European Banking Crisis

[LaoPo]

The Irish did the right thing They got tired with all the bickering and grandstanding that is going on in the EU and made a brillant unilateral move, kudos to the Irish Even one of the directors of the ECB was quoted in your article as having said the Irish made the right move. It looks like once again its just sour grapes from the French, nothing new here!!! The ECB is still way behind the curve as far as rate reductions so I imagine that will be the next "shoe to drop" in the Euro saga, as we see the Euro head down to sub $1.20

They did not and I foresee an Irish drama which will be a lot bigger than the one in Iceland.

A country with 4 million people guaranteeing ALL all the deposits and borrowings with the country's six main financial institutions for a period of 2 years is completely insane.

Guarantee....by a small government like the IRISH....???

With more than € 400 Billion (US $ 515 Billion) in liabilities which is more than 2 times Ireland's GDP, those six institutions (only 3 are banks) are in dangerous waters.

The real estate sector is down the drain; thousands of Polish workers are leaving the country and the country is in a recession. What happens if the depositors withdraw their deposits ?

There is NO WAY the Government could EVER pay back all the depositors, despite their so called "guarantees"...

Waiting for a mega disaster.

The Irish did the right thing...a brilliant unilateral move....kudos to the Irish.....really ?...

Think twice before you write nonsense VV !

LaoPo

[Bizz]

The European Commission has approved the Government's €400 billion guarantee that covers six Irish-owned banks and five foreign-owned financial institutions.

The announcement came as Taoiseach Brian Cowen returned from Paris where EU leaders had agreed on a big funding programme for banks and businesses.

Under the programme, governments can use taxpayers funds to put new money into the banks, either by purchasing shares or by buying up their debts. They have also agreed that the European Central Bank can lend money directly to large businesses.

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Euro zone governments promised to tackle the crisis together, buying into banks by taking preference shares and guaranteeing inter-bank lending to help increase liquidity.

European officials have said the package will cost several hundred billion dollars on top of the huge sums already spent rescuing banks and propping up the money markets.

The European talks came after leaders from the Group of Seven richest economies pledged to support key financial institutions, take measures to get credit flowing, assist banks in raising capital and reassure savers.

In Washington, the EU measures won swift praise from International Monetary Fund chief Dominique Strauss-Kahn, who said the IMF had been calling for months for coordinated international action to the brewing crisis. 'Nearly all advanced countries are now covered and the euro zone provisions may be extended eventually to all of Europe,' he said.

'The euro zone plan is also comprehensive. Altogether we are going in a good direction,' he added.

[fft100]

A few points :-

1. German banks are in serious trouble as the report from Reuters below confirms. They lent more than anyone else to buy property in booming markets, and the pull back in spain, ireland and Iceland will affect them more than most.

2. Germany is the only country in Europe that house prices (country wide) have not gone up in the last 10 years - and even 2 years ago they hadnt gone up. There was no general property boom here.

3. Govt bonds in Greece will get you nearly 100 basis points more than the equivalent in Germany. Yet they have the same currency. However, the money markets dont believe that a Greek Euro is worth the same as German one. Italy is also moving out. Indicates that there is a chance (strong, poor ?) that some countries will leave the Euro in the next few years. I personally think that Germany would like weaker countries to leave the Euro.

FRANKFURT, Oct 23 (Reuters) - German banks lent the most to Icelandic

borrowers and were owed $21 billion before the recent financial storm swept

markets, according to figures released by the Bank for International

Settlements.

The research shows that German banks, as well as handing out almost one

third of loans in the Nordic outpost, are the most exposed to some of Europe's

fragile economies, such as Spain and Ireland.

In a snapshot taken at the end of June, Germany's banks lent far more in

crisis-stricken Iceland than had rivals in Britain, who were owed just $4

billion, or Iceland's neighbour Sweden with less than $400 million.

Despite being Europe's biggest economy, Germany's levels of lending to

countries such as Iceland are disproportionately high.

And in the week that Berlin launched a rescue plan for its banks, the

first signs were emerging that lending at the height of the Icelandic bubble had

come back to haunt Germany.

