Bail-Ins: The Legal Framework is in Place to Continue Looting the American Public.

At the expense of the American public (devastating austerity and elimination of the middle-class), 2008 ushered in government bail-outs in order to preserve Wall Street's corrupt and bankrupt system., but what about government bail-ins (confiscation of bank deposits), the likes of which we saw occur in Cyprus, Greece? In addition to bail-outs, so far, we've been witness to severe austerity measures targeted at the masses, including sequestration, a dog-and-pony-show government shutdown, and massive cuts to food stamp that essentially puts a stranglehold on economic recovery (for the masses), not to mention the threat of default. There is no doubt that the intention is to strip away what is left of the social safety net at a time when its most needed. Meanwhile, J.P. Morgan, Goldman Sachs, Bank of America, Citibank, Deutsche Bank, etc., have not only evaded any and all consequences of their egregious actions, they are generously rewarded as they continue to gamble with taxpayer money. It doesn't take a rocket scientist to see what's going on here.

These austerity measures disproportionately affect children, seniors, and people with disabilities. According to the Center on Budget and Policy Priorities (CBPP), this recent $5 billion cut will average less than $1.40 per person per meal and jeopardize the strength of the current economic recovery. Moreover, according to the Center for American Progress (CAP) "each $1 billion dollar reduction in the Supplemental Nutrition Assistance Program eliminates 13,718 jobs," resulting in more than 68,000 job losses in the coming year.

Keep in mind that programs such as SNAP have what economists call a "multiplier effect"—in other words, "a dollar given to an entitlement recipient has amplified economic benefits. In this case, those consist primarily of the grocers who benefit when food stamp users shop in their stores. The estimated multiplier effect for food stamps is as high as 2 to 1."

The report, "Nourishing Change: Fulfilling the Right to Food in the United States," released by the International Human Rights Clinic (IHRC) at the New York University School of Law is timely as our government cut at least $5 billion-with many more cuts to come-- from the government's already inadequate $80 billion food stamp program, Supplemental Nutrition Assistance Program (SNAP), in the Farm Bill.  This report cites a study by the Center for American Progress, that calculates the "hunger bill" for the country, which includes the costs of treating illnesses and other medical conditions related to food insecurity, the impact of hunger on educational outcomes and lifetime earning potential, and the costs of running charity-based emergency food programs. For 2010, that bill came to $167.5 billion. For about half of that, $83 billion, the Center says we could extend the SNAP program to all food insecure households.

Okay, back to bail-ins.  It's the Dodd-Frank Act that passed in 2010-- it took up 848 pages at the time, as of July 2012 an additional 8,843 pages of rules were added, representing only 30% of the rules to-be-written. The estimate for the final length of the Act is 30,000 pages --that provides the legal framework for bail-ins.

According to the April 24, 2012 IMF report, conversion of bank debt to stock is an essential element of bail-in included in Dodd-Frank. “The contribution of new capital will come from debt conversion and/or issuance of new equity, with an elimination or significant dilution of the pre-bail in shareholders. ...Some measures might be necessary to reduce the risk of a ‘death spiral’ in share prices.” In the language of Dodd-Frank, this will “ensure that unsecured creditors bear losses.”

Under the existing legislation, the FDIC has the power to impose losses on unsecured creditors in the process of resolving failing banks. For example, the FDIC resolved Washington Mutual under the least-cost resolution method in 2008 and imposed serious losses on the unsecured creditors and uninsured depositors (deposit amount above USD 100,000). The Orderly Liquidation Authority (OLA) established under the Dodd-Frank Act further expands the resolution authority of FDIC. Subject to certain conditions, the FDIC now also has the powers to cherry-pick which assets and liabilities to transfer to a third party and treating similarly situated creditors differently, eg: favoring short-term creditors over long-term creditors or favoring operating creditors over lenders or bondholders. -- Economist, Nouriel Roubini

The U.S. is far from the only nation with provisions for bail-ins:

Bail-In Rules for Eurozone Banks Should Start In 2016

Bondholders Bail-in Shows Alternative Method to Rescue Banks

Bank Bail-in Rules Confirmed


But who cares, right? The stock market's soaring to new heights while income disparity continues to widen at unprecedented levels.

