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Behind the curtain, there is a growing concern about a serious banking crisis beginning once again in Europe. Many governments are talking about the crisis behind-the-curtain and we are now beginning to see steps that are being taken to end the TO-BIG-TO-FAIL policies that dominated the 2007-2009 Crash.

The United States is looking at a new radical bank rescue policy where the government is proposing to revise a central pillar of the idea of bailing out banks creating new financial regulation with a new Chapter 14 bankruptcy procedure. They are looking at eliminating the risk of taxpayers’ costs to bail out banks. They are investigating the means for an orderly resolution so that the taxpayers do not have to bail out the banks. This development is causing some concern among the high-flying Wall Street banks, for if that is the case, then another crisis as 2007-2009 will result in even Goldman Sachs closing. The proposal looks to shift the burden to the shareholders and creditors of that bank. This means depositors who are thus creditors.

In Australia, we see similar legislation being proposed. This is the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill 2017. This also authorizes bail-ins bringing an end to the bailout.

Is Another Spanish Bank about to Bite the Dust?

June 11, 2017

Is Another Spanish Bank about to Bite the Dust?

Stockholders and junior bondholders fear a “bail-in.”

After its most tumultuous week since the bailout days of 2012, Spain’s banking system is gripped by a climate of fear, uncertainty and distrust. Rather than allaying investor nerves, the shotgun bail-in and sale of Banco Popular to Santander on Tuesday has merely intensified them. For the first time since the Global Financial Crisis, shareholders and subordinate bondholders of a failing Spanish bank were not bailed out by taxpayers; they took risks in order to make a buck, and they bore the consequences. That’s how it should be. But bank investors don’t like not getting bailed out.

Now they’re worrying it could happen again. As Popular’s final days showed, once confidence and trust in a bank vanishes, it’s almost impossible to restore them. The fear has now spread to Spain’s eighth largest lender, Liberbank, a mini-Bankia that was spawned in 2011 from the forced marriage of three failed cajas(savings banks), Cajastur, Caja de Extremadura and Caja Cantabria.

This creature’s shares were sold to the public in May 2013 at an IPO price of €0.40. By April 2014, they were trading above €2, a massive 400% gain. But by April 2015, shares started sinking. By May 2017, they were trading at around €1.20.

But since the bail-in of Popular, Liberbank’s shares have seriously crashed as panicked investors fled. Scenting fresh blood, short sellers were piling in. On Friday alone, shares plunged another 17%. At one point, they were down 38% before bouncing at the close of trading, much of it driven by the bank’s own share buybacks:

In the last three weeks a whole year’s worth of steadily rising gains on the stock market have been completely wiped out. The main causes of concern are the bank’s high risk profile and low coverage rate.

…click on the above link to read the rest of the article…

Banks Are Evil

March 19, 2017

Barandash Karandashich/Shutterstock

Banks Are Evil

It’s time to get painfully honest about this

I don’t talk to my classmates from business school anymore, many of whom went to work in the financial industry.

Why?

Because, through the lens we use here at PeakProsperity.com to look at the world, I’ve increasingly come to see the financial industry — with the big banks at its core — as the root cause of injustice in today’s society. I can no longer separate any personal affections I might have for my fellow alumni from the evil that their companies perpetrate.

And I’m choosing that word deliberately: Evil.

In my opinion, it’s long past time we be brutally honest about the banks. Their influence and reach has metastasized to the point where we now live under a captive system. From our retirement accounts, to our homes, to the laws we live under — the banks control it all. And they run the system for their benefit, not ours.

While the banks spent much of the past century consolidating their power, the repeal of the Glass-Steagall Actin 1999 emboldened them to accelerate their efforts. Since then, the key trends in the financial industry have been to dismantle regulation and defang those responsible for enforcing it, to manipulate market prices (an ambition tremendously helped by the rise of high-frequency trading algorithms), and to push downside risk onto “muppets” and taxpayers.

Oh, and of course, this hasn’t hurt either: having the ability to print up trillions in thin-air money and then get first-at-the-trough access to it. Don’t forget, the Federal Reserve is made up of and run by — drum roll, please — the banks.

…click on the above link to read the rest of the article…

Savings Guarantee? U.N. Warns Next Financial Crisis Imminent

September 24, 2016

Savings Guarantee? U.N. Warns Next Financial Crisis Imminent

“There remains a risk of deflationary spirals in which capital flight, currency devaluations and collapsing asset prices would stymie growth and shrink government revenues. As capital begins to flow out, there is now a real danger of entering a third phase of the financial crisis …”

UN Conference on Trade and Development’s Annual Report (UNCTAD), September 22, 2016

Image from “Extraordinary Popular Delusions and the Madness of Crowds” by Charles Mackay – Wikipedia

This hard hitting critique in the UN Conference on Trade and Development’s Annual Report, released this week, is suggesting that the ‘third leg of the world’s intractable depression is yet to come.’

“Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out,” said the annual report of the UN Conference on Trade and Development (UNCTAD).

But what does these grand, scary predictions really mean for us? Bankruptcy? Economic collapse? Apocalypse now? End of the world as we know it?

The UN economists certainly think that a la 2007/2008, we are on the verge of the third leg of the global financial crisis – with prospect of epic debt defaults.

We may soon experience the end of the financial world as we know it … but investors and savers feel fine! Many bond and stock markets, including the S&P 500, continue on their merry way to all time record highs.

Few know, or (it seems) care anymore. As we end yet another week with yet another anticlimactic announcement from the “all powerful” Fed, it is understandable that many of us are feeling some cognitive dissonance when it comes to the real impact of central bank announcements, economic forecasts and political changes.

Bail-In Regime Cometh

…click on the above link to read the rest of the article…

Merkel Says No Aid for Deutsche Bank; Depositor Bail-In Coming Up?

September 24, 2016

Merkel Says No Aid for Deutsche Bank; Depositor Bail-In Coming Up?

The €72 trillion (notional) derivatives mess known as Deutsche Bank remains under severe pressure. It’s market cap is $17.43 billion. It has no earnings and pays no dividend.

On April 23, Deutsche Bank was Fined $2.5 Billion over LIBOR rate rigging. Twenty-one people face criminal charges following a seven-year investigation.

On September 16, the US Department of Justice Fined Deutsche Bank $14B for mortgage securities fraud leading up to the 2007-2009 global meltdown.

Today, German Chancellor Angela Merkel Rules Out Assistance for Deutsche Bank.

No Comment

Chancellor Angela Merkel has ruled out any state assistance for Deutsche Bank AG in the year heading into the national election in September 2017, Focus magazine reported, citing unidentified government officials.

The German leader also declined to step into the Frankfurt-based bank’s legal imbroglio with the U.S. Justice Department, which may seek as much as $14 billion in sanctions against Deutsche Bank’s mortgage-backed securities business, the magazine said. A German government spokesman declined to comment on the report Saturday. A Deutsche Bank spokeswoman also wouldn’t comment.

Understanding the Fine

The Guardian reports $14bn Deutsche Bank Fine – All You Need to Know.

The prospect of a $14bn penalty from the US Department of Justice has rattled investor confidence in Deutsche. The penalty aims to settle allegations, dating back to 2005, about the way the bank selected mortgages, packaged them into bonds and sold on to investors. These bonds are known as residential mortgage-backed securities (RMBS).

Can Deutsche Afford the Bill?

Deutsche Bank has been quick to describe the fine as an “opening position” from Washington. It is easy to see why. It would be one of the largest ever fines levied by the US. It could also strain the bank’s finances. For 2015, the bank reported its first annual loss since 2008 and could be heading for another loss this year regardless of the threatened justice department fine.

…click on the above link to read the rest of the article…

Monte Paschi Rescue On The Rocks: Regulators Now “Expect Bank To Ask Italy For Bailout”

September 22, 2016

Monte Paschi Rescue On The Rocks: Regulators Now “Expect Bank To Ask Italy For Bailout”

Ever since two months ago, when Italy’s third largest bank – and the world’s oldest – Sienna’s Monte dei Paschi, failed Europe’s latest stress test, it had scrambled, and assured markets, that it would obtain a private sector cash injection, aka bailout, amounting to roughly €5 billion in fresh capital, there was significant speculation in the Italian press that the capital raise was not going well as third party investors were uncomfortable to allocate funds to a bank whose history of failure and unprecedented bad NPL book remained a daunting obstacle. The reason why Monte Paschi was forced to seek a private sector bailout is that Germany had repeatedly shut down Italian PM Matteo Renzi’s attempts to pursue a public sector bailout. Instead, the Germans demanded that instead of a public sector bailout the bank should implement a bail-in, and impair various liabilities, which however could result in another bout of public anger, due to the substantial retail investment in the bank’s unsecured bonds, perhaps culminating with a run on the bank.

In any case, there was little news about BMPS’ ongoing bailout plan, and now we know why: according to Reuters, European regulators expect Italian bank Monte dei Paschi di Siena will have to turn to the government for support, although Rome – as expected – would strongly resist such a move if bondholders suffered losses. Making matters worse, in the first half of 2016 much of the public’s attention had focused on the infamously unstable Italian banks, of which Monte Paschi was the weakest link, and as such the reemergence of solvency concerns involving the Italian lender could potentially reignite fears about the broader banking sector even as the Italian referendum due sometime in late October or November, gets closer.

