When the Fourthreichian bank stress test results were made public in July of 2010, skepticism soon followed. After all, just seven of 91 banks failed, leading some to consider the tests a hoax. None of Ireland's banks failed. Yet Ireland floundered under the sheer expense of bailing out and reforming its financial system. We now know the stress tests were nothing more than a placebo for the market!
Chancellor George Osborne of UK today announced a new deal with the country's biggest banks to curb bonuses, increase lending to small businesses and improve transparency on pay for executives. Barclays, Lloyds Group, RBS and HSBC agreed to reduce total bonuses for UK-based staff from 2010 levels, and committed to disclose the pay of their executive board members as well as the top five highest paid executives not on the board.
The too-big-to-fail (TBTF) banks that acted as middle men in the mortgage machine knew that the mortgage-backed securities (MBS) they packaged and sold to investors didn't meet the standards they claimed. In essence, MBS buyers were sold Ferraris but took delivery of Yugos. Because of these material misrepresentations, TBTF banks could be forced to repurchase hundreds of billions of MBS that they sold to investors. Since they don't have that kind of cash lying around, it's likely they will turn to their federal benefactors for another bailout.
As part of the talks, known as Project Merlin, the banks agreed to make available £190 billion of new credit to business in 2011, up from £179 billion actually lent in 2010. £76 billion would be made available to small and medium-sized Enterprises, up from £66 billion in 2010. The banks said that if demand exceeded these levels, they would lend more.
Also announced today was the additional commitment of £1.2 billion to support regional growth and the Big Society. Of this the banks said they would provide £200m of additional capital over two years to set up the Big Society Bank.
As the health of much of the global economy weakens on a daily basis, political
leadership increasingly ignores the source of the malady and instead focuses on
short term band-aid remedies. These measures which may buy a few months, or
years, of relative wellbeing, will convince the public that problems have been
solved and will thereby take pressure off governments to make the needed
structural changes. The $1 trillion EU bailout is a perfect example of this
band-aid approach. Napoleon Sarko threatened to pull out of eurozone, unless
Merkel agreed to back the European Union's bailout plan!
A serious threat to the euro would only emerge if the financial markets lost faith in major debtor countries like Spain and Italy. But there is little evidence of that happening right now, because these countries have all passed austerity measures and there is enough money available on the market. Investors must be able to afford to spurn certain investment opportunities, and this is only possible when there are better alternatives. But within Europe, the chances of finding suitable alternatives are limited. Even if all international investors were to view Germany as the only safe haven on the continent, not all potential lenders would be able to get a piece of the action.
The euro has been rescued for the moment, but Eurokleptocrats have thrown the
foundations of Fourth Reich's common currency overboard with their unprecedented
bailout package. In the longer term, the dangers of the crisis can only increase, and the flood of billions of euros will lead to inflation. Eurokleptocrats have thrown overboard all the noble principles and promises of the formal, tough treaty-based foundations for the introduction of the euro and the independence of the European Central Bank.
Eurokleptocracy, gigaregulation, Antitrust Armageddon, and gigataxation, especially VAT, are the real causes of the European financial meltdown. Fourth Reich(EU), an unvoted illegal confederation, cannot protect Europeans from Eurokleptocrats, especially Graecokleptocrats, and police brutes, especially Graecocybercops. Fourthreichian Premier Barroso condones the disgusting Graecokleptocrats who accuse dissident bloggers of treason, confiscate their computers, and lock them is jail!
The freakish government of Greece, October-18 mafia, robs computers and terrorizes the blogosphere! Why on Earth Durao Barroso, Neelie Kroes, Viviane Reding, and Cecilia Malmstroem of the European Commission cannot rein in Graecokleptocrats? If Fourth Reich(EU) cannot protect Greeks from the Greek government, who will? Greek dissident bloggers want back their stolen computers, their stolen files, their stolen persona data, and their stolen lives. Restitution is a basic right in a civil society. Brutal Graecocybercops should be abolished now.
Premier George Papandreou of Graecokleptocracy crossed the Rubicon on October 18, 2010, when a deranged Greek Minister of Foreign Affairs destroyed a distinguished professor and dissident blogger, in order to appease Premier Erdogan of Turkey! That's why the Global Tax Revolt declared October 18 as the International Day Against Cybercop Brutality. http://groups.yahoo.com/group/globaltaxrevolt
Graecokleptocracy has to deal with its debt in a timely manner. Graecokleptocracy faces the typical debt trap, a situation where the existing debt is so large that new investors are discouraged from coming with new funds. The debt to GDP ratio would go up from 115 percent of GDP to almost 150 percent. This is what a debt trap looks like. At 150 percent, the debt chokes growth and employment. And if you don't have growth and employment, Graecokleptocracy will not be able to sustain this.
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