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European Union - Leaders Side with Banks not Citizens
The latest convoluted and idiotic idea coming from Euro-Union leaders is a proposal that guarantees banks won't lose a dime from purchasing national bonds.
"BRUSSELS (Reuters) - Euro zone states may ditch plans to impose losses on private bondholders should countries need to restructure their debt under a new bailout fund due to launch in mid-2013, four EU officials told Reuters on Friday.
Discussions are taking place against a backdrop of flagging market confidence in the region's debt and as part of wider negotiations over introducing stricter fiscal rules to the EU treaty."
Thus Euro-leaders are proposing that the burden of financial losses being levied upon those who made the decision to purchase them (the private sector), this burden will now be shifted to the taxpayers of the Euro Union.
In my opinion, this is close to treasonous and I hope the citizens of Europe do not accept this proposal. 100% of the burden should be levied upon bondholders, not zero percent. Once again, we see how gov't can plays games with market forces by attempting to remove all risk from Euro-bonds.
If the EU wants to restore confidence in their bond market, they would allow bondholders to be punished for foolish decisions. After all, that's what investment is all about....RISK!
Gee, now I wish I bought a boatload of Euro bonds!
__________________ "No one walking this earth knows what is truly righteous"
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Re: European Union - Leaders Side with Banks not Citizens
Didn't our own government screw bond, or shareholders when it bailed out GM? Governments all over the world screw their citizens all the time. Personally I think these global, euro trash beaurocrat elites are doing everything they can to save their utopian dream EU, no matter what it does to the people who live in it. The EU is an elitist creation, that serves the citizens worst interests. The EU, or certainly the Euro, is doomed imo.
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"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him." Leo Tolstoy, 1897
Re: European Union - Leaders Side with Banks not Citizens
The EU is dominated by conservatives, so business interests are well protected. I thought Greece should have defaulted, though I admit I don't quite understand the real implications to the working people.
Re: European Union - Leaders Side with Banks not Citizens
Quote:
Originally Posted by Patters
The EU is dominated by conservatives, so business interests are well protected. I thought Greece should have defaulted, though I admit I don't quite understand the real implications to the working people.
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"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him." Leo Tolstoy, 1897
Re: European Union - Leaders Side with Banks not Citizens
Quote:
Originally Posted by Patters
The EU is dominated by conservatives, so business interests are well protected. I thought Greece should have defaulted, though I admit I don't quite understand the real implications to the working people.
If Greece defaults, their currency becomes the peso. Very few countries will want to extend them any credit. So if their gov't wants to buy crude oil, they'll have to pay cash.
It would devalue any savings the citizens of Greece may have accumlulated. In short, it would suck for the average Greek worker. But it still may be the best option available.
__________________ "No one walking this earth knows what is truly righteous"
Re: European Union - Leaders Side with Banks not Citizens
Quote:
Originally Posted by Real World
Didn't our own government screw bond, or shareholders when it bailed out GM? Governments all over the world screw their citizens all the time. Personally I think these global, euro trash beaurocrat elites are doing everything they can to save their utopian dream EU, no matter what it does to the people who live in it. The EU is an elitist creation, that serves the citizens worst interests. The EU, or certainly the Euro, is doomed imo.
Yes, they did. In this case, the EU are screwing the taxpayers and bailing out the bondholders. Neither should happen.
Re: European Union - Leaders Side with Banks not Citizens
Even if a solution benefits one group more than others that doesn't mean that that was the purpose. The best solution to this sort of problem is to soften the blow as much as possible for everyone overall. If it happens that one group benefits more than others, what can you do?
The stupidest principle to stand on is one that requires all to suffer so things can be fair when there's an alternative that eases things more for some than others.
__________________
Give a man a gun and he can rob a bank, give a man a bank and he can rob everyone.
Re: European Union - Leaders Side with Banks not Citizens
Quote:
Originally Posted by sdaniels7114
Even if a solution benefits one group more than others that doesn't mean that that was the purpose. The best solution to this sort of problem is to soften the blow as much as possible for everyone overall. If it happens that one group benefits more than others, what can you do?
The stupidest principle to stand on is one that requires all to suffer so things can be fair when there's an alternative that eases things more for some than others.
That is not how our legal tradition works. Justice is a based on having a just process, not by trying to measure the justness of the outcome.
Sticking all taxpayers with the bill to bail out a smaller population of bondholders (who by rights are owed nothing if the bond issuer defaults) is unjust to the taxpayers, just as sticking it to the small number of GM bondholders was because they got 5 cents on the dollar for their unsecured bonds while the government got 87 cents on the dollar for theirs. The group with the largest claim got the smallest stake.
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.
...
The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.
“TARP at least had some strings attached,” says Brad Miller, a North Carolina Democrat on the House Financial Services Committee, referring to the program’s executive-pay ceiling. “With the Fed programs, there was nothing.”
Jeebus. Is there anyone on Wall Street who has an idea of what they are doing?
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European Union - Leaders Side with Banks not Citizens
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