Yes, MF Global was the Direct Antecedent to Cyprus

Word is that the initial plan was for a 40% (!!!!) levy confiscation of Cypriot bank accounts. They settled for a MERE 6.75% and 9.9% dual-layered compromise.

Finance: The Cypriot Confiscation is Terrifying

Posted by Ann Barnhardt - March 16, AD 2013 9:27 PM MST

Yes, MF Global was the Direct Antecedent to Cyprus
Posted by Ann Barnhardt - March 17, AD 2013 2:06 PM MST

Cyprus is MF Global on a national, retail banking scale. Corzine absolutely blazed this trail. The particulars are almost exactly the same. Both MF Global/Corzine and Cyprus were failing entities, both took massive, uber-leveraged risks on European sovereign debt, both swept sacrosanct customer money when the house of cards finally collapsed under the weight of its own math.

The indefensible zeroes and ones were instantly swept from the computer servers and customers were locked-out of their accounts.

Interestingly, both were goaded on and enabled by the same people. Corzine was a crony of the Obama regime, which is operationally a Chicago-based phenomenon, as are the regulators of the futures industry, along with the CME group itself.

Cyprus was goaded, overseen, and then "harvested" by the International Monetary Fund, which is chaired by Christine Legarde, who is a Chicago player, and who actually was a partner at Baker & McKenzie before being placed at the IMF by the Obama regime and bankster oligarchy. Cyprus was Christine Legarde's play, and Legarde is in the Chicago oligarch circle.

This will happen here. It already has with MF Global, Cyprus is testing the national, retail banking level, and then it will happen here. They might go straight to bank holidays here, as Warren Pollock has been talking about for over 18 months now, or they may do a levy confiscation like this on retirement accounts.

If you have any money exposed to the financial system, you're just stupid. That's it. Bottom line.

Financial Panic Sweeps Europe As The Head Of The IMF Warns Of A “1930s Depression”

Are we on the verge of another Great Depression?

In its “World Economic Outlook,” the IMF steeply downgraded projections it made in June regarding the U.S. economy

The world economy has entered a “dangerous new phase” of declining growth that will require policymakers to take action, the chief economist of the International Monetary Fund (IMF) warned Tuesday.

IMF warns world about ‘dangerous’ phase of decline

Few protesters in the Middle East connect rising food prices to U.S. monetary policy. But central bankers do...

WSJ: The Federal Reserve Is Causing Turmoil Abroad

In accounts of the political unrest sweeping through the Middle East, one factor, inflation, deserves more attention. Nothing can be more demoralizing to people at the low end of the income scale—where great masses in that region reside—than increases in the cost of basic necessities like food and fuel. It brings them out into the streets to protest government policies, especially in places where mass protests are the only means available to shake the existing power structure.

The consumer-price index in Egypt rose to more than 18% annually in 2009 from 5% in 2006, a more normal year. In Iran, the rate went to 25% in 2009 from 13% in 2006. In both cases the rate subsided in 2010 but remained in double digits.

Egyptians were able to overthrow the dictatorial Hosni Mubarak. Their efforts to fashion a more responsive regime may or may not succeed. Iranians are taking far greater risks in tackling the vicious Revolutionary Guards to try to unseat the ruling ayatollahs.

Probably few of the protesters in the streets connect their economic travail to Washington. But central bankers do. They complain, most recently at last week's G-20 meeting in Paris, that the U.S. is exporting inflation.

China and India blame the U.S. Federal Reserve for their difficulties in maintaining stable prices. The International Monetary Fund and the United Nations, always responsive to the complaints of developing nations, are suggesting alternatives to the dollar as the pre-eminent international currency. . .

Read more

The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency.

Traders were also digesting comments from Federal Reserve chairman Ben Bernanke, who told Congress Wednesday that despite a strengthening economic recovery, the unemployment rate remains high while inflation is "still quite low."

Read more

G-20: a disaster already

The currency issue will be a major topic at the G-20 meeting Obama will attend later this week in Seoul. But the talks that the U.S. had hoped would pressure China “now appear to be a disaster,” and won’t reach a meaningful deal Nov. 11 as planned, according to Morris Goldstein, former research director of the International Monetary Fund.

Barack Obama can’t escape economic debate

Frosty, the "no" man...a story of what ails US

This is an account of what ails us that is radically at odds with the familiar tale of greedy bankers in $5,000 suits...

In 2005, University of Chicago finance professor Raghuram Rajan published a paper in the proceedings of the Federal Reserve Bank of Kansas City called “Has Financial Development Made the World Riskier?” Rajan, then the chief economist at the International Monetary Fund, warned bluntly that incentive structures in the banking profession were leading to reckless credit expansion, herding, and other “perverse behaviors.” He was frostily received when he presented his findings at the Federal Reserve’s annual summer retreat in Jackson Hole that year. The Fed-linked experts who snorted at Rajan’s warnings were sure that financial innovations helped “spread risk” in a way that made the world safer. There was a fixed amount of risk in the world, they seemed to believe, and the more widely distributed it was, the better off we were. Rajan, too, thought the new products and practices “spread risk,” but in a different and more dangerous way: They multiplied it.

Rajan is worth reading not just because he was correct when few were but also because his writing is clear as a bell, even to nonspecialists. His new book, Fault Lines: How Hidden Fractures Still Threaten the World Economy, is not a coherent argument so much as a bunch of independent-minded essays on various topics in contemporary global finance.

H/T: INSTAPUNDIT (forgot this so very early this am)!

A clever little mortgage scheme in Europe foiled

Hungary has approved a ban on mortgage lending in foreign currencies. Talk about closing the barn door after the horse is gone.

