Saturday, March 23, 2013

Life Or Debt

62% of bankruptcies are linked to medical debt. Over 75% of those driven to bankruptcy had health insurance when they incurred those bills. 

From Detroit to Cyprus, Banksters in Search of Prey

Go To Original

From Nicosia, Cyprus, to Detroit, Michigan, the global financial octopus is squeezing the life out of society, stripping away public and individual assets in a vain attempt to fend off its own, inevitable collapse. The bankers “troika” that effectively rules Europe prepares to reach into the individual accounts of ordinary depositors on the island nation of Cyprus to fund the bailout of their local banking brethren. Across the Atlantic, a corporate henchman makes arrangements to seize the assets and abolish the political rights of a Black metropolis. The local colorations may vary, but the crisis is the same: massed capital is devouring its social and natural environment. Either we liquidate the banksters, or Wall Street will liquidate us.

The proposed seizure of a big chunk of every ordinary Cypriot depositors’ accounts, in the guise of a one-time “tax,” was shocking even by the standards of the Euro Zone’s overlords: the International Monetary Fund, European Central Bank and European Commission. The original diktat to finance new lines of credit for Cyprus’s over-extended banks called for snatching 6.75 percent of the cash of customers with balances below 100,000 euros ($129,500), and 9.9 percent above that threshold. When the public went berserk, it was proposed that depositors with 20,000 euros or less be spared – but Cypriot lawmakers balked. The banks are now closed, to prevent people from withdrawing their money. But Europe’s ruling triumvirate at the bankers’ lair in Brussels continues to demand that the public-at-large pay to keep the global criminal financial enterprise humming, or be starved out. “In the absence of this measure, Cyprus would have faced scenarios that would have left deposit-holders significantly worse off,” they said – disaster banksterism.

A rapscallion Black lawyer for the notorious corporate law firm Jones Day delivered the bankers’ ultimatum to Detroit. Emergency financial manager Kevyn Orr, anointed by Michigan’s Republican governor, is a bankruptcy specialist whose mission is to liquidate the assets of the 82 percent Black city, especially the revenue-producing Water and Sewerage Department. Orr’s firm’s clients – which, according to their website, include “more than half of the Fortune 500 companies” – have plenty of experience at liquidating in Detroit. Butch Hollowell, general counsel for the local NAACP, says Wells Fargo has “done more foreclosures in Detroit and the state of Michigan than any other firm,” and is Detroit’s number one property tax scofflaw. Jones Day also represents Bank of America, JP Morgan Chase and CitiGroup.

“These are firms that not only got billions in TARP bailouts, but they’re also the same ones that defrauded people into signing these predatory leases which cause the crash of the housing market,” said Hollowell. “Detroit has been hit harder than anyplace in the country on that score” – hugely aggravating the city’s money problems. Financial manager Kevyn Orr’s job is to extract more booty from Detroit for the bankers’ vaults.

To facilitate the theft of the city’s property, its citizens must first be stripped of their political and civil rights, through the neutering of their elected officials. Orr looks forward to the project. “While I understand there’s a lot of concern and emotion behind the concept that I’m depriving people of certain rights,” he said, “actually it’s very consistent with both the history of this country and specifically in this state.” What he’s about to do “is democracy in action."

This corporate concept of democracy has already devalued the franchise of the 49 percent of Michigan’s Black population that live in municipalities and school districts under the thumb of outside financial managers, a violation of both the Voting Rights Act and the one man-one vote rule embodied in the 14th Amendment, says the NAACP’s Hollowell.

Black Baptist pastors and the AFSCME and UAW unions will join the NAACP’s planned legal action against the “hostile takeover” of Detroit – which is fine, as a civil rights response. But this is a much bigger battle.

Detroit and the people of Cyprus share the same enemy, a class that is beyond the reach of simple civil rights suits. The Lords of Capital on Wall Street and the City of London and the Federal Reserve in Washington and in the “troika” at Brussels confront their own existential crisis, which compels them to liquidate the public sector so that it can eventually be transferred to their own balance sheets. There are many ways to accomplish this, through privatization of existing public institutions, or by simply blowing a hole in public services and allowing privateers to fill the void, subsidized by public funds. However, nothing can save the banksters from inevitable, and increasingly imminent, collapse. Ever-increasing profit margins must be achieved, somehow, or the system implodes. Hundreds of trillions of notional dollars in derivatives must be serviced and fed by a class that makes nothing and can only survive by chicanery and coercion by governments under their control.

In Cyprus, they are prepared to brazenly snatch euros directly from working and retired people’s accounts to fund a bank bailout, without even bothering to construct a convoluted pathway from the victims’ accounts to their own. They have reached the point of outright confiscation, and will not stop until they have stripped society of the potential to save itself from the ruins.

We have no choice but to confiscate them – to destroy them utterly as a class.

