Posted by greydogg, 99GetSmart
* PEOPLE OF CYPRUS: FOLLOW THE VIKINGS!
By George Lakey, Wagining Non Violence
When the banks of the Sweden, Norway and Iceland went out of control, the people refused to bail them out, and the economies of all three countries were the better for it. Instead of allowing themselves to be bullied by international investors represented by the IMF and the European Union, the Cypriots who are facing a similar crisis today might want to learn from the Viking example.
The Cyprus banking sector went rogue to the point that it became eight times larger than the rest of the country’s economy. Perhaps the bankers thought they would become too big to fail, requiring the country to rescue them. But why should citizens rescue bankers?
There is a better way, which is what the Scandinavians insisted on.
When it comes to a financial crisis, what’s needed is the combination of popular will and the existence of an alternative. The Vikings combined smart economics with the organizing muscle to make it happen. As a presidential candidate in 2008, Barack Obama said he knew that the Swedes handled their banking crisis in the correct way, but he also acknowledged that the United States wouldn’t follow the Swedish path. Why? Obama believed that we wouldn’t back him with a mass direct action movement in a confrontation with Wall Street.
So, what is the alternative to bailouts for rogue banks? And what can a movement do when the party in power is in bed with the 1 percent?
What democracy looks like when banks go out of control […]
* YANIS VAROUFAKIS ON CYPRUS ECONOMIC CRISIS
Professor Yanis Varoufakis on BBC Radio 4 speaking on the Cyprus economic crisis on 21/3/13.
* WHOSE INSURED DEPOSITS WILL BE PLUNDERED NEXT?
Spain, it would appear, has changed constitutional rules to enable a so-called ‘moderate’ levy on deposits.
Far more worrying for American and British depositors though is this paragraph Golem XIV brings up from a joint Bank of England and FDIC paper from 2012 which points to the possibility of using deposit insurance funds to bail out illiquid banks:
The U.K. has also given consideration to the recapitalization process in a scenario in which a G-SIFI’s liabilities do not include much debt issuance at the holding company or parent bank level but instead comprise insured retail deposits held in the operating subsidiaries. Under such a scenario, deposit guarantee schemes may be required to contribute to the recapitalization of the firm, as they may do under the Banking Act in the use of other resolution tools. The proposed RRD also permits such an approach because it allows deposit guarantee scheme funds to be used to support the use of resolution tools, including bail-in, provided that the amount contributed does not exceed what the deposit guarantee scheme would have as a claimant in liquidation if it had made a payout to the insured depositors.
Of course, if deposit insurance money is used as a resolution tool to bail out a bank which then goes on to fail anyway (as we have already seen multiple times since 2008 — a bank receives a large liquidity injection, and goes onto fail anyway) depositors could end up moneyless.
As Golem XIV notes:
The new system makes the Deposit Guarantee fund available for use as bail out money.
The rationale is that if using your deposit guarantee fund for propping up the bank ‘saves’ the bank from collapse then you wouldn’t need that deposit guarantee would you? This overlooks the one lesson we have all learned from the bank bail outs of the last 5 years, that the bail outs are never, ever, ever, a one off. The first one fails to save the bank as does the second and third and and and.
So if I have read the above correctly – the new system raids the Deposit Protection scheme, gives it to the bank instead of you and when that fails to save the bank…then what? The bank fails again and there is no money left in the Deposit Guarantee scheme. […]
* BERNANKE FAILS TO ANSWER CONCERNS ABOUT A CYPRUS-STYLE SEIZURE OF AMERICAN BANK DEPOSITS
Source: Washington’s Blog
Bernanke Entirely Fails to Answer Question
The government of Cyprus wants to grab bank deposits, and the chief economist of the German Commerzbank has called for private savings accounts in Italy to be similarly plundered, and other nations may be moving in that direction as well.
The American government has seized private assets before, and President Obama authorized seizure of property again last year. (The Argentinian government grabbed 401k assets; and some in the American government have mulled the same thing. And the U.S. government’s take-down of Megaupload was also an exercise of the power to seize all of the legal property held in a storage facility because a handful of crooks have illegal property in theirs. )
Zero Hedge has been warning for years that Western governments – including the U.S. – would eventually seize bank assets.
