[jeffkrol]

Europeans will awaiken to the fact that the financial "Systems" have little regard for the "little people"... no matter how much they pretend to.
Yes I realize that the 2 are interrelated but ...................

‘The New Ireland’

Spain, like Ireland, can’t simply let its financial firms fail. Ireland tried to stick banks’ creditors with losses and was overruled by the EU, which said defaulting on senior debt would raise the specter of contagion and spook investors away from all European banks. Ireland did force subordinated bondholders to take about 15 billion euros of losses.

The EU was protecting German and French banks, among the biggest creditors to Irish lenders, said Marshall Auerback, global portfolio strategist for Madison Street Partners LLC, a Denver-based hedge fund.

“Spain will be the new Ireland,” Auerback said. “Germany is forcing once again the socialization of its banks’ losses in a periphery country and creating sovereign risk, just like it did with Ireland.”

Spanish government officials and bank executives have downplayed potential losses on home loans by pointing to the difference between U.S. and Spanish housing markets. In the U.S., a lender’s only option when a borrower defaults is to seize the house and settle for whatever it can get from a sale. The borrower owes nothing more in this system, called non- recourse lending.
‘More Pressure’

In Spain, a bank can go after other assets of the borrower, who remains on the hook for the debt no matter what the price of the house when sold. Still, the same extended liability didn’t stop the Irish from defaulting on home loans as the economy contracted, incomes fell and unemployment rose to 14 percent.

“As the economy deteriorates, the quality of assets is going to get worse,” said Daragh Quinn, an analyst at Nomura International in Madrid. “Corporate loans are probably going to be a bigger worry than mortgages, but losses will keep rising. Some of the larger banks, in particular BBVA and Santander, will be able to generate enough profits to absorb this deterioration, but other purely domestic ones could come under more pressure.”

Spain’s government has said it wants to find private-sector solutions. Among those being considered are plans to let lenders set up bad banks and to sell toxic assets to outside investors.

Spain Underplaying Bank Losses Faces Ireland Fate - Bloomberg

for FUN..........

Carrot of Capitalism

You may well think all this strikes at the very carrot of capitalism, that businesses have an obligation to hire the best and that the best have a right to charge whatever the market will pay. But politicians all over Europe and the U.S. have been calling for restraint, or at least delicacy in pay. An eight- digit bonus for the head of a business that is foreclosing on mortgages and calling in loans goes way beyond tasteless. Politicians reassure us that we are “all in this together,” but every grinningly unapologetic bonus and golden handshake shows that some of us are in it, but standing on the heads of others, who are as a consequence much deeper in it.

Europe’s most stable and generally happy societies are the bungalow economies of Scandinavia, where the distance between the gutter and the ceiling is the shortest. Francois Hollande, just stepping into the unrestrained grandeur of the Elysee Palace, has called for executive pay to be capped at 20 times those at the bottom of the ladder. It’s not going to happen, but in most European cafes and pubs that sounds like a very modest proposal.

The Occupy Wall Street movement sprung directly from this perceived inequality. It sprung, but it wasn’t Spring. In retrospect, despite the miles of liberal-egalitarian wishful commentary, it achieved very little. It wasn’t the rebirth of 1968, it wasn’t the vanguard of a new, youthful awareness and commitment to equality and fraternity (though, in Germany, an Occupy group applied for official permission before pitching its camp, and was given it). What it did give us was the slogan “We are the 99 percent,” which neatly identified and focused the anger of people suffering recession onto the 1 percent.

But to be in the 1 percent you only have to earn $380,000 in the U.S. I say “only” because the folks who are facing the U.K.’s Shareholder Spring are the top 0.01 percent and 0.001 percent who have seen their incomes steeple. The people who are taking them down are not the 99 percent but the 10 percent, or even other 1 percenters. Those who own stock and bother to turn up to shareholders meetings are the real forces of change.
Worth Every Cent

It’s not just individual shareholders -- it’s also the institutional investors who are beginning to feel uncomfortable with the unapologetic and willfully unconcerned boardroom venality. Ironically, one of the biggest investor-critics of Bailey at Trinity Mirror was Aviva.

http://www.bloomberg.com/news/2012-05-09/london-s-shareholder-revolt-is-a-wi...1-percent.html

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Last edited by jeffkrol; 05-10-2012 at 03:10 PM.