Thursday, 1 September 2011

Germans and poo

There's a quite interesting piece in September's Vanity Fair that attempts to link the German obsession with poo and their behaviour during the financial crisis, and a paragraph that's pure Joseph Heller;
“There had never been any innovation in German banking,” says Enderlein. “You gave money to some company, and the company paid you back. They went [virtually overnight] from this to being American. And they weren’t any good at it.” What Germans did with money between 2003 and 2008 would never have been possible within Germany, as there was no one to take the other side of the many deals they did which made no sense. They lost massive sums, in everything they touched. Indeed, one view of the European debt crisis—the Greek street view—is that it is an elaborate attempt by the German government on behalf of its banks to get their money back without calling attention to what they are up to. The German government gives money to the European Union rescue fund so that it can give money to the Irish government so that the Irish government can give money to Irish banks so the Irish banks can repay their loans to the German banks. “They are playing billiards,” says Enderlein. “The easier way to do it would be to give German money to the German banks and let the Irish banks fail.”
Of course the Hun, being a terrific hoarder, has some 3,400 tonnes of Gold in the cellar of the national Bank, whereas the UK has, er 300 tonnes left after Gordon's manic depredations. 

13 comments:

formertory said...

Of course the Hun, being a terrific hoarder, has some 3,400 tonnes of Gold in the cellar of the national Bank, whereas the UK has, er 300 tonnes left after Gordon's manic depredations.

Aww c'mon, Raedwald, be fair. When he sold the gold he bought lots and lots and lots of euro and other paper that wasn't just useless metal.

Oh. Wait one.....

John said...

Page 13 is the giveaway to what happened:

"At bottom, he says, the Germans were blind to the possibility that the Americans were playing the game by something other than the official rules. The Germans took the rules at their face value: they looked into the history of triple-A-rated bonds and accepted the official story that triple-A-rated bonds were completely risk-free."

It is not the case that American bankers were playing by other rules. In this example the German banks showed a negligent level of understanding of the ratings system. No investment is risk free and a AAA rating will only be maintained so long as the reasons for that rating persist.

As the article goes on to say banks came to operate along the lines of if it was within the rules it was prudent business and would turn out good. They believed that the rules absolved them of responsibility. And in the end they were mostly right - even when making grossly negligent investments taxpayers have bailed them out.

Anonymous said...

To follow the rules is in the German national character.

Anonymous said...

Request to distribute this from nominadeus. Please spread the word:

Attention please re Birkenhead Court arrests…
Just this minute got news that Malcolm Massie - currently serving time having been wrongfully convicted of assaulting a cop during the Birkenhead event on 7th March - will be appearing at LIVERPOOL CROWN COURT! 10.30! TOMORROW at 10.30!!!! Please spread the word as far and wide as you can!!!
[6:07:54 PM]

David

http://nominedeus.wordpress.com/2011/08/31/attention-please-re-birkenhead-court-arrests/

James Higham said...

Word is that much of that went Venezuela way in the last few days.

Greg Tingey said...

Have you ANY EVIDENCE AT ALL for that statement of the UK Gold holding?

Not what I was told during a Bank of England tour last month .....

And, remember, that Gold is a "fiat" currency, just like all the others.
What is the INTRINSIC vslue of Gold?
Time to grow up, children.

Blue Eyes said...

Is there a rule to stop governments from using their gold stashes to pay off their paper debts? It would seem odd for a country to be going bust whilst also holding hugely valuable assets.

Blue Eyes said...

Greg, the 300 tonnes figure comes from the Bank of England website. There are just shy of 10 million ounces of gold in the vault, which comes out as 300 tonnes, mas o minus.

Greg Tingey said...

OK

But still, what is the intrinsic value of Au?

Gold isn't worth anything at all, unless you want to use it for something, like elctrical contacts

Blue Eyes said...

Nothing has any intrinsic value. The point is that gold has been a very good store of value over the last X decades. Whilst Britain sold its reserves at the absolute low point in the market, some of our competitors have not been so bloody stupid. This means that when the scheisse hits the fan our Teutonic friends will be in a much stronger position than us to get out of the mire.

Anonymous said...

Greg Tingey

Gold is not a fiat currency, it's a precious metal currently worth over $1,700 per troy ounce. People will pay money to buy it from you and that is what gives it value.
Some banks will offer you a share of a gold deposit but this is just paper and does operate on a fiat basis. These paper scrips are what Soros sold in volume over the summer as they would be useless if shareholders simultaneously demanded that their share of the metal should be physically transferred to them.
Real gold in the form of bullion, coins etc has real value - always has done, always will. Unless of course you are Gordon Brown and you sell off a load of the physical gold reserve at rock bottom price despite protestations from the Treasury. Fact.

Rossa said...

Well as the BoE is privately owned any gold in them there vaults belongs to the owners/shareholders of the BoE.

It's on their balance sheet, is a privately owned "asset" and therefore it doesn't "belong" to this country at all.

Same goes for all the other central banks.

Laurie Brown said...

Many don't seem to remember that part, a large part, of the reason that the price Gordon got for our gold was so low, was his own fault. He announced how much he would be selling, and the day he would be selling it, SIX MONTHS IN ADVANCE.

It was at this point I confirmed in my mind that he was (and remains) a total moron, and a danger to the country's finances.