bank run watch

Latvian bank run - photos

2011-11-24T11:13:00.000-08:00

Latvian bank run

2011-11-24T11:06:00.000-08:00

(Translation from Latvian)Across the country to "Latvian Savings Bank" branches on November 23 people gathered to withdraw their money from ATMs. Also at the Savings Bank branch Jekabpils Friendship Alley from 6:00 o'clock on the morning line began to form, and at about 9:30 there's a long line stood more than 100 people who were waiting for money from an ATM costs. neapsīka Row after lunch time, and all day at the cash machine was standing about 100 people. the line was also young people, but the majority, however, was retired. while waiting for their turn, people discussed the latest developments "Latvian Krajbanka "and ruled on the future fate. The media have reported that individuals' Latvian Savings Bank "ATMs from today will be able to withdraw cash 50 lats per day. At first it was intended that the money can be withdrawn from 9:00 in the morning, but for technical reasons, ATMs began work around 9:30. The tomorrow, November 24, people will be able from the "Latvian Savings Bank" ATM to withdraw cash 50 lats ($95). It should be noted that the other bank ATM Savings Bank money can not be removed, it can only be of the "Latvian Savings Bank" ATMs.

"Take some money out"

2011-11-03T10:50:00.000-07:00

Greeks’ worst fear is run on banks

In July, Dimitris Kastriotis’ 80-year-old mother received an unusual pitch from her bank manager.He was not asking her to refinance a loan or sign up for a new credit card. “He said: ‘Take some money out,’” recalled Mr Kastriotis, an Athens lawyer.

That friendly warning was meant to protect an ageing customer from the risks of a fully fledged run on Greek banks, a worry that has stalked the country’s strained financial system as the crisis has dragged on.

Run first... vote later

2011-11-01T12:55:00.000-07:00

Greece's planned referendum on the latest bailout, announced as polls show its citizens reject it, has thrown the whole pack of cards up into the air. Bank runs, disorderly default, a Greek exit from the euro and vicious contagion elsewhere no longer look like wild scenarios.

If the Greeks vote No in a referendum that is likely to take place in January, that aid may also disappear. Given that Athens only has enough money to pay its bills until early next year, it could then be forced into a disorderly default. The country's banks would then go bust because they hold huge sums of Greek government debt, causing the economy to plunge further into the abyss. Greece would have little choice but to quit the euro. But that would bring with it mayhem not least because Athens is still running a primary budget deficit. With nobody willing to provide it with funding, the government would have to embark on even more severe austerity.

Papandreou may hope that such a nightmare scenario will shock his fellow citizens into voting Yes. But such scare tactics could actually trigger problems before the Greeks even have a chance to vote. Depositors have been gradually taking their money out of Greek banks. Faced with the possibility of a No vote, an exit from the euro and the bankruptcy of their banks, a bank run could accelerate. As of August, there was still 189 billion euros of deposits in Greek banks. The European Central Bank would then have to decide whether to allow the central bank of Greece to continue making emergency loans to the country's banks or force their bankruptcy even before the referendum.

From Reuters

A word in your ear...

2011-10-28T10:18:00.000-07:00

Want To Defeat The Banks? Stop Participating In The System!

... if we want to fight back against a system we cannot take back through traditional means, then we must learn to walk away. If the system feeds us, clothes us, and shelters us at will, then ordinary protest is pointless. Our tender parts are in a rusty vice on the autocratic workbench and until we pull them out, no amount of screaming and pounding will improve our situation. Independence is won through the constant striving for self responsibility. Freedom is won through a position of personal strength, not weakness and self-enslavement.

Poetry Corner

2011-10-18T02:13:00.000-07:00

Operation Bank Run - video

2011-10-14T15:02:00.000-07:00

Bank Run Rumours - occupy your atm

2011-10-14T14:48:00.000-07:00

Asked by ABCNews.com if his company is advising any of the companies that have been the focus of the protests, Schiavone said company policy prohibited him from making any comments about their clients. He did say that Listenlogic's clients included Fortune 500 companies covering finance, consumer package goods, healthcare, food and others.ListenLogic, he says, only monitors: it makes no effort to distinguish between threats that are real and those that are false or merely bluster.For example, ListenLogic is warning of a possible run on banks by flash-mob groups trying, en masse, to withdraw their savings from Bank America and other targeted banks. Schiavone says he is seeing an increase in web references to "run on the bank" and "bank transfer"--independent of any mention of Occupy.One such posting, which so far has drawn 100,000 viewers, can be found on YouTube. It purports to show depositors in St. Louis being restrained by a police SWAT team from entering a Bank of American branch.One small problem: The YouTube account isn't true.There's no question that a protest of some kind took place outside a Bank of America branch in St. Louis. But it took place before the existence of the Occupy movement, and no source confirms that it was an effort by depositors to withdraw their money. A spokesman for Bank of America categorically refutes that the incident was a bank run or that depositors were at any time prevented from withdrawing funds. In fact Shtfplan.com, one of the websites that first reported the incident as a "run," has since recanted its account, admitting that the incident was "not a reflection of Occupy protests."Schiavone shrugs off the distinction between truth and fiction, making the point that anything seen by 100,000 people has the power to inspire imitation, and, in this instance, to be a threat to banks or other financial institutions."Not everything people say on the web is true," he allows. "But social media postings don't have to be true to hurt.

He who panics first, panics best!

2011-08-12T11:18:00.000-07:00

Asset/Liability Funding Mismatches: The Major Cause of Institutional “Runs on the Bank”

Modern day banking business models (fiat banking system) fund business investment that often require expenditures in the present to obtain returns in the future (for example, spending on machines and buildings now for production in future years). Therefore, when businesses (banks included) need to borrow to finance their investments, they usually do so on the understanding that the lender will not demand repayment(s) until some agreed upon time in the future. Usually, the farther into the future, the more preferable, thus entities with exposures to business cycles (businesses) often prefer loans with a longer maturity. This longer maturity leads to lower liquidity, which is in the better interests of the borrower. This very same principle applies to individuals seeking financing on the purchase of big ticket items such as real estate, housing, boats, small businesses and cars. The flip side of this equation contains the primary funding source in the fiat banking system, the individual savers (both households and firms). These savers strive for relatively high liquidity due to shorter cycles in their (sometimes sudden) and considerably less predictable needs for cash. The products that serve these needs are the demand accounts that commercial banks use as their primary funding source.

Commercial and investment banks (as well as some broker/dealers) profit by acting as intermediaries between short term savers who prefer highly liquid demand accounts and borrowers who prefer to take out long-maturity loans with considerably less liquidity. When things are working as anticipated in the fiat banking system, banks acting as intermediaries profit by channelling capital from short term savers to long term borrowers, underwriting and eating the risk of this “asset liability funding mismatch”.

Banks also carry on their capital intensive businesses (ex. trading, market making, etc.) in a similar fashion by borrowing heavily on the short end of the yield curve on a relative sliver of equity and investing in the longer end of the curve or in more volatile, risky asset classes (i.e. public equities, private equity, real assets, commodities, etc.)

The premise behind the fractional reserve (a system where only a fraction of deposits are required to be kept in house as reserves against deposit demands)/fiat banking system is that under ordinary circumstances, savers' unpredictable needs for cash are unlikely to occur at the same time. This premise has been justified by the theory that depositors' needs reflect their own and mostly unique individual circumstances. The fiat/fractional reserve banking institution, by accepting deposits from myriad and differing sources, assumes risk has been effectively diversified away, with the bank expecting only a small fraction of withdrawals in the short term at any given time. This is despite the fact that all depositors have the right to take their deposits back at any time. Adherence and acceptance of the logic behind the fractional reserve system allows fiat banks to make loans and investments over a long horizon, while keeping only relatively small amounts of cash on hand to pay any depositors (and counterparties) that wish to make withdrawals, capital calls or collateral calls.

Traditional views on this “bank run model” largely (or more aptly, only) consider individual savers in the form of depositors on the short side (liquid liabilities). It is a run such as this that caused the banking collapse during the US Great Depression. The modern central banking system has proven resilient enough to fortify banks against depositor runs, as was recently exemplified in the recent depositor runs on UK, Irish, Portuguese and Greek banks – most of which received relatively little fanfare. Where the risk truly lies in today’s fiat/fractional reserve banking system is the run on counterparties. Today’s global fractional reserve bank get’s more financing from institutional counterparties than any other source save its short term depositors. In cases of the perception of extreme risk, these counterparties are prone to pull funding are request overcollateralization for said funding. This is what precipitated the collapse of Bear Stearns and Lehman Brothers, the pulling of liquidity by skittish counterparties, and the excessive capital/collateralization calls by other counterparties. Keep in mind that as some counterparties and/or depositors pull liquidity, covenants are tripped that often demand additional capital/collateral/ liquidity be put up by the remaining counterparties, thus daisy-chaining into a modern day run on the bank!

This phenomena essentially discredits the thinking at large and currently in practice that “since individual expenditure needs are largely uncorrelated, by the law of large numbers” banks should expect few withdrawals on any one day. The fact of the matter is that in times of severe distress, particularly stemming from solvency issues (read directly as the Pan-European Sovereign Debt Crisis, and Greece, et. al. in particular), the exact opposite is the case. Individual depositor and counterparty actions are actually HIGHLY correlated and tend to move in tandem, particularly when that move is out of the target fiat bank. They tend to take heed to the saying “He who panics first, panics best!"

