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Thread: EU banks in worse shape

  1. #1
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    EU banks in worse shape

    Typical EU hubris and arrogance comes back to bite them in the ass. Last week, the German Finance Minister was boasting that their banks were fine, our country was finished and that they didn't need a bailout package within the EU. He, along with many talking heads, praised the EU's increased regulation for steering them away from the "casino" mentality we have here in the States. It was just an "American problem". Well, only a few days later, the EU has bailed out no less than three big banks and lending facilities. And now there is talk about them introducing a bailout package for at least $500B. Not to mention, the UK, Ireland and especially Spain housing markets are in deep trouble.

    What a difference a few days make!

    http://www.washingtonpost.com/wp-dyn/co ... cmoduletmv

    I have to give credit to Nicholas Sarkozy, France's President. He has actually recognized that this is a global problem and hasn't put the blame squarely on us. He wants to be constructive on dealing with the issue, so kudos to France and their leader for taking a positive and leading role!

  2. #2
    Moderator Matt Molnar's Avatar
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    Re: EU banks in worse shape

    Should be VERY interesting to see how this first real test of the whole "Eurozone" concept plays out. Yeah they have a central bank, but they also still have to deal with the heads of 27 different countries and their finance ministers who have widely diverging opinions on what should be done. Many of the member countries have been enemies for hundreds of years, and even their most recent conflagration was over half a century ago, plenty of grudge-holding survivors and their children are still alive and voting. Not to mention that some of the banks are quite a bit larger than the countries they are based in...not too big to fail as they would be here, but potentially too big to be saved.

    On the bright side, this time none of them have any serious military to speak of, so the chances of war breaking out are pretty slim. :)
    Ladies and gentlemen, this is your captain speaking. We have a small problem.
    All four engines have stopped. We are doing our damnedest to get them under control.
    I trust you are not in too much distress. Captain Eric Moody, British Airways Flight 9

  3. #3
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    Re: EU banks in worse shape

    When Lehmans went down (apart from dragging down a lot US merchant banks) they also pulled down a lot of UK and european banks.

    3 out of the many big UK banks have needed financial support from the government, 1 went bust a few weeks ago and had to be nationlised, the government has so far pumped 400 billion (around $800 billion) in the city to stop a financial free fall.

    Iceland is now bankrupt, in Europe 3 of their big banks came close to going bust needed financial support from their governments, the stock markets have been going mad, unemployment in the UK is growing (as we are now in a recession), getting work is proving to impossible.

    Even funding for parts of the 2012 Olympic games is now under threat due the recession so things on this side of the Atlantic aren't easy.

    There is saying if America sneezes the UK gets a cold and thats true.

    To stop the mess the world is now in the "Wild Yuppies" need to brought in to line so they don't make the same mistakes again (which in the end has effected us all)..........

  4. #4
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    Re: EU banks in worse shape

    When Lehmans went down (apart from dragging down a lot US merchant banks) they also pulled down a lot of UK and european banks.

    3 out of the many big UK banks have needed financial support from the government, 1 went bust a few weeks ago and had to be nationlised, the government has so far pumped 400 billion (around $800 billion) in the city to stop a financial free fall.

    Iceland is now bankrupt, in Europe 3 of their big banks came close to going bust needed financial support from their governments, the stock markets have been going mad, unemployment in the UK is growing (as we are now in a recession), getting work is proving to impossible.

    Even funding for parts of the 2012 Olympic games is now under threat due the recession so things on this side of the Atlantic aren't easy.

    There is saying if America sneezes the UK gets a cold and thats true.

    To stop the mess the world is now in the "Wild Yuppies" need to brought in to line so they don't make the same mistakes again (which in the end has effected us all)..........

  5. #5
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    Re: EU banks in worse shape

    I think if they bailed out Lehman, we wouldn't be in this mess right now. Investors thought the Fed would come in and bail Lehman out like they did with Bear Stearns. The Fed thought that the market could handle a Lehman bankruptcy. Both were wrong and now we're in a huge mess because of this. Lehman's failure was exactly what caused the credit markets to freeze.

  6. #6
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    Re: EU banks in worse shape

    I think if they bailed out Lehman, we wouldn't be in this mess right now. Investors thought the Fed would come in and bail Lehman out like they did with Bear Stearns. The Fed thought that the market could handle a Lehman bankruptcy. Both were wrong and now we're in a huge mess because of this. Lehman's failure was exactly what caused the credit markets to freeze.

  7. #7
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    Re: EU banks in worse shape

    I agree with you, when Bear Sterns went bust it never caused the disaster which happened when Lehmans went down. When Lehmans went it sucked a lot of others down with it.

    In August there where 5 big US merchant banks, now only 2 exist (Goldman sachs and Morgan Stanley).

    It still can't believe how all this happened as you'd never think banks so big and powerful could go down.

    Now there is less choice for the consumer and less choice for some one who wants to work in a merchant bank.

    Looking back the government should have saved Lehmans but thats life.......

  8. #8
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    Re: EU banks in worse shape

    I agree with you, when Bear Sterns went bust it never caused the disaster which happened when Lehmans went down. When Lehmans went it sucked a lot of others down with it.

    In August there where 5 big US merchant banks, now only 2 exist (Goldman sachs and Morgan Stanley).

    It still can't believe how all this happened as you'd never think banks so big and powerful could go down.

    Now there is less choice for the consumer and less choice for some one who wants to work in a merchant bank.

    Looking back the government should have saved Lehmans but thats life.......

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