and to continue:
http://www.cnbc.com/id/100588887
Dijsselbloem was quoted as saying that future bank restructurings could seek funds from uninsured depositors, among other measures, suggesting to already nervous investors that any European institution could grab depositor funds.
If the bank can't do it, then we'll talk to the shareholders and bondholders, we'll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders," Dijsselbloem was quoted as saying in the Financial Times and on Reuters
Interpretation:
"I would read it as a broader message. No bailouts without some sort of bail ins," said Vassili Serebriakov, currency strategist at BNP Paribas. "I think he meant what he said. I think there's a general pressure for any type of bailout to be accompanied by private sector bail ins. I know we were told Cyprus was a special case."
After the markets reacted:
Dijsselbloem later denied that he called it a template, reiterating that Cyprus is a separate case
Interpretation:
My own words:
He got in trouble, the markets werent ready for this straight talk. He got some harsh phone calls, and had to retract his words.
"He's the new guy on the job," said Boris Schlossberg of BK Asset Management. "I think sometimes they try to be too honest. They have to learn to be more political and disciplined ... but all of this stuff is a sideshow
i see so its like my interpretation. Actually the officials are just reacting as things go along. Officials must use 'fed speak' to obfusicate (spelling) the clear meaning. But at least 'fed speak' only deals with legal central bank medalling. It doesnt involve the blatent breaking of the rule of law.
So how do the officials overcome this? they say its limited to cyprus, cyprus is a 'special case'.
BUT HOW CAN THE BREAKAGE OF THE RULE OF LAW BE A 'SPECIAL CASE'.
If you break it once, you can break it again.
Then there were some other media articles that i read (respected sources as far as media reports go), in a nut shell the commentary coming out of them was essentially the
degree to which markets react determines the 'fixation methods we adopt'.
Now again look at this above paragraph again. And think it through. What B/S is this?????
Policy is dictated by market reaction?????
5 years after the GFC!!!!!
How can a long term secular uplift occur under these sought of market impositions????
For those long term Somersofters, you might remember i posted an article on secular bull/bear markets, a year before this terminology became common place in media writings.
You might want to refresh yourselves of it.
But one word of updated personal insights which i might not have posted in that original article,
within a secular bear market, its quite possible (and probable) to have cyclical bull runs that may last for several years, however as history presents its road, the underlying secular bear market is still in tact.
My feeling is that my original hypothesis is still intact.
I have made incredible returns over the last 5 years playing his market.
My nagging worry, is that could australia be like the US post 1987. Our underlying risks are actually different to the rest of the majority of the world.
We dont really have the global problems to the same degree. Could this result in a structural break out of our local market?????
Specially when the banking industry was leveraged approx 8 times country's GDP...
