Perspectives on the global economic meltdown- (Nov 28 2010)

Neshant · Post by **Neshant** » 06 Apr 2013 08:40

Italian banks are bankrupt.
They fear capital flight.
The now want every nation to follow their plan of robbing savers so the capital does not flee their shores.
I wonder what idiot would still be holding money in an Italian bank.

--------------
UniCredit Says Global Rule Needed to Bail In Big Deposits

http://www.bloomberg.com/news/2013-04-0 ... lures.html

"Uninsured deposits could be used in future bank failures provided global rulemakers agree on a common approach, according to Federico Ghizzoni, the chief executive officer of Italy’s biggest lender, UniCredit SpA. (UCG)

Cutting large deposits in failing banks, along with other liabilities such as bonds, to offset losses is acceptable as long as small savers’ funds remain protected, Ghizzoni told reporters in Vienna late yesterday. The European Union has to introduce identical rules in all of its member states and ideally those rules would be coordinated globally, he said.

Including deposits “is acceptable if it becomes a European solution,” said Ghizzoni, 57. “What we cannot accept is differentiation country by country inside the same area. I would strongly suggest to make this decision not only within Europe but within the Basel Committee, where all countries are represented. Otherwise we would open the market for arbitrage.”

Theo_Fidel · Post by **Theo_Fidel** » 06 Apr 2013 10:25

TSJ,

How come that oisule who drove AIG into bankruptcy still holds a large chunk of shares and was blackmailing his board into suing the government to give more cash. What happened to wiping out shareholders there?

vishvak · Post by **vishvak** » 06 Apr 2013 20:50

From link in Nishantji's message

Cutting large deposits in failing banks, along with other liabilities such as bonds, to offset losses is acceptable as long as small savers’ funds remain protected, Ghizzoni told reporters in Vienna late yesterday. The European Union has to introduce identical rules in all of its member states and ideally those rules would be coordinated globally, he said.
..
Ghizzoni said deposits should only be included when bonds aren’t sufficient, and those below the guaranteed level of 100,000 euros should be off limits. While he would prefer not to touch them at all, including deposits in a global plan was an acceptable solution, he said.

So in 'ideal' situation, as claimed by the chief executive officer of Italy’s biggest lender, is to have an acceptable situation where not just European banks, but every country's banks, to have such coordinated' 'global' plan. Why because deposits 'included' only in Italian banks and such European banks is not 'acceptable'.

So do these plans solve problems at its root? No. Do such plans even address such problems at national/international/global level? No. Such are characteristics of a European acceptable situation.

Hopefully Indian banks will reduce exposure to European banks (not global banks) to minimum. At the same time India should stop entry of such deposit grabber mechanism and not issue visa to such people who push for such schemes.

People on this forum have been talking of currency as ponzy kind of scheme, but this makes even bank deposits free for all. Querying why first world countries could not secure deposits in banks by default seems to be misplaced, even going to roots of banking problem looks too out of place?

RamaY · Post by **RamaY** » 06 Apr 2013 21:32

^ so Bank savings are no more "savings" but an investment same as investment in stocks and other 'karma and stuff' like

One can lose anything.... Welcome to the world of 'financial services'... An individual cannot be immune to the global financial tsunami even if s/he is kind of disconnected from this filth, as people with 100% equity in their homes have seen post 2008. A person who bought a house in 2007 with cash also have seen his money evaporate as the housing market tanked.

TSJones · Post by **TSJones** » 06 Apr 2013 23:14

Theo_Fidel wrote:TSJ,

How come that oisule who drove AIG into bankruptcy still holds a large chunk of shares and was blackmailing his board into suing the government to give more cash. What happened to wiping out shareholders there?

Very Simple. He is claiming that the rescue terms that the government gave AIG which wiped out the shareholders was unfair and illegal. He is seeking redress in the courts. AIG has refused to join the lawsuit. And IIRC, the rescue was a US Treasury package not the Federal Reserve.

TSJones · Post by **TSJones** » 06 Apr 2013 23:28

RamaY wrote:^ so Bank savings are no more "savings" but an investment same as investment in stocks and other 'karma and stuff' like

One can lose anything.... Welcome to the world of 'financial services'... An individual cannot be immune to the global financial tsunami even if s/he is kind of disconnected from this filth, as people with 100% equity in their homes have seen post 2008. A person who bought a house in 2007 with cash also have seen his money evaporate as the housing market tanked.

