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."

Exclusive: Euro zone may drop bondholder losses from ESM bailout - Yahoo! Finance

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!

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.

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
 

:rofl: :rofl: :rofl:

Some things never change.

Re: European Union - Leaders Side with Banks not Citizens
 

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.

Re: European Union - Leaders Side with Banks not Citizens
 

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.

Re: European Union - Leaders Side with Banks not Citizens
 

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.

Re: European Union - Leaders Side with Banks not Citizens
 

Meanwhile, in our own glass house:

Secret Fed Loans Helped Banks Net $13 Billion - Bloomberg

Jeebus. Is there anyone on Wall Street who has an idea of what they are doing?

Re: European Union - Leaders Side with Banks not Citizens
 

Well, at least they were LOANS....do you know if they've all been paid back?