The Swiss must be known for their silly walks, because they're taking the
world's banks over the edge.
The Basel III (three- it looks more regal in Latin) agreement means that
banks need to keep 9% of customers' deposits in liquid assets, like cash.
To me, that means that they can be 11 times overleveraged. However scary that
might be, most of them are over 30x overleveraged, on particularly sick
derivative trades that are likely worthless, but when they implode, the banks
will try to collect their insurance money from us.
So, what was the #Occupy Wall Street protest about? I don't know? @sarc
checkitout: from things that make you go HMMMMMMmmmmm
Such As Basel I...II...III... And Onward ... BASEL III attempts [X to force] encourage banks to hold larger percentages of government bonds on their balance sheets in order to shore up their capital bases and to provide a riskless safety net should they run into liquidity problems.
Thus far, holdings of Italian debt - with its 20% risk-weighting - have bankrupted MF Global in the space of a week (no 30-day cushion there, then) while the ECB SMP program has spent bil¬lions of euros accumulating [X20% risk-weighted assets rapidly-declining assets that everybody else wants to sell] high-grade Italian (and, latterly, Spanish) government bonds in a desper¬ate attempt to stop the very assets that banks have been pushed into holding from bringing down the whole edifice.
The absurdity of the situation is striking.
After 2008, the world’s major governments (in their infinite collective wisdom) transferred the most toxic assets, that threatened to bring down their countries’ banking systems to their own balance sheets rather than suffer the sharp pain of bankruptcies throughout the global financial sector and the inevitable pain that would follow. ... The old EU is finished. The 27-member bloc has never been as unpopular as it is today. Citizens have taken note that the massive bureaucracy in Brussels clearly lacks the power to master the crisis spreading
through the currency union. It has likewise become apparent that the national governments they have elected are in the process of dismantling the historic project of European unification. After all, it isn’t the European Council, the European Commission or the European Parliament that the world is relying on to pull Europe out of crisis. It is Angela Merkel.
...The German chancellor and French President Nicolas Sarkozy more or less singlehandedly implemented the bailout plan for Greece, brought down the government in Athens and placed ailing member state Italy under international supervision. The words “History is being made in Cannes” were emblazoned on posters in the city during the G-20 summit there in early November. But that’s new history. Old Europe, that construct of unity housed in imposing buildings in Brussels, that visionary collection of ideas about peace, freedom and prosperity, the Europe of big words and impenetrable treaties, the Babylonian monster that spits out tons of paper in 23 languages every day, meddles in everything and tries to spoon-feed its citizen. That Europe no longer exists.
