Cyprus bail-out: savers will be raided to save euro in future crises, says eurozone chief

If it can happen in Cyprus, it can happen across more European nations as the EU and its ‘troika’ set a precedent by changing its own rules. What’s more is that if it can happen in Europe, it can happen in the United States.

Savings accounts in Spain, Italy and other European countries will be raided if needed to preserve Europe’s single currency by propping up failing banks, a senior eurozone official has announced.

The euro fell on global markets after Jeroen Dijsselbloem, the Dutch chairman of the eurozone, announced that the heavy losses inflicted on depositors in Cyprus would be the template for future banking crises across Europe. Continue reading

Bank of America issues `bond crash’ alert on Fed tightening fears

The 1994 bond shock – and seared in the memories of bond-holders – ricocheted through global markets. It bankrupted Orange Country, California, which was caught flat-footed with large bond positions. It set off the Tequila Crisis in Mexico as the cost of rolling over `tesobonos’ linked to the US dollar suddenly jumped.

Bank of America said the “Great Rotation” under way from bonds into equities closely tracks the pattern of 1994, with bank stocks leading the way. Continue reading