There was a lot of hectic movement with governments around the world the last weeks to confine the disasters from betting / wild casino speculation within financial institutions. Approaches and road maps laid out (if any) are pointing to different directions even in the key G7 developed countries.
The U.S. – for example – first wanted to give absolute powers to the executive branch and the government – a move widely criticized and changed by the U.S. Congress in the debates following the first bailout plan.
France and the UK have taken another road and bailing out their banks by providing funds only against a collateral – meaning they are de-facto nationalizes key players in their finance industries. France even went a step further with President Sarkozy calling for the creation of national industry funds to stop the fire sales of key industrial players to overseas investors – an interesting step that found much applause with the European Parliament. If you think that further it might turn out that such a move could prove essential for the future of Europe. How otherwise would the conglomerate of states called Europe survive as a leading industrial area when most of its competitive advantages are owned by those it tries to compete with?
Notable of other industrialized countries are the moves of the Australian and the German governments.
While Australia did not create a bailout package for ailing banks and went straight to an economic stimulus package supporting homeowners and industry, Germany took the same route the Bush Administration once dreamt up for them but which was blocked by U.S. Congress twice.
Descriptions for the German EUR 500 Billion bailout plan range from putting the fox in charge of the hen house, over assuring that neo-liberal deregulation will survive with all its mistakes, to cover-up for mistakes of the leading politicians in power, to plain corruption, we would like to provide a 1.5 sentence description of how the German administration is currently gambling away the future of its people and a description in the form of a short parable.
1.5 sentence description:
The current administration including some of its ministers was instrumental in creating the mess in the financial industry and is now using the same consultants / lobbyists that before have written the laws (yes it went that far in Germany) to make such betting and casino finance legal a few years ago, the same who were the key figures in the biggest recent bankruptcies and are now putting those in charge together with the current board members of the banks to resolve the crisis with public funds as they see fit for themselves without any parliamentary or 3rd party control. To top the whole thing all moves will be declared confidential – not even the parliament is allowed to learn about it – and banks will be given the right to fake their balance sheets by putting fictional values up for the toxic waste they created and that are actually worth nothing.
I guess anybody who has a basic knowledge of economics and banking might immediately understand what the consequences from such acting will be for the country as a whole and the next generations of its people. But I’m sure there are already EUR millions in consultancy contracts waiting for those in charge once they retire from their public posts. And there is of course no link between such acting against the country’s interest and even against common sense and such payments in the future will certainly be fully justified by their experience. Or as one former German Under-Secretary of State recently put it when interviewed on why she received consultancy payments of more than Eur 8 million after retiring from her post – why are you bothering me, others have taken much more.
A gang of skilled bank robbers raid the biggest banks and strip them of all assets.
After their raids and while keeping all the swag one of the bank robbers calls the police and offers that – given their expert knowledge – they could create a commission with the objective to repair the damages – meaning to get the money back into the banks by putting up a one-time levy of EUR 10,000 from all citizens living in a 10 miles radius of one of the banks robbed.
The commission of the bank robbers is gratefully established by the police to rescue the banks. Due to the overall critical situation with all the robbed financial institutions the consultancy fees for each of the bank robbers in the commission is capped at EUR 100,000. The bank robbers further agree to devise plans how future bank robberies could be avoided. Only limited interest exists in this last topic by the police and the statutes of the commission suggest that such plans should be seen with a sense of proportion whatever that might mean.
Police, the banks, the media and also the citizens are now greatly relieved. The banks regained the trust of their customers and business can continue as-usual.
I’m sure you agree with us that such a plan would not provide any positive outcome except for the bank robbers of course. But that seems the way forward laid out by the German government and it’s highly praise throughout all mainstream media (and only there).
Common sense of course would immediately tell you that this can’t work … but then you might be one of those designated within that scam to pick up the bill.
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I guess everybody in the banking world around the globe has heard about the Lehman bankruptcy latest this Monday morning, everybody besides Germany’s largest government owned bank – KfW.
In an attempt to win the Darwin award for banks or by taking the name of the bank to literally (KfW – translated: Bank for Reconstruction), they transferred 300 Million Euros to already bankrupt Lehman during Monday. At the same time their government colleagues were closing the German Lehman subsidiary…
Much has been said this week about the so-called USD 700 Billion bail-out plan for banks by the current U.S. administration and finally the right question was asked in congress yesterday – How did you arrive at that USD 700 billion number…
Both Microsoft and the Mozilla Foundation today announced new versions of their popular web browsers. Both releases are primary targeted at web developers. The public release for Mozilla Firefox is due within November 2006 while Microsoft wants to roll out Internet Explorer 7 by the end of October to end users. Developers are strongly advised [...]
If your shouting days are through – Fred Kasulzke shouts for you! That’s how German/French songwriter and singer “Reinhard Mey” was singing in the 70s about the business idea of renting people for demonstrations and riots. Seemingly these days “claqueurs” are getting popular again in Germany particularly with the bureaucrats and stakeholders in the state backed German health system…