Financial Crisis

[Naam]

According to Nigel Farage, leader of the UK Independence Party, northern

EU leaders realize they risk vast losses if they allow Cyprus, Greece

or any other southern member to fail. To prevent this, they have

resorted to extreme measures - even theft.

RT: Every bailout comes with strings attached. But can Cyprus afford the price the EU has set?

The Right Honourable Insane Nigel Farage keeps on beating his anti-EU drum and the resident armchair politicians/economists applaud. but...

Sky News - 15% Tax On Big Savers Mulled

The Bank of Cyprus, the island's largest, has urged politicians to accept a tax on bank deposits in order to prevent collapse.

"It should be understood by everyone ... especially from the 56 members of parliament ... there should not be any further delay in the adoption of the eurogroup proposal to impose a levy on deposits more than 100,000 to save our banking system," bank chairman Andreas Artemis said in a statement.

The chief of ailing Cyprus Popular Bank, the island's second largest, also criticised attempts to find another solution.

"Although we knew the gravity of the situation, and the initial proposal of the eurogroup was painful, it ensured the future of the banking sector," Takis Phidias told state radio.

http://news.sky.com/story/1068577/cyprus-bailout-15-percent-tax-on-big-savers-mull

ed

So Naam wants to keep taking the Blue Pill ?

But postponing the inevitable reset serves the interests of only a handful of people

i wish nothing of that sort. i'm only stating facts, proving that my assumptions are correct and that clowns such as Nigel Farage have not done their homework. the same applies to a variety of bleeding heart journàsslists who blame the EU causing existing problems.

fact is also that, according to the latest rumours from the island, the "theft" percentage will be a rather hefty one although the "poor" owning €100k and less will be spared.

[yoshiwara]

Unfortunately I don't have the background to analyze this to the depth you guys can. What are your reactions to Grannis claiming: The Fed is not "printing money"?

http://scottgrannis.blogspot.com/2013/03/the-fed-is-not-printing-money.html

It is an excellent, interesting and challenging article.

[Lopburi99]

Please, no raining on my parade.....

[cheeryble]

Unfortunately I don't have the background to analyze this to the depth you guys can. What are your reactions to Grannis claiming: The Fed is not "printing money"?

http://scottgrannis.blogspot.com/2013/03/the-fed-is-not-printing-money.html

It is an excellent, interesting and challenging article.

Whilst not qualified to properly judge, I am impressed by the article and also the way he deals with obviously informed critical comments, and the way his answer generally ends the discussion.

If, repeat IF, as opposed to the regular chorus of "inflation is double what everyone says" it is true that CPI is an accurate indicator and may likely be overstated, it is truly meaningful. To be able to cover inflation of 2 or 3% is a very do-able affair for anyone. To think one has to cover inflation of 6 or 7% before even allowing for real gains may make one take unnecessary risks.

ps: Nadeem Walayat, with whom I am on an email basis, (I have pointed out errors to him a couple of times), is one of those who always says inflation is higher. Perhaps I'll send him the article for comment.

Cheeryble

[mccw]

If I was the Cypriot on the street I'd call for the government garrantee of 100k euros to be honoured for all;

So, Mccw...You're suggesting that those highly prudent and intelligent Cypriots who took their money out of the bank and bought gold with all the risk involved should have their moment of glory snatched away and have to bail out those who didn't? No doubt you will be willing to do the same when the inevitable Armageddon arrives at your doorstep?

. So clean bank, no debt for anyone, start again- blatantly bedt for the country and people But no - they are slave to the Troiker.

Slave to the troika?Hmm....If you get a mortgage and merely fulfil the conditions you agreed to for your benefit....are you a slave to the building society.If you borrow £5000 from Mum and Dad and they say you've got to contribute yourself you gonna disown them?

Not sure what your talking about.

I certainly don't advocate gold confiscation to pay for anything.

Regarding the debts examples. They are no good. Cyprus will still be indolvant and subjected to decades of debt crises same like the rest of the med. the troika will squeeze every bit of valuable asset from them.

A much better analogy for the country of Cyprus to a person is like a property owner taking out unsecured loans from the bank. If I can't afford to pay I go bankrupt and 5 years later start again. Why would I give my house away and rob my kids to give the banks a little collateral for more loans wich I still have no chance of repaying? I would keep the house and tell the banks to shtick it.

