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 Post subject: Twisting and turning
PostPosted: Wed Feb 29, 2012 5:00 pm 
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Banks today grabbed €530 billion at the ECB's second offering of cheap three-year funds, fuelling expectations that credit will flow to businesses and borrowing costs will ease for governments hit by the euro zone crisis. This is what Reuters tells us, adding that, in the space of two months, the ECB has now injected more than a trillion euros into the financial system, banishing the threat of a credit crunch.

View full article here

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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 6:25 pm 

Joined: Tue Nov 30, 2010 3:50 pm
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In the mean time Greek bank deposits are taking a hike
http://www.zerohedge.com/news/greek-ban ... rgest-ever


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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 6:34 pm 

Joined: Wed Mar 14, 2007 11:26 am
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Location: UK
Reuters wrote:
banishing the threat of a credit crunch

staving off the threat of bank failures


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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 6:45 pm 
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ELF wrote:
Reuters wrote:
banishing the threat of a credit crunch

staving off the threat of bank failures


Closer to the truth, methinks.

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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 7:19 pm 

Joined: Sun Aug 29, 2010 11:28 am
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So when banks borrow 530 million euros they don't have new CEOs appointed by the ECB and they don't have to introduce austerity measures such as pay and pensions cuts like Greece had to. Am I wrong to think that this is unfair? After all, the banks created the exotic financial instruments that created the money that the Greek government and others borrowed.


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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 7:21 pm 

Joined: Wed Dec 08, 2010 4:25 pm
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They really should build a golden statue of Draghi outside Brussels HQ,The Man That Saved the Euro......we can melt it down later.


The architects of the eurozone deserve a footnote here too,for making it impossible to leave,even in a crisis, which I believe they were well aware of at the time.


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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 7:51 pm 
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Brian wrote:
After all, the banks created the exotic financial instruments that created the money that the Greek government and others borrowed.


No, I think the central banks (under government orders) created the money and gave it to the retail banks who THEN created the exotic financial instruments as a way to launder that money via poor saps like us at a very handsome profit. No wonder they're all getting lovely big bonuses. The retail banks did not create the crisis nor the market, they simply exploited stupidity and greed in the corridors of 'power'.

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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 7:58 pm 

Joined: Wed Mar 14, 2007 11:26 am
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Location: UK
letmethink wrote:
the retail banks who THEN created the exotic financial instruments

I think it was the investment banks (the likes of GS), or the investment banking arms of the big banks, who created derivatives. The retail banks/arms should only have been using them for defensive hedging.

letmethink wrote:
The banks ...simply exploited stupidity and greed in the corridors of 'power'

Once they've played the "regulatory capture" game - and the shadow banking system in particular has escaped proper supervision - then they are culpable.


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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 8:20 pm 

Joined: Wed Dec 08, 2010 4:25 pm
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letmethink wrote:
Brian wrote:
After all, the banks created the exotic financial instruments that created the money that the Greek government and others borrowed.


No, I think the central banks (under government orders) created the money and gave it to the retail banks who THEN created the exotic financial instruments as a way to launder that money via poor saps like us at a very handsome profit. No wonder they're all getting lovely big bonuses. The retail banks did not create the crisis nor the market, they simply exploited stupidity and greed in the corridors of 'power'.


Private banks do actually create 97% of our money in use,something I never realised,which is electronic "account money" they create at the flick of a mouse,via loans,most of it mortgages.That is how money is created.Sure, they have to keep reserves at the central bank,but this is not spending money,the leverage on this "reserve" by private banks is where the system breaks down.


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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 8:36 pm 

Joined: Wed Dec 08, 2010 4:25 pm
Posts: 1032
There are so many quotes,facts and opinions floating about it is hard to see the wood for the trees, but I always look in detail at what Mervyn King has to say,he often is quite understated but he will point one in the right direction.His view on this new LTRO from the Reuters link Richard gives is


Quote:
The idea that the long term repo operations have eased the supply of finance to small businesses in the euro area is a myth," Bank of England Governor Mervyn King told a parliamentary committee in London.

"What it has done is to provide a source of funding to banks particularly in the southern member countries of the euro area which were experiencing a bank run, enabling them to fund the withdrawal of funds,"


So he sees the whole project as totally missing the point and thus unhelpful(unless you are a big bank/business or government)and they are about to create a whole new set of problems further down the line....understated as usual, but that ll do for me. PDT_Armataz_01_34


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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 8:49 pm 
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Were it not clear enough before, we should all be convinced today that the Colleagues would rather bring down the World's financial markets...now or later is of no consequence....in order to save an unmanageable faux currency. In plainspeak, printing money on a scale undreamed of in Zimbabwe...or,let it be well remembered, Weimar. We know where that got us.

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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 9:57 pm 

Joined: Tue Nov 30, 2010 3:50 pm
Posts: 906
Bernanke: ECB well capitalized
http://www.zerohedge.com/news/ben-berna ... apitalized

No wonder stock markets go negative when this guy opens his trap.

S&P downgrades anyone?


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 Post subject: Re: Twisting and turning
PostPosted: Wed Feb 29, 2012 10:41 pm 

Joined: Tue Dec 20, 2011 5:31 pm
Posts: 364
permanentexpat wrote:
Were it not clear enough before, we should all be convinced today that the Colleagues would rather bring down the World's financial markets...now or later is of no consequence....in order to save an unmanageable faux currency. In plainspeak, printing money on a scale undreamed of in Zimbabwe...or,let it be well remembered, Weimar. We know where that got us.

Your Betters understand that their Mere Citizens will not lift a hand against them, out of fear of their Praetorian Guard. When THAT changes...


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 Post subject: Re: Twisting and turning
PostPosted: Thu Mar 01, 2012 12:06 am 
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vincent wrote:
letmethink wrote:
Brian wrote:
After all, the banks created the exotic financial instruments that created the money that the Greek government and others borrowed.


No, I think the central banks (under government orders) created the money and gave it to the retail banks who THEN created the exotic financial instruments as a way to launder that money via poor saps like us at a very handsome profit. No wonder they're all getting lovely big bonuses. The retail banks did not create the crisis nor the market, they simply exploited stupidity and greed in the corridors of 'power'.


Private banks do actually create 97% of our money in use,something I never realised,which is electronic "account money" they create at the flick of a mouse,via loans,most of it mortgages.That is how money is created.Sure, they have to keep reserves at the central bank,but this is not spending money,the leverage on this "reserve" by private banks is where the system breaks down.

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"Knowledge will forever govern ignorance: And a people who mean to be their own Governors, must arm themselves with the power which knowledge gives." -- James Madison


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 Post subject: Re: Twisting and turning
PostPosted: Thu Mar 01, 2012 8:08 am 
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Vincent, I don't seem to be able to publish an answer to your previous point so I'll make it separately.

You are of course describing fractional reserve banking BUT it is still the central banks that determine the size of this fraction and therefore how much new money is created by the next stop in the banking system (I.e. banks in the retail and wholesale markets). Not forgetting of course that generally speaking central banks are themselves "private" banks.

The rental and wholesale banking system may indeed have created 97% of the money in the economy but how else (prior to QE/asset purchase) would the central banks create more money?

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