Saturday, April 12, 2014

Cyprus deposit theft from March 2013 - where are things now on April 12 , 2014 ? Cyprus financial looting coming to a country near you ? Consider Cyprus ( A Year Later, Cyprus Still Has "An Emergency Situation" And Capital Controls ) and then let's just take a peek at fortess USA - What do you think happens to deposits in the big four US banks if / when a TBTF Bank actual does fail ? Just recall you already are on notice as to what the template is for your money !

The Slog ..... On Cyprus templates  - similarities to financial schemes present in the US , the UK and Europe .....




READERAMA: The Cypriot template, the Greek temptress, and more Borisconi tosh

ScreenHunter_09 Apr. 10 08.40  A regular Irish correspondent, whose sharp eyes I value greatly, writes to remind me that the small island of Cyprus hasn’t gone away…but all its money has.
Equally mind-focusing, however, is the fact that when one analyses Cyprus on a comparative basis, the banking system that went spectacularly down the pan there a year ago was in most respects very similar to a great many currently extant in the US, the UK, Europe, Australia and South America. Zero Hedge put America under that spotlight this week, declaring that ‘the FDIC, which is supposed to insure deposits in the Land of the Free….is inadequately capitalized, failing to meet the legal minimum for its insurance fund. All of this is backed up by the US government, whose net worth is negative $17 trillion….The Federal Reserve is supposed to be able to bail out the banks. But at this point, with $50+ billion in unrealized losses and a net equity of just 1.35% of its record $4+ trillion in assets, the Fed itself is practically insolvent.’
At the time of the financial rape of Cyprus, the EC (and most particularly Wheelchair Wolfie) tried to position the island as some kind of giant tax-evading casino with an unsustainable business model, catering to the needs of the Russian mafia. But as usual with Herr Schäuble, this was all so much dissembling poppycock. Cyprus got into trouble by trying too hard to help the Greeks keep their bullies at bay; the Russian gangsters got their money out before the axe fell; and expats with £100,000 in savings are not fat oligarchs: they’re middle income pensioners living off their savings on a cheap and sunny island. What Brussels-am-Berlin wanted was unrestricted access for the EU to the gigantic reserves of gas and oil around Cyprus. Erdogan kept quiet about both this robbery and the attempt to blunder into Syria. His reward was one third of all future energy revenues from Crete’s waters.
It’s a grubby old world out there, but sanctimonious Belgians and Germans are about as bad as it gets. After the Swiss.
But what of the new improved, fully recovered, Merkel-approved Greek butterfly that took to the skies this week after five years in the chrysalis? Our man in New Mexico points out that, at just under 5% yield with repayment as near as damn-it guaranteed, for Hedge Funds buying this week’s Greek sovereign debt, the issue was offering six times the return available on German bunds. This was confirmed later by stats showing that 1 in 3 of those buying this paper tiger were Hedgies. One in three.
A sharp-eyed Athenian lady with a tongue to match points out that the issue was nothing other than Eurobonds in disguise. Investors buy them because of the implied, alleged, suggested support from the ECB, where Mario Draghi had pledged to do anything he needs to in order to support the euro and eurozone. This is of course very true – most of the money raised is owed to EC and IMF anyway now.
I wonder how many Greeks bought them. Probably none, as they’ve been too busy of late burning the furniture for warmth, foraging in the litter bins, looking for a job or trying to survive with tax-inflated prices everywhere. Greece in general – and Athens in particular – continue to make a mockery of the ‘deflation threat’ we hear so much about. But then the entire Berlin-driven strategy there is one in which all rules are reversed to keep the false flags waving merrily.
Meanwhile back on the ground, the issue raised less than 1% of Greece’s formidable public debt – we’ve had gesture politics, welcome to the world of gesture borrowing – and the day before, Greece held a General Strike. The day after, a car bomb went off outside the Bank of Greece. If the target was its boss Alexandros Tourkolias then police might as well call off the investigation now, as the perpetrators could’ve been anyone from Nicolas Sarkozy to Beppo Grillo. Not many know this, but Tourkolios has a Master’s Degree in the Philosophy of Shipping Economics from the University of Wales. As a cv item, they don’t come more surreal than that one.
Perhaps the last word in reality should be left to Professor Charles Wyplosz of the University of Geneva University:
“Debts above 130pc of GDP for Italy and 170pc for Greece are a recipe for disaster once we go into the next downturn….Today’s politicians believe the crisis is over and don’t want to hear any more about it, but they have not tackled the core issues of fiscal union and public debt,” he told a Euromoney conference on Wednesday. (See the last Readerama for confirmation from other sources of the shambolic nature of the ‘Union’ achieved thus far).
Another subject in the previous Readerama was the public money wasted by London Mayor Boris Johnson on his Thames estuary airport “plan”. There was some spluttering afterwards from City Hall et al in my inbox here, so let me just quote (again thanks to a Slogger’s keen eye for detail) this piece from Kent Online last September – which, as you will see, uses BoJo’s own accounts as the source:
‘Boris Johnson has spent £1.4 million promoting the idea of a Thames Estuary airport. Figures released by Transport for London reveal the London Mayor’s huge financial commitment to pushing a project which would irrevocably change the Towns. Since 2010 a total of £1,435,682 has been spent by TfL. The bulk of the cash, around £1.2 million, has gone to paying consultancy fees.’
This is the same Mayor Johnson who earlier this week replied to my email about Ebbsfleet concerns by saying that he had no jurisdiction over the Thames Estuary. Isn’t that £1.44m therefore a flagrant misuse of public funds?
“Not when Bojo does it,” came a chorus of trillling admiration from the Society for the Deification of Fat Frauds, known more colloquially as SODOFF.