It has *always* been the position that the large depositors could be wiped out if the bank became insolvent. When was this not so? The FDIC was started in the 1930s to insure the small depositors. It never insured the large depositors. If a bank is too large to fail then it is saved from insolvency but that has nothing to do large depositors and and everything to do with keeping the US national banking system solvent and stopping panics. The large depositors are just along for the ride *and* they can still lose evrything under the right circumstances. If you are a large depositor then you had better be diversifying your portfolio. "Diversification is the only free lunch you will ever get." - Jim Cramer. US T-boinds are pretty safe though. Just not a very good return right now. If the sequester continues and I'm betting it will, T-Bonds as a percentage of the GDP will start getting rare.

"A person who bought a house in 2007 with cash also have seen his money evaporate as the housing market tanked"

So? The same thing could happen with gold or silver. In fact, I saw it happen to silver when the Hunt brothers tried to corner the silver futures market. They lost their butt. I saw gold hit over $800 in the early '80's when everybody was piling on due to stagflation of the US economy. Then it dropped to $250. I will tell you a great big secret: "Time changes everything". Seriously.

Neshant · Post by **Neshant** » 07 Apr 2013 05:04

This thing is going down in a hurry bhai-log.

Make preperations NOW, do not wait.

Keep plenty of cash on hand, keep your home well stocked with basic essentials and maybe not so basic essentials too - enough to last 6 months, maintain some gold & silver in your possession. Store up a bit of gasoline in jerry cans if you can.

Do it now.

TSJones · Post by **TSJones** » 07 Apr 2013 12:48

Neshant wrote:This thing is going down in a hurry bhai-log.

Make preperations NOW, do not wait.

Keep plenty of cash on hand, keep your home well stocked with basic essentials and maybe not so basic essentials too - enough to last 6 months, maintain some gold & silver in your possession. Store up a bit of gasoline in jerry cans if you can.

Do it now.

Mmmm, that's one way to look at it, yes.

svinayak · Post by **svinayak** » 07 Apr 2013 20:55

RamaY wrote:^ so Bank savings are no more "savings" but an investment same as investment in stocks and other 'karma and stuff' like

One can lose anything.... Welcome to the world of 'financial services'... An individual cannot be immune to the global financial tsunami even if s/he is kind of disconnected from this filth, as people with 100% equity in their homes have seen post 2008. A person who bought a house in 2007 with cash also have seen his money evaporate as the housing market tanked.

False prices gave an illusion of stability. THis sense of market information and rising prices are fueled by the mainstream media which create euphoria. When it is done in a mass scale for the entire country then it is a big operation and also it is a gigantic propaganda in global world.
This american economy and propaganda went thru the roof. Bank are left holding all the rubbish and it is one single point of failure which they are trying to prevent going down.

All other periods in history were short term and could be recovered. But this one is big and they are trying to patch it up so that it will sustain.

TSJones · Post by **TSJones** » 08 Apr 2013 20:34

Take that Austrian School of Economics!

http://finance.yahoo.com/blogs/daily-ti ... 44264.html

Keynesians rule!

JE Menon · Post by **JE Menon** » 08 Apr 2013 21:01

>>debt masquerading as wealth.

A very nice turn of phrase, and very true in many many European countries. Have seen it first hand for decades.

This is an area where people even take annual vacations based on bank loans!!! I have always found it incomprehensible how someone can enjoy a vacation when you know that it's on borrowed money which will hit you the minute you go back!!!

Theo_Fidel · Post by **Theo_Fidel** » 08 Apr 2013 21:08

Most people in west don't pass on money to their kids.
Their attitude is my last chek should bounce....

I know a banda, deep in debt, who plunked down $50,000 to go shoot a polar bear!

TSJones · Post by **TSJones** » 08 Apr 2013 21:10

Theo_Fidel wrote:Most people in west don't pass on money to their kids.
Their attitude is my last chek should bounce....

I know a banda, deep in debt, who plunked down $50,000 to go shoot a polar bear!

It is better to teach a person how to fish than to give them a fish.

JE Menon · Post by **JE Menon** » 08 Apr 2013 21:27

>>I know a banda, deep in debt, who plunked down $50,000 to go shoot a polar bear!