Poverty hits America's suburbs

Go To Original

Like many Americans who move to the suburbs, Tara Simons came to West Hartford because she wanted her daughter to grow up in a nice, safe place with good schools.
Her fall from a more financially secure suburban life to one among the working poor also happened for the same reason it’s happened to so many others. She had a bout of unemployment and couldn’t find a new job that paid very well.
As a single mother, that’s made it hard to hold on to the suburban life that is, in her mind, key to making sure her daughter gets off to the right start.
“I’m basically paying to say I live in West Hartford,” she said. “It is worth it.”
It’s a struggle that many Americans bruised by the weak economy can relate to.
The number of suburban residents living in poverty rose by nearly 64 percent between 2000 and 2011, to about 16.4 million people, according to a Brookings Institution analysis of 95 of the nation’s largest metropolitan areas. That’s more than double the rate of growth for urban poverty in those areas.
“I think we have an outdated perception of where poverty is and who it is affecting,” said Elizabeth Kneebone, a fellow at the Brookings Institution and co-author of the research. “We tend to think of it as a very urban and a very rural phenomenon, but it is increasingly suburban.”
Simons’ situation is complicated by the fact she’s a single mom. Poverty and financial insecurity among single moms is far higher than for households headed by single dads or two parents.
The rate of poverty among single mothers actually improved dramatically through the 1990s, thanks to a strong economy, more favorable tax breaks and the success of so-called welfare-to-work programs. But two recessions and years of high unemployment erased many of those gains.
Moving for a better life
Simons and her daughter Alexis moved from Massachusetts to West Hartford eight years ago because Simons had a job with a local rug retailer.
Alexis, now 14, made friends, became an avid lacrosse player and is now a high school freshman.
The picturesque suburb, with its well-kept homes and an upscale town center, has a median household income of $80,061, more than double that of Hartford itself, which is $29,107 according to the Census Bureau.
And yet the number of people needing help has skyrocketed in recent years, said Susan Huleatt, the human services manager for West Hartford.
About five years ago, Huleatt said a mobile van began coming to town once a month to distribute fresh produce to people in need. Now, four vans come each month, and more than 200 people sometimes line up for the food. That’s in addition to the city’s own food pantry.
Simons expected to work for the rug retailer until retirement, but about a year ago she quit after disputes with one of the two owners. She had never had trouble finding a new job and was unprepared for how hard it would be.
“I know that part of it is my fault and I absolutely take responsibility for that, but I never in a million years thought that I would (be in this position),” she said.
Simons went without work or unemployment benefits for five months before she got her current job about six months ago. The position, as a customer service representative for a local health products company, pays $14 an hour. That leaves her with take-home pay of about $460 to $480 a week, plus about $127 a week in child support. Simons has full custody of her daughter.
She is behind on her electric and gas bills and owes nearly $400 to her daughter’s club lacrosse team, which has her worried that her daughter won’t be able to play this spring.
Like many working poor people, she has fallen into a debt spiral. She took out an $800 payday loan, and she estimates that it will end up costing her $1,600 to pay it back. She also has several hundred dollars in credit card debt and has worked to pay off hundreds of dollars in bank overdraft fees. She’s sold jewelry for cash.
She and Alexis had to leave the house they were renting after she lost her job and a roommate. She got one-time aid from the city’s crisis fund to help with the down payment for her new, cheaper apartment. Still, the $1125 rent eats up more than half of her monthly take-home pay.
She went on Medicaid after being unable to afford health insurance.
Simons said it’s been hard, and sometimes embarrassing, to accept help.
“The thing is, I don’t want it,” she said. “I want to pay my bills.”
Hoping for a break 
Simons has continued to apply for jobs daily, hoping to land a higher-paying position with health insurance she can afford.
One morning in early March, she got a break.  A rug retailer about 40 miles from West Hartford offered her a job interview.
Excited and anxious, Simons carefully picked out her clothes and fretted about her hair. She was too nervous to eat.
A few hours before the interview, her boyfriend Phil Volonis stopped by to give Simons some gas money. Her 2005 Chevrolet Cavalier had broken down the day before, so he had lent her a car.
Later that evening, Simons walked out of the interview confident that she had done well, but still not sure if she had gotten the job.
Driving home in the pouring rain, Simons said that while living in West Hartford has been good for her and her daughter, she dreams of moving somewhere warmer.
She mused that perhaps Alexis will go to University of Florida – which has a good women’s lacrosse team - and she could move down there, too.
But for now, she said, she would do almost anything to keep her daughter in this town.
“The kid’s been through enough,” Simons said. “So, I just want her to feel as safe and settled as possible, and I want her to know that she can count on her mom to keep her where she is and keep promises.”

Friday, March 22, 2013

U.S. To Have DHS And Corporations Dramatically Increase Scanning Of Private Web Traffic, Email


The U.S. government is expanding a cybersecurity program that scans Internet traffic headed into and out of defense contractors to include far more of the country's private, civilian-run infrastructure.

As a result, more private sector employees than ever before, including those at big banks, utilities and key transportation companies, will have their emails and Web surfing scanned as a precaution against cyber attacks.

Under last month's White House executive order on cybersecurity, the scans will be driven by classified information provided by U.S. intelligence agencies — including data from the National Security Agency (NSA) — on new or especially serious espionage threats and other hacking attempts. U.S. spy chiefs said on March 12 that cyber attacks have supplanted terrorism as the top threat to the country.

The Department of Homeland Security will gather the secret data and pass it to a small group of telecommunication companies and cyber security providers that have employees holding security clearances, government and industry officials said. Those companies will then offer to process email and other Internet transmissions for critical infrastructure customers that choose to participate in the program.

DHS as the middleman
By using DHS as the middleman, the Obama administration hopes to bring the formidable overseas intelligence-gathering of the NSA closer to ordinary U.S. residents without triggering an outcry from privacy advocates who have long been leery of the spy agency's eavesdropping.

The telecom companies will not report back to the government on what they see, except in aggregate statistics, a senior DHS official said in an interview granted on condition he not be identified.

"That allows us to provide more sensitive information," the official said. "We will provide the information to the security service providers that they need to perform this function." Procedures are to be established within six months of the order.

The administration is separately seeking legislation that would give incentives to private companies, including communications carriers, to disclose more to the government. NSA Director General Keith Alexander said last week that NSA did not want personal data but Internet service providers could inform the government about malicious software they find and the Internet Protocol addresses they were sent to and from.

"There is a way to do this that ensures civil liberties and privacy and does ensure the protection of the country," Alexander told a congressional hearing.

Fears grow of destructive attack
In the past, Internet traffic-scanning efforts were mainly limited to government networks and Defense Department contractors, which have long been targets of foreign espionage.

But as fears grow of a destructive cyber attack on core, non-military assets, and more sweeping security legislation remained stalled, the Obama administration opted to widen the program.

Last month's presidential order calls for commercial providers of "enhanced cybersecurity services" to extend their offerings to critical infrastructure companies. What constitutes critical infrastructure is still being refined, but it would include utilities, banks and transportation such as trains and highways.

Under the program, critical infrastructure companies will pay the providers, which will use the classified information to block attacks before they reach the customers. The classified information involves suspect Web addresses, strings of characters, email sender names and the like.

Not all the cybersecurity providers will be telecom companies, though AT&T is one. Raytheon said this month it had agreed with DHS to become a provider, and a spokesman said that customers could route their traffic to Raytheon after receiving it from their communications company.

As the new set-up takes shape, DHS officials and industry executives said some security equipment makers were working on hardware that could take classified rules about blocking traffic and act on them without the operator being able to reverse-engineer the codes. That way, people wouldn't need a security clearance to use the equipment.

Civil liberties implications
The issue of scanning everything headed to a utility or a bank still has civil liberties implications, even if each company is a voluntary participant.

Lee Tien, a senior staff attorney with the nonprofit Electronic Frontier Foundation, said that the executive order did not weaken existing privacy laws, but any time a machine acting on classified information is processing private communications, it raises questions about the possibility of secret extra functions that are unlikely to be answered definitively.

"You have to wonder what else that box does," Tien said.

One technique for examining email and other electronic packets en route, called deep packet inspection, has stirred controversy for years, and some cybersecurity providers said they would not be using that. In deep packet inspection, communication companies or others with network access can examine all the elements of a transmission, including the content of emails.

"The signatures provided by DHS do not require deep packet inspection," said Steve Hawkins, vice president at Raytheon's Intelligence and Information Systems division, referring further questions to DHS.

The DHS official said the government is still in conversations with the telecom operators on the issue.

The official said the government had no plans to roll out any such form of government-guided close examination of Internet traffic into the communications companies serving the general public.