and....

A Year Later, Cyprus Still Has "An Emergency Situation" And Capital Controls

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Submitted by Simon Black via Sovereign Man blog,
Imagine that your country and banking system are so broke that you have to receive approval from a special committee just to send your own money to your kids who are away at university…
Crazy, right?
But that’s exactly what’s going on in Cyprus. And it all happened overnight.
Just over a year ago, people across Cyprus went to bed thinking everything was just fine. They woke up the next morning to a brand new reality: their government AND their banking system were flat broke.
In collusion with other European powers, the Cypriot government FROZE bank accounts across the country. Suddenly an entire nation had no access to their savings.
The government spent weeks bickering about whose funds they were going to confiscate in order to bail out the banks… all the while maintaining the freeze.
Finally they made a decision: wealthy people would have their funds seized.
But this wasn’t a victory for everyone else… because simultaneously the government announced a flurry of severe financial restrictions.
Sure, people could log on to a bank website and see an account balance.
But it was nothing more than a number on a screen. It didn’t mean the banks actuallyhad the money. Nor did it mean they were free to access their own funds.
Cash withdrawal limits were imposed. Funds transfers were curtailed. Cypriots were even forbidden from doing something as simple as cashing a check.
Peoples’ savings were essentially trapped inside of a highly insolvent financial system.
These destructive tactics are called capital controls. And one year later they’re still in place. Some are being relaxed. Others are being maintained.
But by its own admission, the Ministry of Finance still believes there is a “lack of substantial liquidity and risk of deposits outflow. . . that could lead to instability of the financial system and have destabilizing consequences on the economy and society of the country as a whole.”
Naturally, since this is an “emergency situation” in their view, they have to impose these “restrictive measures” in order to safeguard “public order and public security”.
In other words, capital controls are for your own good.
This is exactly the sort of thing that happens when governments and banking systems go bankrupt.
And every shred of objective evidence suggests that many of the ‘rich’ nations of the West are in a similar position.
Some of the largest banks in the US (like Citigroup) have failed their stress tests; this means they are inadequately capitalized to withstand any major financial shock.
Then there’s the FDIC, which is supposed to insure deposits in the Land of the Free. But the FDIC itself is inadequately capitalized, failing to meet the legal minimum for its insurance fund.
All of this is backed up by the US government, whose net worth is negative$17 trillion.
The Federal Reserve is supposed to be able to bail out the banks. But at this point, with $50+ billion in unrealized losses and a net equity of just 1.35% of its record $4+ trillion in assets, the Fed itself is practically insolvent.
This is the reality: inadequately capitalized banks are backed by an inadequately capitalized insurance fund backed by an insolvent government and nearly insolvent central bank.
Hardly a beacon of stability. Yet this is the system in which literally hundreds of millions of people have misplaced their trust and confidence.
It doesn’t take a financial guru to figure out that this is not a consequence-free environment.
All that’s required is the independence of mind to look at the facts rationally and understand that, like Cyprus, this could all change overnight.
It’s worth considering that at least a portion of your savings may be much safer elsewhere– in a stronger, well-capitalized foreign bank located in a stable country with minimal debt.
It may be wise to consider those options while you still have the ability to do so.
++++++++++++++
But don't worry because Greece is issuing 5Y bonds into the "public" markets so everything must be fixed in Europe...



Something to consider ......

