Looks like someone is beginning to panic.
President Barack Obama, who was swept into office amid a financial crisis, is trying to avoid being swept out by one.
Obama administration officials are stepping up efforts to push Europe to quell an escalating debt crisis that poses serious risks to the U.S. economy just five months before the presidential election.
U.S. officials are trying to convey lessons from the 2008 global crisis to ease Spain's debt troubles before they cause more financial turmoil and harm to the world global economy. In private meetings, they are urging officials in the 17-nation euro zone to take swifter action to calm markets, reassure depositors about their banks' health, and prevent some of Europe's largest countries from suffocating under high borrowing costs and weak economic growth.
A key lesson from the crisis, U.S. officials say, is act quickly and decisively to stabilize the financial system and prevent investor panic.
For instance, U.S. officials want Europe to use the continent's rescue fund now around 700 billion ($866 billion)to provide assistance to governments struggling with soaring borrowing costs. Allowing the rescue fund to directly recapitalize banks, instead of forcing the struggling governments to borrow first from the rescue fund, would help prevent bank failures and enable the banks to continue lending, which would help support economic growth, the officials believe. Under this approach, the governments wouldn't have to boost their own debt loads by borrowing from the fund.
The U.S. channels much of its advice through the International Monetary Fund, in which it is the largest shareholder. The IMF has been urging Europe to use the rescue fund for that purpose, but the idea is opposed by Germany and other euro-zone nations.
The U.S. and IMF urge Europeans to move more boldly toward tying their national economies more closely together.
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Spain's deputy prime minister Soraya Saenz de Santamaria said Thursday that U.S. Treasury Secretary Timothy Geithner pledged to work with Madrid in its fight to fix its escalating banking crisis.
Spain's No. 2 official said Geithner "has signalled that we're all working together in the same direction and that we have to find a solution for the banks."
#3
That sucking sound sounds like a roar now. I hope they take out the trash after they are swept out. The klingon's, lifer government types and so on.
#4
Saw this post "The Short Sellers Association (SSA) has just started a super pact for the re-election of Obama. In return ,the Obama administration has promised to continue blocking all attempts to reinstate the up-tic rule. No promises on tanking the economy though his record speaks for its self. All short sellers are encouraged to contribute a portion of recent gains".
Even in the worst of times some make good money.
Many have done well because of this administration. Crisis created means opportunity.
#6
...well, as long as you intervene to avoid the natural destruction in a free market place, you just, sort of putter down the road with the same lame institutions and their campaign contributors and special interests operators leaching on the back of everyone else, one self inflicted crisis to another.
#7
Have been reading about suspicions that the Fed is ramping up to bail out the European banks to save the Euro due to the assumed impact of a Euro bank run on 0's campaign.
#10
Ok - thanks. After the Fiscal Compact proves its futility, fewer countries may use the euro as their currency. But it doesn't need to be "saved." I could see some sneakiness via the IMF. Otherwise, I'd be inclined to call bull, because I just can't see what the rationale would be.
#11
I thought our best and brightest have already advised Spain and Greece on how to flip their debt?
Didn't Lehman Bros and JP Morgan/Chase and Gouldman Sucks all do a land office business in crazy crap financial schemes and shinnanegans with the EC?
I think the entire world financial crisis is a product of our nonsensical MBA programs at Harvard, U of Chicago, and Yale. Those leftie infested faculties have pumped a million miles of horse crap up the butts of nearly two generations of unethical twits in pinstriped suits.
PS is Legarde a relative of Janet Reno, Are we sure it is a woman?
Posted by: Bill Clinton ||
06/01/2012 14:09 Comments ||
Top||
#12
RJD,
Where I first saw this was back in Dec. & Jan. Apparently the Fed is printing money to swap for Euros and the Euros are using the dollars to bail out their banks. This was from the WSJ. Apparently since this is a "swap" and not a loan there's no need to really account for it.
Ron Paul, (yeah I know but he IS a Congress critter) is calling for his committee to investigate this funny number work as of this month I think that was also WSJ via another site. Supposedly the EU is getting this service for .5% rather than having to go to our over-capitalized banks and paying 1%-2%.
Some other mentions of funny business with the IMF.
#13
Saw this post "The Short Sellers Association (SSA) has just started a super pact for the re-election of Obama. In return ,the Obama administration has promised to continue blocking all attempts to reinstate the up-tic rule. No promises on tanking the economy though his record speaks for its self. All short sellers are encouraged to contribute a portion of recent gains".
Even in the worst of times some make good money.
Many have done well because of this administration. Crisis created means opportunity.
'Miss White' (Inside Man): "When there is blood in the streets, buy property."
Oddly enough, the wife and I took said advice last year. Sold our old place and bought a new one in a short sale. (see also: lemons and lemonade)
#14
Thanks for the follow-up AlanC. I'd be interested to know who is on the European end of the swaps - banks? governments? - but swaps and favorable interest rates do not = bailouts. Ron Paul is a kook when it comes to everything else, but I am glad he is watching like a hawk. Someone has to.
#15
RJD, I won't get into semantics cause I don't know finance that well, but, something about stinky fish comes to mind.
As I understand it the swaps were with the ECB, BUT, given the weird EU banking system I won't swear to it. I'm pretty sure that the individual European gov'ts are NOT involved, this is all the EUSSR.
#16
Central banks generally only do business with other central banks (Fed, ECB), and give the discount rate. Still, yes, the European banking system is absolutely byzantine, which the euro made ten times worse. E.g., the ECB can't print money as the Fed can. Each member state prints their own euros (a BIG reason everyone is panicking over Greece.)
I agree, I think it's safe to assume there's a fish rotting in there somewhere. I just sought clarification.
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