Confusion reigns over Germany’s exposure to our debt
independent.ie/business/euro … 34734.html
The truth will out, no matter how hard some may try to conceal it. The bank gaurantee, the bailouts etc are not designed to “get credit flowing again” but instead to protect speculators who have gambled on the Irish property bubble.
The problem is that much of the debt is investor rather than bank debt. That’s what we see from the random lists of bondholders that have been posted up (on GuidoFawkes, for example). These are, as far as I can see, investment funds. That means that Hans and Gertie’s money is invested in a fund that has invested in Irish banks. This is not a liability of the German banks, it is a liability of their investors.
In addition, the IFSC has large borrowings (for which it largely has matching assets). This will skew any picture based on the BIS. We have no idea, however, how much of IFSC lending is to Irish banks - how much is lent on exposure.
So, do we want to stuff Hans and Gertie? Or Jean-Claude and Fifi?
Sure. They’re easier to mount over the mantelpiece that way.
I don’t care if it’s senior money and is the same as depositor money - anyone who put their faith in Seanie and Fingers and perpetual double-digit growth deserves to lose their shirt. Greedy, dumb bastards, probably fund managers chasing bonuses. Fuck em.
Aye, I don’t doubt it, I am attempting to explain the confusion on numbers.
The German fund managers had a reputation amongst the US banks as being dimmer than the average - read Michael Lewis’s The Big Short.
I think it is a little dim of us to do this without at the same time stiffing the NAMA loan ‘investors’ (those who borrowed to invest and are now in NAMA claiming poverty). Is it materially different to those who borrowed to buy apartments in Bulgaria/Dubai/anywhere in Ireland as their investment nest eggs? Or indeed, just an over-priced PPR (whether they hoped to flip it at a later date)? Or the grannies with their lifesavings in BoI shares?
I suspect German bankers arn’t dimmer than your average banker, just a later entrant into the game.
Given their domestic markets attitude to debt, profits are harder to come by, thus they look farther afield and depend upon foreign markets to boost earnings.
Hence they are overly exposed to the Greek, Irish and American banking problems.
I’d understood from the subprime fiasco that plenty of European banks/funds had automated orders to buy AAA-rated instruments.
Eh. no. Dimmer. Also big players (i.e losers) in the great South American debacle of the 1980’s and the Asian blow up in the 90’s.
Its that classic combination of being yield ho’s, pathologically risk averse and hobbled by often utterly perverse regulatory requirements.
That’s what makes them such easy marks every time. Hence Depfa and Hypo…
wrong thread