The BofE: ready to bail out the banks ‘too big to fail’ – again!
Now we know why there were no leaks from the Treasury, why there were no excited gossipy articles about what all Hunt was going to do. What was this again about a mountain being pregnant and bringing forth a mouse?
Good old ‘staff’ at the BBC has come up with this: “Newspaper headlines: Hunt ‘defies gloom’ and ‘Giveaway for the 1%’.” (link). To no-one’s surprise it’s the grauniad wailing about about yon ‘giveaway for the 1%’. Well, the 1% mostly profiting from this ‘giveaway’, the ‘lifting of the pension cap’, are the public servants, or rather the top level employees thereof. So be careful, grauniad: these are your readers!
Frankly, scanning the frontpage headlines, in print or online, is as mind-blowingly boring as the budget itself. There’s nothing we can do about it except pay. The tediousness of the coming ‘debates’ in Parliament will only reinforce the impression that they all live in a glorious bubble, perched on the top of a modern-day Mount Olympus where nothing can touch them. I can only agree with Fraser Myers’ interpretation in ‘spiked online’ when he writes that “The UK chancellor has managed to produce the most lacklustre, most uninspiring and most dispiriting budget of the modern age.” (link)
Hunt and the government, together with the Treasury, is patting itself on the back for this bland, ‘safe’ budget and Sunak is basking in the sunshine of yon AUKUS agreement which he signed with the Aussie PM and Biden at the past weekend. That’s also meant to make us all ‘feel safe’. You might like to have a quick glance at Caitlin Johnstone’s observations regarding that treaty. She writes that: “In reality, Australia is not arming itself against China to protect itself from China. Australia is arming itself against China to protect itself from the United States.” (link)
Meanwhile, the tremors presaging the coming economic earthquake are coming closer. After the crash of the Silicon Valley Bank which allegedly nobody was able to predict, not even their top manager, the next bank experiencing an earthquake is very much closer than California. It’s the Swiss bank ‘Credit Suisse’. Yesterday afternoon The Times reported:
“Credit Suisse will borrow up to 50 billion Swiss francs (£44.5 billion) from the country’s central bank in a bid to quell anxiety over its financial health. The Zurich-based lender said it was taking “decisive action to pre-emptively strengthen liquidity” in a statement issued in the early this morning. […] The bank said that exercising an option to borrow up to SwFr50 billion from the Swiss National Bank “would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs”.” (link, paywalled)
Note the reassuring weasel words, note that Credit Suisse aims to ‘create a simpler and more focus bank around client needs’. Don’t ask what that bank was focussed on before. Mind you, this optimistic announcement was made in the afternoon. It got worse in the evening. This morning, the DT had more news on this bank (this and other emphases are mine):
“The Bank of England was holding emergency talks with international counterparts on Wednesday night after shares in Credit Suisse plunged as much as 30 per cent, spreading fear through the City of London that overshadowed Jeremy Hunt’s maiden Budget. […] Growing fears of a new banking crisis have led financial experts to begin reassessing forecasts for economic growth, with some predicting that central banks will soon have to start cutting interest rates.” (paywalled link)
With the Bank of England again involved, with ‘experts’ already saying that there might be a ‘bail-out’ for that bank – we remember who will pay for this, do we not! – or talking about the bank being ‘too big to fail’, or about the necessary lowering of interest rates, there was only scant mention of why Credit Suisse was suddenly at the financial abyss, after their afternoon statement. Scrolling down nearly to the end, we’re told, in one bland sentence, that “Ammar Al Khudairy, chairman of the Saudi National Bank (SNB), said his company will not invest any more capital into Credit Suisse for regulatory reasons.” (paywalled link)
That decision, you will agree, begs quite a few questions. The German paper ‘Die Welt’ had a bit more to say (machine translated):
“The major Swiss bank Credit Suisse exacerbated concerns about a new banking crisis on Wednesday. The trigger was an interview by Ammar Al Khudairy with the television Bloomberg TV. In it, the president of the Saudi National Bank stated that he was under no circumstances willing to put more money into the institute. Since a capital increase at the end of last year, the institute from the Gulf State is the largest shareholder of the second largest Swiss bank with a share of 9.9 percent. […] The reason for the crash is the realization that the Arabs are not ready as rescuers in need in case of doubt. “The Saudis have enough money,” said a high-ranking Swiss banker the day before. Now this option is officially excluded.” (paywalled link, in German)
Not even the German reporters asked why suddenly the Arabs aren’t willing to hand over more of their money. Some intrepid comment posters did point out that the Swiss breaking their famed neutrality by joining the sanctions against Russia last year might conceivably have had something to do with the Saudi’s unwillingness to hand over more of their money. After all, when even the financial safe haven of Swiss banking becomes the playball of US political ‘interests’, up to sanctions and freezing of assets, why would they, why should they? ’Russians today’ might easily become ‘Arabs tomorrow’, ‘Chinese next,’ at the drop of Uncle Sam’s hat. Why throw good money after bad …
That’s all I have for today. Truly, events have shown the truth of Kissinger’s quip: “To be an enemy of America can be dangerous, but to be a friend is fatal.”. Will Sunak even notice? Meanwhile the economic earthquake is coming ever closer. Have a good day.
