irish economist & journalist who began his career at the Central Bnak of Ireland, and then went on to work for UBS and BNP, was interviewed by ZDF, the German TV channel about the collapse of Hypo Real Estate. In that interview, McWilliams uses the metaphor of German bankers behaving in Dublin like 'Men in a brothel' with the blessing of the Irish Financial Regulator. This observation makes it a bit harder to lay the blame fairly and squarely at the door of a particular nation, but reminds us that we are all paying for the greed of bankers and the criminal stupidity of the authorities.
"In that interview, McWilliams uses the metaphor of German bankers behaving in Dublin like 'Men in a brothel' with the blessing of the Irish Financial Regulator."
Watch it here:
http://www.youtube.com/watch?v=8RE56XsRmRU
So you think this is mere innocent calamity, without forethought to bind countries closer together?
Money is easily created and all nations will accept the currency if it frees them from these debts.
Does that not give you a clue? First create the weakness then provide a solution. Hint: the solution will involve much less austerity than currently promised!
I bet Catherine Day is behind it!
Havoc,
thanks for the link to McWIlliams!
Let's not forget that David McWilliams was first out of the 'traps' in his weekly column for the Sunday Business Post when the financial crisis broke in Sept '08, in his support for the bank bailouts in Ireland, including the infamous Anglo Irish Bank. David identified the problem as one of liquidity and through his column, I seem to remember,had a 3 stage strategy for extensive guarantees etc, all at tax payers expense to save the banks.David likes to portray himself as an 'outsider' when in fact he is a consummate 'insider' and self-publicist, darling of the state broadcaster RTE which is little more than the propaganda wing of Fianna Fail – the most irredeemably corrupt political party in these islands.David has always been way behind the curve during this crisis and is now scrambling desparately to get himself onside.David and the then minister for finance, Mr Lenihan attended similar priviledged private schools.David and the then minister were friends – the man who delivered Ireland for the banks.
pilibi,
I tend to agree with you about Mr McWIlliams. But I do have a soft spot for that quote.
StevieFinn,
Good question. The Little Englanders are standing to one side trying to pretend that what happens in Europe is just proof of how inferior the Continentals are . Ignoring the fact that our banks are easily as mired in manure and just as tied to bad loans as theirs are and every bit as morally insolvent as well.
Our time will come don't you worry. And then we'll see who feels superior to who.
We little Englanders have been distracted by the hacking farce. Amazing that being told journalism, politics and senior police have been swirling in the sewer together has the shock value to take over all news coverage. I wondered whether it was all a cover-story and I'd wake to find Melvin King had run off with the gold reserves and sold the country to a sovereign equity fund. Golem's story is as true as the hacking diversion, but far too serious for the British press.
Patience is occasionally not a virtue more a camouflage for funk.
Murdochgate if it had to happen at all, couldn't have chosen a better time for Cameron.
Anybody know how much we're paying into the EU coffers this year and the near future?
I don't recall the amounts but it's quoted as an increase of 97%.
I suppose that will sneak through at a late night sitting, much as the extra £24 or was it £42b did as a contribution to the IMF.
Makes you wonder if we can afford these EU and IMF types and whether it would be cheaper to simply ban them from the country.
Ah well – many mens famine is one mans feast.
My former colleagues in academe have lowered expectations – we used to imagine we got undergraduates capable of 'understanding' the financial press – this seems to have dropped to 'reading'.
allcoppedout – that isn't so bad.
There are many at Balliol that only read history.
#allcoppedout
perhaps this is a reflection of the quality of the financial press, perhaps your former colleagues are inferring that students should think for themselves.
Think !
How should the new world be ordered ?
Why is your world order better than theirs ?
What is in it for me ?
….?
We need questions (good ones) not pat answers
I've already raised the question of how to link up popular revolt with proposed solutions, and got no reply.
