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Today, March 25th, is Greek Independence Day, but in Athens, just as in Nicosia, there is little reason to celebrate.  In the wee hours of Monday morning, the Eurogroup and Cypriot government representatives reached an agreement in principle on a new deal that would "bail out" Cyprus and its suffering economy.  According to reports coming out of Brussels, the new plan proposes a 30% "haircut" on deposits of over €100,000 in the Bank of Cyprus, which will, as a result, be "saved."   This plan differs from last week's agreement—which was later voted down unanimously by the Cypriot parliament—which called for a 6.75% haircut of all Cypriot bank deposits of €100,000 or less, and a 9.99% levy of all deposits over €100,000.

By Michael Nevradakis

Today, March 25th, is Greek Independence Day, but in Athens, just as in Nicosia, there is little reason to celebrate.  In the wee hours of Monday morning, the Eurogroup and Cypriot government representatives reached an agreement in principle on a new deal that would "bail out" Cyprus and its suffering economy.  According to reports coming out of Brussels, the new plan proposes a 30% "haircut" on deposits of over €100,000 in the Bank of Cyprus, which will, as a result, be "saved."   This plan differs from last week's agreement—which was later voted down unanimously by the Cypriot parliament—which called for a 6.75% haircut of all Cypriot bank deposits of €100,000 or less, and a 9.99% levy of all deposits over €100,000.

At face value, there's many unanswered questions which arise out of this new deal.  It is being reported, for instance, that the Cyprus Popular Bank will not be saved as part of this agreement and will instead be split into two banks, a "good" and a "bad" bank, but there is no word regarding what will happen with the money of large depositors in this bank (small deposits of up to €100,000 will supposedly be shifted to the "good" bank).  There is also no word as of yet as to whether this agreement comes with further "strings attached," such as cuts in other sectors of the Cypriot economy.  Last week, German Chancellor Angela Merkel rejected the possibility of dipping in to Cypriot pension funds in order to partially fund the island's "bailout"—but as has been proven over the past three years, the EU is certainly capable of reneging on its promises.

What is now known is that Cyprus will borrow €10 billion from the "troika" (the EU, the European Central Bank, and the International Monetary Fund) as part of the "bailout" package, as had originally been proposed with the first "bailout" and "haircut" last week.  What is also known is that this deal will not have to gain parliamentary approval in Cyprus, since the new laws passed by the Cypriot parliament gave the government new powers to resolve the country's banks. It seems that the European Union and the president of Cyprus have found a way to circumvent the democratic will of the people (once again) by coming to an agreement with pre-emptive parliamentary approval—a legislative blank check.  It should be noted that in a recent poll, over 67% of respondents in Cyprus were in favor of a departure from the Euro and 91% of respondents were against the original "bailout" and "haircut."

While small depositors—those with less than €100,000—have presumably been "saved" as a result of this deal, there is absolutely no guarantee that the average citizen is out of the woods.  As recently stated by economist Costas Lapavitsas in a recent piece in the Guardian, any borrowing on the part of the Cypriot government as part of the "bailout" is likely to be disastrous:

The extra borrowing will raise Cypriot public debt well over 100% of GDP. The economy is already in recession and, with the extra austerity measures, including the inevitable blow to bank credit, contraction might be around 5% this year. It is likely that the increased national debt will need restructuring in the near future, meaning fresh loans and even more austerity.
If the above scenario seems familiar, that's because it is.  This has been the reality in Greece over the past three years, where austerity measures have brought more austerity, where more austerity has further strangled the economy, and where the solution to this stranglehold has been to tighten the noose even further, a vicious, murderous cycle with no discernable end in sight.  Small depositors might see that their bank accounts have been salvaged—but may very well be assaulted with new taxes, and with reductions in wages and pensions in the near future.  And in a confirmation of what Lapavitsas wrote, a freshly released analysis by Moody's suggests that Cyprus could still default anyway, despite the deal.

