ECB....WE won't bale anymore!

[Mega]

http://www.telegraph.co.uk/money/mai.../bcnecb121.xml

They mean they WILL!
Mike

[don]

Re: ECB....WE won't bale anymore!

from the linked Telegraph article:

"This "soft bail-out" is largely underwritten by German and North European taxpayers, though it is occurring in a surreptitious way."

Not necessary here in the USA, with the best informed public of all time.
That's right.

All time.

Keep'em coming Mega!

[Starving Steve]

Re: ECB....WE won't bale anymore!

Since the lines are growing at the discount window ( the begging-bowl loan window ), it does not seem that credit conditions are improving, does it? So that begs the question: How much worse are things going to get, worldwide?

And then there is the issue of the moral hazard, i.e, the central banks rewarding those bankers who lent fully-knowing that they were lending to dead-beats. Doesn't that reward mean more bad loans are going to be made, and more bankers will be in line at the begging-bowl window in future?

[GRG55]

Re: ECB....WE won't bale anymore!

Since the lines are growing at the discount window ( the begging-bowl loan window ), it does not seem that credit conditions are improving, does it? So that begs the question: How much worse are things going to get, worldwide?

And then there is the issue of the moral hazard, i.e, the central banks rewarding those bankers who lent fully-knowing that they were lending to dead-beats. Doesn't that reward mean more bad loans are going to be made, and more bankers will be in line at the begging-bowl window in future?

Future may not be that far away. I believe jk posted something on another thread with the question: What happens if a foreign (e.g. non-US) finance house holding mountains of worthless US mortgage derivatives is about to fail, potentially triggering the sort of domino cascade that the Fed and Treasury feared from Bear Stearns? The ECB apparently has no mandate similar to the Fed to bail out. Does that mean the Fed creates another special facility for non-US entities in order to save the US financial system? What a mess. Maybe I need to dig the bunker a bit deeper...

[Jim Nickerson]

Re: ECB....WE won't bale anymore!

Future may not be that far away. I believe jk posted something on another thread with the question: What happens if a foreign (e.g. non-US) finance house holding mountains of worthless US mortgage derivatives is about to fail, potentially triggering the sort of domino cascade that the Fed and Treasury feared from Bear Stearns? The ECB apparently has no mandate similar to the Fed to bail out. Does that mean the Fed creates another special facility for non-US entities in order to save the US financial system? What a mess. Maybe I need to dig the bunker a bit deeper...

GRG55, yes, don't send that back-hoe thing away until the hole is deeper, and dig slowly, because you may even want to make it deeper yet.

Steve, there is no moral hazard issue. Look that up in Webster's. It has been designated: Obs.