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Suddenly, Europeans were thrust into the center of the furnace

Nicolas Stassen

  08/10/2008

Europeans Put Hope In Farseeing Banker
Trichet May Cut Continent’s Interest Rate
By Craig Whitlock
Washington Post Foreign Service
Tuesday, October 7, 2008; 11:06 PM
BRUSSELS, Oct. 7—With European lawmakers still bickering over how to respond to a string of bank failures and a fading economy, expectations are rising that a clairvoyant French banker will come to the rescue.
Jean-Claude Trichet, president of the European Central Bank, has been playing a key behind-the-scenes role in recent days as elected leaders and finance ministers from across the 27-nation European Union have held emergency meetings to deal with the credit crisis. Although politicians have struggled to present a united front, analysts said odds were high that Trichet will intervene soon with a cut in interest rates—something that his bank hasn’t done in more than five years.
Last Thursday, after a regular meeting of the central bank in Frankfurt, Germany, Trichet hinted that a cut was forthcoming, though he didn’t say when. With global stock markets tanking, some analysts said the bank could make an announcement this month in what could be a coordinated rate cut with the U.S. Federal Reserve and the Bank of England.
“The ECB should not be stubborn,” said Wolfgang Gerke, a banking expert and director of the Bavarian Center of Finance, a private advisory group. “Now is the time to act and to use the means it has to make a strong statement.”
Trichet had warned of big troubles looming in the banking sector and, unlike many European leaders, had predicted that local banks were vulnerable to the collapse in subprime loans plaguing the U.S. market. “We have to look very carefully at the business model of banks,” he warned last January.
Trichet, however, has also consistently resisted political pressure to cut rates and has fiercely defended the independence of the European Central Bank, which was created nearly a decade ago to oversee the creation of the euro as the continent’s common currency.
Unlike the Federal Reserve, which is also legally bound to fight unemployment by stimulating growth with low rates, the European Central Bank has a single mission: to maintain price stability by keeping inflation low.
As a result, it has been far more reluctant to cut rates than the Fed. In the face of a dragging economy, the Fed has slashed its benchmark rate since last year from 5.25 percent to 2 percent. In contrast, despite a similar slowdown in Europe, its European counterpart raised its benchmark rate by a quarter-point in July to 4.25 percent—citing inflationary risks from high commodity prices and rising wages.
Some European countries, in particular France, have long complained that Trichet’s strategy as president has been too conservative, hampering growth.
Christian de Boissieu, chairman of French Prime Minister François Fillon’s Economic Analysis Council, said a rate cut was overdue. He said that inflation risks had subsided and that Europe badly needed the boost in liquidity that a rate cut would provide. “This would not solve everything,” de Boissieu added. “But it would help.”
Unlike Federal Reserve chief Ben S. Bernanke, who worked side-by-side with Treasury Secretary Henry M. Paulson Jr. to fashion a $700 billion bailout fund, Trichet and the European Central Bank have been careful to remain at arm’s length, at least publicly, from politicians trying to come up with a fiscal solution to the banking crisis.
He attended an emergency summit of European leaders in Paris on Saturday, however, as well as a gathering of finance ministers in Luxembourg this week. On Monday, he took the rare step of inserting himself into the proceedings by holding a late-night news conference to urge the private sector not to overreact to falling markets.
“My own appeal would be for all actors at this stage to shoulder their responsibilities, be calm and have trust,” he said. “We were amongst the first, if not the first among the central banks . . . to make it clear that we were underestimating the risk on financial markets. I think it’s fair to say that we’ve now reached the stage in this development where the pendulum may have swung too much the other way.”
While the European Central Bank oversees monetary policy for the 15 countries that use the euro, each member of the European Union is responsible for regulating its own banks. That has made it difficult to forge a common strategy in Europe for helping troubled banks, many of which operate across national borders.
Miguel Ángel Fernández Ordóñez, a member of the governing council for the European Central Bank, said Europe had no choice but to find a way to coordinate a solution among its many finance ministries and national banks. “Even the biggest countries are too small to resolve this problem” on their own, he told reporters in Madrid.
Trichet, however, has defended the effectiveness of the European response. Despite the complexities involved, he said Europe has acted as responsibly as the United States in addressing the credit crisis. “Who can say we’ve done worse than the other side of the Atlantic?” he said Monday. “There is no lack of coordination. There is a European spirit. We have different governments and they have different means of intervention.”
Some analysts said Trichet was likely using a potential rate cut as an inducement for European finance ministers to take more aggressive action. “If the finance ministers do something, then it would make a rate cut much more effective,” said Daniel Gros, director of the Center for European Policy Studies in Brussels. “But the ECB should not go first. The prospect of a rate cut is what gives it leverage.”
Other analysts praised Trichet’s handling of the situation but said he was far less likely than the Fed to favor a drastic cut in interest rates just to stimulate markets.
Inflation, while declining, remains significantly above the European Central Bank’s target rate of 2 percent. And inflation hawks remain firmly entrenched in Europe, where central bankers for decades have vigilantly guarded against the hyperinflation that decimated Germany’s economy in the 1920s and helped bring on World War II.
Wolfgang Filc, a professor of finance and credit policy at the University of Trier in Germany, noted that Europe’s powerful labor unions are pushing for steep wage increases to adjust to rising living costs. While falling stock markets may make headlines, he said, the European Central Bank is unlikely to ignore any inflationary threats.
“This economic situation is the most serious crisis we have had in 50 years,” he said. “But fighting inflation is the ECB’s primary task. That is law.”
Correspondent Edward Cody in Paris and special correspondent Shannon Smiley in Berlin contributed to this report.

