Telegraph: Large banks risk getting caught in “perpetual” cycle of bankruptcy like aerospace companies and carmakers unless they radically alter the way they do business, according to a leading industry consultant.
Alix Partners, one of the most influential advisers to senior banking executives, warns that global investment banks must tackle head-on issues such as bonuses and their addiction to the “steroids” of debt-fueled growth.
“Just look at the auto manufacturing and commercial aviation industries, where over the past two decades, changes in regulatory and operating environments combined to render formerly solid businesses into perpetual wards of the bankruptcy court,” said the consultants.
According to Alix, investment banks still pay their staff far too much, pointing out that the “overpayment effect” last year was $18bn (£11bn), or close to 30pc of the world’s top 15 banks’ combined pre-tax profits.
Senior bankers agree lenders must change their ways if they are survive. The head of one major British bank said he agreed with the findings and that those businesses, which did not adapt to the new world, would “die”.
Liquid Money Has Already Flowed Quickly Away From The Various Banks, Currencies And Assets Affected Peripherally By The Debacle.
Goldseek: The EU has failed to recapitalize its banking sector, which still remains massively over-leveraged. They have not yet had their “Lehman moment” of truth.
Furthermore, governments of the Eurozone adopted the Euro as a common currency in part because by doing so, they could collectively borrow at much lower interest rates than they were used to when they printed their own money.
Now they cannot continue to do this because the beleaguered Eurozone has lost the confidence of the markets and cannot seem to regain it no matter what financial band aids are applied to the situation of excessive sovereign debt. Instead, confidence is largely confined to the currencies of those nations which still maintain a legal monopoly on its creation.
Fleeing to any perceived safe haven in the wake of the European sovereign debt crisis, liquid money has already flowed quickly away from the various banks, currencies and assets affected peripherally by the debacle.
The Fiscal Cliff Will End The Era Of The U.S. As A Superpower
The nation is heading over the fiscal cliff, an economic triple threat — tax hikes, spending cuts, and, soon thereafter, the debt limit — that has been forecasted by government agencies to throw us back into recession. Fix that, and government funding may still run out in March when the current continuing resolution expires, since Congress never got around to passing the 2013 appropriations bills. Tasked with solving these successive crises is the same President and, with modest changes, the same status quo Congress that failed to fix them last year. It’s exhausting, living constantly on the edge.
Global chaos in 2013?
leap2020.eu: The current geopolitical dislocation, largely anticipated by LEAP/E2020 since February of 2009 (GEAB No. 32), has resulted in a global fragmentation than will accelerate over the course of next year, amidst global recession. The end of the leadership of traditional powers will bring about global chaos in 2013, with the “world after” beginning to emerge.
It will be a somber year for the United States, as it loses its status as the sole superpower and finds itself unable to influence the construction of a new global governance. For if all players are desperately seeking a way to gain the upper hand in the game, only those countries and regions prepared for the shockwaves can even hope to influence the emergence of the “world after.” Alliances of any kind (CELAC, UNASUR, MERCOSUR, ALBA, CAN, ALADI, NAFTA, OAS, AU, NEPAD, SADC, COMESA, ECOWAS, UEMOA, CEMAC, the Arab League, EU, EFTA, ASEAN, APT, EAC, BRICS, CASSH, Eurasian Union, etc.) all reflect such attempts, but they are all more or less advanced, more or less homogenous, and more or less resistant to the coming storm.
Euroland, born in the crisis and strengthening with each wave like a tidal power plant, Asia, and South America are better equipped to become the big winners in the “reshuffled” world, while the old powers, like the United States, the United Kingdom, Israel, Japan, etc., are failing to adapt to the multi-polar, post-crisis world and find themselves utterly destitute. There is an extraordinary open world game afoot, one providing numerous opportunities to those willing to seize them. This is evident in the Middle East, where populations are taking the opportunity to change the region in accordance with their aspirations; in the BRICS, where their advancing pawns approach declining powers; and in Europe, where each attack by the crisis creates the energy to adapt to the challenges of tomorrow.
The economic situation (recession) and geopolitics (major tensions in the Middle East, but also in Asia (1), etc.) make 2013 a difficult and dangerous period, with mishaps likely, making stable regions that benefit from this state of affairs more attractive by comparison. Everything is relative, of course, but global violence in 2013 figures to make Euroland one of the few havens of peace, stability, and comfort… and for investors it will be one of the few regions offering some visibility for the future (2). This will create a powerful engine for exiting the European crisis in 2013….
ECB cuts growth outlook for eurozone due to spending cut and tax hikes
The eurozone’s economy is in recession, having shrunk 0.1 percent in the third quarter after a 0.2 percent fall in the previous three months. A recession is often defined as two quarters of negative growth in a row. It is expected to contract again in the last three months of the year.
Draghi said the slump would continue into next year, with a gradual recovery later in 2013. The bank’s minus 0.3 percent outlook is the midpoint of the forecast rate of between minus 0.9 percent and plus 0.3 percent.
Growth is being held back across the eurozone as governments slash spending and raise taxes to try to reduce levels of debt piled up from overspending in the case of Greece or real estate bubbles and banking crises in Spain and Ireland. Greece, Portugal, Ireland and tiny Cyprus have already needed bailouts, while Italy and Spain, the eurozone’s third- and fourth-largest economies, teetered on the edge of needing help this summer.
2013 – Financial Destruction & How Gold & Silver Will Perform
KingWorldNews: Today Egon von Greyerz spoke with King World News about the financial destruction that investors will witness in 2013 and in coming years, and how gold and silver will fare in this incredibly volatile environment. Here is what Greyerz, who is founder of Matterhorn Asset Management in Switzerland, had this to say: “Eric, 2012 was a tough year for some investors since gold has not really done much in dollar terms. Gold is also only up a bit in other currencies, and silver has done slightly better, being up around 7% in dollar terms, and a little better in euros.”