Banks cannot participate voluntarily in illegal acts, such as fiduciary imprudency. Bank directors are committed to bank's welfare, and not the public interest. If bankers waive outstanding debts at the expense of the bank, this is a breach of trust and punishable by law. All those bankers, that IIF claims plan to participate in rollovers, might go to jail for violating the fiduciary duty of prudency!
October-18 Mafia pressures the banks to participate, but it really opens Pandora's box. The bailout for the Cradle of Kleptocracy is taxpayers' hard-earned money blown out with the wind, because the October-18 Mafia continues corruption, squander, marilizardism, incivility, stupidity, charge stacking, and junketing.
Christine Lagarde of IMF has made it absolutely clear she does not trust Graecokleptocrats, because they never apply what they vote in the Grand Brothel on Syntagma Square! That's why she sent her inspectors to Athens to see things are done as promised and voted. Now she is mad as hell about October-18 Mafia, and she ordered her inspectors back to Washington.
Investors plan to sue those imprudent bankers who participate in stupid rollovers, when banks know very well another haircut is on the horizon! The situation for banks is more dramatic than it was in 2008. In 2008, governments were still able to support their banks. Now this is simply no longer possible, as governments play dirty games with rollovers. Banks are currently finding it difficult to raise even long-term financing.
Banks who particiapate in Greek rollovers are in danger zone. All this situation on the markets looks very much like the autumn of 2008. All stocks of imprudent banks will downtrend for a long time, eventually crashing to zero. European banking stocks were hammered across the board on Monday, the Dow Jones STOXX Europe 600 banking index closed down 6 percent to its lowest level in 29 months.
The Fourth Reich bailout of the Cradle of Kleptocracy cannot succeed, because the October-18 Mafia continues corruption, Kangaroo Justice, marilizardism, Marilizard Libel, Marilizard Spaghetti, and Marilizard Towers. October-18 Mafia is the most disgusting predator of internet on Earth! Civil society was shocked by the brutality and stupidity of the October-18 2010 fiasco, initiated by the Ministry of Foreign Affairs of the government of Greece. That's why October-18 Mafia is the new name of the government of Greece!
There is only one solution to the dilemma faced by the Greek government over its inability to borrow more money. Shut it down! Debt ceiling or no debt ceiling, deficit or no deficit, all of stupid ministries, agencies, boards, commissions, authorities, bureaus, divisions, services, administrations, and programs should be shut down. This is not complicated!
Last week, Asian, European and US investment banks were sued by the US Federal Housing Finance Agency for mis-selling mortgage-backed securities, which helped trigger the last crisis that led to the collapse of Lehman Brothers. In addition to the US lawsuit, Deutsche Bank is being investigated by the UK's Serious Fraud Office (SFO), also in connection with asset-backed securities.
There is no way any prudent investor will throw a euro in the Cradle of Kleptocracy, which is infested with marilizardism, the October-18 Mafia, charge stacking, and the cancer of socialism. Yields on Greek, Italian, and Spanish government bonds hit their highest levels in nearly a month on Monday and were expected to rise further as pressure mounted on G7 Italy, the Queen of the PIGS, eurozone's third-largest economy, to get its fiscal house in order.
Fuehrer Merkozy knows that only stupid investors would squander their money in a country addicted to kleptocracy, socialism, charge stacking, and marilizardism. Merkel was further weakened by a disappointing election result for her Christian Democrat party in the eastern state of Mecklenburg-Western Pomerania. Her junior partners at the federal level, the Free Democrats, failed to even make it into the state parliament.
On Wednesday, Karlsruhe will rule on German involvement in the bailout for Greece, adding to the uncertainty on the markets. The German Constitutional Court in Karlsruhe held its first hearing on July 5, 2011 in a case against interventions such as the bailout packages to PIGS. A ruling in the case is expected on September 7. A group of German euroskeptic eggheads led by Joachim Starbatty filed the case last year. The group argues that creating rescue funds violates the European Union's no-bailout clause, which says neither the EU nor member states should take on governments' liabilities.
Wolfgang Schaeuble says you can go ahead, if you do it on a voluntary basis. That may be true as long as he uses his own money. It's not Schaeuble's money to give! Schaeuble is using taxpayers' money, so he has to ask them whether he can be so generous with their money. That is something Schaeuble should consider - after all, first and foremost, his main obligation is to the German taxpayer. Karlsruhe will probably set clear conditions for any new package. The bailout packages for the peripheral countries, such as Greece, contradict the spirit of the Maastricht treaty.
If Karlsruhe were to say that everything that is being done now is unconstitutional, Greece would have to leave the currency union, and there would be a debt rescheduling. There's no escaping that. What Germans are doing now isn't solving any problems. Continuing to give Greece money so it can pay its creditors, only means pushing Greece further into the debt trap. It's a bailout for the banks, but without saving the European currency system.
Merkel is pressured to expel Greece from eurozone, amid growing dissent from within her own party to her European policies. But Merkel thinks the expulsion of Greece might set off a domino effect that would be extremely dangerous for euro. The European project has lost significance among Germany's policy elite as the central driver of foreign economic policy.
No clear grand strategy has replaced this Einbindungspolitik, German foreign policy tenet of engagement. Given the heavily-fragmented nature of checks and balances in German politics, the political elite seems to be buffeted by a cycling of priorities from regional elections to Chancellory infighting. The end result has been a series of policy reversals and costly delay. http://venitism.blogspot.com
Jean-Claude Trichet calls for the bailout fund to be immediately strengthened, and urges more structural reforms to boost the flagging financial sector. Mario Draghi urges eurozone countries not to rely on ECB supportive bond-buying program forever, a criticism also leveled at his own country Italy, where Il Duce Berlusconi has backtracked on planned austerity measures.
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