Shocking, but not surprising... It really is cultural this thing I think. Although we may be heading in that direction.

vishvak · Post by **vishvak** » 08 Apr 2013 21:33

Wonder what was taught to the Italian chap, mentioned in earlier post, who was talking of in-bailing in all countries as an acceptable situation without having to address and solve problems at roots. Wonder what was he doing all the while the unviable banking situations were developing. An ad-hoc solution suggested to solve problems of financial institutions is hardly called a skill, especially if the suggested methods are to steal bank deposits, not just in Italian banks; but of banks all over. For western world this hardly is an ideal impression of ad-hoc approach in top down management of financial situation.

TSJones · Post by **TSJones** » 08 Apr 2013 23:02

vishvak wrote:Wonder what was taught to the Italian chap, mentioned in earlier post, who was talking of in-bailing in all countries as an acceptable situation without having to address and solve problems at roots. Wonder what was he doing all the while the unviable banking situations were developing. An ad-hoc solution suggested to solve problems of financial institutions is hardly called a skill, especially if the suggested methods are to steal bank deposits, not just in Italian banks; but of banks all over. For western world this hardly is an ideal impression of ad-hoc approach in top down management of financial situation.

Who in their right mind places all of their money, and we're talking about a large uninsurable sum here, in a savings account in only one bank? If you know of anybody, please send them to me for I will teach them how to fish.

Now if you are talking about an *investment brokerage" that is an entirely dfferent matter. Most brokerages in the US offer some kind of insurance but that is a self insurance not backed by the government. Even there, my guru, Cramer-ji, can help them upon the right path of conciousness.

vishvak · Post by **vishvak** » 08 Apr 2013 23:36

That hardly explains anything. Most of all, learning to fish/farm won't explain how usual it has been to have problems with financial sector at institutionnal level. One amongst many is LIBOR scandal. LIBOR scandal is a class in itself with similar situations for many others, for example, gold rate fixing. Many such discussions on this board by knowledgeable people here.

TSJones · Post by **TSJones** » 09 Apr 2013 00:08

vishvak wrote:That hardly explains anything. Most of all, learning to fish/farm won't explain how usual it has been to have problems with financial sector at institutionnal level. One amongst many is LIBOR scandal. LIBOR scandal is a class in itself with similar situations for many others, for example, gold rate fixing. Many such discussions on this board by knowledgeable people here.

The LIBOR scandle which affected the derivatives market is one thing, but it is quite another thing to equate it with too big to fail banks that have to be saved in order to prevent the collapse of retail banking. Let's compare apples to apples shall we, and not to oranges? WHich do you want to talk about? Large depositors in the retail banks? Or derivatives trading, hedge funds, credit default swaps and investment brokerages? The only retail aspect that I can see for LIBOR is that a lot of peoples home mortgage rates and credit cards were tied to it. But that's got nothing to do with large depositors keeping all their money in one one retail bank.

OK, back to apples to apples: One of the shocking things that came out in the Cyprus retail bank panic was that the large depositors were able to get their money out while the small depositors were frozen. THat right there is corruption. That's not retail banking, that's an organized crime syndicate.

And I will go one step further: THE ONLY REASON WHY ANYBODY WITH ENOUGH IQ TO WALK AND CHEW BUBBLE GUM AT THE SAME TIME keeps all their large sum money in an uninsured account at a retail bank is in order to buy influence at the bank for some purpose such as tax avoidance, special business privileges, lack of transparency etc. I don't lose a lot sleep worrying about those kind of depositors. Especially at a corrupt banking system that Cyprus has shown evidence to be.

JE Menon · Post by **JE Menon** » 09 Apr 2013 01:51

Guys, think about it... It is not only crooks who hold deposits of over 100K in banks accounts. There are school administration funds, hospital administration funds, all kinds of similar things. People don't divvy up all their money into under 100K accounts and have 10 different accounts for this. Generally, people trust banks. It is that trust that has been taken away, but Cyprus will eventually pay much less than "Europe" in general... Wait and see.

TSJones · Post by **TSJones** » 09 Apr 2013 02:33

JE Menon wrote:Guys, think about it... It is not only crooks who hold deposits of over 100K in banks accounts. There are school administration funds, hospital administration funds, all kinds of similar things. People don't divvy up all their money into under 100K accounts and have 10 different accounts for this. Generally, people trust banks. It is that trust that has been taken away, but Cyprus will eventually pay much less than "Europe" in general... Wait and see.

