Wednesday, 1 June 2011

Add two headlines to get the truth

Today's DT business headlines one of its page 1 articles, " Banks  'use soft terms to conceal the truth'". This castigates banks for shifting home owners onto interest only deals, extend terms or even permit payment holidays - some 63% of troubled home loans so benefit according to the FSA. It avoids the banks having to own up to bad debts, non-performing loans or whatever you care to call someone who has defaulted on their repayments. It hides the unpleasant truth from the general public.

The next DT business headline reads, "Markets buoyed by hopes of second Greek bailout". Markets believe this will reduce the risk of Greece defaulting and the nasty Huns will give up their demand for Greek bond holders to take a loss on their bonds. The two situations are exactly analagous so why are the banks castigated and the EU praised for doing the same thing? I presume because the DT does not want to upset boy Dave by telling the truth about his beloved EU.

Damian Reece on page 2 is not so easily fooled. 'Europe's rich can't keep bailing out the poor'. Exactly Mr Reece and as you say, 'hardly a cause for celebration'. Its called chucking good money, your money, after bad or as the EU have it strengthening the case for fiscal union.

Don't worry, the markets will soon be back to irritate the Eurocrats again.

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