Of course, throughout the week, EU leaders paved the way for the new agreement by justifying any new haircuts and new measures as necessary to trim Cyprus' "bloated" banking system down to size.  The president of Germany's Federal Intelligence Service (BND), Gerhard Schindler, stated recently that 40% of Russian money deposited in Cyprus originates from the black market.  This, of course, is somehow meant to justify a haircut of all large depositors—whether their money was attained illegitimately or not.  Indeed, the rhetoric about the black market activity of Russians in Cyprus has been a constant theme from the first days of this new crisis.  Not a word, either by EU officials or the self-righteous media, about how hardworking Cypriots who have managed to "do the right thing" and save a substantial amount of money over the years will be adversely affected by the decisions of the "fair" and "socially just" EU.  Not a word about actually investigating those who are laundering their money through Cyprus, instead of punishing everyone for the actions of a few.  Not a word about punishing bankers for the poor decisions that they have made which helped precipitate this crisis—in Cyprus and elsewhere.  Certainly not a word about similar tax and banking havens in European territory, including Luxembourg (with an outlandish external debt of $1.8 trillion), Lichtenstein, Gibraltar, the Isle of Man, and the City of London corporation, not to mention such overseas havens as the Cayman Islands, and a new favorite of Germans seeking to evade taxes: Panama.  What's that?  "Honest" and "hardworking" Germans evading taxation?  Imagine that!  For a moment, we thought that only lazy, corrupt, ouzo-swilling Greeks (and Cypriots and Russians, apparently) were tax cheats!  (For an incredible example of German tax evasion, look no further than Hochtief, the German-Spanish company which operates the Eleftherios Venizelos International Airport in Athens, and which is alleged to owe as much as €600 billion in back taxes to the Greek State).

More disturbingly, though, it seems that Cyprus is not just being "punished" due to its supposedly oversized banking sector.  It seems that there were more than a few politicians within the EU who wanted to teach Cyprus a different lesson.  As reported recently by Time magazine:

Some experts say resentment toward Cyprus has compounded the problem.

“I think patience with Cyprus was running out also on other issues, such as its intransigence over the (Turkish) north and its history of encouraging tax evasion,” said Josef Janning, a political scientist at the German Council on Foreign Relations, an independent think tank in Berlin.

Cyprus has refused to budge in long-running negotiations to find a political solution for the breakaway Turkish north of the island, which Nicosia refuses to recognize.

In other words, Cyprus is being "taught a lesson" for refusing to accept the Annan Plan, which would have "reunified" the island—37% of which remains illegally occupied by Turkey.  However, what is never mentioned is that this plan was rather lopsided in favor of Turkey, which invaded and occupied the island in the first place.  It would have permitted a permanent Turkish military presence on the island with enhanced intervention powers, would have given the Turkish Cypriot community wildly disproportionate representation in the governmental structure of the new "unified" state, and would have required Greek authorities to contribute towards the reparations that would be paid to the Greek Cypriot refugees who lost their homes and properties during the Turkish invasion!  This plan, however, had the full support of the United Nations, the United States, the "fair" and "just" EU, Turkey, and even Greece—where treason is a time-honored political tradition which continues to this day.  The "pro-European" Cypriot president Nikos Anastasiadis, who was elected just last month, was also a supporter of the Annan Plan back in 2004.  Perhaps then, his current stance on the EU "bailout" should not come as a surprise at all.

To add further salt to the wound, Turkey's minister for EU affairs and its chief negotiator in accession talks with the EU, Egemen Bagis, recently suggested that Cyprus could adopt the Turkish Lira as its currency.  It probably should come as no surprise that such an abrasive and undiplomatic individual is in charge of negotiations with the EU—he would fit right in with the "diplomats" and politicians in Berlin and Brussels!  Indeed, this is not the first time Bagis has generated controversy: last year, in a visit to Switzerland, he publicly made remarks denying the Armenian Genocide, which led to an investigation against him launched by Swiss prosecutors.

One of the buzzwords that has been repeated often during the past three years of financial crisis in the EU has been "responsibility."  We were told that the Greeks, for instance, would have to "take responsibility" and "stop blaming others" for a mess that they created.  We're hearing the same things now about Cyprus: that the country, and its people, need to take "responsibility" for mismanaging their economy and their banking sector.  Nowhere though in all of this self-righteous talk about responsibility is any blame thrown the EU's way.  If the EU is so big on the idea of "taking responsibility," then why does it not take responsibility for the failed "haircut" of Greek bondholders that it imposed, which not only did not make a dent in Greece's external debt or bring Greece any closer to meeting the EU and IMF's comical growth projections, but it also precipitated the current crisis in Greece.  Cypriot banks were heavily exposed to Greek bonds and were forced to take major losses when the haircut was imposed (not to mention the thousands of ordinary Greeks who lost substantial amounts of money that they had invested in the supposedly "safe" government bonds).  One year later, the banking sector in Cyprus is—surprise, surprise!—seriously in trouble.  We're supposed to believe that money laundering run amok is entirely to blame?  Not to mention that the haircut in Greece was imposed after two years of failed austerity policies, which instead of helping to lead Greece back to growth, as repeatedly promised in 2010 and 2011 (and 2012 and continuing up until today), instead shoved Greece further into an economic depression.

