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Friday, June 21, 2013

More haircuts on the way

I'm a little surprised at Mr. Evans-Pritchard's dismay.  What else did he expect?
Another shameful day for Europe as EMU creditor states betray South.
So much for the denials. The Cyprus "template" for banking crises is to be eurozone policy for other countries after all.
Don't be complacent if you're on the other side of the Atlantic.  The same "bail-ins" are coming to the USA too.  In fact, two have already taken place there, compared to the one in Cyprus.  It's already been determined by the courts that "your" money in the bank is not yours, it is merely an unsecured loan you have made to the bank... for what is effectively a negative interest rate.

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32 Comments:

Anonymous Cederq June 21, 2013 4:08 PM  

Vox, do you have a estimate to when this might occur in the US at blatantly as the Cyprus haircut?

Blogger Nate June 21, 2013 4:11 PM  

So...if your money is in the bank... they can take it whenever they want..

if your money is in your residence... they can charge you with money laundering.

Land of the Free!

Anonymous Cederq June 21, 2013 4:14 PM  

Only thing to do then is bury it in the yard like grandpa did with his money and gold when that was confiscated back in his day.

Anonymous Woeuro June 21, 2013 4:18 PM  

When was that determined by the courts?

Blogger El Borak June 21, 2013 4:21 PM  

Evans-Pritchard has been around for many years and has many times shown genuine insight into subject both political and financial. How can he be such a naif as to take the bleatings of politicians seriously? Sometimes I wonder if journalists are stupid enough to be genuinely surprised at all the things they express surprise about, or if they are so uncreative as to unable to affect a different emotion.

Anonymous Daniel June 21, 2013 4:29 PM  

Already has Cederq. It will merely increase in intensity, a la birth pangs. They've certainly started already. Just try withdrawing something as small as $5000 in cash from your local bank. Just don't be surprised when Jimmy Stewart comes running out to tell you that it just happens to be in your neighbor's business (when he really means his drunk uncle lost it).

I tried to drain one single account of around that much several months ago. The guy who came out to talk to me actually looked like a young Jimmy Stewart. He stuttered like him too, especially when I start to ask the unfriendly questions.

Anonymous aviendha June 21, 2013 4:30 PM  

If you have money in a bank, you are giving the bank an unsecured loan at a negative interest rate which the banks have an IOU that holds as long as they are solvent (factor inflation).

Theft has already happened in the US.
Look at MF Global.
Look at Peregrine/PFG Best.
Look at when when money market funds broke the buck in '08.

Keep your money out of the banks, at the very least go credit union and then just what you need for bills.

Good luck

Anonymous JartStar June 21, 2013 4:40 PM  

The irony is that the safest place for large amounts of cash may be in non-retirement equity and/or bond accounts. It's possible, but unlikely that the government will try to confiscate money from these accounts due to the difficulty involved.

Nobody I read thought they'd go right after the cash of bank creditors, but here we are in the Fourth Ring.

Here's a link to the actual pdf. I'm not seeing the €100,000 limit but creditors are mentioned in the pecking order.

Anonymous VD June 21, 2013 4:45 PM  

When was that determined by the courts?

It goes back to 18th century England and the Bank of England. But you can see it reiterated in the MF Global case last year.

Blogger RobertT June 21, 2013 4:53 PM  

A few years ago there was a bill sitting in committee in the U.S. Senate that would seize all retirement accounts, including 401(k)'s, IRA's and presumably even Roth IRA's. A vote in committee would send it to the Senate floor. I mentioned a rumor to this affect in a newsletter and two clients sent me copies of letters from their Senators affirming the bill's existence but stating they would never vote for it. One was a Republican and one was a Democrat. Whether it's still sitting there, I have no idea.

Anonymous Noah B. June 21, 2013 5:09 PM  

@RobertT

The only logical assumption is that it's still there. When the right emergency comes along, they'll pass that and 500 other laws from their wish list with the same suddenness with which they passed the Patriot Act and TARP.

Anonymous Noah B. June 21, 2013 5:12 PM  

Naturally, when that day comes, they won't admit that they're raiding private accounts to continue funding the ridiculous excesses of government. They'll say they're saving the retirement system from systemic failure. Because the cost of doing nothing is simply unaffordable.

Anonymous JartStar June 21, 2013 5:14 PM  

When the right emergency comes along, they'll pass that and 500 other laws from their wish list with the same suddenness with which they passed the Patriot Act and TARP.

If the big crash happens then you are going to get hit regardless of what you do now. The focus now is to limit the hit through diversification across many asset classes.

Anonymous Noah B. June 21, 2013 5:19 PM  

Diversification is important. You don't want all .308, you'll probably want some .22LR for small game and other light duty stuff.

Anonymous JW June 21, 2013 5:22 PM  

There is a book called "The History Of Money", I think from Mises. One common theme since the first US central bank, through the second US central bank, other federal banks, and numerous state chartered banks is that banks cannot be trusted, they screwed their customers over and over again; the banks promised to pay withdrawals in specie (gold/silver) but rarely did. They negotiated with customers to take a fraction of their deposits, or to take money created by the bank instead of specie, or governments would step in to protect the bank from lawsuits. Things have not changed much over the past two hundred years.

