Bailout

ECB Proposes End To Deposit Protection

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“Savers should be looking for means in which they can keep their money within instant reach and their reach only.“

– Protect Your Savings With Gold: ECB Propose End To Deposit Protection:

– Protect Your Savings With Gold: ECB Propose End To Deposit Protection
– New ECB paper proposes ‘covered deposits’ should be replaced to allow for more flexibility
– Fear covered deposits may lead to a run on the banks
– Savers should be reminded that a bank’s word is never its bond and to reduce counterparty exposure
– Physical gold enable savers to stay out of banking system and reduce exposure to bail-ins

It is the ‘opinion of the European Central Bank‘ that the deposit protection scheme is no longer necessary:

‘covered deposits and claims under investor compensation schemes should be replaced by limited discretionary exemptions to be granted by the competent authority in order to retain a degree of flexibility.’

To translate the legalese jargon of the ECB bureaucrats this could mean that the current €100,000 (£85,000) deposit level currently protected in the event of a bail-in may soon be no more. But worry not fellow savers, as the ECB is fully aware of the uproar this may cause so they have been kind enough to propose that:

“…during a transitional period, depositors should have access to an appropriate amount of their covered deposits to cover the cost of living within five working days of a request.”

So that’s a relief, you’ll only need to wait five days for some ‘competent authority’ to deem what is an ‘appropriate amount’ of your own money for you to have access to in order eat, pay bills and get to work.

Read moreECB Proposes End To Deposit Protection

The Bailout Legislation Begins Before The System Collapses – First Power Grid Drill, Now A Biological Attack Drill, What’s Next?

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https://youtu.be/FVtTOM6wYZ8

https://youtu.be/r8F6H2NLLXM

H/t reader squodgy:

“The positive bubbling of activity is palpable, unsustainable, ethereal and really worrying. People are spending, especially as Christmas approaches.
The employment facts, core inflation and general economy truths are being successfully hidden.
But in my humble opinion, it only serves to fog up the coming train wreck which only makes it worse for when it happens.

By hiding the reality, the Rothschilds and their obedient mainstream media are herding the sheep over the cliff, which will simply prove their empathy for the suffering their massive debt bomb is creating.”

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Italy’s Monte Paschi Told To “Prepare For State Bailout”

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– Italy’s Monte Paschi Told To “Prepare For State Bailout”:

Bankers are running out of private-sector solutions for Monte dei Paschi di Siena and have told the Italian lender to prepare for a state bailout this weekend after prime minister Matteo Renzi was felled by a referendum defeat.

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Handelsblatt: “Deutsche Bank May Ultimately Need A State Bailout”

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And again …

Deutsche is to big to save, thanks to former CEO, Bilderberg & Rothschild puppet Josef Ackermann.

Josef Ackermannjosef-ackermann

Continue to prepare for collapse, the greatest financial/economic collapse in world history, accompanied by hyperinflation, civil war and revolution.

– “Deutsche Bank May Ultimately Need A State Bailout” – Handelsblatt:

While the most recent set of troubles plaguing Deutsche Bank have been duly documented here, most recently yesterday when the stock price tumbled once again just shy of all time lows over fears the bank’s multi-billion DOJ settlement could severely impact its liquidity and/or solvency, this may be the first time we have heard the “n“-word tossed around in an official German publication: as Germany’s top financial newspaper, Handelsblatt said, “German financial officials reacted with shock and dismay to the leaking of a U.S. government demand for a $14 billion fine against Deutsche Bank, which may ultimately need a state bailout to pay the bill.”

Some more details from the article titled “Deutsche Bank in New Existential Crisis“:

Read moreHandelsblatt: “Deutsche Bank May Ultimately Need A State Bailout”

First Italy, Now Portuguese Banks “Unexpectedly” Need A Taxpayer Bailout

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Portugal-flag

– First Italy, Now Portuguese Banks “Unexpectedly” Need A Taxpayer Bailout:

Portuguese banks, already undercapitalised and loaded with bad debt, are bracing for heavy losses from Lisbon’s so far unsuccessful attempts to sell Novo Banco, the lender salvaged from the collapse of Banco Espírito Santo.

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Italy Granted “Extraordinary ” €150 BILLION Bank Bailout Program To Prevent “Panic, Run On Deposits”

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Italy

“Needless to say, for Italy’s Prime Minister to be contemplating how to avoid “investor panic” and prevent a “run on deposits“, then Italian banks must truly be on the verge of collapse.”

