Richard Koo on credit crunch in Europe

[gaf63]

http://www.businessinsider.com/credit-crunch-arrives-in-europe-2011-11?

 

If most euro banks follow Unicredit in reducing risk assets/loans,  a collapse into a full blown recession cant be far behind

[ubuy2wron]

What has been the historical precedence re European vs North American recessions, I would think that economic activity in one economy would always result in similar results in the other. It would seem to me that unless Europe prints a contraction in the economy is a certainty with the contraction in credit which is comming.

[oddballstocks]

Good article, thanks for posting.

 

I have often wondered where these banks were going to raise capital from, but as Richard Koo says it makes more sense to deleverage and shrink the balance sheet. 

[ubuy2wron]

I frankly just do not get it as I have said before thinking macro makes my head hurt. Italys largest bank Uni credit announced a 10 billion loss and a rights offering which will dilute by 50% and has basically asked the ECB to change the rules to keep them alive and the mkt is unchanged as I type this. Italy can not bail out Uni-credit and Europe can not bail out Italy and the rest of the world is basically saying to Europe its your problem and Uni credit is within 48 hours perhaps of having to shut down and Uni credit is NOT a little bank its huge.  I bought a little gold today because it is looking more and more that Europe has just two choices crash or print.

[Myth465]

I think you pretty much have it figured out. Jim Rogers is looking like a genius from where I sit. He said they will print about 1.5 years ago. Germany is going to have to let the ECB do its thing or Europe will crash. Both options suck, but one is much worse then the other. Everything else is just Theater inmo.

[txlaw]

I think you pretty much have it figured out. Jim Rogers is looking like a genius from where I sit. He said they will print about 1.5 years ago. Germany is going to have to let the ECB do its thing or Europe will crash. Both options suck, but one is much worse then the other. Everything else is just Theater inmo.

 

As Keynes and WEB have argued, central banks should not give up their ability to print money. 

 

The ECB needs to to start printing Euros like they're going out of style because the European governments can't get their acts together.

[gaf63]

first off, take this for what its worth , zilch, however,

I think its too late to print, the time to print and lower rates was months ago,

the Germans are too afraid of their 20's/30's inflation and refuse to participate

they may even wish for the union to dissolve , but the whole world would suffer including them,

I'm in agreement with Watsa/FFH and their deflation bet , any qe now would probably be too little and too late

[txlaw]

first off, take this for what its worth , zilch, however,

I think its too late to print, the time to print and lower rates was months ago,

the Germans are too afraid of their 20's/30's inflation and refuse to participate

they may even wish for the union to dissolve , but the whole world would suffer including them,

I'm in agreement with Watsa/FFH and their deflation bet , any qe now would probably be too little and too late

 

I hope you're wrong, but I'm worried you're right.  What a mess.