European Banking Crisis

[siamamerican]

My hunch is that the costs of the European banking crisis will surpass the US in the next 6 months.

Unlike the US, European banks are going to get hit from two directions. The banks are going to have huge losses in their US mtg investments and also experience losses in domestic real estate investments.

European real estate as a whole is more over valued than the US. The common opinion is that the loans are more solid than the US, but decreasing real estate values will erase the safety. If in doubt, take a look at what is happening now in the US. The US loans were solid before values dropped.

I'm amazed how many are amazed that US banks didn't see this catastrophe with signs aplenty. I'm even more amazed European banks didn't see the crisis. Why were they investing in US mtg securities when it was so obvious they were a mess, and why were they ignoring the domestic real estate bubbles?

[Ground Engineer]

My hunch is that the costs of the European banking crisis will surpass the US in the next 6 months.

Unlike the US, European banks are going to get hit from two directions. The banks are going to have huge losses in their US mtg investments and also experience losses in domestic real estate investments.

European real estate as a whole is more over valued than the US. The common opinion is that the loans are more solid than the US, but decreasing real estate values will erase the safety. If in doubt, take a look at what is happening now in the US. The US loans were solid before values dropped.

I'm amazed how many are amazed that US banks didn't see this catastrophe with signs aplenty. I'm even more amazed European banks didn't see the crisis. Why were they investing in US mtg securities when it was so obvious they were a mess, and why were they ignoring the domestic real estate bubbles?

If you want a good understanding of what is happening to the US, the European and eventually the world economy watch Zeitgeist Addendum by Peter Joseph free on the internet:

http://vidzking.com/Tags/Zeitgeist-Addendu...t-today-Oct-3rd

"Zeitgeist was created in the hope that it will inspire people to start looking at the world from a more critical perspective, and to relay the understanding that very often things are not what the population at large think they are. The true understanding of events, both historical and modern, are crucial to the development, awareness and spirituality of the human condition."

[skipvice]

My hunch is that the costs of the European banking crisis will surpass the US in the next 6 months.

Unlike the US, European banks are going to get hit from two directions. The banks are going to have huge losses in their US mtg investments and also experience losses in domestic real estate investments.

European real estate as a whole is more over valued than the US. The common opinion is that the loans are more solid than the US, but decreasing real estate values will erase the safety. If in doubt, take a look at what is happening now in the US. The US loans were solid before values dropped.

I'm amazed how many are amazed that US banks didn't see this catastrophe with signs aplenty. I'm even more amazed European banks didn't see the crisis. Why were they investing in US mtg securities when it was so obvious they were a mess, and why were they ignoring the domestic real estate bubbles?

If you want a good understanding of what is happening to the US, the European and eventually the world economy watch Zeitgeist Addendum by Peter Joseph free on the internet:

http://vidzking.com/Tags/Zeitgeist-Addendu...t-today-Oct-3rd

"Zeitgeist was created in the hope that it will inspire people to start looking at the world from a more critical perspective, and to relay the understanding that very often things are not what the population at large think they are. The true understanding of events, both historical and modern, are crucial to the development, awareness and spirituality of the human condition."

what amazed me was the user rating.

Current status:

-2 (1 vote)Users Votes

Anonymous Bull Shit (-2)

[maccaroni man]

My hunch is that the costs of the European banking crisis will surpass the US in the next 6 months.

Unlike the US, European banks are going to get hit from two directions. The banks are going to have huge losses in their US mtg investments and also experience losses in domestic real estate investments.

European real estate as a whole is more over valued than the US. The common opinion is that the loans are more solid than the US, but decreasing real estate values will erase the safety. If in doubt, take a look at what is happening now in the US. The US loans were solid before values dropped.

I'm amazed how many are amazed that US banks didn't see this catastrophe with signs aplenty. I'm even more amazed European banks didn't see the crisis. Why were they investing in US mtg securities when it was so obvious they were a mess, and why were they ignoring the domestic real estate bubbles?

IMHO The US had already demonstrated the ability and willingness to do bail outs for the private sector hence this reduced the risk

[siamamerican]

IMHO The US had already demonstrated the ability and willingness to do bail outs for the private sector hence this reduced the risk

I'm not being a smart ass - not sure what the icon at end means. Do you think the US bail out is good?