– Italy Granted “Extraordinary ” €150BN Bank Bailout Program To Prevent “Panic, Run On Deposits”:

As we noted today, the rumors of an Italian bank bailout, which started on Monday morning, and were promptly shot down by Merkel the next day, got louder today after a Reuters report that the government is considering more creative ways to inject liquidity into Italy’s banks. However that was just an appetizer to a main course, which came later today when as the WSJ reported citing a spokeswoman for the European Union’s executive arm that the “European Commission has authorized Italy to use government guarantees to create a precautionary liquidity support program for their banks.”  

How did this happen so quietly under the table and without Merkel’s blessing? WSJ says that the program was approved under the bloc’s “extraordinary crisis rules for state aid.”

And here we thought that Italy’s banks are actually doing so very well.  Oh wait, no we didn’t.

Read moreItaly Granted “Extraordinary ” €150 BILLION Bank Bailout Program To Prevent “Panic, Run On Deposits”

Republicans, Democrats Agree On A Bill To Bailout Puerto Rico

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Republicans, Democrats Agree On A Bill To Bailout Puerto Rico

– Republicans, Democrats Agree On A Bill To Bailout Puerto Rico:

It turns out that Puerto Rico’s plan to default on its debt and beg congress for help is working out as planned.

After a slight delay, House Republicans have reached an agreement with the Obama administration to provide a path to restructure Puerto Rico’s $70 billion debt load. The bill would offer the island a legal out similar to bankruptcy and wouldn’t commit any federal money according to the WSJ.

Read moreRepublicans, Democrats Agree On A Bill To Bailout Puerto Rico

No deal: Greece-EU bailout talks break down, Athens given 1 week ultimatum

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20150216_EU2

– No deal: Greece-EU bailout talks break down, Athens given 1 week ultimatum (RT, Feb 16, 2015):

The eurozone has given Greece an ultimatum of one week to request an extension of its bailout deal, as Athens turned down the offer dubbing it “absurd” and “unreasonable”. Greece’s finance minister said they were ready to sign – but something different.

But despite not reaching a deal, Greece Finance Minister Varoufakis insisted Athens is “ready and willing” to reach a deal and that he is confident of reaching one in 2 days, he said in statement after the talks.

“We were offering to refrain effectively from implementing our own program for a period of six months and all we were getting back was a nebulous promise of some flexibility that was never specified,” Varoufakis said.

Read moreNo deal: Greece-EU bailout talks break down, Athens given 1 week ultimatum

Italy Unveils Most Bizarre Bank Bailout Yet

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italy bailout_0

– Italy Unveils Most Bizarre Bank Bailout Yet (ZeroHedge, Feb 1, 2014):

The biggest problem facing European banks – one we highlighted most recently yesterday when we showed the latest 20% surge in Spanish Banco Popular Non-Performing Loans to a fresh record – and one we have been covering since 2010, which as of 2012 amounted to some $4.5 trillion that needs to be “remedied” – is the staggering amount of bad debt on the books of Europe’s numerous banks, the bulk of which especially in the periphery are cojoined with their sovereign host in an unbreakable bond which despite Europe’s theatrical attempts to sever, only keeps getting stronger.

Read moreItaly Unveils Most Bizarre Bank Bailout Yet

Prof. Michel Chossudovsky: Shutdown Of US Govt & ‘Debt Default’: Dress Rehearsal For Privatization Of Federal State System?

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The U.S. Capitol looms in the background of a sign on the National Mall reminding visitors of the closures to all national parks due to the federal government shutdown in Washington October 3, 2013. (Reuters/Kevin Lamarque)

Michel Chossudovsky is an award-winning author, professor of economics, founder and director of the Centre for Research on Globalization, Montreal and editor of the globalresearch.ca website.

– Shutdown of US govt & ‘debt default’: Dress rehearsal for privatization of federal state system? (RT, Oct 15, 2013):

By Michel Chossudovsky

The ‘shutdown’ of the US government and the financial climax associated with a deadline date, leading to a possible ‘debt default’ by the federal government, is a money-making undertaking for Wall Street.

Several overlapping political and economic agendas are unfolding. Is the shutdown – implying the furloughing of tens of thousands of public employees – a dress rehearsal for the eventual privatization of important components of the federal state system?

A staged default, bankruptcy and privatization is occurring in Detroit (with the active support of the Obama administration), whereby large corporations become the owners of municipal assets and infrastructure.

The important question: could a process of ‘state bankruptcy’, which is currently afflicting local level governments across the land, realistically occur in the case of the central government of the United States of America?