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Austerity Measures and Sequestered. Meanwhile Over $28 Trillion in Limbo or Given Away to Foreign Banks and Corporations.

Remember the GAO audit released on July 21, 2011, discovering $16.1 trillion went to foreign banks, and foreign corporations in addition to domestic banks and corporations?  Well, apparently you can add $9 trillion that's supposedly unaccounted for, or lost.  And let's not forget the $2.3 trillion missing from the Pentagon, announced by Donald Rumsfeld on 9/10/2001.

As one seadooyah1 commented:

“How is it the IRS (which is the mafia for the FED) can find a $100 mistake on our tax returns, but cannot find 9 trillion dollars of our money???

And as Hugh Mann said:

“Money? What money. There hasn't been REAL money on this planet in decades. This digital horseshit called currency isn't even backed by shit. It's absolutely worthless. The banks print money from thin air, loan it to you with interest and when you can't repay the loan, they take all you own. What an ingenious idea of getting something tangible for nothing.

The Parasites That Be are spending and losing like drunken sailors because they know it's crap and it's going to collapse. They better get as much as they can before it's too late.

Below, Rep. Alan Grayson questions Inspector General Elizabeth Coleman in 2009 as to where $9 Trillion went. She responds that she has no idea.

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Sentencing Two Populations to Generations of Debt Slavery

The first real test of establishing America’s commitment to "democracy" came from Greece after WWII. During the war, the Left Wing National Liberation Front had provided the majority of resistance to the Nazis. It also set up interim governments across the nation. Though its military government leaders were communist, the partisan governments bore no resemblance to Stalinist Russia. They were decentralized and participatory. The peasants were treated fairly and their status, raised. It was a real people’s government. The goal was to make Greece independent, free from all ties.

But Winston Churchill claimed anarchy and demanded the return of the monarchy. He wanted to keep Greece in their sphere of influence in the Mediterranean for their own political ends. In other words, they wanted to restore the old order in Greece. They wanted the King back on his throne because he was the best guarantee of British interest in Greece: political, economic, and strategic, despite the fact that all of the Greek people hated the oppressive regime of the King.

So America stepped in and a network of concentration camps were set up across the Greek islands while right winged death squads terrorized villages. A favorite technique was beheading. President Truman gave $400 million to aid in restoring the old order. In 1947, 74,000 tons of military equipment was sent to Greece including massive stocks of napalm, and during the Civil War in Greece, the Truman Doctrine was announced which was in effect to crush the peasant and worker based anti-Nazi resistance and restore the traditional fascist order. As a result, 150,000 Greeks were killed. Greece was the first major police task which the United States took on in the postwar world.

Fast forward almost 60 years, and the European feudal system is scapegoating Greece, along with its tiny neighbor, Cyprus --many Cypriots consider themselves Greeks; they share the same National Anthem, are Orthodox and of course they speak Greek--once again, only this time, instead of tanks, they're using banks.

"At least 1,600 Greek businesses - from shipping, retail to tourism - will suffer from the Cyprus bailout deal announced on Sunday after a showdown between Brussels and Nicosia, according to Vasilis Korkidis, head of the National Confederation of Greek Commerce (ESEE).

“The tragic situation in Cyprus will certainly have immediate effects on the Greek market, since a large part of the domestic businesses maintain close ties with Cypriot companies,” Korkidis said in a statement on Tuesday. He was particularly critical of the capital controls and the impending haircut on large deposits (over 100,000 euros) expected to be more than 40%.

Greece's exports to Cyprus exceed 1billion euros annually and the country is Cyprus’ biggest trade partner, followed by the United Kingdom and Germany.

According to Korkidis, the Eurogroup’s Cyprus deal establishes new, severely punitive rules for countries needing emergency aid in the future.

He also slammed the Eurogroup deal (which he called the "German plan" to stress the key role played by German Chancellor Angela Merkel in the negotiations) for “crippling” Cyprus. He said the deal is “tragic” because it “sentences” Cyprus - the country’s markets and economy - to a long period of recession and debt.

