Lessons learned ( or not ) from Cyprus debacle......

http://www.silverdoctors.com/cyprus-wealth-grab-the-big-tell/

CYPRUS WEALTH GRAB: THE BIG TELL!

MARCH 25, 2013 BY THE DOC 13 COMMENTS

By SD Contributor AGXIIK:

I call this THE BIG TELL
If you play Texas Hold’em, you know what big stack, small stack, tells, reading the cards and going ‘all in’ means.
We, the people, are in the BIG GAME.  This is the one where you get to play for the entire stack, or nothing, depending on your skills. It’s a winner-takes-all game.

The evil Troika banks, their ghouls, Bernanke, LeGard, Draghi and Merkel the Merciless are dead set on making an example of Cyprus. This is not about the debts owed or the bankrupt banks. It’s about control, controlling the table,  going ‘all in’ with a policy of scorched earth and making an example of Cyprus so the PIIGS get the message that they are next.  This ‘all in’ message was a warning shot across the bows of the middle stacked plays like Spain and Italy.  You are next!  We plan to take your stack, your deposits, your pensions, even your livelihoods and lives, and send you to the rail.  Get ready.

There are millions of players at the table. The big stacks belong to the ECB, IMF, US Fed and some extremely wealthy people and countries.   The small stackers are us, the little guys and gals who found themselves sitting at a table that was once reserved for a polite game of Monopoly or Yahtzee.  A penny a point, a quarter a game; small stakes in our lives and nothing that would make or break us.
Suddenly we find ourselves pulled into something so large that even the big stackers are having trouble managing, unable to calculate the odds and even ending up with rotten cards that could destroy a stack, and a player, that took years to build.  If you’ve watch the World Series of Poker you’ll see the best players lose to amateurs.  That’s one of the enjoyable aspects of the game.  The least likely player can pull a Moneymaker playing style and get a huge payday.  But watching is NOT NOT NOT the same as playing in the big game. Yet here we are, whether willingly or dragged kicking and screaming to the game, we are being dealt the cards and expected to play with the big boys.  But in this game the dealers are crooks and the cards are marked. While the cards are against the smalls we can still win.

Most of us see clearly that this FIAT game always ends badly.  We have  great historical reference points.  All unbacked currencies fail every time.  Like FIAT, card games have winners and losers.  The best you can hope for is that you break even or, if you lose a bit, it was fun and entertaining, or so goes that ad for Harrah’s  But losing is still losing and the odds that you will lose big increase the longer you play. 

You know the toke and rake will absorb a goodly part of your stack so you can’t just sit and wait.  That alone will drain your bank account or bank roll.  If you gamble big and win, the odds will always work against you in time. Even the best players have losing streaks that bankrupt them.  It’s like watching high performance skiers on Warren Miller’s ‘best of’ drop of cliffs. Looks easy?  Sure. But no one talks about the months of rehab after accidents

So here we are, at the edge of a cliff watching the people of Cyprus slipping over the edge.  They went all in.  Their bosses, the Russians, as not happy about this. They are like Teddy KGB, the high stakes gambler on the movie, The Rounders. He ate people who lost.  The Cypriots are squeezed between Teddy and his version of high stakes poker and the vig from Granma, the shylock who owned Matt Damon  for the $15,000 contract he owed.  Not a good place to be, all things considered.

The evil Troika banks, their ghouls, Bernanke, LeGard, Draghi and Merkel the Merciless are dead set on making an example of Cyprus. This is not about the debts owed or the bankrupt banks. It’s about control, controlling the table,  going ‘all in’ with a policy of scorched earth and making an example of Cyprus so the PIIGS get the message that they are next.

This ‘all in’ message was a warning shot across the bows of the middle stacked plays like Spain and Italy.  You are next!  We plan to take your stack, your deposits, your pensions, even your livelihoods and lives, and send you to the rail.  Get ready. And the politicians and legislatures of Spain and Italy willingly complied by writing laws last week that included provisions for the infamous ‘deposit tax’ in those rules.  Spain tried to hide this tax by making it 0%.  Just add a 1 to the front and it’s a 10% haircut.  Sir Marks Alot is at the ready.  Spain’s banks are on lock down so confiscations are easily accomplished. Italy is finalizing their deposit tax as well.  Message received Mein Fuhrer. We hear and obey.  These two countries are trying to front run the consequences of the IMFs actions by acquiescing to the troika, setting their citizens up for a loss. Obeisance to supra corporate fascists banksters is a losing game.  The bank runs there will be epic.

