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Date: 2025-04-07 Page is: DBtxt003.php txt00001445

Money Banking and Financial Services
A really broken system

Sarkozy: Europe's 'Liquidity Run' Has Begun Because There Is An Unsolvable $30 Trillion Problem

COMMENTARY
Huge numbers ... really huge! Why? The bankers have been allowed to build a 'house of cards' that has little or no connection with the real world.

I really am disgusted that the world's leadership elite have allowed things to get to the present state of affairs. It did not happen overnight, it started about 40 years ago and the accumulation of wealth and power by greedy people was allowed to get out-of-hand.

In terms of the future and a sustainable solution, I am an optimist simply because the science and technology to have a great quality of life in a peaceful world is available ... but I am a pessimist simply because our leadership is working in a direction that ensures cataclysmic failure. A few will be very rich, but there will be disaster.

I cannot pretend to understand what is being said in this video ... largely because nobody understands the situation and the mechanism that will kick in under any given set of monetary actions. I hear very large numbers ... but have no idea how sensible these numbers are. All of these people engaged in high finance should be made to do some accounting and held to account.
Peter Burgess

Sarkozy: Europe's 'Liquidity Run' Has Begun Because There Is An Unsolvable $30 Trillion Problem

Submitted by Tyler Durden on 11/23/2011 10:59 -0500

Carlyle European Central Bank Fail TARP

No, not that Sarkozy. His half-brother - the one who actually can use a calculator. In an interview on CNBC, the Carlyle group head had the temerity to tell the truth, the whole truth, and use math - that long-forgotten concept which one has to scour various backwater blogs to rediscover - to explain nothing but the truth which is that Europe needs many more trillions than either the EFSF or the ECB can afford to give. Actually, we take that back. The ECB can inject the needed €3-5 trillion, but after that concerns about localized episodes of (hyper)inflation, especially now that Kocherlakota has confirmed that the transmission mechanism between bank reserves and inflation may be broken, will be all too justified. In the meantime, Sarkozy on Europe math fail: 'The math i'm working with is very simple. In the US banking sector, we had 3 trillion of wholesale funding that needed to be stabilized, got stabilized by the implementation of TARP which saw the US treasury buy $212 billion worth of preferred in the banking sector to stabilize that $3 trillion, give our banks the time to work through hair problem their problem assets. In Europe, that $3 trillion is $30 trillion. so if you multiply the $212 by 10, you get the $2.12 trillion. In my view, the issues on the European banks are bigger than the issues on the books of the US Banks. So if you want to stabilize that $30 trillion and in my view it's not that you want to, it's that you have to, you do not have a choice, you're going to have to be at least at 2.1 trillion and i suspect it may need to be more.' Q.E.D. - there, the math wasn't that difficult, was it?

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