Tuesday, Sep 23, 2008
If only the Americans could look beyond their shores for once....
NY Times: How Sweden Solved Its Bank Crisis
A banking system in crisis after the collapse of a housing bubble. An economy hemorrhaging jobs. A market-oriented government struggling to stem the panic. Sound familiar?
It does to Sweden. The country was so far in the hole in 1992 — after years of imprudent regulation, short-sighted economic policy and the end of its property boom — that its banking system was, for all practical purposes, insolvent.
But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing.
Sweden spent 4 percent of its GDP to rescue ailing banks. The $700bn that the Bush administration wants is 5 percent of GDP. But the final cost to Sweden ended up being less than 2% of GDP...
7 Comments
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1. planning4acrash said...
$700bn is a joke. They are underwriting hundreds of trillions of derivatives and even planning to bail out foreign banks. They already pumped in hundreds of billions and the sole purpose of this bill was to formalise Paulston's role as financial dictator.
2. shipbuilder said...
I'm interested to know if you agree with the idea of this, p4ac. Naturally it would only work if you trust your government. To me, it is a far preferable alternative to what is proposed at present. Losses need to be privatised without allowing the system to collapse, then reform and payback can happen.
3. Northern Lad said...
Incompetence at it's best.... and they are still in power!
4. micasasucasa said...
Very interesting article... I very much doubt the States have as much sense as the sensible Swedes!
5. Cheekie Charlie said...
This isn't a little local difficulty this is a global meltdown!
6. planning4acrash said...
There is an argument that, given that the Federal Reserve is unconstitutional, that the bankers behind the Federal Reserve, etc. be treated as enemy combatants and that the fraudulently produced money be declared illegal and null and void. That congress take over the purse strungs and the army be sent to ensure it happens, that social security, medicare be bailed out and foreclosures banned for 5yrs. Open oil fields in Alaska, etc. to pay off the national debt and bring back all the troops from abroad, in Germany, in Iraq, secure the borders and sort it out.
Problem is, Congress is being held at the barrel of a gun right now. I don't think people are aware that they are in grave peril and that a quiet coup de ta has indeed been carried out. The same people that killed Kennedy are in control at the moment.
7. planning4acrash said...
Bail out the local high street banks and the equivalents of the building societies, let the investment banks and derivatives fall. That's the argument. Thing is, derivatives have to fall. Question is whether they are treated as fraudulent and those behind them treated as criminals, or whether derivatives are treated as part of the "majic of the market" and those behind them are treated as pillars of society in the process.