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/07/AR2008100703434.html?hpid%3Dsec-business&sub=AR

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October 3, 2008
Europe Opens Door to Easing in Rates

By CARTER DOUGHERTY
FRANKFURT — The European Central Bank on Thursday abandoned its long-held position that inflation is the main threat to the Continent’s economy and hinted that an interest rate cut could come as early as November.
The sharp pivot comes as European leaders grapple with a financial crisis that has destabilized one bank after another in recent days and could drag down economic growth even further.
Jean-Claude Trichet, the president of the E.C.B., who has firmly stuck to the bank’s inflation-fighting mandate since the crisis began 14 months ago, said the drastic weakening of the European economy had sharply moderated the risks of a price surge in the future. “They have diminished, but they have not disappeared,” he said.
He said senior policy makers had decided unanimously to leave the benchmark rate at 4.25 percent. But, leaving no doubt about future intentions, Mr. Trichet added that they had discussed lowering rates as well.
The stance creates a situation in which the bank and the Federal Reserve could cut borrowing costs at about the same time to help reassure jittery investors. Many politicians have accused the European bank of vastly underestimating the effect that seized-up credit markets would have on the region’s economy.
Mr. Trichet’s hints did little to ease pressures in credit markets, where the main gauges of confidence among banks edged up again Thursday. And the euro fell to a 13-month low against the dollar as the prospect of lower interest rates diminished the allure of euro-denominated assets. It bought $1.38 in late European trading, down from $1.40 on Wednesday, and $1.3824 in New York in late trading.
The European bank’s decision came two days before Mr. Trichet and top European leaders were scheduled to convene in Paris at the invitation of the French president, Nicholas Sarkozy, to adopt common approaches to the financial crisis.
Though French and Dutch officials have suggested responses along the lines of the $700 billion bailout proposed in the United States, Mr. Sarkozy and Britain’s prime minister, Gordon Brown, ruled out that idea Thursday.
Referring to the immense infusions of cash that central banks have repeatedly made into the financial system and with the House of Representatives expected to reconsider a bailout package in the United States on Friday, Mr. Trichet called on political leaders to do their part as well.
“We do all we can,” he said. “But there are cases where we need decisions by governments.”
The E.C.B. said its decision to keep rates unchanged was made in the light of an annual inflation rate that, at 3.6 percent, is running far above the bank’s goal of less than 2 percent. But Mr. Trichet underscored the “extraordinarily high level of uncertainty,” suggesting that repeated bank failures in Europe had eased the way for the shift in the E.C.B.’s attitude.
“Suddenly, Europeans were thrust into the center of the furnace and had to take actions to prevent the European financial system from collapsing,” said Julian Callow, chief Europe economist at Barclays Capital in London. “That surely would have affected their thinking.”
The bank’s shift is positive for those who think that lower interest rates globally would reduce the effect of the financial crisis and contribute to business confidence.
The Fed is scheduled to meet on Oct. 27, a short time before the E.C.B.’s next meeting in early November, and many analysts say they think they both may move to cut rates. The Bank of England will meet next week, when a rate cut is also possible.
Mr. Trichet also stressed that the bank could act at any time, suggesting the top central banks could move in unison independent of any meeting.
The E.C.B.’s new willingness to consider lower interest rates opens the bank to criticism that it misjudged how weak the economy of the 15-nation euro area had become by midsummer and was acting erratically.
The E.C.B. actually raised interest rates by a quarter of a percentage point in July to head off rising expectations of higher inflation.
Paul de Grauwe, a professor at the Catholic University of Leuven in Belgium, said the E.C.B.’s reluctance to ease credit even as the euro zone economy contracted in the summer showed a lack of the kind of flexibility that led the Federal Reserve to cut United States rates aggressively. “They are risking being well behind the curve here,” he said.
“Holding rates will lead to a situation in Europe where we are always in the defensive pose as opposed to an offensive approach,” he added. “It is very different from the United States.”

http://www.nytimes.com/2008/10/03/business/03euro.html?scp=3&sq=Europe%20ECB&st=cse

Economists call for EU-wide banking rescue operation

Nicolas Stassen

  08/10/2008

Open Letter to European leaders on Europe’s banking crisis: A call to action

Alberto Alesina   Richard Baldwin   Tito Boeri   Willem Buiter   Francesco Giavazzi   Daniel Gros   Stefano Micossi   Guido Tabellini   Charles Wyplosz   Klaus F. Zimmermann
1 October 2008

This is a once-in-a-lifetime crisis. Trust among financial institutions is disappearing; fear may spread. Last week’s US experience showed that saving one bank at a time won’t work. A systemic response is needed and in Europe this means an EU-led initiative to recapitalise the banking sector. Unless European leaders immediately unite to address this crisis before it spirals out of control, they may find themselves fighting over how best to salvage the aftermath.