BayernLB, a state-backed regional lender that was the first to seek

government help this week, said it expected to write off 800 million euros

($1.03 billion) of its 1.5 billion euro exposure to the tiny island state.

German banks have also been active in other booming economies which have

hit the rocks such as Ireland, a country hit by recession after a property price

bubble burst.

German banks lent $240 billion to Ireland, again the most globally and

slightly more than its biggest neighbour, Britain.

One reason that this figure is unusually high could be due to the

off-shore investment companies that many German banks set up in the country's

capital, Dublin.

German banks were also most active in Spain, lending $310 billion ,

significantly more than French banks which were owed about $200 billion, and

roughly twice as much as British banks.

[Naam]

Govt bonds in Greece will get you nearly 100 basis points more than the equivalent in Germany. Yet they have the same currency. However, the money markets dont believe that a Greek Euro is worth the same as German one. Italy is also moving out. Indicates that there is a chance (strong, poor ?) that some countries will leave the Euro in the next few years. I personally think that Germany would like weaker countries to leave the Euro.

it's not the currency that counts but the debtor's rating. the rating of Greece is four steps below Germany's rating.

[fft100]

Naam,

i think you missed my point. with the same currency then it shouldnt make any difference. However, since there is only a unified monetary policy and not fiscal policy then it does. A single currency cant work that way. It adds a lot more uncertainty to the market.

but anyway, that was just an aside to the problems of the German banking sector.

Cant believe the $ is where it is today. This must be an over correction. Not good for tourism (along with the rest)....

Govt bonds in Greece will get you nearly 100 basis points more than the equivalent in Germany. Yet they have the same currency. However, the money markets dont believe that a Greek Euro is worth the same as German one. Italy is also moving out. Indicates that there is a chance (strong, poor ?) that some countries will leave the Euro in the next few years. I personally think that Germany would like weaker countries to leave the Euro.

it's not the currency that counts but the debtor's rating. the rating of Greece is four steps below Germany's rating.

[Naam]

Naam,

i think you missed my point. with the same currency then it shouldnt make any difference. However, since there is only a unified monetary policy and not fiscal policy then it does. A single currency cant work that way. It adds a lot more uncertainty to the market.

you seemed to have missed my point FFT the rating of the debtor DOES make a difference and we have proof (Germany/Greece) that a single currency does "work that way". how long it works remains to be seen. also, a unified fiscal policy exists regarding maximum budget deficits (3%). but that bracket is crossed by individual states (and has been crossed by Germany too a couple of years ago).

edited to correct tchermann shpelling, krammar and taipos

Edited October 24, 2008 by Naam

[henryalleman]

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 don't know where you get the idea that the European real estate is overpriced. The financial crisis is caused by the overspending and over borrowing of the American consumer and government. Just look to the fact that a country like China has 1200 billion $US government loans in their hands. Not yet to mention the takeovers by Arab investors. Only look to the financial problems of Amex, Merryl Lynch, Citi group and others a few months ago, al resquided by Arabs . Due to the fact that the US banks did give loans to people who are in fact not able to pay such loans back, and are always on their credit cards limits. European saving rates of the public are much higher than his US counterparts.

In fact its due to the low rating of savings and overspending and not the ability to pay their debts back that the social and economical catastrophe in the US and the impact on the home market is not yet fully started. And it will be much worse than in Europe because their is no social safety net to protect them. Don't forget that the EU industry, budget and trade balance is in much better shape than the US. The EU currency zone is obligated by the EU comittee to have a much more strict budget and monetary policy than the US. Severe punishments have to be payed when they brake this rules. Only a maximum of 3% deficit is allowed, and they must bring down their global debt. All of this to avoid inflation.

Also don't forget that the EU don't have the burden of billion $ war on their budget. Its only the small shareholder who is the loser, because all savings up to 100 000 Euros are guaranteed by the different governments, and its only a minority of banks who are in problems. Big EU banks like Deutsche bank and Rabo internet bank still have an AA+ or a AAA rating. The European governments also guarantee all daily inter banking loans, so the money can start to turn around again.

Also the EU economy is a regulated marked economy, and not a total free marked economy as the US, so they have much better weapons to tackle the crisis. So in next 6 months, after the new banking rules are implemented everything will be normal again.

