Better send Dodd and Frank over there to fix everything.
The rescue of Banco Espirito Santo, is just the tip of the iceberg. When the global economy turns down next year, we will see the widespread banking carnage in Europe. I hate to inform the world, but the German banks are up there at the top of the list of problems. Only when capital sees the risks in Germany will it flee to the dollar causing sharp decline in the Euro at least back to par.
BadBank
Under this new plan, Banco Espirito Santo, or BES, will be split into a “good bank”, renamed Novo Banco, and a “bad bank”, which will house BES’s exposures to the troubled Espirito Santo business empire, which last week tipped the bank in to a record 3.6 billion euros loss. We are seeing the same proposals everywhere – even in Switzerland where they have split the proprietary trading entities from the core banking system.
ECM-Wave-2011-2020
On top of this, when the economy turns down from 2015.75, we will start to see far more municipal defaults rising to the surface in Europe – including Germany. This entire system of perpetually borrowing and never paying off debt is just totally insane. Absolutely nobody in their right mind would have designed such as system – yet here we are. It has been the gradual encroachment and that has led to the ASSUMPTION that government just must be the exception to economics.