Oct

10

GM NigelIn the wake of the recent debacle, I wonder if some more traditional ways of doing business are about to boom. I'm not convinced that the gloating described below forshadows the return of the Roman empire, but perhaps we will see asset based finance services doing well.

BTW, noting some other posts comparing today to the 1930s, I believe that we are dealing with two individual samples of one, which have very little to do with each other. What we have is something new, and completely unknowable despite the comfort that might be derived from labeling it.

From the FT :

Giulio Tremonti was almost gloating when he addressed the Italian Parliament on Thursday. He described the geography of the financial crisis with relish: the Northern earthquake, with its epicentre in Iceland, its problematic “Continental dimension”, the troubles in the UK, and the fear of a spill over into the Baltics and eastern Europe. As for Italy’s banks, the Treasury Minister said they were sheltered from the crisis because they were “less advanced and sophisticated” than elsewhere.

Back-handed praise, indeed. But Italy is a demonstration of the merits of doing nothing, a conservatism that has served its stay-at-home banks well. Although Italian bank stocks have collapsed, depositors have not rushed to withdraw their cash – to the disappointment of the paparazzi waiting to photograph panic outside branches.


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