Behind Europe's Debt Crisis Lurks Another Giant Bailout of Wall Street

michaelr

Former Staff
Dec 2006
89,668
6,643
FEMA Region 10
Behind Europe's Debt Crisis Lurks Another Giant Bailout of Wall Street

The Street’s total exposure to the euro zone totals about $2.7 trillion. Its exposure to to France and Germany accounts for nearly half the total.


What did i say on a few threads? Those trillions that the banks are being paid to hoard will disappear? It doesn't take a rocket scientist here peeps. What do we get next? That too is easy, we get to replace the trillions, so the banks can hoard that.

This is no way to run an economy. But of course I think we all know that.

I wonder when people are going to stop being lead around like a fucking dog on a leash.
 

jackalope

Former Staff
Jan 2010
51,139
17,672
Maine
From your article:


It’s rumored that Morgan could lose as much as $30 billion if some French and German banks fail. (That’s from Federal Financial Institutions Examination Council, which tracks all cross-border exposure of major banks.)
$30 billion is roughly $2 billion more than the assets Morgan owns (in terms of current market capitalization.)

But Morgan says its exposure to French banks is zero. Why the discrepancy? Morgan has probably taken out insurance against its loans to European banks, as well as collateral from them. So Morgan at least feels safe.

Should it? Does anyone remember something spelled AIG? That was the giant insurance firm that went bust when Wall Street began going under. Wall Street thought it had insured its bets with AIG. Turned out, AIG couldn’t pay up.

Haven’t we been here before?

Republicans and Wall Street executives who continue to yell about Dodd-Frank overkill are dead wrong. The fact no one seems to know Morgan’s exposure to European banks or derivatives – or that of most other giant Wall Street banks – shows Dodd-Frank didn’t go nearly far enough.

Regulators still don’t know what’s happening on the Street. They don’t know whether Morgan is telling the truth. They have no clear picture of the derivatives exposure of giant U.S. financial institutions.
Which is why Washington officials are terrified – and why Treasury Secretary Tim Geithner keeps begging European officials to bail out Greece and the other deeply-indebted European nations.

Several months ago, when the European debt crisis became apparent, Wall Street banks said not to worry. They had little or no exposure to Europe’s problems. The Federal Reserve said the same. In July, Ben Bernanke reassured Congress the exposure of U.S. banks to European nations in trouble was “quite small.”

Now we’re hearing a different tune.

Make no mistake. Lurking here is another giant bailout of the Street. The United States wants Europe to bail out its deeply indebted nations so European banks don’t implode. And they don’t want European banks to implode because they don’t want the Street to crash again like it did three years ago.

One of the many ironies here is some European nations went deeply into debt bailing out their banks from the last crisis.

Full circle.

In other words, Greece isn’t the real problem. Nor is Ireland, Italy, Portugal, or Spain. The real problem is the financial system — centered on Wall Street.


Read more: Robert Reich (Follow the Money: Behind Europe's Debt Crisis Lurks Another Giant Bailout of Wall Street)

There is no way - NO way - the American people would get behind another Wall Street bailout.
 
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anonymous

Former Staff
Jun 2008
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Passing Through
Well, I can't really see anything that will save the Euro so I guess we are fucked. I am interested to see if the people will buy another bailout. With those sorts of numbers someone will be going homeless and hungry.
 

michaelr

Former Staff
Dec 2006
89,668
6,643
FEMA Region 10
Dec 2007
477
14
Jax beach FL
Well, I can't really see anything that will save the Euro so I guess we are fucked. I am interested to see if the people will buy another bailout. With those sorts of numbers someone will be going homeless and hungry.
No offense to you or Mike but defense subsidies in the form of US garrisons have undermined Europe and Japan to the point that their collapse on US withdrawal or even cutbacks has made this collapse inevitable.
 

anonymous

Former Staff
Jun 2008
10,578
2,873
Passing Through
No offense to you or Mike but defense subsidies in the form of US garrisons have undermined Europe and Japan to the point that their collapse on US withdrawal or even cutbacks has made this collapse inevitable.
That is true but we can no longer afford empire. Outta the coming chaos order will be found.
 
Dec 2007
477
14
Jax beach FL
That is true but we can no longer afford empire. Outta the coming chaos order will be found.
Well we will still need Naval and air assets to protect the left coast. If Mike's at a Pacific beach and an order comes out to evacuate to the great plains then he would have to cross the coastal, cascade, bitter root and rocky mountain ranges to get out of Dodge. That would be tolerably bad at best and slips rapidly downhill from there so there is empire and there is empire. Lightly inhabited islands in the Pacific that can act as speed bumps against invasion forces are a least bad plan.