[dutch]

I believe that all of the financial institutes in the USA will very soon lower the creditlimits on all kinds of creditcards.

The lower and middle class will be hit inmediately.

The credit bubble is barsting.

[tracker]

Ground engineer,

I watched that zeitgeist movie. Excellent! It is spit out clear how finance works and why it is going down. The venus project, if you ask me, is one of the best answers out there.

[VegasVic]

My hunch is that the costs of the European banking crisis will surpass the US in the next 6 months.

Unlike the US, European banks are going to get hit from two directions. The banks are going to have huge losses in their US mtg investments and also experience losses in domestic real estate investments.

European real estate as a whole is more over valued than the US. The common opinion is that the loans are more solid than the US, but decreasing real estate values will erase the safety. If in doubt, take a look at what is happening now in the US. The US loans were solid before values dropped.

I'm amazed how many are amazed that US banks didn't see this catastrophe with signs aplenty. I'm even more amazed European banks didn't see the crisis. Why were they investing in US mtg securities when it was so obvious they were a mess, and why were they ignoring the domestic real estate bubbles?

You make some valid points S.A., I think that the scary part of this for Europe is that they are just at the beginging of their real estate-banking-financial crisis, while the U.S. is in the middle of it! It is hard to say at this juncture if the European situation will be worse than the U.S. or not, I guess we will just have to wait and see! The fact that the E.U. central banks did not lower interest rates at their meeting a few days ago tells me that many european countries could be in for a very tough time. I am only willing to make one prediction at this time, and that is that Germany will exit the E.U. sometime in the next 18months!

[Naam]

You make some valid points S.A., I think that the scary part of this for Europe is that they are just at the beginging of their real estate-banking-financial crisis, while the U.S. is in the middle of it! It is hard to say at this juncture if the European situation will be worse than the U.S. or not, I guess we will just have to wait and see! The fact that the E.U. central banks did not lower interest rates at their meeting a few days ago tells me that many european countries could be in for a very tough time. I am only willing to make one prediction at this time, and that is that Germany will exit the E.U. sometime in the next 18months!

c'mon Vic! the "mother of the EU" exiting? are you feeling alright?

p.s. i'd be the first one to applaud a move like this and get my beloved Deutsche Mark again. alas, the chances that i (being a chain smoker) will live to celebrate my 100th birthday are considerably higher than Germany exiting the EU.

[lannarebirth]

My hunch is that the costs of the European banking crisis will surpass the US in the next 6 months.

Unlike the US, European banks are going to get hit from two directions. The banks are going to have huge losses in their US mtg investments and also experience losses in domestic real estate investments.

European real estate as a whole is more over valued than the US. The common opinion is that the loans are more solid than the US, but decreasing real estate values will erase the safety. If in doubt, take a look at what is happening now in the US. The US loans were solid before values dropped.

I'm amazed how many are amazed that US banks didn't see this catastrophe with signs aplenty. I'm even more amazed European banks didn't see the crisis. Why were they investing in US mtg securities when it was so obvious they were a mess, and why were they ignoring the domestic real estate bubbles?

You make some valid points S.A., I think that the scary part of this for Europe is that they are just at the beginging of their real estate-banking-financial crisis, while the U.S. is in the middle of it! It is hard to say at this juncture if the European situation will be worse than the U.S. or not, I guess we will just have to wait and see! The fact that the E.U. central banks did not lower interest rates at their meeting a few days ago tells me that many european countries could be in for a very tough time. I am only willing to make one prediction at this time, and that is that Germany will exit the E.U. sometime in the next 18months!

The problem with derivatives and leverage is, if you have to unwind it suddenly, you could get a whole lot of uninteneded consequences. What if the ECB CAN'T lower rates right now, because to do so would send all kinds of interest rate derivatives in a direction that only compounds the global finacial problem. You've got a tail wagging the dog situation here and investing in nearly anything right now makes little sense as prices are only going to go where the unwinding takes them.

[VegasVic]

My hunch is that the costs of the European banking crisis will surpass the US in the next 6 months.

Unlike the US, European banks are going to get hit from two directions. The banks are going to have huge losses in their US mtg investments and also experience losses in domestic real estate investments.

