'Grexit' - Germany Open to Possible Greek Euro Zone Exit.

'Grexit' - Germany Open to Possible Greek Euro Zone Exit. (Spiegel).

There was a time when Germany feared the consequences were Greece to leave the euro zone. Now, though, with Greek elections approaching, Chancellor Angela Merkel is willing to accept a "Grexit" should a new leftist government in Athens demand concessions.

At midnight, Lithuania's days without the euro came to an end. As the calendar flipped to 2015, the countdown clock hanging over the entrance to the country's central bank hit zero and fireworks shot into the air above the city palace in Vilnius. People celebrated in the streets and in the bars of the Lithuanian capital as a euro symbol was projected onto the facade of the city's neoclassical cathedral. Not long later, Prime Minister Algirdas Butkevicius withdrew a 10-euro note from a cash machine decorated especially for the occasion.

Lithuania is now the 19th member of the euro zone. The country's currency, the litas, is history, making way for the "euras," as the European common currency is known in the country. 

In Greece, meanwhile, 2,000 kilometers (1,243 miles) to the south, a different kind of countdown is proceeding apace. In contrast to Lithuania, however, the days being counted could be the final ones in the country's participation in the euro zone. On Jan. 25, Greek voters will be heading to the polls for parliamentary elections. Should the leftist alliance Syriza win, as polls show it might, the euro could soon be history in the country. Read the full story here.

Great Britain closer to quitting EU.

Great Britain closer to quitting EU. (Express). By: Macer Hall

FURIOUS David Cameron last night conceded that Britain had been pushed closer to a European Union exit after receiving an eye-watering £1.7 billion Brussels bill.

Red-faced with anger, the Prime Minister vowed to block payment of the “completely unacceptable” surcharge presented by EU officials in a surprise overhaul of national contributions.

“It is not acceptable, it is an appalling way to behave,” Mr Cameron said.

Calls for the UK to withdraw from the EU intensified yesterday following the cash demand, which will cost every family in the country £65.

And he admitted the latest insult to UK taxpayers – with the bill due to be paid by December 1st – was undermining his drive to keep Britain in the EU.

When pressed on the issue by the Daily Express he said: “It certainly doesn’t help, put it that way.”

Mr Cameron insisted: “It is an unacceptable way for this organisation to work, to suddenly present a bill like this for such a vast sum of money with so little time to pay it.

“And it is an unacceptable way to treat one of the biggest contributors to the European Union.”

Repeatedly thumping his lectern with a clenched fist, he added: “I am not paying that bill on December 1st.

"If people think I am, they’ve got another thing coming; it is not going to happen.

“As an important contributor to this organisation, we are not suddenly going to get out our chequebook and write a cheque for two billion euros; it is not happening.”

As the row deepened, there was fresh pressure for the Prime Minister to accelerate his promised in-or-out referendum on Britain’s EU membership.

UK Independence Party leader Nigel Farage warned that Mr Cameron was in “real political trouble”.

“Yes, it’s outrageous, but that’s how the European Union works,” he said.

“He’s in a very weak position. He can do nothing about this."

“And I think, really, he’s now being pushed into a position where, unless he brings forward his referendum promise, I think he’s in real political trouble.” More here.

RELATED:  'Euro Communism' 101 - New Law against Democratically Dismantling EU from Within.

'Euro Communism' 101 - New Law against Democratically Dismantling EU from Within.

'Euro Communism' 101 - New Law against Democratically Dismantling EU from Within. HT: GatestoneInstitute.

It looks as if this new law is meant to serve as a severe roadblock to parties that would like to dismantle the EU in a democratic and peaceful way from within.

A rather dull semantic trick pro-EU figures usually apply, is calling their opponents "anti-Europe."

Two years ago the European Commission proposed a law that would authorize an “independent authority” within the European Parliament [EP] to decide whether EP parties would receive an official legal status as EP parties. 

This legal status is needed for a party to obtain EP party subsidy, which is designed to cover 85% of party expenditures.

Despite a British and Dutch lobby against the law, it was passed by the EP on September 29, 2014.

Among the demands parties have to meet are that of “internal party democracy” and that they must “respect the values on which the European Union is based.” Among these values are: “pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men.” Also, the parties must be active in at least seven out of 28 EU member state countries.

The law states that: “decisions regarding a party’s respect for values on which the EU is based, may only be taken following a special procedure and in cooperation with a committee of independent prominent individuals.”

Although the law does not specify the composition of this illustrious special committee, it is highly probable that Martin Schulz, the EP’s chairman, is among them. 

Schulz is a German socialist who got reelected as EP chairman even though he was absent during the parliamentary debate for the position. Schulz is also known for strongly condemning the content and distribution of a film critical of Islam, “Innocence of Muslims,” and for hisdisproportionate criticism of Israel.

Even though the committee is designated as an “independent authority,” within the self-aggrandizing dynamic of the EU, one cannot be “prominent” and “independent” at the same time.

