The coming worldwide credit crunch

I take that as a no then (no worldwide organisation to monitor and control)....

 It's about time that people started to demand accountability of their Banks, and no bettter time to start calling for radical reform than now!

Ads.  So nice to see someone with a sense of irony posting on this thread.  It was ironic wasn't it?

M.

TJ,

Are there no constraints or pre-conditions being placed upon these monies to prevent a repeat of reckless mismanagement  by the Banks? Are directives issued and effectively monitored so as to control the use and distribution of these funds?Is there any organisation as yet who have effective powers to ensure more ethical behaviour by the European (and worldwide for that matter) Banks? Do they remain unaccountable or are there behind-the-scenes reforms being negotiated as we speak? Is there any Worldwide organisation that adequately monitors the Banks and have powers to enforce accountability under these extreme circumstances? Or is this suggestion an impossible pipe dream?

It looks like the ECB is about to go nuclear and print up a fresh 1.75 trillion to bolster the EFSF and try another hopless and dangerous attempt to stop the crisis by buying more time. Most of the money in reality will go to the reckless French and other banks who gambled on the peripheral zone.

If you though the cost of living and unemployment was bad now you aint seen nothing yet.

 More from Sky News correspondent Ed Conway (via Twitter):

• G20 now preparing itself for Greek default after October - Sky sources. Will be on Sky News imminently with more
• G20 sources: all efforts behind the scenes (by G20 members) are now going into recapitalising banks, preparing economies for default
• G20 sources: default not expected until after Cannes G20 early November. Emergency funding should still keep Greece afloat thru October
• G20 sources: No suggestion Greek default need imply country leaving the euro
• G20 sources: @ Washington summit marked difference in attitude. Confident euro members edging closer to recapitalising banks, expanding EFSF

From Zero Hedge

European banks are hemorrhaging deposits as savers and money funds pile into other perceived havens such sterling, dollar and Swiss franc deposit accounts. Retail and institutional deposits at Greek banks fell 19 percent in the past year and almost 40 percent at Irish lenders in 18 months. 

A tiny fraction of these European deposits has gone into gold with the majority going into other fiat currency deposits. It is not just the saver of periphery nations who are opening non euro deposit accounts - many German savers are opening up deposit accounts in Switzerland.

I wonder how much money has been taken out of the Spanish banking system in recent months.  I've got enough euros in my account just to cover living expenses.  Most of the people I work with (including Spaniards) have dumped most of their euros as well.

Yes and i wonder if Bennys got any more cheques left 600 billion spent and the markets still down and no more US jobs DOUBLE DIP oh yes Ithink he should go to TEXAS for a holiday OBAMA wants 300 billion MAD

Lucky we placed all those geared SHORTS

Banks in particular 2 trillion sterling in british banks and the goverment has less than 2 billion in its current account 

RBS is bust BARCLAYS on the ROPES ETC ETC

This is going to get even UGLIER

Rod

 Market rumours of a Greek default this w/e. Looking at the EUR vs the USD and GBP could be correct. If not its only a matter of time. I think then all the peripheral countries will be watching intently to see what happens to Greece and this could the start of a series of exits from the Euro.

As people may know the only resaon Spain is still in the game is because the ECB keeps interviening in the bond market to stop the yield on the debt going above 6%. Above 6% and the country is finished as far as the Euro is concerned. However this daft behaviour with bond purchases now puts the ECB itself in grave danger as during the Greek crisis the ECB tried this trick with Greek bonds, but got flattened by the market and is now the proud owner of a huge stack of near worthless debt, or should i say the ECB taxpayers.

Now the ECB itself is in danger of going bust with Greece and it is still repeating the trick with Spanish bonds. Of course in reality the ECB will never go bust as it can simply print money, but Germany is extreemly reluctant to go down the route after their last disasterous experience with printing money and hyperinflation.

However this is looking like the only option now to keep the Euro Titanic afloat. 

They're still interested - just comes down to the terms.

Barclays were sniffing around CAM Bank (rumoured to have failed the stress tests) recently, but I don't think they are going to take it any further thank god.

Sanchez, I''d expect you're right; I'm also hearing that there are a number of buyers ready to step in to purchase cajas under "fire-sale" terms. The owners and the government may have little option other than to go with whatever terms are on offer if that provides a route to recapitalise the system.

It's rumoured that 5-6 Spanish banks will fail the stress tests.  I guess we'll find out later this evening...

I would guess TJ 222 is holding his breath like the rest of the financial world.  I may be what another thread calls a "doom and gloom merchant", I would rather call it being a realist.  With Ireland demoted to junk bond status and Italy in crisis, how much more of this can the Euro system take before someone admits that the Macawber axiom (Income 6p more than expenditure-happiness etc) applies today just as it did in Dickens' time.  Lending more money to someone who can't repay their existing debts (at ever greater interest rates) is just a means of embroiling the rest of the world in to a sick and failing system by spreading the pain and putting off the day when the debt must (but cannot) be repaid. We are not simply paying for the profligacy of governments in the past, but the arrogance of politicians who don't want the crash to happen on their watch. 

Welcome my friends, to the thread that never ends.

TJ 222 where are you?

The most informative thread on EOS by a mile.

TJ:

Quoting you:

"There is a big difference between being right and getting your way."

Isn't that the truth!  Or as a friend of mine puts it: "What you ask for and what you get are two entirely different things". 

Patricia

Welcome my friends, to the thread that never ends.

TJ 222 where are you?

Looks like the markets are starting to panic about Spain and Italy now.   10 year Spanish Govt bond yields have recently topped 6% for the first time since 1997.  It's like watching a car crash in slow motion.

