While bank executives and government leaders have been reluctant to acknowledge that the hundreds of billions of euros of Greek debt held by financial institutions is worth far less than its face value, they are slowly accepting the grim reality…
Hmm…isn’t the foundation of our economic system supposed to be: you take a risk, you win or lose, you face the consequences. Apparently, to paraphrase Leona Helmsley, that only applies to little people.
“Once you take a write-down on Greek debt for Dexia [a major European bank], …it will be the taxpayer that pays for this.”
Whoaa! Where does that come from? Why not the owners of the bank? And finally:
While the question remains whether taxpayers or financial firms will make up the difference, European authorities may be moving closer to a coördinated effort on the banks.
Yep, there’s that nagging question again. Are we (the bankers) actually going to have to lose?! The game is supposed to prevent that…for us! This is the sort of thing that US commentary has castigated the Japanese about for many years. If only they would get honest and face their losses, but no, there isn’t any transparency: it’s all rigged by the government that’s in bed with the bankers… Sound familiar?
One reader commented on our situation here at home:
“A growing number of economists, and some voices within the International Monetary Fund, argue that banks need to formally acknowledge their losses to restore their credibility.”
This is something the US banks have never really done. They still have huge numbers of non-performing mortgages on the books that are listed as assets. Of course, this has been aided and abetted by Fannie Mae, Freddie Mac, and the Fed, all in the hopes that a housing recovery that never materialized would solve the problem.
Ordinary people have to acknowledge their losses, lose their homes, forego college for their children, while banks pretend ‘face value’ is market value and squeeze the 95% of the population not in on the game to pay the difference.