Therefore, prominent individuals within the EU are those that fully and without any reticence subscribe to the EU’s mission of dismantling European nation states and furthering the EU’s influence at the cost of national democracies. More here.

Greece: unpaid electrical bills amount to 1.7 billion euros, 2.16 Billion $

Greece: unpaid electrical bills amount to 1.7 billion euros, 2.16 Billion $. (Ansamed)

As of the end of June, the Greek public power company DEI is owed about 1.7 billion euros, which it intends to claim back through the courts as daily To Vima online reports today.

Prior to the introduction of the special tax on electrified real estate (Eetide) in 2012, unpaid electrical bills amounted to less than 300 million euros.

As a result though many customers were unable to pay the tax and ended up not paying their electricity bills at all. Even though the government later tried to improve the tax, customers were still unable to pay as necessary. Based on DEI's data, unpaid bills amounted to 1.4 billion euros at the start of the year and increased to 1.7 billion by the end of June.

About 950 million euros is attributed to households, 430 million euros to high voltage users and a further 180 million euros is owed by the greater public sector.

At this rate, the power company has estimated that unpaid bills will amount to 2 billion euros by the end of the year. In order to curb this increase, DEI has assigned the collection of 20,000 unpaid bills to experienced legal service providers. Hmmmm.....Good luck, as the saying go's 'You can't skin a stone' (ANSAmed).

Europe Considers Wholesale Savings Confiscation, Enforced Redistribution.

Europe Considers Wholesale Savings Confiscation, Enforced Redistribution.HT: ZeroHedge.

At first we thought Reuters had been punk'd in its article titled "EU executive sees personal savings used to plug long-term financing gap" which disclosed the latest leaked proposal by the European Commission, but after several hours without a retraction, we realized that the story is sadly true. 

Sadly, because everything that we warned about in "There May Be Only Painful Ways Out Of The Crisis" back in September of 2011, and everything that the depositors and citizens of Cyprus had to live through, seems on the verge of going continental.

In a nutshell, and in Reuters' own words, "the savings of the European Union's 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis, an EU document says."

What is left unsaid is that the "usage" will be on a purely involuntary basis, at the discretion of the "union", and can thus best be described as confiscation.

The source of this stunner is a document seen be Reuters, which describes how the EU is looking for ways to "wean" the 28-country bloc from its heavy reliance on bank financing and find other means of funding small companies, infrastructure projects and other investment.

So as Europe finally admits that the ECB has failed to unclog its broken monetary pipelines for the past five years - something we highlight every month (most recently in No Waking From Draghi's Monetary Nightmare: Eurozone Credit Creation Tumbles To New All Time Low), the commissions report finally admits that "the economic and financial crisis has impaired the ability of the financial sector to channel funds to the real economy, in particular long-term investment."

The solution? "The Commission will ask the bloc's insurance watchdog in the second half of this year for advice on a possible draft law "to mobilize more personal pension savings for long-term financing", the document said."

Mobilize, once again, is a more palatable word than, say, confiscate.

And yet this is precisely what Europe is contemplating:

Banks have complained they are hindered from lending to the economy by post-crisis rules forcing them to hold much larger safety cushions of capital and liquidity.

The document said the "appropriateness" of the EU capital and liquidity rules for long-term financing will be reviewed over the next two years, a process likely to be scrutinized in the United States and elsewhere to head off any risk of EU banks gaining an unfair advantage.

But wait: there's more!

Inspired by the recently introduced "no risk, guaranteed return" collectivized savings instrument in the US better known as MyRA, Europe will also complete a study by the end of this year on the feasibility of introducing an EU savings account, open to individuals whose funds could be pooled and invested in small companies.
Because when corporations refuse to invest money in Capex, who will invest? Why you, dear Europeans. Whether you like it or not.
But wait, there is still more!
Additionally, Europe is seeking to restore the primary reason why Europe's banks are as insolvent as they are: securitizations, which the persuasive salesmen and sexy saleswomen of Goldman et al sold to idiot European bankers, who in turn invested the money or widows and orphans only to see all of it disappear.

It is also seeking to revive the securitization market, which pools loans like mortgages into bonds that banks can sell to raise funding for themselves or companies. The market was tarnished by the financial crisis when bonds linked to U.S. home loans began defaulting in 2007, sparking the broader global markets meltdown over the ensuing two years.

The document says the Commission will "take into account possible future increases in the liquidity of a number of securitization products" when it comes to finalizing a new rule on what assets banks can place in their new liquidity buffers. This signals a possible loosening of the definition of eligible assets from the bloc's banking watchdog.

Because there is nothing quite like securitizing feta cheese-backed securities and selling it to a whole new batch of widows and orphans.
And topping it all off is a proposal to address a global change in accounting principles that will make sure that an accurate representation of any bank's balance sheet becomes a distant memory:

More controversially, the Commission will consider whether the use of fair value or pricing assets at the going rate in a new globally agreed accounting rule "is appropriate, in particular regarding long-term investing business models".

