The Eurozone crisis/break-up may crash the system?

[energy-village]

The Guardian - 13/06/12


Eurozone crisis: Banking sector could be 'wiped out' if weakest nations leave

Analysis by Credit Suisse estimates that up to 58% of the value of Europe's banks could be wiped out by the departure of the 'peripheral' countries.

Article continues ...

For every yin there's a yang.

Holy Camoly!

[SleeperService]

The Guardian - 13/06/12


Eurozone crisis: Banking sector could be 'wiped out' if weakest nations leave

Analysis by Credit Suisse estimates that up to 58% of the value of Europe's banks could be wiped out by the departure of the 'peripheral' countries.

Article continues ...

For every yin there's a yang.

Holy Camoly!

Doubly so when you realise that 58% doesn't cover knock-on costs arising through third party lending. So British bank lends to French bank lends to Greek bank, the first isn't covered completely. IMHO the real figure will be near 70%. Then we have the knock ons from the futures and derivatives markets that will also shrink.

Enjoy the Collapse because what comes after will be Horrible for most

[Aurora]

Enjoy the Collapse because what comes after will be Horrible for most

"Tickets please"

[energy-village]

Searches unsuccessfully for popcorn emoticon.

[frank_begbie]

When Europe becomes desperate enough, along will come a Knight in Shining Armour with a plan that will save us all.

We will all welcome him with open arms.

[Aurora]

When Europe becomes desperate enough, along will come a Knight in Shining Armour with a plan that will save us all.

We will all welcome him with open arms.

Let's hope he's not sporting a stupid moustache this time.

[emordnilap]

When Europe becomes desperate enough, along will come a Knight in Shining Armour with a plan that will save us all.

"with a plan to save us all", not "will". Subtle difference.

[Aurora]

The Independent - 16/06/12

World braces for worst case scenario as Greeks cast their votes

Europe offers banks a blank cheque should election trigger withdrawal from the euro.

Article continues ...

[SleeperService]

That's pretty much the last resort isn't it?

Seems as if the Greek result is accepted as a No to Austerity and now they're trying to contain the fallout. I still think they'll hold things togeather here until after the Olympics but my confidence in that statement is falling

[UndercoverElephant]

Except even now, at the 11th hour and 59 minutes, the lies are still flowing.

The head of the European Central Bank, Mario Draghi, signalled that he is ready to enact emergency lending to stabilise the financial system if the election result pushes the country decisively towards the exit door, something that could prompt widespread financial panic. "The eurosystem will continue to supply liquidity to solvent banks where needed," said Mr Draghi.

The Governor of the Bank of Japan, Masaaki Shirakawa, said that central banks around the world will be "carefully watching" the financial markets after the vote. In the event of meltdown, central banks would be expected to allow all major financial institutions under their jurisdictions to borrow unlimited amounts of cash in order to avoid a cascade of bank failures.

The whole f******g problem is that the banks are NOT SOLVENT. This is not a f*******g "liquidity problem". It's a solvency problem.

Another journalist gets a black mark from me.

ETA: reading further, more poor quality journalism:

What if Greece does not get its bailout funds?

It would not be able to redeem its bonds and will default. The country's banks will be in big trouble. If the ECB cuts Greek banks off from the European financial system, the country will have no reason to remain in the single currency.

Poppycock! They'd have plenty of reasons to remain in the single currency and have shown absolutely no indication whatsoever that they would choose to leave it. The only people who have ever spoken seriously about Greece choosing to leave the euro aren't Greek.

[UndercoverElephant]

That's pretty much the last resort isn't it?

Seems as if the Greek result is accepted as a No to Austerity and now they're trying to contain the fallout. I still think they'll hold things togeather here until after the Olympics but my confidence in that statement is falling

I don't even understand what is being proposed (again). Are the central banks prepared to provide liquidity to solvent banks who have cashflow problems? Or are they prepared to bail out hopelessly insolvent banks? This is the difference between keeping the system together while it goes over a bump in the road, and pouring unlimited amounts of cash down a bottomless black hole. Which is it??

The one thing that is completely obvious is that the politicians who supposedly run this world care only about banks. Ordinary people don't matter.

[SleeperService]

Short answer to your question. Both at least in the short term.

It's almost impossible to tell which banks are viable from those that aren't at the moment. Any test that has showed a bank's viability so far has subsequently been shown to be wrong. IMHO we're looking at a shrinkage of about 70% in the value of bank holdings. I can't see any of the big retail banks taking that and surviving, more to the point I can't see any country being able to bail out their national banks.

Main feature starts sunday

[UndercoverElephant]

It's getting hard to keep up with the developments. In the last 24 hours we've had Gordon Brown saying Italy and France are close to needing bailouts, Angela Merkel attacking the French for "allowing their economy to stall", the Spanish PM calling for Greeks to vote to stick with the euro (but not saying who they should actually vote for) and central banks all over the place promising to print however much money is asked for.

What I want to know is this: do the people who are running the EU actually have a plan for what Europe is going to look like when this is all over, or have they really spent the last four years failing to make any contingency plans for the inevitable disaster that is about to happen? Because I rather suspect the answer is the latter. I think their only plan, throughout, was to try to save the status quo by any means possible, and that now they may have no more idea where this thing is going than you or I do.

[Lord Beria3]

Things are starting to crack up in the eurozone - amazing that the german leader is attacking the French economy. Whatever happened to the great Franco-German 'motor' in Europe?!

[snow hope]

All I can add, is that it seems clear we have entered the End Game.