LOL! Remember AIG? The LARGEST insurer in the world. They went bust and needed a bailout. Lehman Brothers? They went bust. GM? They went bankrupt. Bank of America? Haha. We saw that in 2008 and we're going to see it again. The Euro currency WILL collapse along with the rest of the Eurozone. The US will follow shortly thereafter.
Whoa, hold on, I was with you until the last bit.
But first, your point needs to be reiterated: the larger they are, the harder they fall - on taxpayer's dollars that provide a golden parachute, Lehman being the exception, a bone to the masses if you will.
So BNP could absolutely go under. They own a lot of the distressed assets - what do you think their 3.1 trillion IS? The entire financial system, at least within major regions (EU, US, China, Japan, etc.), are all systemically connected.
Why do you think the small countries are causing so many problems? Because they are owned - a lot of debt, mortgages, commercial loans, etc. - by the foreign banks, who invested stupidly.
But will it? This is the question. DID AIG? No. Its debt was transferred to the people, along with all the other major companies. If they were not directly bailed out, then, as in the case of GM, through new labour agreements, whereby, for instance, many are working at plants for $14 an hour instead of $25.
So why won't that happen again? Private debt will be made public again, to the detriment of growth in the "advanced industrial world"? BNP will walk away from their losses (at least to a large extent), the Euro will continue, rioting will become more commonplace, and growth will be slow to nonexistent for a decade - except for the rich, who will continue to invest in rapidly growing areas of the world, such as South America and Asia in general.
As for the US falling: China will not let it occur. Not yet, anyway. They own 1.6 trillion. But, if the US doesn't right its path soon, they could stop caring, at which point, a US fall could occur. Imagine yourself as a Communist leader: you need the US to buy your stuff so the people will have jobs and will not revolt. How long they need the US is another question, and the time frame is probably much smaller than most believe. But, the US institutions have already taken their major hits. The Europeans did not have the mass failings of their banks, save in Ireland and the UK.
Let's hope the world gets it together, responsibly - which to my mind means investing in infrastructure and education while asking the rich to pony up. Otherwise, a new global elite is forming, and will leave behind the idea of country as they take their money.
Bottom line for Canada, though: Toronto is probably one of the best assets that BNP has right now, and I think the worst that could happen would be a sale to another institution, who would continue a profitable project. Unless the world is going to hell. Then it would all be off, BNP or not.
