Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.
Tuesday, April 9, 2013
Will the " cancelled " bank merger in Greece lead to haircuts for depositors if bank recap plans fail ? As the politicians are saying deposits are safe , wise men and women should take their money out now......
Slovenian Prime Minister Alenka Bratusek (left) with European Commission Chairman Jose Manuel Barroso today. Photograph: GEORGES GOBET/AFP/Getty Images
That's all for today, folks.
Here's a closing summary:
• Slovenia's prime minister has denied that she will be forced to seek a bailout.
Alenka Bratusek said that fixing the Slovenian banking sector was her government's top priority, and could be achieved without international help.
• But the OECD has warned that Slovenia is on the brink of a serious banking crisis. It wants Bratusek to push on with recapitalising struggling banks and makes wide-ranging reforms (see 12.09pm for details and the report itself).
• Slovenia also accepted higher borrowing costs at an bond auction today (results here)
• George Soros, the billionaire investor and philanthropist, has given a speech in Frankfurt arguing that Germany should drop its opposition to eurobonds. If it cannot accept collective debt, it should leave the euro, he argued (see 5.25pm).
• In Cyprus, officials warns that time is running out to get its bailout finalised (see here)
• On the economic front... German exports and imports both fell in February (see here), and Britain's trade gap widened again.... (see here).
Let's do it all again tomorrow. Goodnight!
Greece and Cyprus news items ....
Understanding why Germany dropped the hammer on Cyprus ....
testosteronepit.com / By Wolf Richter / April 9, 2013, 7:11PM
In March, six years after inception, the first ECB-organized Eurozone-wide household-wealth survey results were trickling out. But when the Bundesbank refused to publish the German data, insiders leaked the reason: too explosive for the current debt crisis and bailout environment because Italian households were far wealthier than German households. Shocking! And a red herring. The truth turned out to be far more shocking.
Now the ECB has finally published the all-country report—and it’s far worse than feared. Italian median household wealth was indeed over three times larger than Germany’s. But that wasn’t the problem. The problem was Cyprus.
Cypriot households (CY), as measured by both median and average household wealth, were the second richest in the Eurozone. Median household wealth—half the households had more, half less—of €266,900 was over five times Germany’s puny median of €51,400. Average household wealth reached a phenomenal €670,900 (that’s $872,000!), 3.4 timesGermany’s €195,200, and just shy of Luxembourg’s €710,100. Rarified levels of wealth achievable only by small countries with huge and murky banking centers, or lots of oil. Few countries in the world are in that elite club.
And Germans (DE), based on median household wealth, were the poorest in the Eurozone.
It wasn’t that Cypriot households earned a lot of money—they earned the same as German households! They just knew how to hang on to it. At least until their bubble blew up. What’s particularly galling for our hardworking Teutonic heroes is that since Reunification their real incomes have declined while that of their southern neighbors has soared, and their wealth was eaten up by taxes, high housing costs, and other expenses.
The comparisons are sobering. German household wealth amounted to less than half the Eurozone median of €109,000 and was even below that of former east-bloc countries, the poorest of which was Slovakia at €61,200. West Germans were better off, barely, at €68,000. East Germans were steeped in poverty at €21,000. Their comrades in Slovakia were three times richer. Even the maligned lazy corrupt Greeks were worth €101,900.
Or were in 2010, when the surveys were taken. It was the beginning of the surge of the German stock market, and the beginning of a rise in property values that had languished for years. By now, wealthier German households, those who own property and stocks, are significantly better off than they were in 2010, and they have since pulled up the average. Median household wealth, however—almost none of them own property or stocks—has certainly been left behind, again.
Alas, in Cyprus, the stock market, down 98% from its peak in 2007, has become inconsequential; real estate values, after a mind-boggling bubble, have been plunging for over two years; and billions in bank deposits have evaporated. So, some of the wealth was ephemeral, but Cypriot households are in all likelihood still, even today, wealthier than our Teutonic heroes.
Spanish household wealth has also been caught in a downward spiral of devastating unemployment and an exploding housing bubble—Spanish households lead the survey with a homeownership rate of 83%. In 2010, homeowners valued their homes at bubble prices still lingering in their minds. By now, much of the home equity Spaniards were clinging to in their minds has dissipated—with dramatic impact on household wealth.
