The individual has always had to struggle to keep from being overwhelmed by the tribe. If you try it, you will be lonely often, and sometimes frightened. But no price is too high to pay for the privilege of owning yourself. - Friedrich NietzscheI thought it would be interesting to take a poll of a cross-section of Americans and find out just how many actually know what went down in Cyprus over these last two weeks. I would bet good money that, at most, 20% could tell you that "something" happened with the banks, that another 30% have heard of Cyprus and a full 50% have no clue. It would be interesting to see what percentage of those that have no clue are part of the now 48 million Americans receiving food stamps as of the end of December (which means the real number is closer to 49 million now)
At any rate, I'm sure the readers of blogs like this one are well aware of the bank stress tests that have been performed by western Central Banks on the big banks in their respective countries. I'm also sure most you are aware of just what joke those stress tests are.
Well, for those you who think the stress tests have merit, here's a headline from the July 16, 2011 Cyprus Mail, which is Cyprus' leading newspaper:
Cyprus banks pass EU stress test
And here's the article from that edition: LINK
I guess a lot of skeptics will want to believe that Cyprus is a little out of the way country with an unsophisticated Central Bank and that the U.S. Fed's bank stress tests are bona fide. But then again, those are the same people who read the headline in the Wall Street Journal announcing that a record number of American joined the food stamp payroll even though the economy is getting better: "Use of Food Stamps Swells Even as Economy Improves" LINK
Call me crazy but the idea that "food stamp usage swelling/improving economy" seems like an oxymoron. More like, only a moron would believe that the economy is improving.
In honor of the language of one the next countries to enjoy a successful bank stress test and which will likely be one of the next two or three countries to experience a bank "bail-in"/uninsured bank deposit confiscation operation: buon fine settimana lungo a tutti.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/sp_en_6.gif)
Buona Pasuqua!
ReplyDeleteAnche te! Comunque, se fossi religioso, sarebbe "felice Passover"
DeleteI guess the grading of the stress tests depends on the curve and grade inflation (how many times will we be hearing about inflation).
ReplyDeleteMy wife wants to know why I am so cynical. Duh.
Bonne fin de semaine aussi a vous. Now speak American, compadre.
ReplyDeleteLOL. English? I think "American" might be the various forms of American Indian languages.
DeleteDave,
ReplyDeleteIn the not too far off future we will all be on some type of food dole (if we're lucky!) or digging through trash cans for scraps or fighting over road kill.
It's too bad we don't have a culture and/or government that will allow a functional monetary system that allows savings and capital investment that would provide jobs that come with a livable wage so that people wouldn't have to ask for a handout.
Yes, our government has manipulated our culture and economy to become what it is now and uses food stamps to buy votes rather than allow people to die in the streets. But the situation is so out of hand now, are we to allow people to starve just to make a point?
The elites are now so filthy rich, as a result of their lobbying (buying) the law makers to fix the system in their favor so that they acquire every penny they can suck out of the system, they could never consume their wealth in any rational way, except through frivolous consumption of items and pleasures for the purpose of catering to their egos.
Our culture is so irreparably broken now that nothing other than a complete default of all debt and a collapse of the system will rectify what is the current state of affairs.
I certainly believe in EARNING an honest income from your own efforts or trading my time and labors for a decent wage based upon what I contribute to any enterprise, but I also believe we all owe our fellow men, women and children the right to a helping hand when they have fallen to a subsistence level where they can't find a way to improve their situation either due to a lack of jobs, ill health or some other type of unexpected calamity.
Far too many people are too quick to judge their fellow citizens (and people of other cultures) for the conditions of their lives without having ever been in similar situations of poverty, distress and need. Where is their compassion for others? Don't we each expect compassion for ourselves when we are in trouble?
What have we become when we can watch others be tortured or starved to death or blown up by drones because they express displeasure for our invading their lands or forcing economic sanctions on them to make them bend to our will?
I have been down several times in my long life, and it's not always easy to pick yourself up, especially as you get older and suffer from physical problems or are rejected due to advanced age. If you live long enough, each of us will get to experience the discrimination the young display towards their elders. As they say, "youth is wasted on the young."
I wasn't perfect as a youngster, but I never displayed the contempt and disrespect I see in today's youth for their elders or any of society's rules of conduct.
Empathy for your fellow man is the starting point of any recovery of humanity, if that is even possible anymore.
I personally think we are going to destroy ourselves in a nuclear war or a mass planetary genocide through starvation.
My best to you all as we struggle with our dilemma.