Why This Harvard Economist Is Pulling All His Money From Bank Of America

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A classicial economist... and Harvard professor... preaching to the world that one's money is not safe in the US banking system due to Ben Bernanke's actions? And putting his withdrawal slip where his mouth is and pulling $1 million out of Bank America? Say it isn't so...
From Terry Burnham, former Harvard economics professor, author of “Mean Genes” and “Mean Markets and Lizard Brains,” provocative poster on this page and long-time critic of the Federal Reserve, argues that the Fed’s efforts to strengthen America’s banks have perversely weakened them. First posted in PBS.
Is your money safe at the bank? An economist says ‘no’ and withdraws his
Last week I had over $1,000,000 in a checking account at Bank of America. Next week, I will have $10,000.

Why am I getting in line to take my money out of Bank of America? Because of Ben Bernanke and Janet Yellen, who officially begins her term as chairwoman on Feb. 1.
Before I explain, let me disclose that I have been a stopped clock of criticism of the Federal Reserve for half a decade. That’s because I believe that when the Fed intervenes in markets, it has two effects — both negative. First, it decreases overall wealth by distorting markets and causing bad investment decisions. Second, the members of the Fed become reverse Robin Hoods as they take from the poor (and unsophisticated) investors and give to the rich (and politically connected). These effects have been noticed; a Gallup poll taken in the last few days reports that only the richest Americans support the Fed. (See the table.)
Gallup poll
Why do I risk starting a run on Bank of America by withdrawing my money and presuming that many fellow depositors will read this and rush to withdraw too? Because they pay me zero interest. Thus, even an infinitesimal chance Bank of America will not repay me in full, whenever I ask, switches the cost-benefit conclusion from stay to flee.
Let me explain: Currently, I receive zero dollars in interest on my $1,000,000. The reason I had the money in Bank of America was to keep it safe. However, the potential cost to keeping my money in Bank of America is that the bank may be unwilling or unable to return my money.
They will not be able to return my money if:
  • Many other depositors like you get in line before me. Banks today promise everyone that they can have their money back instantaneously, but the bank does not actually have enough money to pay everyone at once because they have lent most of it out to other people — 90 percent or more. Thus, banks are always at risk for runs where the depositors at the front of the line get their money back, but the depositors at the back of the line do not. Consider this image from a fully insured U.S. bank, IndyMac in California, just five years ago.
  • Some of the investments of Bank of America go bust. Because Bank of America has loaned out the vast majority of depositors’ money, if even a small percentage of its loans go bust, the firm is at risk for bankruptcy. Leverage, combined with some bad investments, caused the failure of Lehman Brothers in 2008 and would have caused the failure of Bank of America, AIG, Goldman Sachs, Morgan Stanley, Merrill Lynch, Bear Stearns, and many more institutions in 2008 had the government not bailed them out.
In recent days, the chances for trouble at Bank of America have become more salient because of woes in the emerging markets, particularly Argentina, Turkey, Russia and China. The emerging market fears caused the Dow Jones Industrial Average to lose more than 500 points over the last week.
Returning to my money now entrusted to Bank of America, market turmoil reminded me that this particular trustee is simply not safe. Or not safe enough, given the fact that safety is the reason I put the money there at all. The market turmoil could threaten “BofA” with bankruptcy today as it did in 2008, and as banks have experienced again and again over time.
If the chance that Bank of America will not return my money is, say, a mere 1 percent, then the expected cost to me is 1 percent of my million, or $10,000. That far exceeds the interest I receive, which, I hardly need remind depositors out there, is a cool $0. Even a 0.1 percent chance of loss has an expected cost to me of $1,000. Bank of America pays me the zero interest rate because the Federal Reserve has set interest rates to zero. Thus my incentive to leave at the first whiff of instability.
Surely, you say, the federal government is going to keep its promises, at least on insured deposits. Yes, the Federal Government (via the FDIC) insures deposits in most institutions up to $250,000. But there is a problem with this insurance. The FDIC currently has far less money in its fund than it has insured deposits: as of Sept. 1, about $41 billion in reserve against $6 trillion in insured deposits. (There are over $9 trillion on deposit at U.S. banks, by the way, so more than $3 trillion in deposits is completely uninsured.)
It’s true, of course, that when the FDIC fund risks running dry, as it did in 2009, it can go back to other parts of the federal government for help. I expect those other parts will make the utmost efforts to oblige. But consider the possibility that they may be in crisis at the very same time, for the very same reasons, or that it might take some time to get approval. Remember that Congress voted against the TARP bailout in 2008 before it relented and finally voted for the bailout.
Thus, even insured depositors risk loss and/or delay in recovering their funds. In most time periods, these risks are balanced against the reward of getting interest. Not so long ago, Bank of America would have paid me $1,000 a week in interest on my million dollars. If I were getting $1,000 a week, I might bear the risks of delay and default. However, today I am receiving $0.