That German households are now officially, and for all to see, the poorest in the Eurozone is causing front-page gloating. Yet, that these poor households are expected to carry the lion’s share of bailing out their far richer neighbors would only be a problem in Germany.Central bank sources told the FAZ that the Bundesbank and the ECB, to avoid stirring up a storm at an inconvenient time, kept this explosive wealth data secret until after the Cyprus bailout had been decided. But the data also explains the political motivation for the haircuts of account holders in Cypriot banks.
State-owned statisticians immediately scurried about Germany to explain away and rationalize the wealth difference. They dragged out homeownership rates—Germany at 44% was at the bottom—and the large publicly owned housing stock with its subsidized rents; it was public wealth, rather than private, but would end up in the same pot, or something. And they pointed at the average household size in Germany of 2.04, the lowest in the Eurozone, versus 2.76 in Cyprus, etc. etc.
But in the end, it was an ugly picture of wealth inequality in the Eurozone, where German households were the big losers. Chancellor Angela Merkel, however, remained unscathed and immensely popular though this wealth fiasco happened in part under her watch—testimony to her skills as the ultimate political animal.
In Spain, not a day goes by without a new political scandal. Just the last few days, King Juan Carlos’ daughter, La Infanta Cristina, was charged with aiding and abetting her husband in his myriad scams to embezzle money from the public purse. Now ties to a known drug trafficker hit the governing party. Read.... Spain’s Descent Into Banana Republicanism
After the suspension of a planned merger of the National Bank of Greece and Eurobank because of capitalization problems and opposition from Greece’s international lenders, the German magazine Spiegel said it believes the Greek government is planning to confiscate some of the deposits in banks as happened on Cyprus.
’The magazine said the decision raised suspicion that in an economic emergency that the government would go after bank accounts. Tax revenues are far off expectations despite big tax hikes as part of austerity measures that include pay cuts and slashed pensions.
The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) said it didn’t want the merger because it would create the largest lender in the country, with some 170 billion euros ($222.12 billion,) and be too big if there were solvency problems, as happened on Cyprus.
Greek Finance Minister Yannis Stournaras and a spokesman for Prime Minister Antonis Samaras have assured that despite the suspension of the merger bank accounts are safe and won’t be touched. There was no response on the Spiegel report.
( National Bank to examine all options regarding recapitalization - are seizing deposits in play ? )
National to examine all possibilities
NBG and Eurobank make their plans for finding private funds
By Yiannis Papadoyiannis
National Bank and Eurobank launched increased efforts to preserve their private status in the recapitalization process within a very tight timetable on Tuesday. They must complete the procedure by the end of the month.
National Bank’s executive board will continue the meeting it started in the afternoon, aimed at activating the recapitalization process and convoking a general meeting of shareholders. The purpose of the decision to continue the meeting on Wednesday is for the board members to be better informed about finding private investors to participate in the capital increase and to complete the technical preparations for the mix of new shares and convertible bonds (CoCos) to be used for drawing the necessary funds.
Sources say that the representative of the Hellenic Financial Stability Fund (HFSF) on the bank’s board has also asked for additional time in order to examine the situation, following the decision to halt the lender’s merger with Eurobank. According to National officials, the general meeting during which the definitive decisions will be taken has been scheduled for Monday, April 29.
National needs 9.8 billion euros for its recapitalization, but up to 1.8 billion of that could be covered through CoCos, which means that it will need to find 800 million euros (or 10 percent of the increase) from the private sector in order to maintain its private character after the entry of HFSF funds.
Meanwhile the union of National Bank employees expressed its support to the bank’s board and accused the governor of the Bank of Greece, Giorgos Provopoulos, of hampering the participation of current bank shareholders, including social security funds and the Church of Greece, in the capital increase.
Labor Minister Yiannis Vroutsis confirmed on Tuesday that social security funds are free to decide by themselves whether they will take part in the process, as the government will not intervene.
Eurobank’s board meeting concluded without the bank issuing any statements, likely in anticipation of a statement from National. Its extraordinary general meeting of shareholders, at which the capital increase will be decided, has been scheduled for April 30.
A parliamentary committee looking into who transferred money out of Cyprus before the island’s banking system was locked down in March suspended its probe on Tuesday, complaining of not being given all the data it had demanded from the central bank.