European real estate as a whole is more over valued than the US. The common opinion is that the loans are more solid than the US, but decreasing real estate values will erase the safety. If in doubt, take a look at what is happening now in the US. The US loans were solid before values dropped.

I'm amazed how many are amazed that US banks didn't see this catastrophe with signs aplenty. I'm even more amazed European banks didn't see the crisis. Why were they investing in US mtg securities when it was so obvious they were a mess, and why were they ignoring the domestic real estate bubbles?

You make some valid points S.A., I think that the scary part of this for Europe is that they are just at the beginging of their real estate-banking-financial crisis, while the U.S. is in the middle of it! It is hard to say at this juncture if the European situation will be worse than the U.S. or not, I guess we will just have to wait and see! The fact that the E.U. central banks did not lower interest rates at their meeting a few days ago tells me that many european countries could be in for a very tough time. I am only willing to make one prediction at this time, and that is that Germany will exit the E.U. sometime in the next 18months!

The problem with derivatives and leverage is, if you have to unwind it suddenly, you could get a whole lot of uninteneded consequences. What if the ECB CAN'T lower rates right now, because to do so would send all kinds of interest rate derivatives in a direction that only compounds the global finacial problem. You've got a tail wagging the dog situation here and investing in nearly anything right now makes little sense as prices are only going to go where the unwinding takes them.

That was the gist of my post Lanna! The ECB is in a dammed if you do and dammed if you don't position, this time around they decided to stay pat. When they do eventually start lowering rates it will not be 25 basis points at a shot, it will be a cascade!

[siamamerican]

You make some valid points S.A., I think that the scary part of this for Europe is that they are just at the beginging of their real estate-banking-financial crisis, while the U.S. is in the middle of it! It is hard to say at this juncture if the European situation will be worse than the U.S. or not, I guess we will just have to wait and see! The fact that the E.U. central banks did not lower interest rates at their meeting a few days ago tells me that many european countries could be in for a very tough time. I am only willing to make one prediction at this time, and that is that Germany will exit the E.U. sometime in the next 18months!

In the process of educating myself about the E.U. monetary policies. It does seem that Germany exiting E.U. would have horrific consequences. I really don't see this happening now, but the union is going to be tested. The European Central bank in theory is independent, but theory and reality can be very different. From what I've read, real estate in Germany is not nearly as over valued as most of the other members. Germany being Europe's 1000 pound gorilla, will probably push it weight around and have more a say in what happens in the near term.

[VegasVic]

You make some valid points S.A., I think that the scary part of this for Europe is that they are just at the beginging of their real estate-banking-financial crisis, while the U.S. is in the middle of it! It is hard to say at this juncture if the European situation will be worse than the U.S. or not, I guess we will just have to wait and see! The fact that the E.U. central banks did not lower interest rates at their meeting a few days ago tells me that many european countries could be in for a very tough time. I am only willing to make one prediction at this time, and that is that Germany will exit the E.U. sometime in the next 18months!

c'mon Vic! the "mother of the EU" exiting? are you feeling alright?

p.s. i'd be the first one to applaud a move like this and get my beloved Deutsche Mark again. alas, the chances that i (being a chain smoker) will live to celebrate my 100th birthday are considerably higher than Germany exiting the EU.

Never better! I have a penchant for making predictions that go against the tide! If you remember I was the one here on thaivisa back in the spring of 2007 warning everyone about the terrible unregulated hedge fund industry and the exponential expansion of the derivative markets, and I was the one a year ago that battled daily with lao po and said that the SSE would lose over 50% of its value BEFORE the Olympics, and not so many months ago when oil was shooting toward $150/bbl and many thought it would hit $200/bbl and gold was over $1000/ounce and all the goldbugs were certain gold would shortly be at $1500/ounce and the Dollar was at $1.60/Euro, I was the one who shouted many times over to short oil, short gold, and go long the Dollar, so far all of those predictions are doing pretty well. I guess 18 months from now we will know if my most recent prediction here comes to pass!!!

[VegasVic]

You make some valid points S.A., I think that the scary part of this for Europe is that they are just at the beginging of their real estate-banking-financial crisis, while the U.S. is in the middle of it! It is hard to say at this juncture if the European situation will be worse than the U.S. or not, I guess we will just have to wait and see! The fact that the E.U. central banks did not lower interest rates at their meeting a few days ago tells me that many european countries could be in for a very tough time. I am only willing to make one prediction at this time, and that is that Germany will exit the E.U. sometime in the next 18months!