Would it be such a bad thing if we were to wipe ourselves out? No doubt the Universe would breathe a sigh of relief.
DeleteGreat Nietzsche quote! that's how i feel sometimes. sniffle-sob-sob.
ReplyDeletePretty sure it's actually a Kipling Quote that is often mis-attributed to Nietzsche. FWIW.
DeleteCanada releases new budget with provision for forced depositor bail in's.
ReplyDeleteI think things are begining to move at an increased rate of speed. The question is when will gold be taxed or confiscated ? Watched Max Keiser today and random Americans were asked where Cyprus was located. All giggeled and said "I don't know". This entire situation is like watching a train wreck in slow motion.
Dave, what do you make of this in Canada?
ReplyDeletehttp://www.silverdoctors.com/canada-includes-bail-in-provision-for-systemically-important-banks-in-2013-budget/#more-24006
Btw - I didn't know you were Italian. So am I.
Cheers.
Sono Americano. I'm actually German/Norwegian. I took 9 months of l'italiano 2 years ago before I went to Italy for 3 weeks. Can't wait to go back again.
DeleteWe're going to see bail-in's everywhere. Canada is a socialist country so I'm not surprised they're legislating ahead of the U.S. Soon as the dollar goes down the drain, we'll get bail-ins here too.
Well said Goldtrader!
ReplyDeleteIf you can, help others; if you cannot do that, at least do them no harm. -- Dalai Lama
Is Steven A. Cohen Buying Off The U.S. Government?
ReplyDeleteWhen the S.E.C. announced the agreement on March 15th, it played up the size of the settlement, most of which related to allegations of insider trading in the stocks of two big drug companies. “These settlements call for the imposition of historic penalties,” said George S. Canellos, the acting enforcement director of the S.E.C. But one man’s “historic penalty” is another’s drop in the ocean. The fund itself is paying the fine, but it is owned by and essentially synonymous with Cohen, its founder, who is worth $9.5 billion, according to the Bloomberg Billionaires Index. The settlement was arguably the trade of his life. For 6.5 per cent of his fortune—the equivalent of four Picasso paintings—he has gone a long way toward removing a threat that could have destroyed his firm and possibly seen him facing charges.
Exactly how Cohen pulled off this feat is something of a mystery. The details of the dealings between his lawyers and the government haven’t been revealed, and most likely won’t be. What we do know is this: until the settlement with the S.E.C. was announced, things were looking increasingly grim for Cohen and his firm, which is based in Greenwich, Connecticut.
During the past several years, investigators from the S.E.C. and the U.S. Attorney’s office in Manhattan have been carrying on a wide-ranging investigation of SAC, which manages about fifteen billion dollars in assets. As a result of this probe, no fewer than nine current or former employees of SAC have been tied to insider dealing while working at the firm, and four of them have pleaded guilty. The investigation started out with lowly former employees. Over time, though, it moved closer and closer to Cohen, the firm’s founder, until, finally, it enveloped him.
The lack of any admission of wrongdoing on SAC’s part would be astounding if such omissions hadn’t become depressingly common in recent settlements between the government and Wall Street firms. In the aftermath of the financial crisis, Judge Jed S. Rakoff, one of Marrero’s colleagues on the district court, initially rejected S.E.C. settlements with Bank of America and Citigroup over their misconduct. But the government, for whatever reason, persists in allowing Wall Street firms to resolve big cases without admitting the obvious: the reason they are paying large fines is that they did something wrong.
It’s a farce, and it’s not getting any funnier. The SAC settlement marks the first time, to my knowledge, that the S.E.C. has accorded such deference to a hedge fund, and it also raises the question of whether the Justice Department is now ducking bringing criminal charges against Cohen himself. Some folks who know how the system works from the inside think that that’s what it looks like. “I read the Martoma complaint,” Bradley Simon, a prominent white-collar criminal defense attorney and former federal prosecutor, told me. “It seems like there’s evidence there for them to charge Cohen, but they don’t want to do it.”
http://www.newyorker.com/online/blogs/johncassidy/2013/03/did-stevie-cohen-just-buy-off-the-us-government.html
think about this in the context of the gold/ silver cartel suppression....and you think they'll come clean with an investigation?
Betray Your Bank Before Your Bank Betrays You
ReplyDeleteOblivious Customers
The Central Bank of Cyprus warned months ago that the country’s banks needed an infusion of 10 billion euros -- which is more than half the size of the nation’s economy -- largely because of heavy losses on Greek sovereign debt held by Laiki and Bank of Cyprus. It seems a lot of customers were oblivious to the banks’ deteriorating health, or were confident they would be cared for by somebody else. The country is getting a 10 billion-euro bailout, nine months after it first asked for aid, except none of the money will go to the banks.
