The REASON for the economic crisis is here.

geezer466 · **Joined:** Thu Jan 12, 2012 1:06 pm **Posts:** 1307

john wrote:

so can we buy a bank or two from Spain , at a heavy discount now

Why would you want one?

Spanish banks are toast they are very heavily exposed to the Spanish property market in mortgages they have granted.

Turns out the value of the assets they hold against these mortgages are not worth the sums they have lent against them.

If they have lent 200,000 Euros against a house which was valued at 240,000 Euros 3 years ago and that same house is now only worth 120,000 Euros they have a problem.
Multiply that by severely hundred thousands (possibly even millions of properties) and you can see it is an overwhelming problem.
Banks are now being forced (as arrears are starting to show through to balance sheets) to re-possess and then resell the asset at the lower price. In other words they are having 'to write down the loss'.

The Spanish property market was in a bubble, that bubble has now burst!!

Westonman · **Joined:** Thu Jan 12, 2012 10:46 am **Posts:** 1806

Surprise- surprise; ever closer political union is the answer to the Eurozone's problems:

http://www.reuters.com/article/2012/06/ ... op+News%29

Quote:

(Reuters) - Under pressure from financial markets and anxious world leaders, Europe agreed on Monday to move towards a more integrated banking system to stem a debt crisis that threatens the survival of the euro.[/b]
At a Group of 20 summit of the world's leading industrialized and developing economies in this Mexican resort, Germany and its big euro zone partners took the unusual step of spelling out in detail measures to complete the economic and monetary union they launched to great fanfare 13 years ago.
Among the commitments in a draft G20 communique was a pledge to consider concrete steps towards a "more integrated financial architecture" in Europe that would include common banking supervision and firm guarantees to repay bank depositors.
The United States, the International Monetary Fund and European Commission have been urging EU member states to press ahead with a banking union to break the vicious link between deeply indebted governments bailing out illiquid financial institutions, worsening the sovereign debt problems and deepening the euro-zone crisis.
While that term did not appear in the declaration, the wording did suggest that Germany, which has rejected initiatives that might expose it to the cost of rescuing banks outside its borders, was growing more open to the idea of closer banking cooperation.
U.S. President Barack Obama, concerned that Europe's debt crisis could deteriorate further and upend his re-election hopes, met with Chancellor Angela Merkel, who as the leader of Europe's biggest economy is under intense pressure to commit German resources to underpin the euro zone and prevent a catastrophic breakup.
Obama's spokesman said the U.S. president was encouraged by the talks, which touched on steps to "increase European integration".
EU President Jose Manuel Barroso showed frustration over the pressure which is piling on Europe to act fast. He said G20 members must understand it will take time for the 17 euro zone democracies to agree on how to build a full financial, fiscal and political union and asked fellow G20 members to stop lecturing.
"We certainly are coming here to receive lessons from nobody," he said.

geezer466 · **Joined:** Thu Jan 12, 2012 1:06 pm **Posts:** 1307

Baldrick: "What I want to know, Sir is, before there was a Euro
there were lots of different types of money that different people
used. And now there's only one type of money that the foreign
people use. What I want to know is, how did we get from one
state of affairs to the other state of affairs"

Blackadder: "Baldrick. Do you mean, how did the Euro start?"

Baldrick: "Yes Sir it’s all very confusing"

Blackadder: "Well, you see Baldrick, back in the 1980s there
were many different countries all running their own finances
and using different types of money. On one side you had the
major economies of France, Belgium , Holland and Germany,
and on the other, the weaker nations of Spain, Greece , Ireland,
Italy and Portugal all doing their own thing.
They all got together and decided that it would be much easier
for everyone if they could all use the same money, have one
Central Bank, and belong to one large club where everyone
would be happy and no exchange rates when we go on holiday.
Doing this meant that there could never be a situation whereby
one country would nose dive into financial meltdown which in turn
would lead to social unrest, wars and crises".

Baldrick: "But this is sort of a crisis, isn't it Sir?".

Blackadder: "That's right. You see Baldrick, there was one slight flaw with the plan".

Baldrick: "What was that then, Sir?"

Blackadder: "It was all Bollocks".

Uncle Festa · **Joined:** Wed Jan 11, 2012 11:42 pm **Posts:** 26

Rumour is that Germeny are looking to exit the Euro to save their economy

jim · **Joined:** Wed Jan 11, 2012 6:10 pm **Posts:** 1461

looks like they lost the war and the peace :shock:

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