In the process of educating myself about the E.U. monetary policies. It does seem that Germany exiting E.U. would have horrific consequences. I really don't see this happening now, but the union is going to be tested. The European Central bank in theory is independent, but theory and reality can be very different. From what I've read, real estate in Germany is not nearly as over valued as most of the other members. Germany being Europe's 1000 pound gorilla, will probably push it weight around and have more a say in what happens in the near term.

We shall see 18 months hence! If I am wrong then by all means hold me to it and bring back these posts

[siamamerican]

Never better! I have a penchant for making predictions that go against the tide! If you remember I was the one here on thaivisa back in the spring of 2007 warning everyone about the terrible unregulated hedge fund industry and the exponential expansion of the derivative markets, and I was the one a year ago that battled daily with lao po and said that the SSE would lose over 50% of its value BEFORE the Olympics, and not so many months ago when oil was shooting toward $150/bbl and many thought it would hit $200/bbl and gold was over $1000/ounce and all the goldbugs were certain gold would shortly be at $1500/ounce and the Dollar was at $1.60/Euro, I was the one who shouted many times over to short oil, short gold, and go long the Dollar, so far all of those predictions are doing pretty well. I guess 18 months from now we will know if my most recent prediction here comes to pass!!!

I remember you making these predictions and it's not to difficult to verify your claims. If Germany exits things will have surely gone to hel_l in a handbasket! I hope you are very wrong on this forecast.

[lannarebirth]

Never better! I have a penchant for making predictions that go against the tide! If you remember I was the one here on thaivisa back in the spring of 2007 warning everyone about the terrible unregulated hedge fund industry and the exponential expansion of the derivative markets, and I was the one a year ago that battled daily with lao po and said that the SSE would lose over 50% of its value BEFORE the Olympics, and not so many months ago when oil was shooting toward $150/bbl and many thought it would hit $200/bbl and gold was over $1000/ounce and all the goldbugs were certain gold would shortly be at $1500/ounce and the Dollar was at $1.60/Euro, I was the one who shouted many times over to short oil, short gold, and go long the Dollar, so far all of those predictions are doing pretty well. I guess 18 months from now we will know if my most recent prediction here comes to pass!!!

I remember you making these predictions and it's not to difficult to verify your claims. If Germany exits things will have surely gone to hel_l in a handbasket! I hope you are very wrong on this forecast.

You should have paid closer attention siamamerican, as I do. Anyone following these recommendations, when given, would be broke today and in no position to take advantage of subsequent market moves. If you're goig to be a trader, understand, timing matters.

[siamamerican]

Never better! I have a penchant for making predictions that go against the tide! If you remember I was the one here on thaivisa back in the spring of 2007 warning everyone about the terrible unregulated hedge fund industry and the exponential expansion of the derivative markets, and I was the one a year ago that battled daily with lao po and said that the SSE would lose over 50% of its value BEFORE the Olympics, and not so many months ago when oil was shooting toward $150/bbl and many thought it would hit $200/bbl and gold was over $1000/ounce and all the goldbugs were certain gold would shortly be at $1500/ounce and the Dollar was at $1.60/Euro, I was the one who shouted many times over to short oil, short gold, and go long the Dollar, so far all of those predictions are doing pretty well. I guess 18 months from now we will know if my most recent prediction here comes to pass!!!

I remember you making these predictions and it's not to difficult to verify your claims. If Germany exits things will have surely gone to hel_l in a handbasket! I hope you are very wrong on this forecast.

You should have paid closer attention siamamerican, as I do. Anyone following these recommendations, when given, would be broke today and in no position to take advantage of subsequent market moves. If you're goig to be a trader, understand, timing matters.

I guess my gains this year aren't real. You have no idea how I invest, so please don't make unfounded accusations. Wise master Lanna, please explain how getting out of China, oil, and the Euro would leave a person broke.

Sometimes I'm at a loss trying to understand some of the silly posts. Are you just angry at me and blindly made a foolish post. If so, my feeling are hurt.

