Sunday, February 1, 2009

The ECB draws up their bad bank plans

The ECB is drawing up guidelines on their bad bank, and their idea is to use some form of insurance.

"Insurance" just means that the problem is too big for the European governments. It's just another variety of the "Don't Ask, Don't Tell" plan of the bank's toxic assets.

So Europe wants to be play "let's pretend!" The ECB is formulating guidelines so the bailout plans are similar from one country to another.

But in Europe, the protesters are taking it to the streets:

France paralysed by a wave of strike action, the boulevards of Paris resembling a debris-strewn battlefield. The Hungarian currency sinks to its lowest level ever against the euro, as the unemployment figure rises. Greek farmers block the road into Bulgaria in protest at low prices for their produce. New figures from the biggest bank in the Baltic show that the three post-Soviet states there face the biggest recessions in Europe.

It's a snapshot of a single day – yesterday – in a Europe sinking into the bleakest of times. But while the outlook may be dark in the big wealthy democracies of western Europe, it is in the young, poor, vulnerable states of central and eastern Europe that the trauma of crash, slump and meltdown looks graver.

Exactly 20 years ago, in serial revolutionary rejoicing, they ditched communism to put their faith in a capitalism now in crisis and by which they feel betrayed. The result has been the biggest protests across the former communist bloc since the days of people power.
Europe's time of troubles is gathering depth and scale. Governments are trembling. Revolt is in the air.

You also had wildcat oil strikes across the UK:

The government called in mediators from Acas last night in an urgent attempt to end the dispute over the exclusion of British workers from construction contracts which led to a wave of wildcat strikes across the country yesterday.

You have had riots in Latvia, Lithunaia, Sofia, Iceland and Bulgaria, and borders blocked in Greece and strikes and protests in France.

In the United States, the national mood is changing against these banks. We don't see the civil unrest because we have administration that is selling hope, and we have an apathetic populace, and our unrest is simmering under the surface.

So "our" bank bailout plan, (because you are paying for it) is now called the "big bang plan." It's a combination of buying toxic assets, and guaranteeing prices on toxic assets they can't sell, and limiting executive pay. They may even throw in a sop to the underwater homeowner, as long as he pays 38% of his gross income to his mortgage.

At least we know why it's called the "big bang plan."

It's full of dark matter!

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