Asset/liability mismatch can, at the margin nearly assure a Lehman-style fiasco in the case of an impetus that sparks herding mentality, whether it be among depositors/savers or institutional counterparties.

Since banks both lend out and often invest at long maturity, they cannot quickly call in their loans or sell their investments. This scenario is exacerbated when said loan and/or investments have materially dropped in value causing a capital gap in between what said loans/investments can be called in for, and what is actually owed to the short term creditors. Again, this is a perfect example of what happened in the US with AIG, Lehman Brothers and Bear Stearns. Therefore, if a significant portion of depositors or counterparties either attempt to withdraw their funds or raise collateral/capital requirements simultaneously, a bank will run out of money long before it is able to pay all of its short term the depositors. The bank will be able to pay the first depositors who demand their money back, but if all others attempt to withdraw too, the bank will be realized insolvent and the last depositors will be left with nothing. It is for this reason that short term creditors tend to “panic first” in an effort to “panic best”, leading to a chain reaction that perpetuates a bank run. Essentially, the fiat/fractional reserve banking system creates a self-fulfilling prophecy wherein each depositor/counterparty's incentive to withdraw liquidity and funds depends on what they expect other depositors/counterparties to do. If enough depositors/counterparties expect other depositors to withdraw their funds, then they all have an incentive to rush to be the first in line to withdraw their funds. “He who panics first, panics best!"

The Black Swan is on the Wing

2011-08-12T10:35:00.000-07:00

WORTHLESS - the video

2011-08-06T03:21:00.001-07:00

Why Do Banks Make So Much Money?

2011-08-04T10:36:00.000-07:00

silent bank run

2011-08-03T07:27:00.000-07:00

Greece in panic as it faces change of Homeric proportions

Fear is driving a silent bank run in Greece – but some see the government's austerity plans as a chance to transform. Worried about whether the banks will stay in business, Greeks have been taking their life savings out of accounts and sticking them in metal slits in basement vaults.

The boxes are so popular that the bank has doubled the rent on them in the past year – and still every day between five and 10 customers request one. This bank ran out of spares months ago. The clerk leans over: "I've been working in a bank for 31 years, and I've never seen a panic like this."

Banking for Beginners

2011-07-26T06:27:00.000-07:00

The Eleventh Marble
Any five-year old child knows that if you put ten marbles into a tin can, you can only take ten marbles back out. No amount of wishful thinking, dreaming, or praying, will yield that eleventh marble from inside that can. That eleventh marble does not exist. It never did, and it never will. All discussions about the eleventh marble are the product of imagination. The eleventh marble is a fantasy.

Private central bankers issuing the public currency as interest-bearing loans operate on the belief that they can put ten marbles (dollars) into a tin can (the world) and magically get 11 marbles back out.

Greek run update

2011-06-01T04:04:00.000-07:00

They lifted 1.5 billion Thursday and Friday from banks

From early morning to counter the banks there is serious pressure for withdrawals of deposits, especially small amounts. It is significant that Thursday and Friday, banking sources estimate that rose around 1.5 billion euros in total! According to the same month in May estimated the outflow estimated at least 4 billion from 2 billion in April ...

The majority of depositors rushed to withdraw for pensioners and small savers and amounts ranging from 2-3000 lifted until 10 -15 000 euros. Motivation in most cases it was the fear that led the country into bankruptcy, deposits frozen even temporarily left without cash, or even lose their savings.

(via Google translate)

Keep on running!

2011-06-01T03:55:00.000-07:00

Fears grow over Greece bank run as country seeks bail-out

Greece's banks are being hammered by a run on their reserves, leaving the country's main lenders increasingly reliant on the European Central Bank for funding.
The latest figures from the Bank of Greece paint a grim picture, with foreign lenders and individuals withdrawing funds from Greek banks at an alarming rate.
Simon Ward, chief economist at fund manager Henderson, likened the situation to Britain's Northern Rock, which was eventually nationalised to save it from collapse.

Iceland: where no means no

2011-04-10T08:57:00.000-07:00

Deposits accord rejected by Iceland's voters

Icelanders have rejected a depositor claims agreement with Britain and Netherlands for a second time in as many years as voters signalled they did not want tax funds to cover foreign losses by a private bank.

Sounds reasonable to me...

Korean Worries

2011-02-19T10:17:00.001-08:00

Bank run fears engulf savings bank industry

More than a thousand customers lined up in front of the Busan II Savings Bank located in Busan yesterday as soon as the nation’s financial regulator announced a six-month business suspension of Busan Savings Bank and its affiliate Daejeon Mutual Savings Bank.

The line formed by depositors extended about 100 meters (328 feet) from the door of Busan II Savings Bank. “You won’t be allowed to withdraw your money if you are just standing there without a queue ticket number,” a bank employee told the crowd using a microphone.

Those without a ticket then headed to the automated teller machines to withdraw their money, but the machines quickly ran out of cash.

“I’ve saved 40 million won ($35,810) over my whole life. That money was going to be used for my grandson’s marriage but I cannot trust these people [bank employees] saying that I am guaranteed to get my money back,” said Cho So-young, 79.

2011-02-19T10:17:00.000-08:00

African runner

2011-02-19T10:05:00.000-08:00

Ivory Coast Banks, Stock Exchange Close Amid Bank Run

Ivory Coast’s financial system is grinding to a halt with banks closing and the stock market suspended, sparking a run on the lenders left open as the West African nation’s political crisis drags on.

Abou Traore, a 31-year-old police officer, said he tried to close his account and withdraw all his money at a branch of SGBCI, the unit of France’s Societe Generale in Ivory Coast. The lender denied the request, he said, “because it doesn’t have enough liquidity.” The gate to a cash machine outside its main branch was also locked.

pyramid scheme

2011-02-02T12:18:00.000-08:00

Egypt central bank says banks liquid for Sunday reopening

CAIRO, Feb 2 (Reuters) - Egypt's central bank reassured investors that the country's banks will have enough funds to deal with a possible run when they reopen on Sunday after a week-long closure caused by anti-government protests.

Bankers have warned that investors and Egyptians, spooked by protests that have closed down much of the economy since they broke out on Jan. 25, will seek to send funds abroad or convert them into cash.

"We are expecting that transfers out of the country and dollarisation will be unprecedented," said a treasury dealer at a medium sized bank in Cairo.

"Bank runs are the major concern -- whether the banks will have enough cash in their branches to pay depositors. You should expect long queues," he said.

Waiting for the big one... or already heading for the hills?

2011-01-07T10:57:00.000-08:00

Swiss bank vaults filling up ... with our deposits

The Swiss franc is the canary in the coal mine of Europe finance. Every time there is a crisis anywhere in Europe, money flows into Switzerland. It is the ultimate save haven. Having worked for a Swiss bank, I remember seeing this first-hand. A wall of money swept through the bank's coffers at the first sign of trouble.

However, according to friends who work here in the Swiss banking business, this time has been different. Today the deluge of European cash is reaching unprecedented proportions. They have never seen such sums before. They are all waiting for "the big one". The big one is not Portugal or even Spain, for the Swiss bankers the big one to go will be Italy.

When Berlusconi goes... so does the euro.

This is the logic of capitalism. When you pile more and more financial burdens on the population in order to bail out the banks and to guarantee banks, the chances of the population being able to pay all this back diminish. This increases the risk. As the risk increases, capital gets scared and leaves. There is a well-established pattern in this development.

First to leave is professional capital. This is the money in the stock market which goes. Then money leaves the bond market. The bond market shuts down. Then the big corporate deposits leave as financial directors of large companies decide that they are not being paid for the risk of holding assets in the crippled banking system. Ultimately, this fear permeates down the food chain and ultimately the ordinary depositors up sticks and head for the hills.

Can't put it clearer than that!

2011: Year of the bank run

2011-01-05T11:48:00.000-08:00

2011: Year of the bank run?

"Facing facts like these, each morning when I wake up I have to wonder, 'Why is today not a good day for a wholesale run on the Irish banking system?'" asks Scott Minerd, chief investment officer at Guggenheim Partners. "And if there is a wholesale run on the Irish banking system, then what stops the same scenario from cascading into Portugal, Greece, Italy, and most importantly, Spain?"

Happy New Year!

The American Dream

2011-01-05T11:43:00.000-08:00

Great new animated film - watch and get informed!

Dutch courage?

2010-12-23T11:19:00.000-08:00

Netherlands Plans to Make Call for Bank Run a Criminal Offense

The Dutch government plans to make calls for bank runs a criminal offense to help protect the banking system’s stability, more than a year after an outflow of deposits sparked the bankruptcy of lender DSB Bank NV.

“A lender can only function if deposit holders and creditors have faith in its solidity,” Minister of Justice Ivo Opstelten said in a letter to parliament. “Persons who intentionally make public statements on a lender’s solidity and call for a bank run put this lender in a real danger of bankruptcy."

The truth needs no laws to support it...

Spanish fly

2010-12-18T09:29:00.000-08:00

Roubini Says Spain Risks Bank Run Without More European Support

“Spain is too big to fail but also too big to be bailed out,” Roubini said today in a Bloomberg Television interview on “Surveillance Midday” with Tom Keene. He said the existing resources for bailouts are too small “to backstop the Spanish banks and the sovereign if there is going to be a run on them.”

One to watch...

The bank run will not be televised...

2010-12-08T03:43:00.000-08:00

Cantona's bank run set to flop in France

Today's mass bank run plot that was launched off the back of an Eric Cantona interview on YouTube looks set to flop.