Europe is in the midst of a once-in-a-lifetime crisis. Every European knows what happened when financial markets seized up in the dark years of the 1930s. It is not an exaggeration to say that it could happen again if governments fail to act. We are not predicting that it will happen, but it is critical to know that this is what is at stake.
Trust among financial institutions is disappearing and there are risks that fear will spread more widely. Turmoil in financial markets must be stopped before it causes major damage to the real economy. The savings of hundreds of millions of Europeans are directly threatened. If the turmoil produces credit market paralysis, jobs and businesses will be destroyed on a massive scale. A further weakening of the real economy would put more loans at risk and create a vicious cycle of falling asset prices, deteriorating ability to repay loans, and diminishing credit flows.
Actions by US policymakers are welcome, but they are not sufficient. Decisive policy action is required in Europe as well.
Policy spillovers: European-level actions to supplement and coordinate national actions
The US authorities learned last week that saving one bank at a time won’t work; a systemic crisis demands a systemic response.
In Europe, saving one bank at a time means either a rescue effort mounted by one nation, despite important spillovers to neighbouring countries, or last-minute improvised coordination and agreement about fiscal burden sharing. The national responses and ad-hoc cooperative efforts to date have been useful. Yet interdependence among European banks is too deep and too wide-spread for national responses or case-by-case coordination to be enough. Each national policy intervention and each cooperative intervention by a small number of countries can have unpredictable implications for other European nations. It is critical that national authorities sit together and coordinate their responses, developing Europe-wide solutions where appropriate.
Now is the time to act while the situation still appears manageable. Last week’s events in the US demonstrate that financial crises do not evolve smoothly and predictably. One unexpected event can trigger a cascade of failures and panics that become increasingly difficult to control.
Solutions
Many solutions will be part of the answer. In the US, dealing with the immediate crisis requires restoring liquidity to money and credit markets, and creating the conditions for the resumption of the securitisation of prime mortgages and other illiquid but sufficiently homogeneous and transparent assets. In Europe, the key problem is high leverage among the internationally active large banks. Hence the EU contribution must be centred on a recapitalisation of the banking sector, through the injection of public equity or through mandatory debt-to-equity conversions. This has to be done at the EU level (e.g. through the EIB). The current approach of rescuing one institution after another with national funds will lead to a Balkanisation of the European banking sector. Agreeing a harmonised level for deposit insurance would also be important.
To prevent future crises of this nature, regulation of the European financial markets and institutions at the European level will also be required.
The problem is not a lack of understanding of how to stop financial crises. The problem is a lack of political will.
Unless European leaders immediately unite to address this crisis before it spirals out of control, they may find themselves fighting over how best to salvage the aftermath.

http://www.voxeu.org/index.php?q=node/1729
French
http://www.telos-eu.com/fr/article/crise_financiere_que_faire
Italian
http://www.lavoce.info/articoli/pagina1000650.html

http://www.guardian.co.uk/business/2008/oct/02/europeanbanks.europe
http://www.lalibre.be/economie/actualite/article/451174/250-economistes-lancent-un-appel-a-l-union.html
http://www.letemps.ch/template/opinions.asp?page=6&article=241012
http://www.ledevoir.com/2008/10/08/209647.html
http://www.france-info.com/spip.php?article195201&theme=22&sous_theme=24

georgie et islande, inversion des situations

Jérôme

  08/10/2008

la puissance américaine “perçue” avait été sérieursement ébranlée par l’affaire Georgienne, mais le cas Islandais va infiniment plus loin.  En effet dans le premier cas les USA n’était pas intervenus (ou si peu) pour sauver un de leur protegé de la menace russe, mais pour l’islande c’est la Russie qui intervient pour sauver un (ex?)protégé US, un modèle du capitaliste financier, otanien jusqu’à l’os sans aucune force armée (mais surtout pas membre de l’UE), plus royaliste que le roi financier (avec 100b$ d’emprunt pour 14b$ de PIB). A quand l’annonce d’une base russe en Islande?
apres les interrogations sur l’article 5, le protectorat US semble bien faire parti du passé. Au moins les russes, toute dictature qu’ils sont, interviennent (mais ils en ont les moyens, eux…)

Terror Storm

Article lié : Leur religion en lambeaux, leur Foi pulvérisée

Stephane Eybert

  08/10/2008

Alex Jones racontait comment un aparatchik US lui avait froidement avoue que 911 avait ete fait parce qu’ils n’avaient pas le choix. C’etait ca ou la chute. Il fallait gagner du temps.

http://www.mininova.org/tor/1827456

Interessant comme la peur est le heros toujours au centre de la scene, ce depuis 911.

