Monday, June 4, 2012
Let's Play Bailout Spain
This comes on top of last weeks stock market plunge, and really crappy jobs numbers. U.S. stocks plunged on Friday after a troubling weak jobs report added to fears about a global economic slowdown and sent the Dow into negative territory for the year. All gains in 2012 were wiped out in one day.
The Labor Department said employers created a paltry 69,000 jobs last month, the weakest in a year, while the unemployment rate rose to 8.2 percent.
Madrid has begun openly discussing outside assistance for its troubled banking sector, with a top Spanish official saying she had raised the issue with Tim Geithner, who urged the EU to “find a solution” to stabilise Spain’s banks.
Soraya Sáenz de Santamaria, Spain’s deputy prime minister, said after a meeting with Mr Geithner that the two had discussed proposals to recapitalise Spanish and other European banks “without state intervention and without conditions,” a clear reference to Madrid’s wish to get EU bailout assistance without strings attached.
“It’s something in the debate, and we’ve been discussing that possibility,” Ms Santamaria said. “Treasury secretary [Geithner] has indicated that we are working in the same direction and that we must find a solution to the banks, because the problem is not just a problem in Spain as a nation, but our financial system.”
Madrid has insisted it will not need an international rescue, with the government in complete opposition to any form of externally imposed programme as seen in Greece, Portugal and Ireland.
Luis de Guindos, Spain’s finance minister, travelled to Germany earlier this week to meet his counterpart, but received no compromise from Berlin on its opposition to European funds being injected directly into troubled banks.
“I don’t know if we are on the edge of a precipice, but we are in a very, very difficult situation,” Mr De Guindos said at a conference
Could it be that Fed.Chairman Ben Bernanke is willing to bailout the EU banks is because the EU and the US banking systems are interconnected? -- and are CHAINED TOGETHER. If so, this means that if the EU Banking System collapses, so will ours.And the EU banks are collapsing under the weight of their bad Loans, because their mortgage-backed securities are in danger of defaulting. With economic collapse in the air, you can almost smell the financial panic.
We just might see a disastrous game of dominos' where -- one bank after another, one nation after another -- falls over the financial cliff.
In America we have two systems at play, one the competitive dog-eat-dog capitalism for average folks, and the other the completely corrupt crony capitalism with socialist guarantees and an almost communist command and control profit center for banks. Just the very idea of shoving bank losses onto the public balance sheet ought to be enough to convince people that both political parties are criminal by their very nature.
Political power goes to the highest bidder with the highest ability to bribe the politicians through campaign donations.
Then who will create the jobs?