Image above: Looks a bit like Dominique Strauss-Kahn "reprofiled" as the Sun King, Louis XIV of France.From (http://southfloridaclassicalreview.com/2010/07/seraphic-fire-presents-intimate-vocal-rarities-from-the-court-of-the-sun-king).
Ok, kids, look at the blackboard now, we’re going to learn a new word today.
The word is "reprofiling". And no, I think I know what you're thinking, but it has nothing to do with a CSI episode, or with the CIA, and not even with Dominique Strauss-Kahn (DSK), though that guy's profile has certainly changed a tad in recent days.
No, reprofiling is a term invented over the past few days by one or more negotiators at the table discussing how to hide the fact that Greece is disappearing into the Aegean Sea slowly but surely, a while longer. Come to think of it, perhaps DSK did think of the term from his new and conveniently humble Rikers Island abode. But still, that's somewhat beside the point for our intents and purposes.
A few steps back in history: Greece last year received a €110 billion bail-out from the EU and the IMF (I know, I know, DSK is/was the head of the latter). Today it is glaringly clear that €110 billion was never going to lift Athens out of its financial swamp. Which is why the usual suspects are back to the drawing board.
In normal days and circumstances, Greece would default on its debt. The parties holding that debt would reach a hard-fought agreement to take losses on various percentages of their claims, and the next morning, the sun would rise again, as it always has, over all 100,000 (crude estimate) or so Greek islands.
Not this time. This time, Greece is part of the EU and the Eurozone, and, more importantly, the country owes its debts to financial institutions all across the globe that can't afford the losses any hard-fought agreements would force upon them. Whether it's Wall Street banks, or the German Landesbanken, or French giants Paribas and Crédit Agricole, they're all tilting so close to the edge that any such loss recognitions might do them in.
It's not even just the Greek losses per sé that are the biggest issue, mind you. What's underlying the fear that pervades the financial classes is that any loss taken may open the monetary equivalent of the Morganza spillway, so to speak. A full-size Greek default, or debt restructuring in more opaque terminology, carries a very real danger of books having to be opened all across the board. Sort of like Morganza cubed.
Reportedly, Goldman Sachs and the Greek government engaged in some 13 currency swap deals over the past decade. Secretive, over the counter, backroom deals set up with one purpose only: hide the depths of the doldrums. And while it's impossible to gauge the exact "standing" of those specific deals, they are an indication of what is at stake.
German banks alone have €28 billion in Greek debt on their books. That does not include any swaps! A haircut such as that which would probably be required in a run-of-the-mill debt restructuring might be in the vicinity of 50% or more. Which would take €14 billion out of German banks' books. And many billions more out of other global banks. They would need to recapitalize, and some might not be able to do so.
But that’s not the worst part. Those same German banks carry €114.7 billion in Irish debt, and €146.8 billion in Spanish debt. That is still only the German banks. What British, French, Dutch and Spanish banks hide in their vaults at 100 cents on the dollar (or euro) is easily an order of magnitude more.
And that's how we get to our word of the day. Reprofiling.
Another bail-out would be A) useless and B) politically untenable. The logical next step, restructuring, risks the bankruptcy of an entire series of smaller and larger financial institutions. So something in between was needed. And that has become "reprofiling". Which in essence is a term devoid of any real meaning. But that doesn't matter much in a world in which accounting standards are routinely changed on the fly, and in which private losses are not recognized, but instead transferred to the public sector.
Since reprofiling doesn't mean anything, it can't be expected to achieve anything either, other than to add a few more weeks or months to the extend and pretend period that's been going on globally since 2008. So why do they do it? Simple: to transfer ever more losses to the public. To take an admittedly crude example: the above mentioned €28 billion exposure of German banks to Greek debt constitutes less than 9% of those same banks' total exposure to the PIGS economies. Of which Spain is by far the biggest liability.
Spain will soon, in all likelihood before the year, or even the summer, is over, require its first bail-out. That will take negotiations that will make the present Greece, Ireland and Portugal ones look like laid back sunny summer afternoon cocktail parties by the pool.
