Here's a goodie! Satyajit Das, one of the few people who had a grip on why the GFC unfolded tells us that we're ripe for another one but we've really not accomplished the damage repair we promised ourselves.
The signs are obvious to all. The World Bank estimates the ratio of non-performing loans to total gross loans in 2015 reached 4.3 per cent. Before the 2009 global financial crisis, they stood at 4.2 per cent.
If anything, the problem is starker now than then: there are more than $US3 trillion ($4 trillion) in stressed loan assets worldwide, compared to the roughly $US1 trillion of US subprime loans that triggered the 2009 crisis.
European banks are saddled with $US1.3 trillion in non-performing loans, nearly $US400 billion of them in Italy. The IMF estimates that risky loans in China also total $US1.3 trillion, although private forecasts are higher. India's stressed loans top $US150 billion.
Once again, banks in the US, Canada, UK, several European countries, Asia, Australia and New Zealand are heavily exposed to property markets, which are overvalued by historical measures.
In addition, banks have significant exposure to the troubled resource sector: lending to the energy sector alone totals around $US3 trillion globally.It sure doesn't get any better. For all the talk about fixing balance sheets and prudential lending and all the excess printing of money to reflate assets, we're not really in better straits than at the peak of the GFC. QE bought time, but instead of using that time to really fix things up, the banks have gone with business as usual.
The asset price issue is probably the elephant in the room. The asset price slide brought about the bubble burst of the subprime mortgage bonds. To shore up the banks, the asset price drop had to be stopped, and so the massive amounts money printed was injected into banks as liquidity, essentially to keep the music going in the musical chairs. While the music keeps playing we don't have to find out just who it is that is without the chair.
It's kind of funny because Australia being so far away from the centre of this mess, our own property bubble was barely touched by the GFC. Everybody who was in property has essentially been able to keep their asset price, and even with more ridiculous gains. It's easily arguable that for all the storm clouds over the horizon, the GFC didn't hit Australia at all - thanks even to Kevin Rudd. It's one thing to have nice asset prices but if it's being held up by tricky central banking, you might want to think about what prices might look like if theydroppes around 30-40%.
Oh, and wonder about the fundamental cogitation going on when the RBA looks to be cutting interest rates again soon. Maybe what it's doing is exactly what they say they're not doing, which is pandering to the interests of the banks who want more asset price rises in the housing sector.
The French Are Asking Questions
It turns out the guy who went and slit the throat of the priest in Normandy was known to the French authorities and yet was left free to roam free and do as he did. Now questions are being asked.
A Mass at the Cathedral of Notre-Dame, reserved for the most solemn state occasions, was held Wednesday evening in memory of Father Hamel, 85, whose attackers forced him to kneel before killing him in the old stone church of St.-Étienne-du-Rouvray in Normandy. Much of the government and two of France’s three living former presidents attended.
At the same time, a new feeling of helplessness was setting in. One of the attackers, Adel Kermiche, 19, had tried twice to go to Syria. On Wednesday, the Islamic State released a video that it said was recorded before the attack by him and his accomplice in which they pledged allegiance to the group.
Mr. Kermiche, like the Nice attacker, Mohamed Lahouaiej Bouhlel, had a documented history of psychiatric troubles, according to the newspaper Le Monde, which leaked his judicial files in Wednesday’s editions and whose report was confirmed by the Paris prosecutor’s office, which leads terrorism investigations.
But unlike Mr. Lahouaiej Bouhlel, Mr. Kermiche was also already in the government’s books as a terrorist threat.
Indeed, barely four months ago a judge released him from detention, convinced by the young Franco-Algerian’s arguments that he was ready for a normal life and no longer wanted to become a jihadist.
At the time, the Paris terrorism prosecutor’s office appealed the judge’s decision, arguing that Mr. Kermiche should stay behind bars.You can't make this stuff up. They had him. Twice. And they fitted an electronic tracking device on the guy. They knew he was dangerous. They denied him access to Syria. They gave him curfew to follow. He violated his probation, twice, which put him behind bars for a little while but the same judge that freed him the first time let him go again. And of course this happens while the whole country is under 'heightened security' thanks to the Nice truck driving bastard. You'd think somebody somewhere would have done something about this guy. But they didn't, and so we have yet another instance of state incompetence in apprehending a terror perp.