Based on all of the above, I have a few very simple questions, which most professional "journalists," however, seem completely incapable of asking: how does the EU, after all of these lies, after three years of austerity policies that have completely failed, after proposing policy after policy that punishes ordinary people instead of the politicians and bankers, still have any legitimacy?  How can the EU and the IMF dare talk about corruption and about the need to "take responsibility" when their own members are corrupt to the bone?  How can they talk about "money laundering" when countries such as Luxembourg and Lichtenstein continue to operate their own "oversized" banking sectors unabated?  And, perhaps most significantly, who appointed Germany as the ultimate and final "decision-maker" in Europe?  It's interesting how we never really hear what so many other countries think about the austerity measures and "haircuts."  It's always the German chancellor, the German finance minister, and German EU officials in the news, along with perhaps the occasional Dutch politician.  Is the EU really a "union," or is it a dictatorship that is ruled by Germany, in a modern-day Fourth Reich?

The media shares in this hypocrisy and crisis of legitimacy as well.  Over the past week, hoards of international journalists have converged on Nicosia, the capital of Cyprus.  Not one of these journalists has uttered more than a cursory mention of the fact that Cyprus, an EU member-state (lest we forget) remains partially occupied by Turkey, and that over 20 years after the fall of the Berlin Wall, Nicosia remains a divided capital, within EU territory.  Instead, these "journalists" (the quotation marks are, sadly, necessary) resorted to the cheapest forms of sensationalism possible.  Photos of supermarkets with supposedly empty shelves were uploaded onto their Twitter feeds and blog posts—except that these photos were not from Cyprus, and certainly not from the past week.  Absolutely shameful.  Perhaps an addendum to the above question should be added: not only should we question the legitimacy of the EU and its structure and representatives and decision-making power, but we should perhaps also begin to question the supposedly "objective" and "reputable" media and all of the (mis)information that it has been feeding us (and all of the information it has been denying us) about Cyprus, about Greece, about Portugal and Spain and Ireland, about Iceland, about the bank(st)ers in the United States and Europe and worldwide.

By this point, EU and austerity apologists that are reading this article are surely asking: "yes, but what else could Cyprus have done?," following in the logic that Cyprus had no other choices available to it other than accepting the EU's bitter "medicine" or going under in a catastrophic national bankruptcy.  Such narrow-minded thinking completely (and conveniently) overlooks the possibility that the bankers and politicians responsible could be held accountable for their actions, prosecuted, and their assets seized.  It overlooks the possibility that independent commissions could be formed that would investigate matters such as the banking mess in Cyprus, or how Greece's debt grew to be so large and what percentage of it is, in fact, illegitimate or odious.  And it completely ignores real-world examples that have proven to be effective, such as what Iceland did following its own banking crisis, which has many parallels to that of Cyprus.  In the words of Lapavitsas:

Iceland followed a radically different path, as it is free of the troika and not a member of the EMU. It refused to increase its national debt and it thus let banks go bankrupt, shifting the costs on to shareholders, bondholders and depositors abroad. Iceland looked after small depositors, but also allowed its currency to devalue and applied capital controls. The country avoided a deep and protracted recession, and last year the economy grew at 2.5%.
And of course, there's the biggest move of them all: a departure from the Eurozone, which over two-thirds of Cypriots are in favor of.

All of the above solutions, however, would require that politicians, bankers, technocrats, and high-echelon businesspeople take responsibility, and would require that banks in the "core" of the EU accept losses.  And in the Nobel Prize-winning EU that professes to be "socially just" and "fair" and which touts responsibility while shifting blame on everything to the corrupt, incompetent, clueless Greeks or Cypriots or Portuguese or Spaniards, such solutions would truly be unacceptable.

Tue Mar 26, 2013 at 1:25 AM PT: Typo: the amount of back taxes allegedly owed by Hochtief to the Greek state is €600 million, not €600 billion.

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Comment Preferences

  •  I have come to the conclusion that the banksters (10+ / 0-)

    and wall street are truly the enemy. Have read Shock Doctrine. This looks text book.

    if a habitat is flooded, the improvement for target fishes increases by an infinite percentage...because a habitat suitability index that is even a tiny fraction of 1 is still infinitely higher than zero, which is the suitability of dry land to fishes.

    by mrsgoo on Sun Mar 24, 2013 at 09:13:52 PM PDT

  •  It's funny that when there was a discussion about (1+ / 0-)
    Recommended by:
    johnny wurster

    Greek bonds guys like you were saying that these bonds should lose all value b/c bondholders are slaveholders (or smth along these lines). And now when they lost most of their value and Cypriot banks failed b/c of it it becomes a problem.