Mass Panic In Cyprus: The Banks Are Collapsing And ATMs Are Running Out Of Money


European officials are openly admitting that the two largest banks in Cyprus are "insolvent", and it is now being reported that Cyprus Popular Bank only has "enough liquidity to cover the next few hours".  Of course all banks in Cyprus are officially closed until Tuesday at the earliest, but there have been long lines at ATMs all over Cyprus as people scramble to get whatever money they can out of the banks.  Unfortunately, some ATMs appear to be "malfunctioning" and others appear to have already run out of cash.  You can see some photos of huge lines at one ATM in Cyprus right here.  Some businesses are now even refusing to take credit card payments.  This is creating an atmosphere of panic on the streets of Cyprus.  Meanwhile, the EU is holding a gun to the head of the Cyprus financial system.  Either Cyprus meets EU demands by Monday, or liquidity for the banks will be totally cut off and Cyprus will be forced out of the euro.  It is being reported that European officials believe that the "economy is going to tank in Cyprus no matter what", and that it would be okay to let the financial system of Cyprus crash and burn if politicians in Cyprus are not willing to do what they have been ordered to do.  Apparently European officials are very confident that the situation in Cyprus can be contained and that it will not spread to other European nations.

Unfortunately, European officials are losing sight of the bigger picture.  If the largest banks in Cyprus are allowed to fail, it will be another "Lehman Brothers moment".  The faith that people have in banks all over Europe will be called into question, and everyone will be wondering what major European banks will be allowed to fail next.

Meanwhile, European officials have already completely shattered confidence in deposit insurance at this point.  Everyone now knows that when there is a major bank failure that depositors will be expected to share in the pain.  Expect to see "bank jogs" all over southern Europe over the coming weeks.

The banks in Cyprus had been scheduled to reopen on Tuesday, but very few people expect that to actually happen at this point.  In fact, Bloomberg is reporting that EU officials are actually thinking about shutting down the two biggest banks in Cyprus and freezing their assets...

    Finance ministers for the 17 euro countries are considering a plan to shutter the two biggest banks in Cyprus and freeze the assets of uninsured depositors, said the four officials, who asked not to be named because the talks are ongoing. The ministers are holding a teleconference tonight.

    Cyprus Popular Bank Pcl (CPB) and the Bank of Cyprus Plc would be split to create a so-called bad bank, one of the officials said. Insured deposits -- below the European Union ceiling of 100,000 euros ($129,000) -- would go into a so-called good bank and not sustain any losses, while uninsured deposits would go into the bad bank and be frozen until assets could be sold, said the four officials.

    Losses to unsecured creditors, including uninsured depositors, could reach 40 percent under the plan, which has support from the International Monetary Fund and the European Central Bank. The proposal, a version of which was rejected last week, is considered a better option than taxing insured deposits or allowing Cypriot banks to collapse in a disorderly fashion if they lose access to ECB aid, the officials said.

Such a scenario would be an utter disaster.

How would you feel if you woke up someday and 40 percent of your life savings was suddenly gone?

According to Greek newspaper Kathimerini, European officials are also openly discussing the possibility of a Cyprus exit from the eurozone if a suitable bailout agreement is not worked out...

    The possibility of Cyprus exiting the eurozone was discussed during teleconference involving technocrats from the Euro Working Group on Wednesday, Kathimerini understands.

    A reliable source told Kathimerini that the technical implications of a euro exit, as well as the adoption of capital controls were debated by the Euro Working Group officials during the teleconference.

As I mentioned above, European officials seemed resigned to the fact that there will be an economic collapse in Cyprus "no matter what", and so letting Cyprus leave the euro would not make that much of a difference.  Either way, the banks are going to have to be "reorganized" and capital controls will be imposed...

    In detailed notes of the call seen by Reuters, the group’s chair Austria's Thomas Wieser said: “The economy is going to tank in Cyprus no matter what. Restrictions on capital will probably be imposed.”

Never before have we seen European officials impose such a harsh ultimatum with such a short deadline.  It is almost as if they want to boot Cyprus out of the euro.  The following comes from a recent CNBC report...

    In stark twin warnings on Thursday, the European Central Bank said it would cut off liquidity to Cypriot banks and a senior EU official made clear to Reuters that the bloc was ready to see the bankrupt island banished from the euro in the belief it could then contain damage to the wider European economy.

And European officials are even publicly talking about the possibility that Cyprus will soon need to start using "their own currency"...

    In Brussels, a senior European Union official told Reuters that an ECB withdrawal would mean Cyprus's biggest banks being wound up, wiping out the large deposits it has sought to protect, and probably forcing the country to abandon the euro.

    "If the financial sector collapses, then they simply have to face a very significant devaluation and faced with that situation, they would have no other way but to start having their own currency," the EU official said.

This is absolutely shocking.  Everyone always thought that Greece would be the first to leave the euro, but now it looks like it might be Cyprus.

However, there is still a chance that Cyprus may find a way to comply with EU demands.  Politicians in Cyprus are frantically searching for a way to raise the needed cash without raiding private bank accounts.  The following is what CNN is saying about the latest efforts...

    Leaders of Cyprus' political parties agreed Thursday to create an "investment solidarity fund," which would issue bonds backed by state and church assets.

    The plan was due to be discussed by the Cypriot government and parliament on Thursday evening, but few details were available and it was not clear how much the fund would be worth.

According to Reuters, other proposals have been under consideration as well...

    The government said a "Plan B" was in the works.

    Officials said it could include: an option to nationalize pension funds of semi-government corporations, which hold between 2 billion and 3 billion euros; issuing an emergency bond linked to future natural gas revenues; and possibly reviving the levy on bank deposits, though at a lower level than originally planned and maybe excluding savers with less than 100,000 euros.

At this point it is unclear whether any of those proposals will turn out to be acceptable to European officials.

In fact, the tone of European officials has noticeably changed from previous bailout efforts.  They now seem much more willing to play hardball.  For example, just check out what German Finance Minister Wolfgang Schaeuble is saying about the situation in Cyprus...

    German finance minister Wolfgang Schaeuble told the ZDF public broadcaster on Tuesday night (19 March) he "took note with regret" of the Cypriot parliament's rejection of the bailout deal, but insisted that the terms will stay the same.

    Asked if the eurozone was willing to let Cyprus go bust, he answered: "Well, we are much more stable in the eurozone - we took measures to protect ourselves from the risks of contagion ... but I don't want to have any of this."

    He added: "It is a serious situation, but this cannot lead to a decision that makes absolutely no sense, to rescue a business model that has failed. Cyprus has a banking sector that is totally oversized and this made Cyprus insolvent. And nobody outside Cyprus is to blame for it."

Schaeuble knows that the EU is holding all of the cards and that Cyprus is doomed without their help...

    "The Cypriot state cannot fund itself on the markets. Its two largest banks are insolvent and are being kept afloat with emergency funding from the ECB, but only on the condition that there will be a long-term rescue programme. If this condition is no longer met, Cyprus will no longer be solvent and this is something Cypriot decision makers must know"

But the truth is that the EU can't really afford to allow major banks to fail or for a single member to leave the eurozone.  If either of those things happen, the confidence game that has been holding the European financial system together will begin to rapidly evaporate.

If the EU thinks that they can abandon Cyprus without the crisis spreading to the rest of southern Europe they are just being delusional.

