I have already written about some City sentiment I heard yesterday.
The Leavers had another point in common. They agree Italian banks will begin failing soon.
And that Deutsche Bank has been waiting to slide into insolvency.
After which the French banking system looks to be pretty wobbly.
They were adamant that they did not want to be a part of these forthcoming failures, which they were sure would happen.
It seems that they may not have worked out counter-party risk and that being outside the EU in three years time will not change anything now.
The risk of an early autumn banking crisis does, however, at this moment look to be significant enough to take seriously.
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The banking crisis is ongoing -I suppose you mean ‘how long before it becomes explicit.’
> It seems that they may not have worked out counter-party risk and
> that being outside the EU in three years time will not change anything now.
It means we are one more step removed, so the begging bowl for bail out funds won’t come to our door. We’ll be last in line after the Eurozone countries, other EU members & IMF.
Remember the row over whether UK should contribute to Greek bailout bridging funds last year? In a real crisis, the EU must act before the patient dies. It won’t want for agreement from some incalcitrant member.
We may have to bail out our banks separately, but that is manageable (if depressing). This whole problem is caused by the Euro, the Eurozone needs to be responsible for its mess, and they need to get used to the downsides of their federal union.
It was already agreed we were not in any bail out
But that’s all history now
“We may have to bail out our banks separately”
Why?
Because they will suffer the counter party risk
Any day now, put the Maria Theresa Thaler’s under the mattress. Did you know that Deutsche Bank has a lien on the freeholds of most of Britain’s retirement flats?
Then the liens will be sold
But they can’t be called in if the borrower is not defaulting
Takes me back to the 70`s – there may be lots of empty premises to squat in a little while.
Capitalism is inherently unstable. In the 20th century there were 21 recessions in the US alone (http://www.cnbc.com/id/20510977). Nobody, therefore, should be surprised when another crisis occurs. Globalisation has inevitably made each new crisis worse simply because of the increased scale and reach of financial institutions. Capitalism is like the Hydra. Cut off one of its heads and another grows. Hence ‘rumours of its death have been greatly exaggerated’. Until a political Heracles can be found to deliver the fatal blow, it will continue to adapt and readapt to meet Capital’s needs – pretty much as predicted by Marx and then Minsky.
You are infinitely closer to the real world of big finance than me (just an armchair theorist) but until there is a government prepared to build a banking system for the people, nothing will change. Even after the 2007 crash, I can’t see a manifesto pledge to nationalise the banks being as popular as it should be. The best we could hope for is more regulation, which is never enough to eliminate its systemic weaknesses. Unfortunately both candidates for PM are umbilically linked to the City and its power structure.
The collapse of the Italian banks and the demise of Deutsche Bank have been on the agenda for several years. It used to be a favourite topic of Max Keiser. The fact that these terminally sick patients are still alive is, I guess, a tribute to the efficacity and ingenuity of Neo-liberal doctors who have a dispensary full of financial medication. But it seems they have little or no appetite for surgery.
The tragedy is that the UK, as an issuer of its own sovereign currency, could create a much more sustainable and communitarian financial industry as a building block for the future prosperity of the nation as a whole. But it’s not going to happen any time soon, is it? As Michael Hudson clearly explains, the parasite is eating the host from within. Tinkering with the status quo is pointless, other than attempting to mitigate against its worst excesses.
Do you know of any movement that has developed a realistic model that could replace the exisitng one in the event of what some see as an inevitable global collapse sometime within the next 10-15 years? Or is it simply time to retreat to an underground bunker? What happens when the cash machines no longer dispense cash? What would trigger a new grass-roots revolution that would carry on from where Occupy Wall Street appears to have left off?
While it will be ever more effective BandAid for the forseeable future, the longer-term is not looking good, is it? What should ordinary people do to protect themselves? Questions. Questions.
At this rate, there may be nothing left to Leave in three year’s time!
The good news is that the houses & the mortgages are both priced in £s, so the crash shouldn’t matter. On the one hand, as the economy short-circuits, you can see demand plummeting but thats going to mostly effect the places where people buy houses to live in, e.g. Rochdale or Ipswich. In Central London the falling £ is going to make real estate more affordable than ever to overseas investors so, regrettably, I don’t see the prices falling at all.
Crashes do matter: negative equity destroys lives and banks
Cheap UK housing might indeed become the world’s favourite investment
Brutally, I can see a lot of positives to house prices falling like a one-legged man doing the hokey-kokey.
Councils could cushion the worst effects by buying up negative-equity houses, letting the family stay there but with the proviso that the properties were, from now on, social housing. I, obviously, don’t want to see families thrown out on the street.