No, they keep them in various CD's, repo agreements, money market mutual finds, etc. Then, when they go to make payroll, they fund the payroll account at the bank and send the bank a listing of each check amount and the check number so that each check is individually accounted for. Its the same when they make an accounts payable cycle for the month. I know because I audit them. When we audit the company, we call short term assets(less than a year) held at various banks, investment firms, government agencies, etc, liquid assets or cash equivilents. But it's really not cash, but they are considered the same as cash. Cash and long term (more than a year) investments management are a major concern for any organization. Generally, they don't get caught flat footed either because it's their job, man. I have seen investment managers move cash into a repo agreement just for the two day weekend! And then pull it back out. If the money ain't working they ain't doing their job. And none of that money is insured. Never has been. Investment manager cunning is the only insurance it ever gets.

JE Menon · Post by **JE Menon** » 09 Apr 2013 02:49

Maybe in the US, TSJ.

Several of my daughter's friends don't know if their school will be operational in a couple of months time. Cyprus is a small country, with a tiny population. Schools, hospitals, small businesses just put their money in bank accounts and have "standing orders"... Anyways, hardly matters now for them.

TSJones · Post by **TSJones** » 09 Apr 2013 02:56

Fun fact:

I know someone, who has credit card sales of at least $2 million a month. He finally got a bank to process his sales but the bank demands "reserve requirements". So they hold $1 million dollars of his money at any point of time. And he has no capability of telling them how to invest it! He's just grateful that they will process his credit card sales! If the bank goes under, bye, bye, "reserve requirements".

Needless to say, he doesn't keep his personal funds at that bank. He scatters his personal funds but no, he doesn't rgidly follow insured only accounts either. Too much banking to keep track of.

svinayak · Post by **svinayak** » 09 Apr 2013 02:59

JE Menon wrote:Guys, think about it... It is not only crooks who hold deposits of over 100K in banks accounts. There are school administration funds, hospital administration funds, all kinds of similar things. People don't divvy up all their money into under 100K accounts and have 10 different accounts for this. Generally, people trust banks. It is that trust that has been taken away, but Cyprus will eventually pay much less than "Europe" in general... Wait and see.

http://blogs.e-rockford.com/tedbiondo/2 ... ening-now/

Could Cyprus happen in U.S. or is it happening now?
Posted on March 27, 2013 at 10:33 pm by Ted Biondo

Despite saying last week that they wouldn’t allow money to be confiscated from private bank accounts, Cyprus caved under pressure from the EU, taking up to 40% from accounts that have more than 100,000 Euros.

The Cyprus progressives have gone wild, left with no solution except to take private funds directly from bank accounts. The progressive socialist political system is responsible for this turmoil – deficit spending for years without any concern for the consequences – sound familiar?

Read about the closing of banks, loss of thousands of jobs, freezing amounts over 100,000 euros here. Private bondholders have already lost 75% on their investments a year ago.

The U.S. government would probably not take savings directly from our bank accounts but read here how the government is currently reducing our accounts through inflation, quantitative easing by the federal reserve, etc.

Excerpt:

This new money (Quantitative Easing) buys just as much as the money you sacrificed to save for years. More money in circulation, without a corresponding increase in output, means rising prices. Although the numbers in your bank book may remain the same, part of the purchasing power of your money is transferred to the government. Is that really different from what Cyprus has done?

Take a look at the tactics Cyprus is using to avert a run on the banks - total government control in action. The government is even investigating people who took large sums of money out of Cyprus weeks before the bailout terms were determined.

Just get used to these tactics by progressive governments as they head toward a fiscal cliff of their own making, they confiscate citizens money to pay for their fiscal mismanagement.

Can Cyprus happen in US. In fact, this is what happened to GM Bondholders – the gov’t came in and devalued their investment. It also just happened in Stockton California where their union workers took a haircut while their municipal bond holders went to a St. Baldrick’s fundraiser. So yes, the gov’t has come in here and devalued private investments.

TSJones · Post by **TSJones** » 09 Apr 2013 03:12

Acharya wrote:
JE Menon wrote:Guys, think about it... It is not only crooks who hold deposits of over 100K in banks accounts. There are school administration funds, hospital administration funds, all kinds of similar things. People don't divvy up all their money into under 100K accounts and have 10 different accounts for this. Generally, people trust banks. It is that trust that has been taken away, but Cyprus will eventually pay much less than "Europe" in general... Wait and see.

http://blogs.e-rockford.com/tedbiondo/2 ... ening-now/
Could Cyprus happen in U.S. or is it happening now?
Posted on March 27, 2013 at 10:33 pm by Ted Biondo

Despite saying last week that they wouldn’t allow money to be confiscated from private bank accounts, Cyprus caved under pressure from the EU, taking up to 40% from accounts that have more than 100,000 Euros.

