Posted by greydogg, 99GetSmart
* BAILOUT, AUSTERITY, CONFISCATION: CYPRUS REVEALS THE 3rd PHASE OF THE GREAT BANK ROBBERY
By Scriptonite Daily
Yesterday, the people of Cyprus awoke to the news that up to 10% of the cash in their bank accounts was to be confiscated on Tuesday 19th March, as part of an EU deal to bailout banks. This decision, signals the insidious next step of the Great Bank Robbery underway since the Financial Crisis of 2007/8. First Bailout, then Austerity and now direct Confiscation of wealth from the 99% to the 1%.
The Three Steps of the Great Bank Robbery
There have been three distinct phases to the great bank robbery of the banking and corporate class on the 99%.
In the bailout of 2009, the UK government had to guarantee funding to the banking sector, of 101% of GDP. That is, the UK diverted over £2trn of tax payer money (101% of GDP), equivalent to almost 3 times its entire annual budget, to prop up its failed banks. This is twenty years of NHS spending (£106.7bn a year), forty years of education spending (£48.2bn), or five hundred years of job seekers allowance (£4.9bn a year). All that money is going to prop up a derivates market which serves zero social purpose. It doesn’t build things, it doesn’t create things, it doesn’t do anything except repackage debts for fees and notional profits.
The US spent or guaranteed $12.8trn in its bailout package, which is equivalent to almost its entire annual GDP.
This rescue package for Banks, is absolutely unprecedented. If you take just the UK and US figures, ignoring everyone else, you’re at $15trn. How does this compare to other large scale expenditures? […]
* ECB GIVES CYPRUS MARCH 25 LIQUIDITY ULTIMATUM
By Tyler Durden, zerohedge
As reported yesterday, Cyprus banks are now expected to reopen next Tuesday. We would boldly go ahead and take the under following overnight news that the ECB has once more escalated its political interventions (remember the lies about “apolitical, independent” Central Banks – good times…), and following a Reuters report yesterday that the ECB is prepared to let Cyprus go, the FT now has doubled down on the propaganda, reporting (in an article with no less than five authors) that the ECB has issued an ultimatum to Cyprus to agree to a bailout by Monday (which is a holiday), or the free liquidity ends.
“The European Central Bank raised the stakes in the Cyprus crisis on Thursday, telling Nicosia it had until Monday to agree a bailout with the EU and International Monetary Fund or it would cut off emergency liquidity provision to the country’s banks. The hardline stance from the ECB sets a clear deadline for Cyprus to agree to a plan after its parliament rejected a bailout negotiated at the weekend that would have taxed the deposits of account holders in the country’s banks.” Which means yet another weekend of ad hoc choices and spontaneous decisions awaits, only this time with a key non-Euro actor involved in the face of Russia, whose interest just in case there is any confusion, is to see Cyprus crushed, so it can swoop in later and “acquire” the assets on the cheap, or preferably free, while the local population welcome the second coming of the glorious Red Army with open arms, delighted to be free of European slavery. Well played Putin.
The ultimatum came as EU leaders maintained pressure on Nicosia to come up with a new plan on its own and Russian prime minister Dmitry Medvedev told a visiting European Commission delegation that a solution had to include Russian participation.
“It is now up to the Cypriot authorities to come up with proposals,” Jeroen Dijsselbloem, chair of the committee of 17 eurozone finance ministers who negotiated the bailout, told the European Parliament on Thursday morning.
In a short statement the ECB said its 23-person governing council had agreed to maintain emergency liquidity provision to Cyprus’s banks until Monday. “Thereafter, Emergency Liquidity Assistance could only be considered if an EU-IMF programme is in place that would ensure the solvency of the concerned banks,” it said.
The country’s two biggest banks, Bank of Cyprus and Laiki, are believed to be reliant on Emergency Liquidity Assistance provided by the Central Bank of Cyprus. The ECB’s governing council can terminate ELA if it believes the banks receiving it are no longer solvent.