La Russie au secour de l'Islande

Les Raisins De la folie

  08/10/2008

Quanf ses icebergs de la finance se transforment en glaçons les masques tombent en Islande. (re)badaboum! :

http://www.ft.com/cms/s/0/41392f38-9450-11dd-953e-000077b07658,dwp_uuid=a36d4c40-fb42-11dc-8c3e-000077b07658.html

Iceland forced to seek Russian capital injection
By Tom Braithwaite in Reykjavik and Catherine Belton in Moscow
Published: October 7 2008 10:16 | Last updated: October 7 2008 18:07

Iceland expressed disappointment on Tuesday that western allies had failed to provide support to help ease the country’s financial crisis, forcing it to turn to Russia for a €4bn loan.

“We have not received the kind of support that we were requesting from our friends,” said Geir Haarde, prime minister. “So in a situation like that one has to look for new friends.”

In spite of the new friendship, Mr Haarde said it did not extend to military co-operation, refuting the suggestion that Russia might be given access to an airbase vacated by the US air force in 2006. “We are a founder member of Nato,” noted an official, “categorically denying” any such deal.

There was confusion over the status of the Russian loan, with the central bank first saying it had secured €4bn ($5.4bn, £3bn) on a four-year deal, at between 30 and 50 basis points above the London interbank offered rate, before acknowledging that the pact had yet to be finalised.

Alexei Kudrin, Russia’s finance minister, confirmed Russia had received a request from the Icelandic government for credit. “We will examine it,” he said. ”Iceland is well known as a country with tough budgetary discipline and a high rating of reliability. We see such an application positively.”

Iceland needs to bolster its foreign exchange reserves in an attempt to shore up the krona, whose depreciation has caused sharp price rises in imported goods such as fuel. The central bank said on Tuesday that it had begun intervening in currency markets to try to strengthen the krona, helping it to rise 13 per cent against the euro at IKr150.

Mr Haarde refused to say which countries had refused to offer help. He said the Nordic central banks were the only ones to come forward before Russia; they agreed a €1.5bn facility in the spring but the Icelandic government decided it needed more funds to shore up the currency. “In a situation like this it’s turning out that it’s every man for himself, every country for itself, everybody’s taking care of their best interest and that’s what we are doing,” the prime minister added.

Chris Weafer, chief strategist at Uralsib investment bank, said, “Lending money to Iceland is a very strong and clear statement from Russia that it is solvent and it has spare cash.”

“This is going to make a big difference to the Icelandic economy and it’s a very clear statement. It builds up political goodwill which could be helpful when it gets into difficult negotiations over territorial rights in the Arctic,” said Mr Weafer.

Iceland is continuing to look abroad for other funds but, if finalised, the Russian package will almost double its foreign currency reserves. Mr Haarde said the funding would be used to support the krona but would not be extended to commercial banks. He said despite ratings downgrades and a near-record price to ensure government debt from default, there would be no such move from the country. “Iceland has never defaulted on its sovereign debt and will not,” said Mr Haarde.

Copyright The Financial Times Limited 2008

On pourrait bien avoir pire ? Evidemment : pire ET différent !

Article lié : Trop peu, trop tard, et le rouge est mis

Francis Lambert

  08/10/2008

Cette référence enfermante à 1929, ces psychologies régressives qui veulent absolument se référer à papa, aux erreurs indépassables de papa bref cette terreur à envisager seulement la nouveauté, à se référer à la réalité d’aujourd’hui ... toutes les “solutions de papa” appliquées en boucle actuellement démontrent à l’envi que le passé n’est pas l’avenir.

D’ailleurs ils ne réussiront pas à répéter leur passé chéri.

En réglant leur conduite dans le rétroviseur ... ils vont bien entendu enisager une guerre mondiale : c’est la référence indépassable de ces “esprits” certainement pas libres. L’attente peut devenir réalisatrice en psycho surtout aussi régressive.

La globalisation, la pollution, l’épuisement des ressources et la conscience de la finitude de ce qui est maintenant une planète et plus “le monde”, le fantastique accroissement de population, la puissance hallucinante des techniques, l’écroulement des empires occidentaux, l’accroissement spectaculaire et mondial des niveaux de vie (eh oui malgré des drames), la convergence des bouleversements ...  bref la dimension, la variété, l’accumulation et la convergence de ces changements n’a pas grand chose à voir avec 1929.

Mais on peut se rappeler Valéry, Kondratieff par exemple. Se rappeler que dans l’histoire rares sont ceux qui compris.

Apprendre et s’adapter sont des choses très difficiles ... ils n’ont aucune chance de réussir dans leur condition, avec leur éducation d’espèce en voie de disparition.

1929 au musée des dinosaures svp. Je m’y vois aussi.

L'Islande hors l'UE c'était trop génial, sans l'UE c'est trop la cata !

Francis Lambert

  07/10/2008

... En novembre 2007, l’Islande était encore considérée comme l’une des plus belles réussites économiques occidentales, ce que soulignait sa place en tête du classement des endroits où il faisait bon vivre sur la planète ... Après avoir été l’un des pays les plus pauvres d’Europe,

... dettes dépassant les 100 milliards de dollars ... un PIB aujourd’hui évalué à 14 milliards de dollars ... Les taux d’intérêt ont été catapultés à 15,5 % dans l’espoir d’endiguer l’inflation. La couronne islandaise est en chute libre ... seule la devise zimbabwéenne, en plein naufrage, est dans une situation pire ... Les devises étrangères s’épuisent, les banques internationales refusant de prêter de l’argent.