The Cyprus progressives have gone wild, left with no solution except to take private funds directly from bank accounts. The progressive socialist political system is responsible for this turmoil – deficit spending for years without any concern for the consequences – sound familiar?

Read about the closing of banks, loss of thousands of jobs, freezing amounts over 100,000 euros here. Private bondholders have already lost 75% on their investments a year ago.

The U.S. government would probably not take savings directly from our bank accounts but read here how the government is currently reducing our accounts through inflation, quantitative easing by the federal reserve, etc.

Excerpt:

This new money (Quantitative Easing) buys just as much as the money you sacrificed to save for years. More money in circulation, without a corresponding increase in output, means rising prices. Although the numbers in your bank book may remain the same, part of the purchasing power of your money is transferred to the government. Is that really different from what Cyprus has done?

Take a look at the tactics Cyprus is using to avert a run on the banks - total government control in action. The government is even investigating people who took large sums of money out of Cyprus weeks before the bailout terms were determined.

Just get used to these tactics by progressive governments as they head toward a fiscal cliff of their own making, they confiscate citizens money to pay for their fiscal mismanagement.
Can Cyprus happen in US. In fact, this is what happened to GM Bondholders – the gov’t came in and devalued their investment. It also just happened in Stockton California where their union workers took a haircut while their municipal bond holders went to a St. Baldrick’s fundraiser. So yes, the gov’t has come in here and devalued private investments.

Same thing with Chrysler. Stuff happens. I would like to point out that before GM and Chrysler finally hit the skids, their bonds were under a "junk" rating. Only speculators where holding them at pennies to a dollar in the hopes the government would make them whole. No way, not gonna happen when the shareholders took it in the neck.

TSJones · Post by **TSJones** » 09 Apr 2013 03:16

JE Menon wrote:Maybe in the US, TSJ.

Several of my daughter's friends don't know if their school will be operational in a couple of months time. Cyprus is a small country, with a tiny population. Schools, hospitals, small businesses just put their money in bank accounts and have "standing orders"... Anyways, hardly matters now for them.

It's sad because small businesses particularly in a small country have very limited choices. They don't have the influence that large businesses or foreign investors have. And a small business consists of what dreams and asperations are made of...........

svinayak · Post by **svinayak** » 09 Apr 2013 03:17

JE Menon wrote:Guys, think about it... It is not only crooks who hold deposits of over 100K in banks accounts. There are school administration funds, hospital administration funds, all kinds of similar things. People don't divvy up all their money into under 100K accounts and have 10 different accounts for this. Generally, people trust banks. It is that trust that has been taken away, but Cyprus will eventually pay much less than "Europe" in general... Wait and see.

This is going to happen in the big banks too. It is not confined to small countries alone

svinayak · Post by **svinayak** » 09 Apr 2013 03:19

vishvak wrote:Wonder what was taught to the Italian chap, mentioned in earlier post, who was talking of in-bailing in all countries as an acceptable situation without having to address and solve problems at roots. Wonder what was he doing all the while the unviable banking situations were developing. An ad-hoc solution suggested to solve problems of financial institutions is hardly called a skill, especially if the suggested methods are to steal bank deposits, not just in Italian banks; but of banks all over. For western world this hardly is an ideal impression of ad-hoc approach in top down management of financial situation.

This is just band aid to keep thing calm and prolong the inevitable

http://www.american.com/archive/2013/ma ... e-farmland

The Next Real Estate Bubble: Farmland
By Blake Hurst
Friday, March 29, 2013
Filed under: Economic Policy

Farmers have been taking on mounting debt, creating an unsustainable increase in land prices and risking a crash that would ripple through our economy.

Eeyore should have been a farmer. It’s almost impossible to find a farmer happy about his situation. The weather’s too hot, cold, wet, or dry, and prices are too low or too high, depending on whether we’re buying or selling. We can’t, at least in front of our peers, admit to prosperity or even the chance of prosperity. Although we’d never admit it at the local coffee shop, the last few years have been good, at least for Midwestern grain farmers. Prices have been strong — strong enough to make up for much of the production lost to last year’s drought. That’s terrible news for livestock producers, who’ve been faced with drought-damaged pastures and high feed costs, but for farmers producing corn and soybeans, it has been a profitable few years.