At least there are a few politicians in Europe that understand what is happening.  Nigel Farage, a very outspoken member of the European Parliament, is telling people to get their money out of banks in southern Europe as quickly as they can.  He is warning that a great collapse of the European financial system is coming and that people need to get prepared for it...
The real "takers" in America are the unproductive rich .


You don’t have to be a Tea Party conservative to believe that the economy is threatened when there are too many “takers” and not enough “makers.” The “takers” who threaten the dynamism and fairness of industrial capitalism the most in the 21st century are not the welfare-dependent poor — the villains of Tea Party propaganda — but the rent-extracting, unproductive rich.

The term “rent” in this context refers to more than payments to your landlords. As Mike Konczal and many others have argued, profits should be distinguished from rents. [3] “Profits” from the sale of goods or services in a free market are different from “rents” extracted from the public by monopolists in various kinds. Unlike profits, rents tend to be based on recurrent fees rather than sales to ever-changing consumers. While productive capitalists — “industrialists,” to use the old-fashioned term — need to be active and entrepreneurial in order to keep ahead of the competition, “rentiers” (the term for people whose income comes from rents, rather than profits) can enjoy a perpetual stream of income even if they are completely passive.

Rents come in as many kinds as there are rentier interests. Land or apartment or rental-house rents flow to landlords. Royalty payments for energy or mineral extraction flow to landowners. Interest payments on loans flow to bankers and other lenders. Royalty payments on patents and copyrights flow to inventors.  Professions and guilds and unions can also extract rents from the rest of society, by creating artificial labor cartels to raise wages or professional fees. Tolls are rents paid to the owners of necessary transportation and communications infrastructure. Last but not least, taxes are rents paid to territorial governments for essential public services, including military and police protection.

All of these goods or services are necessary to make or distribute the goods and services generated by productive industry (which can be government-owned or nonprofit, as well as for-profit). If one or more of the sectors providing inputs or infrastructure to productive industry charges excessive rents, then industry can be strangled.  Industry cannot flourish if too much rent is paid to landlords, if credit is too expensive, if excessive copyright protections stifle the diffusion of technology. Even progressives must concede that guilds or unions or professions can use the power of labor monopolies to demand excessive incomes for their members and that at some point high taxes really do strangle the economy. (The evidence of successful high-tax-big government countries like those of Scandinavia suggests that you can go safely up to about 40-50 percent of GDP going to government, assuming the taxes are well spent and raised largely by less-distortionary taxes including consumption, property and wealth taxes).

All of this suggests that, if we want a technology-driven, highly productive economy, we should encourage profit-making productive enterprises while cracking down on rent-extracting monopolies, whether they are natural products of geography and geology (real estate and energy and energy and mineral deposits) or artificial (chartered banks, professional licensing associations, labor unions, patents and copyrights). This is a valid distinction between “makers” and “takers.”

Unfortunately, with the exception of some leftist and liberal economic thinkers [4] who distinguish “rentier capitalism” or “financial capitalism” from “industrial capitalism,” conventional political discourse doesn’t distinguish among profit-earning “makers” and rent-extracting “takers.” Many progressives and populists indiscriminately denounce “big business” and “the corporations” as though a productive consumer electronics manufacturer were no different than a company that monopolizes the tolls from a privatized municipal parking meter system.  At the same time, the center-left, whose upscale supporters tend to be credentialed upper-middle-class professionals, tend to ignore the antisocial aspects of the rent-extracting schemes of the professional guilds — medicine, law and the professoriate — as well as of their elite accomplices, the credential-granting universities.

On the right, the greatest triumph of the rentier interests has been to redefine “capitalist” to mean, not productive entrepreneur or successful industrial company executive, but “anybody who makes money” — a category that includes not only investors in productive enterprises but also rentiers and a third category of speculators in unproductive assets (Picasso paintings and Persian rugs, as opposed to machine tool factories). In today’s rentier-friendly conservative ideology, somebody who makes payday loans at usurious interest rates, gouges businesses with high insurance rates, or gets paid tolls from a privatized toll road is as much a “maker” and an “entrepreneur” and a “capitalist” as someone who puts together a team of inventors, engineers, workers and investors to apply 3-D printing to printing replacement body parts. All money-making enterprises are supposed to be equally productive and socially useful, for no other reason than they make somebody rich.

A case can be made that the greatest threat to the future of industrial capitalism comes, not from excessive statism, but from the excessive share of the economy going to the “private taxation” of productive business by unproductive, parasitic private rentier interests. In the U.S., the rentier sector is sometimes described as the FIRE (finance, insurance, real estate) sector. The FIRE sector accounts for most of the rent-seeking in the U.S., although it does not include energy/mineral rentier interests or professional associations.

Without invoking a conspiracy, we can identify a Rentier Agenda that is harmful both to productive business and ordinary wage earners but promotes the policy goals of many of America’s large and influential rentier interests, particularly those in finance. The Rentier Agenda has three broad components: low taxes on rentiers, privatization of natural monopolies, and a macroeconomic policy driven by fear of inflation.


Links:
[1] http://www.salon.com
[2] http://www.alternet.org/authors/michael-lind
[3] http://rortybomb.wordpress.com/2011/07/07/rents-versus-profits-in-the-financial-reform-battle-and-post-industrial-economy/
[4] http://www.peterfrase.com/2011/07/slouching-towards-rentier-capitalism/
[5] http://www.alternet.org/tags/private-sector-0
[6] http://www.alternet.org/%2Bnew_src%2B

What It Costs the Worst Bank to Be Truly Evil

Go To Original

$16 billion.

That's how much JPMorgan Chase has paid in fines, settlements and other litigation expenses in the last four years alone.

More than half of that amount, $8.5 billion, was paid out in fines and settlements as the result of illegal actions taken by bank executives.

$8.5 billion is almost 12 percent of the net income the mega-bank brought in during the same period.

High Overhead

These figures comes from "JPMorgan Chase: Out of Control [3]," an impressive analysis of the bank's performance by Joshua Rosner, an investment analyst at GrahamFisher. And there's more. Since Rosner published his report only last week, JPMorgan Chase has settled another dispute.

This latest agreement is with the trustee for customers of fraudulent investment firm MF Global.

The MF Global deal [4] included a $100 million cash payout from Chase, and an agreement to waive the $417 million in claims it had made against MF Global's clients. If you add in the full amount of this agreement, the bank has given up more than $9 billion in settlements since 2009.

Now we're over 12 percent just in payouts. Throw in all the other litigation costs and the total comes to well over 20 percent of the bank's net income in a four year period.

And illegalities aren't the only thing that's costing JPMorgan Chase's shareholders a lot of money. There's also the London Whale foul-up, an apparently illegal series of trades that's already lost the bank $6.2 billion.

Add it all up. Then throw in the massive fines JPMorgan Chase paid before 2009, but after Dimon took the helm. Then add in the likely cost of the cases which loom before the bank today. You'll find that the Price of Evil for Dimon & Co. is very high -- at least by normal standards.