... La vitesse à laquelle l’Islande a atteint les sommets pour ensuite mordre la poussière a surpris non seulement la population, mais aussi Geir Haarde, le Premier ministre ... L’atmosphère de crise a encore été aggravée quand le gouvernement a suspendu toutes les émissions du service public, mesure d’ordinaire réservée aux alertes volcaniques.

Les syndicats ont fait pression pour que l’Islande entame des pourparlers afin d’entrer dans l’Union européenne, ce que le gouvernement répugnait à faire depuis des années.

Andrew Pierce, The Daily Telegraph, en français http://www.courrierinternational.com/article.asp?obj_id=90143

Le principal conseiller économique de McCain a affaiblis les USA au-delà des rêves les plus fous des terroristes

Article lié : FDR, au secours, – suite et sans fin

Francis Lambert

  07/10/2008

Les mauvaises fréquentations de John McCain par Harold Meyerson, The Washington Post

Traduit dans http://www.courrierinternational.com/article.asp?obj_id=90103

“L’un des premiers responsables de la crise financière qui est en train de plonger le pays dans la récession n’est autre que l’ancien sénateur du Texas Phil Gramm, le propre conseiller économique de John McCain.

... Sa plus grosse erreur a été son amendement à la loi de modernisation des contrats à terme sur les matières premières (CFMA) qui a empêché le gouvernement de réglementer les “credit default swaps”, ces polices d’assurance couvrant les pertes sur les titres lorsqu’ils tournent mal.

... La CFMA a également empêché toute réglementation gouvernementale du marché énergétique, ce qui a permis à Enron de conduire quasiment à la banqueroute l’Etat de Californie avant de faire faillite elle-même.

... (McCain) n’a pas démenti la rumeur selon laquelle il est bien placé pour devenir ministre des Finances si lui-même est élu. “

( FDR semble d’une autre galaxie ... comparer cette crise à 1929 comporte d’énormes dangers d’interprétation. C’est Paulson—expert de 1929—qui a allumé cette crise qui s’accumulait depuis longtemps en laissant Lehman Brothers tomber en faillite : cela a sapé la confiance commune des banques qui ont refusé dès lors de se faire crédit plus longtemps. Paulson a peut être essayé de les faire revenir au “principe de réalité” ... mais “l’expert” n’a prévu AUCUN garde fou avant de jouer avec le feu. Je crains que l’histoire ne soit très dure avec “l’expert de 1929” ... encore une fois l’histoire des Nations ne leur sert pas à grand chose face à la sape quotidienne des lobbies. Un “expert” du Pentagone surgira bien un jour ... un expert de Napoléon peut-être ?)

President of the European Central Bank said “We (EU) do not have a federal budget.”

Nicolas Stassen

  06/10/2008

October 7, 2008
Europe Tested by Financial Crisis
By CARTER DOUGHERTY, NELSON SCHWARTZ and FLOYD NORRIS
European nations scrambled further Monday to prevent a growing credit crisis from bringing down major banks and alarming savers as Sweden followed Germany, Austria and Denmark in offering new protections for bank deposits.

As troubles in financial markets spread around the world, some governments are eager to act to avoid the mistakes of the 1930s when authorities sat on their hands during the Wall Street crash and its aftermath, Julian Chillingworth, chief investment officer at Rathbone Unit Trust Management in London, said.

Sweden became the latest European country to offer protection for bank deposits, after the German government offered blanket guarantees Sunday to all private savings accounts. Austria and Denmark also did the same.

Britain’s government on Monday scrambled to find ways to help the country’s ailing banking sector and even considered a partial nationalization of the industry. The chancellor of the Exchequer, Alistair Darling, continued to consult with advisers on Monday on ways to stabilize the banking sector, which may include a recapitalization financed by taxpayers, said a person at the Treasury who declined to be identified because the discussions were private.

Stocks fell sharply on Monday in London, Paris and Frankfurt.

New bailouts were arranged late Sunday for two European companies, Hypo Real Estate, a large German mortgage lender, and Fortis, a large banking and insurance company based in Belgium but active across much of the Continent. Under the agreement, BNP Paribas will acquire the Belgium and Luxembourg banking operations of Fortis for about $20 billion.

The spreading worries came days after the United States Congress approved a $700 billion bailout package that officials had hoped would calm financial markets globally.

The crisis in Europe appears to be the most serious one to face the Continent since a common currency, the euro, was created in 1999. Jean Pisani-Ferry, director of the Bruegel research group in Brussels, said Europe confronted “our first real financial crisis, and it’s not just any crisis. It’s a big one.”

Britain is coming under increasing pressure to act. Some investors criticized the government for failing to set up an American-style rescue fund and for its piecemeal approach to deal with each problem.