Blogger Nate June 21, 2013 5:22 PM  

Y'all hear Zimmerman got an all female jury?


bet he's gonna be calling for a Miss Trial.

Anonymous FUBAR Nation Ben June 21, 2013 5:23 PM  

Keep some gold silver, and cash out of the banking system (that includes bank safe deposit boxes). The bastards can't be trusted.

Anonymous Noah B. June 21, 2013 5:35 PM  

"Y'all hear Zimmerman got an all female jury?"

One word of advice, George: cry.

Anonymous Noah B. June 21, 2013 5:36 PM  

Oh, and kiss your wife so that the jury can see, but don't make it too obvious.

Anonymous John June 21, 2013 5:37 PM  

Speaking of the markets being rigged........

http://finance.yahoo.com/news/the-last-mystery-of-the-financial-crisis-154447818.html;_ylt=Am._nfp4Kjc45XNmSaFju8GcVOV_;_ylu=X3oDMTIzMHByMG5uBG1pdANIQ01PTCBvbiBhcnRpY2xlIHJpZ2h0IHJhaWwEcGtnA2lkLTMzNjE0OTkEcG9zAzQEc2VjA2hjbQR2ZXIDMTE-;_ylg=X3oDMTBhYWM1a2sxBGxhbmcDZW4tVVM-;_ylv=3

Anonymous Cederq June 21, 2013 5:40 PM  

Daniel> So, what you and Vox are saying "Abandon all hope ye that enter here, or stay here." Sobering and quite scary.

Blogger Nate June 21, 2013 5:44 PM  

Daniel... you want to see them stutter? Try asking for your 40k... in cash.

Anonymous Huckleberry - est. 1977 June 21, 2013 5:50 PM  

Y'all hear Zimmerman got an all female jury?


bet he's gonna be calling for a Miss Trial.


Better to be tried by 12 than carried by six.
Wait, the jury is six chicks?
Hell.
Honest question, though, would the plot of 12 Angry Men have been as compelling if it were Six Cranky Women?
I'm guessing no, what with all the biting silence and furtive glances...

Anonymous Daniel June 21, 2013 6:00 PM  

Daniel... you want to see them stutter? Try asking for your 40k... in cash.

Did you actually do that, Nate? That's a riot. No way would I want to spend my afternoon that amused. I just chunked down the accounts 5 at a time, so I only had to explain the traditional theory of deposits to Jimmy over and over again, rather than having to bring up Old Man Potter on charges of buggery.

I'm a two-bit hood, not a kingpin, and I'm not a mason, either. So you clearly have me at an advantage when it comes to hassling bankers (for your own doggone money!). Good for you, though. My guess is that the tellers dropped their underthings and the manager dropped a load when they all realized you were serious.

Did they have to send a guy out to rob 20 other banks just to settle with you?

Blogger Nate June 21, 2013 6:24 PM  

it was a fun time. but I would be a liar if I said things didn't get a little sideways.

I may have asserted that I should be legally considered a bank because I kept more cash on hand than they do.

Anonymous Wanderer June 21, 2013 10:13 PM  

Add to that the Unafordable Care Act:

http://globaleconomicanalysis.blogspot.com/2013/06/obamacare-effects-hit-local-governments.html

Oh, and don't forget riots in Brazil:

http://globaleconomicanalysis.blogspot.com/2013/06/violence-erupts-in-brazil-fatalities.html

Anonymous Wanderer June 21, 2013 10:15 PM  

"Diversification is important. You don't want all .308, you'll probably want some .22LR for small game and other light duty stuff."

Ohhh, is that what you mean by a diversified portfolio.

Anonymous zen0 June 22, 2013 1:10 AM  

Mr. Evans-Pritchard's dismay.

This is both a title of some epic literary exposition, or a good line in a blues song.

Anonymous sprach von Teufelhunden June 22, 2013 1:25 AM  

How far do we have to reach to connect the dots?

Yes, it is ALL about Banking.

Corpocracy = Conspiracy = Banks (Too Big to Fail)

However, you “ain’t seen nothin yet!”

Anonymous zen0 June 22, 2013 1:50 AM  

@ spake the devil hound

Chill

There are always more dots.

Anonymous gwood June 22, 2013 9:31 AM  

"Diversification is important. You don't want all .308, you'll probably want some .22LR for small game and other light duty stuff."
True diversification means having both .308 and 7.62X54R.

Anonymous sprach von Teufelhunden June 22, 2013 4:26 PM  

@zenO

I challenge you to tell Harris and Dr. James et al to ................ chill

See what kind of response you get. Understand, they have far more access than you do. There are far too many dots to connect. And, you don't need all of them. Otherwise, as Duff quips, you are probably "too stupid to live."

Put that in your pipe, and smoke it ...

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