[ronz28]

Forget Cyprus, no one is stealing more from savers than banksters and central banksters with the financial repression of interest rates paid to savers to replace money banks spent for excessive compensation including bonuses and quid pro quo loss trades to buddies (those whales aren't stupid), etc.

http://finance.yahoo.com/blogs/daily-ticker/forget-cyprus-noboby-stealing-depositors-more-bernanke-170851783.html

[mccw]

Forget Cyprus, no one is stealing more from savers than banksters and central banksters with the financial repression of interest rates paid to savers to replace money banks spent for excessive compensation including bonuses and quid pro quo loss trades to buddies (those whales aren't stupid), etc.

http://finance.yahoo.com/blogs/daily-ticker/forget-cyprus-noboby-stealing-depositors-more-bernanke-170851783.html

Interest rates go up and down; its swings and round abouts really. Totally not the same as reaching in to people's accounts and just taking what was garranteed as safe money.

[midas]

WOW some dynamite allegations about European banks being made in this interview

"What is a bank?" "The rules haven't been changed, they've just been revealed!"

[mccw]

Chris marteson on the bond bubble

http://www.zerohedge.com/news/2013-03-22/chris-martenson-warns-market-risks-today-are-higher-ever

[midas]

Unfortunately I don't have the background to analyze this to the depth you guys can. What are your reactions to Grannis claiming: The Fed is not "printing money"?

http://scottgrannis.blogspot.com/2013/03/the-fed-is-not-printing-money.html

It is an excellent, interesting and challenging article.

At the end of the day it's still a house of cards because we are trying to maintain an artificial standard of living based on not what we earn but what we can borrow

[Naam]

Chris marteson on the bond bubble

http://www.zerohedge.com/news/2013-03-22/chris-martenson-warns-market-risks-today-are-higher-ever

once in a while zerohedge contributors are worthwhile to read!

[kblaze]

I agree, Zerohedge, although it tends to be alarmist as it has to generate page views to stay alive, has a lot of well written articles with charts and data for backup. I read that is ran by a group of ex-analysts and finance pros.

[yoshiwara]

I agree, Zerohedge, although it tends to be alarmist as it has to generate page views to stay alive, has a lot of well written articles with charts and data for backup. I read that is ran by a group of ex-analysts and finance pros.

and this isn't one of them. Just a load of blah blah risk risk blah blah. All part of the mood music for this website.

[yoshiwara]

Unfortunately I don't have the background to analyze this to the depth you guys can. What are your reactions to Grannis claiming: The Fed is not "printing money"?

http://scottgrannis.blogspot.com/2013/03/the-fed-is-not-printing-money.html

It is an excellent, interesting and challenging article.

At the end of the day it's still a house of cards because we are trying to maintain an artificial standard of living based on not what we earn but what we can borrow

..and I am borrowing at around 1% thank you very much. Save me from your moralistic nostrums not worth a bucket of ......

[mccw]

I agree, Zerohedge, although it tends to be alarmist as it has to generate page views to stay alive, has a lot of well written articles with charts and data for backup. I read that is ran by a group of ex-analysts and finance pros.

and this isn't one of them. Just a load of blah blah risk risk blah blah. All part of the mood music for this website.

Not the lotus underwater, but the mud that its stuck in

[mccw]

BRICS meeting today to discuss setting up thier alternative world bank or IMF type oganisation. Between them apparently they have reserves of value 4.4 trillion US dollars. But the Russian only fancy putting 10bllion in , not exactly monumental. But stil,l a sign of the times - the rising powers attempting to strike out from under the western money masters control. They just don't really trust each another enough to get in bed together.

[yoshiwara]

BRICS meeting today to discuss setting up thier alternative world bank or IMF type oganisation. Between them apparently they have reserves of value 4.4 trillion US dollars. But the Russian only fancy putting 10bllion in , not exactly monumental. But stil,l a sign of the times - the rising powers attempting to strike out from under the western money masters control. They just don't really trust each another enough to get in bed together.

Any such an attempt a guaranteed failure.

[midas]

BRICS meeting today to discuss setting up thier alternative world bank or IMF type oganisation. Between them apparently they have reserves of value 4.4 trillion US dollars. But the Russian only fancy putting 10bllion in , not exactly monumental. But stil,l a sign of the times - the rising powers attempting to strike out from under the western money masters control. They just don't really trust each another enough to get in bed together.