…click on the above link to read the rest of the article…

George Friedman: Italy Is the Mother of All Systemic Threats

September 17, 2016

George Friedman: Italy Is the Mother of All Systemic Threats

Italy has been in a crisis for at least eight months, though mainstream media did not recognize it until July. This crisis has nothing to do with Brexit, although opponents of Brexit will claim it does. Even if Britain had voted to stay in the EU, the Italian crisis would still have been gathering speed.

The high level of non-performing loans (NPLs) has been a problem since before Brexit. It is clear that there is nothing in the Italian economy that can reduce them. Only a dramatic improvement in the economy would make it possible to repay these loans. And Europe’s economy cannot improve drastically enough to help. We have been in crisis for quite a while.

Banks were simply carrying loans as non-performing that were actually in default and discounting the NPLs rather than writing them off. But that only hid the obvious. As much as 17 percent of Italy’s loans will not be repaid. This will crush Italian banks’ balance sheets. And this will not only be in Italy.

Italian loans are packaged and resold, and Italian banks take loans from other European banks. These banks in turn have borrowed against Italian debt. Since Italy is the fourth largest economy in Europe, this is the mother of all systemic threats.

Bail-Ins, Not Bail Outs

The only way to help is a government bailout. The problem is that Italy is not only part of the EU, but part of the eurozone. As such, its ability to print its way out of the crisis is limited. In addition, EU regulations make it difficult for governments to bail out banks.

The EU has a concept called a bail-in, which means the depositors and creditors to the bank will lose their money.

…click on the above link to read the rest of the article…

The War on Savings: The Panama Papers, Bail-Ins, and the Push to Go Cashless

April 11, 2016

The War on Savings: The Panama Papers, Bail-Ins, and the Push to Go Cashless

Exposing tax dodgers is a worthy endeavor, but the “limited hangout” of the Panama Papers may have less noble ends, dovetailing with the War on Cash and the imminent threat of massive bail-ins of depositor funds.

The bombshell publication of the “Panama Papers,” leaked from a Panama law firm specializing in shell companies, has triggered both outrage and skepticism. In an April 3 article titled “Corporate Media Gatekeepers Protect Western 1% From Panama Leak,” UK blogger Craig Murray writes that the whistleblower no doubt had good intentions; but he made the mistake of leaking his 11.5 million documents to the corporate-controlled Western media, which released only those few documents incriminating opponents of Western financial interests. Murray writes:

Do not expect a genuine expose of western capitalism. The dirty secrets of western corporations will remain unpublished.

Expect hits at Russia, Iran and Syria and some tiny “balancing” western country like Iceland.

Iceland, of course, was the only country to refuse to bail out its banks, instead throwing its offending bankers in jail.

Pepe Escobar calls the released Panama Papers a “limited hangout.” The leak dovetails with the attempt of Transparency International to create a Global Public Beneficial Ownership Registry, which can collect ownership information from governments around the world; and with UK Prime Minister David Cameron’s global anti-corruption summit next month. According to The Economist, “The Panama papers give him just the platform he needs to persuade other governments, and his own, to turn their tough talk of recent years into action.”

The Daily Bell suspects a coordinated global effort linked to the push to go cashless. It’s all about knowing where the money is and who owns it, in order to tax it, regulate it, “sanction” it, or confiscate it:

…click on the above link to read the rest of the article…

Let The Bail-Ins Begin

January 16, 2016

Let The Bail-Ins Begin

Portugal is starting to bail-in banks. The fascinating aspect that nobody seems to see is that this is a total failure of socialism. The U.S. Federal Reserve was formed in 1913, with the shareholders being the banks, to provide the cash needed to prevent bank failures. To stimulate the economy when the banks could not or would not lend, the Fed was supposed to buy CORPORATE notes. Then World War I came and the politicians ordered the Fed to buy government bonds. Of course, they never returned the Fed to its original purpose.

FDR usurped the Fed, placed it in Washington, and instituted a single national interest rate; each of the branches maintained a different interest rate to attract capital when there were shortages in one district. So it was common to see rates differ around the country based upon the local economic conditions. FDR also created the FDIC because the Fed failed to function during the Great Depression. The creation of the FDIC was sparked by bankers who were willing to let a New York bank fail in 1930 that happened to be named THE BANK OF THE UNITED STATES. Bank runs began nationwide as people assumed that this Bank of the United States was the government or Federal Reserve. The Bank of the United States was a Jewish banks and the other bankers wanted it to fail to get its business. When it was settled, the Bank of the United States eventually paid out 92 cents on the dollar.