The report it was given showed that 6,000 individuals and legal entities withdrew tens of millions of euros in cash from Cypriot banks and sent it abroad in the period from March 1-15.
The head of the Cypriot Parliament’s ethics committee, which was due to look into a list detailing transfers of more than 100,000 euros from the two major banks – Bank of Cyprus and Cyprus Popular Bank – said the list fell short of what he had requested.
“It was with great disappointment and anger that, when we opened the envelope, we realized it contained data for only 15 days even though we had asked for a year,” lawmaker Demetris Syllouris told reporters.
“This kind of behavior is unacceptable.”
Underscoring tensions in relations between the central bank and Cyprus’s one-month-old center-right government, the government also withdrew the appointment of the deputy central bank governor who supplied the data.
Spyros Stavrinakis’s appointment, made by the previous leftist administration, was based on “faulty legal reasoning,” the government said.
THE president has cancelled the controversial appointment of Spyros Stavrinakis to the post of deputy Central Bank (CBC) governor, the government spokesman said today.
Stavrinakis, a senior CBC director, had been appointed deputy governor by former president Demetris Christofias 13 days before the February 17 presidential elections, which he did not contest.
Christofias claimed the appointment was necessary due to the Central Bank’s increasing obligations, rejecting suggestions it that it was politically motivated.
The position is reserved by the constitution for Turkish Cypriots, and had been vacant for the past 50 years.
The appointment was made possible by invoking the Law of Necessity, passed after the Turkish Cypriots abandoned parliament and their positions in the government in 1960s, basically to enable the state to function properly even if certain acts conflicted with the constitution.
EXEMPTING additional groups from a haircut on Bank of Cyprus (BoC) deposits could mean higher losses for other depositors, Central Bank of Cyprus (CBC) Governor Panicos Demetriades warned yesterday. Uninsured deposits in BoC – over €100,000 – currently face a €37.5 per cent cut although an additional 22.5 per cent, which have been frozen, could also suffer the same fate. The raid on deposits in the island’s biggest lender was decided by the Eurogroup together with the resolution of the second-biggest, Laiki. The government has decided to exempt various entities from the scheme, such as municipalities, charities, schools, and insurance companies. Various groups have also demanded their provident funds be exempted. “The contribution of uninsured depositors increases with every additional exemption,” Demetriades told the House Finance Committee. MPs heard that the final rate would become clear by September. Finance Minister Haris Georgiades stressed the need for the island’s banking system to return to normalcy. “This is the government’s objective; this is our priority at this time, to stabilise the situation definitively,” Georgiades said. Cyprus introduced curbs on money movements when banks reopened on March 28 after a two-week shutdown while the government negotiated a €10 billion bailout from the International Monetary Fund and the European Union. Its capital controls are a first for the eurozone, introduced in an effort to prevent a cash drain. Responding to criticism, Demetriades said the CBC was merely enforcing political decisions. “I respect and understand the people and the difficulties. I understand there is anger and insecurity on the part of the public, maybe because they do not know the real events,” the CBC governor said. The CBC and governor found themselves faced with a reality that came about through political decisions and they were responsible for tackling the dire situation the banking sector found itself in. The CBC reiterated that the sale of the Cypriot banks' Greek operations had been set by international lenders as a condition for the approval of Cyprus’ financial support programme. If the Cypriot government had not agreed to this sale, the negotiations with the troika for the finalisation of the deal would have been terminated, resulting in the disorderly collapse of the financial system and of the country itself, the CBC said.