Bernanke was asked yesterday whether a Cyprus-style grab of bank deposits is possible in the U.S. :
Question: I was wondering if you can tell me how if a run on the banks happens in Cyprus, how that might affect U.S. markets. And also is it possible for the U.S. to levy a tax on regular deposits here? Or why not?
Bernanke: As someone mentioned Cyprus is a tiny economy. I don’t think these issues as worrisome as they are and as concerned as we would be for the Cyprus people, I don’t think that they have a direct implications for the U.S. economy.
The only way that they would create a problem would be if the runs became contagious in some sense, if depositors in other countries lost confidence. But to this point I’m not aware of any evidence that that is in fact the case.
The argument the Europeans are making is that Cyprus is a unique situation, very different situation, and indeed, it is quite unusual to have a banking sector as large as they have relative to their economy.
In terms of the United States, the FDIC was founded in 1934, and we have insured deposits and they are very proud of the fact that no one has ever lost a dime in insured deposits.
And during the crisis the response of the government was in fact to increase the level of deposit or account sizes that were insured. So I consider that to be extremely unlikely in the United States. […]
* STOP THE WATER PRIVITIZATION IN THE EU – A NEW VIDEO BY YIANNIS BILIRIS
Source: Yiannis Biliris, vimeo
Sign the European Citizens Initiative (All EU Citizens).
(Website owners and bloggers are kindly requested to copy paste the links above when embedding the video)
VIDEO @ http://vimeo.com/62326569
* THE WORLD SOCIAL FORUM IN TUNIS (26-30 MARCH 2013) … “THE SUCCESS [OF THE FORUM] DEPENDS ON THE PARTICIPATION OF SOCIAL MOVEMENTS”
By Sergio Ferrari, Mimoun Rahmani, CADTM
The success of the next World Social Forum (WSF) in Tunis depend fundamentally on the ability of social movements to appropriate open space and give a true transformer content. This is the main thesis of Mimoun Rahmani, an active member of the Maghreb Social Forum, which, as such, has participated in several preparatory meetings in Tunis 2013.
“The region of the Maghreb / Mashreq, mainly Tunisia, Morocco, Algeria and Egypt, was the scene of major uprisings in recent years. This is an ongoing process, unfinished, which will require us time and struggles … “said Rahmani, a leader of ATTAC Morocco and the Committee for the Abolition of Third World Debt (CADTM) the same country.
In this sense, the convening of the Forum, to the end of March, in the Tunisian capital, where between 30 and 50 thousand participants are expected to meet – according to estimates by organizers – “may have a significant impact if social movements are present the most dynamic in the region, those actors revolutionary process.”
A challenge which is not a foregone conclusion, given that many of these social actors frontline “have very specific agenda of priorities and, in addition, many suffer financial constraints to move,” said Rahmani.
For this reason it is particularly important that can be achieved on the promise of the organizers of the WSF 2013, to devote a percentage of the budget to facilitate this participation. According to Rahmani, a total budget of about one and a half million euros, was planned originally, allocating 15% to the solidarity fund to promote participation:
“We realized assemblies preparation of the WSF in July and December … And we see that NGOs predominate. But the end of 2012, there was a low participation of social movements. “
The biggest challenge reiterates Rahmani, is “how movements mobilize who actually struggled, how they are involved. Especially youth movements, the unemployed, students, peasants … that exist in the region but do not have the resources to move. And who does not clearly identify the WSF as a means to catalyze their real fighting.”
Thinking behind the leader of ATTAC Morocco, is a recurring theme in the space of altermondialiste Forums : That of “political content”. Although programmatic axes are provided extensive and interesting, the challenge is to “give political content in the Forum.”
Thus, “some sectors have expressed the need for a forum with discussions, lectures but also concrete actions on the ground, holding shares in public places; protests outside the Central Bank of Tunisia … engage people, create Forum areas close to the people and not in isolated areas difficult to access.”
Not to mention, insists Rahmani, “the explosive situation in the Maghreb, and many other parts of the world, is the result of a hegemonic system, based on structural adjustment and free trade agreements that have impacted catastrophic for the people. ” The importance of the WSF Tunis will be linked to the ability to “reconcile and unite the struggles. In a strategic location such as North Africa, close to Europe, sub-Saharan Africa and the Middle East in turmoil, “he concludes.
Translation : Liliane Fazan
* HENRY KISSINGER in 2009: “OBAMA WILL CREATE A NEW WORLD ORDER.”