Under the auspices of “protecting clients from criminal activity,” JPMorgan Chase has decided to impose withdrawal limits on certain ATM transactions. As WSJ reports, following the bank’s ATM modification to enable $100-bills to be dispensed with no limit, some customers started pulling out tens of thousands of dollars at a time. This apparent bank run has prompted Jamie Dimon to cap ATM withdrawals at $1,000 per card daily for non-customers. Continue reading
The Greek proposals included higher taxes and welfare charges and steps to curtail early retirement. This is simply more deflationary pressure that will crack Greece apart. However, Prime Minister Alexis Tsipras is not prepared to cut nominal pension or wage cuts first sought by lenders, which would more likely than not spark revolution. Tsipras was elected in January on a promise to end austerity measures, also appeared to have avoided raising value added tax on electricity or loosening job protection laws. He is not fulfilling the will of the people making his election highly questionable. He refuses to look at the Greek economy or the Euro. All he is doing is trying to now support Brussels over his own country – a VERY BAD MOVE. Continue reading
Made in Germany, and by design it will fail. The incoming Fourth Reich will see to it.
Europe will lead the world into this Economic Totalitarianism because government is now desperate to retain the Euro. If the Euro collapses, so will Brussels. The government exists solely because of the Euro.
The fatal design of the Euro is the key. The failure to have consolidated the debts of all individual member states has been the worst possible mistake perhaps ever made in this post-Great Depression era of New Economics where government lawyers assume they can just write a law and that will be followed as some new modern dictator. Continue reading
Here is a slightly surprising sign that Greece is in the classic throes of a bank run: car sales jumped by 47pc in April. It was the 20th consecutive month that car registrations of new and used vehicles has risen.
People living in a country gripped by financial turmoil often worry about the security of their money. If it’s in a bank, it can be caught up in capital controls and lost through insolvency. Better, then, to spend it. And the purchase of choice is often a car. Continue reading
The first time the phrase Emergency Liquidity Assistance, or ELA, was used in the context of Greece was in August 2011, when Greece was imploding, when its banking sector was on (and past) the verge of collapse, and just before the ECB had to unleash a global coordinated bailout with other central banks including global central bank liquidity swap and unleash the LTRO to preserve the Eurozone.
As a reminder, this is what happened back then: “In a move described as the “last stand for Greek banks”, the embattled country’s central bank activated Emergency Liquidity Assistance (ELA) for the first time on Wednesday night.”
“Although it was done discreetly, news that Athens had opened the fund filtered out and was one of the factors that rattled markets across Europe. At one point Germany’s Dax was down 4pc before it recovered. The ELA was designed under European rules to allow national central banks to provide liquidity for their own lenders when they run out of collateral of a quality that can be used to trade with the ECB. It is an obscure tool that is supposed to be temporary and one of the last resorts for indebted banks.” Continue reading
And he’s right about the FDIC having less funds available than what it needs to cover its obligations.
Last week I had over $1,000,000 in a checking account at Bank of America. Next week, I will have $10,000.
Why am I getting in line to take my money out of Bank of America? Because of Ben Bernanke and Janet Yellen, who officially begins her term as chairwoman on Feb. 1.
Before I explain, let me disclose that I have been a stopped clock of criticism of the Federal Reserve for half a decade. That’s because I believe that when the Fed intervenes in markets, it has two effects — both negative. First, it decreases overall wealth by distorting markets and causing bad investment decisions. Second, the members of the Fed become reverse Robin Hoods as they take from the poor (and unsophisticated) investors and give to the rich (and politically connected). These effects have been noticed; a Gallup poll taken in the last few days reports that only the richest Americans support the Fed. (See the table.) Continue reading
The European Union will seek on Friday to forge rules to force losses on large savers when banks fail, a sensitive reform that could shape how the euro zone deals with its sickly banks.
Finance ministers in Luxembourg will try to resolve one of the most difficult questions posed by Europe’s banking crisis – how to shut failed banks without sowing panic or burdening taxpayers. Continue reading
If the raid on Cypriot depositors and subsequent bank run could happen in Cyprus, it could happen in the rest of Europe, as demonstrated. If it can happen in Europe, it can also happen in America. In Cyprus’ case, it will take generations to recover.
The euro zone’s messy bailout of Cyprus caused a mini-run on banks in many of the currency union’s 17 members in April, exacerbating the decline in lending to the real economy, data from the European Central Bank showed Wednesday. Continue reading
When Angela Merkel – to cut out the middlemen – feels entitled to arrest the bank accounts of individuals and institutions in another country and help herself to 10 per cent of their deposits, then the rule of law has become a folk memory in German-occupied Europe. Is this what was meant by negative interest rates? The sheer irresponsibility of risking a bank run, not just in Cyprus but potentially in Greece, Spain, Portugal, Italy and everywhere else the dominoes might topple, betrays the stupidity of those shoring-up the deluded euro project. Continue reading
SD contributor AGXIIK warned readers months ago about the FDIC’s expanded deposit insurance which was set to expire Dec 31st, predicting that the expiring expanded deposit insurance enacted in the wake of the 2008 financial panic could trigger a bank run. Many scoffed at the report and its implications, due to the fact that the story received zero attention by the likes of Bloomberg, CNBC, or even ZH.
It appears that the expiring expanded FDIC insurance has in fact triggered a massive deposit withdrawal at the nation’s largest banks, as the Fed is reporting that $114 billion were withdrawn from the largest 25 US banks over the first week of January, the largest fund outflow since the 9/11 attacks, even exceeding the pace of the outflow during the 2008 financial panic! Continue reading
Suddenly, it has become easy to see how the euro — that grand, flawed experiment in monetary union without political union — could come apart at the seams. We’re not talking about a distant prospect, either. Things could fall apart with stunning speed, in a matter of months, not years. And the costs — both economic and, arguably even more important, political — could be huge.
Europe’s answer has been austerity: savage spending cuts in an attempt to reassure bond markets. Yet as any sensible economist could have told you (and we did, we did), these cuts deepened the depression in Europe’s troubled economies, which both further undermined investor confidence and led to growing political instability.
And now comes the moment of truth.
So now what? Right now, Greece is experiencing what’s being called a “bank jog” — a somewhat slow-motion bank run, as more and more depositors pull out their cash in anticipation of a possible Greek exit from the euro. Europe’s central bank is, in effect, financing this bank run by lending Greece the necessary euros; if and (probably) when the central bank decides it can lend no more, Greece will be forced to abandon the euro and issue its own currency again.
This demonstration that the euro is, in fact, reversible would lead, in turn, to runs on Spanish and Italian banks. Once again the European Central Bank would have to choose whether to provide open-ended financing; if it were to say no, the euro as a whole would blow up.
Full article: Apocalypse Fairly Soon (NY Times)
C. September 15th, 2008: $550 billion gone within hours.
While most were sleeping, the nation almost had the rug pulled out from under it.
Should active measures not have been taken by the Federal Reserve, within hours of the same day $5.5 trillion would’ve been drawn out of the market, instantly collapsing the entire US economy and sending the entire world into global collapse. This is something that actually happened and should serve as a warning to exactly how vulnerable and exposed our financial markets are to this type of attack. The American people must understand that it’s completely false to believe that we are living in a time of peace and prosperity when, in fact, the US is in a constant state of war.