I freely admit that I do not understand much about ‘finance’. Thanks Viv for the Kissinger remark. Even more true now than it was then! The Spiked comment was also good. Doesn’t the Government always fiddle while Britain burns.
The one thing I do think I understand is that we only have to look at Southern Ireland to see that raising Corporation Tax is completely the wrong move. Eire has won foreign investment by lowering their Corporation Tax. Surely that is what we need to do.
Clearly the 25 % corporation tax was a deliberate ploy to please and protect the EU from the mismatch with Britain and NI. The EU is only a Customs union. to hold them together , and the lack of a border threatens it to the extent of destroying the EU > Therefore we have to help. A collapsed EU would be a calamity for the west. We need EU to unsettle American natural resources, and provide a law and order barrier from Islam. A far bigger and really dangerous threat to the planet than China… Our politicians think Islam is just grooming gangs… Grooming gangs are only a symptom. and signpost.
TG: we managed without the EU membership prior to joining. Surely we can manage without it now provided that those in government accept that and stop trying to sell us out again.
Sorry T.G.S. I think you have got the wrong end of the stick completely there.
So fifty odd billion for Credit Suisse, a loan that will never be repaid, in the grand scheme of things just a drop in the ocean, it won’t go far or last very long. What this does do though is to give an indication as to how governments will play this situation for now, they’ll use our money to prop up the banks for as long as they can and it’ll cost us dear.
In reality, the way the banking system is imploding, it’s impossible to bail out but the criminals we call politicians that are supposed to look after our interests won’t give up until they’ve subjected us to hyperinflation and poverty. When they’ve bled us dry, they’ll resort to bail ins just to make sure that they get whatever some of us may have left.
It looks like this whole ugly, criminal scenario is going to take a while to play out as governments try and prop things up. Credit Suisse will stagger on for a bit longer but in the meantime there are plenty of others on the brink, just wait until one of the US big four falls over, this will take a while longer though.
Meanwhile the mainstream media provide scant information and propagate the downright lies of politicians who along with the bankers will look after themselves first before throwing us to the wolves.
Interesting comment on Traitor Lineker:
https://www.gbnews.com/celebrity/gary-lineker-bbc-impartiality-row-frank-warren
I can’t recall reading of any intent by Lineker to provide financial support for the illegals’ accommodation and other costs covered by we taxpayers.
Lineker knows, like most of the establishment politicians that most British people of a centre Right disposition prefer grumbling and complaining on their keyboards rather than getting their sleeves rolled up and engaging in political activism.
The average person on the centre Right is lacklustre and ineffective in driving forward their beliefs compared to the average Leftist supporter. The Left are prepared to put some energy, time and money in the game to push their agenda forward and my goodness haven’t they been successful.
An acquaintance of mine is a typical centre Right supporter. He is never off his What’s App group sending/receiving endless links of commentary of centre Right Tweets to each other but he, like his group, never donate a penny to help these organisations/individuals/podcasters and are not signed up members of any centre Right party, nor would they dream of helping out a centre Right Party candidate in their own constituency if one was standing for election.
You’ll be glad to know, the gov. now has another option if a bank fails – “bail in” instead of bail out.
The failed bank takes your savings and issues you with a “valuable” certificate in lieu.
They did this in Cyprus back in ’08. 10% of everyone’s savings was purloined.
Glad to be of assistance! (Ha Ha!)
Funny that! At the start of the covid scam i was suspicious and moved my saving from the bank in several withdrawals leaving only a nominal sum to keep the account open. They can have 10% of that two pounds.
The rest is in a safebox, I thought their scam would not be only a jab!
Which I also refused by the way, as it was put into service to quickly.
He who laughs last lasts longest Harold!
But Michael, that money in your safebox will not buy much when we have hyperinflation. Seems to me there really is nothing any of us can do.
You could diversify a little by buying a few gold sovereigns if you believe hyperinflation is imminent. Do remember where you hide them though!!!
I wouldn’t worry just yet though – there are no signs that rich people are abandoning the country – apart from the Sussexes of course.