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View Full Version : The ECB wishes you a Merry Christmas...


airship
18th Dec 2007, 14:03
A 500 billion Xmas, no less (http://news.bbc.co.uk/2/hi/business/7149329.stm).

The European Central Bank knows that as always, you're going to be running up a small overdraft over the Christmas / New Year holidays. That's why they're putting half a trillion euros (say 357 billions or $720 billions) into your local banks this Christmas. Just so that you don't get the usual nasty letters from your bank manager about your immoderate spending habits. This year, no more hypocritical bank letters or incredulously absurd surcharges - your bankers will be leaning over backwards in order to accommodate your small contribution in keeping the world financial crisis at bay...?!

It's just another example of why I like the EU (Life's a Beech might be interested to know). They're so much more generous compared to say, the US Federal Reserve or the Bank of England with their miserly billions measured in 2 figures. And to think it's the Americans whom we have to thank for all this largesse...?! :D

J-NUS
18th Dec 2007, 14:22
Its all going to end in tears. Too many people, too much borrowing propping up a failing economy, energy prices spiralling. Bust!

airship
19th Dec 2007, 14:05
When I wrote that the ECB are ...so much more generous compared to say, the US Federal Reserve or the Bank of England with their miserly billions measured in 2 figures., I might have been underestimating both the Bank of England and the US Federal Reserve:

1) It would appear that uptil now over 57 billion in UK public funds have gone into Northern Rock. And nationalising this failing bank (http://news.bbc.co.uk/2/hi/business/7151840.stm) is not ruled out.

2) And the public cost of US government's latest plans to help out individuals in mortgage repayment distress will undoubtedly easily surpass the ECB's latest largesse.

Nationalising the Northern Rock - you'd have thought that would have at least caused an uproar in the UK markets, if not farther afield? After all the free-market criticisms of nationalisations generally in the past, apparently it's OK now that the public purse absolutely has to be used to save the bacon of stock-market investors (and other interested parties) instead of coal-miners, ship-builders or other blue collar trade-union members. But why just stop at Northern Rock? Let's just nationalise the whole financial system, the UK government in consort with other governments already appears to be willing to prop-up the system with public funds?!

In time, and once all the losses have been absorbed by the ordinary taxpayer (or more accurately, their children and grand-children) we will once again hear "the great clamour" from the free-markets of "how they would perform so much better and at greatly reduced cost to the public if privatised" so that these newly-healthy enterprises can once again be returned to private ownership at advantageous rates.

And the profitable merry-go-round of some people hopping from public office into private and back again when it suits can continue eternally ad infinitum...?! :mad:

BlooMoo
19th Dec 2007, 15:37
The 'free market' is actually saying that NR should've have been left to sink or swim.

The net result of state intervention is likely that the remainder of uk banks will be less effectively managed. Had NR gone under (I don't actually believe it would have) the boards of other banks would have a stark picture of the downside risk in playing fast and loose with their business models. If banks can't fail why should depositors in future trust their management to be careful with their money?