Bad Company

Is "evil" too harsh a word? Merriam-Webster defines evil [5] as "morally reprehensible," "arising from actual or imputed bad character or conduct," "causing discomfort or repulsion," or "causing harm." Which of those descriptions is not true for the leaders of an institutions that's paid billions for misdeeds such as:

Reportedly [4] taking MF Global's customers' money as that firm was collapsing under the weight of its own fraud;
Closing [4] the bank account and freezing the credit card of a hedge fund manager because he criticized its handling of MF Global on television;
Bribing officials in Jefferson County, Alabama, which subsequently went bankrupt;
Fraudulently submitting court documents in support of its foreclosures, using a group of untrained college students and other young people (known in the firm as "Burger King Kids") to prepare and submit the papers.
Follow the links at the bottom of the page if you want more information, but here's a sneak preview: Angels, they ain't.

The Gang That Couldn't Cheat Straight

If "evil" strikes you as too harsh you may not like the word "incompetent" either. But the Office of the Controller of the Currency, which is not known for being overly aggressive with bankers, secretly downgraded [6] its internal assessment of the bank's management and ruled that its internal oversight "needs improvement."

The OCC found that the "Matters Requiring Attention" within the bank include its much bragged-about risk management, its money-laundering controls, audit oversight, and its valuation of its trading positions."

What's a little laxity about money-laundering between friends?

They're not just taking us for a ride. They're bad drivers. By being both unethical and incompetent, the management at JPMorgan Chase has violated the moral principle expressed so eloquently the late, great country singer Vern Gosdin: "If you're gonna do me wrong, do it right."

Who's in Charge Here?

You'd think shareholders would be up in arms at Dimon and the Board of Directors for mismanaging their bank so badly. And yet they're all still in their seats, thanks in part to the way large corporations are allowed to manipulate their own corporate governance. Dimon is both CEO and Board Chair, an extraordinarily privileged position he was not asked to give up after the London Whale scandal.

And about that scandal: There are four things worth knowing about the Whale:

The trades were illegal, according to all the evidence.
Despite the bank's bragging about its risk management model -- which it publicized widely as a lure to investors -- that model wasn't followed by the London office.
Jamie Dimon's publicists and politician friends have burnished his reputation as "America's best banker" - and he bypassed his bank's org chart so that the London unit reported directly to him.
His friends and publicists have also burnished his reputation as the country's most ethical banker. As Henny Youngman used to say, How do ya like me now?
We've been all over JPMorgan Chase and Jamie Dimon for a long time. (See below for a partial listing), so we're glad to see the public tide finally turning against the bank and its leader. One of the triggers for that shift was the Senate's report on the bank's trade, which is as damning in its own way as Rosner's.

Payback


The media climate's changing, too. Lynn Parramore of Alternet has written a piece [7]called "The Spectacular Rise and Fall of Jamie Dimon, Wall Street's Golden Boy." A Google search of "Jamie Dimon" and "tarnished" (as in reputation) yields articles from USA Today [8], Bloomberg News [9], and WGBH News [10]. And Dimon was finally forced to resign [11] his seat on the Board of the New York Federal Reserve.

At long last, people are openly questioning the competence and ethics of Dimon and his team.

But nothing's really happened. Dimon's still the boss. Nobody's been charged with a crime. The only 'punishment'the bank has faced has been fines which, while massive by ordinary standards, are a slap on the wrist considering the gravity of the offenses.

The bank executives who committed those crimes haven't paid a penny in restitution, nor have they been charged with crimes. Those fines have been paid by the bank's shareholders, who in some cases were the victims of the very crimes that led to the fine in the first place!

It's like we said the other day about Cyprus: In banking, the victim's expected to pay restitution to the criminal.

Talk Talk

Chase's most recent annual report [12], the document which represents it to current and prospective shareholders, boasts of a "laser focus on managing expenses" and states that "As a business, we are guided by our objectives to expand and deepen client relationships, invest consistently in our franchise, and maintain our risk and expense discipline."

How's that working out for you?

Senators came down hard on these malefactors last week -- rhetorically, anyway. But the government isn't cracking down on this den of iniquity. It's enabling it. As Rosner notes, "Rather than being driven by the strength of its operations and management, many of JPM's returns appear to be supported by an implied guarantee (emphasis Rosner's) it receives as a too-big-to-fail institution."

That's right: Instead of cracking down on these guys, the government is helping them get even richer -- and helping their out-of-control bank get even bigger and more dangerous. And they're doing it at a time when the Attorney General of the United States has made it clear that he will not prosecute criminals at a too-big-to-fail bank like Chase. Talk is cheap, but actions speak louder than rhetoric.

Crime Pays

Life is still good for Dimon and some of the other senior executives at JPMorgan Chase: Shareholders can't -- or won't -- fire them. The government won't prosecute them. Taxpayers are helping them get rich. And every day their institution becomes bigger and more powerful. Sure, all that power doesn't come cheap, but they've found other peoplewilling to pay the price ...

$16 billion and counting.

The price of evil may be high at JPMorgan Chase, but the malefactors who actually committed the wrongdoing aren't paying it. Wrongdoing and incompetence may be expensive. But for executives at JPMorgan Chase and our other too-big-to fail banks, it's also surprisingly affordable.

Links:
[1] http://www.ourfuture.org
[2] http://www.alternet.org/authors/rj-eskow
[3] http://www.scribd.com/doc/130291230/GF-Co-JPM-Out-of-Control
[4] http://dealbook.nytimes.com/2013/03/20/with-jpmorgan-settlement-mf-global-clients-move-closer-to-payout/?hp
[5] http://www.merriam-webster.com/dictionary/evil
[6] http://online.wsj.com/article/SB10001424127887323639604578370781832140000.html?mod=WSJ_hps_LEFTTopStories
[7] http://www.alternet.org/economy/spectacular-rise-and-fall-jamie-dimon-wall-streets-golden-boy
[8] http://www.usatoday.com/story/money/personalfinance/2013/03/17/companies-paying-highest-income-taxes/1991313/
[9] http://www.tricappartners.com/jpmorgan%E2%80%99s-bacon-says-%E2%80%98onus-is-on-us%E2%80%99-as-bank-tarnished/
[10] http://www.wgbhnews.org/post/jp-morgan-chase-sees-profits-rise-halves-ceos-salary-london-debacle
[11] http://blogs.wsj.com/economics/2013/03/15/banco-popular-de-puerto-rico-chief-to-take-over-dimons-slot-on-ny-fed-board/
[12] http://files.shareholder.com/downloads/ONE/2339885501x0x556139/75b4bd59-02e7-4495-a84c-06e0b19d6990/JPMC_2011_annual_report_complete.pdf
[13] http://www.alternet.org/tags/jp-morgan
[14] http://www.alternet.org/%2Bnew_src%2B

US Corporate Executives Cash In

Go To Original

 As the US government prepares to furlough 1 million federal workers and slash hundreds of billions in social spending, corporate executives in the United States are receiving among the highest payouts in history. USA Today reported Thursday that at least ten CEOs took in $50 million apiece in 2012, largely as a result of cashing in stocks that have soared in value with the rising market. According to the newspaper, “Early 2013 proxy filings detailing 2012 compensation show a growing number of CEOs reaping $50 million or more, gains that could prove unmatched in breadth and size since the Internet IPO craze enriched tech company executives more than a decade ago.”