'Bankrun 2010' was created by two filmmakers in response to Eric Cantona's call for millions of people to 'cripple the banks' by all withdrawing their cash at once.

A date was set for Tuesday 7 December, but the plan looks to have fizzled out with just a handful of activists turning out across France.

Just goes to show that most people will only start running... when its too late!

On your marks.... get set....

2010-12-06T07:05:00.000-08:00

Banks braced as King Eric's day of reckoning arrives

More than 34,000 people around the world, mainly in France, Italy and Britain, have taken Cantona's big idea seriously. They have pledged their support to internet sites which have called for a co-ordinated "bank run" tomorrow. Another 27,000 are said to be "considering" joining in.

Politicians and bankers, who initially ignored the growing "buzz" surrounding the Cantona bank raid, have been making increasingly jittery remarks in recent days. They say there is no danger that the banking system will collapse, even if the super-wealthy Cantona withdraws all his own millions (which he insists that he will).

If Ireland Doesn’t Take The Bailout . . .

2010-11-29T07:01:00.000-08:00

Gonzalo Lira: If Ireland Doesn’t Take The Bailout . . .

However, we have a long week ahead of us—a very lo-o-o-o-ong week, to be sure. Because although this is the deal that’s been approved by the EU finance ministers, the deal negotiated by the Cowen government, there is one final hurdle to this bailout:

The Irish. Specifically, the Irish parliament.

The key date that’s coming up insofar as Ireland is concerned is December 7: “A date which will live in infamy!” really is living up to its moniker, because that’s the day the Irish are supposed to pass their budget—their budget with the EU/IMF bailout conditions: The Austerity Budget.

Now, here’s a question—the obvious question:

What if the Irish can’t—or won’t—pass the austerity budget?

What if the Irish don’t take the bailout?

December 7 is also World Bank Run day ... show the banksters and the politicians what you think!

Ireland: bank run warning

2010-11-25T00:59:00.000-08:00

Ireland Risks Bank Run, El-Erian Says

Ireland risks a “major bank run” unless European officials act quickly to calm the financial turmoil in the nation, Pacific Investment Management Co. Co- Chief Investment Officer Mohamed A. El-Erian said.

“What you advise your sister in Ireland now is that you’d say take your money out of an Irish bank and put it in another bank headquartered elsewhere,” El-Erian said. “That’s what happened in Argentina and in emerging economies. People worry about their savings.’

Lights.. Camera.. ACTION!

2010-11-24T01:11:00.000-08:00

British Bankers' Association warns of Cantona-inspired crisis

A plan hatched by ex-footballer Eric Cantona for a mass run on the banks could cause a financial "crisis", the British Bankers' Association has admitted.

The UK trade body warned that the direct action revolution promoted by the French former Manchester United striker risked a new Northern Rock "if enough people" withdraw their savings.

"I don't understand what benefit there would be in trying to crash the banking system," a BBA spokeswoman said.

"You would very quickly get into a Northern Rock situation if everybody wanted their money at once. It wouldn't take very long before you get queues and then you would get camera crews.

"Once something looks like a crisis it becomes a crisis.

Indeed.... and of course its all Erics fault!

'bad idea'

2010-11-24T01:05:00.000-08:00

Global 'Bank Mutiny Day' a bad idea, warns UK Banking Association

If enough people act on Catona's urging, said a spokesperson for the BBA, "... a mass run on the banks could cause a financial catastrophe."

The idea is spreading rapidly into North America, with people publicizing Stop Banks on blogs and Facebook, urging contemporaries to sign on for the day.

World Bank Run Day - links

2010-11-24T00:40:00.000-08:00

Irish Run On

2010-11-24T00:22:00.000-08:00

Run on the banks prompted Irish rescue deal

IMF to pump in $110 billion to Irish economy

Fears of a run on the banks caused the weekend bailout of the Irish economy after massive sums were withdrawn in recent weeks.

The New York Times reported that the action taken this weekend of an expected $110 billion dollar package was “prompted by fears of a bank run when the markets opened on Monday morning.”

WATCH THIS!

2010-11-22T12:42:00.000-08:00

Official European Bank Run Day - review

2010-11-22T11:58:00.000-08:00

Bank Run 2010, Eric Cantona forces the tipping point

Start your own bank, and if the state tries to stop you, confront them. You can be sure that the existing banks will be pushing for the violent suppression of you and this bank run right now; that is all they have left to fight with; the apparatus of the police state.

If you want your money to be used for good purposes only, you have to stop paying it to the state. Period

Good critique of the current situation.... only 15 days to go!

Domino Effect

2010-11-22T11:34:00.000-08:00

Ireland accepts a bail-out – who'll be next?

..as concerns have grown over the state of the economy, there's been evidence of a slow-moving bank run (or 'bank walk', as some wags have put it) on Irish institutions. For example, an estimate by Ciaran Callaghan of Dublin-based NCB Stockbrokers, suggests that Bank of Ireland lost €10bn in deposits between late August and early September.

For all the support given by the ECB, depositors have clearly been becoming increasingly nervous that – to put it simply – Irish banks would just run out of money. The Irish government promised that it would stand behind the banks. But of course, everyone's realised by now that this is a hollow promise – the Irish state can't afford to bail out its entire banking sector.

Still more pulling out...

2010-11-20T00:05:00.000-08:00

Account holders withdraw €23bn from banks this year

MORE than €23.5 billion of deposits have been withdrawn from the three major Irish banks since the start of the year. AIB says it has seen outflows of €13bn in deposits due to withdrawals by nervous corporate and business customers who fear for the Irish bank system.

The loss of faith in Irish banks was further highlighted recently as Bank of Ireland confirmed it suffered €10bn in similar withdrawals prior to the end of September 2010as big investors feared the guarantee on the banks might not be extended.

KILL THE BANKS - 7/12/10

2010-11-19T10:15:00.000-08:00

"We don't pick up weapons to kill people, to start the revolution... the revolution is really easy to do nowadays. What is the system? The system revolves around the banks. It's based on the power of the banks... so it must be destroyed starting with the banks. This means that the 3 million people with their placards on the street... they go to the bank, withdraw their money from the banks and these ones collapse. 10 million people and the banks collapse and there is not real threat, a real revolution. We must go to the bank. In this case there would be a real revolution. It's not complicated. You simply go to the bank in your country and withdraw your money. If there are enough people withdrawing their money, the system collapses. No weapon, no blood, or anything like that."

More pulling out...

2010-11-18T07:24:00.000-08:00

A bank run begins in Ireland

The FT reports this morning that corporate customers have been pulling out their deposits from Irish banks, amid signs of fading confidence in the banking system. Irish Life & Permanent said corporate customers had withdrawn â¬600m, more than 11% of total deposits, during August and September.

DON'T PANIC!

2010-11-15T23:57:00.000-08:00

Savers told not to panic over state bailout speculation

SAVERS were told not to panic last night. The Central Bank, economists and financial advisers all insisted that depositors' savings would be safe if the country was forced to sign up for an international bailout.

Stopbanque update#1

2010-10-29T00:51:00.000-07:00

Stopbanque - 07/12/10

2010-10-29T00:24:00.000-07:00

Stopbanque - european call to withdraw your money on 7th december - follow the links!

http://stopbanque.blogsport.de/ - german site

http://stopbanque.blogspot.com/ - french site

Facebook event - english site

Irish rug pulling

2010-09-30T07:33:00.000-07:00

Headlines about the Irish government's billion-euro bail out of Anglo Irish Bank will leave hundreds of thousands of British investors and savers fearful for the security of their money.

The Irish government first stepped in to ensure Anglo Irish Bank's solvency through nationalisation last year, with Allied Irish Bank and the Bank of Ireland also recapitalised in February of that year to the tune of €3.5bn each.

The Irish government has long claimed that customers with savings in all of Ireland's major banks are safe. It extended a 100% deposit guarantee to all Irish-owned financial institutions in 2008 until 29 September 2010, and this has recently been extended to the end of the year. But panicked savers have continued to withdraw their cash – in the first half of this year customer deposits fell by more than €5bn to €23.1bn.

Andrew Hagger of Moneynet.co.uk says: "Savers who have fixed-rate bonds with Anglo Irish Bank or other Irish banking groups will just have to wait for them to expire. When they do, especially if this is after 31 December when the 100% government protection is scheduled to end – and especially if they have savings worth more than €100,000 in any one group – customers might want to spread their cash around to be safe. No one is saying the banks will go under, but then no one thought Icesave would go bust." more

Last year small savers piled into Irish banks because of the government protection... now it looks like its time to move again.

Are we trying to keep people in poverty?

2010-09-01T12:43:00.000-07:00

Do we want Britain to have fewer poor people in the future? I trust that your answer to this question is “yes”, whatever your political inclinations or favoured economic theory. So let’s take as a starting point that our goal is to reduce the number of poor people, OK? This might seem like the most uncontroversial premise imaginable. But it is, in fact, an extremely contentious proposition. There are a great many politicians, lobby groups and think tanks who are arguing for the precise opposite: who are demanding that the poor be preserved – or, as they describe it, “protected”, much in the way that endangered species are protected from extinction. more

Dont forget to read the comments...

2010 - predicting the futue

2010-01-15T04:05:00.000-08:00

2010: Giant Gathering Storm Clouds

The blind, the deficient, and the compromised fail to fully appreciate and detect the meaning of the Dubai debt default or the Iceland financial failure. They actually believe these busts have been dealt with by the very strength of the capitalist system. These default failures signify a continuation of the credit market crisis that never went away.

