EU leaders gather in Brussels for debt-tackling summit

Recapitalizing the banks has already been agreed by finance ministers and topping up the euro bailout fund to EUR 940bn is also possibility.

B92

This is, and always has been, a crisis of solvency. Put simply, the banks are broke ,they always have been from the start, and there is no way their debts can be repaid.This is mainly due to the fact that banks activities are gambling( default Swaps and derivatives) and banks
liabilities are just a big black hole which is 50000 light years deep.I am not exaggerating,estimates of the notional value of the worldwide derivatives market go from $600 trillion all the way up to $1.5 quadrillion.Keep in mind that the GDP of the entire world is only somewhere in the neighborhood of $65 trillion.

What is so scary is the way that these private gambling debts of private companies have over the past two years been turned into public debts.

Governments have slashed their spending, raided pension funds and ripped up any social contract that isn't nailed down, and given all the cash to the banks, under the threat that if they don't the whole system will fall apart and there will be riots in the streets.

Banks re-capitalisation -make no mistake- is nothing more than borrowing money to give to the banks on the basis that people's income tax will pay it back for years to come.Of course there wont be any money left for hospitals or libraries or roads or education but hey that doesn't matter as long as the banking classes get their losses covered.

For now, Western governments are trying to keep the casino rolling, but it is inevitable that at some point this entire mess is going to come crashing down.When it does, we are going to be facing a derivatives crisis that really could destroy the entire global financial system.

Leonidas, 23 October 2011 13:00)

As usual your commentary does you credit, but this is the most frightening part. How on this earth have private companies managed to put their gambling debts onto the public?

And there is no better example than the US. On the weekend CBS breakfast program were discussing the economy in the US. It was stated that only two areas were growing. The first is that the number of people earning $20,000 and less and the number earning $1 million plus which means the middle class is being decimated.

(sj, 23 October 2011 23:52)

Likewise with your informative comments.

I agree with your comment that the US middle classes have been decimated by the crisis.It is exactly the same that has been happening in Greece.

Staying with the US the majority of U.S. state and local governments are barely keeping body and soul together; releasing convicts from prison, laying off police, firefighters and emergency personnel, even selling off state buildings just to avoid financial disaster.

It's also well known the US government has been manipulating statistics and markets in order to present an improvement in its economy.We have a situation in which the dollar has been depreciated by more 15% then inflation stays at less than 3%.Unemployment rates remain at around 9% which includes only the people that receive entitlements.Independent financial analysts estimate inflation rates at present of 11% and unemployment rates in excess of 21%.The bond market is also manipulated.Since China has reduced its bond buying some new mysterious buyers have appeared from Cayman Islands spending $billions on unwanted US treasury bonds.Many suspect those buyers are proxy for the US Fed.

With the European crisis coming to a head with Greece defaulting and possibly taking the rest of the PIGS with them US and UK will be next.

Recapitalizing the banks has already been agreed by finance ministers and topping up the euro bailout fund to EUR 940bn is also possibility.

B92

This is, and always has been, a crisis of solvency. Put simply, the banks are broke ,they always have been from the start, and there is no way their debts can be repaid.This is mainly due to the fact that banks activities are gambling( default Swaps and derivatives) and banks
liabilities are just a big black hole which is 50000 light years deep.I am not exaggerating,estimates of the notional value of the worldwide derivatives market go from $600 trillion all the way up to $1.5 quadrillion.Keep in mind that the GDP of the entire world is only somewhere in the neighborhood of $65 trillion.

What is so scary is the way that these private gambling debts of private companies have over the past two years been turned into public debts.

Governments have slashed their spending, raided pension funds and ripped up any social contract that isn't nailed down, and given all the cash to the banks, under the threat that if they don't the whole system will fall apart and there will be riots in the streets.

Banks re-capitalisation -make no mistake- is nothing more than borrowing money to give to the banks on the basis that people's income tax will pay it back for years to come.Of course there wont be any money left for hospitals or libraries or roads or education but hey that doesn't matter as long as the banking classes get their losses covered.

For now, Western governments are trying to keep the casino rolling, but it is inevitable that at some point this entire mess is going to come crashing down.When it does, we are going to be facing a derivatives crisis that really could destroy the entire global financial system.

Leonidas, 23 October 2011 13:00)

As usual your commentary does you credit, but this is the most frightening part. How on this earth have private companies managed to put their gambling debts onto the public?

And there is no better example than the US. On the weekend CBS breakfast program were discussing the economy in the US. It was stated that only two areas were growing. The first is that the number of people earning $20,000 and less and the number earning $1 million plus which means the middle class is being decimated.

(sj, 23 October 2011 23:52)

Likewise with your informative comments.

I agree with your comment that the US middle classes have been decimated by the crisis.It is exactly the same that has been happening in Greece.

Staying with the US the majority of U.S. state and local governments are barely keeping body and soul together; releasing convicts from prison, laying off police, firefighters and emergency personnel, even selling off state buildings just to avoid financial disaster.

It's also well known the US government has been manipulating statistics and markets in order to present an improvement in its economy.We have a situation in which the dollar has been depreciated by more 15% then inflation stays at less than 3%.Unemployment rates remain at around 9% which includes only the people that receive entitlements.Independent financial analysts estimate inflation rates at present of 11% and unemployment rates in excess of 21%.The bond market is also manipulated.Since China has reduced its bond buying some new mysterious buyers have appeared from Cayman Islands spending $billions on unwanted US treasury bonds.Many suspect those buyers are proxy for the US Fed.

With the European crisis coming to a head with Greece defaulting and possibly taking the rest of the PIGS with them US and UK will be next.