Woops….Your Collateral Is No Good Here

This is going to get interesting rather quickly…

Germany’s Bundesbank is the first of the 17 euro-area central banks to refuse to accept as collateral bank bonds guaranteed by member states receiving aid from the European Union and the International Monetary Fund,Frankfurter Allgemeine Zeitung reported.

The Bundesbank won’t lend to banks against bank debt guaranteed by Greece, Ireland and Portugal from May, the newspaper said, citing unidentified officials. The Frankfurt-based central bank currently has less than 500 million euros ($667 million) of those bonds on its balance sheet, FAZ reported.

That ought to the end of the “fungibility” argument for Euro-area debt.

Or how about a new “household tax” being assessed in Ireland?  Wait…. a tax for being alive?  That sounds like Obama!  Unfortunately the Irish appear to have lost their balls — and their rifles from the IRA years.  They need to find at least one of the two, and soon — and hopefully the non-violent forms of recourse will be employed.  After being sold out repeatedly by the jackals of finance, one wonders if Irish whiskey has addled their brains to the point of inability to properly respond to being financially raped.

Oh, I forgot to tell you that the flat tax is being replaced next year by a progressive (funny, that word) tax that will assess some people with as much as 10 times the current liability (oops!)

Ireland is no stranger to corruption.  Remember Unicredit?  Maybe you can all explain to me why the Irish people should pay for the profligacy and intentional bad lending decisions made by Irish banks?  After all, they didn’t get a seat at the table in the lender’s committee when making the decision to loan (or not), so why should they bear the cost?

That’s the key question, you see.  The ability to shift responsibility after the fact for bad decisions while pocketing the money for good ones (and even for bad ones!) is commonly known as slavery or despotism.  It is the sort of thing that has, in the past, led to revolution, especially when enabled and combined with official corruption.

More importantly, however, you can’t obtain actual prosperity until these games and schemes stop and the bad loans are forced into the open and defaulted.  Covering them up with even more schemes and scams doesn’t solve anything — it just makes for a bigger, more-convoluted mess.

If you think we’ve found an answer to any of the problems we began to stare down in 2007 and 2008 you need your thorazine dose adjusted — upward.

And no, this isn’t an April Fools’ joke.

Discussion (registration required to post)