At the risk of giving a pat answer and partially repeating what has been suggested elsewhere on this blog, three key elements of a solution would seem to be:
1. Full-reserve (as opposed to fractional reserve) banking (http://www.neweconomics.org/publications/towards-a-21st-century-banking-and-monetary-system );
2. A land tax (http://www.guardian.co.uk/business/2011/may/02/land-value-tax-oecd-comment ).
3. A financial transactions (Robin Hood) tax.
As I've suggested before, however, any proposed solutions are meaningless unless they can be implemented. At the end of the day, we either have to persuade those who have the power to implement them, or somehow gain the power to ensure that they are implemented.
What we need, in fact, is to assemble a raft of policies to present to the main political parties and media, in order to open up a broader debate. This in turn means identifying and setting up a network of organizations, groups and key individuals with a broadly shared diagnosis of the current situation, and who have individually proposed piecemeal solutions. Joining up the thinking dots, in other words.
Neil,
I apologise if you felt ignored. I read what you wrote and thought about it. I didn't reply just because I am a bit pre-occupied at present and what you're after is, as you say, jioning up the dots not jotting down some pat answer.
I believe we – you, me, many others here – are gradually doing what you suggest, here on this blog and on others. We do need to pull things together you're right. And I believe we will. I do not think it will be a matter of presenting teh ideas to the main parties.
I would love to believe that would work but I don't. I think we are going to need to look beyond the main parties and also think beyond national borders.
David, no need to apologize – it's not easy to keep track of posts and your preoccupation is understandable (I don't know how you manage to do what you do already).
I don't have any hopes myself about presenting ideas to the main parties, but the aim would be to get the issues more widely aired and open up debate. Like you, I also think we need to look beyond national borders, because the problem is international.
The trillion-dollar question, however, remains: how do we get from coming up with viable solutions to getting them implemented?
The post, and our glorious leaders' latest 'radical plan to save the euro' made me think of this:
http://www.youtube.com/watch?v=grbSQ6O6kbs
Which cheered me up. For a minute.
Neil,
I have no objections to 1. Full Reserve Banking although given house prices only reached the dizzy multiples they did due to 'overenthusiastic' lending policies I can see lots of vested interests not being too happy as one outcome may be a reduction in asset prices.
No. 2 Land Value Tax, I quite like this one but for it to be accepted it would have to be an open and transparent system where anybody can work out the tax liability of any given piece of land and not subject to political influence.
One fly in the ointment of such a system might be where TPTB decide (possibly democratically) that a new motorway and junction should be built in my vicinity, I personally might lose amenity (more traffic/building in my vicinity) whereas my Land Tax might rise due to my area becoming more accessible.
3. Tobin Tax, not sure this is required if there is both 1. and 2. implemented.
The trillion-dollar question – convince the current vested interests that it is in their interests to implement them, business as usual is what worked for them in the past and they see little incentive to change at the moment.
The only way to get these interests to even consider change is to demonstrate the outcome of an attempt to return to BAU ie. a total collapse where even they will suffer (under BAU it has only been those in the middle and bottom who suffered)
The economy will have to be pushed right to the very edge and only then will change become viable.
I've just been reading a devastating piece by Michael Hudson (http://michael-hudson.com/2011/07/the-euthanasia-of-industry/ ). Going well beyond its title, it compares Obama to Blair and talks (among other things)about him "delivering" his constituency to his (Wall Street) campaign contributors.
So, one more necessary measure to add to the mix: cut the financial link between corporations and parties/politicians. Easier said than done, I know, but politics will be in the pocket of financial interests until the link is cut.
Thanks for sharing your ideas and thoughts, i like your blog and bookmark this blog for further use thanks
again…
Selling home tips
Hi Golem, saw this linked on politicalworld forum.
How much of Irish bank debt covered by the guarantee was owed by the banks to european financial institutions ?
Hello Thom.
If you are asking what I think you’re aksing then you might find the post I wrote called “Who are the bond holders we are bailing out?” of interest. You can find it on the front page of the blog under “Featured posts” . Or if I’ve misunderstood your question get back to me. But I am going to bed soon. Long day and I’m out till Friday pm.
I’ve since found that post, thanks.
I should have looked harder first…