“The government needs to get on their front foot and get control of their own destiny,” Mr. Chillingworth said. “We could well be in a period where we see a quasi-nationalization in the banking sector, where taxpayers are taking equity stakes.”

Britain partly nationalized Bradford & Bingley last week after the mortgage lender struggled to get financing and brokered a takeover of HBOS by Lloyds TSB after its shares lost most of its value. From Tuesday, the government will also increase the amount of retail deposits it guarantees to £50,000, or $88,600, from £35,000.

Some analysts said guaranteeing deposits might reinstate client confidence but would fall short of bringing back the trust among banks that is desperately needed to encourage them to lend to each other. British banks remain burdened by their exposure to worthless mortgage assets, but the larger problem remains their unwillingness to lend to one another — even after an injection of £40 billion by the Bank of England.

“Liquidity is drying up,” said Richard Portes, a professor of economics at the London Business School. “The authorities have to deal with this paralysis in the money markets.”

The European Central Bank has aggressively lent money to banks as the crisis has grown. It had resisted lowering interest rates, but signaled on Thursday that it might cut rates soon. The extra money, aimed at ensuring that banks have adequate access to cash, has not reassured savers or investors, and European stock markets have performed even worse than the American markets.

In Iceland, government officials and banking chiefs were discussing a possible rescue plan for the country’s commercial banks.

In Berlin, Chancellor Angela Merkel and her finance minister, Peer Steinbrück, appeared on television Sunday to promise that all bank deposits would be protected, although it was not clear whether legislation would be needed to make that promise good.

Mindful of the rising public anger at the use of public money to buttress the business of high-earning bankers, Ms. Merkel promised a day of reckoning for them as well. “We are also saying that those who engaged in irresponsible behavior will be held responsible,” she said.

The events in Berlin and Brussels underscored the failure of Europe’s case-by-case approach to restoring confidence in the Continent’s increasingly jittery banking sector. A meeting of European heads of state in Paris on Saturday did little to calm worries, though officials there pledged to work together to ensure market stability.

President Nicolas Sarkozy of France and his counterparts from Germany, Britain and Italy vowed to prevent a Lehman Brothers-like bankruptcy in Europe but they did not offer a sweeping American-style bailout package.

The growing crisis has underlined the difficulty of taking concerted action in Europe because its economies are far more integrated than its governing structures.

“We are not a political federation,” Jean-Claude Trichet, the president of the European Central Bank, said after the meeting. “We do not have a federal budget.”

Last week, Ireland moved to guarantee both deposits and other liabilities at six major banks. There was grumbling in London and Berlin about the move giving those banks an unfair advantage. But Germany proposed its deposit guarantee Sunday after Britain raised its guarantee.

The German officials emphasized that the guarantee applied only to private depositors, not to the banks themselves. But on Monday, Mr. Steinbrück said the government was considering an “umbrella” to protect the banking sector.

Unlike in the United States, where deposits are now fully guaranteed up to a limit of $250,000 — a figure that was raised from $100,000 last week — deposits in most European countries have been only partly guaranteed, sometimes by groups of banks rather than governments. In Germany, the first 90 percent of deposits up to 20,000 euros, or about $27,000, was guaranteed.

Even before the Paris meeting began it was becoming clear that two bailouts announced the week before had not succeeded and that UniCredit, a major Italian bank, might be in trouble. UniCredit announced plans on Sunday to raise as much as 6.6 billion euros.

Fortis, which only a week ago received 11.2 billion euros from the governments of the Netherlands, Belgium and Luxembourg, was unable to continue its operations. On Friday, the Dutch government seized its operations in that country, and late Sunday night the Belgian government helped to arrange for BNP Paribas, the French bank, to take control of the company for 14.5 billion euros, or about $20 billion.

In Berlin, the government arranged a week ago for major banks to lend 35 billion euros to Hypo Real Estate, but that fell apart when the banks concluded that far more money would be needed. Late Sunday night the government said a package of 50 billion euros had been arranged, with both the government and other banks taking part.

The credit crisis began in the United States, a fact that has led European politicians to assert superiority for their countries’ financial systems, in contrast to what Silvio Berlusconi, the prime minister of Italy, called the “speculative capitalism” of the United States. On Saturday, Gordon Brown, the British prime minister, said the crisis “has come from America,” and Mr. Berlusconi bemoaned the lack of business ethics that had been exposed by the crisis.

Many of the European banks’ problems have stemmed from bad loans in Europe, and Fortis got into trouble in part by borrowing money to make a major acquisition. But activities in the United States have played a role. Bankers said Sunday that the need for additional money at Hypo came from newly discovered guarantees it had issued to back American municipal bonds that it had sold to investors.

The credit market worries came on top of heightening concerns about economic growth in Europe and the United States.

“Unless there is a material easing of credit conditions,” said Bob Elliott of Bridgewater Associates, an American money management firm, after retail sales figures were announced, “it is unlikely that demand will turn around soon.”

Henry M. Paulson Jr., the United States Treasury secretary, hoped that approval of the American bailout, which involved buying securities from banks at more than their current market value, would free up credit by making cash available for banks to lend and by reassuring participants in the credit markets.