They can't do Spain. Spain will be certain to bring down banks, reputations, vast wealth and markets. But still, Spain, both the country and its banks, are in dire straits. And unless the millions of "overbuilt homes" it is home to are soon sold at (under the circumstances) impossibly high prices, the whip will come down on Madrid. And thereby on the international finance markets.
DSK, presently residing at Rikers Island, has been the global go-to-man in the European debt talks. He's made sure that no EU periphery nation has failed outright so far. It's the key role of the IMF, the World Bank and similar institutions these days. Keep the existing system afloat as long as possible at the expense of Joe and Jane Main Street, or whatever their names may be in other languages.
Everyone in the know has long since realized that the debts incurred in the golden gambling days can and will never ever be paid back. But as long as Joe and Jane don't know this, their money, and their children's, can be used to pay off the bookmakers.
That was DSK's role in the grand scheme of things. Now that he's gone, we may speculate about him having being trapped, or just feeling like an invincible sexual predator, or something along those lines, but what may be much more important is the possibility that the entire 3-year-old bail-out scheme, be it through TARP and a myriad of other Fed and Treasury programs in the US, or the wheelings and dealings of the European Central Bank and the IMF with the broke PIGS in Europe, might be reaching a preliminary phase change.
Though it's hard to say at this point. DSK's interim successor is a man named John Lipsky, whose main claim to fame is he was the IMF man in Chile under Pinochet. If you don't know what that entails, read Naomi Klein's Shock Doctrine. And all the other people mentioned as permanent DSK IMF successors are Goldman Sachs, JPMorgan, World Bank, BIS etc.
We need to ask ourselves why we allow these folks the control of what remains of our wealth, and the very control of our lives. There's this image of this incestuous clique that don't mean anyone no good but themselves. US historian Christopher Lasch called it "pathological narcissism", while others go straight for the "psychopath" jugular, but whether DSK is found guilty or not in this particular instance, the very idea that a guy who stays in a $3000 a night hotel suite can run for president of France for the Socialist Party kind of says it all, when it comes to being twice removed from the real world, doesn't it?
I see lots of people writing about how the IMF needs to change, or something, because it will have to play a major role in the financial problems of countries all over in the future, but I'm thinking it should just be absolved and abolished. The IMF has only ever served the needs of financial elites, like the World Bank has, and since the controlling interests behind both firmly control the politics of all relevant nations these days, why not put them by the side of the curb with all the other garbage?
You want reprofiling? Well, alright, let's have some true and genuine reprofiling, then. And if you’re stateside, and/or Greece is not your thing, why not take a look at Tim Geithner raiding US pension funds in order to avoid hitting the debt ceiling? Perhaps if anyone needs to be "reprofiled", it's him.
.
Today's Word - "Reprofiling"
SUBHEAD: The IMF serves the needs of financial elites. Why not put them by the curb with all the other garbage?
By Ilargi on 17 May 2011 for the Automatic Earth -
(http://theautomaticearth.blogspot.com/2011/05/may-17-2011-reprofiling.html)
Image above: Looks a bit like Dominique Strauss-Kahn "reprofiled" as the Sun King, Louis XIV of France.From (http://southfloridaclassicalreview.com/2010/07/seraphic-fire-presents-intimate-vocal-rarities-from-the-court-of-the-sun-king).
Ok, kids, look at the blackboard now, we’re going to learn a new word today.
The word is "reprofiling". And no, I think I know what you're thinking, but it has nothing to do with a CSI episode, or with the CIA, and not even with Dominique Strauss-Kahn (DSK), though that guy's profile has certainly changed a tad in recent days.
No, reprofiling is a term invented over the past few days by one or more negotiators at the table discussing how to hide the fact that Greece is disappearing into the Aegean Sea slowly but surely, a while longer. Come to think of it, perhaps DSK did think of the term from his new and conveniently humble Rikers Island abode. But still, that's somewhat beside the point for our intents and purposes.
A few steps back in history: Greece last year received a €110 billion bail-out from the EU and the IMF (I know, I know, DSK is/was the head of the latter). Today it is glaringly clear that €110 billion was never going to lift Athens out of its financial swamp. Which is why the usual suspects are back to the drawing board.
