Whose Insured Deposits Will Be Plundered Next?


According to Zero Hedge, it could be Spain:






As Golem XIV notes:









44 thoughts on “Whose Insured Deposits Will Be Plundered Next?

  1. Banks that made bad debts failed all the time, and bank runs were common. Then Governments, through increased taxation laws used the Treasury to backstop crony banks, make them safer, and allowed Banks to monopolise and grow by gobbling up un-connected banks.

    Australia had a lot of Banks. In the Gold rush times. Now we have only 4 major players.

    Governments are technically broke, so in reality, they don’t have the ability to protect their crony banks. It is each man for himself now.

    With interest rates just keeping up with inflation, it would be better to find alternative sources of wealth. What is valuable, in demand now and in the future, can be stored on land and does not deteriorate?

    It is a declining commodity, and is relatively cheap at the moment, way off its 2007 highs. In a time of war, half wit soldiers would not realise its value. It can be easily buried too if need be.

    I will leave readers to ponder, and I have discussed in earlier posts, if you need clues.


    • hahahha good try.

      Bitumen. Nat gas does not have bitumen as a by-product. Nat gas is the future energy, but we need bitumen to seal roads. I saw Indian workers with a wheel barrow a fire a pot and chunks of bitumen, fixing a road by hand, in the upper Himalayas. We need bitumen so the cars of today can drive on smooth roads. Try getting good efficiency from heavily beefed up suspension on an unsealed road. Impossible.

      Bitumen will become very expensive, as only the capital cities will be sealed. It will be like 100 years ago, with potted roads. Horse and Cart. Only the rich will whizz around on sealed roads. Paying a electronic toll of course.

      I am buying blocks of it and storing underground as we speak. Bough an old excavator. Like being in the sandpit again! Grow crops and run sheep over the top of it. It is preety cheap as it is a by-product now. But will run out eventually.

  2. it seems probable that governments and central banks would try to replenish the deposit insurance fund.

    You don’t think like a politician – with envy and power as your guiding principles.

    I’d bet the US solution would be a capital loss that could be taken as an income tax deduction over 10 years, with a max of 10K per year. God forbid some non-elite rich person (aka anyone in the top quintile not in the top 1%) get some lump sum of “new” money that they will likely buy assets with (because they certainly wouldn’t redeposit into another bank) – that might cause a bubble that the elites wouldn’t be able to milk for a period of years,. And you certainly wouldn’t want to help the rich people that had deposits up to the FDIC limit in multiple (read: two) banks.

    After the middle class is plundered, the rich (aka the upper-middle class) are next.

  3. If banks fail, the losers should be the uninsured creditors.

    And who are they? Who holds the bonds and equity shares of these TBTF banks?

    You’re basically saying you won’t lose your deposits, but you lose your retirement plan instead. This means the demographics will decide what happens. And they already did in the “last crisis” of 2007 when basically the choice was to save the banks by raping the taxpayers and savers or expose the pension bomb (especially the public employee pension bomb). We forget that the housing bubble would have had a softer crash if not for public employee pensions pressuring the GSE’s to “get in on the housing market gains” by lowering their loan purchasing standards; housing was about to have a small crash in ’03 but the GSE’s came to the “rescue” and pumped the bubble some more.

    • In an Banks accounting system, deposits are liabilities. Depositors are creditors, like any other lender. The longer they “lend” the more interest they get for example term deposits.

      People got complacent with FDIC insurance and similar government guarantees. At the end of the day the bank invests in “assets” i.e. loans them out to borrowers. If they make bad choices, under current Basel 3 guidelines, capital takes a hit on losses. If capital is severely stretched, they may choose to have a capital raising. If markets seize up, creditors miss out.

      We should never have allowed banks to invest in sub prime loans, or shabby beach houses along the Mediterranean sea.

      • I don’t have a problem with banks making stupid loans because banks can go bankrupt. If that makes deposits at risk, so be it; the depositors made those choices individually. You are correct that people get complacent with deposit guarantees. The problem I have is screwing the depositors WITHOUT the bank going bankrupt and its bondholder taking no loss.

        I have a BIG problem with GSE’s making those kinds of loans. Because the government will rape its subjects to avoid its own bankruptcy. But the individuals losing out did not make those risk decisions, complacent or not; in fact you are rewarding the few who made the poor high-risk decisions at the expense of those smart enough to purposely avoid the risk. I suppose one could argue that the way we treat banks of a certain size they are basically GSE’s and therefore no different than government itself.

