Okay, so they're at it again. These people seem to be uneducable. http://www.ft.com/cms/s/0/ca979904-2216-11df-98dd-00144feab49a.html?nclick_check=1
Reports are increasing that the banks have worked out a new scam to earn lots of virtual money by a particularly vicious sort of manipulation, thereby endangering the still terribly fragile recovering world economy. The background is pretty clear. Firstly, over many years, they lent Greece far too much money and then helped the Greeks cook their books so that they could be admitted to the euro zone. Secondly, as a result of the crisis, the Greek economy goes belly-up. The Euro-zone members are playing a very sensitive scenario to try to sort things out, putting the Greeks under massive pressure to deal with their current-account deficit, while at the same time signalling that they are not - in the end - going to let the Greeks go down the tubes and take the euro with them. This is sensible. The last thing the world needs now is a crisis in confidence in the euro. Thirdly, the big banks know this (organisations like Goldman Sach's and our old friend, Deutsche Bank). They also know that the European Central Banks and the major European economies, particularly the Germans, will do almost anything to keep the euro basically stable. So, are they doing everything possible to support this? Are they what? What they ARE doing is pushing down the costs of Greek bonds, while at the same time, through derivative deals, betting that the Greece is going to default and, basically, insuring their loans against this scenario, and then dealing with these insurance "policies" (so-called credit default swaps). This is, as one German commentary I read, comparable to insuring your neighbour's house against fire, and then playing around with gasoline and matches. They seem completely oblivious to the fact that this is setting the world economy up for a financial crisis 2.0, with Greece, on a national scale, playing the role of Lehman Bros. Or just betting on the fact that the national economies, which bailed them out of the last crisis with thousands of billions of taxpayers money, will go on throwing money into Greece (which they, the banks, will promptly vacuum up) in order to stop this happening. It's high time they were dealt with. Francis -- You received this message because you are subscribed to the Google Groups ""Minds Eye"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/minds-eye?hl=en.