What galls me is that these ghouls DO NOT THINK FOR A MOMENT about the social and societal costs of their actions.  They take down a player and then dance around the table like Phil Hellmuth or Mike Matasow when they ‘felt’ a small player.  Bad manners is all I can say.

The big stack players are finding out that they are also subject to the laws of nature and the odds of the game.  In their glee of winning a few hands they start acting like amateurs. They are now exposing their strategy with the Big Tell.

There is no way to win against them if you stay at the table.  Win or lose, the Big 3 will take us down.  If they don’t do it by their play they will do it by changing the rules or simply by through the barrel of a gun.  Yes, Mao, Stalin, Pol Pot and Hitler were bloodthirsty ruthless megalomaniacial murdering despots. They and their minions caused the deaths of hundreds of millions of people.  So what separates the ruthless tyrants of the uber banks?  How do they kill us?  They do that by debt and despoliation of our lives, demanding we em-beggar ourselves at the feet of these tyrants as they demand Austerity.

To my ears Austerity is code for “DIE” and be quick about it. We, the banksters of the world are on a mission.  World wide domination. We will do it by any means at our disposal and humanity is disposable.
This is the Big Tell. We saw it  with all its radiant stench and wretchedness, laid on the people of Cyprus.   It does not matter the whys and hows, the reasons the people of Cyprus find themselves in this jam. It’s the way they are being treated and the end results of the destruction planned for them and their country.
This Big Tell is also a clarion call and if you’ve tolerated my long essay, then you’ll see that clarion call is pretty simple.

GET THE HELL OUT OF THE GAME.

Take your stack, push away from the table, cash in the chips, tuck them away,  bid adieu to the players, wish them good luck as they will need it and exit as fast as your feet can carry you out of the casino and down the road. It does not matter if you are ahead of the game, breaking even, or losing a bit, the big stacker players are coming for us, every one of us and the best thing we can do is get out.

They made the most serious mistake a player can make. They told us how they play the game.  It’s a ‘no win’ if you stay.  The only way to win is leave.  I’ve been there, done that and lived to tell the story. And I am an amateur to that game.

http://www.zerohedge.com/news/2013-03-25/wealth-tax-contagion-rapidly-spreading-switzerland-cyprus-and-now

( Grand larceny is the flav of the year...... ) 

The "Wealth Tax" Contagion Is Rapidly Spreading: Switzerland, Cyprus And Now ....

Submitted by Tyler Durden on 03/25/2013 19:27 -0400

• China
 
• Credit Suisse
 
• Department of Justice
 
• Eurozone
• Greece
 
• Swiss Banks
 
• Switzerland
 
• Zurich

It was only yesterday that we wrote about comparable problems to those which Russian depositors may (or may not be?) suffering in Cyprus right, this time impacting wealthy Americans and their Swiss bank accounts, where as a result of unprecedented DOJ pressure the local banks will soon breach all client confidentiality and expose all US citizens who still have cash in the former tax haven under the assumption that they are all tax evaders and violators. And in the continuum of creeping wealth taxes which first started in Switzerland, then Cyprus, and soon who knows where else, there was just one question: "The question then is: how many of the oligarchs, Russian or otherwise, who avoided a complete wipe out and total capital controls in Cyprus, will wait to find out if the same fate will befall them in Switzerland? Or Luxembourg? Or Lichtenstein? Or Singapore?" Today we got the answer, and yes it was one of the abovementioned usual suspects. The winner is.... Lichtenstein.

Yes: the little principality that is an even greater tax (evasion) haven for the world's ultra wealthy, even more so than Zurich, Geneva or Zug, is now under Big Brother's microscope.

But fear not. All the other tax havens listed above are quite certainly about to meet the iron, resolute fist of the US Department ofInjustice. After all, unlike TBTF banks, depositors are hardly "systemic", and thus Eric Holder and his henchmen will have zero reservations when pursuing the full extent of the (selectively crony) US laws against them.