The US created the problems and the rest of the world have to pick up the tap, to protect themselves. And lucky for the US they do like that, otherwise the US was bankcrupt.

The reason why the European banks did'nt see or don't won't te see the comming crisis is very simply, it was greed just greed.

PS: sorry for my poor English because I'm nat a native English speaker.

[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?

I don't know where you get the idea that the European real estate is overpriced. The financial crisis is caused by the overspending and over borrowing of the American consumer and government. Just look to the fact that a country like China has 1200 billion $US government loans in their hands. Not yet to mention the takeovers by Arab investors. Only look to the financial problems of Amex, Merryl Lynch, Citi group and others a few months ago, al resquided by Arabs . Due to the fact that the US banks did give loans to people who are in fact not able to pay such loans back, and are always on their credit cards limits. European saving rates of the public are much higher than his US counterparts.

In fact its due to the low rating of savings and overspending and not the ability to pay their debts back that the social and economical catastrophe in the US and the impact on the home market is not yet fully started. And it will be much worse than in Europe because their is no social safety net to protect them. Don't forget that the EU industry, budget and trade balance is in much better shape than the US. The EU currency zone is obligated by the EU comittee to have a much more strict budget and monetary policy than the US. Severe punishments have to be payed when they brake this rules. Only a maximum of 3% deficit is allowed, and they must bring down their global debt. All of this to avoid inflation.

Also don't forget that the EU don't have the burden of billion $ war on their budget. Its only the small shareholder who is the loser, because all savings up to 100 000 Euros are guaranteed by the different governments, and its only a minority of banks who are in problems. Big EU banks like Deutsche bank and Rabo internet bank still have an AA+ or a AAA rating. The European governments also guarantee all daily inter banking loans, so the money can start to turn around again.

Also the EU economy is a regulated marked economy, and not a total free marked economy as the US, so they have much better weapons to tackle the crisis. So in next 6 months, after the new banking rules are implemented everything will be normal again.

The US created the problems and the rest of the world have to pick up the tap, to protect themselves. And lucky for the US they do like that, otherwise the US was bankcrupt.

The reason why the European banks did'nt see or don't won't te see the comming crisis is very simply, it was greed just greed.

PS: sorry for my poor English because I'm nat a native English speaker.

Your Engllish is very good. It's your assessment that's flawed.

True, you ca't say enough bad things about the fiscal discipline of many Americans and the American government. What kind of bankers place bets that that kind of economics can go on indefinitely and then leverage up that bet 30-50 times? Here's a hint, it's not just American Banks who did it.

[henryalleman]

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.

That Texas is leaving the US and quit the US $ is more likely than that Germany or any other EU country leaving the EURO zone. On the contrary, the ECB and his EU bank regulator will be given more power. Because not any country can deal with the financial crisis by oneself. The outcome of this crisis will be a stronger and more united EU than ever before.

[henryalleman]

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

Laopo,

but a small country like Belgium saved his biggest bank Fortis from a collapse, and Holland virtually took over Fortis daughter ABN Amro. In Europe their is no idealogical barriere to nationalise a bank. This is an big advantage over the US.

btw I congratulate you withy your previous posting about the different Europs.

[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

Laopo,

but a small country like Belgium saved his biggest bank Fortis from a collapse, and Holland virtually took over Fortis daughter ABN Amro. In Europe their is no idealogical barriere to nationalise a bank. This is an big advantage over the US.

btw I congratulate you withy your previous posting about the different Europs.

Fortis wasn't a Giant like I was talking about a large US corporation; maybe in your/our eyes but not in reality.

Apart from that Fortis made the biggest mistake in it's history to try and eat a huge cookie: ABN AMRO and couldn't swallow it; see what happened.

The (sorry for you, being Flemish) ego's of the establishment in the top of Fortis, in Knokke, (and you know who I mean) was more important for them than the healthy future of Fortis.

The Dutch government didn't just buy (back) ABN AMRO but the Dutch Fortis branch as well; both are to be merged soon.

Next to the above it could very well be that ING is next in line to be taken over by the government -and that the € 10 Billion injection won't be enough-; let's say before the end of 2008...who knows ?