In normal days and circumstances, Greece would default on its debt. The parties holding that debt would reach a hard-fought agreement to take losses on various percentages of their claims, and the next morning, the sun would rise again, as it always has, over all 100,000 (crude estimate) or so Greek islands.
Not this time. This time, Greece is part of the EU and the Eurozone, and, more importantly, the country owes its debts to financial institutions all across the globe that can't afford the losses any hard-fought agreements would force upon them. Whether it's Wall Street banks, or the German Landesbanken, or French giants Paribas and Crédit Agricole, they're all tilting so close to the edge that any such loss recognitions might do them in.
It's not even just the Greek losses per sé that are the biggest issue, mind you. What's underlying the fear that pervades the financial classes is that any loss taken may open the monetary equivalent of the Morganza spillway, so to speak. A full-size Greek default, or debt restructuring in more opaque terminology, carries a very real danger of books having to be opened all across the board. Sort of like Morganza cubed.
Reportedly, Goldman Sachs and the Greek government engaged in some 13 currency swap deals over the past decade. Secretive, over the counter, backroom deals set up with one purpose only: hide the depths of the doldrums. And while it's impossible to gauge the exact "standing" of those specific deals, they are an indication of what is at stake.
German banks alone have €28 billion in Greek debt on their books. That does not include any swaps! A haircut such as that which would probably be required in a run-of-the-mill debt restructuring might be in the vicinity of 50% or more. Which would take €14 billion out of German banks' books. And many billions more out of other global banks. They would need to recapitalize, and some might not be able to do so.
But that’s not the worst part. Those same German banks carry €114.7 billion in Irish debt, and €146.8 billion in Spanish debt. That is still only the German banks. What British, French, Dutch and Spanish banks hide in their vaults at 100 cents on the dollar (or euro) is easily an order of magnitude more.
And that's how we get to our word of the day. Reprofiling.
Another bail-out would be A) useless and B) politically untenable. The logical next step, restructuring, risks the bankruptcy of an entire series of smaller and larger financial institutions. So something in between was needed. And that has become "reprofiling". Which in essence is a term devoid of any real meaning. But that doesn't matter much in a world in which accounting standards are routinely changed on the fly, and in which private losses are not recognized, but instead transferred to the public sector.
Since reprofiling doesn't mean anything, it can't be expected to achieve anything either, other than to add a few more weeks or months to the extend and pretend period that's been going on globally since 2008. So why do they do it? Simple: to transfer ever more losses to the public. To take an admittedly crude example: the above mentioned €28 billion exposure of German banks to Greek debt constitutes less than 9% of those same banks' total exposure to the PIGS economies. Of which Spain is by far the biggest liability.
Spain will soon, in all likelihood before the year, or even the summer, is over, require its first bail-out. That will take negotiations that will make the present Greece, Ireland and Portugal ones look like laid back sunny summer afternoon cocktail parties by the pool.
They can't do Spain. Spain will be certain to bring down banks, reputations, vast wealth and markets. But still, Spain, both the country and its banks, are in dire straits. And unless the millions of "overbuilt homes" it is home to are soon sold at (under the circumstances) impossibly high prices, the whip will come down on Madrid. And thereby on the international finance markets.
DSK, presently residing at Rikers Island, has been the global go-to-man in the European debt talks. He's made sure that no EU periphery nation has failed outright so far. It's the key role of the IMF, the World Bank and similar institutions these days. Keep the existing system afloat as long as possible at the expense of Joe and Jane Main Street, or whatever their names may be in other languages.
Everyone in the know has long since realized that the debts incurred in the golden gambling days can and will never ever be paid back. But as long as Joe and Jane don't know this, their money, and their children's, can be used to pay off the bookmakers.
That was DSK's role in the grand scheme of things. Now that he's gone, we may speculate about him having being trapped, or just feeling like an invincible sexual predator, or something along those lines, but what may be much more important is the possibility that the entire 3-year-old bail-out scheme, be it through TARP and a myriad of other Fed and Treasury programs in the US, or the wheelings and dealings of the European Central Bank and the IMF with the broke PIGS in Europe, might be reaching a preliminary phase change.