        • Do not forget that these Cypriot banks paid very high interest rates. They also bet big on the Greek economy. This is a fact that has to be taken in the context of losses. In a way the interest paid in the past is being taken back. Depositors have become defacto equity owners. Their deposits capital contributions, with interest a profit share.

          This will make people around the world question their bank. Perhaps banks need to segregate deposits on a slidig scale. much like the investment scale many 401k have. 0% for 100% Government backing (Banks pay insurance to Government, so this offsets the interest paid) up to 10% for funds invested in high risk property. This would relate better to the criticisms of banking by Hyman Minsky. When interest rates go crazy, people can dive in or use as a warning of a credit bubble.

  4. All systems are designed so that the few [the designers] can [legally] steal from the many.

    When people watch the kind of stealing that has been going on since 2008, it is like a six year old walking in on their parents for the first time and thinking to himself that there must be some kind of mistake here.

    The stealing that generally goes in [in non-crisis times] is much more subtle, but it’s stealing just the same. People deal with in by rationalizing this, that, or the other thing, because coming to grips with reality would suggest that they would actually have to take responsibility for their own lives, something few are willing to do.

    The wealthy always have a thousand reasons why they should be privileged [allowed to steal], but few are willing to acknowledge the truth of the matter. It becomes very clear in times of crisis, though, how the manipulation of money destroys the only thing the vast majority of people on this planet have, their labor to sell.

    Although in a free labor market, you can not refuse to pay someone their wage, you can do the next best thing, manipulate their money [their labor-value, abstracted]. Printing money is the same as withholding a person wages.

    Stealing, stealing, stealing, how we humans LOVE to get something for nothing!

  5. Aziz’s final sentence says, “..the losers should be the uninsured creditors.” – those being shareholders and bondholders.

    But the problem is that the latter attend the same cocktail parties as senior politicians, and one doesn’t want to upset those one meets at cocktail parties, does one? Plus bondholders are often other financial institutions, thus shafting bondholders can just spread contagion.

    That’s where those new fangled “bail-in” bonds are a farce. Bond holders, as Aziz rightly points out, should get a hair cut before depositors. But political pressures tend to stop that. And exactly the same political pressures will make sure in the future that “bail-in bond holders” are spared.

    • The problem is the Bondholders are not the tycoons of yesteryear bu the PIMCOS who everyone’s 401K bond default or % allocation is in.

      Basically everybody loses, except for the guy who bough houses in the mid 90’s, sold them all in the 2006 financial year, bought himself used car, and put his money in the bank. When Bernanke said he saw “Green Shoots”, he dialed his broker and bought Apple, Then sold Apple at the peak. His money is quietly parked in US Treasuries now.

      For everybody else who passively invests it is bad luck.

  6. “Stealing, stealing, stealing, how we humans LOVE to get something for nothing”

    This is really at the bottom of all history…how can I get others to work while I reap the rewards….this is the ultimate goal of all would be elite ruler and group. I am special and others should spend their lives working while I spend my life lording it over them and consuming their labor products.

    • Although a decreasing percentage of human labor is contained with each [commodity] unit a robot puts-out, it is only when this quantity approaches zero that Marx’s theory will be put to the test.

      Again, the problem with this era is not the above, as this has been going on since the beginning, but instead, that fact that capital is NOT being employed in new areas due all the omni-present dys-function [corruption, financialisation, money/interest rate manipulation, lack of market transparency, etc.].

      The amount of crap people desire is [literally] endless, so once “normal” capital markets are re-established, the material frenzy will resume and your children/grandchildren will be amusing themselves with an entirely new generation of do-dads, gizmos, and what-nots.

  7. IMF and EU want to broker the development of the natural gas reserves. Greeks and Turks at odds over how to divide energy rights. EU energy companies unwilling to sign deal fearing increased tensions on the island… Greek Cypriots independently moving forward with Russian oil interests… Turkey puts pressure on EU….. on and on and on… EU and IMF was sending two messages…. “Cyprus share the wealth with the north” ” Russia stay out of this one ” US and Europe used the TBTF as cover for the real issue….

    In the energy business “unproven” reserves means the drilling rights have not been settled. Everyone knows there is at least half a trillion dollars of gas and oil off the Cyprus coast… the question is who will profit? Just as a side note… There are comparable reserves off the coast of Israel.

  8. God I love this blog and all the blogger contributions of thought and ideas…

    Financially, I do not contribute to this blog because most of you are “way above my head…” and as i have been brought up, that “sciolism is worse than ignorance..”

    So my question to all of the you is this….

    Where do I invest my small savings and capital strengths in times like this? I was always was a fan of land, even if ROI was low and I continue to source and seek cheap land, as the majority in my country do not want it out fear of high taxation in the future. Right now the tax is only 1/1000 th of th “book” value per hectare. But I fear this will increase greatly as so large amounts of land masses can be acquired cheaply by big agricultural corporations.

