Here are the the predictions of a little establishment Brit creep. These are based on the crazy idea that only someone who views money from the same perspective of the Bank of England has any right to manage the banking system of a nation.
What happens when Greece defaults
By Andrew Lilico May 20th, 2011
It is when, not if. Financial markets merely aren’t sure whether it’ll be tomorrow, a month’s time, a year’s time, or two years’ time (it won’t be longer than that). Given that the ECB has played the “final card” it employed to force a bailout upon the Irish – threatening to bankrupt the country’s banking sector – presumably we will now see either another Greek bailout or default within days.
What happens when Greece defaults. Here are a few things:
- Every bank in Greece will instantly go insolvent.
- The Greek government will nationalise every bank in Greece.
- The Greek government will forbid withdrawals from Greek banks.
- To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law.
- Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting)
- The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting 0n 50 per cent or more of all Greek euro-denominated debts.
- The Irish will, within a few days, walk away from the debts of its banking system.
- The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn.
- A number of French and German banks will make sufficient losses that they no longer meet regulatory capital adequacy requirements.
- The European Central Bank will become insolvent, given its very high exposure to Greek government debt, and to Greek banking sector and Irish banking sector debt. moreBut this is what is really happening in the real world. Governments who listen to the extreme neoliberal prescriptions are turned out. Of course, the very idea of a neoliberal Socialist is so absurd that it is strange these guys were ever elected to anything in the first place.
Spain’s Socialists suffer worst electoral defeat in 30 years
Spain's ruling Socialist Party suffered a humiliating defeat in Sunday’s regional elections, with their worst electoral outcome in over 30 years, according to preliminary results.
AFP – Spain's ruling Socialists suffered thumping losses in local elections Sunday as protesters vented outrage over the highest jobless rate in the industrialized world.
Support for Prime Minister Jose Luis Rodriguez Zapatero's party crumbled in the face of the beleaguered economy and massive street protests, a grim omen for 2012 general elections.
With 63.37 percent of the municipal ballots counted, the Socialists had just 27.85 percent of the national vote compared to 36.86 percent for their conservative opponents in the Popular Party.
Grinding in the humiliation, Socialists were set to lose Barcelona, a city they have run since the first city elections in 1979, four years after the death of General Francisco Franco, an exit poll said.
"We think we are facing a difficult night and a very clear malaise among Spanish people, which we perfectly understand," Socialist Party election committee spokeswoman Elena Valenciano said. moreThe day of reckoning is sneaking up on USA's MOTUs. They have gotten themselves in messes they cannot escape (but that doesn't stop them from trying.)
A Low Bid for Fixing a Big Mess
By GRETCHEN MORGENSON May 14, 2011
SO the feds finally got one: Raj Rajaratnam, the hedge fund tycoon, is going down for insider trading.
Just don’t think for a moment that this victory for prosecutors will be keeping the high and mighty of finance up at night. No, some giant financial institutions have a bigger worry — namely, how to make the foreclosure fiasco go away.
As the Rajaratnam verdict captivated many on Wall Street last week, the institutions that service about two-thirds of the mortgagesin this country offered to pay $5 billion to settle allegations about robo-signing and other shady practices that quick-step troubled borrowers out of their homes.
That figure is a fraction of the $20 billion that state attorneys general had apparently floated. If regulators accept the lowball offer, perhaps that would be because they haven’t dug deep enough.
Because evidence of extensive and abusive servicing practices does in fact exist. It is piling up at the offices of the United States Trustee Program, the arm of the Justice Department that monitors the bankruptcy system. Over the past six months, the trustee has drawn material from 95 field offices covering 88 judicial districts. The findings should dispel any notion that toxic servicing practices were atypical or have done no harm.
Clifford J. White III, director of the executive office of the United States Trustee, discussed some of the findings in an interview last week. But before we recount the ugly details, it’s worth noting the immense pushback the banks have mounted against the trustee office.
Banks have repeatedly tried to thwart the program’s actions, filing lawsuits and court motions to prevent officials from compiling evidence. Never mind that part of a trustee’s job is to investigate possible improprieties in foreclosures to determine if they are poisoning the bankruptcy system.
“We have faced consistent opposition by all of the major servicers,” Mr. White said. “We are currently facing 200 motions to quash our discovery requests. We also are facing upwards of 20 appeals either in district courts or in circuit courts.”
Those pushing back include Bank of America, Citigroup, G.M.A.C., JPMorgan Chase and Wells Fargo, he said. more