To summarize: forced savings "mobilization", the introduction of a collective and involuntary CapEx funding "savings" account, the return and expansion of securitization, and finally, tying it all together, is a change to accounting rules that will make the entire inevitable catastrophe smells like roses until it all comes crashing down.

So, aside from all this, Europe is "fixed."

The only remaining question is: why leak this now? Perhaps it's simply because the reallocation of "cash on the savings account sidelines" in the aftermath of the Cyprus deposit confiscation, into risk assets was not foreceful enough? What better way to give it a much needed boost than to leak that everyone's cash savings are suddenly fair game in Europe's next great wealth redistribution strategy.

Update:

First It Was Bail-Ins And Now EU Sees “Personal Pension Savings” As “Plug” For Banks

An objective stress test of the euro zone's biggest banks could reveal a capital shortfall of a whopping  770 billion euros (more than $1 trillion), a study by an advisor to the EU's financial risk watchdog and a Berlin academic has found.

Related:

Some European banks 'have no future', need to 'die in an orderly fashion’– new bank supervisor

Some European banks 'have no future', need to 'die in an orderly fashion’– new bank supervisor

Some European banks 'have no future', need to 'die in an orderly fashion’– new bank supervisor. (RT).

“We have to accept that some banks have no future,” Nouy told the Financial Times (FT) in an interview published February 10, 2014. Nouy will serve a five-year term.

The single supervisory mechanism (SSM) is a regulatory body of the EBC that along with the London-based European Banking Authority, will conduct an asset quality review, and the health of 130 banks that hold about 80 percent of all bank assets in the 18-member currency bloc.

The mega-regulator will either close "non-viable" banks and attempt to re-capitalize weak, yet "viable" lending institutions by November 2014, when they take over as the region’s bank regulator and announce the results of the "stress tests".

“I hope that we will be able to resolve to put banks in run-off and not necessarily try to combine bad banks with good banks,” Nouy said.

“I do not have any idea of how many banks have to fail. What I know is that we want to have the highest level of quality,” she told FT.

The ECB will assess a lender’s key risks, including liquidity, leverage and funding, as well as asset quality and the ability of a banks’ balance sheet to resist stress scenarios.

“They may need resolution plans because they have to die in an orderly fashion; that’s very important for financial stability,” Nouy said.

The French national was appointed to chair the ECB Supervisory Board in December after a long stint at the Bank of France.

“We have to let some banks disappear in an orderly fashion, and not necessarily try to merge them with other institutions. We don’t want banks disappearing in a disorderly fashion, that’s the main point.”

Nouy’s message is in step with Mario Draghi, who has previously said some banks need to fail in order for the health check to be legitimate. The tests in 2011 were widely seen as unsuccessful because lenders hugely underestimated their risks.

“If they do have to fail, they have to fail. There’s no question about that,” Draghi said in October.


Eurozone banks may have a capital deficiency of as much as €50 billion, according to Davide Serra, chief executive of London-based Algebris, an investment firm that specializes in government and banking consulting. Serra told The Telegraph that Germany has one of “the worst banking systems in the world”, and also expects many banks in Portugal and Greece to be low on capital. Read the full story here.

"In Corruption we Trust" - Corruption across the EU costs some 120 billion euros ($162 billion) per year

Corruption across the EU’s 28 countries costs some 120 billion euros ($162 billion) per year, the European Commission said Monday, urging member states to do more to stamp out the problem.

The EU’s Home Affairs Commissioner Cecilia Malmstroem said the actual figure could be even higher, despite amounting to the EU’s entire annual budget or a little less than one percent of the bloc’s total economic output.

“This is an estimation,” Malmstroem said as she presented the report, the bloc’s first, “so probably it is much higher.” 

The report will hopefully “spur the political will and the necessary commitment at all levels to address corruption more effectively across Europe,” she said. “The price of not acting is simply too high.”

The report does not rank the countries as to the seriousness of the problem nor suggest legal remedies, with Malmstroem saying that could follow after talks with member states.

But “one thing is very clear — there is no ‘corruption-free’ zone in Europe,” she said.

She said research showed that one in 12 EU citizens had experienced corruption in the past year while four out of 10 companies regard it as “an obstacle for doing business within the EU.”

The report reviews how existing laws and policies work and suggests what further effort could be made. Malmstroem singled out public procurement, notably tenders for construction projects, as a major cause of concern. The report did not cover corruption in the EU’s own institutions with the bloc’s finances reviewed by the separate Court of Auditors. Hmmm....I wonder which leadership each country has?More here.

"The Great Bank Robbery" - Germany's Bundesbank calls for capital levy on the citizens to avert government bankruptcies.

"The Great Bank Robbery" - Germany's Bundesbank calls for capital levy on the citizens to avert government bankruptcies.(Reuters).

