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Showing posts with label banking. Show all posts
Showing posts with label banking. Show all posts

Tuesday, March 19, 2013

Could a Cyprus-style banks robbery happen in the U.S.?

This past weekend was spent semi-unplugged.  Heck I didn't know that Miami had beaten UNC for the ACC Basketball Tournament title until late last night!  Since all that mess was happening in Greensboro I drove a hunnerd miles the opposite direction on 220 to do ballroom dancing and general geek-ery with my girlfriend.

But even so, I have been following the mess in Cyprus, where the government is poisoned to confiscate 10% of everyone's bank accounts in an attempt to get bailed out of the monetary mess of its own manufacture.  So much commentary could be made of this: the failure of socialism, the complete failure of the Eurozone as anything remotely a feasible concept, the failure of policies that can only lead to hyper-inflation, the failure to rein-in the "banksters" (i.e. those who see banking as not a sacred trust but an exploitable resource), the failure to hold those most responsible accountable for their own mistakes and misdeeds...

Right now banks across Cyprus are closed until Thursday (at least).  The ATMs are empty or damn near it: an old-fashioned bank run for the 21st Century.  There is now concern that Italy and other countries are considering similar measures.

It was two years ago that I read Atlas Shrugged for the first time.  A book some consider to be semi-science-fiction.  It's now clear to me that what Ayn Rand had written was in fact a horror novel, and not nearly scary enough.  For all the madness that Directive 10-289 embodied, Wesley Mouch knew better than to raid the private bank accounts.  The same cannot be said of too many politicians in Europe and now, little Cyprus could set off financial disaster throughout Europe and around the world.  It might well be the camel that breaks the straw's back.

(Witless warble of words or cryptic commentary with cliche?  I'll leave it as an exercise for the reader...)

Could a Cyprus-ish raid on our bank accounts happen here in the good ole' Yoo-Ess of Aye?  Neil Boortz thinks so.  Writing at Townhall.com, Boortz suggests that not only could it happen but that it has been incrementally building up toward such for two decades (at least).  From his essay...
Oddly enough, the people of Cyprus weren’t particularly elated over this move, nor were investors and citizens throughout the Eurozone. Imagine that! Cypriots immediately grabbed their ATM cards and started to withdraw as much money as they could from their accounts. Cash in their hands wouldn’t be hit for 10%. It was clear there would be a run on the banks as soon as they reopened. Now the plan to simply seize individual wealth is being delayed, though not abandoned.
Could it happen here? Well certainly it could. Congress could pass and the President could sign legislation calling for the seizure of 10% of every checking and savings account in every bank in America. This might finally be enough to cause a resurrection, but they could do it. So in America the wealth seizure has to be just a bit more selective and subtle. And that brings us to the warning I’ve been voicing for 20 years.
There's plenty more at the Townhall.com link, including mention of something that has not been remembered nearly enough: the 1993 budget battle in Congress that saw retroactive taxation: something which according to the Constitution should never have happened.  I phoned the office of Steve Neal, my representative at the time.  His lackey listened to me rant about how wrong this was and then told me "well sir that's for the courts to decide."

The courts didn't stop it from happening then.  Anyone wanna bet that a raid on the banks by the government could be stopped now?

Sunday, March 07, 2010

Iceland citizens vote no on government bailout of failed bank

I don't get it: why don't those Icelanders take on the extra $3.5 billion in debt that would have been incurred by their politicians bailing out the British and Dutch for the failure of Landsbanki, by borrowing more money and creating massive inflation of the currency?

I mean, that's what we do here in the United States, ain't it?!

Seriously though: nice to see some fiscal sanity in this world. Maybe our Icelandic friends could consider exporting some of that here.

Mash down here for more of the story. Worth keeping an eye on as no doubt the European Community is going to be looking to retaliate against Iceland for its gumption.

Monday, November 02, 2009

Think Switzerland is the world's most secretive place for banking?

According to the Tax Justice Network based out of Great Britain, the most secretive financial jurisdiction on Earth is actually... the state of Delaware.