So my cash is leaving Bank of America.
But if Bank of America is not safe, you must be wondering, where can you and I put our money? No path is without risk, but here are a few options.
  1. Keep some cash at home, though admittedly this runs the risk of loss or setting yourself up as a target for criminals.
  2. Put some cash in a safety box. There is an urban myth that this is illegal; my understanding is that cash in a safety box is legal. However, I can imagine scenarios where capital controls are placed on safety deposit box withdrawals. And suppose the bank is shut down and you can’t get to the box?
  3. Pay your debts. You don’t need to be Suze Orman to know that you need liquidity, so do not use all your cash to pay debts. However, you can use some surplus, should you have any.
  4. Prepay your taxes and some other obligations. Subject to the same caveat about liquidity, pay ahead. Make sure you only pay safe entities. Your local government is not going away, even in a depression, so, for example, you can prepay property taxes. (I would check with a tax accountant on the implications, however.)
  5. Find a safer bank. Some local, smaller banks are much safer than the “too-big-to-fail banks.” After its mistake of letting Lehman fail, the government has learned that it must try to save giant institutions. However, the government may not be able to save all failing institutions immediately and simultaneously in a crisis. Thus, depositors in big banks face delays and defaults in the event of a true crisis. (It is important to find the right small bank; I believe all big banks are fragile, while some small banks are robust.)
Someone should start a bank (or maybe someone has) that charges (rather than pays) interest and does not make loans. Such a bank would be a good example of how Fed actions create unintended outcomes that defeat their goals. The Fed wants to stimulate lending, but an anti-lending bank could be quite successful. I would be a customer.
(Interestingly, there was a famous anti-lending bank and it was also a “BofA” — the Bank of Amsterdam, founded in 1609. The Dutch BofA charged customers for safe-keeping, did not make loans and did not allow depositors to get their money out immediately. Adam Smith discusses this BofA favorably in his “Wealth of Nations,” published in 1776. Unfortunately — and unbeknownst to Smith — the Bank of Amsterdam had starting secretly making risky loans to ventures in the East Indies and other areas, just like any other bank. When these risky ventures failed, so did the BofA.)
My point is that the Federal Reserve’s actions have myriad, unanticipated, negative consequences. Over the last week, we saw the impact on the emerging markets. The Fed had created $3 trillion of new money in the last five-plus years — three times more than in its entire prior history. A big chunk of that $3 trillion found its way, via private investors and institutions, into risky, emerging markets.
Now that the Fed is reducing (“tapering”) its new money creation (now down to $65 billion a month, or $780 billion a year, as of Wednesday’s announcement), investments are flowing out of risky areas. Some of these countries are facing absolute crises, with Argentina’s currency plummeting by more than 20 percent in under one month. That means investments in Argentina are worth 20 percent less in dollar terms than they were a month ago, even if they held their price in Pesos.
The Fed did not plan to impoverish investors by inducing them to buy overpriced Argentinian investments, of course, but that is one of the costly consequences of its actions. If you lost money in emerging markets over the last week, at one level, it is your responsibility. However, it is not crazy for you to blame the Fed for creating volatile prices that made investing more difficult.
Similarly, if you bought gold at the peak of almost $2,000 per ounce, you have lost one-third of your money; you share the blame for your golden losses with Alan Greenspan, Ben Bernanke and Janet Yellen. They removed the opportunities for safe investments and forced those with liquid assets to scramble for what safety they thought they could find. Furthermore, the uncertainty caused by the Fed has caused many assets to swing wildly in value, creating winners and losers.
The Fed played a role in the recent emerging markets turmoil. Next week, they will cause another crisis somewhere else. Eventually, the absurd effort to create wealth through monetary policy will unravel in the U.S. as it has every other time it has been tried from Weimar Germany to Robert Mugabe’s Zimbabwe.
Even after the Fed created the housing problems, we would have been better of with a small 2009 depression rather than the larger depression that lies ahead. See my Making Sen$e posts “The Stockholm Syndrome and Printing Money” and “Ben Bernanke as Easter Bunny: Why the Fed Can’t Prevent the Coming Crash” for the details of my argument.
Ever since Alan Greenspan intervened to save the stock market on Oct. 20, 1987, the Fed has sought to cushion every financial blow by adding liquidity. The trouble with trying to make the world safe for stupidity is that it creates fragility.
Bank of America and other big banks are fragile — and vulnerable to bank runs — because the Fed has set interest rates to zero. If a run gathers momentum, the government will take steps to stem it. But I am convinced they have limited ammunition and unlimited problems.
What is the solution? For you, save yourself and your family. For the system, revamp the Federal Reserve. The simplest first step would be to end the dual mandate of price stability and full employment. Price stability is enough. I favor rules over intervention. We don’t need a maestro conducting monetary policy; we need a system that promotes stability and allows people (not printing presses) to make us richer.