Germany's Bundesbank said on Monday that countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help.

The Bundesbank's tough stance comes after years of euro zone crisis that saw five government bailouts. There have also bond market interventions by the European Central Bank in, for example, Italy where households' average net wealth is higher than in Germany.

"(A capital levy) corresponds to the principle of national responsibility, according to which tax payers are responsible for their government's obligations before solidarity of other states is required," the Bundesbank said in its monthly report.

It warned that such a levy carried significant risks and its implementation would not be easy, adding it should only be considered in absolute exceptional cases, for example to avert a looming sovereign insolvency.

The International Monetary Fund discussed the option in a report in October and said that reducing debt ratios to end-2007 levels for a sample of 15 euro area countries, a tax rate of about 10 percent on households with positive net wealth would be required.Read the full story here.

Cyprus ‘defaulted’ on debt – Moody’s.

Cyprus ‘defaulted’ on debt – Moody’s.HT: RussiaToday.

The downgrade, although Moody's doesn't technically have a default rating, was issued after Cyprus said it would delay the bonds and go ahead with a bond swap default strategy.

Cypriot authorities said they will swap government bonds maturing in 2013 through to the first quarter of 2016 with new debt that matures at between five and 10 years.
The bond swap is a ‘distressed exchange’, and therefore, a debt default. Because the amount exchanged is less than the original deal, and Cyprus is allowed to avoid payment on the bonds.
Cyprus' biggest banks are the largest holders of Greek bonds, which became ‘bad’ and ‘distressed’ following the Greece financial crisis, which left Cypriot banks with big debts.
67 percent of outstanding amounts were subject to the swap.
Moody's said the exchange of Cyprus government bonds for new ones with a longer maturity level means the financial commitment of Cyprus to the holders of the bonds will decline.
Moody’s statement on Monday came after Standard and Poor’s downgraded Cyprus to ‘selective default’ and Fitch downgraded the rating to ‘restricted default’ because of the debt exchange.
Other factors, including the likelihood that Cyprus will comply with the rest of the measures spelled out in its bailout agreement with the International Monetary Fund, the European Central Bank and the European Union, will be taken into consideration as well.
The island’s sovereign credit rating was downgraded from B3 to Caa3, or junk status, in April, shortly after the country’s accruement of 10 billion euros in loans from European lenders.
Economic activity on the island remains dormant, unemployment high, and bank deposits have dispersed since the deal.
In exchange, the financial center agreed to cut spending and restructure its banking system.
Moody’s say it will reissue a credit rating for Cyprus ‘in due course’ in which they will reassess the impact of the bond exchange on the Cypriot economy.
The next credit rating will also closely look at Cyprus’s ability to carry out compliance measures under its lenders as well as potential growth prospects.
Cyprus' bailout problems are heavily tied to Greece as Cyprus' biggest banks are the largest holders of Greek bonds. Greece had huge financial problems which has left Cyprus' banks with big debts.

In related news: Greece Has Three Days To Deliver On IMF Terms Or Face Consequences 

"The Great Euro Bank Robbery" - Investors to pay for bank failures – EU.

"The Great Euro Bank Robbery" - Investors to pay for bank failures – EU. HT: RussiaToday.

If pursued, bailout strategy, shareholders, bondholders and depositors with more than 100,000 euro will share the financial strain of saving a bank. Deposits under 100,000 will be protected.

Under the new protocol, which would come into effect in 2018, countries would be obliged to absorb 8 percent of a bank’s liabilities, with some leeway thereafter.
The next time a big bank fails, governments will make sure “that shareholders and creditors are liable first and foremost,” German Finance Minister Wolfgang Schaeuble told reporters.

Rescuing banks will not be less painful for political leaders and institutions, who can now just take bank deposits instead of hiking taxes.
French Finance Minister Pierre Moscovici said France got “what we wanted” from the blueprint, and Danish Economy Minister Margrethe Vestager called the deal a “balanced compromise.”
The Irish, whose taxpayers paid nearly $40 billion to bail out Anglo Irish Bank, are happy that the new status quo will be bail-ins, not bail-outs. Banks will have to bail themselves out.

Other ministers were happy to have a universal strategy to address dealing with troubled banks."If a bank gets in trouble we will now, throughout Europe, have one set of rules on who pays the bill," Dutch Finance Minister Jeroen Dijsselbloem said.