Yeah, that Delaware: on the eastern seaboard of these United States! $2.6 trillion was deposited in this country by non-resident citizens and corporations in 2007, with Delaware leading the way...

The survey of laws, practices and size of inflows in 60 jurisdictions found Delaware coming in first, followed by Luxembourg and then Switzerland. The Cayman Islands and the United Kingdom round out the top five.

"While the U.S. has been jumping up and down and saying 'Aha, bad, wicked Swiss banks,' the U.S. is doing exactly the same things as far as non-resident bank account holders," said Sarah Lewis, executive director of the group, based in the U.K.

Switzerland has been the poster child for financial secrecy over the past year. The United State sued Swiss global banking giant UBS AG, which paid a $780 million fine to settle a lawsuit against it by the government. As part of the deal, UBS admitted it actively helped Americans evade U.S. taxes.

The ranking is based on a composite of total offshore activity and measures such as whether a jurisdiction obtains beneficial ownership information about companies and the degree of cooperation in turning over requested financial information.

Delaware is attractive because it does not tax profits realized outside the state and does not require companies to be physically present, according to the Tax Justice Network.

So if I ever win the lottery or write a best-selling novel, I'll know now that I don't need to fly to Europe or the Bahamas to stash my money: I can just drive a few hours north and put it in Delaware :-)

Sunday, October 18, 2009

FDIC without adequate funds until 2012 (at least)

The Federal Deposit Insurance Corporation is in the red, and it's going to stay that way for another two years.

Meanwhile the ninety-ninth federally-insured bank this year has gone under.

Looks like I'm gonna have to begin stockpiling some more "breadlines" photos to use...

Thursday, August 27, 2009

1,000 banks to fail across America?

That's what John Kanas of BankUnited is now saying. Kanas believes that a thousand banks - mostly small, privately-run institutions - will go belly-up during the next two years.

Ordinarily I'm automatically inclined to disregard this kind of statement as extreme alarmism (like how I never take any "climate experts" from the United Nations seriously). But given the number of banks and more than a few of those being larger ones that have gone down in just the past year, I do have to think this is something that merits serious credence.

But hey: if worse comes to worst, I guess the Federal Reserve only has to inject another five trillion dollars or so into the economy and thinks will be fixed. Right? Right?!?

Thursday, July 16, 2009

Man charged $23,148,855,308,184,500.00 for pack of cigarettes

Josh Muszynski of Manchester, New Hampshire went to the local convenience store and bought a pack of Camel cigarettes. He put the purchase on his debit card. And then when he got home found out that he had been charged more than TWENTY THREE QUADRILLION DOLLARS for his smokes.

Turns out to have been a programming error on the part of Visa, and apparently it's hit a number of its cardholders. Visa and his bank quickly resolved the issue for Muszynski, and he was no longer stuck with a tab that was more than 2007 times the current national debt.

But hey, as bad as inflation is getting, it's just a matter of time before all our purchases are this astronomical! :-P

Wednesday, March 04, 2009

FDIC may become insolvent (Uh-oh....)

"Gloom, despair, and agony on me.
Deep dark depression, excessive misery."

The Federal Deposit Insurance Corporation - the government agency which makes sure that the money you keep in the bank will still be there if the firm goes bust - is running out of money for its fund and risks insolvency, FDIC Chairman Sheila Bair has told bank CEOs. A lot of banks have gone under in the past several months and its depleted the FDIC's coffers.

The FDIC is now looking to shore up the fund with new banking fees, and is projected to raise $27 billion.

Will that be enough at all to keep scenes from yesteryear like the one depicted above from happening again?

In my opinion: not likely.

Monday, February 16, 2009

Banker gives $60 million of own money to his employees

Lately it seems like the "feel good" stories have become even more few and far between. So when one is found, I feel more than a little compelled to give it a shout-out.

Take, f'rinstance, what Leonard Abess Jr. did. Back in November he sold a majority share of his holdings in Miami-based City National Bancshares.