Though it's hard to say at this point. DSK's interim successor is a man named John Lipsky, whose main claim to fame is he was the IMF man in Chile under Pinochet. If you don't know what that entails, read Naomi Klein's Shock Doctrine. And all the other people mentioned as permanent DSK IMF successors are Goldman Sachs, JPMorgan, World Bank, BIS etc.
We need to ask ourselves why we allow these folks the control of what remains of our wealth, and the very control of our lives. There's this image of this incestuous clique that don't mean anyone no good but themselves. US historian Christopher Lasch called it "pathological narcissism", while others go straight for the "psychopath" jugular, but whether DSK is found guilty or not in this particular instance, the very idea that a guy who stays in a $3000 a night hotel suite can run for president of France for the Socialist Party kind of says it all, when it comes to being twice removed from the real world, doesn't it?
I see lots of people writing about how the IMF needs to change, or something, because it will have to play a major role in the financial problems of countries all over in the future, but I'm thinking it should just be absolved and abolished. The IMF has only ever served the needs of financial elites, like the World Bank has, and since the controlling interests behind both firmly control the politics of all relevant nations these days, why not put them by the side of the curb with all the other garbage?
You want reprofiling? Well, alright, let's have some true and genuine reprofiling, then. And if you’re stateside, and/or Greece is not your thing, why not take a look at Tim Geithner raiding US pension funds in order to avoid hitting the debt ceiling? Perhaps if anyone needs to be "reprofiled", it's him.
.
Image above: Looks a bit like Dominique Strauss-Kahn "reprofiled" as the Sun King, Louis XIV of France.From (http://southfloridaclassicalreview.com/2010/07/seraphic-fire-presents-intimate-vocal-rarities-from-the-court-of-the-sun-king).
Ok, kids, look at the blackboard now, we’re going to learn a new word today.
The word is "reprofiling". And no, I think I know what you're thinking, but it has nothing to do with a CSI episode, or with the CIA, and not even with Dominique Strauss-Kahn (DSK), though that guy's profile has certainly changed a tad in recent days.
No, reprofiling is a term invented over the past few days by one or more negotiators at the table discussing how to hide the fact that Greece is disappearing into the Aegean Sea slowly but surely, a while longer. Come to think of it, perhaps DSK did think of the term from his new and conveniently humble Rikers Island abode. But still, that's somewhat beside the point for our intents and purposes.
A few steps back in history: Greece last year received a €110 billion bail-out from the EU and the IMF (I know, I know, DSK is/was the head of the latter). Today it is glaringly clear that €110 billion was never going to lift Athens out of its financial swamp. Which is why the usual suspects are back to the drawing board.
In normal days and circumstances, Greece would default on its debt. The parties holding that debt would reach a hard-fought agreement to take losses on various percentages of their claims, and the next morning, the sun would rise again, as it always has, over all 100,000 (crude estimate) or so Greek islands.
Not this time. This time, Greece is part of the EU and the Eurozone, and, more importantly, the country owes its debts to financial institutions all across the globe that can't afford the losses any hard-fought agreements would force upon them. Whether it's Wall Street banks, or the German Landesbanken, or French giants Paribas and Crédit Agricole, they're all tilting so close to the edge that any such loss recognitions might do them in.
It's not even just the Greek losses per sé that are the biggest issue, mind you. What's underlying the fear that pervades the financial classes is that any loss taken may open the monetary equivalent of the Morganza spillway, so to speak. A full-size Greek default, or debt restructuring in more opaque terminology, carries a very real danger of books having to be opened all across the board. Sort of like Morganza cubed.
Reportedly, Goldman Sachs and the Greek government engaged in some 13 currency swap deals over the past decade. Secretive, over the counter, backroom deals set up with one purpose only: hide the depths of the doldrums. And while it's impossible to gauge the exact "standing" of those specific deals, they are an indication of what is at stake.
German banks alone have €28 billion in Greek debt on their books. That does not include any swaps! A haircut such as that which would probably be required in a run-of-the-mill debt restructuring might be in the vicinity of 50% or more. Which would take €14 billion out of German banks' books. And many billions more out of other global banks. They would need to recapitalize, and some might not be able to do so.