In its own analysis, the Wall Street Journal observed that executive pay has become ever more directly tied to stock values, noting that last year, more than half of compensation at major companies was tied to “stock or financial performance,” compared to 35 percent in 2009.

Among the top pay packages according to preliminary calculation is that of Starbucks CEO Howard Schultz, which included stock options valued at $103.3 million this year, on top of $30 million in other compensation and stock, as well as $10.2 million in vested shares, according to USA Today.

Ford CEO Alan Mulally likewise took home $61 million by cashing in shares that vested last year, added to his compensation of $21 million. This payout was based on a sharp rise in the company’s profitability that has been made possible by downsizing and the slashing of wages for newly hired workers to $15 per hour. Mulally’s pay is more than 2,500 times that of a new auto worker.

Apple’s Tim Cook got $139.7 million from restricted shares that vested last year, while Oracle CEO Larry Ellison was granted $90 million in stock.

These payouts are only a sampling of the huge sums that the ruling class is handing itself. The stock market, inflated through $85 billion a month handed to the banks by the US Federal Reserve, is the central transmission belt for this enrichment.

The engorgement of the ruling class has been facilitated by the actions of the state, and in particular the Obama administration. After the financial collapse of 2008, facing widespread public outrage at executive compensation, the administration explicitly opposed any constraints on pay. “We don’t disparage wealth,” Obama said repeatedly. Proposals for CEO pay centered on encouraging companies to tie this pay more directly to “performance”—i.e., share values.

Even while the corporate CEOs and other members of the financial oligarchy rake in astronomical payouts, the constant refrain from the media and big business parties is that there is no money to pay for social spending, and that health care and retirement programs must be cut and workers’ incomes slashed.

Next month, as a result of $85 billion in “sequester” spending cuts, over 1 million federal government employees will begin scheduled furloughs, resulting in effective pay cuts of 20 to 35 percent. These furloughs come together with tens of billions in cuts to public education, anti-poverty programs, and unemployment insurance.

With both Democrats and Republicans acknowledging that the cuts will be permanent, the turn now is toward working out an agreement to slash hundreds of billions of dollars from Medicare, Medicaid, and Social Security. The ultimate aim of the ruling elite is to dismantle everything that remains of the social safety net, plunging the working class into Dickensian poverty and social misery.

The argument that there is no money to pay for these programs is rendered absurd by the vast amounts of cash being handed out to executives or simply sitting around on corporate balance sheets. In 2012, the amount of cash held by US non-financial corporations rose by 10 percent, to $1.45 trillion, according to Moody’s. This figure is enough to pay for the sequester cuts 17 times over.

In fact, Apple, whose cash hoard rose to $137 billion, could itself pay for this year’s sequester cuts, with $50 billion to spare.

Loaded with cash and unwilling to invest, corporations have dramatically increased dividend payments to investors. The New York Times reported earlier this month that S&P 500 companies are expected to hand investors $300 billion in dividends this year, an increase over last year’s payout of $282 billion. American corporations bought back $117.8 billion in their own stock last month, the highest total on records going back to 1985.

The relationship of the American ruling class to the rest of society is a fundamentally parasitic one. Over the course of three decades, under conditions of economic decline, stock market speculation, rather than production, has become the central mechanism of wealth accumulation.

The 2008 crisis, far from reversing this process, has strengthened it. The ruling elite seized on the crisis to escalate the transfer of wealth. The soaring CEO pay and investor payouts on one hand, and vast social misery on the other, are in reality two sides of the same process.

The American ruling class proceeds with an almost shameless disregard for the consequences of its own actions. Amidst mass poverty and unemployment, as it dictates the most brutal austerity measures all around the world, the financial aristocracy engages in an uncontrollable orgy, propelled by its own social being.

Such actions, however, do not go unnoticed. They are producing within the United States an immense wellspring of social opposition that will take the form of working class struggle.

CIA tech officer reveals agency's plan to keep information 'forever'


Just days after the CIA inked a $600-million cloud computing contract with Amazon, chief technology officer Gus Hunt admitted that the agency is trying to amass as much data as it can, hold it indefinitely and use it for analysis in the future.
In a Wednesday speech in New York City to an audience of technology experts assembled for GigaOM’s Structure: Data conference, Hunt admitted the intelligence community has long sought a database to store text messages, tweets, Facebook activity, videos and any other information Americans make available - intentionally or otherwise.
Technology in this world is moving faster than government or law can keep up,” he said. “It’s moving faster, I would argue, than you can keep up. You should be asking the question of what are your rights and who owns your data.”
Hunt said CIA analysts have been at work on new algorithms that will break down vast amounts of information into easily digestible tools that allow them to closely examine trends in the public. The agency will then be able to base its covert strategies off those results.
The value of any piece of technology is only known when you can connect it with something else that arrives at a future point in time,” he added. “Since you can’t connect dots you don’t have ... we fundamentally try to collect everything and hang on to it forever.”
Earlier in March Federal Computer Week reported that the CIA agreed on a contract with Amazon that will allow the government to develop a private cloud infrastructure, thereby keeping up with the same technology Hunt alluded to during his speech on Wednesday.
In the past the CIA’s intelligence model has relied on small, more specific cloud servers that didn’t have the capability the future service presumably will.
During his speech, Hunt stressed that the CIA will collect information on individuals thought to be America's enemies, evaluate it quickly, and act on those assertions. Along with the Amazon partnership – which neither side would officially recognize to media outlets – Hunt’s speech alluded to the “underwear bomber,” who was foiled in his attempt to blow up an airliner on Christmas of 2009. A 2010 report from the White House explained how the Al Qaeda plot made it as far as it did.
Though all of the information was available to all-source analysts at the CIA and the [National Counter Terrorism Center] prior to the attempted attack, the dots were never connected, and as a result, the problem appears to be more a component failure to ‘connect the dots,’ rather than a lack of information sharing,” the report read.
Based on Hunt’s comments it would appear that the CIA is prepared to fill in those gaps by any methods in its grasp.
You are aware of the fact that somebody can know where you are at all times, because you carry a mobile device, even if that mobile device is turned off,” Hunt said. “You’re already a walking sensor platform - you know this, I hope? Yes? Well, you should.

The Spies Who Fooled the World

Euro Banking System On The Verge Of Collapse

Go To Original

News came out yesterday that all Cypriot banks will continue to be closed until at least next Tuesday and may remain closed permanently.

Last week, the European Central Bank threatened to cut the Emergency Liquidity Assistance which Cyprus had been receiving unless Cyprus’ major banks implemented legislation which would “tax” all investors who have accounts in Cypriot banks an amount up to 9.9 percent of their total deposits. The tax was rejected by the Cyprus parliament on Tuesday.