The government had no problem with consumers borrowing in Swiss francs at low interest rates when CHF/HUF was at 165. Now that it is at 215, they think its a bad idea…

Hungary announced a package of reforms a short while ago, including a bank tax. A new "precautionary" deal with the IMF is their aim, the economy minister says.

The same problem extends across central Europe where homeowners "cleverly" borrowed in Swiss to avoid high local rates.

Those homeowners are now choking, helping drive the franc ever-higher. An ugly situation that never should have been allowed to happen.

NOW Hungary bans FX mortgage lending

The national debt in the US (on a gross basis) will climb to above 100pc of GDP by 2015 – a far steeper increase than almost any other country!

But level of debt isn’t the only problem. Then there’s the fact that the US has a far shorter maturity of government debt than most other countries, meaning that even if it weren’t borrowing any extra cash it would have to issue a large chunk of new stuff each year...America is not Greece, but if it does not start making efforts to cut the deficit within a few years, it will head in that direction. The upshot wouldn’t be an IMF bail-out, but a collapse in the dollar and possible hyperinflation in the US, but it would be horrific all the same. America has time, but not forever.

Read the whole thing

"A demonstration is one thing and murder is quite another.."

Tens of thousands of people took to the streets as part of nationwide strikes to protest new taxes and government spending cuts demanded by the International Monetary Fund and other European nations before heavily indebted Greece gets a euro110 billion ($141 billion) bailout package of loans to keep it from defaulting...Three people died after being trapped in a burning bank along the main demonstration route in central Athens.

Read the whole thing

Whatever happened to the Depression?

By Allan H. Meltzer

Day after day, economists, politicians and journalists repeat the trope that the current recession is the worst since the Great Depression. Repetition may reinforce belief, but the comparison is greatly overstated and highly misleading. Anyone who knows even a bit about the Great Depression knows that this is false.

The facts we face today are very different than the grim reality Americans confronted between 1929 and 1932. True, this recession is not over. But it would have to get improbably worse before it came close to the 42-month duration of the Great Depression, or the 25% unemployment rate in 1932. Then, the only safety net was the soup line.

The current recession is also much less severe than the 1937-38 Depression. A more accurate comparison is to the 1973-75 recession...

And why has the Obama administration been so invested in telling us this is as bad, or close to as bad, as THE GREAT DEPRESSION?

Reason #1:

The Obama administration wanted to make it appear as though it saved us from an incipient disaster, so it overstated its achievements. The White House also wanted to foist its huge "stimulus" program on the country in order to redistribute income. That pleased many Democrats, but did very little to restore growth.

Reason #2:

Then there are economists who would like to see government take a larger role in the economy. They've chosen to use the recession as a pretext for arguing for this change

Think "Keynsian" ... "Paul Krugman" ... "IMF" ... "financial press" ... "Federal Reserve" ...

The Federal Reserve also shared this Keynesian viewpoint. It provided unprecedented monetary stimulus, increasing the monetary base by more than $1 trillion. Much of this increase corrected for its major mistake: allowing Lehman Brothers to fail. After 30 years of bailing out almost all large financial firms, the Fed made the horrendous mistake of changing its policy in the midst of a recession. That set off a scramble for liquidity and heightened the public's distrust in the market.

This had world-wide repercussions. For four months, many financial markets remained frozen and real activity collapsed. Allowing Lehman to fail without warning is one of the worst blunders in Federal Reserve history. Extrapolation caused many market participants to conjecture that we were in a depression. The New York Times and others piled on, speculating foolishly about the end of capitalism.

Now, with recovery in sight, we need to ask what kind of a recovery to expect and what kind of policies are appropriate.

Read the whole thing

Letter to an ignorant Obama-worshipping kool aid-drinking friend

(Name removed even though none of my liberal friends would ever waste their precious Obama-worshipping time on my blog...and I say "ignorant" because every Obamaphile I know REFUSES to even glance at ANY news reflecting badly on him.)

This person, a real estate agent, was telling me how great things are (and how Obama is cleaning up Bush's mess) so I sent this: Bloomberg reported yesterday – “U.S. Home Prices May Be Lost for a Generation”

"A major lesson of Fan and Fred and the subprime fiasco is that no one benefits when we push families into homes they can't afford. Yet that's what Congress is doing once again as it relentlessly expands FHA lending with minimal oversight or taxpayer safeguards." Wall Street Journal reports today – “The Next Housing Bust”

Wall Street Journal reports today: …the International Monetary Fund has just released a study of estimated losses on U.S. loans and securities. It was very bleak -- $2.7 trillion, double the estimated losses of six months ago. Our estimates at RGE Monitor are even higher, at $3.6 trillion, implying that the financial system is currently near insolvency in the aggregate.

PS: Your history is factually incorrect about the previous eight years.

Bush and Republicans repeatedly called for financial reforms and were blocked by Democrats--who took over Congress in 2006--including Chris Dodd (Chairman of the Senate Banking Committee) and House Financial Services Committee Chairman Barney Frank and more: http://tinyurl.com/5xz7d6

Democrats distorted the market through the CRA and through Fannie and Freddie’s massive securitizing of bad debt, and then blocked regulators from doing their jobs. Shocking Congressional Video: Democrats insist “nothing wrong” at Fannie Mae, Freddie Mac (2004): http://tinyurl.com/4njuuv

The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity

The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity.

A single clause in Point 19 of the communiqué issued by the G20 leaders amounts to revolution in the global financial order.

"We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity," it said. SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.

In effect, the G20 leaders have activated the IMF's power to create money and begin global "quantitative easing". In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it.

The G20 moves the world a step closer to a global currency