Suddenly it should be dawning on a lot of Europeans that deposit-guarantee limits matter. In Slovenia, the maximum is 100,000 euros per depositor, the same as in Cyprus. (Deposit- insurance programs vary among the 17 countries that use the euro.) For a few days last week, it looked as if customers at Laiki and Bank of Cyprus would lose even some of their insured deposits, which would have been a sacrilege.
That plan was scrapped, but could resurface elsewhere for all we know should some genius at the German Finance Ministry insist upon it. The one constant among bailouts of euro-area countries is that there is no rhyme or reason, much less fairness, in the way many details get worked out.
Cypriots may bemoan the inequities of their rough treatment, as might a bunch of wealthy Russians who mistook the island for a reliable financial center and failed to yank their money when they could. For the rest of Europe, the implications should be obvious. Anyone who leaves uninsured deposits in a euro-area bank is on notice that their money can and will be taken from them, if that is what’s demanded by the troika of the IMF, the European Commission and the European Central Bank.
Uninsured deposits aren’t riskless. Nor should they be. Still, it’s unclear why the euro area’s central planners sought to create a precedent that encourages capital flight from weak countries. This could lead to more instability, not less.
http://www.bloomberg.com/news/2013-03-28/betray-your-bank-before-your-bank-betrays-you.html
'I went to sleep Friday as a rich man. I woke up a poor man'
ReplyDelete'Very bad, very, very bad,'' says 65-year-old John Demetriou, rubbing tears from his lined face with thick fingers. ''I lost all my money.''
John now lives in the picturesque fishing village of Liopetri on Cyprus' south coast. But for 35 years he lived at Bondi Junction and worked days, nights and weekends in Sydney markets selling jewellery and imitation jewellery.
He had left Cyprus in the early 1970s at the height of its war with Turkey, taking his wife and young children to safety in Australia. He built a life from nothing and, gradually, a substantial nest egg. He retired to Cyprus in 2007 with about $1 million, his life savings.
He planned to spend it on his grandchildren - some of whom live in Cyprus - putting them through university and setting them up. There would be medical bills; he has a heart condition. The interest was paying for a comfortable retirement, and trips back to Australia. He also toyed with the idea of buying a boat.
Advertisement
He wanted to leave any big purchases a few years, to be sure this was where he would spend his retirement. There was no hurry. But now it is all gone.
''If I made the decision to stay, I was going to build a house,'' John says. ''Unfortunately I didn't make the decision yet.
''I went to sleep Friday as a rich man. I woke up a poor man.''
Read more: http://www.smh.com.au/national/i-went-to-sleep-friday-as-a-rich-man-i-woke-up-a-poor-man-20130328-2gxab.html#ixzz2OwNPrWhT
An American Recovery - Police Restrain Hundreds of People Begging For Food
ReplyDeletehttp://youtu.be/XxroieGk704
that's a lot of wasted food.
Risk - It's Not Just A Board Game
ReplyDeletePublished on Mar 29, 2013
My recent presentation at Mines & Money in Hong Kong in which I discuss risk - focusing on the corruption of traditional price signals by Central Banks' ZIRP policy, financial repression and the possibility that the gold leasing market is about to fall apart.
http://youtu.be/wzzoBVK3fyE
Lanny Breuer Cashes in After Not Prosecuting Wall Street Execs, Will Receive Approximate Salary of 4 Million Dollars
ReplyDeleteIt's official, and former Department of Justice (DOJ) Criminal Division Chef Lanny Breuer is bragging about it. He'll return for the third to time the white collar (now expanding its clients internationally) legal defense firm of Covington & Burling, but this time at a whopping salary.
According to the New York Times: "Mr. Breuer is expected to earn about $4 million in his first year at Covington. In addition to representing clients, he will serve as an ambassador of sorts for the firm as it seeks to grow overseas."
As BuzzFlash at Truthout has speculated before, one can argue (and the same holds true for Eric Holder, also a Covington & Burling alumni appointee), Breuer was building his value in the marketplace at the DOJ, while Wall Street executives who nearly destroyed the American economy went unprosecuted. And his future value to his old white collar defense firm was dependent, in large part, on him not angering the people who would be the clients of Covington & Burling when he left the Department of Justice. The result, one can contend: no prosecutions of banks "too big to fail" execs as publicly stated as a policy by both Breuer and Holder.