The ECB proposal led to runs on Cypriot banks and to angry protests, including from Russia’s Vladimir Putin, as many Russians have money in those banks. Cyprus is a more than thousand-year-old banking center which has facilitated trade in the region for centuries, so this situation is of great interest to many people worldwide including a massive amount of shipping companies who use Cyprus as their financial center.

Nigel Farage is a British politician and leader of the UK Independence Party (UKIP) since 2010 and, since 1999, he has been a Member of the European Parliament for South East England. He came out with a scathing rebuke of the ECB’s plans.

In his first TV appearance since the Cypriot wealth tax was announced, he stated that in all his years and all his experience of the desperation of the European Union's leadership "never did [he] think they would resort to stealing money from people's savings accounts."

He stated the obvious. The EU knows they cannot let any country leave, no matter how small, for "once one country goes, the whole deck of cards will come tumbling down."




He echoed our comments that this has the potential to destroy the entire EU banking industry and even the euro itself. Italians, Spaniards and many other weaker EU citizens must be looking at their local bank accounts with great worry.

We agree completely with Nigel’s prognosis that Europeans and anyone with a bank account in Europe should "get your money out while you can."

"Do not invest In The Euro-Zone," he said, which we have been saying at TDV for years. He went on, "you have to be mad to do so - as it is now run by people who do not respect democracy, the rule of law, or the basic principles upon which Western civilization is based … They are propping up a Eurozone that, in the end, will collapse in disastrous failure and they are prepared to do anything to do so."

But here we take issue with Nigel that this shows a lack of respect for democracy. This is the inevitable outcome of the democratic political process which allows voting for goodies from politicians at the expense of future generations and ever increasing debt. The bill is now coming due.

The events in Cyprus in the last week may have been the linchpin that sets off a complete collapse of the Euro Zone and even, by extension, the entire Western financial and banking system should enough panic set in.

Dollar vigilantes are ready for this, but many in the world are just waking up to the fact that the entire Western financial system is a house of cards underpinned by nothing but debt and only propped up in the last few years by massive amounts of money printing.

Your Assets Are Not Safe

What can we take away from the events of the last month? It’s the same conclusions we have been promoting for nearly three years. To start, get your assets outside of the Western financial system.

This may not be quite as simple as you may think. While Cyprus was obvious as being a place to avoid due to its inclusion in the collapsing Euro Zone, many other places are not as obvious.

As example, the British colony, Bermuda, long thought of as a safe, tax-free banking center is not as safe as you might think. The 21 square mile British Overseas Territory’s debt has soared from $176 million in 1998 to almost $1.2 billion in August 2011 - about a 610 percent rise. Much like in the US, the “debt ceiling” has recently been raised exorbitantly to $2.5 billion and there are plans in the works to raise the debt to as high as $4 billion in the next few years. With a population approximately 65,000 that would work out to $60,000+ in national debt for every man, woman and child in the country.

Just recently, the eyes of the British government have turned their Sauron-like gaze to the Bahamas. During a debate this week in the UK’s House of Commons, a UK MP said Britain “is responsible for some of the biggest tax havens in the world,” singling out the British Overseas Territories of Barbados, the British Virgin Islands and Bermuda.

How long will it be before Bermuda becomes the next Cyprus?

As you can see, we live in a dangerous world for your assets. I have stated that this is the most dangerous time in human history for capital and you now have to be incredibly cautious and diligent with where you place your assets.

TDV’s recommendation has been to keep most of your assets in “hard assets”, located internationally in safer jurisdictions, so as to reduce the chances of government confiscation as the Western financial system collapses.

At TDV Offshore we help you attain a bank account in some countries that we deem to be safer. These countries generally are not as tied into the Western financial system and are in countries without a massive debt load. [In the March Issue of TDV, Justin O’Connell will look at a few jurisdictions we deem to be safer at this time.]

As well, as we have recommended for years – and Cypriots are now just learning the hard way – to keep at least a few months' worth of fiat cash in your house for emergencies should you find your bank machines closed for a significant period of time and also keep some precious metals nearby. With the remainder, look to diversify internationally as prescribed in our Special Report for subscribers, “Getting Your Gold Out Of Dodge”.

And, if you can, get a second passport to give yourself options as TEOTMSAWKI progresses.

There are no green shoots, there will be no real recovery and things are only going to get worse from here… before they once again get better. So, prepare now and keep your eyes open.

TEOTMSAWKI and the collapse of all fiat currencies will be the biggest event in human history. The symptoms of it are all around us and are so obvious that only a truly close-minded person or someone who just cannot handle the truth could possibly deny it.

Thursday, March 21, 2013

The Great Cyprus Bank Robbery Shows That No Bank Account, No Retirement Fund And No Stock Portfolio Is Safe

Go To Original

The global elite have now proven that when the chips are down they are going to go after any big pile of money that they think they can get their hands on.  That means that no bank account, no retirement fund and no stock portfolio on earth is safe.  Up until now, most people assumed that private bank accounts were untouchable and that deposit insurance actually meant something.  Now we see that there is no pile of money that is considered "off limits" by the global elite and deposit insurance means absolutely nothing.  The number one thing that any financial system depends on is faith.  If people do not have faith in the safety and stability of a financial system, it will not work.  Well, the people that rule the world have just taken a sledgehammer to the trust that we all had in the global financial system.  They have broken the unwritten social contract that global banking depends on.  So now we will see a run on the banks, and this will not just be limited to a few countries in southern Europe.  Rather, this will be worldwide in scope.  Yoda may have put it this way: "Begun, the global bank run has."  All over the world, frightened people are going to start pulling money out of the banks.  A lot of that money will go into gold, silver and other hard assets.  And as money starts coming out of the banks, this could cause many of the large banks that have been teetering on the edge of disaster to finally collapse.

Many of you may not believe that they would ever come after bank accounts, retirement funds or stock portfolios in the United States.

Many of you may be entirely convinced that the Great Cyprus Bank Robbery could never happen in America.

Well, where do you think this whole plan was dreamed up?

It was the IMF that reportedly pushed the hardest for the wealth tax in Cyprus, and the IMF is headquartered right in the heart of Washington D.C.

Almost every nation on the planet has to deal with the IMF.  It is an organization that is dominated by the United States and that is always involved when there is an international debt crisis.

If the IMF thinks that it is a great idea to steal from bank accounts to solve a financial crisis in Cyprus, why wouldn't they impose a similar solution in other countries in the future?

And if bank accounts are no longer safe, are there any truly safe places to put your money?

You can trust the politicians when they tell you that an unannounced "wealth tax" will never happen where you live if you want, but that is the exact same lie that the politicians in Cyprus were telling their people until the day that it happened.  The following is from an article in the Cyprus Mail...