    •  Umm (9+ / 0-)

      When did I say that bondholders are slaveholders?  You'll have to try harder if you want to make a legitimate critique.

      Also, in the case of the Greek bonds, they didn't "lose" most of their value in a vacuum.  The EU imposed a "haircut" and this set off a chain of events whose latest victim is the Cypriot banking sector.

      For the record, I was against the haircut of Greek bonds from the beginning, as it was clear that it was not going to reduce the Greek debt (indeed it increased, thanks to the subsequent "bailout" loans), because it transferred remaining bonds to British legal jurisdiction from Greek legal jurisdiction, and because it killed the small bondholder who invested his or her life savings and lost most of it.  And now, we're seeing what is happening in Cyprus.

      You're proving my point about austerity apologists and the fact that the EU and IMF never seem to take any responsibility for any of their actions, quite nicely.

  •  NYT is saying Laiki Bank (0+ / 0-)

    will be "wound down." Is this the same bank as Cyprus Popular Bank ? ☛ New York Times

    The free market is not the solution, the free market is the problem.

    by Azazello on Sun Mar 24, 2013 at 10:04:44 PM PDT

  •  On the contrary, easily discernible. (6+ / 0-)
    where austerity measures have brought more austerity, where more austerity has further strangled the economy, and where the solution to this stranglehold has been to tighten the noose even further, a vicious, murderous cycle with no discernable end in sight.
    If the eternal debt-rollover game doesn't end with Jubilee or investors taking a loss, sooner or later the currencies have to become worthless.

    There being no sense in taking a percentage of worthless currency, the next step is to demand that people give a number of hours in labor for free every week. Perhaps just a few at the start to see if that's sufficient.

    As sure as night follows day.


    If Republicans said every 3rd person named "Smith" should hang, we'd bargain them to every 7th. Then we'll see apologia written praising this most pragmatic compromise. There's our losing formula.

    by Jim P on Sun Mar 24, 2013 at 11:07:25 PM PDT

    •  This is the thing I've been thinking. (2+ / 0-)
      Recommended by:
      Jim P, nchristine
      There being no sense in taking a percentage of worthless currency, the next step is to demand that people give a number of hours in labor for free every week. Perhaps just a few at the start to see if that's sufficient.
      Sooner or later it has to come down to the Labor Theory of Value. All these digital trillions have to come out of the labor of real people. That's why TBTF Government and involvement is necessary, taxes on wages/labor.

      The free market is not the solution, the free market is the problem.

      by Azazello on Sun Mar 24, 2013 at 11:30:48 PM PDT

      [ Parent ]

  •  Rightly or wrongly, every minute this situation (0+ / 0-)

    persists the Turks have an "I told you so" moment. It has set any unification dreams back by decades.

    •  p.s. (1+ / 0-)
      Recommended by:
      auron renouille

      And if someone doesn't think this has destabilizing strategic ramification for multiple countries in the eastern Med, I've got Taiwan to sell you.

    •  Why? (1+ / 0-)
      Recommended by:
      upstate NY

      Why is it an "I told you so moment"?  Why should Cyprus have given in to a terrible "deal" that benefited the occupier?  Why should Cyprus give in to the passage of time but the Turks, whose pseudo-state is not recognized by anyone but themselves, are given a free pass to wait the Greeks out?  Reunification is not up to the Greeks, it's up to the Turks to finally begin to respect international law and the sovereignty of its neighbors.  When they do that, then there will be a solution.  The Cypriot people are willing to wait, rather than to succumb to a "reunification" that will benefit the occupier.

      •  The Greek Cypriots can wait as long as they like. (0+ / 0-)

        But in the meantime, I suggest this is what they can look forward to, and I'm struggling to see what leverage that gives them. Hence "decades".

        •  Wishful thinking (0+ / 0-)

          I can't help but feel that your insistence on this issue has to do with wishful thinking on your part.  Alternative currencies have sprung up in many other countries around the world, with or without capital controls.  Greece, the UK, even some parts of the US.  

          Greek tourism was supposed to be "destroyed" by the economic crisis of the past three years as well.  As a matter of fact, though, it hasn't.