From Bloomberg:

The U.S. has asked Liechtenstein to hand over data on foundations that may have been used to hide untaxed American money from the Internal Revenue Service, a step that may threaten Swiss banks. 

The U.S. wants to know the number of foundations set up by fiduciaries -- lawyers, accountants, financial advisers and asset managers -- for American taxpayers, according to a letter sent by the Department of Justice to authorities in the Alpine principality. A “formal request” to fiduciaries will follow, the DOJ said. 

“Seeking documents from the Liechtenstein fiduciaries is an important investigative step,” which will shed light on “the roles of banks, of bankers outside of Liechtenstein,” the Justice Department wrote in the letter, adding that it looked forward to receiving the data by March 29.

The DOJ is investigating at least 11 financial firms, including Credit Suisse Group AG (CSGN) and Julius Baer Group Ltd. (BAER), for allegedly helping Americans hide money from the IRS. The Liechtenstein request will add to the information the IRS garnered as 38,000 Americans avoided prosecution through an amnesty program, which involved paying back taxes and penalties and disclosing their offshore accounts and bankers. 

“It’s a further evolution of the Department of Justice using third-party fiduciaries to gather more information on these structures and the banks involved,” said Milan Patel, a former IRS trial attorney who is now a partner at Zurich-based law firm Anaford AG. “This could be bad news for Switzerland, as the information could be used against more Swiss banks.”

In case anyone is still confused about what is going on, here is the summary: any geographic venue that for whatever reason was once considered a global tax haven in the "Old Normal", be it Switzerland, Greece, Luxembourg, Singapore, or as the case may be Lichtenstein, is now fair game for confiscation and otherwise expropriation of local capital. 

Alas, as this money will not be enough to plug what is not a liquidity but global insolvency black hole, which is made worse daily by the endless interventions of central planners, once the deposits of the wealthy at these small, powerless to defend themselves countries is concluded, next come the entities with the really big deposits: the US, the Eurozone, and the grand daddy of them all: China.

In other words, the forced ~30% wealth tax on all financial assets is coming. Just as foretold here first in September of 2011 and as wasrecapped last weekend.

http://www.silverdoctors.com/worlds-first-bitcoin-atm-launched-in-cyprus/#more-23860

WORLD’S FIRST BITCOIN ATM LAUNCHED…IN CYPRUS!

MARCH 25, 2013 BY THE DOC 11 COMMENTS

Bitcoin (which incidentally has approximately doubled in value over the past week as Europe pulls their money from the banks and looks for alternate savings vehicles) has launched its first ATM…in Cyprus!

Still waiting for the world’s first silver ATM.

and......










http://www.zerohedge.com/news/2013-03-25/deposit-bank-not-riskless-form-saving

A Deposit In A Bank Is Not A Riskless Form Of Saving

Submitted by Tyler Durden on 03/25/2013 15:24 -0400

• Lehman
 
• Lehman Brothers

Submitted by Tim Price of Sovereign Man blog,

Like Lehman Brothers before it, Cyprus may well come to be seen not so much as the cause of further crisis but as yet another symptom of the ‘long emergency’ that continues to suffocate the western economies.

We would describe this emergency as, fundamentally, an inevitable crisis triggered by an unsustainable explosion of credit; western banks and western governments are now like Macbeth’s “…two spent swimmers, that do cling together / And choke their art.”

The prime minister of Luxembourg, Jean-Claude Juncker, has provided two clear insights into this world of deceit:

“We all know what to do, we just don’t know how to get re-elected after we have done it.”

And,

“When it becomes serious, you have to lie.”

This is what we now have by way of government: a self-serving elite who cannot be trusted, operating to a timetable defined by, and limited to, the electoral cycle.

This liberty deficit is possibly more severely damaging than the supposedly intractable fiscal one that lies beneath it. Yet whatever emerges from the disaster, Cyprus has reminded us of a couple of awkward truths:

1. A deposit in a bank is not a riskless form of saving.
   We may not see eye to eye with the FT’s Martin Wolf on many aspects of modern economics and central banking in particular, but he described banks well last week:
   “Banks are not vaults. They are thinly capitalised asset managers that make a promise– to return depositors’ money on demand and at par– that cannot always be kept without the assistance of a solvent state.”
2. When states become insolvent, the piper must ultimately be paid. Fatal, embarrassing insolvency is not a problem that can be perpetually or painlessly deferred.

