In The News Today

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Bill Holter’s Commentary

More or less “pulling the plug”?

Europe’s New Mistake on Failing Banks
October 9, 2017

Three years since their banking union began to take shape, European Union regulators are seeking fresh powers to deal with lenders in trouble. Their plan would let them stop withdrawals from a failing bank for a few days while they address the problem, with the aim of preventing a run. But this approach could easily have the opposite effect, spreading panic to the whole financial system. There’s a better way.

Instead of freezing bank accounts, EU governments should enable regulators to keep a bank going while they restructure it and search for a new owner. This will require EU governments to commit additional resources for the task.

The European Central Bank and the euro zone’s Single Resolution Board have been calling for the power to freeze bank accounts — a so-called moratorium — since the swift resolution of Banco Popular in June. They succeeded in winding down the troubled Spanish lender by selling it to rival Banco Santander, but had to do it on a weekday night with a run on deposits in progress. The regulators say that next time it might be impossible to find a buyer overnight. A moratorium would relieve that pressure and perhaps allow them to sell the bank at a better price.

This approach would mirror an arrangement which is currently in place in Germany, and it’s superficially appealing: Closing a bank would certainly stop a run. But it could also have unintended consequences. Depositors may run from a bank in trouble sooner — fearing that if they wait too long they may not be able to withdraw their money. It could also lead depositors to empty their accounts as soon as the bank re-opens. Most dangerous of all, freezing accounts in one bank could spread panic to the rest of the system, as other depositors fear the same will happen to them.


Bill Holter’s Commentary

Another of many warnings from the IMF. They can certainly say “YOU WERE WARNED”!

Debt binge threatens UK economy as IMF warns of financial crash
October 8, 2017

A surge in household borrowing is paving the way for another financial crisis, according to the International Monetary Fund.

In a hard-hitting report published ahead of its annual meetings in Washington this week, the watchdog warned of ‘risks down the road’ from rising levels of debt.

And raising the prospect of a new financial disaster, ten years on from the last, the Fund said: ‘Higher household debt is associated with a greater probability of a banking crisis, especially when debt is already high.

‘A sudden economic shock – such as a decline in home prices – can trigger a spiral of credit defaults that shakes the foundations of the financial system.’

The intervention will set alarm bells ringing among central bankers and top politicians as they prepare for this week’s gathering at the IMF headquarters in Washington.


Bill Holter’s Commentary

“It’s just more scare tactics by people who oppose all LGBT civil rights and protections,” Weiner said in a statement last month.

Would they really write a law…not to use it?

New California Law Allows Jail Time For Using Wrong Gender Pronoun, Sponsor Denies That Would Happen
October 9, 2017

California health care workers who “willfully and repeatedly” decline to use a senior transgender patient’s “preferred name or pronouns” could face punishments ranging from a fine to jail time under a newly signed law.

California Gov. Jerry Brown signed the legislation last week.

The sponsor, Democratic state Sen. Scott Wiener, has argued adamantly that nobody is going to be criminally prosecuted for using the wrong pronoun.

“It’s just more scare tactics by people who oppose all LGBT civil rights and protections,” he said in a statement last month.

But the language seemingly allows for the possibility, however remote.