[lannarebirth]

Never better! I have a penchant for making predictions that go against the tide! If you remember I was the one here on thaivisa back in the spring of 2007 warning everyone about the terrible unregulated hedge fund industry and the exponential expansion of the derivative markets, and I was the one a year ago that battled daily with lao po and said that the SSE would lose over 50% of its value BEFORE the Olympics, and not so many months ago when oil was shooting toward $150/bbl and many thought it would hit $200/bbl and gold was over $1000/ounce and all the goldbugs were certain gold would shortly be at $1500/ounce and the Dollar was at $1.60/Euro, I was the one who shouted many times over to short oil, short gold, and go long the Dollar, so far all of those predictions are doing pretty well. I guess 18 months from now we will know if my most recent prediction here comes to pass!!!

I remember you making these predictions and it's not to difficult to verify your claims. If Germany exits things will have surely gone to hel_l in a handbasket! I hope you are very wrong on this forecast.

You should have paid closer attention siamamerican, as I do. Anyone following these recommendations, when given, would be broke today and in no position to take advantage of subsequent market moves. If you're goig to be a trader, understand, timing matters.

I guess my gains this year aren't real. You have no idea how I invest, so please don't make unfounded accusations. Wise master Lanna, please explain how getting out of China, oil, and the Euro would leave a person broke.

Sometimes I'm at a loss trying to understand some of the silly posts. Are you just angry at me and blindly made a foolish post. If so, my feeling are hurt.

I undersdtand that when people are losing money their emotions can get the better of them. I wasn't referring to you at all, so I'm not sure why you've reacted in this way. The fact is Vic made all these predictions while the investments in question were still rising. They rose considerably further after his prognostications. Anyone acting on that advice would have lost their money. No ego here, no anger, no intent to hurt. I'm just telling you what I saw.

[maccaroni man]

IMHO The US had already demonstrated the ability and willingness to do bail outs for the private sector hence this reduced the risk

I'm not being a smart ass - not sure what the icon at end means. Do you think the US bail out is good?

No.

[siamamerican]

Never better! I have a penchant for making predictions that go against the tide! If you remember I was the one here on thaivisa back in the spring of 2007 warning everyone about the terrible unregulated hedge fund industry and the exponential expansion of the derivative markets, and I was the one a year ago that battled daily with lao po and said that the SSE would lose over 50% of its value BEFORE the Olympics, and not so many months ago when oil was shooting toward $150/bbl and many thought it would hit $200/bbl and gold was over $1000/ounce and all the goldbugs were certain gold would shortly be at $1500/ounce and the Dollar was at $1.60/Euro, I was the one who shouted many times over to short oil, short gold, and go long the Dollar, so far all of those predictions are doing pretty well. I guess 18 months from now we will know if my most recent prediction here comes to pass!!!

I remember you making these predictions and it's not to difficult to verify your claims. If Germany exits things will have surely gone to hel_l in a handbasket! I hope you are very wrong on this forecast.

You should have paid closer attention siamamerican, as I do. Anyone following these recommendations, when given, would be broke today and in no position to take advantage of subsequent market moves. If you're goig to be a trader, understand, timing matters.

I guess my gains this year aren't real. You have no idea how I invest, so please don't make unfounded accusations. Wise master Lanna, please explain how getting out of China, oil, and the Euro would leave a person broke.

Sometimes I'm at a loss trying to understand some of the silly posts. Are you just angry at me and blindly made a foolish post. If so, my feeling are hurt.

I undersdtand that when people are losing money their emotions can get the better of them. I wasn't referring to you at all, so I'm not sure why you've reacted in this way. The fact is Vic made all these predictions while the investments in question were still rising. They rose considerably further after his prognostications. Anyone acting on that advice would have lost their money. No ego here, no anger, no intent to hurt. I'm just telling you what I saw.

OK, just a misunderstanding. The first sentence of your post you mentioned my name, hence my response. I understand they increased after his prediction, but have plummeted since ( excluding gold). I still don't understand how you could come to the conclusion that you would be broke if you followed his advice. Actually, you would have much more money than if you stuck with the investments.

I chose to get out of my long term international investments early this year and I would be much worse off if I hadn't. I don't invest in oil futures, but did get out of oil company stocks 3 months ago. In both cases, I missed the top, but oh so happy I avoided the bottom.

Not claiming VegasVic is an oracle, just giving him a little credit for his predictions. To be honest, many on TV made some of the same predictions.