Any such an attempt a guaranteed failure.

only YOUR opinion

China and Brazil strike $30bn bilateral swap deal to reinforce economies

http://www.guardian.co.uk/world/2012/jun/22/china-brazil-bilateral-swap-deal

[mccw]

This is good:

Rt-

The scheme to save Cyprus sinking banking system is likely to become a new template for the European Parliament when tackling eurozone troubles.

The Cyprus deal will serve as a template for future bank restructuring in the eurozone and will see the European Parliament now demanding big shareholders, bondholders and uninsured depositors to take losses in restructuring if their banks start to suffer, Dutch Finance Minister and head of the Eurogroup of eurozone finance ministers Jeroen Dijsselbloem told the media.

"What we've done last night is what I call pushing back the risks," Dijsselbloem told Reuters and the Financial Times hours after the Cyprus deal was struck Monday.

"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?' If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders," he said.

The new template is now likely to turn into a full-scale EU law, letting taxpayers off the hook in case a bail-out is needed, but imposing major losses on bigger savers on a permanent basis.

"You need to be able to do the bail-in as well with deposits," said Gunnar Hokmark, member of European Parliament, who is leading negotiations with EU countries to finalize a law for winding up problem banks, Reuters reported.

[Naam]

BRICS meeting today to discuss setting up thier alternative world bank or IMF type oganisation. Between them apparently they have reserves of value 4.4 trillion US dollars. But the Russian only fancy putting 10bllion in , not exactly monumental. But stil,l a sign of the times - the rising powers attempting to strike out from under the western money masters control. They just don't really trust each another enough to get in bed together.

Any such an attempt a guaranteed failure.

only YOUR opinion

China and Brazil strike $30bn bilateral swap deal to reinforce economies

http://www.guardian.co.uk/world/2012/jun/22/china-brazil-bilateral-swap-deal

it makes sense for the BRICs to facilitate their "internal" trade through various agreements such as swaps.

simple reason: the currencies of China, Brazil and India are highly restricted.

[MrWorldwide]

mccw, I just dont see how that is 'good' ? A run on deposits will inevitably mean those banks collapse - in some cases, probably an inevitability, but I'm not sure that could be considered 'good' ....

[chiang mai]

This is good:

Rt-

The scheme to save Cyprus sinking banking system is likely to become a new template for the European Parliament when tackling eurozone troubles.

The Cyprus deal will serve as a template for future bank restructuring in the eurozone and will see the European Parliament now demanding big shareholders, bondholders and uninsured depositors to take losses in restructuring if their banks start to suffer, Dutch Finance Minister and head of the Eurogroup of eurozone finance ministers Jeroen Dijsselbloem told the media.

"What we've done last night is what I call pushing back the risks," Dijsselbloem told Reuters and the Financial Times hours after the Cyprus deal was struck Monday.

"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?' If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders," he said.

The new template is now likely to turn into a full-scale EU law, letting taxpayers off the hook in case a bail-out is needed, but imposing major losses on bigger savers on a permanent basis.

"You need to be able to do the bail-in as well with deposits," said Gunnar Hokmark, member of European Parliament, who is leading negotiations with EU countries to finalize a law for winding up problem banks, Reuters reported.

No this is not good, it creates huge amounts of anxiety amongst savers, disrupts the entire international banking system while savers rearrange their holdings and it gives other nations the idea that they will be able to do the same thing, at some point, all in all I'd say that's seriously not good.

[Naam]

i agree that it is not good but would like to remind that in case of a bank going belly-up deposits which are not secured/guaranteed are always partially or even totally lost. that was always the case but most people are not aware of it.

[farang000999]

Well in countries that have printing presses it will be pretty unpopular to let depositors go bust. So much easier politically to just print some more money. It's all stimulus anyways right?, re: Keynesian multiplier!

[cheeryble]

No this is not good, it creates huge amounts of anxiety amongst savers, disrupts the entire international banking system while savers rearrange their holdings and it gives other nations the idea that they will be able to do the same thing, at some point, all in all I'd say that's seriously not good.

There is surely an upside as banks.....which as a concept people are unlikely to abandon, as they are obviously useful......will have to change their ways and tighten up to assure customers. Presumably this is an area where government bring in expertise and demand (stricter) safeguards on the peoples' behalf.

[chiang mai]

No this is not good, it creates huge amounts of anxiety amongst savers, disrupts the entire international banking system while savers rearrange their holdings and it gives other nations the idea that they will be able to do the same thing, at some point, all in all I'd say that's seriously not good.

