Discussion
All that is happening is that the politicians are dependent on the bankers to supply them with cash and will do nearly anything within their power to keep them afloat. The banks however are mostly bust, for a very good reason. I cannot put it better than Matthew Lynn, in his article in Money Week -
"Investment banking used to be a real business. The finance houses arranged stock and bond issues for companies. They provided advice on mergers and acquisitions. They arranged new flotations and offered research for fund managers. They may well have been overpaid for much of the work, and a lot of what they did may not have been as useful as it was cracked up to be. But they performed a clear economic function.
Over the last decade, however, all that has changed. The banks turned themselves into massive trading operations, gearing up and betting their balance sheets in the market. There is a problem, however. Trading [for which read gambling - ed] is essentially a zero-sum game. No fresh wealth is created. The money is merely recycled around the table, much as it is in a game of poker. During the credit bubble of the 1990s the banks could get away with that because the massive creation of debt meant that new money kept coming onto the table, which could then be shuffled around, creating the illusion that everyone was winning. Now that is no longer true. One bank’s gain is another bank’s loss. So trading is simply too risky. Whatever you make in one year will simply be lost in the next.
So the banks should be scaling back, and going back to what they used to do. But there’s a snag. The old-fashioned core business of investment banking can’t possibly sustain the lavish operations it has built up."
the full article can be read at -
http://www.moneyweek.com/investments/stock-markets...
I wouldn't feel too sorry for those wo bought Greek debt suffering a 50% haircut, most of them will have bought the debt at at least a 50% discount so they will be in profit. Those losing on it will be, I guess, taxpayer subsidized banks and poorly run pension funds.
"Investment banking used to be a real business. The finance houses arranged stock and bond issues for companies. They provided advice on mergers and acquisitions. They arranged new flotations and offered research for fund managers. They may well have been overpaid for much of the work, and a lot of what they did may not have been as useful as it was cracked up to be. But they performed a clear economic function.
Over the last decade, however, all that has changed. The banks turned themselves into massive trading operations, gearing up and betting their balance sheets in the market. There is a problem, however. Trading [for which read gambling - ed] is essentially a zero-sum game. No fresh wealth is created. The money is merely recycled around the table, much as it is in a game of poker. During the credit bubble of the 1990s the banks could get away with that because the massive creation of debt meant that new money kept coming onto the table, which could then be shuffled around, creating the illusion that everyone was winning. Now that is no longer true. One bank’s gain is another bank’s loss. So trading is simply too risky. Whatever you make in one year will simply be lost in the next.
So the banks should be scaling back, and going back to what they used to do. But there’s a snag. The old-fashioned core business of investment banking can’t possibly sustain the lavish operations it has built up."
the full article can be read at -
http://www.moneyweek.com/investments/stock-markets...
I wouldn't feel too sorry for those wo bought Greek debt suffering a 50% haircut, most of them will have bought the debt at at least a 50% discount so they will be in profit. Those losing on it will be, I guess, taxpayer subsidized banks and poorly run pension funds.
As usual the Daily Mash has this one nailed.
http://www.thedailymash.co.uk/news/international/e...
Arriving at the Brussels summit last night, Merkel stood behind Polish prime minister Donald Tusk, pointing at him with one index finger while drawing the other across her neck and sticking out her tongue in a way that was both playful and utterly terrifying.
She then pointed at French president Nicolas Sarkozy, threw her hands in the air and pretended to run away.
A Downing Street source said: "She greeted the prime minister warmly but then leaned in and whispered, 'you're no Churchill and this time we won't f
k it up, Tommy'
http://www.thedailymash.co.uk/news/international/e...
Arriving at the Brussels summit last night, Merkel stood behind Polish prime minister Donald Tusk, pointing at him with one index finger while drawing the other across her neck and sticking out her tongue in a way that was both playful and utterly terrifying.
She then pointed at French president Nicolas Sarkozy, threw her hands in the air and pretended to run away.
A Downing Street source said: "She greeted the prime minister warmly but then leaned in and whispered, 'you're no Churchill and this time we won't f
k it up, Tommy'
Altogether now...
"Who do you think, you are kidding Mrs Merkel.... if you think we're on the run....."
I just ordered 10,000 shtogun cartridges.
The Frogs and the Gerries are simply trying to finish the job that Adolf couldn't, and now the wheels are coming off they don't like it.
fk the Euro. fk Europe. We should get out and stay out.
"Who do you think, you are kidding Mrs Merkel.... if you think we're on the run....."
I just ordered 10,000 shtogun cartridges.
The Frogs and the Gerries are simply trying to finish the job that Adolf couldn't, and now the wheels are coming off they don't like it.
f
k the Euro. fk Europe. We should get out and stay out.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff