Officials In Brussels Are Threatening To Cross A Line That Will Set Off Panic

From Bruce Krasting:

A move is being made in Brussels to “force” the Swiss government/banks to transfer all of the assets of Greek citizens back to the Greek banks.

The Swiss government/banks are obligated to cooperate with EU tax authorities when there is evidence of tax fraud. But that is not what this is about. The people in Brussels and Bern know that. The fact is that the Greek tax system is so screwed up that there simply are no taxes levied on certain types of income/capital (the shippers). No doubt, some of the Greek cash that is in Switzerland is there because of tax avoidance. But the vast majority is simply safe haven money.




The word “Repatriation” sounds nice enough but really it means “Theft and expropriation”. There will be nothing voluntary about this. There will be little (if any) due process.

If this happens (the folks in Brussels are pushing hard) a very dangerous precedent will have been set. Flight capital will have been made illegal. Where might this go?

-It will go to Spain very quickly. After that it will go to Italy where there are truly huge fortunes outside the country. I see a development like that as being a lights out event.

-It will come to the USA. EU residents have tons of assets here.

-Money that is subject to forced repatriation back to countries with weak banks and bankrupt governments will seek the last remaining safe haven, gold. If governments go so far as to repatriate money, they would also not hesitate to make gold ownership illegal. That too would be a lights out event.

The technocrats in Brussels are trying to institute capital controls. They have put a gun to the Swiss government to achieve their objectives. They will likely succeed. The fear of broader capital controls and more repatriation will spread like wildfire. The fact is, capital flight is a very reasonable response in our current environment. Capital controls that either stop or reverse it will undermine confidence and create a panic. Those officials in Brussels have no idea what they are unleashing.

http://www.businessinsider.com/brussels-capital-controls-jefferies-2011-11

Watch Nigel Farage Dance On The Euro's Grave | ZeroHedge

Nigel Farage has the temerity to question the stupidity of the Eurozone leaders from day one. Now, he has every right to gloat in the European parliament.

Click video image below to play.

Book: Rahm Emanuel Dumped Tons Of Freddie Mac Stock Days Before It Collapsed

Former White House Chief of Staff Rahm Emanuel is the latest lawmaker to get caught up in allegations of insider trading while a member of Congress.
Then-Rep. Emanuel reportedly sold up to $250,000 in Freddie Mac stock on February 21, 2003 days before it dropped by 10 percent — and weeks before it was publicly revealed that the entity was under criminal investigation for inflating earnings."

'via Blog this'

Why the Euro is screwed

“Understanding Modern Money” Randall Wray;

"…As currently designed, the EMU will have a central bank (the ECB) but it will not have any fiscal branch. This would be much like a US which operated with a Fed, but with only individual state treasuries. It will be as if each EMU member country were to attempt to operate fiscal policy in a foreign currency; deficit spending will require borrowing in that foreign currency according to the dictates of private markets.”"

'via Blog this'

Transfer the money out of Wall Street

Conservative free market entrepreneurial capitalist Karl Denninger notes:
If you have an account at a BANK, go move it to a CREDIT UNION.
You know, a place that you own and is a mutual association of people?
Yes. One that you own. Where the fees assessed go to provide services to.... you, not to feather the nests of bank executives and stockholders.

http://www.zerohedge.com/contributed/real-capitalists-move-our-money-big-banks-credit-unions

eyes fixed on the yo-yo

Alan Abelson

• "Do you know what investing for the long run but listening to market news everyday is like? It's like a man walking up a big hill with a yo-yo and keeping his eyes fixed on the yo-yo instead of the hill."

The President’s Taxes

At Steven Landsburg

 "So the Obama position seems to be that a) the rich ought to meet obligations over and above what the current tax code requires; b) the Obamas are rich, and c) the Obamas choose to meet no obligations over and above what the current tax code requires.

It’s almost enough to make you begin to doubt his sincerity."

'via Blog this'

Eurocrats in Action

Video from http://globaleconomicanalysis.blogspot.com/2011/11/hilarious-video-of-eurocrats-in-action.html shows Eurocrats in action, ripping off taxpayers and inadvertently running into walls to escape the lights of the camera. The video is in German but has English subtitles. Please click arrowhead below to view video.

Not horrible, just bad

"Michael Santoli says In the new issue of Barron's:
Sometimes, when enough folks are positioned for the world to end rapidly, the mere suggestion that it might occur gradually is enough to energize the bidders."