This isn't just a revolving door; one can argue it's a dereliction of legal responsibility by an employee of the people of the United States. One can proffer that it's a cash-in career move by a resume climber who was careful not to bite the hands that will write the checks that will feed him on a lavish scale.
http://www.truth-out.org/buzzflash/commentary/item/17885-lanny-breuer-cashes-in-after-not-prosecuting-wall-street-execs-will-receive-approximate-salary-of-4-million-dollars
MSM MORONS CACKLING ABOUT SURGE IN CONSUMER SPENDING
ReplyDeleteYou can count on the MSM to spin bad news into great news. It’s their job. The MSM story below leads off with bullshit about surging consumer spending in January and February proving that consumers are happy and confident again. They quote a Wall Street shill who exuberently declares the 1st quarter of 2013 will be great. One little problem. It’s a completely false storyline, which the story glosses over later in the story. Here are the facts:
Personal spending increased $78 billion in February.
Energy expenditures (aka filling up your gas tank) accounted for $57 billion of the increase.
Food expenditures (aka grocery shopping to not starve) accounted for $10 billion of the increase.
Purchases of durable goods DROPPED.
So 86% of the SURGE in consumer expenditures was for gasoline and food. This is supposed to lead to a surge in 1st quarter GDP?????
http://www.theburningplatform.com/?p=51849
I Moved my Money Out of the Stock Market-Laurence Kotlikoff
ReplyDeleteIn January, Economist Dr. Laurence Kotlikoff said he was “worried” that the economy was reaching “a real threatening point.” The Cyprus banking crisis hit the Globe last week. Now, when asked if he was still “worried,” he replied, “This morning, I moved my money out of the stock market . . . because I’m worried about Cyprus.” Dr. Kotlikoff explained his dire concern by saying, “The rich people are already running on these banks. That’s been going on for a year. . . . The everyday working people could start visibly running on these banks, and that could spread like wildfire throughout Southern Europe and Northern Europe and into the U.S. because we have a banking system that’s built to fail.” Dr. Kotlikoff also says, “It’s going to happen in the form of a crash in the bond market. Interest rates are going to skyrocket, and we’re probably going to have high inflation because the government is printing money out the wazoo.”
http://usawatchdog.com/i-moved-my-money-out-of-the-stock-market-laurence-kotlikoff/
GOLDTRADER's comments stimulate me to respond. IMO, A government that creates and promotes a welfare class is different than a government that lends a helping hand to deserving citizens. GT implores us to keep high ideals and favor conscious, caring humanity. Well said GT.
ReplyDeleteAnother take on GT's wish for a "functional monetary system" could be said as "our reliance on a flawed monetary system creates the basis for the welfare state." (My take.) A government (a people) whose money is illegitimate is the perfect host for such corrupt welfare politics. The government, we the people, have surrendered the goal of production and accepted "distribution" as the state's objective.
Sadly, we distribute only debt.
After all, WE ARE:
A government (people) who accept debt as money. Debt is not money.
A government (people) who do not control issue or regulate the debt that is used as currency. We surrender monetary authority to a private bank.
A government (people) who repudiate their own legitimacy to govern all by accepting willful killing of citizens as a "power" for a select class or person (void of court/judicial oversight.)
A government (people) who allow the establishment of rights and privileges for the legislators above the rights of the private citizen.
A government (people) who accept a "state" that cannot separate it's national interest from the interest of the dominant private industry, global banking... in other words, we are a people who accept fascism.
We've been duped. If "We the people" had real representation this couldn't have happened. No one would make themselves so inferior. Clearly, we are not currently governing the USA. We need to rectify this.
"I would bet good money that, at most, 20% could tell you that "something" happened with the banks, that another 30% have heard of Cyprus and a full 50% have no clue. It would be interesting to see what percentage of those that have no clue are part of the now 48 million Americans receiving food stamps as of the end of December (which means the real number is closer to 49 million now)."
ReplyDeleteI resent that remark: I like my food stamps (just kidding; haven't applied YET). But many workers can't get hired (and they have alot of skills) and so they have to do what they have to do. Some have went back to College and now they have massive debt (on top of other debts) and regrets. Part-Time work is even hard here in Nevada.
