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Sancho Panza

George Soros Blasts 'parasite' Banks

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Telegraph 8/3/14

'George Soros, the billionaire investor, believes the banking sector is a “parasite” holding back the economic recovery and an “incestuous” relationship with regulators means little has been done to resolve the issues behind the 2008 crisis. “The banking sector is acting as a parasite on the real economy,” Mr Soros said in his new book “The Tragedy of the European Union”.

“The profitability of the finance industry has been excessive. For a while 35pc of all corporate profits in the United Kingdom and the United States came from the financial sector. That’s absurd.”

Mr Soros outlined how the problems that caused the Eurozone economic crisis remain largely unresolved.

“Very little has been done to correct the excess leverage in the European banking system. The equity in the banks relative to their balance sheets is wafer thin, and that makes them very vulnerable.

“The issue of “too big to fail” has not been solved at all.”

The proposed solution of a European banking union does not address the underlying problems, Mr Soros adds.

“A real danger to the financial system is the incestuous relationship between national authorities and bank managements. France in particular is famous for its inspecteurs de finance, who end up running its major banks. Germany has its Landesbanken and Spain its caixas, which have unhealthy connections with provincial politicians.”

In his new book Mr Soros outlines, in a series of interviews with Dr. Gregor Peter Schmitz, how he believes the European Union is in danger of becoming a thing of the past unless its flawed structure is reformed.

The German economy at the regions heart could also be its biggest weakness.

“What was successful in Germany before the crisis will not be successful as a prescription for the rest of Europe in the years ahead.

“In German the word Schuld has a double meaning (both “blame” and “debt”). So it is natural (selbstverstandlich) to blame the debtor countries for their own misfortunes,

“Germany’s tone, is sometimes self-righteous and even hypocritical…. In 2003 Germany was among the first countries to break the eurozone rules. ”

The prospect of Germany leaving the eurozone is very real and it would have serious implications as the euro would depreciate sharply and deutsche mark would go through the roof, Germany would find out how painful it is to have an overvalued currency.

Mr Soros, who famously “broke the Bank of England” by betting against the pound during the 1992 sterling crash, talks candidly about his most successful trade.

“I have a clean conscience. The big events in which I participated would have occurred sooner or later, whether I speculated on them or not.”

- “The Tragedy of the European Union” is available from March 11 at £12.99, published by PublicAffairs.'

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“In German the word Schuld has a double meaning (both “blame” and “debt”). So it is natural (selbstverstandlich) to blame the debtor countries for their own misfortunes,

“Germany’s tone, is sometimes self-righteous and even hypocritical…. In 2003 Germany was among the first countries to break the eurozone rules. ”

The prospect of Germany leaving the eurozone is very real and it would have serious implications as the euro would depreciate sharply and deutsche mark would go through the roof, Germany would find out how painful it is to have an overvalued currency.

Spot on.

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Spot on.

I have memories of you saying this a few years ago iirc,and it being the first time I'd seen the reasoning put forward in a coherent manner.At the time,I remember thinking that was out of left field but as time moves on,it makes more and more sense.

Fair play to you.

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The Germans won't leave since they are the ones who benefit most from being in the Euro.

That was the case,not so much now they're funding bail outs.

Edited by Sancho Panza

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That was the case,not su much now they're funding bail outs.

well I guess they have to now everybody is skint

who's going to buy all the bmw's and mercs?.....and TBH germany's economy is just as much of a one-trick pony as britains over reliance on flipping houses and casino finance.

...but of course it all happened this way completely by accident,didn't it? :lol:

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That was the case,not so much now they're funding bail outs.

How much of that money is actually being recycled back into German banks though?- I know that much of the Greek 'bailout' was actually paid into an escow account to prevent it being spent on trivia like food or healthcare instead of servicing their French and German creditors.

European officials are insisting that any new bail-out programme for Greece earmark funds specifically to pay off remaining holders of Greek debt, giving lenders the freedom to withhold aid to Athens without risking a messy default that could reignite panic in financial markets.

Under a new Franco-German plan that senior European officials said was likely to be included in a new Greek rescue, eurozone officials would create an escrow account to accept new bail-out funding instead of paying it all directly to Athens, as in the past.

http://www.ft.com/cms/s/0/35bd53aa-50ef-11e1-939d-00144feabdc0.html#axzz2vUTsUfng

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well I guess they have to now everybody is skint

who's going to buy all the bmw's and mercs?.....and TBH germany's economy is just as much of a one-trick pony as britains over reliance on flipping houses and casino finance.

...but of course it all happened this way completely by accident,didn't it? :lol:

There is far more to the German economy that bmw's and mercs. It may be worth taking a closer look at all the other things they do too.

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I have memories of you saying this a few years ago iirc,and it being the first time I'd seen the reasoning put forward in a coherent manner.At the time,I remember thinking that was out of left field but as time moves on,it makes more and more sense.

Fair play to you.

You have a good memory Sancho! They've inflated a teensy weensy bit since then, but not nearly enough to save the piggies yet.

Good to see Soros coming around to my position though, unless he was there already. I wouldn't bet against him.

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The prospect of Germany leaving the eurozone is very real and it would have serious implications as the euro would depreciate sharply and deutsche mark would go through the roof, Germany would find out how painful it is to have an overvalued currency.

Rubbish. Germany and Japan had stronger and stronger currencies for 50 years and they became top 2 exporters.

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The prospect of Germany leaving the eurozone is very real and it would have serious implications as the euro would depreciate sharply and deutsche mark would go through the roof, Germany would find out how painful it is to have an overvalued currency.

Rubbish. Germany and Japan had stronger and stronger currencies for 50 years and they became top 2 exporters.

As the DM increases in value, the DM cost of products just decreases. In other words, it makes no difference to exporters.

The whole overvalued currency ******** is just special pleading by debtors.

Edited by (Blizzard)

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