This will be the year of magnificent crises that change the face of the global financial structures. Debt will be dumped like a broken Vegas gambler. Paper money will be discarded like yesterday's newspaper.

Read the rest of the article for all the good news and predictions for 2010. Happy New Year!

Watch this!

2010-01-14T13:22:00.000-08:00

And if you have £20 to spare you could do a lot worse than give it to this guy!

Watch this!

2010-01-07T09:36:00.000-08:00

Cuba of the North

2010-01-06T02:54:00.000-08:00

Angry Iceland defies the world

Iceland's president has blocked a Bill to pay Britain and Holland up to £3.4bn for Icesave depositors, acknowledging that popular feeling in the island nation is too strong to proceed without a referendum.

The reality is that Icelanders have erupted in collective rage at what they believe to be gross injustice and "gunboat diplomacy" by Downing Street. What rankles is Britain's use of anti-terrorism law to freeze Iceland's assets. The Icelandic central bank was listed besides al-Qaeda as a terrorist body – unprecedented treatment for a NATO ally. Holland was careful not to go so far.

"Importers couldn't get trade finance for food. We feel deeply wronged," said Johannes Skulason from InDefence. Shelves were bare for weeks in Icelandic shops as the banking system disintegrated.

Watch the IMF and banking community start their dirty tricks to force Iceland to play the game!

Money Toilet Paper

2009-11-11T02:27:00.000-08:00

$100 Dollar Bill Toilet Paper

If you want to show your contempt for currency and feel that the dollar is devalued, you can use it to wipe your bottom on and express your true feelings about the state of the financial system!

Also available in euros.

Toilet Paper Money

2009-11-11T02:21:00.000-08:00

Fiat Currency: Using the Past to See into the Future

The history of fiat money, to put it kindly, has been one of failure. In fact, EVERY fiat currency since the Romans first began the practice in the first century has ended in devaluation and eventual collapse, of not only the currency, but of the economy that housed the fiat currency as well.

A short article explaining what happens when banks create money out of thin air.

Fiat money alchemy

2009-10-14T10:38:00.000-07:00

Gold Coin Vending Machine Offers Profit in Case of a Bank Run

The Stuttgart-based company just unveiled its first prototype at the Frankfurt airport, which offers a 1g gold wafer for €30, a 10g bar for €245, or gold coins. The machines are wired to monitor current gold prices and adjust their rates accordingly.

Thomas Geissler, who owns TG-Gold-Super-Markt, told The Telegraph, "German investors have always preferred to hold a lot of personal wealth in gold, for historical reasons. They have twice lost everything. Gold is a good thing to have in your pocket in uncertain times.

Doesn't it seem kind of twisted to make the spectre of a financial crash into a glittering vending machine offering salvation in the event of a bank run?

Can you imagine the scene if banks started putting these things outside their front doors?

Zimbabwe Times

2009-10-13T12:45:00.000-07:00

Improbable research: the hundred trillion dollar book

Gideon Gono, author of the new book Zimbabwe's Casino Economy – Extraordinary Measures for Extraordinary Challenges, displays a rare, perhaps unique, kind of scholarly reserve. Since December 2003, Gono has been the governor of Zimbabwe's Reserve Bank.

Two weeks ago, Gono was awarded the 2009 Ig Nobel prize in mathematics. The Ig Nobel citation lauds him for giving people a simple, everyday way to cope with a wide range of numbers – from very small to very big – by having his bank print banknotes with denominations ranging from one cent to 100 trillion dollars.

During 2007 and 2008, Zimbabwe's inflation rate rose past Olympian heights: topping 231m%, by Gono's reckoning; and reaching 89,700,000,000tr%, according to a study done by Dr Steve H Hanke of Johns Hopkins University and the Cato Institute.

The book explains that every larger, richer country will face the same problems...

distortion economy

2009-10-13T12:33:00.000-07:00

State should have let banks fail, says Nobel-winning economist

"I find it very ironic that people who have always been in favour of market economics all of a sudden suspended the rules of capitalism. It really undermines the functioning of the economy. It's a distortion to the economy."
But his comments came as a security analyst in London said troops would have had to be deployed on the streets if the government in Britain had let large banks there fail.

No running please! (update)

2009-10-13T07:53:00.000-07:00

Dutch central bank takes over DSB - oct 12

“The bank called for the emergency measure [to take control] due to a large outflow of liquidity that endangered the continued existence of DSB over the short term,” the central bank said in a statement.
Nout Wellink, president of the central bank, said DSB was now under administration in a process likely to lead to liquidation.

DSB boss took millions from 'his' bank - oct 13

On Monday, the bank was put under central bank control and administrators were appointed. The intervention followed a run on savings. In total, over €600m was removed from the bank over the past few days.

All savings at the bank have now been frozen and bank customers can use their bank cards to withdraw a maximum €750 - or €250 a day - before Wednesday afternoon.

Savers with up to €100,000 in the bank will be able to get their money back under the country's deposit guarantee scheme. But some 4,000 people with savings in excess of this amount are likely to lose the rest.

And some 4,000 people with subordinated deposits, which earned interest of around 6.5%, are not covered by the guarantee scheme at all.

Too late... the runnings all done... the fat cat got the cash... and the small guys are left waiting.

No running please!

2009-10-09T10:09:00.000-07:00

DSB Bank website down, hackers or a run? - oct 1

Clients of independent bank DSB were unable to transfer their money electronically on Thursday, leading the company to blame a concerted attack by hackers.
But the Telegraaf claims the site crashed because too many customers were trying to shift their money following a tv programme.

DSB Bank website still down (new) - oct 2

Clients of DSB Bank continued to have difficulty in accessing their accounts online on Friday report various media.
The bank is still officially blaming hackers for the problems but a bank employee told ANP press service on Friday morning that the website had crashed because too many clients were trying to move their money, reports the NRC.

Central bank wants probe into DSB run call - oct 5

The Dutch central bank is in favour of an investigation to establish whether Pieter Lakeman, head of a lobby group representing disgruntled customers of DSB Bank, could be held legally responsible for calling on savers to withdraw their money from the bank in order to force it into bankruptcy.
Last week customers removed around €60m from the bank following a call by Lakeman to force the bank into bankruptcy.

Sounds like the dutch are getting a bit jittery..... come on now.... you know your moneys safe.

G20

2009-09-25T14:50:00.000-07:00

G20 leaders map out new economic order at Pittsburgh summit

G20 leaders, installing themselves as permanent stewards of the world economy for the first time, agreed today on a tighter regime on bankers' bonuses and mapped out a new economic order ... while elsewhere in Pittsburgh...

Sonic Warfare Erupts in Pittsburgh, Honduras

Police in Pittsburgh are using sound blasters and other non-lethal weaponry to ward off protesters at the G-20 summit.

Ask the environmental health to come on the next demo ... and tell the government to KEEP THE NOISE DOWN!

Anniversary of a near-death

2009-09-14T12:47:00.000-07:00

One year from the day the financial system stared into the abyss, how the world has changed

IN THE days following that fateful collapse of Lehman Brothers almost exactly a year ago, Mohamed El-Erian, CEO of Pacific Investment Management Co, the world's largest bond-fund manager, feared the worst. 'I remember at the end of the week calling up my wife and saying, 'Jamie, go to the ATM, go to the cash machine, and take cash out',' he told Bloomberg. 'She said, 'Why?' I said, 'I don't know whether the banks are going to open tomorrow'.'

On the other side, Piyush Gupta, Citi's CEO for Southeast Asia, remembers doing everything to prevent a run on the bank. He told BT: 'We were really concerned because we saw a lot of people coming in, wondering if they can cash out. Now, the first rule in banking is never to let a bank run happen. Once a bank run happens, you're just dead.'

One Man Bank

2009-09-06T13:49:00.000-07:00

One-man bank - Clients trust him more than big banks
Caricato da swissinfovideos. - I nuovi video di oggi.

The Encyclopedia

2009-09-04T15:51:00.000-07:00

The Encyclopedia of public choice, Volume 2

Fiat money has no inherent value. Its exchange value depends on a vast system of iterated beliefs: today a person is willing to accept dollars for a cow ...

tomorrow the cow is his only valuable asset - the dollars are worthless pieces of paper.

Can a Central Bank Go Broke?

2009-09-04T15:24:00.000-07:00

Can a Central Bank Go Broke?

Centralized monetary authorities enjoy a privileged position in the current monetary system. People tend to view the economists and politicians at these institutions as demigods, individuals who if given enough resources will ensure that the economy continues an ever-advancing and smooth trajectory. However, unlike the Greek demigods of yore, today's central bankers are mere mortals who must work within the confines and constraints of the institution that they head.
While they present an aura of invincibility, the truth is that the effectiveness of their policies faces severe limits.

Central banks enjoy a revered position in discussions on monetary matters. At their disposal are a seemingly endless array of tools and weapons ready to correct any market "imbalance" that threatens economic stability. However, these institutions are only as useful as the assets they represent.

Debt Slave - the video

2009-08-30T07:58:00.000-07:00

QE - more, more more!

2009-08-19T09:47:00.000-07:00

UK debt rises to £799 billion or £13,000 per person

If you were hoping that Britain’s financial situation was getting better, you’re about to be sorely disappointed. Official figures have shown that UK debt has now reached a record £798.8 billion – equivalent to 56.6% of gross domestic product (GDP).