I know people that are working jobs and making great money and they have no idea what cyprus is all about. You have to remember that Americans are working more hours for less pay now. And they would rather be on twitter and facebook and youtube instead of being in charge of one's education. I always told college students I've known that "Learn how to Learn instead of learn-how-to-be-taught". But they were too busy playing games, texting, and selling dope on the side for extra money while cramming for classes.
"In the not too far off future we will all be on some type of food dole (if we're lucky!) or digging through trash cans for scraps or fighting over road kill."
Montana already passed a roadkill bill!
http://business.time.com/2013/03/25/meet-the-people-who-eat-roadkill-meat-and-rave-about-it/
(somehow that dead cat on the street don't look all that appetizing.....)
"It's too bad we don't have a culture and/or government that will allow a functional monetary system that allows savings and capital investment that would provide jobs that come with a livable wage so that people wouldn't have to ask for a handout."
That's not the objective. These elites or whatevers have no idea how to get any economy going. Everyday, they keep playing the same illusions but the data statistics don't add us. Japan just flagged down with 6% and it's the 3rd largest economy. Next, they'll "redefine" what an economy is to add to their bag of tricks - just like they did with negative GDP in Q4 2012 and saying that "it was the best negative GDP ever seen!".
"An economist is someone who sees something happen and then wonders if it would work in theory." - Ronald Reagan
Why Mr. Dijsselbloem is right and Cyprus is a template for the Euro zone
ReplyDeletePublished on March 29th 2013
In step 3, we see the transaction that I hold responsible for allowing unsecured depositors to be fair game across the Euro zone. With the Euros loaned by the ECB, banks bought out subordinated investors. Unfortunately, I have not had the time to quantify the exact impact of this transfer to date. However, reviewing past research notes released at that time (March 2012), my point will be clarified. (ADDENDUM: I HAVE BEEN GENEROUSLY FORWARDED TO THIS LINK, WHERE ZEROHEDGE.COM DID THE MATH ON THIS POINT, PROVIDING AN UPDATED STATUS OF THE ISSUE)
On March 28th, 2012, Barclays’ Credit Research team had published a report titled “European Banks: Liability management shrinks the bank capital market”. In it, it was estimated that at the end of March (only one month after the second LTRO), about 20% of the subordinated debt (equivalent to EUR97BN) had been targeted for exchange. The average exchange ratio of the transactions had been calculated at 82% of par (74% for Tier 1 and 89% for Lower Tier 2). The reductions were split as follows: Close to 35% of cash out in the Tier 1 market (EUR54BN), 12% reduction of the Lower-Tier 2 (EUR37BN), and 18% reduction in Upper-Tier 2 (EUR6BN).
According to Barclays too, all the transactions had been bondholder-friendly, with an average 7pt (i.e. 7%) premium to secondary market across all issues (9pts for Tier 1, 5pts for Lower Tier 2). The main motivation behind all the transactions was capital optimization. They created capital gains to the banks. Except for two transactions in which the subordinated debt was exchanged for common stock or new Lower Tier 2, the rest were all tenders for cash. Greek banks in particular (i.e. National Bank of Greece, EFG Eurobank and Piraeus Bank) also participated in this liability management exercise; in some cases (i.e. Piraeus’s Prefs at 37 and LT2 floater at 50, announced on Mar 7/12) at premiums ranging 10 to 17pts.
In other words, both banks and subordinated debt holders enjoyed great capital gains, leaving unsecured depositors exposed to higher risk. This played out in the context of a virtuous cycle, where the cheaper funding improved the risk profile of the financial institutions and attracted capital back to the Euro zone. In the process, both the Euro appreciated and the EURUSD basis tightened, which furthered strengthened the equity of the financial system.
The depositors of course, continued to receive mere basis points for their trust. On May 29th and later on June 25th, I had warned about the danger of this outcome.
http://sibileau.com/martin/2013/03/29/why-mr-dijsselbloem-is-right-and-cyprus-is-a-template-for-the-euro-zone/
Superb synopsis article out on FDIC, derivatives, bank runs/closings, forcible conversion of deposits to uninsured bank equity shares (no kidding!), derivatives placed ahead of depositor funds in event of payout in 2005 Bankruptcy Act.
ReplyDeletehttp://webofdebt.wordpress.com/2013/03/28/it-can-happen-here-the-confiscation-scheme-planned-for-us-and-uk-depositors/
Remember Lehman? When the investment bank failed, unsecured creditors (and remember, depositors are unsecured creditors) got eight cents on the dollar. One big reason was that derivatives counterparties require collateral for any exposures, meaning they are secured creditors. The 2005 bankruptcy reforms made derivatives counterparties senior to unsecured lenders.
