Thursday, October 27, 2011

Godfather Merkel's Offer the Banks could not refuse

Anyone wanting to know how to deal with the banks should not look to President Obama but to Chancellor Angela Merkel of Germany.
Deep Throat in Brussels

Deep Throat has it on good authority that Merkel is a fan of the famous Godfather movies of Francis Ford Coppola, and this extract from Bloomberg seems to bear that out:


The world’s biggest banks bowed to what German Chancellor Angela Merkel called the “last word,” agreeing to write down their Greek government debt by half in the pivotal piece of the euro area’s bid to stem the financial crisis.

The Institute of International Finance, which represents financial companies, agreed to “develop a concrete voluntary agreement on the firm basis of a nominal discount of 50 percent on notional Greek debt held by private investors,” Managing Director Charles Dallara said in a statement e-mailed at 4:26 a.m. in Brussels.


Euro-area leaders who called Dallara into a meeting at about midnight, forcing a break in their 10-hour summit, said that while the bond transaction will be voluntary, the decision resulted from an offer he couldn’t refuse.

“It was the fiercely delivered wish by Merkel, Sarkozy, Juncker, that if a voluntary agreement with the banks was not possible, we wouldn’t resist one second to move toward a scenario of the total insolvency of Greece,” Luxembourg Prime Minister Jean-Claude Juncker told reporters. That “would have cost states a lot of money and would have ruined the banks.”

Nothing like a bit of tough love to make greedy banks see the error of their ways ...

Now perhaps Godfather Merkel should turn her attention to the derivatives these idiot bankers like playing with, and the outrageous profits made by calculated runs on currencies, shorts, and casino gambling.

2 comments :

  1. Greedy banks? What about greedy Greeks who borrowed that money to finance unworkable pensions, benefits and salary packages? Yeah, how dare banks expect people who borrow money to actually pay it back. Just like those student loans...

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  2. Lots of greed around; both borrowers and lenders and governments and citizens - we're just coming off an era of cheap money, easy credit greed.

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