The move, however, raises the prospect of the ECB having to make good on its ultimatum on Monday, which could leave the banks unable to honour their obligations. Some analysts have speculated that the collapse of the banks could trigger a series of events that lead to Cyprus leaving the euro, with unpredictable consequences for the rest of the eurozone. […]
* PRIVATIZING EUROPE: USING THE CRISIS TO ENTRENCH NEOLIBERALISM
The text and infographics below are excerpted from a new working paper, Privatising Europe: Using the Crisis to Entrench Neoliberalism, which was just released by the Transnational Institute in Amsterdam:
The European Union is currently undergoing the biggest economic crisis since its foundation 20 years ago. Economic growth is collapsing: the eurozone economy contracted by 0.6% in the fourth quarter last year and this slump is set to continue. The euro crisis was incorrectly blamed on government spending, and the subsequent imposition of cuts and increased borrowing has resulted in growing national debts and rising unemployment. Government debts in crisis countries have predictably soared: the highest ratios of debt to GDP in the third quarter of 2012 were recorded in Greece (153%), Italy (127%), Portugal (120%) and Ireland (117%).
Europe’s member states have responded by implementing severe austerity programmes, making harsh cuts to crucial public services and welfare benefits. The measures mirror the controversial structural adjustment policies forced onto developing countries during the 1980s and 1990s, which discredited the International Monetary Fund (IMF) and World Bank. The results, like their antecedents in the South, have punished the poorest the hardest, while the richest Europeans – including the banking elite that caused the financial crisis – have emerged unscathed or even richer than before.
Behind the immoral and adverse effects of unnecessary cuts though lies a much more systematic attempt by the European Commission and Central Bank (backed by the IMF) to deepen deregulation of Europe’s economy and privatise public assets. The dark irony is that an economic crisis that many proclaimed as the ‘death of neoliberalism’ has instead been used to entrench neoliberalism. This has been particularly evident in the EU’s crisis countries such as Greece and Portugal, but is true of all EU countries and is even embedded in the latest measures adopted by the European Commission and European Central Bank. […]
READ / CHARTS @ http://roarmag.org/2013/03/tni-infographics-european-fire-sale/
* CONGRESS NEVER FIXED THE FINANCIAL SYSTEM … AND IS ABOUT TO MAKE IT EVEN WORSE
Source: Washington’s Blog
Out-of-control derivatives were largely responsible for the 2008 financial crisis … and still pose a massive threat to the economy.
Unchecked derivatives are so harmful to the economy that:
- Warren Buffet called them “weapons of mass destruction”
- A Nobel prize winning economist who helped develop derivatives pricing said some of them were so dangerous that they should be “blown up or burned”
- Newsweek called them “The Monster that Ate Wall Street” after the financial crash
This is especially true since the big banks are manipulating the hundred trillion dollar derivatives market.
No, the big “financial reform” bill passed in the wake of the financial crisis didn’t fix anything. We noted last year:
No, there have not been any reforms or attempts to rein in derivatives, and the Dodd-Frank financial legislation was really just a p.r. stunt which didn’t really change anything.
Harold Bradley – who oversees almost $2 billion in assets as chief investment officer at the Kauffman Foundation – told the Reuters Global Exchanges and Trading Summit in New York that a cabal is preventing swap derivatives from being forced onto clearing exchanges:
There is no incentive from the moneyed interests in either Washington or New York to change it…I believe we are in a cabal. There are five or six players only who are engaged and dominant in this marketplace and apparently they own the regulatory apparatus. Everybody is afraid to regulate them.
Indeed, the U.S. has agreed to backstop potential trillions in derivatives in the U.S. … and abroad.
If the big banks are manipulating the derivatives market, they could manipulate every other market on the planet. Given that the size of the derivatives market dwarfs the entire global economy, and given that derivatives are – by definition – not real assets, but paper abstractions loosely based upon real assets, manipulation of derivatives can drive asset prices up or down at whim. […]
* WHAT IN THE WORLD IS A BITCOIN?
By Simon Black, Sovereign Man blog
[…] In most countries, a small tiny banking elite exercises total control over that nation’s money supply. And we’re just supposed to trust them to be good guys.
Yet central bankers around the world have conjured trillions of dollars out of thin air, debasing the money’s value. It’s a concept any six-year old can understand. If money grew on trees, it wouldn’t be worth very much.
This is one of the key reasons why people buy gold. You can’t just conjure gold out of thin air. It takes years of exploration and investment to pull it out of the ground.
In the information age, though, we have an alternative.
Bitcoin is digital currency. It doesn’t actually exist in our physical world… only in computers.
If this sounds esoteric and far-fetched, it’s not. The vast majority of our monetary system today is already digital. […]
If you want to find out more about Bitcoin, this website provides a lot of great introductory information