Germany has previously indicated it disagrees with a universal plan to deal with bailouts across the continent, and has warned having such a strong central banking authority goes against standing treaties.
“It took a long time and it was arduous and it was intense,” German Finance Minister Wolfgang Schaeuble said, without publicly voicing Germany’s previous qualms over the structure.
It is highly unlikely Chancellor Merkel will agree to such a banking union before the election in September.
The European Central Bank will officially take over supervision of eurozone banks next year. Last year it provided 1 trillion euros of cheap three-year loans to struggling banks.
Under the new umbrella, banks will be able to receive direct loans from the European Stability Mechanism, a eurozone bailout fund. The European Banking Authority was set up in 2011 to integrate rules across the EU and has secured a new supervisory function. All 17 currency member states support the motion, but some fear an all-too-powerful central bank.
By next week, the 27 member states need to choose a governing body, or executor, to carry out the task.
The legislature’s text grants nations a clear right to nationalize failing banks, if the step is seen as essential to preserve financial stability.
Switzerland, Norway, and other non-EU countries within Europe will still have jurisprudence over how to deal with bank failures.
The precedent was set after Cyprus requested an EU bailout and aid was dependent on the country’s agreement to levee account holders with more than 100,000 euro, which will likely result in a loss of 30 percent in savings.
The Cyprus scenario marked the first time depositors were forced to contribute to the bank’s bailout and now it is set to become the norm.Read the full story here.

Video - Nick Barisheff: What’s Different Than The Other 65 Hyperinflations Is, This Time, We Are Going To Have Global Hyperinflation.

Nick Barisheff: What’s Different Than The Other 65 Hyperinflations Is, This Time, We Are Going To Have Global Hyperinflation.HT: InvestmentWatch. “People are perceiving the drop in price as a gigantic buying opportunity. It’s on sale at a lower price.” The dollar is going to dramatically lose value. Barisheff predicts, “What’s different than the other 65 hyperinflations is, this time, we are going to have global hyperinflation.”

http://usawatchdog.com/global-hyperinflation-coming-nick-barisheff/ Nick Barisheff, President and CEO of Bullion Management Group, says nothing has changed to justify gold’s dramatic price drop. Barisheff says, “When I listened to the debt ceiling debate in 2011, it became crystal clear the debt situation wasn’t going to get resolved. So, it is accelerating, and the relationship between the U.S. debt and gold is almost a perfect correlation.” Join Greg Hunter as he goes One-on-One with gold expert Nick Barisheff and author of the new book “$10,000 Gold.”

Video - Students protest Christine Lagarde over IMF’s austerity policies.

German euro founder calls for 'catastrophic' currency to be broken up.

German euro founder calls for 'catastrophic' currency to be broken up.(Telegraph)."The economic situation is worsening from month to month, and unemployment has reached a level that puts democratic structures ever more in doubt," he said.

"The Germans have not yet realised that southern Europe, including France, will be forced by their current misery to fight back against German hegemony sooner or later," he said, blaming much of the crisis on Germany's wage squeeze to gain export share.

Mr Lafontaine said on the parliamentary website of Germany's Left Party that Chancellor Angela Merkel will "awake from her self-righteous slumber" once the countries in trouble unite to force a change in crisis policy at Germany's expense.

His prediction appeared confirmed as French finance minister Pierre Moscovici yesterday proclaimed the end of austerity and a triumph of French policy, risking further damage to the tattered relations between Paris and Berlin.

"Austerity is finished. This is a decisive turn in the history of the EU project since the euro," he told French TV. "We're seeing the end of austerity dogma. It's a victory of the French point of view."

Mr Moscovici's comments follow a deal with Brussels to give France and Spain two extra years to meet a deficit target of 3pc of GDP. The triumphalist tone may enrage hard-liners in Berlin and confirm fears that concessions will lead to a slippery slope towards fiscal chaos.

German Vice-Chancellor Philipp Rösler lashed out at the European Commission over the weekend, calling it "irresponsible" for undermining the belt-tightening agenda.

Mr Lafontaine said he backed EMU but no longer believes it is sustainable. "Hopes that the creation of the euro would force rational economic behaviour on all sides were in vain," he said, adding that the policy of forcing Spain, Portugal, and Greece to carry out internal devaluations was a "catastrophe". Read the full story here.

Video - Nigel Farage On “Wholesale, Violent Revolution” In Europe - “Get your money out,”

In a little under two minutes, Nigel Farage sums up the utter farce that “the religion” that Europe has become.

He explains, his fear is that what will break up the Euro, “is not the economics of it, but wholesale, violent revolution,” in the Mediterranean, and that is “all so unnecessary!”

Speaking at Simon Black’s Offshore Tactics workshop, the so-called modern day Cicero goes on to point out that France’s Hollande is “the number 1 among idiots running countries around the world,”and worries that Merkel’s pending election means there will be more and more ‘tough talk and action’ as she shows the people she is in charge.

Simply put he warns, alongside Ron Paul, that if you have money in European banks, “Get your money out,” because, “when the next phase of the disaster comes, they will come for you.”HT: ZeroHedge.

"Eurogeddon" Germany rejects joint EU bank deposit scheme: Merkel.

