Financial Trading Product Reports

Bank nationalization – a can of worms, but huge opportunities

Despite the massive infusion of capital that followed, the large banks in government aid life remain battered from one side to another confirming what a blind man could have said long ago: the self-proclaimed Masters of the Universe have been walking zombies by year and the fact remains that insolvent banks can not be prevented with an injection of public funds rather than a dead body can be resurrected with a transfusion Massive blood. Although the government had prayed and hoped their rescue battered banks plan to nurture sick back to health and "ready" to begin to contribute to growth Economically, the undeniable fact is that banks have failed and / or unwilling to use the huge billion dollar capital injection from taxpayers for anything temporarily fill the cracks in their condition the terminal itself, while using their millions of customers and most powerful bargaining chip with the government.

It's fantastic think that the international financial crisis (which has been preparing for over 15 years) could be fixed in a mere matter of months with a simple remedy: throwing money AT! Wealth, which was created over the years by the acceptance of housing prices well above fair market value was neither real nor cattle. It was created notional bond with fraudulent, corrupt, debt ratings agencies, questionable accounting practices, and convoluted financial bundling products anyone likely to be able to properly value, since, at a basic level, they were only generating commissions for greedy bankers extremely nails machines long. The financial system has been so overwhelmed by the downward pressure on asset prices as a very visible hand of the market gets back a strip of no value from work. And the effect is being felt and even expanded in the entire world economy. Given the magnitude of damage is simply a matter of time before that all insolvent banks are made by government and put out of their misery and nationalized in its entirety. Some say this should have happened long ago long time since, at a stroke, have dispelled the doubt and brought certainty and stability then, for the world's financial system, which immediately unblock veins These zombies walking fragile. Some Western governments have recognized this reality sooner than others. Q1 of 2009, Germany became the latest country to approve the nationalization of its banks. This followed similar action in Iceland, Ireland and the UK, who have been forced to admit that nationalization may be the only total way to avoid the collapse of entire financial system. However, instead of taking over banks and executives actively suing the banks for what in many cases, was a clearly and fraud, politicians glass house once tried to lure top bankers in line gently. In this sense, the disproportionate influence of Goldman Sachs and JPMorgan Chase Bank in the U.S. Federal Reserve ("Too big to fail"?) And the knighting of several directors in the United Zombie Kingdom, for "Services to the Banking Industry" is saying. This limp-wristed attempt to make bankers admit that has resulted in large banks progressively and gradually to be discovered in a sequence directly proportional to their top executives' ability to deceive the financial markets about the true state of their loan books. Today, even the zombie banks actually means the acquired companies during the worst days of the crisis to "prove" were not in crisis are, finally, if tentatively, reaching the altar of government forced food and timidly tucking into taxpayers' money. …

A program effectively nationalizing forces of denial zombie banks and government control, if this is taken by it or not. Banks that have been cleansed of its toxic assets called (BAD DEBTS you and me), recapitalize public funds, to be "eventually" sold to investors private, over time, leaving existing shareholders in the cold with almost anything. As the dust begins to settle, so that the vacuum left by the commercial zombies has revealed huge new opportunities for a good position independent institutions (of which more below), but also terrible conflicts of interest that governments rather not have to deal with: 1.) What happens to thousands of financial subsidiaries currently own (as an example, U.S. bank Citi has 427 subsidiaries ofshore) whose sole purpose seems to be complicit in depriving them (and other governments) of taxes? 2.) How do you justify objectively continuous ownership of these subsidiaries to voters, taxpayers, unions, the socialists on the left? Governments speak of "arms length" as if it were some kind of prophylaxis policy to isolate them from all evils, including "O" word, but the truth is already sitting in a rock and a hard politically for some time.