The prosecutor was contemptuous of the judge’s arguments for limited surveillance, calling them “perfectly illusory, given the context,” according to the documents quoted in Le Monde. “He’s claiming a mistake, and arguing for a second chance. But there’s a very big risk.”
Once before, in 2015, after his first failed effort to go to Syria, Mr. Kermiche had been allowed to go free but was required to check in with the police and probation authorities. He violated that order within about six weeks trying a second time to go to Syria. This time he made it as far as Turkey where authorities arrested him.
When he was caught the second time, he was put in preventive detention until March 18 of this year, when he came before the judge who ultimately let him go.
This time he was fitted with an electronic ankle bracelet, forbidden to leave his local department of Seine-Maritime and made to report to a probation officer at the police station once a week, and ordered to live in his parents’ house, where he was allowed to leave only between 8:30 a.m. and 12:30 p.m on weekdays.
Get your head around that one. The French at least are trying and they're finding it awfully hard. I don't blame them; I find it hard.
It may even be that we're getting the whole thing wrong. The cross over between the spree-killing and terror act is really quite small. Many of these people around he world doing these spree-killings are probably adding on an ideological dimension to what is simply an act of mass violence. After all, it is a very fine distinction between killing 50 people in a spree killing and killing 50 people in an act of terror. The latter merely appears to have a plausible motive. What if this were an illusion?
What if what was really going on was simply spree-killings giving themselves the cover of ideology? Then it would be easier to understand the danger of crazy people walking around on the streets, and in some countries, being able to purchase weapons of tremendous destructive power. It suits the government far more to have narrative where a crime can be made out to be a political problem than a medical problem. Consider for a moment a lot of spree-killings are done by people who struggle to find meaning in their lives. Whether that be Wade Frankum in Strathfield or Eric Harris and Dylan Klebold in Columbine. Ideology offers an ad hoc assignment of meaning to such acts. This offer politics a tremendous amount of leeway to then enact things that maybe need-not-ought to be enacted.
Back in the 90s, - way before 9/11 made terrorism a front line issue - with the cases of Wade Frankum in Sydney and the Columbine boys in Colorado, the state had no such recourse. Thus back in their day, the governments respectively went after things like 'American Psycho' by Brett Easton-Ellis and violent computer games while completely ignoring the problem having weapons readily available to the general population - something the USA under the threat of the NRA is still insisting upon to this day. At the moment the discourse has turned availability of weapons in America, but all the same it misses half the point.
It is laughable to think 'American Psycho' or 'Crime and Punishment' caused somebody to go on a killing spree. It is equally laughable to think the problem in Columbine was computer games or the Rap music the boys listened to. In the same way, it is laughable to think the attacks in Nice and Normandy were because of the Koran. These acts of 'terror' in Nice and Normandy were done by people who were willing to exchange their meaningless lives for a sliver of metaphysical meaning. That's desperate, violent and crazy, but not driven by ideology first.
There are a lot of desperate people walking around this planet without much meaning in their lives. Some of them are mentally ill, and filled with violent mentation. Demonising an ideology merely offers these people an excuse in an otherwise meaningless, lacking life. If the state thinks it is getting closer to the ideological problem through anti-terror laws and going after radicalised people, they're missing the point because they release the mentally unstable ones back into the public. As the cases in Nice and Normandy amply demonstrate, it is the crazy people who are willing to do this stuff. This can be corroborated with Man Monis of the Lindt Cafe siege who also fell off the AFP watch list exactly because he was deemed crazy.
I'm sure the politicians don't want to hear it but the real problem is mental illness, not ideology. That would be because they've been cutting mental health budgets to support budgets for 'Anti-Terror' for a good decade and a half. Nobody wins elections advocating for sanity; they only seem to win on the basis of being tough on other people. They need an army of mental health workers, not guys with guns and bulletproof vests.
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