USDollar: Ring-Fenced & Checkmate
ReplyDeleteBRICS DEVELOPMENT BANK
Consider the BRICS Development Bank. It is so much more than a fund to build railroads in remote African locations, as the delusional US press reports. It will form the giant credit line for countless projects upon which trade will be conducted, often called infrastructure, but so much more. It will gradually reveal itself to provide a second function, a core bank for trade payments outside the USDollar sphere. Steps are being made, extremely important steps, that will shape the next chapter. The United States will not play a role. With a trade zone and financial payment structure, the USDollar is to be rendered an outsider looking in, soon to be deemed obsolete. The many emerging nations are coming of age, flexing their muscles, banding together. Their critical mass in trade volume, in industrial output, and in product development, including patent registration, are impressive. In the last two years, they have demonstrated that the G-20 Meeting of finance ministers has totally eclipsed the G-7 Meeting that had dominated for two decades. They are making the next critical step in creating a bank, a global bank whose role will grow and expand. It will operate under the golden glow.
EXCLUSION OF UNITED STATES
The many years of abusive control of the FOREX currency markets, intervention in the sovereign bond markets, manipulation in the important commodity markets, devious propaganda in the communications networks, with support role played by the aggressive USMilitary and nefarious activity by its security agencies have guaranteed exclusion of the United States. The unspeakable abuse of the US$ credit card will end, as the global reserve currency is dismissed from its throne. The US leader crew, led by fascist bankers, can print money and counterfeit bonds all they wish, but the currency will be required to submit to grand devaluation if they wish to purchase supplies for the massively lopsided and imbalanced USEconomy, the greatest travesty in marketplace history. While the Keystone Pipeline is corrupted by the USGovt with hidden beneficiaries such as Halliburton and Burlington Northern, essentially divvying up the gangrenous paunch of the exhausted bloated American torso, the vast pipelines of the European and Asian continents are merging. They will not include the Americans, whose pathetic gambit fell on its face, the Trans-Pacific Partnership pushed by the Obama Admin. It actually attempted to form a trade zone with Asia, on condition that the lead nations Japan and South Korea excluded China. How incredibly moronic and amateurish! What a pathetic return on the dime for votes for this leader in the new police state.
http://news.goldseek.com/GoldenJackass/1364601600.php
http://www.fdic.gov/about/srac/2012/gsifi.pdf
ReplyDeleteBail in for all
Thanks Jim.
Il Folletto
Stop subsidizing Wall Street
ReplyDeleteThomas M. Hoenig is vice chairman of the Federal Deposit Insurance Corp.
Financial firms can borrow money — their equivalent of fuel — more cheaply and with less market scrutiny when they have access to government guarantees of deposit insurance, loans from the Federal Reserve and, ultimately, taxpayer support such as we saw with the Troubled Assets Relief Program in 2008. This safety net was intended to stabilize the financial system by protecting the payments system that transfers money around the country and the world as well as the essential lending that commercial banks provide. But these protections also assure those who lend to banks that they will be repaid regardless of the condition of the bank. Under such circumstances, creditors give the firms a discount on the cost of the funds they borrow.
Things are made more difficult by the fact that the largest financial companies now combine traditional commercial banking with higher-risk activities such as trading so that both their banking and betting activities get access to these government protections and the multibillion-dollar subsidy that comes with them. Using subsidized money to finance the conglomerates’ bets encourages ever-higher levels of debt, risk and interconnectedness not attainable or sustainable in a truly free market.
Non-banking financial activities such as proprietary trading, market making and derivatives should be placed outside of commercial banks and so outside of the safety net. Trading and investment companies would be free to engage in these activities; they would be subject to the forces of market discipline and have greater incentives to innovate and thrive.
None of these reforms can be effective unless the shadow banking system is also removed from the safety net by ending the subsidy for money-market funds and the short-term institutional loans known as repurchase agreements or “repos.” Money-market funds should be required to represent themselves for what they are: uninsured investments, the value of which changes daily. Similarly, repo lenders that accept mortgage-related collateral should be subject to the same bankruptcy laws as other secured creditors. (Details of my proposal can be found at www.fdic.gov/about/learn/board/hoenig/index.html.)
http://www.washingtonpost.com/opinions/federal-government-should-stop-subsidizing-wall-street/2013/03/28/c976b8d0-917a-11e2-9cfd-36d6c9b5d7ad_story.html
hmmm... money market funds back on table?
i found some charts on the gold/silver ratio going back to 1344, and i must say that a 16-1 call looks highly unlikely; happy easter!