Note: The blue tags show the start of when that issue was used in the index and do not reflect the date relative to the chart. Upon that issue date, the bond expired.

Then, for World War II, FDR ordered the Fed to support the U.S. bond market at PAR. Therefore, bonds rose during the war because of this support ordered by FDR.

…click on the above link to read the rest of the article…

With

“Bail-ins Begin”: Interviews with Greg Hunter and Thom Hartmann

January 10, 2016

“Bail-ins Begin”: Interviews with Greg Hunter and Thom Hartmann

My Dec. 29th article “Bail-ins Begin” prompted two video interviews, with Greg Hunter on USAWatchdog.com, and Thom Hartmann, below.

The EU Bail-In Directive: Dark Clouds are Gathering

January 10, 2016

The EU Bail-In Directive: Dark Clouds are Gathering

Portugal’s Rickety Banking System

After the unseemly bankruptcy of the Espirito Santo Group and the associated bank, then Portugal’s second biggest (likely a result of not praying enough, see: “Big Portuguese Bank Gets Into Trouble” and “Fears Over Banco Espirito Santo Escalate” for the gory details), Portugal’s state-run deposit insurance fund basically ran out of money.

It turns out that Europe’s new Bank Recovery and Resolution Directive (BRRD for short) came just in time for Portugal. At the end of 2015, another Portuguese bank bit the dust, the country’s seventh largest lender by assets, Banif. Portugal’s government once again decided to bail the bank out, but with strings attached. Subordinated bondholders and shareholders were essentially wiped out, which is as it should be.

Banif SA, weekly. Although this is hard to see on this linear chart, the stock rose by 40% today, to €0.002. Shareholders are allegedly planning to throw a wild party in Lisbon over the weekend (we were unable to confirm this rumor) – click to enlarge.

Senior bondholders and depositors were spared however, with Portugal’s overburdened taxpayers once again footing the bill. According to the FT:

Portugal has agreed a €2.2bn state rescue for Banco International do Funchal (Banif), splitting the Madeira-based lender into “good” and “bad” banks and selling its healthy assets to Spain’s Santander for €150m in the country’s second bank bailout in less than 18 months.

António Costa, Portugal’s new socialist prime minister, said the bailout would involve “a high cost for taxpayers” but had the advantage of being “a definitive solution”. Branches would open normally on Monday, he said. The rescue, which “bails in” shareholders and subordinated creditors, follows the €4.9bn bailout in August last year of Banco Espírito Santo, once Portugal’s largest listed bank, whose healthy assets, split off into Novo Banco, remain unsold.

…click on the above link to read the rest of the article…

Brave New World of Bank Bail-Ins As Of January 1st

January 5, 2016

Brave New World of Bank Bail-Ins As Of January 1st

On January 1st, 2016, the new bail-in regime became law putting at risk the deposits of savers and companies in the EU.

EU countries join the UK, the U.S., Canada, Australia and New Zealand in having plans for bail-ins in the event of banks and other large financial institutions getting into difficulty. It is now the case that in the event of bank failure, personal and corporate deposits could be confiscated.

The bail-in architecture was seen in the Cyprus bank bail-ins that were seen in 2003. Then, deposits of over €100,000 were confiscated in “haircuts” in order to bail out banks in Cyprus. Now the exact same principles that were used in Cyprus – which we were told was unique and a one off – are going to apply to all of Europe.

Bail-ins and the risks they pose have largely been ignored in most of the media. In one of the very few articles on bail-ins in recent days, Hugh Dixon of Reuters Breaking Views has looked at bail-ins but has focused on the “political risks” rather than that posed to savers and indeed company depositors:

The European Union entered a brave new world of bank “bail-ins” at the start of 2016. Europe has wasted so much taxpayers’ money on bailing out bust banks in recent years that it is right to try to get investors to help foot the bills in future. However, the tough new regime carries big political risks.

The article, ‘EU enters brave new world of bank bail-ins’, is interesting despite ignoring the financial and economic risk of bail-ins – they would likely be very deflationary in a world already beset by deflation – and can be accessed here
Download Our Must Read Bail-In Guides Here:

Protecting Your Savings In The Coming Bail-In Era

From Bail-Outs To Bail-Ins: Risks and Ramifications

The Catastrophic Threat of Bail-Ins

December 30, 2015

The Catastrophic Threat of Bail-Ins

It has now been more than two and a half years since the Cyprus Steal , the first “bail-in” perpetrated in the Western world, occurred. Before reviewing the history of this newest financial atrocity, it is necessary to define the terms.