David Kern, Chief Economist at the British Chambers of Commerce (BCC) said“Although slightly smaller than feared, these figures confirm the grim state of our public finances"

“We believe that the risks of a relapse in economic activity are still serious,” he said. “With bank lending remaining weak and unemployment continuing to rise, there is still an urgent need to reinforce the stimulus. We urge the MPC to increase the QE programme at its next meeting"

He got his wish - Merv even wanted more!

ODIOUS DEBT

2009-08-19T09:00:00.000-07:00

ODIOUS DEBT - IF YOU DIDN'T BUY IT, YOU DON'T HAVE TO PAY

Odious (or Hostile-to-the-borrower) Debt is a legal theory which holds that “debt incurred by a regime for purposes that do not serve the interest of the nation … should not be enforceable as the debt was not incurred by the nation or (by or for) its people, but by the interests of the regime, whether elected or not.”

Reject odious debt!

Ice-Slaves

2009-08-19T08:55:00.000-07:00

Iceland´s Refusal To Pay, A Quantum Leap Away From Debt-Slavery

Here in Iceland people say, that if the country´s government agrees to give in to British and Dutch blackmail to pay the debts of the private internet-subsidiary Ice-Save of the private bank Landsbanki, we all will become Ice-Slaves.
So public opinion is forcing the parliament to refuse unconditional debt-payments. According to a new agreement payments are only to be made conditional as a percentage of economic growth.

However the Icelandic stand has it´s risks. In the past countries which opposed the plans of the corporate and financial elites have experienced assassinations of their political leaders, false-flag terrorist attacks and all kinds of political destabilization tactics.

Fly Posting

2009-03-07T13:50:00.001-08:00

At the London Summit , the G20 ministers are trying to get away with the biggest April Fools trick of all time. Their tax-dodging, bonus-guzzling, pension-pinching, unregulated free market world's in meltdown, and those fools think we're going to bail them out. They've gotta be joking!

http://www.g-20meltdown.org/

Its a Numbers Game

2009-03-07T13:33:00.000-08:00

'Run on UK' sees foreign investors pull $1 trillion out of the City

Some $597.5bn was lost to the banks in the last quarter of last year alone, after a modest positive inflow in the summer, but a massive $682.5bn haemorrhaged in the second quarter of 2008 – a record. About 15 per cent of the monies held by foreigners in the UK were withdrawn over the period, leaving about $6 trillion. This is by far the largest withdrawal of foreign funds from the UK in recent decades – about 10 times what might flow out during a "normal" quarter.

Colin Ellis, an economist at Daiwa Securities, commented: "The outflow of overseas banks' UK holdings is not surprising – indeed foreign investors in general will still be smarting from the sharp fall in the exchange rate last year, as many UK liabilities are priced in sterling terms. That raises the question of what could possibly tempt overseas investors to return to the UK.

Answers on a postcard to: .....

Monopoly money

2009-03-04T12:03:00.001-08:00

More trouble in store for sterling

Official preparations to flood the economy with cash may prompt sterling to retest 23-year lows against the dollar and analysts say all graphs point down for the pound if it breaks lower.

The central bank voted unanimously in February to ask finance minister Alistair Darling for permission to begin quantitative easing, which it would do either by buying government bonds or corporate assets.

Darling was quoted on Tuesday as saying the BoE could start buying assets this week with newly created money.

Do you believe in monetary 'creationism'?

£2.3bn bank run

2009-02-26T09:24:00.000-08:00

Savers in the UK have withdrawn £2.3bn in January this year:

Savers' £2.3bn bank raid after rates slide

Banks were put on red alert today after customers withdrew more than £2bn from savings accounts in just one month.

Industry figures showed deposits at High Street banks fell by £2.3bn in January, the first significant drop since 1999 and the largest since British Bankers' Association (BBA) records began in 1997.

BBA statistics director David Dooks advised against reading too much into one month's figures, particularly as deposits rose sharply in November and December. However, he warned that if withdrawals continued, banks could face a fresh funding crisis and reduce lending even further.

Ben Yearsley, an investment manager at Hargreaves Lansdown, said savers were moving funds from cash Isas and other savings accounts with banks to the stock market as well as to corporate bonds and gold.

He added: 'They are looking at the returns they are getting and thinking they are diabolical. There was a big shift in January, and February is running on a par with January. There is also nervousness about the banking system, so people are withdrawing cash.'

Sounds like a bank run to me!

Emerald Alert - detailed analysis

2009-02-23T14:47:00.000-08:00

Following a comment on yesterdays post i thought i would look a bit deeper into irelands current financial situation:

Ireland uses NPRF to recapitalise banks

IRELAND – The Irish minister for finance has confirmed the recapitalisation of Allied Irish Bank and Bank of Ireland will be funded by the National Pension Reserve Fund.

In a statement, the government said €4bn (US$5.1bn) would come from the NPRF’s current resources while €3bn would be provided by means of a frontloading of the Exchequer contributions for 2009 and 2010.

Irish banking sector mired in borrowing costs

In some respects Ireland is uniquely badly placed to cope with the current financial crisis. It is entering recession with a hole in its public finances as property- related taxes dry up in line with the construction and housing slump.

There is no cash for a fiscal stimulus - ministers are hinting at the need for tax increases and public spending cuts to correct the ballooning budget deficit.

So on top of trying to finance a record fiscal deficit this year, set to be 9.5 per cent of gross domestic product, the government is also having to find funds to recapitalise its banks, which are facing large scale asset writedowns as property developers are unable to sell houses, and the value of collateral collapses.

Here perhaps there is some relief in sight. Ireland can dip into its National Pension Reserve Fund, a sovereign wealth fund established in 2001 as a far-sighted initiative to anticipate the greying of Ireland's population. It was originally set up to part fund the future pensions of retiring public sector workers. The fund was only meant to be drawn down from 2025.

As of December 29 assets under management stood at €16.4bn. Included in this are cash balances of €1.7bn and €3.5bn bonds, which officials say can be turned into cash.

So everythings all right in ireland.... theres plenty of money to fund the financial crisis... the government has just agreed to recapitalise two of the countrys biggest banks to the tune of 4bn from the National Pension Reserve Fund (NPRF).

BUT its only got 1.7bn in cash.... so its selling 2.3bn of bonds. All taken from a pension fund set up to cover the future pension liabilities of public sector workers which was not supposed to be touched until 2025.

I read somewhere that The Last Official Act of Any Government is to Loot the Nation.

Emerald Alert

2009-02-22T10:55:00.000-08:00

Scandal sees €10bn flood out of country

Up to €10 billion in funds is believed to have left Ireland in the last seven days as details of the Anglo Irish Bank scandal emerged.

Labour's Finance spokesperson Joan Burton said yesterday that the events at Anglo and its impact on Ireland's banking reputation is bleeding the country of cash.

Ireland in the face of default?

Last week ireland's five-year credit default swaps rose to a record 377 basis points.

Will ireland go the same way as iceland?

GIVE US OUR MONEY BACK!

2009-02-19T12:05:00.000-08:00

If you go to work everyday, 9-5 and then hand over about a quarter of your income to the government every month and you're not angry about the current banking F-up, then youre either one of the financial or political elite that have been ripping off the world since time immemorial, or youre a snivelling, subservient little slave and you deserve all the subjugation you get. The UK government is bailing the banks out to the tune of £500 billion!

Run in the Sun

2009-02-18T12:41:00.000-08:00

People seeking to withdraw funds line up outside the Bank of Antigua in St John's February 18, 2009.

Hundreds seek their money as Stanford fallout spreads

Hundreds of people rushed on Wednesday to withdraw money from banks in Antigua and Venezuela linked to Texas billionaire Allen Stanford as the fallout from U.S. fraud charges against him rippled from the United States to the Caribbean, Latin America and Europe.

A day after the tycoon and two top executives were charged with an $8 billion fraud by the U.S. Securities and Exchange Commission (SEC), investors and depositors in his banks and companies tried to redeem funds or sought information about their savings.

Police officers stood watch at the Bank of Antigua as at least 600 people stood in line outside.

"I'd like to get my money out," said Andrea Lamar, 28.

electronic bank run - video

2009-02-13T12:25:00.000-08:00

"$550 billion dollar electronic bank run" - listen out for the latest revelations on the US economy.

WTF is he talking about?

Bank Users Strike

2009-02-09T14:03:00.000-08:00

This looks like an interesting response to the global bank crisis:

The campaign for the bank users strike begins

Why?

We won't use the valuable space of this pamphlet to explain the damage banks and their governing accomplices make to us; if you are here now it's because you already know it. ¡Let's go to the point! These mobilizations on 15N are one first step, but we need to go further beyond. We all know that demonstrations are not enough to change the state of things, we need more sharp and forceful actions. Now is the time to move into action! That's why we are preparing a banks users strike.

What will we do?

It will be an indefinite strike which will not end until the worker's debt become canceled just the same as they have canceled Wall Street speculator's loss. It won't finish until the current international financial system is abolished and a new one is created, a new one directed by fair rules, which mean to cover the people needs and not those from speculators.If hundreds of thousands of people all around the world arrange to stop paying our debts, and if we support each other, they will not stop us. If there are a lot more participating in this call by withdrawing the money from the banks, we will stop this system which is enslaving us.Which meaning could have a delinquencies list if everybody was registered in it? Which strength will their seizes represent if they are affecting millions of people? What will they speculate with if we take out all the money from banks? Take part in this indefinite strike! Withdraw all your money from the bank, let's stop them speculating with our savings! Do not pay your mortgage and stay living in your home, do not pay back any personal credits, let this crisis be paid by the richest!

