Policy-administered asset monetization would stop the global financial system from seizing, restore sorely needed economic balance, and reset commercial incentives so that real growth can once again gain traction.
It won’t happen – at least not any time soon.
As it happened in Mexico 18 years ago, Spain’s banking system’s woes seem to be setting up the stage for a self-fulfilling prophecy of Mayan proportions.
Maybe it is also time to step back and think about what capital is supposed to do, and with that as a guideline, think of rules that make sense.
Germany will have to change their tone or risk being the ones seen responsible for breaking up the Eurozone and causing strife across Europe.
Among the many questions raised by Bankia’s nationalization in extremis, there is one that cannot go unanswered: who is responsible?
Why and how the global monetary system is failing, why it is too late to stop, what will come next, and why the crisis is only financial – not commercial.
How long can lower provisions cover for the sluggish credit environment?
Europe is about to begin its “Audacity of Hope” moment.
I continue to believe that longer dated Spanish and Italian bonds are poised for a significant sell-off.
It is important to distinguish between leveraged and unleveraged non-bank lenders, both investors and both implicitly “shadow banks”.
We think it is imprudent to advise legitimate savers to invest in levered financial assets.