This is not a hypothetical question. A large number of developing countries under the brunt of  IMF ‘economic medicine’ were ordered by their external creditors to dismantle the state apparatus,  fire millions of public sector workers as well as privatize state assets. The IMF’s Structural Adjustment Program (SAP) has also been applied in several European countries.

Read moreProf. Michel Chossudovsky: Shutdown Of US Govt & ‘Debt Default’: Dress Rehearsal For Privatization Of Federal State System?

Warren Buffett’s Bailout Bonanza

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– Buffett’s Bailout Bonanza (ZeroHedge, Oct 7, 2013):

In the past we have tried to show the growing divide between the haves and the have-nots in the US. Whether through this morning’s “aggregate” Main Street vs Wall Street chart or various anecdotal indicators of diverging confidence. However, no one signifies the beneficiaries of the status-quo-sustaining government bailouts and stimulus better than Warren Buffett (who now, like Obama, sees stocks are full valued). The following chart shows just how well one can do with a few billion in your pocket and an ear for what the Government will do.

Janet Tavacoli: Why Obama Allowed Bailouts Without Indictments

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From the article:

The government’s bailout plan destroyed capitalism. In a capitalist system, those who stood to gain–and already made off with large gains—would have to bear the risk. The bailouts represented a corruption of capitalism. Crony capitalism violates the spirit of democracy established by the Founding Fathers of the republic known as the United States. I expressed these sentiments in a letter to the Financial Times on September 29, 2008.

– Why Obama Allowed Bailouts Without Indictments (Tavacoli Structured Finance, Sep 10, 2013):

By Janet Tavacoli

In November 2008, President Obama was elected, and he was sworn in January 2009. The country was promised change and reform. Recently two democrats close to the top of President Obama’s administration made excuses to me for the lack of financial reform in the United States. Their separately related versions were remarkably similar, so similar they seemed scripted:

The administration made a bargain, and I’m not sure it was the right decision. The world was teetering on the edge of collapse. There was a crisis of confidence. There would have been unimaginable consequences. So bad even your imagination can’t handle the truth?

Read moreJanet Tavacoli: Why Obama Allowed Bailouts Without Indictments

Cyprus 37.5% Depositor Haircut Upgraded To 47.5% Brazilian Wax

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– Cyprus 37.5% Depositor Haircut Upgraded To 47.5% Brazilian Wax (ZeroHedge, July 29, 2013):

Once upon a time (in April), a few weeks after reversing its initial disastrous decision to haircut all deposits (including insured ones) the Troika slammed large Cypriot depositors (read evil Russian oligarchs) with a “bail-in” template, soon coming to all insolvent European nations, that included not only a forced assignment of equity in broke Cypriot banks, but far more importantly a haircut that amounted to 37.5% of deposits over €100,000. Since then a few things have happened in Cyprus, neither of them good, i.e., an a record collapse in bank deposits despite capital controls and a record crash in the local real estate market.The confluence of both these events meant that as bank liabilities shrank (deposits), asset fair values (home mortgages) collapsed even faster. Which, as we warned in March, would entail bigger and more aggressive deposit haircuts, and ultimately: another bailout of Cyprus (something the president floated but promptly denied upon rejection by Merkel ahead of her September elections). Today, we learn that while the inevitable next bailout of Cyprus is still on the table, the deposit “haircut” just upgraded to an aggravated Brazilian wax, as the 37.5% gentle trim initially proposed was revised to 47.5%.

InCyprus reports:

The Finance Ministry and the Troika appeared to be converging on an agreement on the haircut of uninsured deposits over 100,000 euros in the Bank of Cyprus at 47.5%.

Read moreCyprus 37.5% Depositor Haircut Upgraded To 47.5% Brazilian Wax

Obama To Detroit: ‘No Bailout For You’

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Related info:

– ‘I Refused To Let Detroit Go Bankrupt’ – Barack Obama, October 2012 (Video)

– Obama To Detroit: “No Bailout For You” (ZeroHedge, July 19, 2013):

While in the past President Obama has been more that willing to throw good money after bad and “refuse to let Detroit go bankrupt,” it seems when push comes to shove – under the intense scrutiny of a nation awash in scandal, a drastically bifurcated congress – that despite the imploring from local congressmen for “moar” already – that the savior of the city will not this time ride to the rescue on his white horse. In a statement, the White House said they “are monitoring the situation in Detroit closely,” with no hint – just as they have made clear for months – of any sort of Federal bailout. As USA Today notes, the federal government provided federal loans to prevent New York City from declaring bankruptcy during the 1970s. But times have changed; the federal government has debt and financial problems of its own, and a Detroit bailout could run into significant opposition in Congress and cause serious damage in the Muni market.

