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Wed Mar 27, 2013, 01:47 AM

 

Instead Of Doing His Job, Jeroen Dijsselbloem Has Given Us A Glimpse Of The Euro 'End Game'

http://www.businessinsider.com/dijsselbloem-reveals-the-euro-end-game-2013-3

"With one or two exceptions, comment and 'analysis' of the Cyprus situation have had a theme that authorities are 'stupid' and 'have shot themselves in the foot'," writes Porter.

But Porter isn't buying it.

"An immediate corollary of ruling out the “stupidity” assumption is that if we can see something, the authorities can see it too," says Porter. "We try to be quicker, and they might not all see it at once. But we have to assume they see it."

Here is the key point, from Porter, though: "And what we see (the difference from the authorities is we can also say it) is a situation well short of its defining moment ... we still see a banking system in deep disequilibrium, with a large number of banks making no money and with no prospect of doing so. We see the Cyprus bank holiday as a foreshock."

What does that mean? It means more bail-ins for Europe. It means everybody knows it has to be done in the long run, but nobody wants to say it in the short run.

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Reply Instead Of Doing His Job, Jeroen Dijsselbloem Has Given Us A Glimpse Of The Euro 'End Game' (Original post)
dkf Mar 2013 OP
Promethean Mar 2013 #1
dkf Mar 2013 #2
sendero Mar 2013 #3
Javaman Mar 2013 #4

Response to dkf (Original post)

Wed Mar 27, 2013, 04:57 AM

1. This looks like tremendously good news to me.

There is a lot of hewing and hawing in that article but the basics are this:

The Eurozone is forcing banks to take financial risks onto themselves instead of propping up failing banks. This is the opposite of the "bailouts" so famous in the US. They are making the banks take their own losses instead of covering them, letting the banks that can't be fiscally viable just die. Of course this is immensely controversial as business and banking leaders don't want to be responsible. They want to keep running their poor investment scams knowing the banks will be propped up by the government.

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Response to Promethean (Reply #1)

Wed Mar 27, 2013, 05:09 AM

2. Depends where your money is.

 

I wouldn't call it good or bad, more of a reality check.

Deposits have been sacrosanct, but it's a new world out there.

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Response to Promethean (Reply #1)

Wed Mar 27, 2013, 05:21 AM

3. Good..

... if you don't have any money in a bank.

Reality check for you - the DEPOSITORS had NOTHING to do with the failure of these banks and should not be forced to pay ANYTHING.

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Response to sendero (Reply #3)

Wed Mar 27, 2013, 10:44 AM

4. +1 nt

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