The government can ill afford to pour more money into CY and in any case cannot due to EU rules
TIME is running out for ailing national carrier Cyprus Airways (CY), which could be forced to shut down unless a way is found to keep the company afloat, the government said yesterday. Communications Minister Tasos Mitsopoulos said the state - which has a controlling interest - could no longer prop up the airline. Itself cash-strapped, the government can ill afford to pour more money into CY; however, even if money was no object, legal constraints prevent any cash injection whatsoever, the minister said. That’s because the European Commission recently initiated an investigation into whether some €100m in state aid granted to CY complied with EU rules. The commission has stressed to Cypriot authorities that “no further state aid measures in favour of Cyprus Airways should be implemented without the commission's prior approval.” The commission said also it doubted the airline's capital increase, with a €31.3m contribution from the Cypriot state, was conducted on market terms. It is looking into a €73m rescue loan for the ailing airline, as well. It appears the airline has only implemented parts of a restructuring plan for CY that concern flight co-operation. The commission further doubted the credibility of CY’s restructuring plan, and questioned intentions to grant compensation to redundant personnel over and above what they were entitled. Nonetheless Mitsopoulos reiterated that the government would exhaust all possibilities to keep the company alive. Later in the day, the airline’s board submitted to a tri-ministerial committee a comprehensive proposal for CY that included a worst-case scenario. The ministerial committee was also briefed on ongoing talks between CY and foreign companies who have expressed an interest in buying the airline, among them China’s Beijing Yi Xiang Da Investment Co Ltd and Lebanon’s Middle East Airlines. In a short statement released after the meeting, CY said its chairman Stavros Stavrou had presented to the ministers all the data and alternative scenarios. Final decisions were expected soon, it added. The ministerial committee is to review the proposal and make a recommendation to the Cabinet; which could reach a decision tomorrow, according to reports. The restructuring plan reportedly calls for a drastic downsizing: the fleet would be stripped down from 11 to 6 aircraft, and one in two employees would be made redundant. The airline currently has some 1,000 people on its payroll. After the redundancies, remaining staff could suffer pay cuts. One major headache concerns the fate of the CY employees’ provident fund, held with the Bank of Cyprus. The fund had invested in bank securities, and with the ‘haircut’ it stands to lose around €10m. Meanwhile the pilots’ trade union PASYPI yesterday urged authorities to conclude a restructuring plan as soon as possible, warning that closure of the airline would impact the economy at large. In a press release, the union said the airline needs financial support to carry it through for the next 1 to 3 months, “after which revenues will come in from the increased air traffic during the tourist season.” The union argued that CY has already pre-sold around 400,000 seats for the summer. “It would be criminal...to allow Cyprus Airways to collapse today,” it added.
THE time has come for Cyprus to foot the bill for past mistakes, Finance Minister Haris Georgiades said yesterday, as he warned that Cyprus could go bust if there was a delay in the ratification of a bailout deal with international lenders. State accountant-general Rea Georgiadou warned that the government needed an additional €80 million – on top of an €85 million reserve -- before April 24 to avoid a default. But the finance minister said this would not happen. “There is certainly no question of a default if everything goes according to schedule,” Georgiades told reporters after a lengthy discussion before the House Finance Committee. “We will face a risk if for some reason, either in Cyprus or in the eurozone, this agreement is not ratified.” The minister reiterated that there was no question of Cyprus abandoning the euro, leaving the EU or seeking non-existent alternatives that would secure the economy without help from the European support mechanism. Abandoning the euro would mean much higher losses, not only for deposits but the entire economy, the minister said, sending “citizens’ living standards back decades .” He challenged supporters of the so called ‘Cypexit’ to recommend an alternative that would ensure that wages and pensions would continue to be paid and state debts financed. Georgiades said the government has presented its proposal, albeit a painful one. “We are essentially paying the price for a course that led the Cypriot economy to the brink of disaster,” the minister said. “Unfortunately it is the time we foot the bill for the mistakes, omissions and delays of the past but we are determined to look ahead, restart the Cypriot economy and keep it inside the European family.” Georgiades said Cyprus could not go any longer without a bailout, urging parliament to approve the austerity measures included in the agreement ahead of meeting of eurozone finance ministers. Ratification of Cyprus’ bailout effectively starts this week at the Eurogroup, Georgiades said. Individual states also have to rubber-stamp the deal. Earlier, Georgiadou warned that the government needed an additional €80 million – on top of an €85 million reserve -- before April 24 to avoid a default. Reports suggested that the shortfall could be covered through the dividend the Central Bank of Cyprus pays the state on profits it made. In 2012 the CBC’s reserves totalled around €250 million, 80 per cent of which goes to the state. Russia meanwhile said it would restructure a 2011 €2.5 billion loan to Cyprus that matures in 2016. “We are making our own contribution” to help the island, President Vladimir Putin told reporters yesterday at a joint briefing in Hanover with German Chancellor Angela Merkel. “At the request of the European Commission, we decided to restructure this debt.” Putin did not disclose the new conditions. Cyprus had asked for a five-year extension and a two percentage point reduction of the 4.5 per cent interest rate. Government spokesman Christos Stylianides said the previous administration’s assurances that Cyprus had enough money to last it until May appeared to be out of touch with the facts on the ground. “The government will do whatever possible -- with the co-operation of the rest of the political system of course, because they will need to pass a bill concerning the memorandum in the next few days – so as not to have a problem with wages and pensions at the end of the month,” Stylianides said. The spokesman took a shot at the previous administration, which dragged its feet for at least one year. “Unfortunately, things were allowed to take this turn due to indecisiveness and shirking of responsibility,” Stylianides said. File under what could go wrong ? http://www.zerohedge.com/news/2013-04-09/italian-bank-holdings-italian-debt-rise-all-time-high
Italian Bank Holdings Of Italian Debt Rise To All Time High
Submitted by Tyler Durden on 04/09/2013 11:45 -0400
Wondering why the Italian bond market has been stable and "improving" in recent months, with yields relentlessly dropping as a mysterious bidder keeps waving it all in despite the complete political void in the government and what may be months of uncertainty for the country, and despite both PIMCO and BlackRock recently announcing they are taking a pass on the blue light special offered by BTPs? Simple.As the Bank of Italy reported earlier today, total holdings of Italian bonds by Italian banks hit an all time record of €351.6 billion in February.
Why are local banks loaded to the gills in the very security that may and will blow up their balance sheets when the ECB loses control of the European sovereign risk scene as it tends to do every year? Because courtesy of ECB generosity, Italian debt continues to be "cash good collateral" with the ECB, and as a result Italian banks can't wait to pledge and repo it with Mario Draghi in exchange for virtually full cash allottment. In other words, the more debt the Italian Tesoro issues, the more fungiblecash the Italian banks have to spend on such things as padding up their cap ratios and making their balance sheets appear like medieval (any refernce to Feudal Europe is purely accidental) fortresses.
In January, we discussed the stunning fact that Spain's social security pension fund was 90% allocated to Spanish sovereign debt. The latest data shows that this farcical epic reach-around has become even more ridiculous as, according to Bloomberg BusinessWeek, the fund's holdings are now 97% weighted to sovereign bonds. The fund purchased about EUR20bn of Spanish debt last year, while it sold EUR4.6bn of French, Dutch and German bonds. More than 70 percent of the purchases took place in the second half of the year, after Draghi's 'promise' to "do whatever it takes" moment.
It appears, since the Spanish government does not explicitly have its own Fed to monetize debt, that it has merely plundered another quasi-governmental entity to do the bond-buying reach-around. The fund, which was profitable last year on this bond-buying in its self-sustaining way, still contributes 1% to Spain's deficit as contributions to the fund are outweighed by the benefits paid.
Rules have been changed to enable this drastic concentration but at 97%, it is perhaps no wonder that Spanish bonds have been more volatile in recent weeks - as the implicit government buyer is now almost all-in. Thepotential for a vicious circle here is immense - but perhaps that is the point, more TBTF sovereigns for Draghi to deal with.
Spain’s pension reserve-fund ramped up its holdings of domestic debt last year, profiting from a rally across southern Europe and making it easier for Prime Minister Mariano Rajoy to raid the fund to finance his budget.
The so-called Fondo de Reserva de la Seguridad Social in 2012 increased its domestic sovereign debt holdings to 97 percent of its assets from 90 percent at the end of 2011, according to its annual report due to be presented to lawmakers today at 12:30 p.m. in Madrid and obtained by Bloomberg News.
The fund purchased about 20 billion euros ($26 billion) of Spanish debt last year, while it sold 4.6 billion euros of French, Dutch and German bonds. More than 70 percent of the purchases took place in the second half of the year, after European Central Bank President Mario Draghi pledged to do “whatever it takes” to defend the euro, boosting Spanish bonds.
...
The bond-buying strategy enabled the fund to end 2012 with 63 billion euros, an amount equivalent to 6 percent of Spain’s gross domestic product. A 3 billion-euro gain offset part of the 7 billion euros used by Spain’s Cabinet starting from September to finance an increase in retirees’ pensions and Christmas bonuses, according to the report.