What happens if a country goes bankrupt?? I have been reading this as an option to the Euro collapsing but cannot understand the difference. Also if a country did declare its self bankrupt what difference would this make to Joe public?? obviously the country wouldnt cease to exist neither would all the businesses in that country (same as if the Euro collapsed, you would still have your newsagents/cafes/restaurants etc etc open and trading) wouldnt you?? Finally, how would a country becoming bankrupt affect people with motgages abroad, would it be the same as the Euro collapsing?

A large dose of inflation... it is the only near term answer to the problem and the engineering is being put in place as we write, if it were not there would already be deflation, as experienced by Japan.

In the medium term I doubt that the profligacy of the last 30 years can be put behind us... people of all generations expect ney demand, continual and rapid improvement in living standards

Deflation would be the final nail in the coffin for the world economy as spending would dry up completely.

Barry

 ads

I cannot really help much with the issue wrt consumer/property rights. I have no legal experience and prefer to keep it that way, no disrespect to Maria who it seems has done her best to try and make up for this miserable situation.

There is a big difference between being right and getting your way. If it was up to me i would reimburse ALL those who were scammed, not just the money lost but an equal amount in compensation and if there was any spare change give it to charity. The banks could come next.

Sadly its not up to me and there are lots of expressions that come to mind - 

Caveat Emptor

Possesion is 9/10 of the law 

He who has the Gold makes the rules

Its ironic indeed that the very safety and respect of property rights in the UK was the factor that gave UK buyers confidence to buy abroad with some abandon. They unconciously (perhaps) assumed that because Spain was part of the EU they would enjoy the same rights. As it turned out they do indeed enjoy the same rights, but sadly that matters little if these rights can't or won't be enforced.

Around the world people are pouring their money into hard assets so that it is not stolen by inflation and currency debasement. They have chosen London because they believe that the UK will both respect AND enforce their properrty rights.

As we talk, in Greece people are draining their accounts before their money evapourates. Elsewhere people do not seem to be so clued up. It seems that people need to see the ship sinking before they worry about the lifeboats

Money is going into gold because even in the UK clued up people DO NOT trust the banks and their money system. The current price of gold reflects that lack of trust in paper money its telling you the jig is nearly up. Without trust the notes in your pocket are just a piece of paper and intrisically are worth the paper content only. History unfortunatly shows that ALL paper currencies eventually go to their intrinsic value which in the case of paper is Zero. Google hyperinflation and you will see a long long list of countries that suffered this throughout recent history. The names may shock you ie America!

As regards your last question about the UK and the deposit guarantee and QE.

In a country that prints money there is no fear about getting your money back from bank deposits/savings within the agreed amounts that you mention. This is not the issue, the issue is not how much money you have but what it will buy when you get it back!

I’m out of sync here! So if you could bear with me I’ll address the previous points first, which focus on Spain.

Apologies TJ, upon re-reading “What i can say is that if you bought the property for a home and you love and enjoy Spain AND you can sensibly afford it, then i think little has changed. “ I realise I misread the detail of your post. I mistakenly thought you were referring to the fact that little had changed with relation to purchasing another property and I was concerned by the ongoing lack of consumer protection within the existing Spanish justice system. 

As for the suggestion that the Banks are unable to fund the monies owed from their illegal activities (non provision of BG's, refusal to meet valid BG claims, etc) , now we come to the crux of the matter, as how does the Spanish system treat those successful first instance judgements, and the attempts thereafter to embargo assets? Are these not classed as a form of ownership of rights? Are the Banks not obliged to recoup monies to meet the judgements at that point in time and ensure that they do not systematically deny consumer rights by delaying the process of law, thereby leaving the consumer unprotected? The “assets” whether they be liquid or otherwise at that point in time should be protected by law, but we all know that this is where the problem lies. There appears to be systemic failure to enforce legislation in Spain.

Who ultimately takes ownership of these assets when bailing out the Banks some years after the judgements have been made but not enforced? The Spanish Government? The Government that negligently, (or incompetently), delayed implementation of the law when liquid assets and/or real estate assets were available to meet these judgements, thus compromising the innocent party? The Government that continues to turn a blind eye to the non enforcement of laws in place to protect the consumer?  If so, then the Government has effectively failed in the duty to protect citizens according to the laws of the land, and in some eyes this can be considered as theft of assets could it not???Hence the immediate requirement for a fair compensation structure to be in place.

The European Parliament stipulates "In any event, the purchase of a real property in Spain is carried out in accordance with national laws and any alleged transgression of that law has to be resolved before the competent Spanish judicial authorities " "The proper means of seeking redress is through the Spanish courts and, ultimately, once all domestic remedies have been exhausted, the Court of Human Rights at Strasbourg "

THE COMPETENT SPANISH JUDICIAL AUTHORITIES!

 This needs to be challenged in light of the video (2 hours 45 mins  ) that has come from Brussels seminar relating to property rights and chaired by Diana Wallis MEP who is vice president of the European Parliament  (http://www.alde.eu/event-seminar/events-details/article/eu-property-rights-and-wrongs-37447/) , during which the EU commission refers to  "member state competence" and Mr A Walker QC makes reference to political pressure on enforcement timeframes.

Isn't the truth that there should not be "hopeless cases" with "victims" but protection according to the laws of the land within a member state? Doesn’t this lie at the heart of any civilised financial structure?

For those wishing to follow up on this point, may I suggest you direct your queries to diana.wallis@europarl.europa.eu

Now to your more recent posting and a higher level concern. With relation to the UK, do you see the UK Government failing to protect Bank savings, or are these now ring-fenced under the existing system of UK government-backed Financial Services Compensation Scheme (FSCS), albeit with limits of £85,000 per account? Is the inference that even this system is under threat given the euro crisis?.