Capital Ratios on the Upper East Side

This reflection will surely sound naive. Maybe it is, but this commentary by George Soros (80) irks me.

“We are on the verge of an economic collapse which starts, let’s say, in Greece, but it could easily spread. The financial system remains extremely vulnerable.” OK already. I swear to ignore anything written, replicated, or said by George Soros from now going forward.

At the same time our unbiased press and bullish stock forecasters tell us fundamentals are still looking good. Excellent. Optimism will return with earnings. Only the really cynical make us laugh!

And according to some guy named Dick Bove, European banks apparently will need higher capital ratios. Someone is inducing global recession. It wouldn’t be George Soros would it? Super.

If I was still sitting in New York, consulting for our “best and brightest”, I’d be looking at all this and be saying, “Jeez the Euro’s in for it, the EU is in for it and the Dollar must be pretty safe.” I’d be thinking, Greece DEBT to GDP reminds me of apartement prices on the Upper East Side. 

I’ve been camping out in Europe for about 10 years now, mostly consulting for Europe’s “best and brightest”. Here’s what is materially different. Europeans have always saved more, earned less, eaten better, and smoked more. Banks are painfully conservative, even to the point of being paranoid. So back to ‘higher capital ratios’: Country by country there’s some obvious DEBT:GDP ratio issues, but on the whole “Europe” is a conservative band of elitists who worry A LOT about how to protect their relevant domain. This is true for retail, private, and investment banking.

I think the Euro and the EU has some tough problems to solve, but it seems to be just a distraction. Apartment prices on the upper east side have hardly budged… One of these days I’ll put a slide in my apartment