'via Blog this'

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

http://www.zerohedge.com/news/guest-post-want-defeat-banks-stop-participating-system

The only practical strategy for combating the tyranny of centralized systems has been and always will be decentralization. Individuals must stop relying on the rules of a rigged game to see them through to the truth. This means that while mass protests are certainly a powerful tactic for voicing concerns on an international stage, they accomplish little to nothing in the way of meaningful change in the long run unless they are backed by individual actions to break away from dependency upon a poisoned political and economic framework.

The common assumption amongst Americans is that nothing can be done without mass action resulting in “compromise” from leadership. That the healing of our cultural dynamic is a “top down” process. That one person alone has little at his disposal for bettering the world. In fact, it is always self aware and self sustaining individuals who build better societies, not angry mobs without understanding or direction. Individuals blaze the path that the rest of the world eventually follows, and they do this through one very simple and effective act; walking away.

Run on Greek Banks Started

Paul Ronzheimer (eg zt. Athens)

Athens - It's depressing scenes from a country close to bankruptcy!

Monday morning, 7.40 clock in the district of Athens, .We, the BILD reporters are witnesses   .... in front of a branch of the "National Bank of Greece" is a snake, .... right after the opening at 8:00 on the clock switch. Pensioners Evagelos Dimitros (73): "I come here to immediately pick up my pension € 300. Who knows what else happened today. My money is safe only when it is at home. "

'via Blog this'

Top 1% Wealth Share: Time plot

Econbrowser: Wealth Inequality: A Time Series Plot:

'via Blog this'

Economy: Debt collection is the new growth industry - latimes.com

Economy: Debt collection is the new growth industry - latimes.com:

press release:

WELCOME RELIEF TO THE NATION'S 14 MILLION UNEMPLOYED:

PROMINENT DEBT COLLECTION AGENCY, CFS II, ANNOUNCES PLANS TO EXPAND NATIONWIDE

WILL ADD 10,000 NEW JOBS IN THE NEXT THREE YEARS

Well, maybe printing the headline is enough. CFS II, which positions itself as a humane alternative to the hectoring approach taken by the typical bill collector, evidently misses the irony of touting how good the downturn has been for the debt-collection business. The Tulsa, Okla.-based firm plans to launch call centers -- i.e., phone banks its employees will use to dun people for money -- in five states. Each center will employ 500 people initially, growing to 2,000 by the third year of operation, the company pledged.

'via Blog this'

Take The Loss | The Big Picture

Take The Loss | The Big Picture: "Its something that every rookie trader must learn to do — and all of the TBTF banks refuse to do. Even sovereign nations seem unwilling to accept this simple fact of financial life.

There will be losses. How you handle them determines your fortune, your fate and your future.

Seeing how people handle losses is revealing of their character and integrity. Hiding losses is what rogue traders do. Its also what rogue banks do, and apparently, rogue nations."

'via Blog this'

Why Zero Interest Rates Don't Help Stimulate the Economy

Nomura Research Institute's Richard Koo says that what the world is experiencing right now, a "balance sheet recession," is different from traditional recessions. However, Japan recently experienced a similar type of recession, and Koo says we can learn a lot from that country's experiences. Interviewed by Daniel Erasmus at King's College, April 2010.

GREG MANKIW'S BLOG - Obama Economics?

The NY Times reports:

President Obama will propose on Monday giving the federal government new power to block excessive rate increases by health insurance companies, as he rolls out comprehensive legislation to revamp the nation’s health care system, White House officials said Sunday.

Very, very strange.  You would think that all those future Nobel-prize-winning economists working for the President would explain to him the history and economics of government price controls.  Imposing price controls certainly wasn't President Nixon's finest hour.


http://gregmankiw.blogspot.com/2010/02/financing-healthcare-reform.html

how one nation came to financial ruin.

A parable about  - By Charles Munger - Slate Magazine

In the early 1700s, Europeans discovered in the Pacific Ocean a large, unpopulated island with a temperate climate, rich in all nature's bounty except coal, oil, and natural gas. Reflecting its lack of civilization, they named this island "Basicland."

The Europeans rapidly repopulated Basicland, creating a new nation. They installed a system of government like that of the early United States. There was much encouragement of trade, and no internal tariff or other impediment to such trade. Property rights were greatly respected and strongly enforced. The banking system was simple. It adapted to a national ethos that sought to provide a sound currency, efficient trade, and ample loans for credit-worthy businesses while strongly discouraging loans to the incompetent or for ordinary daily purchases.

...................

Keynes had famously said, "When the capital development of a country is the byproduct of the operations of a casino, the job is likely to be ill done."

....................................................

Basicland is now under new management, using a new governmental system. It also has a new nickname: Sorrowland.

