http://www.zerohedge.com/node/475804

Priest, Spook And Banker Arrested In Vatican Bank Probe

Submitted by Tyler Durden on 06/28/2013 06:06 -0400

Nearly a year after revelations of financial fraud involving the Vatican Bank, and months after aGerman lawyer was picked to become the new head of the bank that is collateralized by the full faith and credit of Catholicism, the scandal is back following news tha a cleric, a spook and a banker were arrested as part of the ongoing Italian investigation into the troubled bank.

From Reuters:

A Vatican cleric, a member of Italy's secret services and financial broker were arrested on Friday as part of an Italian investigation into the Vatican bank, a police source said.

The source from Italy's Financial Police said the three were suspected of corruption and fraud. There was no indication of their identity or nationality. The source gave no further details pending a news conference later on Friday.

A Vatican spokesman was not immediately available for comment.

The arrests came a day after the Vatican announced that Pope Francis had set up a commission of inquiry into the Vatican bank, which is formally known as the Institute for Works of Religion (IOR) and has been hit by a number of scandals in the past decades.

Ironically, since it is fiath that is in short supply within the encumbered global fractional reserve banking system, one would think the one place where the money religion would be safe is at the Vatican Bank. And yet...

Now back to reality copycatting the latest James Bond movie.

http://hat4uk.wordpress.com/2013/06/28/global-looting-how-the-eu-finmins-scheme-offers-us-almost-no-protection-from-haircuts/

GLOBAL LOOTING: How the EU Finmins’ scheme offers us almost no protection from haircuts

The thrusting lances of the Knights Template will skewer us all in the end

I confess to wondering more and more, as the world careers towards disaster, at what point people will wake up to the systematic rules being drawn up around that world in order to steal every last bit of wealth left to us….now that the econo-banking mess is beyond self-repair.

Already, the European press routinely refers to ‘bail-ins’, casually reporting that EU FinMin clowns have finalised the Template that Was to be Unique…but will clearly be universally applied – probably starting with Italy. The process that emerged from FinMin fulmination is fairly clear. Insured deposits (of under €100,000) are to be fully protected; Uninsured deposits (of over €100,000) are not protected, but given preferential treatment; and Bail-ins of at least 8% of the banks total liabilities have to come to before any resolution funds are tapped.

Resolution funds being most likely to be coughed up by ordinary taxpayers, they also come in the last act from Sovereign treasuries. In short, the game plan is to give every bank customer in the ‘comfortable upper-middle’ an 8% haircut on their holdings before any of the bureaucrats and politicians suffer. In this context, I’m grappling in vain with the expression ‘preferential treatment’: are we expecting maybe that shareholders, for example, will be thrown to the lions as an entertainment for the gormless Underclasses?

Wolfie ‘Spinwheels’ Schäuble was unintentionally hilarious when he said that the group had been “working hard to arrive at a flexibility concept”. I know what Strangelove means: Cyprus was wonderfully flexible, in that a proposed haircut of 10% turned into one that now looks like 85% in BoC, and 100% in Laika Bank.

To reassure us all, Mr Dieselboom has promised that “unsecured bondholders will be cut first”, a marvellous example of Dutch in-yer-face if ever I heard one. You can guess what that’s going to do to the eurobonds market. According to Der Spiegel, the agreement was a milestone ‘in separating the risk of banks and states’. But not protecting the previously unadvertised risks of citizen bankcustomers, as such. Allegedly. Eschewing the ‘cut’ word, Wolfgang Schäuble added ominously that the deal was “an important step towards making clear that shareholders and creditors are liable first and foremost”.

Ominous or not for large investors, it’s just more weaselly crap from the German Finance Minister as far as the ordinary folks are concerned: bank collapses are never cleared – nowhere near cleared – by shareholders and bondholders taking the hit. We, the ordinary citizens, will pick up the lion’s share of the losses.

The SinBins now have to push this scam through the European Parliament, but given most MEPs appear to turn up, sign in and then piss off, I doubt there’ll be much opposition forthcoming. On banking regulation, for example, Dan Hannan talked a good game about resistance, and then duly abstained. He should carry a placard on demos, saying things like “Abstain Now! Death by a thousand nibbling sticklebacks in due course!” Either that, or a quote from Shakespeare.

Talking of due course, in theory this scheme won’t be operative until 2018. These people are profoundly risible, are they not? By 2018, there will be no eurozone. By 2018 there will be no capital left in Europe, and no bonds being bought to structure debt. It is Mickey Mouse goes heisting in Fairyland.

There is, I would stress, a very important document to keep your eyes out for: the written-up final version of the directive that will appear as the Plan for consideration by the Parliament. There’s many a clip shuffled into the small print between cacophony and Law. We have, for example, what seems to be a very clearcut agreement that £85,000 of all deposits are protected by the Member States: but rather less about any wording involving ‘guaranteed’ or even – God forbid – ‘in perpetuity’. Jeroem Dijsselbloem is once again supremely confident that – get this – “the new rules will not discourage depositors”. Of course not, my leeturl Gouda Tuliphead: capital investors will leave their money exactly where it is. Um, by the way Jereboam, how are things going in that area? And what is the state of capital flight from the eurozone right now? Any news from Il Draghi?