LaoPo

[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!

Its correct that you are only willing to make one prediction. Because its impossible to make a more stupid one. You clearly have no clue how the EU works.

I will stick to that prediction and go on to say that unemployment will be skyrocketing in Germany as well You seem to have no grasp on the magnitude of the underlying problems that many of the european banks are facing currently, so I will leave you to your ignorance and let you watch the Euro and Pound get decimated. This recession and the falling Euro will test the E.U. to its limits, and in the end I do believe that the E.U. experiment will disolve and Germany will be the one that rises from the ashes!

[Naam]

1. go on to say that unemployment will be skyrocketing in Germany as well

2. This recession and the falling Euro will test the E.U. to its limits, and

3. in the end I do believe that the E.U. experiment will disolve and Germany will be the one that rises from the ashes!

1. i agree

2. i partly agree

3. your words in GOD's ear Vic. i'd be happy² to see LOTS of my beloved Deutsche Mark in my portfolio again instead of whoring around and catching all sorts of venereal diseases with some miserable losers like €UR and USD

[highdiver]

the last time the world went into a a slowdown and economic drop it resulted in WW2.

OH my god i sound just like bingo....

[OriginalPoster]

the last time the world went into a a slowdown and economic drop it resulted in WW2.

OH my god i sound just like bingo....

I'm expecting Obama to declare war on Great Britain, maybe on Canada too.

[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?

I don't know where you get the idea that the European real estate is overpriced. The financial crisis is caused by the overspending and over borrowing of the American consumer and government. Just look to the fact that a country like China has 1200 billion $US government loans in their hands. Not yet to mention the takeovers by Arab investors. Only look to the financial problems of Amex, Merryl Lynch, Citi group and others a few months ago, al resquided by Arabs . Due to the fact that the US banks did give loans to people who are in fact not able to pay such loans back, and are always on their credit cards limits. European saving rates of the public are much higher than his US counterparts.

In fact its due to the low rating of savings and overspending and not the ability to pay their debts back that the social and economical catastrophe in the US and the impact on the home market is not yet fully started. And it will be much worse than in Europe because their is no social safety net to protect them. Don't forget that the EU industry, budget and trade balance is in much better shape than the US. The EU currency zone is obligated by the EU comittee to have a much more strict budget and monetary policy than the US. Severe punishments have to be payed when they brake this rules. Only a maximum of 3% deficit is allowed, and they must bring down their global debt. All of this to avoid inflation.

Also don't forget that the EU don't have the burden of billion $ war on their budget. Its only the small shareholder who is the loser, because all savings up to 100 000 Euros are guaranteed by the different governments, and its only a minority of banks who are in problems. Big EU banks like Deutsche bank and Rabo internet bank still have an AA+ or a AAA rating. The European governments also guarantee all daily inter banking loans, so the money can start to turn around again.

Also the EU economy is a regulated marked economy, and not a total free marked economy as the US, so they have much better weapons to tackle the crisis. So in next 6 months, after the new banking rules are implemented everything will be normal again.

The US created the problems and the rest of the world have to pick up the tap, to protect themselves. And lucky for the US they do like that, otherwise the US was bankcrupt.

The reason why the European banks did'nt see or don't won't te see the comming crisis is very simply, it was greed just greed.

PS: sorry for my poor English because I'm nat a native English speaker.

Your English is better than mine and I'm a native speaker. I understand your frustrations, but you're dead wrong on solely placing the blame on the US. I have European home value and bank leverage info on my work laptop. I'm currently at home and don't want to do the research. I strongly suggest you do the research yourself. I think it will open your eyes to the problems Europe is facing.

Also, greed is not an American phenomenon. For example, many financial sector employees in Europe were paid unbelievable amounts. Many of these employees played a major role in creating this fiasco.

Might want to ask yourself why Europeans are buying dollars if we are bankrupt. America has its financial issues and we have a lot of company. America was the first to realize the real estate finacial crisis and will be the first, IMO, to recover from this financial crisis.

Edited October 26, 2008 by siamamerican

[philstone]

the last time the world went into a a slowdown and economic drop it resulted in WW2.