"Eurogeddon" Germany rejects joint EU bank deposit scheme: Merkel.(HD).Germany rejects at least for now a standardized Europe-wide bank deposit guarantee scheme, Chancellor Angela Merkel said on yesterday. Germany, Europe’s largest economy, fears such a scheme would leave its taxpayers footing the bill for mistakes made by banks in other euro zone countries.

Speaking in the east German city of Dresden, Merkel also reiterated her centre-right government’s view that in the future bank shareholders should also suffer losses in the event of their institutions receiving euro zone rescue funds.

Wealthy depositors in Greek Cypriot banks were forced to take a hit as part of the recent international bailout for Greek Cyprus. Hmmm.....Place your bet....'rien ne vas plus.'Read the full story here.

"The Great Swiss Bank Robbery" - Switzerland Revises 1934 Banking Act To Allow Bail-In Deposit Confiscations.

"The Great Swiss Bank Robbery" - Switzerland Revises 1934 Banking Act To Allow Bail-In Deposit Confiscations.(SilverDoctors).

The Swiss Financial Market Supervisory Authority (FINMA) has quietly joined the growing parade of western nations who have quietly re-written banking laws to allow depositor bail-ins upon the next banking crisis.
If Switzerland, the once ultimate safe haven for banking deposits across the world is preparing to confiscate depositors funds, there truly is no protection anywhere other than physical gold and silver in your own possession!

In the event that a bank is failing or where its capitalization is no longer adequate, the Swiss Financial Market Supervisory Authority (“FINMA”) may take measures to improve such bank’s financial viability rather than liquidating it. “Loss absorption” and “bail-in” are important instruments to support any such measures.

The Swiss document begins by advising that the FINMA now has legal authority to confiscate depositor funds, thanks to a revision of the Banking Act of 1934, completed in 2011, as well as the revision of the Bank Insolvency Ordinance completed Nov 1st 2012:

In the event that a bank is failing or where its capitalization is no longer adequate, the Swiss Financial Market
Supervisory Authority (“FINMA”) may take measures to improve such bank’s financial viability rather than
liquidating it. “Loss absorption” and “bail-in” are important instruments to support any such measures. This
is now possible as a result of a revision of the Banking Act of 8 November 1934 (the “Banking Act”) in 2011 and
the taking effect of a revised Bank Insolvency Ordinance on 1 November 2012 (the “Bank Insolvency Ordinance”)
and of a revised Capital Adequacy Ordinance on 1 January 2013 (the “Capital Adequacy Ordinance”).

The document states that The Banking Act now grants discretion to FINMA regarding depositor bail-in measures:

RELEVANT PROCEEDINGS Under the Banking Act, if there are concerns that a bank is
over-indebted or if a bank does not meet liquidity or regulatory capital requirements, the FINMA may as appropriate: (i) take protective measures; (ii) initiate bank reorganization
proceedings; or (iii) order the liquidation of the bank (bankruptcy). The Banking Act grants significant discretion to FINMA in this context. This includes, inter alia, ordering
a bank moratorium, a maturity postponement or “bail-in” measures.

And in the scope of bail-in measures, states that bail-ins are to be a measure of last resort (translation: we’ll make this sound unlikely until the banks lose their first franc):

BAIL-IN MEASURES
4.1 Scope
The loss absorption measures described above relate to capital instruments issued by the bank. In addition, the revised procedural rules as specified in the secondary legislation to the Banking Act applicable in a bank reorganization context (i.e. if FINMA believes that the bank may be successfully reorganized or if at least part of the business of the failing bank may be continued), as enacted by FINMA, provide for the competence of FINMA to convert or write-off other
debt (even in the absence of any contractual provision to that effect in the arrangement governing such debt) if and to the extent necessary to allow the bank to meet its regulatorycapital requirements after completion of the reorganization(“bail-in”).

Such bail-in is designed to be available as a measure of “last resort” to be taken in the event that the loss absorption under the capital instruments issued by the bank is not sufficient to restore the required capitalization of the failing bank and if the creditors are likely to be better off than in an immediate insolvency of the bank.The bail-in must be specified in the reorganization plan, which must be approved by FINMA and – except for banks of systemic importance – also by a majority of non-privileged creditors (calculated on the basis of the claim
amounts). If such approval cannot be obtained, the bank would be liquidated in bankruptcy proceedings. In the event that FINMA only applies protective measures, but does not consider any reorganization measures as necessary or adequate, a bail-in could not occur as one of such
protective measures.

Hmmm....Who needs banks with robbers like these guys?Read the full story here.

"Happy Easter" The EU Took €100 Million from the Cypriot Greek Orthodox Church.

"Happy Easter" The EU Took €100 Million from the Cypriot Greek Orthodox Church.(Cyprus Mail).

This so-called “bail-in” designed only to protect the hedge funds of the European and British money center banks scalped the one entity which could help the poor during the nations transition from quasi-capitalism to European serf state. From the article in today’s paper:

The Church stands to lose more than 100 million euros in the bailout deal reached with international creditors early Monday, its leader Archbishop Chrysostomos said.

