#Brittius says a hand up, and not a hand out”, may, possibly, give thought to exploring independence for Puerto Rico

#Brittius Comment & Opinion

#BrittiusReport – Dec.22: This was in reply to a report that l did on Puerto’s financial crisis here:

NEW YORK: Melissa Mark-Viverito are urging Congress to pass a final spending bill that would allow Puerto Rico to restructure its debt

Puerto Rico is a territory of the United States, their people are US citizens by birth. Being a territory, their government has considerable leeway on spending issues, and was a consideration when statehood ballot was proposed. Now they are in dire straits financially. The US Congress should deny their request and resubmit statehood consideration. It would bring financial relief though loss of a quasi-independence.

A friend in high school, was the grandson of Roberto Campos, who sought independence for Puerto Rico. The ideals were, as explained, necessary but leaning towards communism at the time. Perhaps the time, now, favors Puerto Rico’s independence if they could get a workable government, but that would end much financial assistance from the US. Their economy would need to be revamped to include much more manufacturing rather that tourism and the US Navy involvement with training operations of ordnance deployed, which is unfavorable to the environment of the ocean waters. Loss of revenue if America left.

Puerto Rico has some tough decisions to make, and it will not be an easy or luxurious road to travel, as the majority of its citizens live a very modest lifestyle that can be vastly improved economically in time to come. As President Ronald Reagan said,

“A hand up, and not a hand out”, may, possibly, give thought to exploring independence for Puerto Rico.

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‘ Minimising Cost of Future Liquidity and Preventing Financial Crisis ‘

#AceFinanceNews – BRUSSELS – September 22 – Implementing the EU response to minimising the public cost of future financial crises and getting banks to offer up loans top the agenda this WEEK it was reproted by EUobserver.  

European Central Bank (ECB) chief Mario Draghi on Monday (22 September) is set to debate the so-called targeted longer-term refinancing operations (TLTROs) with MEPs in the committee on economic affairs.

The idea is to improve bank lending to the eurozone by offering banks extra liquidity at a fixed rate for up to four years.

But the scheme attracted just €82.6bn (out of the €400bn on offer) of interest from banks this month.

Draghi had earlier this month surprised analysts by slashing interest rates to a historic low in an effort to stimulate lending.

The ECB cut is part of a larger attempt by EU policy makers to kick start member states’ overall sluggish economies and put millions of unemployed back to work.

But with the prospect of possibly having to fend off another financial crisis, lawmakers also tasked the ECB to oversee the financial health of around 130 banks with the power to shut them down.

Also known as the single supervisory mechanism, the newly endowed ECB oversight of banks is part of the single resolution mechanism (SRM), which aims to minimize bank bailout costs to taxpayers.

SOURCE:

#AFN2014

#banks, #brussels, #ecb, #european-central-bank, #eurozone, #financial-crisis, #liquidity, #mario-draghi

Bankers Panic of the 1907 Knickerbocker Crisis that led to the Creation of the Federal Reserve

Wall Street Panic's as bankers lose their shirt!

Wall Street Panic’s as bankers lose their shirt!

The Panic of 1907 – also known as the 1907 Bankers’ Panic or Knickerbocker Crisis  was a United States financial crisis that took place when the New York Stock Exchange fell almost 50% from its peak the previous year. Panic occurred, as this was during a time of economic recession, and there were numerous runs on banks and trust companies. The 1907 panic eventually spread throughout the nation when many state and local banks and businesses entered bankruptcy. Primary causes of the run included a retraction of market liquidity by a number of New York City banks and a loss of confidence among depositors, exacerbated by unregulated side bets at bucket shops. The panic was triggered by the failed attempt in October 1907 to corner the market on stock of the United Copper Company. When this bid failed, banks that had lent money to the cornering scheme suffered runs that later spread to affiliated banks and trusts, leading a week later to the downfall of the Knickerbocker Trust CompanyNew York City’s third-largest trust. The collapse of the Knickerbocker spread fear throughout the city’s trusts as regional banks withdrew reserves from New York City banks. Panic extended across the nation as vast numbers of people withdrew deposits from their regional banks.

The panic might have deepened if not for the intervention of financier J. P. Morgan,  who pledged large sums of his own money, and convinced other New York bankers to do the same, to shore up the banking system. At the time, the United States did not have a central bank to inject liquidity back into the market. By November, the financial contagion had largely ended, only to be replaced by a further crisis. This was due to the heavy borrowing of a large brokerage firm that used the stock of Tennessee Coal, Iron and Rail-road Company (TC&I) as collateral. Collapse of TC&I’s stock price was averted by an emergency takeover by Morgan’s U.S. Steel Corporation—a move approved by anti-monopolist president Theodore Roosevelt. The following year, Senator Nelson W. Aldrich, father-in-law of John D. Rockefeller, Jr., established and chaired a commission to investigate the crisis and propose future solutions, leading to the creation of the Federal Reserve System. 

#acefinancenews, #federal-reserve-system, #financial-crisis, #john-d-rockefeller, #knickerbocker-crisis, #knickerbocker-trust-company, #new-york-city, #new-york-stock-exchange, #panic-of-1907, #theodore-roosevelt, #united-states, #wall-street-panic