Regards,

SiamAmerican

[philstone]

My hunch is that the costs of the European banking crisis will surpass the US in the next 6 months.

Unlike the US, European banks are going to get hit from two directions. The banks are going to have huge losses in their US mtg investments and also experience losses in domestic real estate investments.

European real estate as a whole is more over valued than the US. The common opinion is that the loans are more solid than the US, but decreasing real estate values will erase the safety. If in doubt, take a look at what is happening now in the US. The US loans were solid before values dropped.

I'm amazed how many are amazed that US banks didn't see this catastrophe with signs aplenty. I'm even more amazed European banks didn't see the crisis. Why were they investing in US mtg securities when it was so obvious they were a mess, and why were they ignoring the domestic real estate bubbles?

I agreed the European Banks are twice as stupid as America Banks Also who would want to live in Europe another reason real estate is more overpriced

Edited October 6, 2008 by philstone

[siamamerican]

I agreed the European Banks are twice as stupid as America Banks Also who would want to live in Europe another reason real estate is more overpriced

Phil,

Come on, I asked you in the other global correction thread to stop over indulging on the booze before posting. Appreciate the contrarian views, but no one is going to take you seriously.

[philstone]

I agreed the European Banks are twice as stupid as America Banks Also who would want to live in Europe another reason real estate is more overpriced

Phil,

Come on, I asked you in the other global correction thread to stop over indulging on the booze before posting. Appreciate the contrarian views, but no one is going to take you seriously.

I have your advice and stopped drinking and joking around Please remember this post of mine

The only thing more predictable than European glee at American economic trouble is how quickly it fades amid Europe's own problems. So no sooner did Der Spiegel publish its latest eulogy for American power last week ("The Price of Hubris") than European banks had to be rescued one after another. The euro's recent fall of about 5% against the dollar is further proof that the credit mania was a global phenomenon and its aftermath requires global responses.

In contrast to the U.S., Europe has no lender of last resort. The European Central Bank was created to manage the supply of euros, not to rescue failing institutions. It can provide short-term liquidity against collateral -- which it has done admirably so far. But it can't ease a solvency crisis. ECB President Jean-Claude Trichet can provide intellectual leadership, but in Europe there are 27 separate national purses and no central treasury.

The ECB's limitations aren't necessarily bad. The Federal Reserve has been stretching its powers to the limit, if not the breaking point. One goal of Treasury Secretary Hank Paulson's plan is to put the burden of injecting capital into the U.S. banking system where it belongs -- on the political authorities in the Treasury and Congress. Europe should be wary of damaging its central bank by loading it up with new, fundamentally political, powers.

That doesn't mean Europe's leaders can't step to the fore with public capital and the power to resolve failing banks before they become systemic threats. Last weekend the governments of Belgium, Netherlands and Luxembourg agreed to inject €11.2 billion into Fortis. On Tuesday, the French and Belgian governments bailed out Dexia bank.

National capitals have also acted alone. The U.K. seized Bradford & Bingley and sold the mortgage lender's retail branches and deposits to the Spanish bank Santander. In Germany, a consortium of private banks, backed by state guarantees, stepped in with a €35 billion credit to Hypo Real Estate, one of Europe's largest real estate, project finance and local government lenders. That rescue looked in doubt yesterday, amid friction between the government and other banks over who would pay.

Meanwhile, governments have been acting on their own to guarantee bank deposits, starting with Ireland which guaranteed for two years all deposits, bonds, senior debt and lower Tier-II debt of six Irish financial institutions. That drew the ire of other governments, as British and other depositors flocked to the Irish banks to take advantage. This is one of the drawbacks of separate national responses: It creates "depository arbitrage" and gives some banks a competitive advantage. Berlin gave in yesterday, and said that it too would guarantee all private bank deposits.

The rescues of Fortis and Dexia show that ad hoc cooperation in cross-border cases can work. An advantage of these spontaneous responses is that they don't require new legislation or new institutions, which the EU usually requires years to draw up. French President Nicolas Sarkozy hosted a weekend summit to discuss the crisis, but it produced little but promises "to do whatever is necessary," as British Prime Minister Gordon Brown put it.

