Former Italian Finance Minister Giulio Tremonti tells it like he sees it

[whistle]

Published in an open letter to Corriere della Sera**, former Italian Fiance Minister Tremonti reiterates the current world financial crises, as he did in his recent interview with Raiuno Television channel. This time he gave a bigger kick though.

"We can call it as we want: crisis, turbulence, tempest, collapse, storm, turmoil, distress, crunch. We can-–or we cannot-- compare it to the 1929 crisis. We can call it or see it as we want, but it is sure that, starting from August 2007, from the mysterious depths of financial capitalism, very strong shocks came to the surface," Tremonti writes.

Tremonti goes on, "Above all, it is not at all granted that the shocks are ending and not, instead, beginning," Tremonti is warning of the possibility of the “perfect storm" being unleashed in world finances. A cure is necessary, he says, but “you don’t find the cure of a sickness, if you do not understand the origins first".

Tremonti then points at the transformation of banking which once was the cautionary institutions which avoided risky situations as being turned into gambling operations, typified by the role of the hedge funds.

"Hedge funds are a source of risk", Tremonti writes. "They are nothing else than irregular banks. Banks undergo a state jurisdiction, rules, standards, limitations and prudential criteria for action. Hedge funds are the opposite: Their rule is, in fact, having no rules. They are the opposite of their real name."

"At the end, bankers do not trust bankers any longer," said Tremonti. "The first effect has been the crossover crisis between long-term financing and short-term deposits. This has been the unleasher of the banking panic in England." If every entity in the financial system should open their books and say the truth on what they have; that is the starting point for a solution." he concluded.

It would be nice if every entity opened up their books giving authorities the real picture. However, that might make it nearly impossible to get the dead financial crocodiles beached on Her Majesty Queen Elizabeth II's Cayman Islands to open up what they went there to hide. For many it might prove to be too frightened to find out what's inside those cooked up books.

**NOTE: Corriere della Sera ("Evening Courier") is an Italian daily newspaper (first in sales), published in Milan Italy.