Without blinking an eye, the troika of International Monetary Fund, European Commission and European Central Bank (ECB) wipes out the savings of a people, while imposing draconian capital controls, sentencing two populations to generations of debt slavery. This is the new model. Other countries will surely follow.

Links:

List Released With 132 Names Who Pulled Cyprus Deposits Ahead Of "Confiscation Day"

With every passing day, it becomes clearer and clearer the Cyprus deposit confiscation "news" was the most unsurprising outcome for the nation's financial system and was known by virtually everyone on the ground days and weeks in advance: first it was disclosed that Russians had been pulling their money, then it was suggested the president himself had made sure some €21 million of his family's money was parked safely in London, then we showed a massive surge in Cyprus deposit outflows in February, and now the latest news is that a list of 132 companies and individuals has emerged who withdrew their €-denominated deposits in the two weeks from March 1 to March 15, among which the previously noted company Loutsios & Sons which is alleged to have ties with the current Cypriot president Anastasiadis.

From Sigma:

"Money transfers made within 15 days, namely from 1 until March 15. On Friday, March 15, had met the Eurogroup, which officially decided to impose a tax on deposits by companies and individuals in all financial institutions in Cyprus.

These 132 companies and individuals have withdrawn all deposits in euros, dollars and rubles, which were transferred to other banks outside Cyprus.

The disclosure of the list, which shows that the outflow of deposits from local banks other financial institutions outside Cyprus became massively raises suspicion that some had inside information about the decisions taken by the other 16 eurozone countries in exchange for financing deficits of the economy.

In listings, and the company is Loutsios and Sons Ltd, which carried 21 million deposit in a UK bank, while the owner of the company is alleged to have family ties with the President of the Republic, Nikos Anastasiadis.

The first column are names of companies and individuals in the second record of the amounts withdrawn in the third column refers to the amount withdrawn in the same currency, the currency in the fourth and the fifth and last column refers to the date of transfer.

The Timeline of the Unfolding Eurozone Crisis

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The True Welfare Queen.

Tintern Abbey in Wales is also part of the Crown Estate.

Does the Queen of England deserve a 16% hike, while the rest of the world faces increasing austerity measures? Well, does she?

After all, she has a tough job. She has to wave to crowds of adoring peasants and occasionally cut a ribbon or two. Not to mention, she employs people to do things like break in her new shoes, document and name her outfits, stir her tea, and wipe her...well, you get the point.

The Queen’s income will receive a boost next year after record profits from her lucrative Crown Estate property empire.

Controversial changes made last year tying Royal Family funding to Crown Estate profits means the Queen and royal household will be entitled to a 16 per cent hike in their official duties grant - to £36million from next April, up from £31million this year.

The rise follows the Government’s move last year to scrap the Civil List and link funding for the royals to profits from the Crown Estate, as part of a new sovereign grant.

The royal household is entitled to 15 per cent of profits from the Crown Estate - which belongs to the nation and includes a host of historic properties, such as Regent Street in the West End of London, Windsor Park, Royal Ascot and most of Britain’s coastline.

Figures for the Crown Estate reveal the portfolio enjoyed the best performance in its history, with profits rising to £240million in the year to March 31 from £231million the year before.

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Too Much Austerity Leads to Nazism.

“Imag­ine for a moment that two decades ago, a newly uni­fied Ger­many set out to take over the Euro­pean Con­ti­nent, as the pre­vi­ous uni­fied Ger­many had tried and failed to do half a cen­tury ear­lier. This time it would use money, not guns, to accom­plish the goal. . . ” (“As Europe’s Cur­rency Union Frays, Con­spir­acy The­o­ries Fly” by Floyd Nor­ris; The New York Times; 06/15/2011.)

Austria's central bank head has issued a severe warning about too much austerity, amid the eurozone's debt crisis. He said such an approach contributed to the rise of Nazism in the 1930s.

"The single-minded concentration on austerity policy (in the 1920s and 3Os) led to mass unemployment, a breakdown of democratic systems and, at the end, to the catastrophe of Nazism," Ewald Nowotny said in comments confirmed by his office on Wednesday.

Moreover, it's Germany, in particular, which is promoting such painful spending cuts as the principle way to end the bloc's sovereign debt crisis.