The term “bail-in” describes a scenario in which a bank confiscates private property to indemnify itself for losses it has suffered. A bail-in is a totally lawless theft of assets, as there is no principle of law (of any kind) that could authorize such a seizure of private property. And in fact, there are many principles of law that demonstrate the lawlessness at work here. As with much of the financial crime jargon, “bail-in” is simply another gibberish euphemism like “quantitative easing” or “derivatives.”

As custodians of the financial assets of their clients, banks represent a form of trustee. The purpose of any trust relationship is to provide absolute security to the beneficiary of the trust (i.e., the legal owner of the property). Thus, one of the most fundamental principles of our legal system is non-encroachment regarding the property held in the custody of a trustee.

From a legal standpoint, it is like there is an invisible and impenetrable wall that surrounds the trust property. The only exceptions to this wall (ever) occur when the trust beneficiary makes a legal request for some disbursement or related transaction, when the trust itself directs some form of action (in the interests of the trust beneficiary), or when the trust allows the trustee to manage the trust assets on behalf of the beneficiary.

The idea of trustees using assets for their own benefit or (worse) claiming ownership of any trust assets represents one of the most serious forms of financial crime in Western civilization. Given this context, how did the government of Cyprus respond when its own Big Banks whined and claimed that they “needed” to confiscate deposits in order to pay off their own gambling debts? It meekly rubber-stamped the lawless theft.

…click on the above link to read the rest of the article…

You Will Soon Lose Everything You Own Unless You Act Now!

September 27, 2015

You Will Soon Lose Everything You Own Unless You Act Now!

“Conspiracy theorist”

Have you ever sat in a room and couldn’t figure out why people were laughing? They laughed and laughed and laughed as your curiosity grew and grew. And then, suddenly, you realized they were laughing at you! This is what is happening to all Americans. We have been robbed blind and we have scarcely noticed. Now, our very existence is being threatened and people laugh at you for talking about it as they call you a “conspiracy theorist”, “fear-monger” and “the purveyor of doom and gloom”.

I was roundly criticized when I said the Cyprus bail-in scenario was coming to the United States. I was told there would be a revolution if this happened and the government would be too afraid to try such a thing and that we would have 100 million Americans in the street who would be heavily armed.

Listening to these sheep is like listening to a country song played backwards. You know the song where the wife does not leave, the truck still runs and the cowboy stops drinking. Maybe it is all the fluoride in the water that is causing such widespread ignorance and apathy.

The globalists are preparing to steal everything you own, they have rehearsed for this day, they are on a timetable to carry this plot out and they are laughing at our collective stupidity!

The Beta Tests for the “Grand Theft of the American People” Are Complete

The American people have been through several beta tests related to our private wealth being confiscated and no resistance was offered by the sheep of this country.

…click on the above link to read the rest of the article…

Cash Withdrawal Limits and “Bank Holidays” Coming

September 13, 2015

Cash Withdrawal Limits and “Bank Holidays” Coming

Concerns that next crisis may be imminent
Bail-ins, withdrawal limits and negative interest rates may be imposed
FT proposes a ban on “barbarous relic” cash
Central banks would have people “completely under their control” – Bonner
Gold in safe jurisdictions will again protect wealth

Collapsing commodities prices, erratic market turmoil and the bursting of Chinese bubbles are leading to a crisis in confidence in the economic system across the globe. The long-expected crisis to which the global financial and systemic crisis in 2008 may have been a mere prelude may be upon us.

Governments have no appetite for further bailouts. The EU states have passed legislation which will make the banks or rather unfortunate and unsuspecting depositors liable for the bank’s lending and speculative profligacy.

It is claimed that this is to “protect” the taxpayer. In reality it will likely lead to bail-ins – the confiscation of deposits. It is likely that that in a crisis within the banking system this bail-in mechanism would be imposed on an impromptu “bank holiday” followed by limits on cash withdrawals as were applied in Cyprus and more recently to depositors in Greece.

As has been pointed out by many other analysts, the unelected powers-that-be have used all their conventional weaponry to stave off the consequences of their irresponsible ultra loose monetary policies and massive buildup of debt globally – the largest ever seen in the history of the world.

The typical response to a crisis has been to slash rates from somewhere around 6% – the historic post war norm in the west – to between 0% and 1%. This has stored up an even crisis in the future – the question is not if we have another crisis but when.

…click on the above link to read the rest of the article…

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