OH my god i sound just like bingo....

I'm expecting Obama to declare war on Great Britain, maybe on Canada too.

You must be a fool this time Europe starts a War between themselves President Obama will send you nothing no arms no foods and will never join in on you good fun. I did not what you are going do also you fools have **** to blame this War on. To bad.

[OriginalPoster]

the last time the world went into a a slowdown and economic drop it resulted in WW2.

OH my god i sound just like bingo....

I'm expecting Obama to declare war on Great Britain, maybe on Canada too.

You must be a fool this time Europe starts a War between themselves President Obama will send you nothing no arms no foods and will never join in on you good fun. I did not what you are going do also you fools have **** to blame this War on. To bad.

Can you please translate that into English?

[Naam]

the last time the world went into a a slowdown and economic drop it resulted in WW2.

OH my god i sound just like bingo....

I'm expecting Obama to declare war on Great Britain, maybe on Canada too.

You must be a fool this time Europe starts a War between themselves President Obama will send you nothing no arms no foods and will never join in on you good fun. I did not what you are going do also you fools have **** to blame this War on. To bad.

reading Thaivisa provides flabbergasting educational values

[OriginalPoster]

the last time the world went into a a slowdown and economic drop it resulted in WW2.

OH my god i sound just like bingo....

I'm expecting Obama to declare war on Great Britain, maybe on Canada too.

You must be a fool this time Europe starts a War between themselves President Obama will send you nothing no arms no foods and will never join in on you good fun. I did not what you are going do also you fools have **** to blame this War on. To bad.

reading Thaivisa provides flabbergasting educational values

You need to accept it for what it is. Thaivisa is the cyber equivalanet of a bar stool, and at least 50% of the time the guy sitting next to you will be a few beers deeper than you are.

[henryalleman]

the last time the world went into a a slowdown and economic drop it resulted in WW2.

OH my god i sound just like bingo....

I'm expecting Obama to declare war on Great Britain, maybe on Canada too.

You must be a fool this time Europe starts a War between themselves President Obama will send you nothing no arms no foods and will never join in on you good fun. I did not what you are going do also you fools have **** to blame this War on. To bad.

You clearly did not notice a few points, This wek their was a summit in Shangai between the Asean countries and the EU countries. The US was not invited?

This year already 16 US banks went banckrupt. In the EU non.

All your financial institutes and major banks have major Arab and Chinese investors. Not any EU country have such a high foreign debt as the US. GM is planned to send 100 000 workers home.

Not any EU have such a negative trade balance as the US.

The US is like that poor noble man who don't have a peny to spare but is the bully of the class and still have the arrogance to thinks that hes god's gift to earth.

[henryalleman]

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

Laopo,

but a small country like Belgium saved his biggest bank Fortis from a collapse, and Holland virtually took over Fortis daughter ABN Amro. In Europe their is no idealogical barriere to nationalise a bank. This is an big advantage over the US.

btw I congratulate you withy your previous posting about the different Europs.

Fortis wasn't a Giant like I was talking about a large US corporation; maybe in your/our eyes but not in reality.

Apart from that Fortis made the biggest mistake in it's history to try and eat a huge cookie: ABN AMRO and couldn't swallow it; see what happened.

The (sorry for you, being Flemish) ego's of the establishment in the top of Fortis, in Knokke, (and you know who I mean) was more important for them than the healthy future of Fortis.

The Dutch government didn't just buy (back) ABN AMRO but the Dutch Fortis branch as well; both are to be merged soon.

Next to the above it could very well be that ING is next in line to be taken over by the government -and that the € 10 Billion injection won't be enough-; let's say before the end of 2008...who knows ?

LaoPo

Laopo, you seems to my surprise well informed about the French talking Haute Finance mentallity in Belgium. I guess you mean the interferance of the King in the take over by Fortis of the "Generale bank" instead of ING and the take over of Sabena by Air France even SAS despite the fact that they made an better offer. But they prefer a sell out to France, as the rest of the Belgian crown jewels. The whole energy sector becalme in French hands also. In this light you must also see the reason for the attack an KBC (the biggest Flemish bank), wh is very solvable and have no financial problms at all. But their shares lost more than 20% in one day. For all of this and much more I'm not only a Fleming, but a Flemish Nationalist, who find it an insult to be called a Belgian.

