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Wed Jan 9, 2013, 07:31 PM

 

Europe's Scariest Heatmap



http://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmap

10 replies, 1069 views

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Response to dkf (Original post)

Wed Jan 9, 2013, 07:33 PM

1. Energy costing more, climate change reducing crop yields, governments going bankrupt...

 

The kids are restless.

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Response to dkf (Original post)


Response to devilgrrl (Reply #2)

Wed Jan 9, 2013, 07:40 PM

3. Well I wasn't thinking of it that way til you pointed it out.

 

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Response to dkf (Reply #3)

Wed Jan 9, 2013, 07:48 PM

4. Wonder what this map looked like

before American bankers decided to tank the global economy.

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Response to Sekhmets Daughter (Reply #4)

Wed Jan 9, 2013, 07:55 PM

5. Spain had a huge housing bubble of their own so I imagine their construction was booming.

 

But their debt was in control til the bubble burst.

Housing bubbles hit young men hard as construction gets hit.

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Response to dkf (Reply #5)

Wed Jan 9, 2013, 08:05 PM

6. Spain yes,

but look at the rest of Europe....Wall St has so much to answer for...I'm amazed anyone still talks to us.

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Response to Sekhmets Daughter (Reply #6)

Wed Jan 9, 2013, 08:09 PM

7. Oh Europes banking system might be more to blame than ours.

 

All the LIBOR scandals centered there. Moreover most of the rogue type operations were in the UK subsidiaries. AIG, MFGlobal, Lehman... All overextended thanks to UK laws.

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Response to dkf (Reply #7)

Wed Jan 9, 2013, 08:31 PM

8. Rate fixing the LIBOR did not cause the credit crisis.

The very first "derivative" contract was written by someone working for JPM, in NYC. AIG Financial Products was headquartered in Fairfield, CT.

AIGFP's trading in credit derivatives led to enormous losses. These losses at AIGFP division essentially bankrupted the entire AIG operation, and forced the United States government to bail out the insurer. Under CEO Edward Liddy, the decision was made to unwind AIG Financial Product's entire book of business. Gerry Pasciucco, a vice chairman at Morgan Stanley, who was not involved with AIG FP when it made its catastrophic bets, was selected to manage the unwinding of the portfolio in October 2008, after the company had effectively failed and been taken over by the Federal Reserve.


Besides, what does the geographical location have to do with anything? JPM lost billions when a trader in the UK made a series of bad trades just last year. It is an American bank and it is responsible for what the subsidiaries do. It doesn't matter how lax the UK laws were, the bank(s) were American banks...selling derivatives whose value they didn't know and had no way of ascertaining.

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Response to Sekhmets Daughter (Reply #8)

Wed Jan 9, 2013, 08:42 PM

9. When they are in the UK they operate under UK laws.

 

Thus it was the UK subsidiaries that got in trouble.



AIG's Small London Office May Have Lost Big

JAY SHAYLOR, LAUREN PEARLE and TINA BABAROVIC
3/13/09, 1:04 PM EDT

Ground zero for AIG's spectacular implosion, which has soaked up more federal bailout money than any other entity, appears to have been a small London branch office that may have put as much as half a trillion dollars at risk.

The disastrous deals were built up in a decade and, when the crisis hit, the man who ran the unit for the last eight years retired after making $280 million for himself and leaving with a $1 million-a-month consulting contract.

"AIG financial products was the core, the hottest point of the global financial crisis," freelance investigative reporter Peter Koenig told "Good Morning America" today. "It was the epicenter."

The group's traders "found a crack in the system that was unregulated," Koenig told "GMA."

http://abcnews.go.com/Business/t/story?id=7045889&page=2

Has London Become The Epicenter Of Financial Trading Disasters?

The biggest recent trading scandal to take place in London involved American International Groupís Financial Products unit. AIGFP had a large operation in London, where its leader, Joseph Cassano, engaged in trading that brought down the entire company and was seen as so threatening that it prompted the U.S. government to provide the giant insurer a $180 billion bailout.

Britainís financial regulator, the Financial Services Authority, did not oversee AIGFPís London operations because the unit was deemed to be an internal treasury operation of AIG. As a result, the unit was effectively regulated by the U.S. Office of Thrift Supervision, which operated as part of the U.S. Treasury Department.

The Office of Thrift Supervision is now part of the Office of the Comptroller of the Currency, also part of the Treasury Department, that is the regulator for JPMorganís chief investment office, including its operations in London. My colleague, Robert Lenzner, thinks there is no practical way for the OCC to monitor big derivates trades taking place in London.

http://www.forbes.com/sites/nathanvardi/2012/05/14/has-london-become-the-epicenter-of-financial-trading-disasters/

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Response to dkf (Reply #9)

Thu Jan 10, 2013, 08:38 AM

10. you missed the point...

The banks and AIG made the decision to open branches in the UK and take advantage of the more lax rules. Responsibility lies with those who made that decision. If you want to buy into the Wall St apologists meme you are, of course, free to do so.

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