Bloomberg soaked up the Dijsselbloem bollocks like bone-dry blotting paper, saying the agreement was meant ‘to bolster investor confidence and help overcome the euro-area financial crisis’. Which is OK and fine and all that, but isn’t everyone missing the obvious confidence problem here? Viz, if even these dullards are so certain of bank collapses that they need to get the template in place, why should any money – corporate, bond, citizen or small business – expect anything less than ultimate catastrophe?

Jo Chapman on Twitter posted a belter of a tweet yesterday: ‘Why should we have to pay for living on the Planet Earth?’ I’d love to hear answers to that one and more from the UK Treasury Secretary. We pay taxes to have the government of the day protect us from invasion and destitution. So the armed forces are cut back to nothing, and we get to pay for idiot financiers to be bailed out. Not content with that bizarrely upside-down view of existence, the world’s governments are now asking for what money we have left after taxes – in order to help in the task of rescuing banks we already paid to rescue from our taxes. And then, we are asked to accept austere cuts in the social and health services allegedly accounted for in our taxes….after the MPs pulled every trick in the book to avoid taxes, and Whitehall illegally feathered its pension nest by looting the money we had paid in taxes.

OK, that’s an over-simplified view – but not by much. We may be all in the same boat here, but one rather fancies that the senior officers have got the food supplies and the after-dinner tipple locked safely away at their end of it. “Don’t rock the boat” they say, “We’re all in this thing together”. Hmm.

Looting comes, by the way, in all the sizes and all the colours. Mark Carney begins work next Monday as the new Bank of England governor – and as before he even gets here, another seventy billion quid has been thrown at our flatlining economy, The Slog’s predictions of what the Canuck’s strategy will be look pretty reliable. It won’t be so much QE3 as QE squared, but it will most certainly be using our money to carry through a process that must in the end further devalueour money. I have a horrible feeling that, by the time the Carneyval is over, the Pound will be at parity with the Rupee. By the way, for someone meant to be the Canadian Conquering hero, Carney is leaving rather a lot of unsettled Canadians behind as he jets into Britain. As the BNN site noted two months ago, under his tutelage Canada began drawing up rules for a bail-in plan a few years ago in an attempt to avoid the large government bailouts required by some U.S. banks during the credit crisis. Under the proposed plan, banks would set aside contingent capital, such as shares, which could be quickly converted to cash to provide liquidity and stabilize their operations should a crisis hit.

I have to be blunt and say that such a scheme, given the coming scenario, will be about as much use as micturating on a Tsunami. And ringfenced capital in worthless shares? The feeling I’ve had for a month or more – that Osborne has chosen another tramline banker maniac – is getting stronger by the minute.

Stay tuned.

France .....

Time Is Running Short

Submitted by Tyler Durden on 06/28/2013 08:34 -0400

Submitted by Mark J. Grant, author of Out of the Box,

"It is only in silence that one hears the sounds of life."

-The Wizard

From time to time it is necessary to quietly sit down and assess where we are going.This is a significantly different undertaking than listening to those who try to tell us where we are going. Government and the Pastors of Propaganda are always whispering into our ears either offering Heaven or the retribution of Divine Providence so the removal of either from a deliberate consideration is a necessary part of the examination of reality.

I bring a measure of experience to this task.Things that are not counted, liabilities that are excluded from national budgets or their debts, do not mean that they do not have to be paid. This, in fact, is Europe's greatest problem. They have played "extend and pretend." They have played "lie and deny." They have resorted to every trick imaginable when compiling data such as the debt to GDP ratios of the countries and yet; chicanery does not erase the debts.

The financial projections of the IMF, the EU and the ECB are never accurate or even close to accurate because they use garbage for their data. It is therefore "garbage in" and "garbage out" as they all make a mockery of themselves. The vast amount of investors continue to believe them as evidenced by the markets but certain events are now about to take place.

Greece reported out a -14.2% decline in just one month this morning for retail sales.Greek collapse III is almost at hand as their two major privatizations have failed and as their economy continues to worsen. Soon the Greeks will call for more money but the end of this road is in sight as I do not believe the nations in Europe are willing to roll over again. The IMF is also up against the wall and they have asked, I understand, for Europe to forgive part of the Greek debt which has fallen, so far, on deaf ears.

Soon, soon, the Iceman cometh.

The Cyprus solution is a failure. It is as clear and as simple as that. Cyprus will have $10.17 left in their banks by the end of the year. They will soon be back asking for more money and we will have another IMF problem and a Euro fiasco as the amount of money they have been given to date is akin to a flyswatter trying to smack down an F-14. A ridiculous incident in both cases.

