Tag Archives: Bailout Fail

Western banking regulations could be ‘mutually destructive’: IMF

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“Western governments have put in place banking regulations that could be ‘mutually destructive’ and undermine efforts to prevent bust banks from costing taxpayers billions of pounds, according to a report by the International Monetary Fund.  Policymakers representing the world’s biggest financial centres have failed to make the banking sector stand on its own feet by ending implicit subsidies and co-ordinating rescue plans when multinational banks go bust, the Washington-based lender of last resort said.  Subsidies to the banking sector in some countries are as high as they were before the crash, amounting to $590bn (£355bn), with the eurozone the worst affected.”

http://www.theguardian.com/business/2014/mar/31/western-banking-regulations-costly-mutually-destructive-imf-report

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Fund Manager Jeremy Grantham Blasts the Fed

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“The Fed can manipulate stock prices. That’s perhaps the only thing they can do. But why would you want to get an advantage from the wealth effect when you know you are going to have to give it all back when the Fed reverses course. At the same time, the Fed encourages steady increasing leverage and more asset bubbles. It’s clear to most investing professionals that they can benefit from an asymmetric bet here. The Fed gives them very cheap leverage on the upside, and then bails them out on the downside. And you should have more confidence of that now. The only ones who have really benefited from QE are hedge fund managers.”

http://www.thedailybell.com/news-analysis/35154/Fund-Manager-Blasts-the-Fed/

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Paulson claimed Russia ‘planned Wall Street bear raid’ in 2008

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“For me this is pretty jaw-dropping stuff – the Chinese told Hank Paulson that the Russians were suggesting a joint pact with China to drive down the price of the debt of Fannie and Freddie, and maximize the turmoil on Wall Street – presumably with a view to maximizing the cost of the rescue for Washington and further damaging its financial health.  Paulson says this guerrilla skirmish in markets by the Russians and Chinese didn’t happen.  But this kind of intelligence from China on Russian desire and willingness to embarrass the US in a financial sense may help to explain – in a small way – why President Obama shows little desire to understand Crimea as seen by Mr Putin.”

http://www.bbc.com/news/business-26609548

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Cyprus Central Bank Governor resigns with $250K golden parachute

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“One of the main criticisms directed against Demetriades has been how, under his watch, the now defunct Laiki Bank accumulated around €9.5 billion in emergency liquidity aid, only to buckle and fail when the ECB threatened to pull assistance.  ‘How much independence can a central banker have when, from his statements, it appears he was serving other expediencies instead of his country’s interest,’ President Nicos Anastasiades said last year.  For the state to get its €10 billion in bailout funds last March, the president said, it was told to privatise state companies, seize deposits, make painful cuts, and raise taxes.”

http://cyprus-mail.com/2014/03/10/cbc-governor-panicos-demetriades-resigns/

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RBS has lost all the £46bn pumped in by the taxpayer

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“Royal Bank of Scotland has lost all the money invested in it by the taxpayer six years ago when the lender came close to collapse.  The bank has confirmed its total losses since its bailout have now drawn level with the £46bn pumped into it in 2008 in return for an 81pc stake.  RBS made a loss last year of £8.2bn, its sixth consecutive annual loss, taking its cumulative losses to £46bn.  The scale of the losses means that all the capital provided by the taxpayer has now been used up dealing with the toxic legacy assets on the bank’s balance sheet.  Despite, the loss RBS said it had put aside £576m to pay staff bonuses for 2013.”

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10664372/RBS-has-lost-all-the-46bn-pumped-in-by-the-taxpayer.html

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Bundesbank Floats Wealth Levy Idea for Future Crises

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“Germany’s central bank Monday proposed a one-time wealth tax as an option for euro-zone countries facing bankruptcy, reviving a idea that has circled for years in Europe but has so far gained little traction.  ‘The question arises whether in extraordinary national emergencies in addition to privatization and conventional consolidation efforts, private wealth can also contribute to avert a government insolvency,’ the Deutsche Bundesbank said.  The idea of a one-time tax on private wealth isn’t new. Italy has flirted with the idea of a wealth tax over the past three years.  The IMF in October also floated the idea of a one-time ‘capital levy,’ amid a sharp deterioration of public finances in many countries.”

http://online.wsj.com/news/articles/SB10001424052702304007504579346330639793674

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Greek Government Passes New Property Tax Legislation

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“The new property levy, which has been years in the making, aims to boost Greece’s budget revenues by rolling several taxes into one, but is also seen as harming the economy’s expected rebound next year, driving dented property prices even lower. The law imposes a tax on residential housing, commercial properties, vacant property lots, farms and sports fields and aims to raise some €2.6 billion ($3.55 billion) per year and offers discounts to those who prove they cannot afford to pay it.  In September 2011, Greece imposed a real-estate tax that it placed on electricity bills and is collected by the country’s power company.”

http://online.wsj.com/news/articles/SB10001424052702304866904579272000551853972

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Paul Craig Roberts: No Jobs For Americans

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“The alleged recovery took a direct hit from Friday’s payroll jobs report. The Bureau of Labor Statistics reported that the economy created 74,000 net new jobs in December.  Wholesale and retail trade accounted for 70,700 of these jobs or 95.5%. It is likely that the December wholesale and retail hires were temporary for the Christmas shopping season, which doesn’t seem to have been very exuberant, especially in light of Macy’s decision to close five stores and lay off 2,500 employees. It is a good bet that these December hires have already been laid off.  The unemployment rate fell, because Americans unable to find jobs ceased looking for employment and, thereby, ceased to be counted as unemployed.”

http://www.paulcraigroberts.org/2014/01/10/jobs-americans-paul-craig-roberts/

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European Central Bank Ready For ‘Decisive Action’

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“The European Central Bank is ready to take ‘decisive action’ and use its full range of policies to keep the euro bloc from sliding into crippling deflation, President Mario Draghi said Thursday.  Draghi said it would be ‘pointless’ to speculate now exactly which tool the bank might use.  He said the bank would use any means allowed. In theory, that also includes injecting new money into the economy, as the U.S. Federal Reserve has done, though such a move would run into strong opposition from Germany, the eurozone’s largest member.”

http://bigstory.ap.org/article/ecb-confronts-slow-economy-low-inflation

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All-Time High Unemployment: Depression In Europe Getting Deeper

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“This week we learned that eurozone unemployment came in at an all-time high of 12.2 percent for September.  Back in January 2012, it was sitting at just 10.4 percent.  The funny thing is that the mainstream media will barely call what is going on in Europe a ‘recession’ even though the unemployment rates in both Spain and Greece are now much higher than anything that the United States ever experienced during the ‘Great Depression’ of the 1930s.  A 25-year-old Spanish man with three college degrees that moved to London in a desperate search for a job is now cleaning up poop for a living.  The economic collapse of Europe continues to march on, and there is no end in sight.”

http://theeconomiccollapseblog.com/archives/all-time-high-unemployment-the-economic-depression-in-europe-just-keeps-getting-deeper

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