There is surely an upside as banks.....which as a concept people are unlikely to abandon, as they are obviously useful......will have to change their ways and tighten up to assure customers. Presumably this is an area where government bring in expertise and demand (stricter) safeguards on the peoples' behalf.

The thought that governments or banks actually care about their citizens/customers is a sweet one.

[Naam]

No this is not good, it creates huge amounts of anxiety amongst savers, disrupts the entire international banking system while savers rearrange their holdings and it gives other nations the idea that they will be able to do the same thing, at some point, all in all I'd say that's seriously not good.

There is surely an upside as banks.....which as a concept people are unlikely to abandon, as they are obviously useful......will have to change their ways and tighten up to assure customers. Presumably this is an area where government bring in expertise and demand (stricter) safeguards on the peoples' behalf.

The thought that governments or banks actually care about their citizens/customers is a sweet one.

governments and banks want your best... your money!

[cheeryble]

No this is not good, it creates huge amounts of anxiety amongst savers, disrupts the entire international banking system while savers rearrange their holdings and it gives other nations the idea that they will be able to do the same thing, at some point, all in all I'd say that's seriously not good.

There is surely an upside as banks.....which as a concept people are unlikely to abandon, as they are obviously useful......will have to change their ways and tighten up to assure customers. Presumably this is an area where government bring in expertise and demand (stricter) safeguards on the peoples' behalf.

The thought that governments or banks actually care about their citizens/customers is a sweet one.

governments and banks want your best... your money!

But there's one thing they do want.......stability.

[midas]

BRICS meeting today to discuss setting up thier alternative world bank or IMF type oganisation. Between them apparently they have reserves of value 4.4 trillion US dollars. But the Russian only fancy putting 10bllion in , not exactly monumental. But stil,l a sign of the times - the rising powers attempting to strike out from under the western money masters control. They just don't really trust each another enough to get in bed together.

Any such an attempt a guaranteed failure.

only YOUR opinion

China and Brazil strike $30bn bilateral swap deal to reinforce economies

http://www.guardian.co.uk/world/2012/jun/22/china-brazil-bilateral-swap-deal

it makes sense for the BRICs to facilitate their "internal" trade through various agreements such as swaps.

simple reason: the currencies of China, Brazil and India are highly restricted.

but it is also happening with countries outside BRICs………………………

“ China has been pushing for a more international role for its currency, the yuan. It has been trying to promote the yuan as an alternative to the US dollar as a global reserve currency.

As part of that push, it has signed a series of swap deals with some of its key trading partners.

Such agreements not only allow central banks to swap currencies, but can also be used by firms to settle trade in local currencies rather than in US dollars, as happens now, since China's currency is not fully convertible to other currencies.

Earlier this year, the Bank of England said that it was in negotiations with its Chinese counterpart to finalise a three-year swap agreement.

Last year, China signed a swap deal with Australia worth up to A$30bn ($31bn; £20bn) to promote bi-lateral trade and investment.

It is also looking at currency pacts with Hong Kong and Japan “

http://www.bbc.co.uk/news/business-21949615

[mccw]

Come come; let me tell you why this is good:

Everyone who should be taking losses is finally being forced to take them while the gov garranteed depositors are protected. If its accompanied by bank reform/ end to dodgy mafia type banking and breaking of banks in to smaller utilities with deposits on one side and overly risky stuff on another. If the do this across the eurozone then it might actually address the underlying problems and set up a sustainable model for future prosperity.

Obviously the economic consequences will be huge but the north, quite rightly I think, have said enough is enough and we need to pull out the rotten root. Maybe some countries will vote to leave and then so be it. Risky strategy, but it is "good" to actually get on and deal with it. Who knows what will happen but I say this policy is better than pouring money in to a black hole which would eventually devour everything- sucking in solvent nations to eventual total collapse. If anything its a shame they didn't bite the bullet sooner.

This really is start of new policy across the board then it marks the beginning of the next chapter of turmoil. For sure it will be a hard road and maybe collapse of PIGS or even take down the whole lot, but its a chance of survival at least. The alternative was sure doom for all.

Compare fixing the root problem to UK and America printing to finance everything; I find the letter far more scary.

The Euro zone must be first to face up to over spending and tax receipt issues because of this. They must learn to live within thier means. Democracy can allow the populations if the want less spending less tax or however the balance; but they must balance.

I hope the waves bring the need for balance across the waters too!

Not to be overly dramatic but I think this could be the turning point in to what will be the biggest change western civilisation has seen since WW2.