Watch this one grow and grow!

Straight Talking

2009-02-09T13:44:00.001-08:00

How about this 'no beating about the bush' comment on the current state of the UK banking system:

Financial Markets Analysis: Stocks Bounce, Where Next

Meanwhile greedy culpable bankers continue to reward themselves for failure with billions of tax payers monies across the globe. In the UK the Labour governments in-action is going to cost it the next election for allowing this to happen, after-all the banking rules and contracts have already been been broken in the aid of £800 billion of liabilities with more to come, the only contracts still being held up are those that allow bankers to be rewarded for destroying the British financial system.

This is totally outrageous and unforgivable.

The banks try to defend the indefensible with statements that they need to pay bonuses to attract the brightest and smartest. So smart are these people that they have destroyed the financial institutions that they worked for, any smarter and we may be looking at an Iceland style Bankrupt Britain, which therefore supports the view of dumbing down on the employees as well as the function of the banks, i.e. to focus on lending out deposited money without resorting to financial trickery to mis-price assets so as to reward bonuses for non existent profits.

Sounds about right to me.... Bankrupt Britain!

Comment of the Week

2009-01-24T10:35:00.001-08:00

I have noticed that the best analysis and perspectives are written by the readers and not the journalists:

SERIOUSLY ALARMED

The Sterling collapse is not surprising - the idea that a government can buy christmas tree logs from Finland for 300 pounds and magically convert them into 3 billion pounds of paper "currency" by printing the head of the queen on it is laughable.

Sterling is worth nothing because it is backed by nuthin....

Comment by Johan Meulemeester

Everything else is is irrelevant or a distraction...... its not if but when.

Reykjavik on Thames

2009-01-23T12:56:00.000-08:00

Don't worry.... everything will be all right.... the damage limitation boys are out in force today:

It's a bitter chill but Britain is not Iceland

The economy is in a bad way and government finances are in an awful state, but let's get a sense of perspective. The City is not Reykjavik on Thames. Britain is not Iceland. Sterling has fallen a long way and may fall further. But Britain is not bankrupt.

British banks did grow too big for the economy, which makes us more vulnerable to the banking meltdown than the Americans. But it is nowhere near as extreme as in the case of Iceland.

Not yet.... the PM has not resigned!

UK financial update

2009-01-21T06:36:00.000-08:00

Things are starting to get interesting in the uk as the the following three stories show:

Pound falls further against dollar as bank shares suffer again

The pound slipped to $1.3716 in early trading on the currency exchanges, down almost 1.5 cents to a fresh seven-and-a-half-year low.

Barclays's shares plunged by 33% to 48p, their lowest level since 1985. Lloyds Banking Group also continued to suffer, down another 12% to 29.3p, after a senior Labour MP called for it to be nationalised.

The talk in the City yesterday was that the UK's credit rating could be downgraded, or that the IMF might have to step in – a suggestion denied by chancellor Alistair Darling.

Freefall: Dangers of a collapse

What happens if bank share prices keep falling?

The authorities will be concerned that confidence in the banking system has been eroded and that savers will be spooked enough to start withdrawing their deposits.

Time to turn out the lights on sterling?

Jim Rogers, a punchy international investor who once worked alongside George Soros, weighed in with his view: "I would urge you to sell any sterling you might have. It's finished. I hate to say it, but I would not put any money in the UK."

After a few weeks rest over christmas and the new year it looks like uk depositors should have their running shoes at the ready.

Alternative Money

2009-01-21T00:11:00.000-08:00

An article attempting to explore some alternatives to the current financial system:

If the state can't save us, we need a licence to print our own money

I also know that most of the money in circulation is issued, through fractional reserve banking, in the form of debt. This means that you can't solve one problem (a lack of money) without causing another (a mountain of debt). There must be a better way than this.

As we confront the failure of the government's first bailout and the astonishing costs of the second, isn't it time we considered the alternatives?

Once again one needs to look in the comments section for real insight - and for a better understanding of the real problem behind the current financial crisis many posters refer to this video - Money as Debt. Watch it!

Bailout II

2009-01-19T12:57:00.001-08:00

The UK's relentless drive to become the next Iceland has taken another step:

Darling warns of economic collapse without latest banking bail-out

Alistair Darling today insisted he was right to use hundreds of billions of taxpayers' money in a fresh bail-out of the banking sector, saying the recession would be much worse if he did not act.

But shares in the banking sector plunged despite the new support package. Royal Bank of Scotland lost more than 70% after it said it will make a loss of up to £28bn for 2008 - the biggest loss in UK corporate history.

"It may seem a very wet, miserable January morning, things out there look very grim, but we will get through this," Darling added.

How long will it take before "we will get through this"..... and come back asking for more money?

The readers comments at the end of the article... give a clearer perspective:

You've sussed it.

And why are we up the creak whichever way we turn? Because they have created a fiat and paper money system.

So let's just scrap it! Yes, we can do that. But it still leaves us with the gargantuan, and I mean gargantuan, problem, that those naughty old powers-that-be haven't stupidly carried out an advanced take-over-the-world money system. Oh no. They've gone and incorporated it into the way the entire system of commerce and business works. If we were back in the stone age we wouldn't have lost too much. Two pairs of sandals, a three-legged chair and the boy for the cow and chickens? But in todays world, where 99% of us do not have real skills, cannot make, mend or produce anything of use, most importantly food, and where we rely on external power sources for everything (electricity, petrol, gas), it is going to be a steep learning curve.

....Have you started learning yet?

zero tolerance to martial law

2009-01-02T14:42:00.000-08:00

Zero percent interest rates are in the offing on both sides of the pond:

Savers facing accounts with no interest

More than 7 million people have saving accounts which already pay interest of 1 per cent or less. If a cut is passed on in full by banks, these accounts will dive towards negative territory for the first time on record.

Mark Dampier, of asset managers Hargreaves Lansdown, said: "It is a dire times for savers, especially for elderly people who rely on their income. They have already seen a sharp drop in excess of 50 per cent and can anyone tell me of someone in the public or private who would put up with a 50 per cent pay cut?"

A cut in interest rates raises the bizarre possibility that some savers may soon end up having to pay banks to keep money with them.

Savers pay already - bank charges and annual card fees for a start.... how much does it cost to keep your money under the mattress?

While in the US zero interest has global implications:

The Shadow Money Lenders: The Real Significance of The Fed’s Zero-Interest-Rate Policy (ZIRP)

To secure their global agenda, the shadow money-lenders needed a national base to first consolidate their power and to legislate laws that would secure their monopoly to issue money and credit. The target country was England and that is why the first central bank was the Bank of England. Almost all the laws that secured the money-lenders their unbridled economic and political power can be traced back to the legal basis for the establishment of the Bank of England as a central bank and their unfettered right to create “credits”.

The £ was the currency of choice for world conquest and the result was the mighty British Empire, where the sun never sets! It was an empire based on debt. When the £ Ponzi scheme unraveled, Britain outlived its usefulness and the shadow money-lenders relocated to structure another Ponzi scheme.

The next target country was the United States and the vehicle was the Federal Reserve System.

What is important to understand is that the shadow money-lenders are parasitic in nature and they have to feed on a continuous diet of debts. The financing of military adventures ensures a continuous stream of debts and compound interests. Debts beget more debts!

When the debts reach saturation point, the Ponzi scheme will collapse and hence, the need to revive and or re-establish another Ponzi scheme, failing which the shadow money-lenders’ financial empire cannot be sustained.

THE SHADOW MONEY-LENDERS’ LAST GAMBIT

The Fed’s decision to cut the Fed Fund Rates to 0.25 percent means that the Fed has embarked on a Zero-Interest-Rate Policy (ZIRP) and to proceed with the policy of Quantitative Easing (QE) – to turn on the spigot for “limitless supply of credit”.

In layman’s jargon, to encourage more debts – mortgage debts, credit-card debts, car loans, and more importantly to revive the derivative casino, presently on life support. This was the drug addiction that sustained the global financial system in the last twenty years and more intensely in the last seven years!

The announced policy (ZIRP / QE) is the last bullet in the Fed’s arsenal or as I have stated earlier, using another analogy, the final gamble, the last chip on the betting table. There will be no more ammunition left after this.

This huge gamble will take six months to play out but it will end in failure as surely as the sun will rise in the East tomorrow.

But a more sinister aspect of the zero-interest-rate policy which has not been highlighted by any economist or financial commentator is that the United States under the present Bush regime has declared to the entire world that the United States cannot and will not service anymore interest payments on the nation’s outstanding debts amounting to trillions.

Bush has declared that the United States for all intent and purposes is bankrupt and have no means to service the interest due, what more the principal sum.

