More European Systemic Banking Crisis, and More Restless Anti-System Youth

  • Forbes blogs – The Next Financial Crisis Will Be Hellish And It’s On Its Way: The Greek crisis is first and foremost about the German and French banks that were foolish enough to lend money to Greece in the first place. What sort of derivative contracts tied to Greek debt are they sitting on? What worldwide mayhem would ensue if Greece didn’t pay back 100 centimes on the euro?

    That’s a rhetorical question, since the balance sheets of European banks are even more opaque than American ones. Whatever the actual answer, it’s scary enough that the European Central Bank has refused to entertain any talk about the holders of Greek sovereign debt taking a haircut, even in the form of Greece stretching out its payments.

    That was the preferred solution among German leaders. But it seems the ECB is about to get its way. Greece will likely get another bailout – 30 billion euros on top of the 110 billion euro bailout it got a year ago.

    It will accomplish nothing. Going deeper into hock is never a good way to get out of debt. And at some point, this exercise in kicking the can has to stop. When it does, you get your next financial crisis.

  • ZeroHedgeThe Coming Simultaneous European Banking Collapse: With the creation of a monetary union without a fiscal union the Euro will become the death trap of the old continent as the inventors of the common currency raced down a one-way street, never thinking about the possibility of an exit of a Euro member.
  • The TelegraphEuropean Central Bank risks being ‘wiped out’ by bail-outs: In a report published on Monday entitled A House Built on Sand?, Open Europe has calculated that the ECB has a total exposure of about €444bn (£397bn) to “struggling eurozone economies”.

    The bank is now “23 to 24 times levered” as a result of bailing out Greece, Ireland, Portugal and Spain.

    The London-based think tank argued: “Should the ECB see its assets fall by just 4.23pc in value . . . its entire capital base would be wiped out.”

  • SpiegelEurope’s Central Bad Bank; Junk Bonds Weigh Heavy on ECB: European bankers from countries with ailing economies need fresh infusions of cash from the European Central Bank, but the ECB has turned into the dumping ground for European banks’ junk bonds. The practice could harm the central bank’s reputation as well as the euro.
  • BloombergEU Banks’ Capital Deficit Means Greek Default Not an Option: [Because we are in a bankocracy, this is what really counts…] By delaying a decision some investors consider inevitable, policy makers risk increasing the cost to European taxpayers and prolonging Greece’s economic pain… European banks had $188 billion at risk from the government debt of Greece, Ireland, Portugal and Spain at the end of 2010, according to a report this week from the Bank for International Settlements… Moody’s Investors Service said June 1 that it sees a 50 percent chance of a Greek default. In a Bloomberg survey last month, 85 percent of international investors said Greece will probably default.
  • ZeroHedgeECB Has €444 Billion PIIGS Exposure, A 4.25% Drop In Asset Values Would Bankrupt European Central Bank;
  • CNBCEurope Has Not Had Its Financial Crisis; Asset Manager: “Europe’s debt crisis appears to be entering a more dangerous phase. If the EU and ECB continue pretending this is a liquidity crisis, they run the risk of allowing inadequate fiscal adjustment, particularly in Greece,” said McCaughan in an interview with CNBC on Monday.

    “Debt levels are too high in the peripheral countries, so in the absence of rescheduling, or ‘re-profiling’ as it is now being called, there will need to be a continued large subsidy from the taxpayers in the strong economies,” he said.

    If no one is actually going to leave the euro zone, debt restructuring remains the most likely way out of this crisis according to McCaughan, who refuses to take denials from EU policy makers at face value.

  • CNBCFew Options for Europe’s Indignant Youth: Solidarity with Spain’s “los indignados (the indignant)” has sparked a wave of protest across Europe as jobless and alienated young people show their frustration over their bleak futures. Faced with dwindling jobs, opportunities and benefits and bearing the burden of previous generations’ overspending, this “lost generation” of young Europeans is taking the lead away from weakened labour unions and ineffectual politicians in voicing the discontent felt by many from London to Athens.
  • SpiegelGerman Intelligence Report; Increase in Left-Wing Extremism Sparks Concern: Authorities are worried that the militant left is attracting support from young people who had hitherto been outside the core left-wing scene. It has started to appeal to a violent, thrill-seeking and less ideological youth culture.
This entry was posted in Bankers' Bailout, Civil Disobedience, Debt Default/Restructuring, ECB/IMF, Economy, Elections, EU, Euro / Sovereign Money, Geopolitics, Intelligence / Securocrats, ireland, Youth and tagged , , , . Bookmark the permalink.

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