“The capital owned by the Church, which was over 100 million euros, has been lost,” the archbishop told reporters.

“There will be many difficulties, some will lose their jobs, the hungry will be multiplied and the Church has to take care of people,” he added.

Granted, I’m sure they won’t suffer at the top of the church as in the old Vatican tradition, the Greek Orthodox Church has been known to enjoy ornate lifestyles and investments which per the article range from breweries (yes, that’s correct) to hotels and resorts. The bigger picture is that the European Union using the power of the ECB and IMF combined has now found a formula not just to create vassal states, but to seize the assets of the Church, something the atheistic Marxists which created the Eurozone have fantasized about for over a decade.

This action should make the Vatican extremely nervous about their massive Italian and Spanish property holdings in those nations.

John Galt: When this program is translated into an American version, look for only those “Federally approved” institutions to be exempt from property and capital seizure. Three is no better formula to force a religious institution to pay taxes and force compliance with the political elite’s prevailing point of view to extinguish the concept of freedom of expression.Read the full story here.

Last-Minute Deal : The End of the Cypriot Banking Sector.

Last-Minute Deal : The End of the Cypriot Banking Sector.(Spiegel).By Carsten Volkery. In the end, despite all his pleading, threats and horsetrading, Cypriot President Nicos Anastasiades had no option but to bow to the terms of international lenders. Early on Monday morning, the Euro Group of euro-zone finance ministers agreed a bailout of €10 billion ($13 billion) for the tiny Mediterranean island. In return, the Cypriot government agreed to radically scale down its oversized banking sector. Bank customers with deposits of over €100,000, including wealthy Russians who had deposited funds in Cyprus, will lose a large part of their assets.

The new bailout deal focused on the island's two insolvent major banks. It will wind down the largely state-owned Popular Bank of Cyprus, also known as Laiki, and shift deposits below €100,000 to the Bank of Cyprus.

Deposits above €100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki's debts and to recapitalise Bank of Cyprus through a deposit/equity conversion.

An initial agreement reached 10 days ago had provoked angry protests in Cyprus and was rejected by the country's parliament because it entailed a levy on all deposits. The plan also led to international criticism because it cast doubt on the EU's deposit guarantee for all assets up to €100,000.

The raid on uninsured Laiki depositors is expected to raise €4.2 billion, Dijsselbloem said.

It's not yet clear how high the losses for deposits exceeding €100,000 will be. That will be decided in the coming weeks by the Cypriot government and the troika of EU, European Central Bank and International Monetary Fund.

The final bailout terms are expected to be agreed by mid-April. Before that, the parliaments of Germany, Finland and the Netherlands will have to give their blessing. Nothing else can block it. The Cypriot parliament can't stop the deal because it has already approved a restructuring of the banks. Read the full story here.


UPDATE: It appears the 'deal' to default/restructure the banks has been designed to bypass the need for parliamentary votes, since it is theoretically not a tax.
While we have little color on what kind of carnage the President of Cyprus had to accept to his fellow countrymen, the news is that :

• CYPRUS, TROIKA REACH AGREEMENT IN PRINCIPLE, EU OFFICIAL SAYS
• DEAL MADE AT DINNER WITH DRAGHI, LAGARDE, VAN ROMPUY, BARROSO

The terms, unsurprisingly what zee Germans wanted, are:
i) Laiki to be wound down;
ii) Bank of Cyprus to survive but with deposit haircuts of up to 40% for the uninsureds, and
iii) deal would see secured deposits in Laiki moved to Bank of Cyprus.
In other words, a deal far worse then the original on proposed by the Eurogroup last week - when the banks still existed. The key appears to be the 'saving' of the insured depositors (crucial to avoid a pan-European bank run) and the crushing of the 'whale' depositors.

Related: Euro Bailouts: Savers Be Warned - Your Money's Not Safe 

"Eurogeddon" - The Cyprus Nightmare scenario.

"Eurogeddon" - The Cyprus Nightmare scenario. (Forbes). Cyprus said on Saturday it was looking at seizing a quarter of the value of big deposits at its largest bank, as it races to raise the funds for a bailout from the European Union and to avert financial collapse. Finance Minister Michael Sarris said “significant progress” had been made in talks in Nicosia with officials from the European Union, European Central Bank and International Monetary Fund.

He confirmed discussions were centered on a possible levy of around 25 percent on holdings of over 100,000 euros (about $130,000) at Bank of Cyprus, and expressed hope that a package could be ready by the end of the day for approval by parliament.

Cyprus faces a Monday deadline to clinch a bailout deal with the EU or the European Central Bank says it will cut off emergency cash to the island’s over-sized and stricken banks, spelling certain collapse and a potential exit from Europe’s single currency. Amid signs of momentum, Cypriot and EU officials said Cypriot President Nicos Anastasiades was expected in Brussels on Sunday to meet EU leaders including Council President Herman Van Rompuy and Commission President Jose-Manuel Barroso, as well as IMF Managing Director Christine Lagarde and the head of the ECB, Mario Draghi.