Spain’s state-run social security system, also in charge of unemployment benefits, stopped registering surpluses in 2011. Its deficit was 1 percent of GDP last year, contributing to the nation’s total budget gap of 10.2 percent of GDP.
...
The maximum amount that can be invested in a given security was increased to 35 percent of the total portfolio from 16 percent. At the same time, the fund raised to 12 percent from 11 percent its maximum share in the Treasury’s total outstanding debt. The Treasury’s debt stock was 634 billion euros in February, according to data on its website.
“Negotiations between the Greek government and the troika over the future of the merger between National Bank of Greece and Eurobank Ergasias will likely lead to a compromise. Whatever the outcome, the model of local banks will have to change drastically to adapt to the country’s new economic reality.”
So wrote Kathemerini at the weekend. A regular Slog source based in Greece offers a slightly more pointed opinion:
‘Troika killed the NBG – Eurobank deal. Τhe merger agreement between the two banks, which had already substantially achieved , is CANCELLED.
The Germans want the two banks initially autonomous and under the control of the EFSF. Then they will activate plan B, which provides for the passage of the National Bank to Deutche Bank and the passage of Eurobank, which in the meantime will absorb and the Postal Savings Bank, to another German bank.
Berlin do not like a banking giant that would result from the merger of Bank-Eurobank, and which they could not control. It turns out that the last thing they are interested in is to restart the Greek economy and development, after the cancellation of the agreement that will cause new turmoil in the banking system.
Already many depositors in the last few days are either withdrawing funds or closing their accounts.
The most important thing is that Germany once again forced a showdown, frustrating a deal that was announced months ago and progressing normally. The message from Berlin is that Greece is now a German colony and protectorate, no business deal will not go ahead, no privatization will be stopped unless Berlin says so.
This means that the Germans finally get “the keys of the country”. The absolute control of the banking system, control of all economic activity, loans, deposits and even the control of the microeconomics. It also means the strangling of the minimum most healthy and developing Greek companies, leading these companies to fail – and forcing them into foreign hands.
In the meantime, a recapitalization of the banks could open the door for a haircut of the deposits…’
Legendary gold trader Jim Sinclair sent out an email alert to subscribers over the weekend, advising investors that You must now act to exit the system! Sinclair, who as recently as 2 weeks ago advised those attending his NYC meeting that investors have 2 years to withdraw their IRA and 401k funds from the system, has changed the urgency of his call significantly, stating: You must exit the system immediately because the Financial Nazis struck in Cyprus and now are moving directly towards you. This is simple fact, which if you ignore will be akin to the rise of the Nazis in Germany for those that knew they should, but never made the decision to leave that system.
The US has already put in place bail-in-like powers as part of the Dodd-Frank financial reform act passed last year. The law includes a resolution scheme that gives regulators the ability to impose losses on bondholders while ensuring the critical parts of the bank can keep running.
Employees would be paid, the lights would stay on and derivatives contracts would not have to be instantly unwound.
I have given my all to communicating the most important conclusions concerning your future financially and therefore on every level of life.
The operation to depress the gold price since the high was limited in time and is now behind us in terms of maximum pain for the bulls.
You must exit the system immediately because the Financial Nazis struck in Cyprus and now are moving directly towards you. This is simple fact, which if you ignore will be akin to the rise of the Nazis in Germany for those that knew they should, but never made the decision to leave that system.
The saddest fact is that many of you have thrown away your gold share and bullion insurances to the enriched Bankster bullies. You will now pay no attention to the need to exit the system. It is as if you are moths attracted to the flame of danger, and a sloth in that you are too lazy to take the actions required to protect yourselves. If you do not pay attention to this interview you are going to sacrifice all you have worked to accomplish in your lives. Most certainly those that are planning any form of retirement are right now dancing on the head of a needle.
Here are a few most important actions you, in my opinion, must take.
Government sponsored retirement tax preferential retirement programs must realize that one of the IMF plans in Cyprus was to nationalize all retirement programs. That means steal your retirement funds and assets, replacing them with some form of future paper assuming Cyprus returns to solvency.