Bush, Bernanke and Paulson have therefore collectively agreed to give the “two-finger sign” to the world’s creditors and in no uncertain terms are saying that:

You creditors, you a@#holes, you can jerk off. You know, I know and the whole bloody world knows that the US of A have no income to even service the interest which amounts to a few hundred billion a year.
So let us stop the pretense. We owe trillions and interest on top of that runs to hundreds of billions, which when unpaid is capitalized. And every year we have to borrow from you guys just to pay the interest so as to avoid a call on default. There were so many occasions when we have defaulted, but you guys allowed us to roll over to maintain the façade that the US of A is still floating.
We ain’t floating like a bee, but we are sinking fast! Let’s cut the crap and be real.
So this is the offer. And you jerks better listen good because this will be said once and once only.
You guys should be more than happy with so much interests already accruing on the outstanding. All these years, you guys have been only too happy to see us print the toilet papers in payment of your goods and to service the interests. It was an incredible con and what a free ride we had all these years. You guys were part of the con as well.
If you insist that I continue to pay you in toilet papers, why do you insist that we issue more toilet papers as interest payments? It is just more toilet papers. You guys are swarmed with toilet papers!
The toilet paper is worthless. So what is the point of paying “toilet paper interest” on outstanding toilet papers?
This is it! We are not paying anymore toilet paper interest. We are going to print more toilet papers to pay for whatever we want to purchase. If you want to sell to us, you will get toilet papers but with no interest. Period!

This is the greatest irony. The Fed, the world’s biggest money-lender and its partners-in-crime are telling their creditors to stuff it! When debtors cannot pay the exorbitant interests and the principal, these financial predators demand that the debtors give their pound of flesh in lieu of cash. But when they borrow, they repay in toilet paper money abd get away with it!

And now they even have the audacity to give an ultimatum:

We are the biggest buyers in town. If you don’t want toilet papers from us, that is fine by us. You can get tissue papers from the Europeans, bamboo papers from the Japanese and whatever that is on offer. Who is going to argue whether tissue paper would do a better job than plain toilet paper? Hey, this is a free market. Pick your choice!

This is the ultimate poker game. Bush, Bernanke and Paulson is betting that no one will call their bluff, turn away and stop selling anymore goods to the US of A. Bush is counting that the fear of recession and or social unrest in the creditors’ countries will force the creditors to capitulate.

Unfortunately, this gambit will fail. The reason is simple. The US cannot supply the goods that the American consumers want, even the most basic stuff. The manufacturing industries are all anemic, while others are on life support. Without imports, the United States will have to shut down within six months.

There will be massive riots all over the US, with people killing for food and other basic necessities. Basic raw materials, commodities for manufacturing etc. will be unavailable. There will be no more cars on the freeways! Millions of Americans licensed to carry arms will stalk the streets for whatever scrap they can get their hands on.

You can bet your bottom dollar, the Shadow Money-Lenders and its military partner will impose martial law.

From zero tolerance to martial law.... 2009 is sizing up to be an interesting year!

HAPPY NEW FEAR!

Pot. Kettle. Black

2008-12-27T09:06:00.000-08:00

Top banker accused by bishop of financial 'idolatry'

Speaking to the Berliner Zeitung newspaper, Bishop Huber argued bankers had a duty to look beyond the short term: "Never again should a Deutsche Bank chief executive set a profit goal of 25 per cent." Such goals drove up profit expectations to unsustainable levels and amounted to "a form of idolatry", he said. "In the current circumstances, money has become a god."

Only when the church renounces its 'worldly goods' will it be in a position to preach about false gods.... until then money and religion are two sides of the same coin.

Swindler’s List

2008-12-20T13:41:00.000-08:00

Heres the weekend special for this week:

"It's Kristallnacht Two!" An Ethnic Cleansing in America

Uncle Sam is the biggest Ponzi operator of all, with the added magical power denied Madoff (unless forgery was among his talents) of being able to print money at will. CounterPunch tip of the week. Wheelbarrow stocks. Buy ‘em while the price is right. Soon Americans will be needing wheelbarrows to put the money in to go shopping. A vast new wheelbarrow industry could be part of Obama’s recovery plan. Collapsible wheelbarrows for the soccer moms to get in the back of the Volvo. Electric-powered wheelbarrows. Hybrid wheelbarrows from GM. Gold-plated wheelbarrows from the Defense sector.

Bankrunwatch like the wheelbarrow stories....

10 days and counting

2008-12-14T13:45:00.000-08:00

The story of unusual happenings in the gold market keeps running:

Backwardation That Shook The World

On Friday, December 12, backwardation on gold was still in force at an annualized discount rate hovering around 2% in the December contract, and 0.3% in February contract.

Holders of physical gold, now on fully-fledged strike, are offered a strike-pay by the futures market, and the offer is left on the bargaining table, but the strikers still won't budge. There it is: the gold basis went negative, gold has been in backwardation for over a week, and physical gold is still not coming out of hiding.

Backwardation also gives a signal to those who are not so fortunate as to have some of the precious yellow in hand. It tells them to be prepared for a thunderous collapse of the international payments system, worse than the collapse of the twin towers of the World Trade Center. Backwardation means the inevitable contraction of the world economy, the beginning of an era of diminishing enterprise and employment, an era of snowballing business failures and poverty. Printing more irredeemable promises to pay will make this condition worse, not better.

I am still not sure where this is all leading.... but if things turn out as the writer of this article suggests then maybe a run on the banks will be the least of our worries.

Backwardation buzz

2008-12-09T08:51:00.000-08:00

After seeing this article on the backwardation of gold prices it now seems that the mainstream have picked up on the story:

The gold backwardation theory

Checking in today and backwardation is still in place. At 1430 GMT Tuesday December 9 spot gold was trading at some $768 while Comex futures were at 766.40.

No small call, Fekete is essentially calling the end of the fiat-dollar system - just as the US Treasury sells 3-month bills at the lowest level since 1929, and CDS spreads on sovereign debt continue to wander - hmmm does he have a point?

It certainly sounds like the talk of conspiracy theorists.

Except that this article was written for the Financial Times!

QE II

2008-12-07T10:53:00.000-08:00

No... not the aging british cruise liner but the 'next big idea' of the worlds central bankers:

ECB cuts to 2.5pc and mulls "printing money"

I try to find a bit of light reading for a sunday evening - this article is so good that i intend to cut n paste the whole thing....

The European Central Bank has slashed interest rates by three-quarters of a point to 2.5pc in the boldest move since the launch of monetary union and hinted at revolutionary action to head off a severe slump next year as the economic crisis ravages the car, steel, and machine tool industries.

Revolutionary action - i very much doubt that!

"Tensions have increasingly spilled over from the financial sector to the real economy," Jean-Claude Trichet, the ECB's president, said. He added: "Global and euro-area demand are likely to be dampened for a protracted period of time."

Poor old Trichet is feeling tense as people in the 'real' world are finding out that from now on things will be a bit 'damp' !

Sweden's Riksbank went even further, stunning the markets with a cut of 175 basis points to 2pc. The Swedish authorities are deeply alarmed by the collapse of vehicle sales at Volvo, as well as the large exposure of Swedish banks to the property crash in Eastern Europe
"We're moving towards a world of zero rates in Europe and the G10 countries, perhaps as soon as the second half of next year," said Michael Klawitter, a strategist at Dresdner Kleinwort.

Zero rates... or zero work?

Mr Trichet said the eurozone is likely to contract by 0.5pc next year amid a "hardening" of the credit markets. This is a dramatic reversal from the ECB's forecast of an economic rebound published in September. The bank has undoubtedly been startled by the latest PMI confidence data, which has a good record as a leading indicator and is now pointing to a brutal contraction of 2.7pc year-on-year in early 2009.

Startled? wtf... they havn't a clue. Economic rebound my @$$.

In France, President Nicolas Sarkozy unveiled a €26bn (£22bn) stimulus package of tax cuts and state spending to fight unemployment. It includes €1bn in loans for the French car industry, which is shutting a string of plants for up a month to clear an unprecedented glut of unsold vehicles. The state will build 100,000 new homes to keep construction alive.
Mr Sarkozy said the goal of restoring France's dilapidated public finances to good order could wait for better times. "Not doing anything now would have cost us much more. We're not going to sacrifice the present for the future. This crisis is an ordeal, a painful ordeal and a terrible ordeal, but we have to keep faith," he said.

The financial crisis is turning all religious for the French - painful ordeals and sacrifice all round.

Italy needs a stimulus package even more badly but is having to tread with care as markets fret over some €200bn of Italian state debt that must be rolled over next year. The yield spread on 10-year bonds has risen to 123 basis points over German Bunds. Giulio Tremonti, Italy's finance minister, insisted yesterday that state bonds were at no risk. "Buy them. They are absolutely solid".

Go on... go ahead and buy them... you can always trust the word of a politian.

Mr Trichet signalled for the first time that the bank is considering some form of "quantitative easing" (QE), the term used to describe the emergency measures pioneered by Japan during its Lost Decade and now being adopted by the US Federal Reserve.
"We are supplying liquidity on an unlimited basis. We will continue to look very carefully at the situation of the market and if needed we will take new decisions," he said, when asked about QE measures.

Here we are - QE - also known as printing more money - now apparently on an unlimited basis. Just so you know.

Julian Callow, Europe economist at Barclays Capital, said the ECB had been caught off guard as the crisis gathered pace this year but is now beginning to catch up. "They are still being too hesitant given the gravity of what is happening. Even so, it seems they are now preparing for quantititave easing and undoubtedly have other tricks up their sleeve," he said.

Yes far too hesitant... lets get on with it!! QE will do the trick. If not the conjuror will never fail to amaze!

The Maastricht Treaty prohibits the ECB from injecting stimulus by purchasing the government debt of the eurozone's fifteen states debt – a method known as "monetizing the deficit", or more crudely as "printing money".

Welcome to Weimar World - where wheelbarrows are wallets. Monetize. You know it makes sense.