While the GM debacle put pensioners ahead of creditors, it would be unprecedentedly bad for the massive Muni bond market should Obama acquiesce and change the law once again to put pensioners ahead of GOs…

The White House statement on Detroit.

The president and members of the president’s senior team continue to closely monitor the situation in Detroit.

While leaders on the ground in Michigan and the city’s creditors understand that they must find a solution to Detroit’s serious financial challenge, we remain committed to continuing our strong partnership with Detroit as it works to recover and revitalize and maintain its status as one of America’s great cities.”

Translation: “sorry guys, you’re on your own on this one!”

EU: Investors To Pay For Bank Failures

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h/t by reader M.G.:

“Just saw this story on Rt.com. The new plan is for investors to rescue the crumbling banks. Brilliant. What a way to get people to stop using banks! It is beyond stupid, it is outright stealing. Here is the link. I am too angry to say any more right now. Damn these thieving bastards!”


Eurogroup President and Dutch Finance Minister Jeroen Dijsselbloem talks to journalists during a joint news conference with Portuguese Finance Minister Vitor Gaspar in Lisbon May 27, 2013.(Reuters)

– Investors to pay for bank failures – EU (RT, June 27, 2013):

European Union finance chiefs agreed Thursday investors and wealthy depositors will foot the bill for bank bailouts, in a break with the past convention of burdening taxpayers.

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.

Read moreEU: Investors To Pay For Bank Failures

Cyprus Bail-In Blows Up: President Urges Complete Bailout Overhaul (Full Letter)

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–  The Cyprus Bail-In Blows Up: President Urges Complete Bailout Overhaul (Full Letter) (ZeroHedge, June 18, 2013):

Cyprus’ President Nicos Anastasiades has realized (as we warned), too late it seems for the thousands of domestic and foreign depositors who were sacrificed at the alter of monetary union, that the TROIKA’s terms are “too onerous.” Anastasiades has asked EU lenders to unwind the complex restructuring and partial merger of its two largest banks leaving EU officials “puzzled”, according to a letter the FT has uncovered, as “essentially, he is asking for a complete reversal of the program.” The EU officials claim that the failure to prepare for the bailout’s impact was partially the fault of Mr Anastasiades’ government, which voted down a first agreed rescue before succumbing to a similar deal nine days later.

The FT goes on to note that although the letter does not request it explicitly, Mr Anastasiades is in effect asking for further eurozone loans on top of the existing EUR10bn sovereign bailout – something specifically ruled out by a German-led group of countries at the time. The return of beggars-can-be-choosers we presume – or just token gestures to recover some populist support as the enemy of my enemy is my friend.

As we noted here (and on the chart below), it seemed pretty obvious where this was going to end – obvious that is to everyone except Europe’s victory-claiming politicians.

It seems the ongoing flood of capital (despite controls) and collapse of the economy that we discussed here is occurring at ever increasing pace – and demanding even more gold be sucked out of their vaults…

“Unless Cyprus implements some controls that truly work, at this pace its entire banking system will be completely deposit-free in under one year. And it will need to sell much more than all its gold to continue keeping the Troika happy and in compliance with all the future (because there will be many more) bailouts.”

Read moreCyprus Bail-In Blows Up: President Urges Complete Bailout Overhaul (Full Letter)

Which Country Will Be Forced To Sell Its Gold Holdings Next ?

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– Which Country’s Gold Will Be Sold Next? (ZeroHedge, April 15, 2013):

The first time the Status Quo/Troika tried to force a (not so) stealthy gold confiscation on an insolvent European country was back in early 2012, when as part of the most recent Greek bailout MOU, it was disclosed that “Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal.” However, the public outcry was so loud that the Troika had no choice but to shelve its plans and proceed with a full scale bondholder restructuring instead. Fast forward to last week, when Europe’s appetite for physical gold came back with a bang, this time as part of the Cyprus “Debt Sustainability Analysis“, and subsequent comments from Mario Draghi, demanding that tiny Cyprus, whose opposition, already weakened by the confiscation of uninsured deposits would be far less vocal than Greece’s, sell off €400MM, or virtually all of its sovereign gold, over 10 of its 13.9 total tons, to cover the excess costs of its ever ballooning sovereign bailout.

Read moreWhich Country Will Be Forced To Sell Its Gold Holdings Next ?