You must, in my opinion, face whatever tax consequences there are and close your retirement programs. You are in clear and present danger of confiscation for questionable paper of whatever you hold in these type accounts. In a financial sense you are exactly what the ghettos in Germany and Poland were when they knew they should run but found any excuse possible not to do what was logically screaming at them to take action.
I am screaming at you from every pulpit I can find, with no personal benefit that you must take various actions and take them now. The fact the IMF, a major international body, had the audacity to demand that Cyprus nationalize all it pensioners and confiscate large percentages of the account values should be like a flashbulb going off in your eye to wake you from your sheeple slumber.
Bite the bullet. Pay the tax. Get your assets back. Get out of the system.
The next action you must take is to get as far away from social media, and the use of credit cards for everything because you are painting a picture for the tax collectors that are going to go ballistic in their effort to collect your money from you in order to create revenue for governments going broke, or who are already hiding the fact they are broke.
It might take some effort, but stop your kids from informing the world of everything you and they have done on their social media. Computer based comparisons of family income to family activities will spur punitive audits when the apparent expenses are greater than the combined declared income.
The revenues services of every country are cranking up their computer search programs to grab information. You must stop so freely providing information, and maybe bragging on social media to make others think your lives are better than they really are. You must turn off the switch on your children use of social media if they are still under your authority. You must suggest to your emancipated children that they are foolish in informing the world of every little thing that do in search of 1000 friends on social media that would not really give a damn if they had a problem.
As an example of the new high tech snoops you are feeding with your credit cards and social media, research the following article.
IRS High-Tech Tools Track Your Digital Footprints – Yahoo! Finance
– Charting and analyzing social media such as Facebook – Targeting audits by matching tax filings to social media or electronic payments – Tracking individual Internet addresses and emailing patterns – Sorting data in 32,000 categories of metadata and 1 million unique “attributes” – Machine learning across “neural” networks – Statistical and agent-based modeling – Relationship analysis based on Social Security numbers and other personal identifiers
You must eliminate to the greatest degree possible all the agents between you and your assets.
There is no question that leaving assets in street name with your brokers and bankers is a financial death wish. The preferred way of holding shares of stocks has always been in your own name as physical certificates. The second best method, but much better than street name, is to hold your shares in Direct Registration. Do not expect your banks, brokers or companies you are invested in to make it easy to get out of their system. They will fight you all the way, but you have to insist on your rights regardless of their refusal or false dire warning of negative circumstances when you succeed in demanding your rights. Most of it exaggerations of what is really minutia when it comes to protecting yourselves.
Large credit balances in the form of banking accounts in CDs or in pure cash is now holding up a red blanket for the fighting confection bull of governments seeking your assets to hold off their financial collapse from their own spending sins of decades.
We can discuss in open forum, face to face or in writing later what to do with your assets but right now, as Braveheart cried, they must have FREEDOM from the system. There is much more that needs to be done, but what you have here is what should be called first priority. This should be viewed as call to action. I have not been too much off the mark on calling the developments not only of the past 12 years, but for the entirety of my successful career of more than 50 years in finance.
PASOK chief says public administration is a 'thorn' in negotiations with troika
The head of government coalition partner PASOK, Evangelos Venizelos, said on Tuesday that the overhaul of Greece's public administration remains a "thorn" in negotiations with the country's international creditors after meeting with representatives of the so-called troika of lenders at his party's headquarters in central Athens.
"From our discussion with the troika... it arises that the main problem, the biggest thorn, is public administration," Venizelos said ahead of a planned meeting between the envoys and Finance Minister Yannis Stournaras later in the day which is expected to address public sector reform among other contentious issues in a bid to reach a consensus before Friday’s informal Eurogroup summit in Dublin.
"They are not looking at the issues regarding the public sector from a fiscal standpoint," Venizelos said in a statement following his meeting. "They are looking at them, correctly I think, from the point of view of structural reform. Our credibility rests on this issue; it will determine whether we here in Greece really want deep structural reforms - a different state that can function in a manner that is friendly toward investment, toward growth and foremost toward the citizen, and to this we must give a positive answer."
The head of the Socialists also recommended that the troika envoys hold a meeting with the head of the junior coalition partner Democratic Left, Fotis Kouvelis, who has resisted pressure from the creditors for public sector layoffs.
"I think it very important for a direct meeting to take place between Democratic Left and the troika. It will help a lot toward pin-pointing the issues as each side sees them," Venizelos said.
