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Hit The Siren

Massive reaction to the reality that the world’s big banks are bankrupt, and will be forced to admit it if the euro zone collapses: Shares jump as central banks try to ease financial woes

Global stock markets surged as some of the world’s big central banks launched plans for co-ordinated action aimed to support the financial system.

Wall Street’s Dow Jones index saw its biggest gain since March 2009, rising 4.2%, after jumps on European bourses.

It came after the US Federal Reserve, European Central Bank, and the central banks of the UK, Canada, Japan and Switzerland acted to improve lending.

Their move includes making it cheaper for banks to buy US dollars.

When banks are in trouble from their fraudulent loans and ‘gambling losses’, there is no discussion of ‘moral hazard’ or ‘offsetting with cuts’, the money is just shoveled at them, and the management continues to get obscene compensation packages for failure.

If the money was passed out to the 99%, they would spend it and get the economy moving again, but, no, they have to suffer so bankers can have limos.

4 comments

1 Badtux { 11.30.11 at 11:53 pm }

One of my co-workers has an aluminum soda can on his cubicle wall that has a circle of paper around it with Euro symbols on it. “Taking up a collection in euros?” I asked him. “Nope. That’s the can that the Eurozone leaders keep kicking down the road rather than solve the Eurozone’s banking problems.” Somehow I suspect that Frau Merkel is running out of road to kick that can down…

Of course, you could create a similar can with dollar signs on it, because the American banks are no more solvent in reality…

– Badtux the “We’re running out of road!” Penguin

2 Bryan { 12.01.11 at 12:34 am }

It sounds like the other central banks have been doing a bit of pounding on the ECB in attempts to make it act like a central bank. If it finally steps into that role, then half the battle is won, but that still doesn’t fix the basic problem of bank solvency.

No one wants to admit the real situation with the banks, and finally force them to separate their gambling divisions from their real, useful purpose as commercial banks.

3 Steve Bates { 12.01.11 at 10:11 am }

“No one wants to admit the real situation with the banks, and finally force them to separate their gambling divisions from their real, useful purpose as commercial banks.”

So… is the Glass-Steagall half full, or half empty?

4 Bryan { 12.01.11 at 4:10 pm }

It was dropped during the Clinton era and broke. 😉