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| Notice the Swedish model - they made the bank owners pay |
Summary: U.S. federal and state regulators are taking a very close look at Europe’s biggest banks’ U.S. branches. SEC destroying evidence, S&P’s role in housing crisis investigated. Soros indirectly suggests China is propping up the Euro’s exchange rate.
Views: as we are still in the muddle through-phase and the costs of global banking crisis is obviously unsettled, it is a good idea to look at the historical fiscal costs of taking care of the bust banks. 15-25% would be my take on the final price tag.
Views: as we are still in the muddle through-phase and the costs of global banking crisis is obviously unsettled, it is a good idea to look at the historical fiscal costs of taking care of the bust banks. 15-25% would be my take on the final price tag.
EURO CRISIS
Today’s best: The European Central Bank as a lender of last resort – voxeu.org
There are no innocents in this story. All countries share blame.
Second-best: In Defence of PIGS – The Telegraph
“The ECB must be empowered to purchase distressed sovereign debt as the need arises, the EFSF must be able to issue Union-bonds to the scale required to relieve the ECB when required, and the link must be broken between single loans and national public debt.”
Eurozone crisis: Are we losing the patient? – voxeu.org
“In the absence of a sustainable policy solution, ECB buying is the only viable stopgap”
“How do you get the German taxpayers to write these checks? It may be easier politically to have the Germans bail out the ECB than the Greeks and the Irish, but that may ultimately be what happens, and the economic effects may be similar.”
Comments on yesterday’s UBS analysis and alphaville FT comments
How Eurobonds might “work” – Pragmatic Capitalism
China will defend the Euro, because it wants a viable alternative currency to the U.S. dollar. “There is a mysterious buyer that keeps propping up the euro.”
Soros: Crisis is not over – The Globe and Mail
FINANCIAL CRISIS
Matt Taibbi’s piece is politically probably the most important text in months
Is the SEC Covering Up Wall Street Crimes? – Rolling Stones
Taibbi on SEC’s Records Destruction Reveals How Deeply Entrenched Official Corruption Is – naked capitalism
On the SNB, Once more – Zero Hedge
GDP, housing, manufacturing, employment, retail sales, personal incomes, profits
7 things that make me worry – Pragmatic Capitalism
“There is no question that S&P incorrectly rated mortgage securities, but that was just their "opinion". This investigation is apparently focused on if the analysts wanted to downgrade the ratings, but they were overruled by managers. If so, S&P might lose their first amendment protection and then be open to lawsuits from investors.”
Report: U.S. Investigating S&P Ratings of Mortgages – Calculated Risk
Quelle Surprise! Standard & Poor’s Execs Diddled in Mortgage Bond Ratings (Updated) – naked capitalism
Dallas Fed’s Fisher states that the Fed should never enact such asymmetric policies to protect stock investors, believes FOMC colleagues share this view.
No more Bernanke Put? – the trader
EMERGING
“We have not owned a Chinese bank, and I don’t see owning one any time soon,” said Jain, who oversees about $15 billion, including three funds that beat 99 percent of peers this year, data compiled by Bloomberg show. “If you look at the accounting, I don’t see how anyone could put a penny there.”
Brazil’s middle class: poorer than you think – alphaville FT
OTHER
Natives are getting restless, or Ich bin ein Berliner
The Benz Burners Arrive: Protests Come To Germany As Arsonists Burn Down "Fat Cat" Cars – Zero Hedge
Why the rioters should be reading Rousseau – John Kay