ReplyDeleteYa yer right - it will overshoot and probably to the fixed 8:1 ratio of Roman Empire times
DeleteJIM ROGERS: 'You Better Run For The Hills'
ReplyDeleteRead more: http://www.cnbc.com/id/100600824#ixzz2OzBplkA5
Rogers said that with Cyprus, politicians are saying that this is a special case and urging people not to worry, but that is exactly why investors should be concerned.
"What more do you need to know? Please, you better hurry, you better run for the hills. I'm doing it anyway," Rogers said. "I want to make sure that I don't get trapped. Think of all the poor souls that just thought they had a simple bank account. Now they find out that they are making a 'contribution' to the stability of Cyprus. The gall of these politicians."
"If you're going to listen to government, you're going to go bankrupt very quickly," he added.
"I, for one, am making sure I don't have too much money in any one specific bank account anywhere in the world, because now there is a precedent," he said. "The IMF has said 'sure, loot the bank accounts' the EU has said 'loot the bank accounts' so you can be sure that other countries when problems come, are going to say, 'well, it's condoned by the EU, it's condoned by the IMF, so let's do it too.'"
Read more: http://www.cnbc.com/id/100600824#ixzz2OzBZ7fv0
I've heard that a lot of the money in those Cyprus Banks belongs to Russians. It sounds like the East and West are in a quiet economy War I wonder how much of the 60% is Russian Money?
ReplyDeleteCyprus depositors could lose 60% http://www.bbc.co.uk/news/business-21982652
David Stockman: We've Been Lied To, Robbed, And Mislead
ReplyDeleteBy manipulating the price of money through sustained and historically low interest rates, Greenspan and Bernanke created an era of asset mis-pricing that inevitably would need to correct. And when market forces attempted to do so in 2008, Paulson et al hoodwinked the world into believing the repercussions would be so calamitous for all that the institutions responsible for the bad actions that instigated the problem needed to be rescued — in full — at all costs.
http://youtu.be/Zi1g_PmtQHA
State-Wrecked: The Corruption of Capitalism in America
DeleteBy DAVID A. STOCKMAN
Published: March 30, 2013
Over the last 13 years, the stock market has twice crashed and touched off a recession: American households lost $5 trillion in the 2000 dot-com bust and more than $7 trillion in the 2007 housing crash. Sooner or later — within a few years, I predict — this latest Wall Street bubble, inflated by an egregious flood of phony money from the Federal Reserve rather than real economic gains, will explode, too.
Since the S.&P. 500 first reached its current level, in March 2000, the mad money printers at the Federal Reserve have expanded their balance sheet sixfold (to $3.2 trillion from $500 billion). Yet during that stretch, economic output has grown by an average of 1.7 percent a year (the slowest since the Civil War); real business investment has crawled forward at only 0.8 percent per year; and the payroll job count has crept up at a negligible 0.1 percent annually. Real median family income growth has dropped 8 percent, and the number of full-time middle class jobs, 6 percent. The real net worth of the “bottom” 90 percent has dropped by one-fourth. The number of food stamp and disability aid recipients has more than doubled, to 59 million, about one in five Americans.
So the Main Street economy is failing while Washington is piling a soaring debt burden on our descendants, unable to rein in either the warfare state or the welfare state or raise the taxes needed to pay the nation’s bills. By default, the Fed has resorted to a radical, uncharted spree of money printing. But the flood of liquidity, instead of spurring banks to lend and corporations to spend, has stayed trapped in the canyons of Wall Street, where it is inflating yet another unsustainable bubble.
http://www.nytimes.com/2013/03/31/opinion/sunday/sundown-in-america.html?
Willow Fund had suffered losses of almost 80 percent in the first three quarters of 2012
ReplyDeleteWhat happened to the Willow Fund is a cautionary tale for any investor who entrusts his or her money to an investment fund. Its demise highlights the dangers when a portfolio manager makes a big change in investment strategy. It also raises questions about how assiduously this fund’s independent directors watched over the manager as he ramped up his portfolio’s risk levels. Both are problems that investors cannot be complacent about.
Ken Boudreau, 70, of Farmington, Conn., is an aggrieved Willow Fund investor who has filed an arbitration case against UBS to recover his losses. Mr. Boudreau began putting money into the fund in mid-2009, investing a total of $350,000. His losses were $300,000.