          It's ludicrous of you to suggest that Cyprus should bow to EU pressure and to pressure from the occupier and give in to a "solution" that is morally and legally wrong, while also seemingly suggesting that Turkey should feel no such pressure to take action.

          People like you who support, explicitly or implicitly, an occupier who has blood on their hands are disgraceful.  Shame on you!

  •  So much noise. (2+ / 0-)
    Recommended by:
    johnny wurster, NeverThere

    You have cited the counterargument to your diary yourself.

    ... since the new laws passed by the Cypriot parliament gave the government new powers to resolve the country's banks.
    Well thanks to your elected representatives. Ask them how it came that
    ... the possibility of dipping in to Cypriot pension funds in order to partially fund the island's "bailout" ...
    was even on the table. So it took intervention from Merkel (!) to protect Cypriot pensioners against attempts to socialize losses? Do you not realize that this cuts the ground from under all your pathos?

    Do you not read your own cites? Like:

    Iceland followed a radically different path, ... it thus let banks go bankrupt, shifting the costs on to shareholders, bondholders and depositors abroad. Iceland looked after small depositors, but also allowed its currency to devalue and applied capital controls. ...
    In the Iceland case, the depositors (Dutch and British citizens) took a 100% haircut, and had no 100K guarantee whatsoever. It was the Dutch and British governments i. e. public money who bailed them out. So, Iceland did far worse to bank depositors than is even now on the table in Cyprus.  And you cite that as an example how?

    Overall, it is exactly the common, less wealthy cypriots that can be content with this deal - the more so as the costs are being progressively shifted to the more wealthy deposit holders.

    The wealthy are going to lose here, painfully. Is that what you protest against?

    •  Unfortunately, even the apparent contradictions (4+ / 0-)

      are not as simple as you might think.

      Everyone is going to suffer, not just the wealthy and not just the little folks. Who does the paying becomes irrelevant because none of this addresses the fundamental problem which is our self-fabricated economic "system" that serves the few at the expense of the many.

      The examples of elected officials anywhere actually doing anything other than what their sponsors, not their electors, want are few and far between. If governments truly acted in the interests of their citizens, there would be fewer problems, to be sure.

      We know that there has been massive wrong-doing, but it's was never discussed anywhere except Iceland (which is the real relevance of the Iceland example) and it is not going to be addressed here. In other words, those who are factually responsible will not be called to account.

      None are so hopelessly enslaved as those who falsely believe they are free. -Johann Wolfgang von Goethe

      by achronon on Mon Mar 25, 2013 at 01:01:05 AM PDT

      [ Parent ]

    •  It's you again (0+ / 0-)

      And you're wrong again.

      1. Merkel's words mean nothing.  I mentioned that in my article, but you conveniently failed to quote that part of what I wrote.  Merkel could have promised not to touch pension funds now.  Who is to say she and the IMF wont do so in 3 or 6 months?  If we take Greece as an example, every set of austerity measures that has been passed since 2010 has been the "final set of measures" that would be necessary.  Each time, "no new cuts" were promised, by Greek and EU officials alike.  In July 2011, for instance, Venizelos (then the VP of the Greek government) stated categorically that there will be no "solidarity tax" levied on people's electricity bills.  In September of that same year, Venizelos himself announced the urgent need to implement just such a tax.

      Their words are meaningless and should not be believed.  Anything that was not cut now is not safe from future cuts.  To believe otherwise is to be incredibly naive or stupid.

      2. Thanks to our elected representatives?  It seems that the members of parliament in Cyprus voted for one thing and received another, thanks to typical EU lies and blackmail.  Just like the Greek politicians promised one thing to the voters, then turned around and did another.

      "Democracy" is increasingly facing a severe crisis of legitimacy.  Politicians can lie outright, but they remain firmly in their positions for 4+ years with no consequence.  Politicians can also be lied to, by unelected technocrats and by politicians from other bully nations, with no consequences to those who have lied.

      3. In Iceland, foreign depositors lost their money.  Domestic depositors, however, were saved entirely.  That's because the government there looked after its own people, its electorate, first and foremost.  Imagine that!  The foreigners took a risk investing in another country and they lost.  Iceland didn't force the Dutch and British governments to bail those depositors out--it was a decision of those governments.  There was no law that required those governments to bail out their depositors for money they had stashed away in Iceland.  