Detroit: Glory to Disaster

CRASH COURSE: The American Automobile Industry's Road from Glory to Disaster

Paul Ingrassia
Random House
ISBN 978-1-4000-6863-0
306 pages
$26

---

Reviewed by Jonathan Yardley
Paul Ingrassia of the Wall Street Journal, who covered the American auto industry for a quarter-century and probably knows it as well as any journalist, begins this account of its spectacular collapse by describing something called the "Jobs Bank." No, I'd never heard of it either. It was established by the manufacturers and the United Auto Workers in the 1980s "to provide temporary security for hourly workers on layoff," but "by the 1990s laid-off workers could remain 'bankers,' as they were nicknamed with knowing irony, for an unlimited time, making 95 percent of their wages while not working." This in turn led to "inverse layoffs," wherein "senior workers volunteered to be laid off and thus bumped junior workers back onto the assembly line."
Ingrassia asks: "After all, why should a worker with high seniority slave away building cars when workers with lower seniority collected virtually full pay just for sitting around? Such was the logic of Detroit's dysfunction." Indeed, "dysfunction" barely begins to cover it. "Self-destructiveness" or "insanity" would come a lot closer. Yes, by the time the feds finally forced General Motors and Chrysler into bankruptcy last year, most sentient Americans doubtless were aware that the domestic auto business was a mess, but in order to understand just how much of a mess it was -- not to mention how it got that way and how, if at all, it can be cleaned up -- you really need to read "Crash Course." Ingrassia is not the most gracious prose stylist on the planet, and his efforts to weave in the stories of a car dealer in Maine and father-and-son auto workers in Illinois tend to get lost in the bigger picture. But this is a vivid and wholly persuasive depiction of what can happen when "confrontation instead of cooperation" between labor and management becomes the "default mode" of operation.
"Hubris and sclerosis had been building for years in Detroit," Ingrassia writes, "in a heedless union and feckless managements." This isn't a story about good guys on one side and bad guys on the other, because for decades there was more than enough badness on both sides -- arrogance, incompetence, tunnel vision, irresponsibility, selfishness -- to satisfy even the most morbid screenwriter or novelist's desires. Along the way the occasional good guy makes a cameo appearance -- William Clay Ford Jr. and Alan Mulally, the man he hired to rescue the family business, being the most notable of recent vintage -- but this is such a rare occurrence you almost want to stand up and cheer.

Cap-And-Trade unsound

http://globaleconomicanalysis.blogspot.com/2009/11/cap-and-trade-three-card-monte-dead-for.html

The latest embarrassment arrives via the peer-reviewed journal Science,
not known for its right-wing inclinations. A new paper calls attention
to what the authors (led by Princeton's Tim Searchinger) call "a
critical accounting error" in the way carbon emissions from biofuels
are measured in climate-change programs world-wide.

The Science
study argues [the Cap-and-trade program] is a false economy, because it
doesn't consider changes in land use. If mature forests are cleared to
make room for biofuel-growing farms, then the carbon that would
otherwise accumulate in those forests ought to be counted on ethanol's
balance sheet as well.

Cap-and-trade programs exacerbate the
problem because developed countries (where emissions are putatively
capped) get credit for reductions from ethanol—despite the fact that
their biofuels are generally grown in developing countries (where
emissions aren't capped). So if Malaysians burn down a rain forest to
grow palm oil that ends up in German biodiesel, Malaysia doesn't count
the land-use emissions and Germany doesn't count the tail-pipe
emissions.

By way of a
solution, Mr. Searchinger and his coauthors modestly suggest doing away
with the regulatory three-card monte and counting net ethanol emissions
from where they are actually emitted. But this is political heresy on
Rep. Henry Waxman's Energy and Commerce Committee, which passed its own
cap-and-tax program in July with the votes of farm-state Democrats,
because the bill all but banned the Environmental Protection Agency
from studying land-use changes. So much for letting "the science" guide
public policy.

There is no housing bubble April 2006

April 2006
Bubble, Bubble, Where's the Housing Bubble?
Professors of economics, Gary Smith and Margaret H. Smith, say ....  They found bubble conditions in only one of the 10 metropolitan U.S.
housing markets evaluated.
The professors dismiss talk of a housing bubble questioning the assumption
that home prices have exceeded their fundamental value. "Perhaps housing
prices were too low in the past and recent prices have brought market prices
more in line with fundamental". They claim that existing methods, using
indirect measures or values predicted by regression models, cannot show if
housing prices are justified by the anticipated cash flow. They feel their
model, using unique rent and price data for matched single-family homes, is
a more accurate measure of fundamental home values.