EU Finance Ministers To Obama: Sit And Screw


EU Finance Ministers To Obama: Sit And Screw

Posted by Karl Denninger

You have to love the audacity of hope:

Feb. 15 (Bloomberg) — European Union finance ministers are uniting to oppose President Barack Obama’s proposal to limit banks’ size and risk-taking, saying his plan may run counter to EU policy, according to a draft document.


So let’s see, Brussels thinks that it’s perfectly ok for banks to:

  • Engage in trading against their client’s interests.

  • Create tricky derivatives that, at their core, exist only because someone is shorting a given asset – yet the offering prospectus for those buying said instrument does not say “this instrument only exists because a highly-sophisticated investor wanted a means to bet that what you’re buying will implode.”  Note that this is exactly the opposite of a traditional IPO or Debt Offering in which the premise is that the asset underlying the security is good.  That is, these banks are selling securities that if the intent of the creator is realized, will be worthless.  How can this be legal?

  • Have and maintain a financial system that, according to Jamie Dimon himself, has a crisis every five to seven years.  Really Jamie?  How come we didn’t have one for fifty years – from the 1930s, when Glass-Steagall was passed, until the 1980s?  Might that have something to do with the progressive dismantling (and outright circumvention) of that law?

  • Have entire nations in your so-called “union” that appear to have intentionally cooked the books for the purpose of entry into the EU, and who appear to have solicited major banks (including Goldman) to help them cheat on their accounting in order to do so.  Oh, and you still (thus far anyway) appear to be willing to allow Goldman (and these others banks) to continue to do business there as well, despite their obvious involvement.

How about this?  How about if you keep all those tricky derivatives, banks that screw their customers (on purpose!) and a financial system that threatens to blow the entire economy to bits every five years.

And how about if we, The United States, erect a giant middle finger in your direction, and instead reinstate Glass-Steagall and then mandate that any firm that does business with or in the United States honor and obey our laws, with the penalty for failing to do so being prison time for the offenders – all of them, including those very same pinstripe-suited bankers.

I’m sure we can find wider pinstriped suits that will fit them.

Of course then I woke up.