In an interview, Mr. Boudreau said his UBS brokers had contended that the fund’s investment in distressed debt securities positioned it well for gains in 2009 as the economy recovered from the credit crisis. The experience and track record of Sam S. Kim, the portfolio manager overseeing Willow since it began operations in 2000, was another selling point. Mr. Kim was expert at analyzing distressed debt instruments, Mr. Boudreau said his brokers told him.
“I try to be a disciplined buyer and seller, buying in when markets are down,” Mr. Boudreau said in an interview. “In mid-2009, distressed debt seemed to me a home run.”
Which it might have been, had Mr. Kim, the money manager, not plunged headlong into credit default swaps on government debt of Germany, Sweden, France, Spain and other nations. In these trades, Mr. Kim was buying a type of insurance against the nations’ defaulting; his investors, therefore, would benefit if problems in these nations worsened.
But Mr. Zamansky argues that the Willow Fund erred in failing to warn investors until 2009 that its credit default swaps could require the posting of investor money if the trades went bad. That year, the Willow Fund had $106 million in unrealized losses on credit default swaps.
http://www.nytimes.com/2013/03/31/business/willow-fund-as-a-cautionary-tale-for-investors.html?
Do you really think the Russians would let their money be taken away? I'd bet that a contributing factor to the bank collapse was the withdraw of Russian oligarch money in advance of the bank holiday.
ReplyDeleteFortescue Metals Supports Internationalization of China’s Yuan
ReplyDeleteFortescue Metals Group Ltd. (FMG), Australia’s third-biggest iron ore producer, said it welcomes policies that promote the use of China’s yuan in global trade, following a report Australia was set to sign a conversion deal.
“Fortescue welcomes the ongoing internationalization of the yuan, which is becoming an increasingly important currency in global trade,” the Perth-based company said today in response to a Bloomberg request for comment. “We also support policies that deepen Australia’s engagement with our largest trading partner.”
Prime Minister Julia Gillard may seek a deal enabling direct conversion of Australian dollars into Chinese currency when she visits China next week, the Australian newspaper reported yesterday. Currently companies exporting goods to China have to convert the Australian dollar into U.S. currency or yen, and then into yuan, incurring extra charges.
http://www.bloomberg.com/news/2013-03-31/fortescue-metals-supports-internationalization-of-china-s-yuan.html
As Market Heats Up, Trading Slips Into Shadows
ReplyDeleteThe movement, under way for several years, has gathered force recently. The portion of all stock trading taking place away from the public exchanges hit new highs over the last few weeks, amounting to close to 40 percent on several days, up from an average of 16 percent in 2008, according to Rosenblatt Securities.
The trend has bucked the government’s broad effort in recent years to move more of the financial industry out of the back rooms and into the light. The increasing opacity of stock trading in the United States, long the most transparent place in the financial world, is troubling for investors and regulators.
“We’ve been having a lot of discussions about whether we are reaching a tipping point between lit and unlit markets,” said Thomas Gira, head of market regulation at the Financial Industry Regulatory Authority, the industry-financed regulator.
In March, Australia introduced new rules to limit trading off-exchange, following the lead of Canada, which put regulations in place last fall. In the United States, the Securities and Exchange Commission has so far declined to act.
http://www.nytimes.com/2013/04/01/business/as-market-heats-up-trading-slips-into-shadows.html
Billionaire Investor Eric Sprott Says : ‘I’m in Alex Cowie’s Camp’
ReplyDeleteAnd of course it's brought people back to realise that when you can lose money in your bank account, you are way better off owning gold than having a deposit in the bank.
When Venezuela devalued by 40%, if the citizens had owned gold they would have lost nothing. When Iceland devalued, if the residents had owned gold they wouldn't have lost 60% of their money. I don't know how many more countries it takes to have these events happen until the world finally clicks in to realising it's better to own gold than it is to have a bank deposit.
http://www.dailyreckoning.com.au/on-gold-billionaire-investor-eric-sprott-says-im-in-alex-cowies-camp/2013/04/01/
Asteri Capital and the London Whale: A secret history of Glencore's hedge fund
ReplyDeleteDid you know that Glencore once had a secretive hedge fund called Asteri Capital, and that its senior managers had weird past connections to Lyndon LaRouche? Did you know that the guy who ran it ended up at J.P. Morgan, presiding over Bruno Iskil, the trader implicated in the ‘London Whale’ scandal? Questions need answering, so check out this secret history of Glencore’s hedge fund.
http://suitpossum.blogspot.co.uk/2013/04/asteri-capital-and-london-whale-secret.html