"Our principal objective," said Venizelos, "is and should be avoiding any thought of additional fiscal measures. We will not take additional fiscal measures; society, the economy and the political system cannot afford them."
Thousands withdrew money from Cyprus before haircut, says report
Six thousand individuals and legal entities withdrew tens of millions of euros in cash from Cypriot banks and sent it abroad in the period from March 1-15, just days before Cyprus clinched a deal with foreign creditors demanding that banks contribute to the country's bailout with a hefty haircut on deposits.
The data was sent by the Cypriot Central Bank to Parliament's Ethics Committee on Tuesday.
Committee Chairman Dimitris Syllouris confirmed that the data show that there were cases in which three or four transactions were carried out by the same person. He also expressed his annoyance at the fact that the data covered only 15 days when the committee, which is investigating the handling of the crisis, had requested information covering a full year.
The Central Bank will be questioned over the issue on Thursday when the committee is due to convene for an emergency session.
Meanwhile, one of a separate three-man panel of former Supreme Court judges investigating the present economic crisis resigned on Tuesday, according to the Cyprus News Agency.
Yiannakis Constantinides cited health reasons for his decision. The panel was appointed by the government on March 28, and includes George Pikis and Panayiotis Kallis.
Greek bank recaps may stabilize funding, raise ratings, says Fitch
The completion of the recapitalization process for Greek banks should contribute to their funding stability, Fitch Ratings says. If they can achieve sufficient private-sector participation, it could send a signal of improved investor confidence and eventually provide opportunities for them to access capital and wholesale funding markets. This development would be positive for their credit profile.
However, a significant extension of the end-April deadline for the four largest banks (NBG, Eurobank, Alpha Bank and Piraeus Bank ) to complete their recapitalization plans could prolong the correction of the sector's funding imbalances and its recovery. The bank recapitalizations involve raising equity and issuing contingent convertibles to private investors.
The final capital needs estimated by the Bank of Greece total 40.5 billion euros and arise mainly from losses on Greek sovereign debt and projected credit losses on domestic loan portfolios based on an external stress test. The central bank also assessed each banks' profitability, deleveraging and capital plans.
If the banks are unable to raise private-sector equity to meet the 10% threshold set under the recapitalization framework, it will be important that the Greek authorities cover banks' capital needs. The banks should also focus on achieving restructuring and synergy targets, especially in view of recent mergers and acquisitions, and manage asset-quality pressures. This should enhance their chances of attracting potential investors.
The banks' 'f' Viability Ratings (VRs) could be upgraded if they achieve better solvency and funding profiles. Fitch will reassess the banks' VRs when their stand-alone credit profiles are clearer, and take into account recent acquisition activity and revised restructuring/recapitalization plans. However, VRs are likely to remain at a deeply speculative-grade level in the medium term because of weak credit fundamentals in the poor domestic operating environment. In addition, the four major banks face increased short-term risks from the restructuring and integration of recent acquisitions.
Consolidation of the Greek banking sector could reduce excess capacity and improve financial stability in the longer term, but it also brings many challenges. The most significant transaction - the NBG-Eurobank merger - has been suspended, but will prove challenging due to the size of both banks if it eventually proceeds.
Greek banks' Long-Term IDRs of 'CCC' remain linked to the sovereign. Their IDRs could at some point be driven by their VRs.
The largest four Greek banks received bridge capital under the IMF/EU support framework, temporarily restoring capital levels until their capital-raising plans are completed. The share issues are fully underwritten by the Hellenic Financial Stability Fund, which has received EUR50bn under the international bailout program. Private shareholders will retain control of the banks provided they subscribe to at least 10 percent of the new issue, and will be granted warrants to buy the Fund's shares. [Reuters]
After the suspension of a planned merger of the National Bank of Greece and Eurobank because of capitalization problems and opposition from Greece’s international lenders, the German magazine Spiegel said it believes the Greek government is planning to confiscate some of the deposits in banks as happened on Cyprus.
After the suspension of a planned merger of the National Bank of Greece and Eurobank because of capitalization problems and opposition from Greece’s international lenders, the German magazine Spiegel said it believes the Greek government is planning to confiscate some of the deposits in banks as happened on Cyprus.
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