Saturday, March 26, 2011

How about letting some of them fail?

ECB close to liquidity deal for troubled banks - source

"The European Central Bank is putting the finishing touches on a new facility that will give troubled euro zone banks liquidity over a longer time frame, throwing a lifeline to Ireland's ailing banks". "This will replace the ELA (Emergency Liquidity Assistance) that is currently being provided by the Irish central bank," the source said speaking on the condition of anonymity.

Posted by alan @ 11:42 AM (1689 views)
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6 thoughts on “How about letting some of them fail?

  • general congreve says:

    The whole European bailout effort, for Greece, Ireland and now Portugal (so far) is to stop the big German, French and UK banks taking the hit from the default of these countries (and the others that will inevitably follow). So instead of defaulting as Iceland did (which has worked out better for them than decades of austerity now the dust is settling) the citizens of the bailed out countries will be looking at decades of austerity, higher taxes suppressed standards of living in order to pay back the bailout money. Meanwhile the citizens of the bailer nations will be looking at decades of austerity, higher taxes and suppressed standards because the bailer nations don’t actually have the money to do the bailing, so it goes on the national debt which we can ill afford and has to be paid back.

    In addition everyone can expect tonnes of inflation (hence even further drops in standards of living) because the bailer nations don’t actually have the money to do the bailing, so it goes on the national debt which we can ill afford, hence ZIRP and QE which is inflationary.

    Meanwhile the ‘should be bankrupt’ banks put the gun of ‘economic collapse’ (should they fail) to governments heads and continue to pay themselves fat bonuses with taxpayer money while happily not having to deal with the legacy of their appalling business decisions.

    I forsee much civil unrest.

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  • Thanks general, I wondered how the Portuguese can refuse austerity measures on one day and demand a banking bail-out the next?

    Meanwhile, lots of civil (peaceful) unrest in Piccadilly, London today. Elsewhere, a few anarchists got the headlines but mums with kids did a useful march. Why should Barclays, Topshop & co get away with minimal tax?

    I’m getting worried about paper money. I think my sovs will come in handy someday…. meanwhile expect to see the housing VIs telling everyone that as inflation rises, a house is a great investment!

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  • general congreve says:

    Yep, lock and load those Sovs, they’ll be worth their weight in gold soon 😉

    I think Miken recently suggested that all us gold owners/buyers are rich [email protected] and that we are just rubbing hpcers noses in it. I only came across his post when someone pointed it out to me a few days later. In response I would like to point out that there are no country lords here. Just some savers and HPCers awaiting a house price crash but nervously wondering about the safety and value of the sterling they have in the bank.

    2 sovs will set you back the same as the cost of an iphone (handset only – you could have 8 sovs if you count the cost of a 2 year contract at £25 quid a month). How many of you own smart phones? Or expensive LCD TV’s, laptops etc. I would guess most people on here. Gold investment/insurance is open to the most ordinary men, should they choose to spend their money on gold rather than on the latest frivolous things and it can be bought with the ease of any online purchase. Rant over.

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  • I agree that the first point of call should be to decide whether the bank that is struggling can fail without bringing down the economy. If it can’t then the bank should be funded for a short while and then broken up. It is way overdue for the biggest UK banks to be broken up. Yet this government seems scared to do it.

    Oh, I have just seen your comment GC. I never said you were rich b’stards. Would you like it if the site was bombarded with articles appearing to promote (or repeatedly mention) other political parties or promoting specific companies/products all the time? Anyway I already gave my many reasons for not liking articles about gold in previous articles. There is nothing wrong with not liking something is there… It’s free speech in this country…

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  • You showed them the way Iceland.

    Oh well!

    An advertising slogan on QE, “Once you start, you can’t stop.”

    Oh well!

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  • @1 general congreve

    “Meanwhile the ‘should be bankrupt’ banks put the gun of ‘economic collapse’ (should they fail) to governments heads and continue to pay themselves fat bonuses with taxpayer money while happily not having to deal with the legacy of their appalling business decisions.

    I forsee much civil unrest.”

    Hmm. Be careful what you wish for. Our economy has been so skewed to financial services that we need to tread carefully. Alas the Labour Government did what any UK government in power would do — prop up the banks. Pull the plug on that and you’ll find our economy is seriously holed.

    The real problem with our economy is the lack of investment in infrastructure to respond to a changing world. Manufacturing, that great sponge for blue collar workers, has collapsed and we have not found a replacement. It is difficult to see what could replace it, but by not investing in a century-old infrastructure of the railways many of those deprived areas have lost workers to the SE.

    We need a national infrastructure rebuilding programme to get people back to work and ensure businesses can function across the country, not just huddled in the SE as it is at the moment.

    Imagine the M1 and M6 as six lane (12 with both directions) motorways. (Although you’d still get some numpty that thinks it’s ok to drive in lane 6 — with their fog lights on — twats).

    Imagine train services where there are enough lines and trains so everyone can sit down — with space to spare. It is possible, and it will do much for our economy. You just have to convince the VIs that their houses are worth pulling down to achieve this.

    If this doesn’t happen, we will have to keep relying on the FSS for tax revenues; and that means tip-toeing around the high earners.

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