An alternative would be to establish a temporary Continental resolution authority, with enough power and capital to put out fires across the Continent. The European Investment Bank could act as such an authority. Its board of governors is made up of the finance ministers of all EU member states. As a public agency that issues publicly guaranteed bonds, it could set up the rescue fund relatively quickly.

However Europe responds, at least we can look forward to less gloating about America's predicament. Global cooperation is essential in what has become a global panic.

Edited October 6, 2008 by philstone

[LaoPo]

Never better! I have a penchant for making predictions that go against the tide! If you remember I was the one here on thaivisa back in the spring of 2007 warning everyone about the terrible unregulated hedge fund industry and the exponential expansion of the derivative markets, and I was the one a year ago that battled daily with lao po and said that the SSE would lose over 50% of its value BEFORE the Olympics, and not so many months ago when oil was shooting toward $150/bbl and many thought it would hit $200/bbl and gold was over $1000/ounce and all the goldbugs were certain gold would shortly be at $1500/ounce and the Dollar was at $1.60/Euro, I was the one who shouted many times over to short oil, short gold, and go long the Dollar, so far all of those predictions are doing pretty well. I guess 18 months from now we will know if my most recent prediction here comes to pass!!!

A few remarks here:

1. Modesty isn't on your list Vic, is it ? "I was the one" sounds a bit like a self declared Financial God

2. I never battled with you over the SSE value...if you claim so, please show me where I disagreed with you. I don't think you can.

3. "I was the one" - Vic also predicted that Mike Huckabee would the the next President of the USA...remember Vic ?

4. I fully agree with Naam that an exit of Germany out of the EU is an idea from an alien born in Utopia, a far away country only to be reached by spaceship and taking many lightyears to reach.

5. Everybody is talking "Europe" in this thread and since the OP is American I would like to know what he means by EUROPE.....which definition is to be considered.....which demographics ?

* The Geographical Europe - around 730+ Million people in around 50 countries and 30-40 major languages ??

* The European Union - with some 500 Million people in 27 countries with 23 official languages ??

* The Eurozone Europe - with some 320 Million*** people in 15 Eurozone member-countries (10 or 11 languages) -and the largest economy in the world; based on 2007 GDP and purchasing power parity among the various currencies. ??

There are more 'Europe's' but this will do.

*** that does NOT include the few million people from states outside the Union with or without a formal agreement, using the Euro as well.

Note:

The reason I ask is because for NON-Europeans it's quite easy to talk about Europe, not realizing at the same time there is an EXTREMELY COMPLICATED demography in Europe, not just qua Population - Currencies - Economy - Banking system - Languages etc. etc. but also regarding Mentality.

NON-Europeans have no idea how complicated (but also stunningly beautiful) Europe is and functions.

The US, India and China (to name the largest countries in the world with just one one or two -India and China- major languages) are governed by ONE CENTRAL Government in just 1 place which makes it a lot "easier" to make decisions.

Decision making in Europe is and will always be a very difficult issue.

HOWEVER, the past 3 to 4 days have also shown the incredible -FAST REACTING- flexibility by the individual decisions makers/Governments in some European countries, read: Banking rescue operations.

In the US it took a little longer .....just a little.

LaoPo

[LaoPo]

The rescues of Fortis and Dexia show that ad hoc cooperation in cross-border cases can work. 1. An advantage of these spontaneous responses is that they don't require new legislation or new institutions, which the EU usually requires years to draw up. French President Nicolas Sarkozy hosted a weekend summit to discuss the crisis, but it produced little but promises "to do whatever is necessary," as British Prime Minister Gordon Brown put it.

2. An alternative would be to establish a temporary Continental resolution authority, with enough power and capital to put out fires across the Continent. The European Investment Bank could act as such an authority. Its board of governors is made up of the finance ministers of all EU member states. As a public agency that issues publicly guaranteed bonds, it could set up the rescue fund relatively quickly.

However Europe responds, at least we can look forward to less gloating about America's predicament. Global cooperation is essential in what has become a global panic.

Very good post Philstone.

About highlights:

1. They don't require new legislation BECAUSE it was -very intelligently- written already by the founders of Europe in the so called 'Maastricht Treaty'*** (7 February 1992) in an escape route, especially written for a crisis situation like we are in now, enabling the individual country Governments to act, rescue and/or support local entities if necessary; which under NORMAL circumstances is absolutely forbidden and written accordingly in the Maastricht Treaty.