Cyprus Bailout Size Increases By 35% In One Month To €23 Billion, 120% Of GDP

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– Cyprus Bailout Size Increases By 35% In One Month To €23 Billion, 120% Of GDP (ZeroHedge, April 11, 2013):

As was reported in the previously presented Cypriot Debt Sustainability Analysis, which among other things had this stunner inside of it, things in Cyprus have gone from bad to worse in the brief span of a month. 35% worse to be exact, because this is how much the total bailout of Cyprus has grown by in a few shorts weeks, from €17 to €23 billion, which happened because just as we predicted the stealth outflow from banks was much worse (read bigger) than previously reported, leaving banks with a far bigger hole to plug. This is problematic because at least previously the bailout as a percentage of GDP was in the double digits. No longer so, as the latest (and soon to be re-revised higher) bailout figure now stands at over 120% of the country’s €18.8 billion GDP (which itself is about to tumble following the collapse of the economy).

From the Guardian:

Crisis-hit Cyprus will be forced to find an extra €6bn (£5.1bn) to contribute to its own bailout under leaked updated plans for the rescue.

In total, the bill for the bailout has risen to €23bn, from an original estimate of €17bn, less than a month after the deal was agreed – and the entire extra cost will be imposed on Nicosia.

Read moreCyprus Bailout Size Increases By 35% In One Month To €23 Billion, 120% Of GDP

Here We Go: Cyprus To Sell €400 Million In Gold, About 75% Of Its Total Holdings, To Finance Part Of Its Bailout

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– Here We Go: Cyprus To Sell €400 Million In Gold, About 75% Of Its Total Holdings, To Finance Part Of Its Bailout (ZeroHedge, April 10, 2013):

Curious why every bank and their grandmother, and most recently Goldman today, has been lining up to push the price of gold as low as possible? Here’s why:

  • CYPRUS TO SELL 400 MLN EUROS WORTH OF GOLD RESERVES TO FINANCE PART OF ITS BAILOUT – TROIKA DOCUMENTS – RTRS

Or about 10 tons of gold. But… the bailout was prefunded and there was no need to provide any additional cash? What happened: was the deposit outflow discovered to have been even greater than the worst case scenario and thus Cyprus needed even more cash? As for the buyers? We will venture a guess: central banks buying at the lows.

Finally: congratulations Cypriots. You are now handing over your gold for the one time, unbeatable opportunity to remain a vassal state to the Eurozone. But at least you have your €.

The good news: Cyprus will have at least another 4 or so tons after selling the 10 demanded now, before the Troika kindly requests that Cypriot citizens sell a kidney or two to pay for the ongoing deposit outflow from its insolvent banks, and indirectly, the endless bailout of the Euro.

Visualizing The Cypriot Deposit Confiscation

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– Visualizing The Cypriot Deposit Confiscation (ZeroHedge, April 2, 2013):

From ‘why Cyprus could not bail out its banks’ to its failed financing needs and the road to confiscation, Demonocracy provides the ‘everything you wanted to know about Cyprus’ infograph ‘but were afraid to read’.

Via Demonocracy,

The big depositors will get hit harder than expected, because a lot of money left the banks right before the banks went into lock-down.

Cyprus’ Banks are the first during the last 147 banking crises that will not get a single Euro from EU to bail out the banks. Greek branches of Cyprus banks had €15 Billion in deposits, they were sold last minute to another bank, by so they will not be included in sharing the losses- obviously suspicious. Some people are offering depositors to get their money out of Cyprus for a 20% fee. Cyprus officials are throwing around slogans such as “time for responsibility‘ (to pay up) just to turn around a week later and oppose it.

With the lack of backbone, the next political move is rather unpredictable. EU officials say Cyprus is a unique case, but EU has many countries with over-sized banking sectors.

The crash of Cyprus financial sector and government bailout sentences Cyprus to a long period of recession and debt. The list of demands by EU to Cyprus for accepting the €10 billion bailout includes things such as freeze on pensions, massive tax increase on just about everything and more taxes.

For America: Bernanke Fails to Answer Concerns about a Cyprus-Style Seizure of American Bank Deposits

Ron Paul: ‘The Great Cyprus Bank Robbery’

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– The Great Cyprus Bank Robbery (Ron Paul, April 1, 2013):

The dramatic recent events in Cyprus have highlighted the fundamental weakness in the European banking system and the extreme fragility of fractional reserve banking. Cypriot banks invested heavily in Greek sovereign debt, and last summer’s Greek debt restructuring resulted in losses equivalent to more than 25 percent of Cyprus’ GDP. These banks then took their bad investments to the government, demanding a bailout from an already beleaguered Cypriot treasury. The government of Cyprus then turned to the European Union (EU) for a bailout.

Read moreRon Paul: ‘The Great Cyprus Bank Robbery’