Farmers have cash, and nowhere to invest it but farmland. Farmers largely ignore equities, as they tend to balance the inherent risk in farming by investing in what they perceive as less risky places. We aren’t dumb, however, and have figured out that it's a losing game to invest in bonds or CDs at rates less than inflation while we’re in tax brackets we never even knew existed.

So, farmland prices are booming. Land prices in the heart of the Corn Belt have increased at a double-digit rate in six of the last seven years. According to Federal Reserve studies, farmland prices were up 15 percent last year in the most productive part of the Corn Belt, and 26 percent in the western Corn Belt and high plains. Closer to home, a neighbor planning his estate had an appraisal done in 2010 and again in late 2012. In that two-year period, the value of his farm had doubled. According to Iowa State economist Mike Duffy, Iowa land selling for $2,275 per acre a decade ago is now at $8,700 per acre. A farm recently sold in Iowa for $21,900 per acre.

A debt-to-asset ratio of 30 percent can enter dangerous territory with a land price drop of 50 percent, which sounds like a lot, until you remember that is a price level last seen only 24 months ago in much of the Midwest.
Although much of the increase in land prices has been driven by well-financed farmers and outside investors (many paying a large portion of the purchase price in cash), there are disturbing trends occurring on farm balance sheets. The Kansas Farm Management Association reports that debt-to-equity ratios are highest in large farms, which have over a million dollars in sales. Although the debt-to-asset ratio is low even in the largest farms in Kansas, it's higher than it was in 1979, shortly before the farmland crash of the eighties. As former home owners in Las Vegas and Southern California can attest, equity can melt away in a hurry. A debt-to-asset ratio of 30 percent can enter dangerous territory with a land price drop of 50 percent, which sounds like a lot, until you remember that is a price level last seen only 24 months ago in much of the Midwest.

The number of farmers in the Kansas survey with a 40 percent debt-to-asset ratio is higher now than it was in 1979, and those farms with a debt-to-asset ratio of over 70 percent are three times as numerous today.

We farmers should be more sophisticated than the average subprime borrower and more risk averse than startup investors in the 1990s. After all, we manage multi-million dollar businesses, and since the average age of farmers is near 60, most of us are survivors of the agricultural asset crash of the early 1980s. In 1981, the average price of farmland in Iowa was $2,147 per acre; by 1986, the average farm brought $787 an acre. That period was the formative experience of my farming career, and one I would not wish to repeat. According to a recent article in the USA Today, a third of Iowa’s farmers left the industry during that crash.

paramu · Post by **paramu** » 09 Apr 2013 03:56

The fact the there is a revolving door between the private bankers and regulators in the western banking world tells us how corrupt the whole system is. Not even a single banker is punished for their action that precipitated such a massive crisis. You trust it at your own peril.

Neshant · Post by **Neshant** » 09 Apr 2013 09:12

Ian Gordon on the Kontradiev Winter we're supposed to be entering.

Needless to say, the slant is heavily towards gold.

Neshant · Post by **Neshant** » 09 Apr 2013 09:22

another day, another bail out (or bail in, whichever term you prefer)..

Spanish And Italian Banks May Need Bailout Soon

In the aftermath of the banking crisis in Cyprus, the world’s attention is gripped by the problems experienced by the Italian and Spanish banking systems. Bad loans, combined with capital flight from the eurozone, can negatively affect the financial situation of the Italian and Spanish banks.

The Spanish banking is system is vulnerable and unstable because of the economic slowdown and the inability of the Spanish small and medium companies to pay their debts. “You can be sure that if these companies’ bad debts rise, you’re going to see more bad loans to families, and credit card bills that won’t be paid,” Javier Santoma, Professor at Spain’s IESE business school told Reuters. A report published by the IMF stresses the vulnerabilities of the Italian banking system, noting that “while stabilized, the Italian financial system is not immune from risks: continuing weakness in the real economy and the link between the financial sector and the sovereign remain key risks.”

The unsecured creditors of the Spanish and Italian banks fear that the European Union may be tempted to sacrifice the interests of the creditors and impose a haircut on the bank accounts. A banking crisis in Spain or Italy is quite likely so the worries regarding the EU’s unwillingness to bailout the banks are not unfounded. Reuters quotes Bart Oosterveld, managing director of sovereign risk at Moody’s, who believes that “”Policy makers appear very confident that market conditions are benign enough and that they have the tools to avoid contagion to other peripheral economies and their banking systems… but this confidence may well be misplaced.”