U.S. economist Nouriel Roubini and Niall Ferguson drew a similar historical parallel  in their joint opinion piece in the Financial Times on June 8, attacking Germany's "wait and see" approach to the eurozone crisis.

"Is it one minute to midnight in Europe?

"We fear that the German government’s policy of doing ‘too little too late’ risks a repeat of precisely the crisis of the mid-20th century that European integration was designed to avoid.

"We find it extraordinary that it should be Germany, of all countries, that is failing to learn from history. Fixated on the nonthreat of inflation, today’s Germans appear to attach more importance to 1923 (the year of hyperinflation) than to 1933 (the year democracy died). They would do well to remember how a European banking crisis two years before 1933 contributed directly to the breakdown of democracy not just in their own country but right across the European continent….

"But now the public is finally losing faith and the silent run may spread to smaller insured deposits. Indeed, if Greece were to leave the eurozone, a deposit freeze would occur and euro deposits would be converted into new drachmas: so a euro in a Greek bank really is not equivalent to a euro in a German bank. Greeks have withdrawn more than€700m from their banks in the past month.

"More worryingly, there was also a surge in withdrawals from some Spanish banks last month. The government’s bungled bailout of Bankia has only heightened public anxiety. On a recent visit to Barcelona, one of us was repeatedly asked if it was safe to leave money in a Spanish bank. This kind of process is potentially explosive….

"Until recently, the German position has been relentlessly negative on all such proposals. We understand German concerns about moral hazard. Putting German taxpayers’ money on the line will be hard to justify if meaningful reforms do not materialise on the periphery. But such reforms are bound to take time. Structural reform of the German labour market was hardly an overnight success. By contrast, the European banking crisis is a real hazard that could escalate in days.

"Germans must understand that bank recapitalisation, European deposit insurance and debt mutualisation are not optional; they are essential to avoid an irreversible disintegration of Europe’s monetary union. If they are still not convinced, they must understand that the costs of a eurozone breakup would be astronomically high – for themselves as much as anyone.

"After all, Germany’s prosperity is in large measure a consequence of monetary union. The euro has given German exporters a far more competitive exchange rate than the old Deutschmark would have. And the rest of the eurozone remains the destination for 42 percent of German exports. Plunging half of that market into a new Depression can hardly be good for Germany.

"Ultimately, as Angela Merkel, the German chancellor, herself acknowledged last week, monetary union always implied further integration into a fiscal and political union. But before Europe gets anywhere near taking this historical step, it must first of all show it has learnt the lessons of the past. The EU was created to avoid repeating the disasters of the 1930s. It is time Europe’s leaders – and especially Germany’s – understood how perilously close they are to doing just that."

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Austerity: Destroying the Social Contract Here and in the Euro

Is there any question that both Europe and the US governing powers side with the 1%? Corporate and bankster welfare queens abound! Socialism for the wealthy is alive and well, while the rest of us are subject to increasing austerity measures totally unnecessary considering the US government has well over $100 TRILLION in its CAFRS. That alone should tell you that the concept of austerity is not economic, but one of political control.

As Hugh says responding to the naked capitalism article:

Breaking the social contract is what kleptocracy is all about. Or rather it is about breaking one side of it. The 99% are supposed to honor all the duties of the contract, which largely means paying off the debts the 1% have incurred, supporting public institutions which the 1% control, and obeying the laws which the 1% write. But as regards the benefits for the 99% that flow from the social contract: personal and political rights, jobs, housing, healthcare, education, and retirements, these are being trashed, tossed, and looted by the same 1%.

In this sense, we are all Greece. Look at America’s decaying infrastructure, high unemployment, housing disaster, declining system of public education, student debt, overpriced healthcare that leaves tens of millions un- and under insured, pensions that no longer exist, are underfunded, or gutted by Wall Street gambling, and the multiple attempts by both parties to slash Medicare, Medicaid, and Social Security. How are we any different from Greece? How is the rest of Europe? East Asia, China, and Japan? Kleptocracy dominates them all. It plays out different ways in different countries. But the social contract is being destroyed, to the benefit of the 1% and the detriment of the 99%, in them all.

Links:

Greece has been ordered to reduce health care from its current 10% of GDP to below 6%.

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