Que the next round of bank bailouts, world's oldest bank going under.

Discussion in 'Politics, Religion, Social Issues' started by DearthnVader, Dec 26, 2016.

  1. DearthnVader macrumors 6502

    DearthnVader

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    Red Springs, NC
    #1
    I wonder, do the people ever tire of footing the bill for an industry that can make money out of thin air?

    A bailout for Monte dei Paschi was almost inevitable. The question now is how the government contains the political fallout.

    The bank, which has been crippled by years of losses and loans that may never be repaid, could not be allowed to collapse. That could have triggered further failures in Italy, and potentially started a new European banking crisis.

    But EU rules designed to protect taxpayers insist that banking investors now bear some of the costs of rescuing troubled lenders.

    In Italy those who stand to lose money as a result include tens of thousands of ordinary savers. The government says they will be compensated.

    Analysts warn that a failure to do so could provoke political unrest, potentially undermining the government, and playing into the hands of anti-establishment parties. It could also weaken other banks if savers rushed to withdraw their cash.

    Founded in 1472, Monte dei Paschi is said to be the oldest surviving bank in the world.

    It failed an EU stress test in July due to billions of euros of risky loans on its books, made to clients who cannot afford to repay them.

    The situation has worsened since then.

    On Wednesday, Monte dei Paschi revealed that it could run out of funds by next April, using up nearly €11bn.

    Previously it had said it had enough funds to stay afloat for 11 months.

    It added that by next May, it could burn through even more - €15bn in total.

    http://www.bbc.com/news/business-38412557
     
  2. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #3
    UK should Brexit before they get put on the hook again.
     
  3. ibookg409 Suspended

    ibookg409

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    #4
    Let it fail. Other banks need to stop lending to everybody. What ever happened to down payments or collateral in order to get a loan.?
     
  4. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #5
    How are people with no money supposed to get loans under these policies?
     
  5. The-Real-Deal82 macrumors 601

    The-Real-Deal82

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    #6
    It disappeared when industry ceased to exist and large areas contained more unemployed people than not.
     
  6. ibookg409 Suspended

    ibookg409

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    #7
    Lending to unqualified people and 0 consequences for lose who reneg on loans has to stop. Spending beyond your means has to stop. From the poor all the way up to federal governments we need to stop spending more than we make. If a bank makes poor investments in people who don't repay then the bank should fold. If you don;t pay your mortgage you should get kicked out of your house. End of story. We've been living beyond our means for decades and now the chickens are coming home to roost.
     
  7. The-Real-Deal82 macrumors 601

    The-Real-Deal82

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    #8
    People who live beyond their means yes but I've been made redundant twice in 2 years and very nearly had to borrow to get out of a hole. I landed a good job in the nick of time but there are people who through no fault of their own find themselves in severe financial difficulty and banks and pay day loans are the only desperate options they have.
     
  8. ibookg409 Suspended

    ibookg409

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    #9
    I get that. It there is mortgage insurance in case you get laid off from work. This insurance covers your mortgage while you look for a new job. Maybe that's not available in the UK.
     
  9. Desertrat macrumors newbie

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    #10
    I've read that there are some 360 billion dollars in bad loans in the Eurozone. Interest rates going up means that there will be even more problems in making interest payments on the bonds and in rolling them over.

    Way too much of "growth" has been based upon debt, rather than in reality-based investments. Corporate profitability is more of a paper game from stock buybacks instead of from sales. The bad news is that the buy-backs used borrowed money.

    Basically, decisions by governments and central banks have brought about situations for people like The-Real-Deal82. The sad part is that those who created these problems are not competent to find any solution.
     
  10. The-Real-Deal82 macrumors 601

    The-Real-Deal82

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    #11
    It is and I used it plus the 2 month relief in my mortgage policy. I also got the £47 a week job seekers allowance but money was still tight with our outgoings being suited to a decent wage coming in. I was lucky. I'm a Design Engineer and my area is quite deprived so I've been lucky landing a job as the work pool is very under qualified at that level with unskilled jobs being the hardest to get. It's been a wake up call though and good having a comfortable income again.
     
  11. s2mikey macrumors 68020

    s2mikey

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    #12
    Well, they need to NOT get into a bad financial position in the first place but good luck with that in this day and age of no one being responsible for their own bad decisions. It's always fate or someone else's fault. Loans should be for people who have a proven track record of credit and employment. They then use the lonas for bigger and better things. Loans shoudnt be for neerdowells that have zero chance of repaying. I dunno. Something like that.

    My favorites are the alleged "poor" that have tattoos everywhere, smoke cigarettes, and still manage to have an iPhone 7. Great. Instead of another dragon face on your forearm or pack of stoagies,why don't you pay a bill or two? Whatever.

    I know everyone has to start somewhere with credit and loans. But IMO qualifying is part of the deal.
     
  12. juanm, Dec 27, 2016
    Last edited: Dec 27, 2016

    juanm macrumors 65816

    juanm

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    #13
    The UK is living its own (much bigger) bubble. Brexit will (would) make it pop and crash. Chances are a common ground will be found, that they will call Brexit to appease those who voted for it, while retaining most of the characteristics of the current situation.

    Regarding the main thread issue, enjoy real life capitalism, as broken as real life communism.
     
  13. ibookg409 Suspended

    ibookg409

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    #14
    I started my credit history with a secured loan. I went to the bank with $500 and got a secured loan for $500. I then paid the monthly payments on the $500 and there was no risk to the bank because they were holding the full $500 in cash. That's how I started building credit history. 0 risk to the bank.
     
  14. The-Real-Deal82 macrumors 601

    The-Real-Deal82

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    #15
    I hope we do keep many of the characteristics under Brexit. I hope you are right and other EU countries agree to a deal.
    Exactly. Somebody who has never borrowed without any financial track record is as much of a risk as somebody who is terrible with money.
     
  15. ibookg409 Suspended

    ibookg409

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    #16
    Right. But I was 0 risk because I brought full collateral.
     
  16. The-Real-Deal82 macrumors 601

    The-Real-Deal82

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    #17
    I know I read what you wrote about your situation.
     

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