And after all, President Anastasiades had emphatically declared in his inauguration speech that “absolutely no reference to a haircut on public debt or deposits will be tolerated,” adding that “such an issue isn’t even up for discussion.” Finance Minister Michalis Sarris made similarly reassuring statements, arguing that it would be lunacy for the EU to impose such a measure because it would threaten the euro system.
At this point, politicians in Cyprus have been given two very unappealing options.  Either they vote yes on the wealth tax and destroy all faith in the banking system of Cyprus, or they vote no and they are forced out of the eurozone.  In either case, we will probably see the financial system of Cyprus collapse and their economy plunge deep into depression.

At this point, the vote has been delayed until Tuesday.  Apparently some additional "arm twisting" was required to get the needed votes.

And there have been proposals to change the terms of the wealth tax.  Reportedly, some politicians want to impose a maximum rate of up to 15 percent on bank accounts of over 500,000 euros so that the rate on smaller accounts can be decreased.

It has also been announced that the earliest that banks in Cyprus will reopen will be Thursday.

But what is happening in Cyprus is small potatoes compared to how this will affect the rest of the world.  The entire planet is watching this unfold, and as a recent article by Lucas Jackson described, faith in the global financial system is being greatly shaken...

It would be hard to over-emphasize how significant the Cyprus situation is.  The EU demonstrated under no uncertain circumstances that they will destroy the rule of law to maintain their own power.  It was a recognition of tyranny that many of us have always assumed was the case but yesterday became reality.

The damage done here is not related to the size of the haircut - currently discussed between 3 and 13% - but rather that the legal language which each and every investor on the planet must rely on in order to maintain confidence in the system has been subordinated to the needs of the powerful elite.  To the power elite making the major decisions in DC, London, Berlin, France, Brussels, et. al., laws are like ice cream, easily melted.

Which begs the question, who is next?  Will it be Portugal?  Greece? Spain?  Italy?  France???

Will they impose a “one-time” tax on your bank account?  Your house?  Your stocks and bonds?  Retirement accounts?
The global elite have declared open season on all large piles of money, and now many people all over the world will consider taking money out of the bank to be the rational thing to do.  This will especially be true in countries in southern Europe since they would probably be the next to have wealth confiscated.

This is so abundantly clear that even Paul Krugman of the New York Times understands this...

It’s as if the Europeans are holding up a neon sign, written in Greek and Italian, saying “time to stage a run on your banks!”

Tomorrow and the days immediately following should be very interesting.
The global elite have truly "crossed the Rubicon" by going after private bank accounts.  It is almost as if they purposely chose the most damaging solution possible to the financial crisis in Cyprus.

Many in the financial world are absolutely stunned by all of this.  For example, David Zervos is describing this move as a "nuclear war on savings and wealth"...

All of us should really take a moment to consider what the governments of Europe have done. To be clear, they initiated a surprise assault on the precautionary savings of their own people. Such a move should send shock waves across the entire population of the developed world. This was not a Bernanke style slow moving financial repression against risk free savings that is meant to stir up animal spirits and force risk taking. This is a nuclear war on savings and wealth - something that will likely crush animal spirits. This is a policy move you expect from a dictatorial regime in sub-Saharan Africa, not in an EMU member state. If the European governments can clandestinely expropriate 7 to 10 percent of their hard working citizen's precautionary savings after the close of business on a Friday night, what else are they capable of doing? Why even hold money in a bank account? Are they trying to start a bank run?
So what motivated the global elite to do this?

According to CNBC, one of the motivations was to go after the Russians that had been using the banking system of Cyprus to launder money...

Indeed, the IMF is reported to have been keen on the levy as a way to stem the flood of Russian money into the island over the last few years which has prompted concerns over money laundering.
Russian money accounts for about 25 percent of all money in the banking system of Cyprus, and obviously the Russians are quite upset by what the IMF and the EU have decided to do.  Even Vladimir Putin is loudly denouncing this move...

Russian President Vladimir Putin called the tax “unfair, unprofessional and dangerous,” according to a statement posted on the Kremlin website. Russian companies and individuals have $31 billion of deposits in Cyprus, according to Moody’s.
And you haven't heard a lot about this in the western media, but the Russians have actually stepped forward and have offered to help Cyprus out of this jam.  For example, there are reports that Russian investors are interested in buying the two banks that were the primary cause of this bailout...

Officials have also said Russian investors are interested in buying a majority stake in Cyprus Popular Bank and increasing their holdings in Bank of Cyprus - the two biggest banks on the Mediterranean island.
And according to Sky News, Gazprom has offered Cyprus a very large sum of money for the right to explore their offshore gas reserves that have not been developed yet...

The uncertainty comes as Russia's finance minister said his country would consider restructuring its loans to Cyprus.

Russian energy giant Gazprom has also reportedly offered financial assistance to Cyprus in exchange for access to the island's gas reserves.
So far the government of Cyprus has rejected the help of the Russians, but could they change their mind at some point?  Apparently the Russians are offering enough money to completely fund the bank bailout...

According Greek Reporter, Gazprom made an offer over the weekend to the Cypriot government to fund the bank restructuring planned under the Cypriot bailout (which is set to cost up to €10bn) in exchange for exclusive exploration rights for Cypriot territorial waters. How reliable this story is remains to be seen, but it does hint at the geopolitical tension which we have been warning about.

Gazprom is known to be very close to the Russian government and despite Russian President Vladimir Putin overtly slamming the deposit tax - calling it "unfair, unprofessional and dangerous" -  it is unlikely that they would let this opportunity pass untouched. Fortunately, the Cypriot government is said to have rejected the deal off the bat, but if displeasure towards the eurozone and the EU grows, the Russian option may become increasingly appealing.
It will be very interesting to see what happens.

Meanwhile, some European officials are already suggesting that other nations in southern Europe should have a "wealth tax" imposed upon them.  The following comes from an article by Paul Joseph Watson...

Joerg Kraemer, chief economist of the German Commerzbank, has called for private savings accounts in Italy to be similarly plundered. “A tax rate of 15 percent on financial assets would probably be enough to push the Italian government debt to below the critical level of 100 percent of gross domestic product,” he told Handelsblatt.
A "tax" of 15 percent on all financial assets?

Could you imagine if you woke up one morning and the government had decided to suddenly steal 15 percent of all the money that you had in bank accounts, retirement funds and stock portfolios?

If I had a bank account in Italy I would be very nervous right about now.

Under normal circumstances these kinds of things don't happen, but governments will use an "emergency" to justify all kinds of things.  I recently came across an article that included a great quote by Herbert Hoover that put this beautifully...

"Every collectivist revolution rides in on a Trojan horse of ‘emergency’. It was the tactic of Lenin, Hitler, and Mussolini. In the collectivist sweep over a dozen minor countries of Europe, it was the cry of men striving to get on horseback. And ‘emergency’ became the justification of the subsequent steps. This technique of creating emergency is the greatest achievement that demagoguery attains."
This is what the elite love to do.

They love to create order out of chaos.

And this is just the beginning.  The Great Cyprus Bank Robbery was just a beta test for what is coming next.

As the global financial system crumbles, the global elite are going to target our bank accounts, our retirement funds and our stock portfolios.  You might want to start thinking about how you will protect yourself.