But it can achieve the same effect by mopping up sovereign debt, mortgage securities, or even company debt on the open market, as the Fed has already begun to do. At the moment the ECB accepts some of these assets as collateral in exchange for loans, but it has not yet hit the atomic button by buying them outright with its own freshly-minted fiat money.

Ahhh... at last - the magic words fiat money... and the one big question no ones talking about - where does all this money come from? Watch this for some of the answers.

The silent type

2008-12-04T06:04:00.000-08:00

Just spotted this lightweight, heavily anicdotal piece about how the public are reacting to risk:

Where Safety-First Investors Are Putting Their Money

Figures released this week by the Bank of England suggest we could be seeing the beginnings of another bank run – as depositors head into the safest investments they can find. Except this time, the consequences could be a whole lot nastier. Because it’s not just one bank that has lost the trust of its customers. It’s the entire British banking industry....

No queues are forming outside any branches. No CEO memos are being read out to anxious customers. But, behind the scenes, depositors have started fleeing for the exits…

I’m reminded of a conversation I had with a friend two months ago. He was telling me he’d just that day transferred the bulk of his money into his wife’s account. Not only that, his mother and his sister had done the same.

“I’ve engineered my own mini bank run,” he told me. “I’m not proud, but it’s worth it for the peace of mind.”

What are you doing to protect your money?

Ice Storm

2008-12-02T06:04:00.000-08:00

The latest reports from Iceland show that the local population know who to blame for their country's financial problems:

Protesting Icelanders storm bank, streets, over economy crisis

Reykjavik - What began Monday as a celebration of Iceland's 90th birthday since its independence from Denmark in 1918 turned into protests by several hundred people who stormed to the central bank in anger over the government's handling of the financial crisis.
Monday's protestors pushed into the Central Bank foyer, loudly demanding the resignation of Central Bank chief David Oddsson.

You can also see a video of the days events here.

Running Ahead

2008-12-01T11:19:00.001-08:00

Most of the respondents on the bankrunwatch poll have now withdrawn their money from the bank for the first time since i started this blog. I dont know how significant this is as the numbers are low....

Out of Africa - Zimbabwe

2008-11-29T11:12:00.000-08:00

A guy goes shopping with a wheelbarrow full of Zimbabwe dollars. On the way to the shop, he is mugged – the muggers overturn the barrow, tip out the cash and make off with the wheelbarrow.

The financial situation in Zimbabwe has not changed much in the five years since this article was written.... in fact things have only gotten worse.

"Council has since resolved to offer free graves to those who have died of cholera since most people are finding it hard to get cash to pay for the graves," it quoted the town clerk as saying. A grave in Harare costs an average of $30, a teacher's monthly salary at the current exchange rate.

Free graves anyone?

Background reading #2

2008-11-27T07:34:00.000-08:00

The Five Stages of Collapse - a thought provoking article by someone who has studied the timeline of collapse in the USSR and has now seen the same thing happening across the world.

If the US government has to lend banks over 200 billion dollars a day just to keep the whole system from imploding, then the term "crisis" probably doesn't do justice to the situation. To keep this game going, the US government has to be able to sell the debt it is taking on, and what do you think the chances are that the world at large will be snapping up trillions of dollars of new debt, knowing that it is being used to prop up a shrinking economy? And if the debt can't be sold, then it has to be monetized, by printing money. And that will trigger hyperinflation. So, let's not quibble, and let us call what's happening what it looks like: "financial collapse".

Stages 2 and 3 - commercial and political collapse, are driven by financial collapse, and will overlap each other. Right now, it is unclear which one is farther along. On the one hand, there are signs that global shipping is grinding to a halt, and that big box retailers are in for a very bad time, with many stores likely to close following a disastrous Christmas season.

Shipping rates are down 99% and the stores are already closing ... welcome to stage 2.

In addition, it also makes sense to keep an eye out for signs of environmental collapse. This article about the 73% fall in zooplankton could have dramatic effect on those of us at the top of the food chain:

The ongoing disappearance of zooplankton, amphibians, butterflies, and bees is tied directly or indirectly to the continuing growth of our own species—both in population (there are nearly seven billion of us large-bodied omnivores, more than any other mammal) and in consumptive voracity (water, food, minerals, energy, forests—you name it).

The financial meltdown tells us these trends can't go on forever. How the mighty have fallen! - the Masters of the Universe reduced to begging for billion-dollar handouts in front of a television audience.

Next will come a human demographic collapse (resulting from the economic crisis, with poor folks unable to afford food or shelter), as mortality begins to exceed fertility.

Iceland - Latest

2008-11-26T12:01:00.000-08:00

A near-riot and parliament besieged: Iceland boiling mad at credit crunch

One young man climbed on to the balcony of the Althing building, where the president appears upon inauguration and on Iceland's national day, and hung a banner reading: "Iceland for Sale: $2,100,000,000" – the amount of the loan the country is getting from the IMF.

A separate group of 200-300 people gathered in front of the city's main police station, throwing eggs and demanding the release of a young protester being held there. Police in riot gear used pepper spray to drive back an attempt to free the protester during which several windows at the police station were shattered.

Gudrun Jonsdottir, a 36-year-old office worker, said: "I've just had enough of this whole thing. I don't trust the government, I don't trust the banks, I don't trust the political parties, and I don't trust the IMF."

Could be a sign of things to come as the people realise that borrowing more money from the IMF won't solve anything. Iceland leads the way.... and others follow.

Debt is as dangerous as heroin

2008-11-25T10:52:00.000-08:00

Is Britain going bankrupt?

The cost of insuring against the bankruptcy of the British state has broken out - upwards - over the last month. Yes, credit default swaps (CDS) are dodgy instruments, but they are the best stress barometer that we have.
Today they reached 86 basis points, near Portuguese debt in the league table. For good reason. Alistair Darling has had to admit that the British economy faces the most sudden economic collapse since World War Two, and the worst budget deficit of any major country in the world.
Ok, this is a lot lower than Iceland, Ukraine, Hungary, and other clients of the IMF, but is significantly higher than Germany (35), USA (43), and France (49).

As usual the the comments shed more light on the real state of the country than the article.

fruitwood-smoked quail and a chanterelle-jussed tomato, fennel and eggplant fondue

2008-11-16T07:40:00.000-08:00

Whats on the menu tonight?

Let the people eat cake

WASHINGTON (MarketWatch) -- The most powerful people in the world will dine on roasted rack of lamb, fruitwood-smoked quail and a chanterelle-jussed tomato, fennel and eggplant fondue, while millions of people around the world lose their jobs, their homes and their hopes.

Sounds nice... where's my recipe book..... eat (like) the rich!

Running in second place

2008-11-16T07:31:00.000-08:00

The runners are picking up speed... keep an eye on them in the next few weeks!

Baltic Bank Bust

2008-11-10T14:44:00.000-08:00

News of a run on a major bank in Latvia:

Latvia takes over Parex after run on bank

Parex, Latvia’s second largest bank with 3.1bn lats ($5.6bn) in assets, was forced to seek protection from the state after clients panicked and it lost 60m lats in deposits at the end of last week.

Walking in the Alps

2008-11-05T12:06:00.000-08:00

Seems that even the prestigious swiss banks no longer provide a safe haven for depositors cash:

Customers pull their money out of ailing UBS

Switzerland's largest bank, UBS, has reported record outflows in the third quarter as clients seek security in other financial institutions.

UBS said outflows from its core wealth management business totalled a record SFr49.3 billion and a further SFr34.4 billion was taken out of its Global Asset Management business.

bank run watch

Latvian bank run - photos

Latvian bank run

"Take some money out"

Run first... vote later

A word in your ear...

Poetry Corner

Operation Bank Run - video

Bank Run Rumours - occupy your atm

He who panics first, panics best!

The Black Swan is on the Wing

WORTHLESS - the video

Why Do Banks Make So Much Money?

silent bank run

Banking for Beginners

Greek run update

Keep on running!

Iceland: where no means no

Korean Worries

African runner

pyramid scheme

Waiting for the big one... or already heading for the hills?

2011: Year of the bank run

The American Dream

Dutch courage?

Spanish fly

The bank run will not be televised...

On your marks.... get set....

If Ireland Doesn’t Take The Bailout . . .

Ireland: bank run warning

Lights.. Camera.. ACTION!

'bad idea'

World Bank Run Day - links

Irish Run On

WATCH THIS!

Official European Bank Run Day - review

Domino Effect

Still more pulling out...

KILL THE BANKS - 7/12/10

More pulling out...

DON'T PANIC!

Stopbanque update#1

Stopbanque - 07/12/10

Irish rug pulling

Are we trying to keep people in poverty?

2010 - predicting the futue

Watch this!

Watch this!

Cuba of the North

Money Toilet Paper

Toilet Paper Money

Fiat money alchemy

Zimbabwe Times

distortion economy

More light reading - 2

No running please! (update)

No running please!

G20

Anniversary of a near-death

One Man Bank

The Encyclopedia

Can a Central Bank Go Broke?

Debt Slave - the video

QE - more, more more!

ODIOUS DEBT

Ice-Slaves

Fly Posting

Its a Numbers Game

Monopoly money

£2.3bn bank run

Emerald Alert - detailed analysis

Emerald Alert

GIVE US OUR MONEY BACK!

Run in the Sun

electronic bank run - video

Bank Users Strike

Straight Talking

Comment of the Week

Reykjavik on Thames

UK financial update