But that did not happen last week. Instead, credit grew more expensive and harder to get as investors became more skittish about buying commercial paper, essentially short-term loans to companies. Rates on such loans rose so fast that some feared the market could essentially close, leaving it to already-stressed banks to provide short-term corporate loans.

Europe’s need to scramble is in part the legacy of a decision to establish the euro, which 15 countries now use, but not follow up with a parallel system of cross-border regulation and oversight of private banks.

“First we had economic integration, then we had monetary integration,” said Sylvester Eijffinger, a member of the monetary expert panel advising the European Parliament. “But we never developed the parallel political and regulatory integration that would allow us to face a crisis like the one we are facing today.”

In Brussels, Daniel Gros, director of the Center for European Policy Studies, agreed. “Maybe they will be shocked into thinking more strategically instead of running behind events,” he said. “The later you come, the higher the bill.”

While the European Central Bank has power over interest rates and broader monetary policy, it was never granted parallel oversight of private banks, leaving that task to dozens of regulators across the Continent.

This patchwork system includes national central banks in each of the euro zone’s 15 members and they still retain broad powers within their own borders, further complicating any regional approach to problem-solving.

“The European banking landscape was transformed fairly recently,” Mr. Pisani-Ferry said. “When the euro was first introduced, the question of cross-border regulation didn’t really arise.”

Optimists say one potential long-term benefit from the current turmoil is that it often takes a crisis to propel European integration forward.

“Progress in Europe is usually the result of a crisis,” Mr. Eijffinger said. “This could be one of those rare moments in E.U. history.”

Carter Dougherty reported from Frankfurt, Nelson D. Schwartz from Paris and Floyd Norris from New York. Katrin Bennhold and David Jolly contributed reporting from Paris and Julia Werdieger and Landon Thomas Jr. from London

http://www.nytimes.com/2008/10/07/business/07euro.html?pagewanted=2&WT.mc_id=BI-S-E-GG-NA-S-europe_banking&WT.mc_ev=click&ei=5087&en=80360eb1d5ef3296&ex=1238904000&WT.srch=1&excamp=GGBUeuropebanking

Le calendrier du Congrès : la farce de la démocratie américaine démontrée

Francis Lambert

  06/10/2008

Au pire de la crise, que fait l’assemblée responsable de la plus grande Nation démocratique du monde, Nation à l’origine de l’ouragan du crédit qui assaille la planète et ruine son propre peuple ?

Le Congrès prend congé de la Nation jusqu’aux élections du 4 novembre.

Il ne reste que Bush : déjà croupion d’exécutif. L’autre “moitié des institutions” est en vacances !
Ensuite le croupion et son “Congrès de la Nation” longuement ... jusque fin janvier.

Et enfin une administration débutante écrasée d’hypothèques. 

Curée opportuniste des Nations d'europe à la faveur du déclin de l'empire américain

Francis Lambert

  05/10/2008

Quand une Nation comme la Belgique s’appauvrit en cumulant les charges de sa dette autant d’années, quand ses politiciens pataugent dans la corruption et les querelles de poulallier, il ne faut pas s’étonner d’un effondrement exemplaire. La crise mondiale du crédit était prévue et décrite depuis longtemps (voir La Chronique Agora, Leap2020, d’innombrables blogs prestigieux comme Nourini, Krugman, des sommités comme Warren Buffet, Soros etc. etc.) ... mais pas pour les “responsables démocratiques” des Nations d’europe !

FORTIS ne s’est même pas retirée de son alliance d’achat d’ABN-AMRO devant l’annonce de l’échec ! Les pitres claironnent maintenant la garantie “Nationale” ... un cadavre criblé de dette, alourdit d’une faillite supérieure à son PIB, devient LA garantie s’il est National !
Plus le mensonge est gros, plus la “Nation” devient crédible.

La Nation d’Irlande garantit jusqu’à deux fois le montant de son PIB ... au début d’une récession séculaire ! Seulement deux fois !?

La Grèce surenchère ...

Lors de la faillite d’une SABENA criblée de dettes (symbole national s’il en est) la Suisse avait dépecé le cadavre dans l’excitation de l’occasion. Swissair ennivrée un moment de la curée, s’est effondrée dans la jungle de la vulgarité financière. Maintenant l’UBS gavée de subprime serait à l’abris grâce à la Nation cantonale ?!

Une autre Nation mais “communautaire d’europe”, la Hollande, se réjouit d’avoir saisi les “meilleurs morceaux” de FORTIS. La “solidarité communautaire” est déjà piétinée par la Nation qui crève fièrement la réputation de leur “allié du Bénélux”. Les gueules avides des Nations prédatrices grimacent à travers toute l’europe “civilisée”. Evidemment ces chacals ont la vue aussi courte que leur mémoire, les loups et les ours sont à l’affut. La Hollande recroit en ses digues au milieux de la pire tempête mondiale ...

