EU Leaders Meet. Ordinary Europeans Weep. Bankers Celebrate.
The leaders of EU countries have successfully confronted the Greek Crisis. The crisis of 11 million Greeks being ground down into national penury, their economic futures taken away? Oh, no. Why bother about that? The crisis that EU leaders successfully confronted was the possible lose of a lot of money by banks that had loaned money to Greece.
It was important that this challenge be met because if it weren’t, there could be horrible spin-off crises in places like Ireland, Spain and Italy. Am I referring to the fact that a bank-sponsored real estate bubble that popped is making economic life in Ireland so much more difficult for so many more of its people? That Spain has an unemployment rate of more than 20 percent? That Italian workers and pensioners will have to take crushing hits?
Oh no. Why worry about things like that? The crisis here that EU leaders set about meeting was that banks that loaned money to these countries might have losses far greater than their Greek losses.
By wait, you say. This agreement reached by EU leaders requires banks to take a 50 percent “haircut,” to take voluntary write-offs of 50 percent. Doesn’t that mean that banks are going to share the pain of the tens of millions of citizens whose economic lives will be so severely diminished because of the agreement reached by EU leaders?
Well, not exactly,
Because these voluntary write-offs will only come about after the banks are “recapitalized” to the full extent of their loan losses. The money for this recapitalization will come from European governments in diverse ways, or from new investment, which will come about because EU governments in diverse ways will be guaranteeing investors against losses.
European sock markets soared on the news, rose by as much as 6 percent. Led by bank shares. The Dow in this country rose 3 percent. Led by bank shares. German working people put up the money so huge numbers of their fellow Europeans could experience woeful austerity in order for the banks and richly compensated bankers could once again wax fatter than ever.
Golly. Makes you wonder if maybe all those Occupy Wall Streeters might actually have some good reasons to be protesting.
More from this writer at wallstreetpoet.com.
9 Responses to “EU Leaders Meet. Ordinary Europeans Weep. Bankers Celebrate.”
It is written in stone somewhere, that no banker shall miss a meal in times of woe.
We recently suffered the worse financial crisis in decades. Most of our key economic indicators have not recovered. People are out of work & losing their homes.
Would you like a repeat of that? I sure wouldn’t. There is a still a definite possibility it’ll happen again thanks to sovereign debt. Avoiding it should be a priority
Why?
Wall Street is throwing a party for itself, the rest of us are losing our jobs, houses and pensions. Let Wall Street, the banksters and the rentier get a decent haircut so that they too can enjoy the finer points of the recession.
Misery loves company. We, the 99% could use a little company.
There is a new bill bopping around the Senate I believe that basically is cutting funding for researchers salaries. So while our government does all it can to keep Wall Street salaries at 1M+ a year, they are also trying to cut the salaries of those trying to cure cancer.
Speaking as one of those who used to work ‘trying to cure cancer (or other things–AIDS actually)’ I can honestly say that most of the research is done by pharmaceutical companies, not government research grants. While I detest the salaries that the banksters have finagled for themselves over the past 30+ years, I do not blame the banksters–I blame the voters!
If we did not put in R. Reagan and his “Government is the problem” cohorts the banks, credit unions, investment banks, and insurance companies would not have been deregulated. What kind of idiots would invite the ‘Great Depression’ era failures that occurred again in 2008? The congress not only repealed Glass-Steagall but also the legislation that was created after the 1907 collapse!
So, what has been done to offset these idiocies? Answer: Dodd-Frank, i.e. the bill that has gotten one Republican presidential seeker to say that the two who created it should be arrested for treason! Why? Because it would partially (but only in a very small amount due to lobbyist intervention) reign in some of the abuses of the 2000′s.
“most of the research is done by pharmaceutical companies, not government research grants.”
that is not the case. bigpharma cannot afford to do basic research. They rely on uni scientists to do their basic science r&d.
The NIH did a report on private funding by medical class and it showed that for the most part, NIH funding matches industry funding…and that is just the NIH. Add in CIRM AHA ect… and public funding and research done at universities and research institutes is much greater than what is done in the private sector
and a side note…reports about the meeting are finally coming out and it looks like Merkel did what Obama couldn’t do..
she told them to take the 50% hit or there is no deal…she was willing to roll the economic dice and let them go bankrupt.
She may be boring, but she is a bad chick.
Isn’t it true that pharmas and startups can take the federally funded research, apply it, develop drugs from it, and patent them? ($$$) That has been reported.
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