Posted on 06/28/2016 6:07:46 PM PDT by Lorianne
Remember TARP, the Troubled Asset Relief Program that the US Congress approved to bail out banks and other companies during the Financial Crisis? $700 billion were authorized, later reduced to $475 billion. The Treasury eventually dispersed $432 billion. I bring this up because the ECB bailed out the European banks with more than TARP, in just one day: on Brexit Black Friday.
The ECB saw what was happening to the shares of the largest banks on that propitious day. It saw a blooming financial crisis:
Top UK Banks: •HSBC, the apparent winner in this fiasco, perhaps because of its exposure to Asia, -1.4% •Barclays: -17.7% •Royal Bank of Scotland: -18.0% •Lloyds Banking Group: -21.0%
Top German Banks: •Deutsche Bank: -15.9% to €13.25, down 59% from April last year, possibly on the way to zero. •Commerzbank: -13.6%, to €6.20. The German government still owns nearly 16% of it as a result of the bailout during the Financial Crisis. •The third-largest German bank, KfW, is a state-owned institution, so taxpayers are automatically on the hook.
Top French banks: •BNP Paribas: -17.4% •Credit Agricole: -14% (down 43% since last July). •Societe Generale: -20.6%. It apparently needs to find another low-level “rogue trader” to blame.
The fiasco that happened to the Spanish and Italian banks was so enormous that it sent stock markets into their largest one-day plunges on record, of over 12% [ Brexit Blowback Hits Italian and Spanish Banks].
The Stoxx 600 banking index, which covers the largest European banks, plunged 14.5% on Friday. It’s down 29.3% year-to-date, 42% from its 52-week high, and 76% from its all-time high in May 2007 before the Financial Crisis and the euro debt crisis knocked the hot air out of the banks.
But to keep panic at bay, Brexit and the resulting political crisis are used to cover up the blooming financial crisis.
And what a political crisis it is, not just for the UK, but for the EU. No one knows how this will end up. Businesses need certainty. They need to know what money they’re going to use next year, and what the trade and legal frameworks will be. They like to take those things for granted. But now, in the EU, no one can take anything for granted anymore.
“No one knows how this will end up.”
My prediction? America’s Mother Government will tell us to keep shopping and to look the other way.
We’re. So. Screwed.
Oh, don’t get me wrong. I agree 100% with the UK to leave the ill-fated, parasitic, Socialist EU. I just get the feeling that our One World Financial Overlords are going to make this hurt, and hurt BAD...to teach us all a lesson or something.
*Rolleyes*
Keep your powder dry.
“...•HSBC, the apparent winner in this fiasco...”
One would think that HSBC’s drug cartel money laundering operations would stave off any liquidity problems!
These day, whenever there is a local crisis or conflict somewhere in the world, it is immediately views as another wrecking ball which can topple the world economy. The world has nearly 7 billion people and too many states and societies of wide-ranging set of beliefs and cultural values. It is too diverse. It is impossible that such an event never occurs at regular intervals. Our world is so fragile and held together with very thin threads.
Agreed. The current Puppet Masters are pulling those thin threads...and laughing all the way to the bank!
Geeze - I sound like a Kook, but if the world has gone crazy and I’m the last sane person in it...which of us is crazy? ;)
So not being a global economist (but I did stay at a Holiday Inn last night) how would it be bad that borders were put back and countries manufactured themselves and armed themselves and promoted from within ?...Would spur all types of industry and level the global crap which is a “world conglomerate” union as is this foolish E.U. When you depend on another to make it so that you (a nation) can exist you are vulnerable. I understand that no one man is an island...but with our United States we have just about all we need right under our feet?
This is the same group of people who preached that there would be no financial crisis no matter how the market is overvalued based on some basic indicators. They lived in a bubble, believing that such an idea no longer applies in a new world.
Way back, this kind of people held onto the belief that Soviet Union would hang on after some reform and we should not try to defeat Soviets. They dreamed of happy coexistence with Soviet Union. Whitewashing Lenin and communist atrocities were fashionable. Confronting the truth was regarded as extreme and reactionary. It turned to be wrong.
So-called elites have a tendency to live in a world of their own creation. Orthodoxy can form and challenging it becomes a taboo. Everybody should fall in line without question, a frightening uniformity among people who should think on their own. It has happened so many times that it is safe to assume that their judgment is no better than some amateurs with the sense of reality.
Reality seems to be a rare commodity among elites.
So I think we are not crazy, just a minority with a better sense of reality. However, it puts some strain on us psychologically.
one concept is the benefits accruing from economies of scale.
another concept is lowering of trade barriers which economists theorizes promotes commerce and ultimately results in a better standard of living for the ordinary guy (gal, whatever) on the street.
in practice what this means is more often than not letting multinational corporations dictate the terms of their own regulation, via un-democratic influence over the appointment of the bureaucrats who run the EU
(or so i understand... i am not an economist and i do not play one on tv)
Holiday Hotel (Loggins and Messina):
https://www.youtube.com/watch?v=lCplTpK0J6s
“Whitewashing Lenin and communist atrocities were fashionable. Confronting the truth was regarded as extreme and reactionary.”
It’s STILL, ‘fashionable.’ It’s insane and WRONG.
I have no answers as I am woefully underrepresented by pretty much ANY of my elected officials. It’s maddening!
Thanks for that catalogue of articles.
Great work.
My pleasure.
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