Domino banking

Why was Greece not allowed to abandon the Euro and create its own currency? For the same reason that the charade of "stability tests" is played to convince us that banks are sound and there will be no more bailouts. But the "wheels are coming of the wagon". Italian banks are failing and Deutsche Bank is bankrupt.

If Greece had defaulted on its debt, French and other banks which held its bonds would have collapsed. Banks are dependent on each other in this ba(n/r)king mad integrated world - one goes and they all go.

“We’re Not Dangerous”: Deutsche Bank’s Chief Risk Officer by Wolf Richter
So Deutsche Bank, unlike Monte dei Paschi, isn’t collapsing at the moment. But investors are not entirely convinced. Its shares closed at €12.00 on Friday and are barely up from their multi-decade low of €11.38 on July 7. But there’s no reason to worry about a taxpayer bailout.

We all live in fear of the inevitable collapse but why? Nothing of any real value will be destroyed. Money is a fiction created out of nothing. We can step aside and do things differently. Let 'em go, like Iceland.

Iceland Plans To Create Its Own Money by Carol Adl
Can’t see commercial banks in the western world be too happy with this. They must be contemplating wiping the island nation off the map. If accepted in the Iceland parliament, the plan would change the game in a very radical way.

It worked for Guernsey which was destitute after the Napoleonic Wars.

Guernsey's monetary experiment by Louis Even


0 #5 Clive Menzies 2016-08-03 17:35
The Adam Smith Institute "The stress tests lack credibility because of conflicted objectives, and because political pressures on the Bank and the Bank's own institutional self-interest create incentives to engineer a pass result.
"The stress tests are also counterproducti ve in that they create new systemic risks that are invisible to everyone's risk management systems."
0 #4 Clive Menzies 2016-08-03 17:20
Roger sent through the following link in response to today's Daily Pickings:

Who spawned this cruel little bastard coin? I called its parent, Professor Robert Mundell.

Mundell is known as the Father of the Euro. The Euro is often spoken of as a means to unite post-war Europeans together emotionally and politically and to give this united Europe the economic power to compete with the U.S. economy.

That's horseshit. The Euro was invented in New York, New York, at Columbia University.

Professor Mundell invented both the Euro and the guiding light of Thatcher-Reagan government, "Supply Side Economics" or, as George Bush Sr. accurately called it, "Voodoo Economics."

Reagan-Thatcher voodoo and the Euro are two sides of the same coin. (Ouch! Some puns hurt.)

Like the Iron Lady and President Gaga. the Euro is inflexible. That is, once you join the Euro, your nation cannot fight recession by using fiscal or monetary policy.
0 #3 Clive Menzies 2016-08-03 17:00
Quoting Janos Abel:
A simple but practical advice,
but what are ADRs?

'American Depositary Receipt - ADR'
American depositary receipts were introduced in 1927 as an easier way for U.S. investors to purchase stock in foreign companies. Non-U.S. companies also benefit from ADRs as it makes it easier to attract American investors.
0 #2 Janos Abel 2016-08-03 16:40
A simple but practical advice,
but what are ADRs?
0 #1 Nigel Beynon 2016-08-03 08:34
If I learned anything during the Great Financial Crisis it is to listen to the price, not the pundits. Deutsche's ADRs are trading at 8% of their peak value i.e. down 92% from the top.

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