Sunday, Sep 28, 2008
Its all our fault, ouch
The Local: Germany's News in English: Steinbrück slams US for sparking global financial crisis
Germany headed the Group of Eight industrialized nations last year and
advocated greater transparency in international financial transactions, especially in hedge funds. But it was thwarted by US and British resistance.
The Germans are having a field day with this. Any problems in their own economy will be conveniently blamed on the UK and US. As they say in football, "We have gifted them this one".
Posted by last_days_of_disco @ 08:50 AM (394 views) Add Comment
6 Comments
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1. mountain goat said...
Yes the Germans can sit back and enjoy this one, they've earned it.
However, it takes a hard-hearted person to enjoy this. As he points out the emerging markets in Africa etc will be hurt too, it was not just the mad house price bubble that benefited from easy credit conditions created by the laissez-faire finances of the early 21st century.
2. planning4acrash said...
Nothing to do with European Banks, government bodies, etc. accepting any junk from America, applying no oversight or regulation on financial service imports. Well, the majority of American people wouldn't buy it, but this Ponzi scheme was a crucial part of "The Great Game", so Europeans stepped in to make sure that the late great American Constitution would fall.
3. mountain goat said...
On the subject of weak regulation, this from The Big Picture Blog on the agency that needs to regulate the CDS market, the mother of all bubbles still to pop.
SEC: Less Personnel Than the Smithsonian
Posted by Barry Ritholtz on Saturday, September 27, 2008 | 04:30 PM
in Legal | Taxes and Policy
These are some truly amazing details:
"The number of enforcement personnel, the people who go after the financial engineers, is expected to decline. That's right. Despite the trillion-dollar meltdown now underway, the number of SEC enforcement personnel will decline from 1,209 this year to 1,177 in 2009. In all, the SEC expects to have 3,771 employees next year. For comparison, the Smithsonian Institution budget for 2009 includes funding for 4,324 employees.
That's not meant as a slap at the Smithsonian. It houses a myriad of the nation's most treasured objects. But the SEC actually guards the nation's treasure. And yet, Congress treats it like a bast*rd stepchild. Indeed, Congress doles out more than five times as much money for corn subsidies ($4.9 billion in 2006, the most recent year for which data are available) as it does for the SEC.
Those pitiful numbers lead us to the innumerable problems posed by derivatives, the same financial instruments that led to the chaos at Enron, which before it failed operated a huge—and almost completely unregulated—derivatives exchange business. According to the Bank for International Settlements, the global derivatives market is now worth some $676.5 trillion. That's $676,500,000,000,000. That's a fivefold increase over the value of derivatives that were traded in 2003. Further, that $676.5 trillion is 51 times America's current gross domestic product. (emphasis added)
Gee, how on earth did the 3 million people working in the finance industry ever mange to get away with anything with that type of police enforcement?
4. autopilotengage said...
It's certainly noticable that no-one seems to have banks failing left, right and centre except for Britain and the US. Anyone know of any other bank collapses?
5. beartil2010 said...
There was a failure recently in one of the scandinavian countries - can't remember which one - and Fortis (dutch bank) is taking a kicking at the moment.
6. autopilotengage said...
Thanks. Suspect they didn't feel the need to nationalise them though!