2. Such a, temporary or not, resolution Authority would be ideal but the past weekend meeting of the big 4 showed already that it will be extremely difficult to reach such an agreement, not only between the big 4, but mainly because of the (sometimes greedy) other 23 members of the 27.

The (larger and richer) countries that would have to put up most of the money in such a rescue fund would have the biggest mouth, once it would be necessary to step in -and rescue- a certain financial Institution or even a large corporation in a particular country.

I foresee that the US, very soon, will have to step in and rescue one or more VERY LARGE corporations....the US has great advantage here because it would be 'easier' to save a large American Giant than it would be for a smaller European country to save a local Giant...and there are quite a few in the EU/Eurozone countries.

*** http://www.eurotreaties.com/maastrichtext.html

LaoPo

[Pakboong]

I believe that all of the financial institutes in the USA will very soon lower the creditlimits on all kinds of creditcards.

The lower and middle class will be hit inmediately.

The credit bubble is barsting.

Bank of America already plans to drop it's bottom 60% of card holders. Those with the lowest credit scores.

[philstone]

LaoPo

The reason I ask is because for NON-Europeans it's quite easy to talk about Europe, not realizing at the same time there is an EXTREMELY COMPLICATED demography in Europe, not just qua Population - Currencies - Economy - Banking system - Languages etc. etc. but also regarding Mentality.

Thanks

Edited October 6, 2008 by philstone

[philstone]

LaoPo

The reason I ask is because for NON-Europeans it's quite easy to talk about Europe, not realizing at the same time there is an EXTREMELY COMPLICATED demography in Europe, not just qua Population - Currencies - Economy - Banking system - Languages etc. etc. but also regarding Mentality.

You with you own words have explain to us why you do not understand America. I suggest you go there for at least 2 years before you pass judgment.

[LaoPo]

You with you own words have explain to us why you do not understand America. I suggest you go there for at least 2 years before you pass judgment.

Sir, I built my own businesses in the Americas, both in Canada/Alberta; Edmonton and the USA/California; San Francisco to be precise, with my own money, NOT for a Bossy.

I assure you that it is not easy to create/build a business, 12 hours flying (and a time difference of -9 hours) away from where one lives...but...I did it.

Next to that I created, founded and owned business(es) in most western European countries, Thailand, Hong Kong and China and while I'm writing I'm in the middle of founding another -very exciting- business in a country with 1.3 Billion people...China, rolling it out into 3 European languages/countries, within the next 2 months

Now, if you would be so kind to inform me about your business experiences ? I am all ears since I'm never too old to learn something new from others.

Another cookie with your in the meantime perhaps ?

In the meantime it's a BLOOD BATH in Europe*** on the various stock markets, whilst at the same time, as I write, the Futures on Wall Street show there will be a RED opening...

Have a nice day, wherever you are.

*** as it was in Asia

LaoPo

Edited October 6, 2008 by LaoPo

[philstone]

You with you own words have explain to us why you do not understand America. I suggest you go there for at least 2 years before you pass judgment.

Sir, I built my own businesses in the Americas, both in Canada/Alberta; Edmonton and the USA/California; San Francisco to be precise, with my own money, NOT for a Bossy.

I assure you that it is not easy to create/build a business, 12 hours flying (and a time difference of -9 hours) away from where one lives...but...I did it.

Next to that I created, founded and owned business(es) in most western European countries, Thailand, Hong Kong and China and while I'm writing I'm in the middle of founding another -very exciting- business in a country with 1.3 Billion people...China, rolling it out into 3 European languages/countries, within the next 2 months

Now, if you would be so kind to inform me about your business experiences ? I am all ears since I'm never too old to learn something new from others.

Another cookie with your in the meantime perhaps ?

In the meantime it's a BLOOD BATH in Europe*** on the various stock markets, whilst at the same time, as I write, the Futures on Wall Street show there will be a RED opening...

Have a nice day, wherever you are.

*** as it was in Asia

LaoPo

I am glad to hear you are very successful. I was lucky my family was in the steel business and I received huge amount of US Steel and with that I own a Coal Company. I was lucky others dig the coal and I deposit the profits nothing could be sweeter and easier At age of 74 just rich and stupid I guess.