unhelpful facts

European stock markets are heading down again, extending the already dramatic losses which continue to sythe round and round the world, day after day. One much noted response to these losses, from the Fed, was to publish a somewhat petulant article admonishing all right-thinking citizens not to pay any attention to the unauthorized, rabble rousing bloggers who keep pointing out things that they should keep quiet about.

So, always happy to oblige, let me point out a few more things.

It is a possibly note-worthy fact that that in the six months of 2010 the Shanghai Composite, China’s main stock-market index, has lost 26.8%, over a quater in old money, of its value. Which means anyone invested therein lost a quarter of the wealth they had there. Companies floated on the Index are worth a quarter less than they were.

Could someone, from the Fed perhaps, since someone from the Fed comes here most days for a read, could that person perhaps point out for us mere mortals, how this supports the, ‘China’s growth is going to save us’ idea we have heard so much about this last year?

And while you’re at it, would it be worth setting out the arguments that obviously must underpin Mr Geithner’s and Mr Obama’s shared belief, shared with us just a couple of days ago, that the US and the world’s economy are strengthening, and do so in the face of the following facts.

Today the Nikkei stands at 9192. The top, a few months ago, was 13,600. The low, back in the depth of the crisis of 08, was 6995. Which means Japan’s stock market has fallen much more than half way back to the absolute bottom.

The FTSE is similar. The top was 5834. Today it has fallen another percent to 4852. The ’08 low was 3461. The London market is 1000 from its top and only 1400 from the ‘world’s about to end’ bottom. And this is after the whole banking system had been ‘saved’ first by the Fed, then the BoE and most recently by the ECB as well.

The Dow is only a little better. 11.2K at the top. 6.%K at the bottom today at 9.7K. 33% of the way back down after unloading over a trillion in bad mortgages on to F&F and getting another trillion in other support.

The Central Banks have failed. And worse they are themselves now risking their own failure and the failure of teh currencies they are charged with protecting.

Let’s take the case of the ECB. Before the collapse of Lehman Brothers the ECB was loaning €459 Billion to European banks. And those banks were depositing €1.4 Billion of the cash overnight at the ECB. The rest they were loaning out. Today the ECB is loaning €879 Billion. Double. And of that gargantuan amount the banks deposit €305 Billion of it right back at the ECB. €305 Billion we gave to them, which they are refusing to lend out to nayone. They are just hoarding it against the day they know is coming when the next collpase starts.

That means the ECB IS all that is keeping the entire European banking sysytem alive. The European banks are no longer a system at all. They are just banks, each insolvent and unable to do the only thing they are there to do, failling in the only use they have to humanity. What use is a teacher that doesn’t teach, or a nurse tah doesn’t nurse? Why do we continue to protect banks thaat have no social value at all. We need banks. BUT NOT THESE BANKS.

Now these are exactly the kind of facts and questions it is, in the Fed’s opinion, way above my station in life to mention and very unwise, perhaps even unpatriotic, of you to take any notice of.