But that’s not the worst part. Those same German banks carry €114.7 billion in Irish debt, and €146.8 billion in Spanish debt. That is still only the German banks. What British, French, Dutch and Spanish banks hide in their vaults at 100 cents on the dollar (or euro) is easily an order of magnitude more.
And that's how we get to our word of the day. Reprofiling.
Another bail-out would be A) useless and B) politically untenable. The logical next step, restructuring, risks the bankruptcy of an entire series of smaller and larger financial institutions. So something in between was needed. And that has become "reprofiling". Which in essence is a term devoid of any real meaning. But that doesn't matter much in a world in which accounting standards are routinely changed on the fly, and in which private losses are not recognized, but instead transferred to the public sector.
Since reprofiling doesn't mean anything, it can't be expected to achieve anything either, other than to add a few more weeks or months to the extend and pretend period that's been going on globally since 2008. So why do they do it? Simple: to transfer ever more losses to the public. To take an admittedly crude example: the above mentioned €28 billion exposure of German banks to Greek debt constitutes less than 9% of those same banks' total exposure to the PIGS economies. Of which Spain is by far the biggest liability.
Spain will soon, in all likelihood before the year, or even the summer, is over, require its first bail-out. That will take negotiations that will make the present Greece, Ireland and Portugal ones look like laid back sunny summer afternoon cocktail parties by the pool.
They can't do Spain. Spain will be certain to bring down banks, reputations, vast wealth and markets. But still, Spain, both the country and its banks, are in dire straits. And unless the millions of "overbuilt homes" it is home to are soon sold at (under the circumstances) impossibly high prices, the whip will come down on Madrid. And thereby on the international finance markets.
DSK, presently residing at Rikers Island, has been the global go-to-man in the European debt talks. He's made sure that no EU periphery nation has failed outright so far. It's the key role of the IMF, the World Bank and similar institutions these days. Keep the existing system afloat as long as possible at the expense of Joe and Jane Main Street, or whatever their names may be in other languages.
Everyone in the know has long since realized that the debts incurred in the golden gambling days can and will never ever be paid back. But as long as Joe and Jane don't know this, their money, and their children's, can be used to pay off the bookmakers.
That was DSK's role in the grand scheme of things. Now that he's gone, we may speculate about him having being trapped, or just feeling like an invincible sexual predator, or something along those lines, but what may be much more important is the possibility that the entire 3-year-old bail-out scheme, be it through TARP and a myriad of other Fed and Treasury programs in the US, or the wheelings and dealings of the European Central Bank and the IMF with the broke PIGS in Europe, might be reaching a preliminary phase change.
Though it's hard to say at this point. DSK's interim successor is a man named John Lipsky, whose main claim to fame is he was the IMF man in Chile under Pinochet. If you don't know what that entails, read Naomi Klein's Shock Doctrine. And all the other people mentioned as permanent DSK IMF successors are Goldman Sachs, JPMorgan, World Bank, BIS etc.
We need to ask ourselves why we allow these folks the control of what remains of our wealth, and the very control of our lives. There's this image of this incestuous clique that don't mean anyone no good but themselves. US historian Christopher Lasch called it "pathological narcissism", while others go straight for the "psychopath" jugular, but whether DSK is found guilty or not in this particular instance, the very idea that a guy who stays in a $3000 a night hotel suite can run for president of France for the Socialist Party kind of says it all, when it comes to being twice removed from the real world, doesn't it?
I see lots of people writing about how the IMF needs to change, or something, because it will have to play a major role in the financial problems of countries all over in the future, but I'm thinking it should just be absolved and abolished. The IMF has only ever served the needs of financial elites, like the World Bank has, and since the controlling interests behind both firmly control the politics of all relevant nations these days, why not put them by the side of the curb with all the other garbage?
You want reprofiling? Well, alright, let's have some true and genuine reprofiling, then. And if you’re stateside, and/or Greece is not your thing, why not take a look at Tim Geithner raiding US pension funds in order to avoid hitting the debt ceiling? Perhaps if anyone needs to be "reprofiled", it's him.
.
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