Déjà “Hypo Real Estate, numéro deux du crédit immobilier en Allemagne, a annoncé samedi soir l’échec du plan de 35 milliards d’euros destiné à la sauver de la faillite, après que les les prêteurs privés ont décidé de se retirer, jugeant le plan trop coûteux”.
L’Allemagne ... bastion financier de l’europe et championne de la subsidiarité solitaire dans cette crise planétaire !

Et Fillon de claironner qu’en France ce n’est pas possible ... l’état Français a tellement démontré sa riqueur financière que toute l’europe éclate de rire ... la France est à nouveau à l’abris de toute retombée du “Tchernobyl financier”. Cette Nation shootée aux finances toxiques par sa seringue à produits dérivés qu’est EURONEXT-NYSE ...

La sarabande aveugle et discordante des cruelles Nations d’europe annonce la débacle qui nous raproche d’un tiers monde ahuris, la tragédie recommencée est déjà assourdie des braillements des voyoux des Nations.

La chute de l'Empire Spéculationniste.

Article lié : Un vote de résignation acheté par une corruption massive

Père Iclès

  04/10/2008

En guise de conclusion provisoire, on pourrait dire que la “Douma US” a en seconde lecture décidé de se lever comme (presque) un seul homme pour défendre son système (qu’elle sait pourtant condamné), ses privilèges, ses datchas… :)

On attend la suite avec impatience.

sarko... quel sarko

_ python

  04/10/2008

dans ce que dit sarko que lui écrivent les (sherpas) conseillers, que peut comprendre un sarko-kasstoi-povkon : rien. L’homme est renard et malin, agité du bocal on convient, mafieux à ses heures à la rigueur, stratège non.  ça c’est les autres. les autres n’étant pas et de loin élus les autres c’est toujours pas nous.
et de moins en moins nous, quand on pense aux referendum de france, (des pays-bas), d’irlande, dont les discours continuent et continueront, conseillers non élus ou pas, à se contrefoutre.
Il y a eu une prise de pouvoir mafieuse et c’est dans les media officiels que ça se mesure. Ici et là-bas, mais c’était concerté. Il y a veu par eux des basculements de la psychologie et de la posologie : contre la peur, 3gr de testostérone et 6 gr de mère, trois fois par jour.  Contre la peur de ce que tu es ce qu’il faut que tu sois ce que tu dois croire : c’est 20 fois par jour, sur CNN et sur AFP, tout ça c’est verrouillé.
Ouvrez les vannes !!!!!!!!!
Car rien n’est réel.

La Pologne quitte l'Irak

Francis Lambert

  04/10/2008

AFP 04/10/2008

La Pologne a mis fin officiellement à sa mission au côté de l’armée américaine en Irak, et annoncé le retrait d’ici fin octobre de ses 900 derniers soldats déployés dans le pays, au cours d’une cérémonie officielle dans le centre du pays.

1929, 9/11... et aussi 1912 ?

Article lié : Un vote de résignation acheté par une corruption massive

Alain Vité

  04/10/2008

Bonjour,
En fait d’analogie, je vois dans la finance mondiale en crise, plutôt le naufrage du Titanic. Non dans la quantité de victimes ni la profondeur de l’impact mais dans la succession d’événements.

Il était un… immense paquebot
que ses architectes, aussi ambitieux que peu clairvoyants, ont voulu le plus superlatif de tous et déclaré insubmersible avec une sidérante arrogance (ou sa toute proche soeur l’inconscience) ; construit avec tant de certitudes et d’appât du gain que le nombre de canots de sauvetage avait été réduits à une présence quasi décorative et folklorique ; lancé à pleine vapeur sans essai ni précaution à travers la mer dangereuse. Et lorsqu’il commence à sombrer, le commandement fait donner l’orchestre et distribue des friandises sur le pont, pour calmer et la riche foule qui s’impatiente.

Lorsque le navire coule finalement, les passagers modestes des ponts inférieurs sont les plus nombreux à se noyer dans le sauve-qui-peut final, sans canot de sauvetage ni parachute doré.
Quant aux architectes de ce monumental désastre, hormis leur prestige anéanti, ils n’ont pas été plus inquiétés.

L’ensemble était de conception britannique, que l’on dirait aujourd’hui “anglo-saxonne”, petite observation qui ne contredira pas vos thèses.

Ce qui m’a paru le plus “inlucide”, dans l’affaire actuelle, c’est la transformation de normes comptables, qui font passer les actifs d’une entreprise, passant de leur valeur réelle et concrète à celle accordée par la Bourse. J’ai eu du mal à le croire tant une telle folie me paraissait… incroyable, je ne vois pas d’autre mot

(ou alors j’ai mal compris ?)

Cela revient à remplacer les canots de sauvetage par de grands dessins des mêmes canots, sans doute en plus jolis, artistiques voire de style audacieux mais sans rapport avec la réalité.

En 1912, le Titanic a bel et bien fait naufrage. l’Histoire dira jusqu’où vaut l’analogie et combien de malheureux seront entrainés dans la noyade du système financier actuel.

Voilà voilà. Si tout ceci manque de bon sens, rassurez vous, je ne suis qu’un clampin de passage qui retourne à ses occupations. Bonne fin de semaine