An interesting example was that of a broker in Luxembourg on the high seas, which began in late 2008 hard to avoid the "O" word immediately after it was taken over by the government. After investing hundreds of thousands of euros over a period years promoted with the slogan 'your broker Offshore L. .. These ads are replaced with those representing a group of cowboys Stalking charisma range of "cash cows" and "invesdmend oppurtoonities. Although hardly in line with what one would expect in terms of the rate of advertising a European institution, the inescapable conclusion is that these jeans will surely have served their intended purpose, to prove to the new masters of the corridor that do not pass this corridor the word preemptive O. This particular institution, from time speaks volumes about the concept (and yes, it's a concept) that the government can hold " arm's length "because the reality is very different, especially if you can return to bite and this can indeed. Another interesting conundrum is that the government UK is the proud owner of thousands of offshore financial institutions, but is more reluctant to kick the tires of these departments on the high seas "Probably for fear of political gangrene that catches and we know what happens with gangrenous limbs. The reason is that governments know that zombie banks may take up to a decade to return to their previous healthy state, and the longer you take to repay your debts, the most urgent, and politically insidious, this conflict will be to manage. The mixture is so hot, so obvious that the incompatibility is difficult to draw a different conclusion that governments end they were forced to amputate of these appendages politically toxic as soon as public opinion begins to ratchet the pressure, most likely in the second half 2009. The closer the general election, the most toxic to be developed. But downloading them is very difficult, not be a cake walk and filled minefields if only because most of these institutions are profitable and legitimate governments will have to sit "in language" and resist a strong temptation to throw them into politics, or his jurisdiction to the dogs before entering the block. For the IRS, will be an unwritten pact with the devil himself, but very little room, if necessary, to maneuver. If the government decides to take a photo boat in these easy targets, it would throw millions of pounds of taxpayers' money potential tax "for billions driving further, which is moving from the" full competition "to" beyond reach "in jurisdictions opaque further. And then there are the databases … While you can bet your bottom dollar the zombies take their time feeding in the Festival of Contributors can be equally sure they will take their time building their balance sheets through the implementation of strategies focused on the bread and butter of commercial banks and retail to be very fat and juicy when the bell rings to finally start re-privatization. The near certainty of long delays in any re-privatization program is more than enough to chill the bones of any politician worth his salt, because the longer it takes, the ratio the stronger the political impetus for access to databases of customer data offshore property legally and technically controlled by the state. But then just a breath, not even a little puff of access ofshore the forbidden fruit would be sufficient to convert the toxic trade policy toxic assets, in one fell swoop: a lose-lose if there ever was one, even for a politician. Meanwhile, on the positive side of this political impasse, the main business opportunities had arisen in the gap left vacant by zombies for independent and well positioned to take advantage of the institutions if they are not committed to the government or government-owned zombies.

The huge gap vacant commercial by zombies and has been occupied by independent institutions, financial specialists in specific areas know how to control risk and are independent digging in. These range from large discount brokers brokers pure execution to prime brokers to independent asset managers and retail banks operating in areas very specific market. These specialists vary in size. Some 20 billion U.S. dollars have balances. The largest and most active emanating from the U.S., the UK and Northern Europe and are taking market share. Despite the earthquake in the financial markets markets, large banks and the government continue to dominate markets financial on the European continent with a specific focus on the so-called PIGS (Portugal, Italy, Greece and Spain). This is mainly because the infrastructure PIGS legal when allied with the lack of competition favors large firms and oligopolies tend to become institutionalized. The latent fragility of large banks and savings institutions (Spain is a good example) have made them doubly vulnerable to attack U.S., UK and Nordic banks have moved in an aggressive advertising and technology and independence on television and online. These institutions are betting their land, hoping to stop the zombies from the recovery of this area more and more in the future. In the case of the UK, if recent posts FSA believed then, we should not expect the zombies to access accelerated benefit for long as their new system banks can make "to implement strategies that focus primarily on retail banking business and classic." with "less resources – in terms of people or balance sheet total – - dedicated to the risky trading activities and complex. "Delving deeper into the population specialized brokerage sector, major tectonic movements in the client's behavior since 2008 have been HNWI investors, professional traders, managers portfolio and funds to stop major asset managers and intermediaries zombie who had been supervised by regulators, whose salaries appear to be more impressive its ability to regulate. These customers turned to the relative safety of specialized financial intermediaries, without conflicts and skeletons and their exodus was not bent actively by the plethora of scandals coming out of the wood zombie with customers literally wake up one morning and discover that "… the bank where I have my merchant account offshore is now owned by my Government …". In addition to these scandals, frauds, abject failure and bankruptcy regulations, kidnapping laws against terrorism by the government for use "against bankers has only served to further diminish the status of the latter in the public eye. These bankers "like terrorists" have appeared in magazines including cuffs and helped hand in which to hit the last nail in the coffin of "My word is my Bond ". He has made the less sophisticated investor less willing to trust any financial institution and not be afraid to ask pertinent questions to open trading accounts:

• Does your company have any links with banks or institutions that have failed in 2008 / 9?
• Does any government have a piece of your action?
• Do you have or have had any connection with or invested in assets such as managers Madoff or Stanford?
• Do you have some connection with the supply Madoff funds?
• Do you take positions and / or manage the assets of other clients with executions with my business?
• What Protection Do you offer in addition to the usual scheme of investor protection petty?
• Where have the money of clients and client assets?
• Are customer accounts segregated individually?
• What if you go down, will my money be protected?
• "Take me to your controller" …

Although it seems, in short, a era of financial expertise has given the other ended in the rupture of the largest banks in the world, the supreme irony is that the specialists who have passed the line and achieved the peak time of risk-and-again have inherited and now have to pay for additional distortions, too far from regulation, the costs of bureaucracy and the knee jerk put in place (as shown directly below, or indirectly through costly new catch-all regulation sawed shotgun). This will certainly make recovery more painful and lasting. Instead of promoting and developing best practices within the financial systems, governments have thrown money in a big black hole of poor and sometimes illegal practices that seem to get more hungry every day. In Europe, what the banks are broken left examples are largely distortions that helped make what they (themselves) are. Two very different examples, but are evident EURONEXT and MIF. Whether by design or not, Euronext market was established, fully dominated by the big banks in Europe from the beginning to the detriment of smaller financial institutions, and for a reason. Steep entry costs and high barriers means keeping zombies only effects of scale and leverage with turbocharger can afford to pay membership. Specialist smaller institutions had no choice but to pay the high costs of enforcement or go out of business.

Now that the zombies are not able to pay for expenses of any EURONEXT, taxpayers are paying for them and help maintain your zombie monopoly for many years to come, until they pay their debts and get a "Sal card from prison" of government. Another steep barrier to entry for small independent is a new bureaucratic machine MiFID called self-feeding, which has generated hundreds of companies bureaucrat who are willing to teach financial institutions to speak, walk and procedures to write only mindset bureaucrats must – for a price.

This piece of architecture and meaning of bureaucracy was invented in a time when large banks have been respected and bank managers were generally well above the estimated local players real dog (how ironic) and the customers really need better overall protection. Nobody realized what customers are needed protection from the banks, although a reasonable person would have expected, given the enormous cost in time and human effort invested in this exercise venerable, these expensive, but smart bureaucrats at least have an indication of the inherent disease of excessive leverage European banks that should have been protecting customers. In any event, time and again either by design or not, since their application has only MIFID to strengthen and protect the dominance of the big banks pushing up costs and the removal of smaller independent companies that could not afford it. Time It was then that small and medium enterprises were encouraged as the economy diversified and sometimes became big business and big banks. The first reason MiFID is so rigid with small businesses (and this can only guess) is that it is for big banks with the Master of the Universe status and influence over equivalent Regulatory government and sold the idea that bigger is better = = Lower Risk. Jurisdictions that have followed this flawed policy of less risk to the detriment of smaller competitors, the zombies are healthier now beginning to realize smell the coffee as the likes of Stanford, Madoff et al have cut a swath through their ranks to destroy well-chiseled but extremely fragile racing regulations. The second reason could participate hav a kind , for the moment unproven collusion between the architects of the MiFID and the Zombies that if the above does not include Spot Forex as a regulated activity, latter are in accordance with MiFID.

But now we are told that we can all sleep safe in our beds, because the zombies are under the control of U.S. government and Europe and will be selling more and take advantage of the dispersion of power has probably entered a new era of specialization, where independent will take over his mantle. Zombies should take the example of that most famous of the Counts of Transylvania and avoid tap into all that prevents the garlic and continue with its core business blood meal slowly and deliberately over a long period of customers inside "the classic business retail and commercial banking," because The FSA is suggesting that should happen.

Pierre Bertrand Boulle, MBA, (twitter: offshorebroker) is the Director Www.investorseurope.com CEO and founder of a broker regulated market on the basis of the Rock of Gibraltar with the largest selection of trading platforms online world.

About the Author

Expert in Offshore Trading, Online. Since Pierre Boulle set up investorseurope in 2001, it has become the largest provider of Offshore Trading Platforms. His offering and his expertise are unique in that he provides his clients with the largest choice of Online Trading Platforms in the world. Using numbered accounts, private investors, professional traders and institutions can execute on 33 different offshore trading platforms.

FOREX VIDEO | NEW YORK SESSION REVIEW | June 11, 2009