    Small amounts in the bank with a whopping 5% interest, but sometimes i fear the large interest rate is a carrot as a bait. Meanwhile the government has increased the tax on interest to 15%.

    As i have stated in a previous post, i am also getting taxed through the arse in every other aspect of my life.

    Any takers??????

    As for the natural resources between Greece and Cyprus? Natural Gas, Petrol deposits, precious metal mineral deposits, gold, copper etc…. This will be taken…. no questions asked……

    • I do not give investment advice for others, but personally I want to be able to generate enough energy to fulfil my own energy needs. As solar panel efficiency improves, doing this will get cheaper and cheaper. It creates personal energy independence (that is true even today) and as efficiencies improve will soon offer savings over coal, oil and gas. By the end of the decade I hope to have a personal 3D printer for home-based manufacturing, a solar and wind array that meets my entire energy needs, and greenhouses that grow plenty of food.

      • I already have a 100% fully solar powered home with three heat pumps, electric oven, multiple refrigerators and huge freezer, Samsung SmartTV’s, etc….but my wife doesn’t like the desert, so we’re trying to sell if you know of anyone interested:

      • Hi Aziz,
        Thanks for your feedback. I also am strong believer of ECO power. I also currently have an approved permit of 10kw solar panel farm. I am skeptical though to proceed as it is “On Grid.” I would have proceeded, as currently in Greece, renewable energy income is not taxed, but as nothing is sure in my country, I am not sure if this venture is worth while. Firstly, an investment of about 15-20,000 euro at last year’s buying price was 0,55 euro/kw, has been slashed to 0,33 euro/kw and will continue to drop radically (Troika Orders). It gives me a payoff of the initial investment at 10-12 years versus the original of 5-6 years. The contract would be 25 years. I am not so sure to spend meanwhile at some point get hit with taxes.

        “Off grid” provides no income but gives energy freedom. Although it has a larger investment due to batteries. Plus maintenance etc. Next to this solar farm idea, is the possible summer home which i would like to build which ofcourse will be ECO.

        I am not giving up on renewable energy but right now it does not look good. I hope technology will improve that transformers will create direct energy to energy efficient appliances etc.

    • ” But I fear this will increase greatly as so large amounts of land masses can be acquired cheaply by big agricultural corporations.”

      I invest in land. Provided Governments don’t appropriate with high land taxes this is a secure strategy. You can always raise a few chickens and sheep and vegetables and read a good book, drink a little wine and listen to your favorite music. TVs and DVD are cheap now so you can invest in a comfy sofa and relax.

      Best investment is a deluxe bed. You spend a 3rd of your life in it. Rich or poor.

    • “Any takers??????”

      Here’s the deal, you have to figure out exactly how much labor-value you want to steal from other people; then you have to figure out which group of people [and most of the planet is dedicated to this task] is the best at stealing from other people; send them some of your abstracted labor-value, and they will use it like a weapon in holding-up the [generally-speaking] most vulnerable, the poorest, the most oppressed people on the planet so that you can enjoy more Doritos, up your cable tv subscription to 7634 channels, and download pornography at 65,789 bps [breasts per second].

  9. Pingback: Expiration of Temporary Unlimited Coverage for Noninterest-Bearing Transaction Accounts | betweentwopines

  10. When we say oil and gas off the coast if Isreal, don’t we mean Isreal and Palistine. Correct me if i’m wrong, dosen’t Gaza sit on the coast, don’t they control 200 miles out as everyone else. Come to think of it, much of Palastine sits to the east of Isreal. Or did!! Move along nothing to see here .

  11. Pingback: Sunday READ – 24 March 2013 » 99GetSmart


  13. Pingback: the blame for the continuing crisis has been ascribed, by governments and economic commentators, to everyone other than the original authors of the crisis, narrow banking interests. |

  14. Pingback: Two Interviews both about the failure of Financial Regulators. |

  15. Pingback: Plunderball – The new Euro banking game |

  16. Whenever you find yourself with a banana that’s getting a little too ripe,
    peel it, and then slice it. But rather than scold them into eating their fruits and vegetables, I find that being creative works much nicer.
    For this most basic mango recipe, you only need a

  17. Before starting this smoothie recipe, remove pits from enough cherries to provide
    one cup of fruit. Be careful not to burn out your blender by making your smoothie too thick.

Leave a Reply to zerobs Cancel reply


WordPress.com Logo


Google photo


Twitter picture


Facebook photo


Connecting to %s