Protesters in Cyprus gather outside parliament as government officials try to strike a bailout deal with the European Union. NBCNews.com’s Dara Brown reports.

Van Rompuy and Barroso canceled a planned EU-Japan summit in Tokyo to tend to the Cyprus saga and euro zone officials told Reuters that the bloc’s 17 finance ministers would meet on Sunday afternoon. “Significant progress has been made in the direction of getting a deal, at least at the troika level,” Sarris told reporters.

He said a number of issues were still outstanding, but that a package could be ready “late this afternoon or early evening” for approval by parliament. Arriving at the troika talks, Andreas Artemi, chairman of Bank of Cyprus, was asked if a 25 percent haircut was being considered on uninsured deposits. He replied: “I don’t know that yet.”

Nightmare scenario: Like the Corvair, the banking system in Cyprus is built to fail – to spin out of control at a moment’s notice. But so is every banking system around the globe, including our own. And when a country’s banking system fails, its economy flips from a good path to a bad one – in economics speak, from a good to a bad equilibrium.

Cyprus is a small country. Still, the failure of its banks could trigger massive bank runs in Greece. After all, if the European Central Bank is abandoning Cypriot depositors, they may abandon Greek depositors next.

A run on Greek banks could then spread to Portugal, Ireland, Spain, and Italy and from there to Belgium and France and, you get the picture, to other countries around the globe, including, drum roll, the U.S. Every bank in each of these countries has made promises they can’t keep were push come to shove, i.e., if all depositors demand their money back immediately.

But could little Cyprus , figuratively speaking, be the thin sheen of water that flipped my Corvair from a fun buggy into a death trap? Could it really kick off a global banking panic? Yes. The chances are small. But even a very small chance of an enormous collapse can spell a huge expected problem.

Yes, the Federal Reserve, European Central Bank, Bank of England and other central banks can print “hard” money and give it to the banks to use to pay off depositors. But the specter of this massive money creation, which in the U.S. case would entail printing roughly $12 trillion overnight, would spark fears of inflation. The fear of inflation would, in turn, prompt everyone to get and spend their money as fast as possible before prices rise. This transformation of money into a hot potato would, by itself, produce the inflation that everyone would fear.

Given the above, the question we need to ask about Cyprus is not really about Cyprus. The question we need to ask is why we continue to tolerate a banking system that’s built to collapse with the right triggering events?Hmmmm........Anyone gets an idea why Obama keeps delaying to present a budget plan?Read the full story here.

"The Great Bank Robbery" - Cyprus, Troika agree to 20% tax on deposits over 100,000 euros at Bank of Cyprus.

"The Great Bank Robbery" - Cyprus, Troika agree to 20% tax on deposits over 100,000 euros at Bank of Cyprus.(RT).A senior Cypriot official told Reuters that a plan to tap nationalized pension funds would not be a part of a plan to raise billions of euros in return for a bailout from the European Union.Cyprus said earlier on Saturday that it was looking at seizing a quarter of the value of big deposits at its largest bank in order to raise such funds.

"Unfortunately, the events of recent days have led to a situation where there are no longer any optimal solution savailable. Today, there are only hard choices left," European Union Economic and Monetary Affairs Commissioner Olli Rehn said in a statement.

Cyprus is scrambling to come up with €5.8 billion by Monday, or face being kicked out of the Euro zone. The cash is a pre requisite for a further €10 billion in bailout funds.

Lawmakers' rejection of a previous proposal to tax all bank deposits prompted the European Central Bank to threaten to cut off emergency funding to Cypriot banks unless a deal was reached by March 25. Banks have been shut all week, and are due to reopen on March 26.

Earlier on Saturday, at least 1,000 bank workers in Cyprus hit the streets of the country’s capital of Nicosia. The demonstrators marched against the latest bailout measures taken by the country’s central bank.

“You destroy our work and steal our pensions,”demonstrators chanted as they marched to the Cypriot Parliament.One protester held a banner which read, “Hands off pension funds.”

All ages were present at the demonstration, with many parents pushing their children down the street in strollers.

“I’ve been working for 20 years and I’ve paid all the taxes of all my pension contributions and every Euro. Now I run the risk of losing my job and my pension, and I will have no money to support my children,” Cyprus Popular Bank employee Angela Panayotou said, as quoted by Ria Novosti.

Panayotou, who brought her five children along to the rally,says she believes plans to split the Cyprus Popular Bank in two to be a political move.“We are convinced that the bank is viable, and it there’s no need to close it,” she said.

The Cypriot parliament has adopted a new bailout plan which is comprised of nine laws about the recovery of the country’s financial system. One of the laws gives the Cypriot Central Bank special authorities due to concerns the financial system may collapse.Read the full story here.