The biggest problem though is going to be France. They have a stated debt to GDP ratio of 90.2%. This is another mockery of the data though as the real number, liabilities included, is somewhere around double this number or just below 200%. They also have an economy that, according to "Trading Economics," is expected to decline in the next quarter by -0.5% while their sovereign debt increases to $366.9 billion which is an increase of 9.5%. This is while their government spending rises 9.9% for the same time period. This, then not only puts them in violation of the EU's current mandates, which is a secondary consideration, but puts them clearly on the road to insolvency.

France has run out of road.

The real issue here is a question of politics. In France being rich is defiled. That is fine and dandy except this attitude leads to an inescapable end which is with a 75% tax rate, massive amounts of workers in the government, social programs that keep increasing, and no reason to be successful and thereby support the government; those with money are fleeing the country. The drain is enormous.

Consequently sovereign revenues cannot, by any stretch of the imagination, support the imbedded costs of the country which must either be drastically cut, think massive protests or where France shows up at the door of the EU asking for help, which would be a disaster for the European Union. I believe the country is at this crossroads now as their fiscal policy, regardless of politics, is just not sustainable.

Now the investors of the world are in another reality altogether. They do not want to hear anything about these sorts of things. They are in the state of, "ignore and deplore."

You can live there for a while. Government induced fantasies have occupied the center stage before and for some time. Our current denial of reality is fueled by all of the money that the central banks have pumped into the world but that will be diminishing as the Fed and others examine the longer term consequences of their actions. There are always consequences.

What has been put off will arrive. It was always just a matter of time.

Time is running short.

Thursday, June 27, 2013 2:17 AM

Destruction of French Manufacturing Placed Squarely on Euro

Inquiring minds are digging into a 23 page report by Dr Eric Dor, Directeur IESEG School of Management, Université Catholique de Lille, regarding the consequences of monetary union on the destruction of French manufacturing industry.

Eric Dor writes "The launch of the euro brought about an impressive decrease of manufacturing production in France and huge losses of market shares."

Abstract

Since the launch of the euro, French and German industrial productions have extremely diverged. French manufacturing production decreased while German manufacturing industry very strongly increased. The decrease or stagnation of exports of French products contrasts with the strong increase of German exports. France lost market shares on the foreign markets. This evolution is a direct consequence of the flaws of the monetary union as it has been organized. Also, due to sharp differences in the average degree of sophistication of French products, sharing a common currency with Germany inevitably had to lead to a loss of competitiveness of France on foreign markets.

Manufacturing industry production in France

The detailed data computed in this paper shed light on the magnitude of French disindustrialisation since the launch of the euro. Before EMU, the rates of growth of French and German industrial production were close to each other. For example, from January 1995 to December 1998, the cumulated rate of growth was 5.5% in France and 6.4% in Germany. However, since the launch of the euro, from January 1999 to April 2013, French industrial production decreased by 11.4% while German industrial production increased by 32.8%!

Even before the financial crisis, from January 1999 to December 2008, the divergence was obvious. French manufacturing production only increased by 3.4% while German manufacturing industry increased by 32.4%. The crisis was destructive for France, where manufacturing production decreased by 15.2% from January 2009 to April 2013, while Germany resisted with a decrease limited to 1.5%. The data on manufacturing industrial production also show that since the start of EMU, the UK has performed better than France, which is clearly close to the distressed economies of the periphery, like Spain and Italy.

Disaggregated data of Cumulated growth of industrial production in % show that the divergence between France and Germany occurred in nearly all sectors of industrial activity.

The shortcomings of the monetary union were known from the start

The responsibility of those who pushed ahead with the EMU project is enormous, because many of them were aware of the flaws of its design. This awareness is very well documented by Geert De Clercq (2011).

It must be pointed out that it was known by experts that the mechanics of the common currency would lead to a likely implicit funding of the southern countries by northern countries. Before joining the ECB in 1998, Otmar Issing himself had published a paper where he warned that a single currency would require transfers of cash between the member countries and that it would cause political tensions. While the enormous TARGET related claim of the Bundesbank on the rest of the Eurosystem has recently raised major concerns in Germany, such a likely phenomenon had been very early identified, even before the launch of the Euro, for example by Garber.

The consequences for France

While France did not experience a real estate bubble and an excessive private sector indebtedness that could compare with those of other European southern countries, the competitiveness of the country and the profitability of its industry have dramatically deteriorated since the launch of the euro. As a result the trade deficit has continuously increased and the losses of productive capacity in the industry have been huge.

The PDF paper is 23 pages long and is loaded with charts like these.

Cumulated Industrial Production

click on any chart for sharper image

Trade Balances

Exports

Euro Exacerbated Existing Imbalances

To be completely fair, problems in France (Spain, Greece, Italy, etc) cannot be pinned entirely on the euro. However, it is 100% certain the euro exacerbated existing problems, and in a major way.

Instead of being a savior, the Euro has been more like an anchor to most of the economies in the eurozone.

Mike "Mish" Shedlock

Catharsis Ours

Friday, June 28, 2013

Europe items of note - June 28 , 2013 ......Vatican Bank probes nets the arrests of a priest , banker and spy... Global looting - EU style .....More news on Frnace - the new sick man of Europe !