If the analysis presented by the experts from Moody’s ("experts" my ass) is correct, then new bailouts and new bankruptcies are to be expected in the Spanish and Italian banking sectors. The experience of the Cypriot banking crisis shows that the banks with highest leverage go bust first.

http://www.eurasiareview.com/01042013-s ... lout-soon/

pentaiah · Post by **pentaiah** » 09 Apr 2013 12:51

Since Klinton sahib rule there is no difference between investment bank and retail bank,
They operate under the same umbrella like BOA and Merrill are one and the same.

In the good old days investment banks and retail bank were by prohibited not tread ok trade on each other territory.

From wiki

The Glass–Steagall Act is a term often applied to the entire Banking Act of 1933, after its Congressional sponsors, Senator Carter Glass (D) of Virginia, and Representative Henry B. Steagall (D) of Alabama.[1] The term Glass–Steagall Act, however, is most often used to refer to four provisions of the Banking Act of 1933 that limited commercial bank securities activities and affiliations between commercial banks and securities firms.[2] This article deals with that limited meaning of the Glass–Steagall Act. A separate article describes the entire Banking Act of 1933.
Starting in the early 1960s federal banking regulators interpreted provisions of the Glass–Steagall Act to permit commercial banks and especially commercial bank affiliates to engage in an expanding list and volume of securities activities.[3] By the time the affiliation restrictions in the Glass–Steagall Act were repealed through the Gramm–Leach–Bliley Act of 1999 (GLBA), many commentators argued Glass–Steagall was already “dead.”[4] Most notably, Citibank’s 1998 affiliation with Salomon Smith Barney, one of the largest US securities firms, was permitted under the Federal Reserve Board’s then existing interpretation of the Glass–Steagall Act.[5] President Bill Clinton publicly declared "the Glass–Steagall law is no longer appropriate."[6] Many commentators have stated that the GLBA’s repeal of the affiliation restrictions of the Glass–Steagall Act was an important cause of the late-2000s financial crisis.[7][8][9] Some critics of that repeal argue it permitted Wall Street investment banking firms to gamble with their depositors' money that was held in affiliated commercial banks.[10] Others have argued that the activities linked to the financial crisis were not prohibited (or, in most cases, even regulated) by the Glass–Steagall Act.[11] Commentators, including former President Clinton in 2008 and the American Bankers Association in January 2010, have also argued that the ability of commercial banking firms to acquire securities firms (and of securities firms to convert into bank holding companies) helped mitigate the financial crisis.

TSJones · Post by **TSJones** » 09 Apr 2013 20:59

Yup, BOA picked up Merrill Lynch in last crisis. And Goldman and Morgan Stanley joined the Federal Reserve to seek protection and TARP money. Paulsen, a former Goldman executive was the one who dreamed up the TARP while working as head of the US Treasury department under George Bush.

Goldman wants to back out of the Federal Reserve now. I don't think the Federal Reserve is going to let them.

Prem · Post by **Prem** » 09 Apr 2013 23:57

Offshore Finance Leak Exposes Millions Stashing Money, Maybe You Too?
http://www.forbes.com/sites/robertwood/ ... e-you-too/

$20 trillion? A leak of epic proportions is exposing many to taxes, embarrassment, even prosecution. Millions of internal records have leaked from Britain’s offshore financial industry. Holders of once-anonymous wealth from around the world are in the open.Millions of emails and other documents are in the wind and coming to your local TV shows, tabloids and tax collectors. That means public figures, investors, families, Brits, Yanks, and more. It’s a who’s who from the sedate offshore haven of the British Virgin Islands (BVI). See Leaks reveal secrets of the rich who hide cash offshore.While it will be weeks before investigators root through all the documents and details, many names will stick out. French politicians, wealthy Chinese, Mongolians, Indians, Pakistanis and Russians. Americans? Clearly, and many Canadians and Britons too.You might put money overseas to deal with local family needs, keep it discreet from your spouse, ex-spouse, kids, business partner, or creditors. Taxes too. You might have added to an account a parent started or that was leftover from a business or estate deal or a foreign trip. You might do it for a rainy day.But regardless of the reason or location or backstory, global transparency is coming if it isn’t already upon us. And with the intersection of technology, tweets, WikiLeaks, and all the other sources that have roiled our world, it isn’t just telling Uncle Sam or other governments about your foreign assets and income. Soon the whole world will know.There is nothing illegal about setting up companies in BVI or other offshore havens. But not disclosing it and paying tax can be another matter. The BVI has long been a safe bet with more than a million such offshore entities. It is orderly, fast, and inexpensive. Of course, owners’ identities remain secret. Until now.The names were unearthed in a project by the Washington-based International Consortium of Investigative Journalists, in collaboration with the U.K.’s Guardian and other international media. They are jointly publishing their research results this week.Expect more revelations. Remember the firestorm in 2010 when WikiLeaks got two gigabytes of leaked U.S. military and diplomatic files? That was tiny. This BVI leak is over 200 gigabytes covering more than a decade of financial information. It’s not just BVI but Singapore, Hong Kong and the Cook Islands, too..