      4. Yes, I do protest against this "solution" because it is not just the "wealthy" and the "tax cheats" and the "Russians" that are being hurt.  The hardworking Cypriot who, through sweat and effort, built a successful business and did the "right" thing by putting money aside, is going to get punished for the mistakes and the actions of others.  How is that in any way justifiable?  Because Merkel and the EU and IMF bullies dictate that it is?  Yes, it is a good thing that the small depositors were not affected--for now.  Who is to guarantee that they won't be affected in a few months, when Cyprus, like Greece, finds that the numbers in the EU's "bailout" recipe don't add up?

      EU apologists like yourself are sickening, and are very much a part of the problem.

  •  The enemy are the people who want to use (0+ / 0-)

    currency as a tool to control the population. Currency is a utility. It ought to be regulated much as the bureau of standards regulates weight and measures. Currency is a guaranteed measure of value. The agents of government certify that a dollar is a dollar, much as they assure that a pound or a gallon is as claimed.

    (We've just had people sent to jail in Georgia for shorting their customers on how much gas they got at the pumps when they paid for x number of gallons)

    Dollars and euros have no intrinsic value. They are symbols of value which is only manifest when the currency moves. Stashing it in bank accounts or using it in speculative trades that don't get taxed (send money back to where it's made) is useless. Money does not get more when it is saved. If you don't want to lose it, don't lend it. On the other hand, "use it or lose it." It's called currency because, like the current in a stream, it's supposed to move, circulate ....
    That the dollar has gotten sluggish is evident from this graph:

    We organize governments to deliver services and prevent abuse.

    by hannah on Mon Mar 25, 2013 at 12:46:09 AM PDT

  •  I cannot imagine... (3+ / 0-)

    ...anyone voluntarily keeping their money in Cyprus now.

    Today they came for the rich.  Tomorrow they could come for me.

    Boehner Just Wants Wife To Listen, Not Come Up With Alternative Debt-Reduction Ideas

    by dov12348 on Mon Mar 25, 2013 at 02:08:26 AM PDT

    •  Precedent (1+ / 0-)
      Recommended by:
      nchristine

      The precedent has been set.  Spain and New Zealand are already talking "haircut."  Perhaps not at the same levels as Cyprus, but the mere fact that this idea is "catching on" is bad news.  Not just for Cypriots, but for everyone.  EU/IMF/austerity apologists like a certain commenter elsewhere in this thread need to wake up and smell the reality.  

  •  So, this will prove to be interesting. (0+ / 0-)

    I know that it's not awesome, but at least now the cost is being borne by the uninsured deposits, and I'm sorry but keeping money in uninsured bank deposits is pretty foolish, particularly after seeing what happened a few years ago when the economy first tanked and people learned how their deposit insurance worked.  There are lots of safe investments out there, including T-bills and various Western European sovereign debt.  If a person has at least €100,000, they're probably literate enough to figure out both the importance of deposit insurance and the various ways of keeping one's money safe.

    Is there a workup yet (if ever) as to what percentage of the money is Cypriot/Greek vs. Russian?  I would love to learn that - if this is primarily eaten by Russian oligarchs, I could consider it a net positive.  Fucking thieves cleaned out the Russian economy when they voucherized the entire damn RSFSR - if they lose 30% of their ill-gotten gains, that's karma.

    "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

    by auron renouille on Mon Mar 25, 2013 at 02:57:25 AM PDT

  •  Saying that some people deserve to lose money (2+ / 0-)
    Recommended by:
    agent, neo11

    that they put into a bank bothers me. Who has the right to make that decision?  

    We're fools whether we dance or not, so we might as well dance.

    by PowWowPollock on Mon Mar 25, 2013 at 04:53:43 AM PDT

    •  Well banks are not guaranteed, beyond what (2+ / 0-)
      Recommended by:
      neo11, nchristine

      local governments are willing to guarantee.

      That's the crux of the problem with our current banking "system" there are too many bankers willing to assume that governments will cover their bad judgement, and too many governments willing to cover up for bankers bad judgement. Someone is going to lose, and it appears that (save for Iceland) governments have aligned their interests with that of the bankers and not the people.

      Going after bank deposits is just a quick way to implement a wealth tax, but only on liquid wealth. If your wealth is tied up in ships or land or oil wells, you don't get taxed.

      •  Responsibility (0+ / 0-)

        Indeed.  It's extremely hypocritical (and, indeed, infuriating) to read the EU politicians, technocrats, and banksters talk about how certain countries need to "take responsibility" for their mistakes, when at the same time it seems that the banksters have access to an endless supply of "get out of jail free" cards and have in no way been held accountable for their actions.  

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