Cyprus matters not because of the size of its economy or because it is (for the time being) a member of the euro zone.

It matters because the inept handling of its crisis last week threw one facet of modern banking into sharp relief: if a deposit guarantee is seen to be fraudulent or sufficiently fragile to be easily smashed by politicians, then confidence in banks, and in unbacked paper currency itself, will be vulnerable to an unpredictable run.

CLSA strategist and financial market historian Russell Napier writes as follows:

“The key impact will be long term as the citizens of the Euro, like the citizens of the Soviet Union or the American colonies before them, eventually reject the sacrifice of political rights necessary to support the system.”

“When the history books are written, the Brussels-imposed sequestration in Cyprus will be seen as the tipping point when the citizens of the Euro system realized that the socio-political sacrifice needed to sustain a single currency was just too great.”

Actions have consequences. Cyprus may end up being a storm in a teacup. Like Russell Napier, we fear it may well be the start of something altogether more sinister.

If you have yet to consider the sanctity, stability, ‘store of value-ness’ and true safety of the paper currency you hold within the banking system, now might be a good time to start.

                                                                     

Diesel - Boom's words of wisdom.......

http://www.zerohedge.com/news/2013-03-25/eurogroup%E2%80%99s-dijsselbloem-says-banks-should-save-themselves

Eurogroup’s Dijsselbloem Says "Banks Should Save Themselves"

Submitted by Tyler Durden on 03/25/2013 12:05 -0400

• European Central Bank
 
• Reuters
 
• The Visible Hand

The by-now infamous Dutch FinMin Jeroen Dijsselblom - and head of the Eurogroup of finance chiefs - made some fascinating comments this morning with Reuters and the FT that are changing the shape of European markets rapidly. From banks need to save themselves to forcing "all financial institutions, as well as investors, to think about the risks they are taking on because they will now have to realize that it may also hurt them," he is making a lot of sense - though we suspect Mr. Draghi will not be amused as his 'promise' looks like being tested. Simply put, Dijsselblom is saying that a balance sheet can be 'normalized' not only by boosting assets (courtesy of the ECB) but by collapsing liabilities (or remarking bad loans to market) - something that no one in power has admitted to date. While this is upsetting to markets - so used to the visible hand of central planning saving them from themselves - this is very positive step for 'real people' as taxpayers appear to be 'off the hook' and the responsible parties beginning to be punished.

Via Bloomberg:
Dijsselblom's direct quotations in the interview were confirmed by his spokeswoman, Simone Boitelle.

• “What we’ve done last night is what I call pushing back the risks,” Dijsselbloem says in the interview

• “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 recapitalize 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 says

• “If we want to have a healthy, sound financial sector, the only way is to say, ‘Look, there where you take on the risks, you must deal with them, and if you can’t deal with them, then you shouldn’t have taken them on,’” he says

• “The consequences may be that it’s the end of story, and that is an approach that I think, now that we are out of the heat of the crisis, we should take,” he says

• “It means deal with it before you get in trouble. Strengthen your banks, fix your balance sheets and realise that if a bank gets in trouble, the response will no longer automatically be that we’ll come and take away your problem. We’re going to push them back. That’s the first response we need. Push them back. You deal with them,” he says

• “We should aim at a situation where we will never need to even consider direct recapitalization,” he says

• “If we have even more instruments in terms of bail-in and how far we can go on bail-in, the need for direct recap will become smaller and smaller,” he says

• “I think the approach needs to be, let’s deal with the banks within the banks first, before looking at public money or any other instrument coming from the public side. Banks should basically be able to save themselves, or at least restructure or recapitalise themselves as far as possible,” he says

• “Now we’re going down the bail-in track and I’m pretty confident that the markets will see this as a sensible, very concentrated and direct approach instead of a more general approach,” he says