Neshant · Post by **Neshant** » 10 Apr 2013 10:36

svinayak · Post by **svinayak** » 11 Apr 2013 01:48

Webof Debt

Implosion plan - Being planned in a controlled manner
central banks are in talk behind the scenes
Cypress is an experiment.

RamaY · Post by **RamaY** » 11 Apr 2013 01:55

TSJones wrote: Who in their right mind places all of their money, and we're talking about a large uninsurable sum here, in a savings account in only one bank? If you know of anybody, please send them to me for I will teach them how to fish.

Now if you are talking about an *investment brokerage" that is an entirely dfferent matter. Most brokerages in the US offer some kind of insurance but that is a self insurance not backed by the government. Even there, my guru, Cramer-ji, can help them upon the right path of conciousness.

Apparently there were quite many of them in Cyprus. And also everywhere else.

A family friend used to have few $m in Cyprus. Dont know what happened to him....

RamaY · Post by **RamaY** » 11 Apr 2013 02:00

Acharya wrote: http://blogs.e-rockford.com/tedbiondo/2 ... ening-now/
Could Cyprus happen in U.S. or is it happening now?
Posted on March 27, 2013 at 10:33 pm by Ted Biondo

Despite saying last week that they wouldn’t allow money to be confiscated from private bank accounts, Cyprus caved under pressure from the EU, taking up to 40% from accounts that have more than 100,000 Euros.

The Cyprus progressives have gone wild, left with no solution except to take private funds directly from bank accounts. The progressive socialist political system is responsible for this turmoil – deficit spending for years without any concern for the consequences – sound familiar?

Read about the closing of banks, loss of thousands of jobs, freezing amounts over 100,000 euros here. Private bondholders have already lost 75% on their investments a year ago.

The U.S. government would probably not take savings directly from our bank accounts but read here how the government is currently reducing our accounts through inflation, quantitative easing by the federal reserve, etc.

Excerpt:

This new money (Quantitative Easing) buys just as much as the money you sacrificed to save for years. More money in circulation, without a corresponding increase in output, means rising prices. Although the numbers in your bank book may remain the same, part of the purchasing power of your money is transferred to the government. Is that really different from what Cyprus has done?

Take a look at the tactics Cyprus is using to avert a run on the banks - total government control in action. The government is even investigating people who took large sums of money out of Cyprus weeks before the bailout terms were determined.

Just get used to these tactics by progressive governments as they head toward a fiscal cliff of their own making, they confiscate citizens money to pay for their fiscal mismanagement.

I dont think the above example can be called Cyprification. If that is the logic then any Bank a/c that gives interest rate less than prevailing inflation rate can be called Cyprus Bank?

svinayak · Post by **svinayak** » 11 Apr 2013 02:19

It is true.
The end result is inevitable

Neshant · Post by **Neshant** » 11 Apr 2013 05:13

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

- Ludwig von Mises

another Greece is rising...

BoE's Miles urges "very, very expansionary" monetary policy

LONDON (Reuters) - Weak economic growth and subsiding price pressures suggest Britain's central bank should run an extremely loose monetary policy, Bank of England policymaker David Miles said on Wednesday.

"Growth remains very weak. That's why I think it makes sense for us to assess where the trajectory of inflation is likely to be - I think on the whole it's downwards - and to set monetary policy in a way consistent with inflation moving back to target but also to support growth," Miles told Sky News.

"I think at the moment that implies having a very, very expansionary monetary policy."

Miles is the most dovish member of the nine-member Monetary Policy Committee and has consistently argued that the central bank should be doing more to support growth.

His comments suggest he is unlikely to change his stance anytime soon, as he forecast further trouble ahead.

http://uk.news.yahoo.com/boes-miles-urg ... =m#pkpAUt9

svinayak · Post by **svinayak** » 11 Apr 2013 07:02

It is Inevitable!