[Naam]

Laopo, you seems to my surprise well informed about the French talking Haute Finance mentallity in Belgium. I guess you mean the interferance of the King in the take over by Fortis of the "Generale bank" instead of ING and the take over of Sabena by Air France even SAS despite the fact that they made an better offer. But they prefer a sell out to France, as the rest of the Belgian crown jewels. The whole energy sector becalme in French hands also. In this light you must also see the reason for the attack an KBC (the biggest Flemish bank), wh is very solvable and have no financial problms at all. But their shares lost more than 20% in one day. For all of this and much more I'm not only a Fleming, but a Flemish Nationalist, who find it an insult to be called a Belgian.

when working (years ago) in West Africa i had the privilege socialising with a few belgian gentlemen from both the franco and the flemish (spelling?) side. business meetings made me aware of the existing big rift. i had no <deleted> idea before. there was also no way for me to intermediate as both sides were quite stubborn. finally i had no choice than calling for a private meeting and (by my power as chairman of various state owned corporations) enforced a truce, telling them business is business, Belgium is thousands of miles away and suggested that in future we discuss franco/flam problems in my house over excellent food, good wine and a few games of carambolage.

it took a while but it worked. a good part thanks to our wives who were quite close and discussed their daily problems (caused by living in the bush far away from civilisation) in a mixture of english, french, flam and german. when most of the problems were discussed and settled we conducted business and we lived (more or less) happily ever after... till the second military coup within nine months and then all of us made a run in two Land Rovers across the border to Cameroun

[LaoPo]

Laopo, you seems to my surprise well informed about the French talking Haute Finance mentallity in Belgium. I guess you mean the interferance of the King in the take over by Fortis of the "Generale bank" instead of ING and the take over of Sabena by Air France even SAS despite the fact that they made an better offer. But they prefer a sell out to France, as the rest of the Belgian crown jewels. The whole energy sector becalme in French hands also. In this light you must also see the reason for the attack an KBC (the biggest Flemish bank), wh is very solvable and have no financial problms at all. But their shares lost more than 20% in one day. For all of this and much more I'm not only a Fleming, but a Flemish Nationalist, who find it an insult to be called a Belgian.

As a matter of fact I was NOT talking about the King or his connection or not with the French Haute Finance.

I was talking about the former CEO's of Fortis like Maurice Lippens, Jean-Paul Votron and Herman Verwilst in a lesser role.

PS: you must feel very upset today (after writing the above words)....hearing about the ongoing negotiations today (Sunday October 26th) in Belgium between the Government and KBC about an injection of € 3.5 Billion in return for shares in KBC.

The bank itself is denying it's having problems.

If a solution isn't reached by Monday morning, trading in shares of KBC could be halted.

We'll see.

LaoPo

Edited October 26, 2008 by LaoPo

[siamamerican]

You clearly did not notice a few points, This wek their was a summit in Shangai between the Asean countries and the EU countries. The US was not invited?

This year already 16 US banks went banckrupt. In the EU non.

All your financial institutes and major banks have major Arab and Chinese investors. Not any EU country have such a high foreign debt as the US. GM is planned to send 100 000 workers home.

Not any EU have such a negative trade balance as the US.

The US is like that poor noble man who don't have a peny to spare but is the bully of the class and still have the arrogance to thinks that hes god's gift to earth.

You are quite envious of the US financial strength. You brag that EU doesn't have nearly the foreign debt as the US and come to the conclusion that this is a strength. Countries could invest more in the EU, but they choose to invest in the US because of the perceived strength of the economy. You might be smarter than rest of global investors. I doubt it - you are just angry that America still is percieved as a safe haven during times like these. Also, I wonder why EU stock markets have performed worse than the US during this crisis.

Please let us all know why EU is better positioned than the US to weather this financial crisis. The EU real estate bubble and extremely high leveraged banks will make your argument difficult. Also, unlike the US, EU holds not only toxic US mortgage debt, but also holds it own mortgage debt. If you feel EU isn't going to have its own mortgage meltdown, you're wrong.

