Quick update –
Banco Pupular, Spain’s third largest banking group, has just announced that it will sell “non-strategic assets”.
In Italy All three of Italy’s big banks (UniCredit, Intesa and Banca dei Monte Pasci) have had their stocks stopped yet again this morning.
While in France Soc Gen which already fell 15% on Wednesday is down another 4.24% this morning and PNB Paribas is down 4.18% at time of writing noon GMT.
The fire will spread because the fire-breaks have been removed. Tearing down the regulations that put a brake on the movement of capital and the expansion of 'leverage' (i.e. debt) prevent containment in the downswing.
The same people that called on government to stop interfering with 'market efficiency' now complain about lack of political leadership!
The fire is spreading indeed. 12.45 update Barclays down 13%. Surely that demi god Bob Diamond has nothing to hide, say it ain't so.
Rumour has it that Barclays is now dependant on the FEd for survivval I have no idea if this is true, does anyone else know?
Every stock market is now dependent on permanent government interference. How badly does this end?
Bill,
I think quite a number of Europe's banks are dependant on Swaps from the Fed in order to deal with dollar denominated liabilities.
Mercury4,
Who knows. All we can say with certainty is that it ends far more painfully than it would have it we had dealt with the bank forefully when they first collapsed and forced them to come clean three years ago. Instead of pilling several trillion MORE debt on top of what was already there.
Golem,
It will be one for the ages when it all goes down. Typically, it takes 1 hour to process a standard serve of alcohol. 10 standard drinks – 10 hours. If we might be so audacious as to apply this analogy to our 30 year credit binge, then is a 20 or even 30 year period of "recovery" out of the question? Where excessive risk, extreme bullishness and wishful thinking – also known as Neoliberalism, will need a generation to be erased from the memory of man, for all time.
@Charlie:
"The same people that called on government to stop interfering with 'market efficiency' now complain about lack of political leadership! "
Great one! 🙂
@ Mercury4
Real recovery & a far more sustainable system can be achieved far quicker if government(s) (as sovereign currency issuer net 'deficit' spend into the economy free of debt (MMT monetary economics). This will have a particularly strong effect in reducing the debt/monetary base ratio in present circumstances, because substantial net government spend is required to aggregate demand back up to optimal use of resources (esp labour).
See Prof Yamaguchi's substantially researched modelling here:
http://www.monetary.org/yamaguchipaper.pdf
Hello mikehall,
Governments have been lobotimised by gangsta capitalism. Over the years they have painted the system into an ever narrowing corner by trying to chase away all risk for the gangstas', at everyone and everything else's expense. Now, the system cannot move forwards or back. It can only implode…
Great comment Charlie:
"The same people that called on government to stop interfering with 'market efficiency' now complain about lack of political leadership!"
I also like the way that in a free market economy, where the market is deemed to be an expert at price discovery, there are "interventions" such as this by the CME to prevent Gold from rapidly rising:
"The CME announced margin requirements on gold will rise by over 22% by close of business today. This saw an initial slight sell off prior to further gains."
If these "interventions" can then drive prices in a desired direction, then surely we can't call them "free markets" can we!
'European Central Bank & the sovereign raiders'
Ass Prof Bill Black (UMKC) on Real News
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=7147
Perhaps all of us here have got it all wrong.
Mr Osborne thinks everything is fine and dandy:
"And stick to our plan that has made Britain a safe haven in the global debt storm."
That's right. Austerity and inflation to socialise the losses while privatising the gains is the perfect strategy for weathering this little storm.
Or maybe those words will come back to haunt him…….
@ FS
I rather fell over laughing at that one too and I will be spreading Charlies' comment far and wide. I love this this site.
My own favourite, I cna't remember wether hawkeye (aka FS) or golem asked this question.
Banks for decades have had the entire system rigged in their favour, recieved trillions in bail outs and still they manage to monumentally f+++ things up.
Just how rotten can a system be?
@bill
I think Golem deserves credit for that belter!
@ Mercury4
I would also add mainstream media & mainstream economists to your list of the 'lobotomised' by gangsta capitalism.
And the last days events certainly add weight to 'implosion'. But I guess you'd agree that implosion would not be seen by banksters as really in their interests? (If you believe so, I'd be interested to hear views on that?)
Massive greed and corruption is a given, & also stupid & sufficiently out of control to cause total collapse is highly plausible.
But I'm still hanging on to the idea (just) that the gangstas are pushing things to the brink in order to turn the ECB into a 'Fed' run by the major players exclusively in their interests & with even less oversight (if that's possible?). (As part of the major ramping up of all the other assaults of the ongoing economic warfare on citizens, that is.)