And then, Abess gave away $60 million of the profits to EVERYONE that was on his bank's payroll. He even went so far as to find 72 former employees so that he could give them a share of the money, too. More than 400 people got the "bonuses", and depending on how long they had been employed some got more than $100,000

This is an awesome story of capitalism and corporate responsibility, folks. And when I say "responsibility", what I mean by that is a company or business owner going above and beyond in rewarding its employees - who have already shown loyalty to the company - without it being mandated by some decree of government. Nobody made Abess give up his own money. In my opinion, Leonard Abess Jr. made a smart investment in his own company. And I'd be willing to wager an RC Cola and a Moon Pie that City National Bancshares might be among the better managed banks in this day and age.

Abess didn't publicize his good deed, but it was inevitable that news of it would get out. When asked about his motivation...

Abess said he had long dreamed of a way to reward employees. He had been thinking of creating an employee stock option plan before he decided to sell the bank.

"Those people who joined me and stayed with me at the bank with no promise of equity -- I always thought some day I'm going to surprise them," he said. "I sure as heck don't need [the money]."

Leonard Abess Jr., you're a good man. And you deserve a tip o' the hat for your good deed :-)

Friday, September 05, 2008

U.S. federal government set to take over Fannie Mae and Freddie Mac

Read the story here.

This is, by an order of some magnitude, a much more important story than McCain versus Obama right now.

It's also one of the reasons why I don't believe it really matters which candidate or party wins in the November elections. If Obama wins, he's going to immediately face a ruined economy the likes of which have not been seen since the Depression and if he stays true to the policies he's running on, he'll likely make the situation that much worse. If McCain wins, the state of America's finances is going to be an automatic indictment against not just him and Palin but on the previous eight years of the Bush Administration.

Oh yeah, and another bank - this time it's Silver State in Nevada, with $2 billion in assets - failed today. That's the 11th big bank this year to go under. And so far as I know they've always been announced on Friday evenings.

If there's going to be a bailout of Fannie Mae and Freddie Mac, I cannot recall that there will have been a bigger measure taken in United States history. This is going to hurt the taxpayers like all get out.

Tuesday, August 26, 2008

Major bank about to go under? Reliable source says yes.

A major American bank is not just teetering perilously close to failing, "it's unavoidable", a source has told The Knight Shift.

Details about the possible imminent failure first came this way a little over two weeks ago, and I've been doing a lot of calling and checking around since then. The individual who first told me has been a longtime (over ten years) source whose information has previously turned out to be exceptionally reliable. And all the evidence that I've been gathering over the past few weeks jibes bigtime bad with what the source has been saying.

For various reasons I'm not able to divulge the name of the bank. But this blog can report the following details:

- The bank in question is one of the top five financial institutions in the United States.

- The bank has posted a high profit loss but this is "not even close" to how much money it has actually lost, according to others in addition to the original source.

- The biggest contributing factor to the bank's dwindling financial security has been "fast credit for every Tom Dick and Harry demanding a mortgage". This has been especially severe in the southwestern portion of the United States, where this bank has apparently loaned too much to people with little or even no collateral at all. And apparently this bank has thrived on business with people who weren't even supposed to be doing business in this country at all: parse that as you will.

- Some branches of this bank have already told customers that it might be days or even months before they can access their funds. You read that right. I've spoken with enough customers and one branch manager who confirmed this to be able report it as factual information.

- FDIC "could never" fully compensate depositors if/when this bank goes down. Source says that it will be like IndyMac but "much worse".

I debated long and hard about whether or not to post even this much information. In the end I decided that it would be better to publish what I can talk about now, so that there'd never be the nagging in my brain that I didn't do something about this.

There's not much else to say at the moment other than this: it seems a trend lately that bank failures are only reported on late Friday afternoons or early evenings, after the markets have closed for the weekend. I'd wager a dollar (however much that's actually worth these days) that if/when the institution under discussion takes a dive, that'll be when you first hear solid word about it.

I'll try to write more about this as it becomes available.