• “It will force all financial institutions, as well as investors, to think about the risks they are taking on because they will now have to realise that it may also hurt them. The risks might come towards them,” he says

and......

http://www.zerohedge.com/news/2013-03-25/word-out-place-sends-europe-tumbling

A Word Out Of Place Sends Europe Tumbling

Submitted by Tyler Durden on 03/25/2013 11:07 -0400

• Eurozone
 
• International Monetary Fund
 
• Reuters

Perhaps the best example of a "word out of place" comes from the new Eurogroup head,Dijsselbloem, also phonetically known as Diesel-BOOM, who just may have ushered in the next, next wave of the Eurozone crisis:

• "Cyprus a Template For EU"

Er... wasn't it a special case, inside a unique case, wrapped in a one-time case? We will ignore the rather hilarious Freudian slip, and focus on what he was explicitly talking about with Reuters, which is the resolution model which was just put in place in Cyprus:

A rescue programme agreed for Cyprus on Monday represents a new template for resolving euro zone banking problems and other countries may have to restructure their banking sectors, the head of the region's finance ministers said.

"What we've done last night is what I call pushing back the risks," Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times hours after the Cyprus deal was struck.

"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.

After 12 hours of talks with the EU and IMF, Cyprus agreed to shut down its second largest bank, with insured deposits - those below 100,000 euros - moved to the Bank of Cyprus, the country's largest lender. Uninsured deposits, those accounts with more than 100,000 euros, face losses of 4.2 billion euros.

Uninsured depositors in the Bank of Cyprus will have their accounts frozen while the bank is restructured and recapitalised. Any capital that is needed to strengthen the bank will be drawn from accounts above 100,000 euros.

The agreement is what is known as a "bail-in", with shareholders and bondholders in banks forced to bear the costs of the restructuring first, followed by uninsured depositors. Under EU rules, deposits up to 100,000 euros are guaranteed.

The punchline:

The approach marks a radical departure for euro zone policy after three years of crisis in which taxpayers across the region have effectively been on the hook for resolving problem banks and indebted governments via multiple rescue programmes.

That process, with governments and taxpayers bearing the costs and providing the back stop, had to stop, Dijsselbloem said. Recent financial market calm meant now was the time to make the change, although he conceded there was some concern that it could unsettle markets again.

If adopted by the euro zone, Dijsselbloem's template could also sound a death knell for a plan hatched nine months ago when the euro zone debt crisis was threatening to blow the currency area apart.

Then, euro zone leaders agreed that the bloc's future rescue fund should be allowed to recapitalise banks directly, thereby breaking the debilitating link between teetering banks and weak governments forced to bail them out. That may now never happen.

Asked what the new approach meant for euro zone countries with highly leveraged banking sectors, such as Luxembourg and Malta, and for other countries with banking problems such as Slovenia, Dijsselbloem said they would have to shrink banks down.

"It means deal with it before you get in trouble. Strengthen your banks, fix your balance sheets and realise that if a bank gets in trouble, the response will no longer automatically be that we'll come and take away your problem. We're going to push them back. That's the first response we need. Push them back. You deal with them."

Translation: it now officially sucks to be an unsecured creditor in Europe. In other words:an uninsured depositor.

Why this ad hoc dramatic shift in the European approach to bank solvency, which if anything makes the link between bank and sovereign closer than ever, and crushes all that Draghi achieved in the summer of 2012?

Simple: because what Cyprus allowed was the effective usurpation of democracy - the only reason the Cypriot bailout "passed" (at least so far) is because it was structured as a bank restructuring, a financial system "resolution", not a tax, and thus not in need of a parliamentary, democratic vote.Because as Cyprus also showed, votes to deprive depositors of cash, whether insured or uninsured, simply won't fly.

Hence the shift.

However, there is a problem: it means that depositors are now fair game everywhere, and that the ESM or EFSF, with their unlimited scope but "democratic" impleention pathway, are on the backburner.

And now, the scramble to pull uninsured deposits out of banks everywhere begins. Thanks to the new Eurogroup head.

"You ask for miracles, Theo. I give you Diesel-BOOM"

And now, every European depositor is going to their local financial dictionary to look up the definition of General Unsecured Claims, only to see a picture of... themselves.