They are pretending everything is OK, by still lending to companies and individuals who will never be able to pay loans back?
They are keen as ever ! Lady hasseling me to take larger loan, much more than underlying stuff is worth. Not bothering checking my repayment ability at all. there is another possibility. what if markets dropped drastically to stop out masses that poured funny money into markets ? Maybe stop china miracle ? or whatever the agenda... Of course this massive manipulation caused large effects we see now. As everyhing is clean now, market may gather speed on upside. And of course all that changing bank account balances from 0 into 1 on 15th number place adds to the fantasy.
People keep telling they are all bust but fail to deliver names. I'd like to hear which internationally active european banks are de facto bankrupt as we speak.
3 or 4 months old now, this report explains the situation European Banks find themselves in, and the risks they pose to the greater euro economy. http://www.arpllp.com/core_files/Th...tter 0309.pdf
Savings have skyrocketed in Western europe these last months. Never has there been more cash in bank deposits in countries such as Belgium, Holland or Germany then today. Quite ironic when you think of it given the shaky state the banks find themselves in today. Overal I would say one shouldnt just mix all euro banks into a pot and look at them as one bankrupt group. Rabobank for instance is still AAA as one of the only (the only?) banks in the world. Are they on the edge of the abyss as well? Then where is the downgrade by Moodys?
the banks will not lend the money that people invest because they are worried about the risk. because the bank is acting as an agent effectively investing money for the people that save the saving to lending ratio is out of sync. in short the only reason that saving is increasing is because the bank is doing the investing if the individual had to look for safe investments they would find it difficult and saving would decline. this is the problem due to the banks having to hold more risk because they can no longer pass it on to third parties through credit and default derivatives due to lack of demand the willingness to lend is no longer there so they are not lending the money. incentives to get banks lending again do not seem to be working in england the gov introduced a twenty billion pound short term loan guarantee. it is not nearly enough the conservatives propose fifty billion it is still not enough. the problem is this even though saving is increasing it is not being reinvested.
lending has decreased significantly. credit card companies have been stopping unnecessary accounts and reducing credit limits for the last two years. i agree that individual saving is increasing but reinvestment of that money is not occurring.