When this all over, EU is going to suffer more than the US. At least that what international investors are betting on over the last few months. All you need to do is follow the money to come to this conclusion.

[VegasVic]

the last time the world went into a a slowdown and economic drop it resulted in WW2.

OH my god i sound just like bingo....

I'm expecting Obama to declare war on Great Britain, maybe on Canada too.

Actually if we do see a President Obama he will likely be declaring war shortly after ignauguration, primarily on China and European Union in the form of restictive trade policy! It will be the wrong move and will cause this crisis to last for many more years

[PeaceBlondie]

The mere facts that the dollar is strengthening and the euro and pound are falling, this month or this quarter, are only small blips on the radar screen, overall. No more need for one country to gloat over another, as they all have serious financial problems. It does seem ironic that the Belgians fight over their factions, but then there are English who are insulted when you call them British, and southerners in the US who hate being called Yankees, 143 years after the war.

Financially a very messed up world.

[VegasVic]

1. go on to say that unemployment will be skyrocketing in Germany as well

2. This recession and the falling Euro will test the E.U. to its limits, and

3. in the end I do believe that the E.U. experiment will disolve and Germany will be the one that rises from the ashes!

1. i agree

2. i partly agree

3. your words in GOD's ear Vic. i'd be happy² to see LOTS of my beloved Deutsche Mark in my portfolio again instead of whoring around and catching all sorts of venereal diseases with some miserable losers like €UR and USD

The cream always rises to the top Naam! If it weren't for German scientisits and engineers, there would have been no space program in either the U.S. or the Soviet Union Well that might be a slight exageration but the program would have been delayed for 10-15 years in the U.S. and 20+ years in the Soviet Union!

[VegasVic]

the last time the world went into a a slowdown and economic drop it resulted in WW2.

OH my god i sound just like bingo....

I'm expecting Obama to declare war on Great Britain, maybe on Canada too.

You must be a fool this time Europe starts a War between themselves President Obama will send you nothing no arms no foods and will never join in on you good fun. I did not what you are going do also you fools have **** to blame this War on. To bad.

You clearly did not notice a few points, This wek their was a summit in Shangai between the Asean countries and the EU countries. The US was not invited?

This year already 16 US banks went banckrupt. In the EU non.

All your financial institutes and major banks have major Arab and Chinese investors. Not any EU country have such a high foreign debt as the US. GM is planned to send 100 000 workers home.

Not any EU have such a negative trade balance as the US.

The US is like that poor noble man who don't have a peny to spare but is the bully of the class and still have the arrogance to thinks that hes god's gift to earth.

Sour grapes?

[meom]

You clearly did not notice a few points, This wek their was a summit in Shangai between the Asean countries and the EU countries. The US was not invited?

This year already 16 US banks went banckrupt. In the EU non.

All your financial institutes and major banks have major Arab and Chinese investors. Not any EU country have such a high foreign debt as the US. GM is planned to send 100 000 workers home.

Not any EU have such a negative trade balance as the US.

The US is like that poor noble man who don't have a peny to spare but is the bully of the class and still have the arrogance to thinks that hes god's gift to earth.

You are quite envious of the US financial strength. You brag that EU doesn't have nearly the foreign debt as the US and come to the conclusion that this is a strength. Countries could invest more in the EU, but they choose to invest in the US because of the perceived strength of the economy. You might be smarter than rest of global investors. I doubt it - you are just angry that America still is percieved as a safe haven during times like these. Also, I wonder why EU stock markets have performed worse than the US during this crisis.

Please let us all know why EU is better positioned than the US to weather this financial crisis. The EU real estate bubble and extremely high leveraged banks will make your argument difficult. Also, unlike the US, EU holds not only toxic US mortgage debt, but also holds it own mortgage debt. If you feel EU isn't going to have its own mortgage meltdown, you're wrong.

When this all over, EU is going to suffer more than the US. At least that what international investors are betting on over the last few months. All you need to do is follow the money to come to this conclusion.

Europe will be in for a rough ride considering that Western European banks account for about three quarters of the total $4.7 trillion in cross border bank loans to Eastern Europe, Latin America and Asia.