Thursday, November 24, 2011

$$ SocGen Sues a Newspaper For "Disaster" Article

Read Here from The Daily Mail of the UK is being sued by the French banking giant Societe Generale for an article published in August. The paper claimed Soc Gen was on the verge of crumbling. Curiously, the Mail should be responding with guns a blazin', but instead is cowering in a corner.

The truth is that banks have been and are in horrible shape. What is the Mail apologizing for? For US banks, it's clear that shoddy, but legal FASB accounting practices have amounted to these banks having two sets of books a la the worst ponzi and cheating schemes of all time - worse than Bernie Madoff, or even Mr. Ponzi himself. European banks are stuck with a pile of debt that is on the way to becoming huge write downs that will cause them to collapse one by one.

The Mail's biggest mistake? They should have spent a little more time to dig a little deeper and come up with better sourcing for their claims. They would have found it.

Banks have only themselves to blame for their emasculated share prices, the distrust of the people, and the move by people to consider the mattress as a safer alternative to deposit their money. SocGen sounds ridiculous when it claims it has suffered "substantial damage to its reputation and prejudice to its trade.”

I find the suit offensive. It wreaks of the wrath of the banking establishment coming down on a newspaper for saying the wrong things (in the view of the banks). The banking PC way to go is with the meme - 'that we have it all under control' when in reality the banks are actually INsolvent. True, the Mail is often over the top with its news coverage style, selection of stories, interviews, etc., but the Mail is not the authority of the financial world, yet its dose of wake up to its masses readership elicited quite a response. This is not what the banks want. The banks will stop at nothing to advance their all is ok reality. The Daily Mail did what amounts to a big no-no for giving the masses a hint, or two about what is really going on. For the banking cartel, that Freedom of the Price concept is dangerous.

 Even the most clueless must know that banks are still replete with bad assets that date back to a vintage that caused the 2008 financial crisis. Banks are reviled for receiving billions to trillions (the numbers are so big that an exact figure is debatable but still so large that it cannot be fathomed and is thus abstract except to say it was obscene) in government bailout money for taking risks that would make the best of the gamblers in Atlantic City turn red. The MF debacle has already scared many and has caused another leap in distrust of "banks". Stupid ideas like $5 ATM fees haven't helped. And let's not forget, the chief bankers behind their rape of society are still walking around in $2000 tailored suits. 

If you don't think this stuff isn't going on European banking circles, I have a bridge to sell ya. Banks around the globe have killed their own reputations.

The debt situation in Europe has long been festering. The first Greek bailout took place months before the Mail's August article. By implication of the growing problems that were all too clear by August (without the sensationalist news coverage the Mail is known for providing), banks were a marked lot -- marked for troubles.

Not that I'm a fan of the Daily Mail, but it is stupid for it to back down so quickly.

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