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Financial optimism 'delusional'...

Discussion in 'Finance & Banking' started by Tropo, 16th Apr, 2009.

  1. Tropo

    Tropo Well-Known Member

    17th Aug, 2005
  2. Chris C

    Chris C Well-Known Member

    2nd Apr, 2008
    Brisbane, QLD
    It's good that we are starting to see a turnaround in economic media pundits reporting abilities as the penny is finally starting to drop that we may well be in for quite doosey of a recession.

    From the figures I'm looking at for every dollar of lost capital Australian banks probably need to call in closer to $20 worth of credit, but luckily for Australia banks they don't have any reserve requirements!

    Technicalities aside, this is a massive point in the article and is the same reason I have my doubts about Australian banks, and probably the real reasons why Kruddy was lightning quick to implement government guarantees for depositors when credit markets froze up in October. This of course lead to the massive unwinding of international investment and carry trades which would have smashed many bank reserves... so Kruddy went into hyper drive to prevent a domestic run on the banks.

    Everyone dances around the issue by not giving the public a lot of useful information coupled with its worthless reassurances all is well so they can support their confidence based system long enough to avoid the damage the truth can cause.