Monthly Archives: September 2013

Americans warned bank ‘bail-ins’ coming

Experts say institutions will grab deposits without warning

28 Sep 2013
by Clark Kent

With the United States facing a $17 trillion debt and an acidic debate in Washington over raising that debt limit on top of a potential government shutdown, Congress could mimic recent European action to let banks initiate a “bail-in” to blunt future failures, experts say.

Previously the federal government has taken taxes from consumers, or borrowed the money, to hand out to troubled banks. This could be a little different, and could allow banks to reach directly into consumers’ bank accounts for their cash.

Authority to allow bank “bail-ins” would be in lieu of approving any future taxpayer bailouts of banks that would be in dire need of recapitalization in order to survive.

Some financial experts contend that banks already have the legal authority to confiscate depositors’ money without warning, and at their discretion.

Financial analyst Jim Sinclair warned that the U.S. banks most likely to be “bailed-in” by their depositors are those institutions that received government bail-out funds in 2008-2009.

Such a “bail-in” means all savings of individuals over the insured amount would be confiscated to offset such a failure.

“Bail-ins are coming to North America without any doubt, and will be remembered as the ‘Great Leveling,’ of the ‘great Flushing’ (of Lehman Brothers),” Sinclair said. “Not only can it happen here, but it will happen here.

“It stands on legal grounds by legal precedent both in the U.S., Canada and the U.K.”

Sinclair is chairman and chief executive officer of Tanzania Royalty Exploration Corp. and is the son of Bertram Seligman, whose family started Goldman Sachs, Solomon Brothers, Lehman Brothers, Bache Group and other major investment banking firms.

Some of the major banks which received federal bailout money included Bank of America, Citigroup and JPMorgan Chase.

“When major banks fail, they are going to bail them out by grabbing the money that is in your bank accounts,” according to financial expert Michael Snyder. “This is going to absolutely shatter faith in the banking system and it is actually going to make it far more likely that we will see major bank failures all over the Western world.”

Given the dire financial straits the U.S. finds itself in, these financial experts say that Congress could look at the example of the European Parliament, which recently started to consider action that would allow banks to confiscate depositors’ holdings above 100,000 euros. Generally, funds up to that level are insured.

Finance ministers of the 27-member European Union in June had approved forcing bondholders, shareholders and large depositors with more than 100,000 euros in their accounts to make the financial sacrifice before turning to the government for help with taxpayer funds.

Depositors with less than 100,000 euros would be protected. Considering protection of small depositors a top priority, the E.U. ministers took pride in saying that their action would shield them.

“The E.U. has made a big step towards putting in place the most comprehensive framework for dealing with bank crises in the world,” said Michel Barnier, E.U. commissioner for internal market and services.

The plan as approved outlines a hierarchy of rescuing struggling banks. The first will be bondholders, followed by shareholders and then large depositors.

Among large depositors, there is a hierarchy of whose money would be selected first, with small and medium-sized businesses being protected like small depositors.

“This agreement will effectively move us from ad hoc ‘bail-outs’ to structured and clearly defined ‘bail-ins,’” said Michael Noonan, Ireland’s finance minister.

The European Parliament is expected to finalize the plan by the end of the year.

The purpose of this “bail-in,” patterned after the Cyprus model, is to offset the need for continued taxpayer bailouts that have come under increasing criticism of the more economically well-off countries such as Germany.

Last March, Cyprus had agreed to tap large depositors at its two leading banks for some 10 billion euros in an effort to obtain another 10 billion European Union bailout.

While this action prevented the collapse of Cyprus’ two top banks, the Bank of Cyprus and Popular Bank of Cyprus, it greatly upset depositors with savings more than 100,000 euros.

WND recently revealed that the practice of “bail-ins” by Cyprus a year ago was beginning to spread to other nations as large depositors began to see their balances plunge literally overnight.

A “bail-in,” as opposed to a bailout that countries especially in Europe have been seeking from the International Monetary Fund and the European Union, is a recognition that such outside monetary injections won’t be forthcoming.

Sinclair said that the recent confiscation of customer deposits in Cyprus was not a “one-off, desperate idea of a few Eurozone ‘troika’ officials scrambling to salvage their balance sheets.”

“A joint paper by the U.S. federal Deposit Insurance Corporation (FDIC) and the Bank of England (BOE) dated December 10, 2012 shows, that these plans have been long in the making, that they originated with the G20 Financial Stability Board in Basel, Switzerland, and that the result will be to deliver clear title to the banks of depositor funds,” Sinclair said.

He pointed that while few depositors are aware, banks legally own the depositors’ funds as soon as they are put in the bank.

“Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay,” Sinclair said.

“But until now, the bank has been obligated to pay the money back on demand in the form of cash,” he said. “Under the FDIC-BOE plan, our IOUs will be converted into ‘bank equity.’ The bank will get the money and we will get stock in the bank.”

“With any luck,” Sinclair said, “we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.”

Such plans already are being used, or under consideration, in New Zealand, Poland, Canada and several other countries.

Source

A Small President on the World Stage

At the U.N., leaders hope for a return of American greatness.

The world misses the old America, the one before the crash—the crashes—of the past dozen years.

By PEGGY NOONAN

That is the takeaway from conversations the past week in New York, where world leaders gathered for the annual U.N. General Assembly session. Our friends, and we have many, speak almost poignantly of the dynamism, excellence, exuberance and leadership of the nation they had, for so many years, judged themselves against, been inspired by, attempted to emulate, resented.

As for those who are not America’s friends, some seem still confused, even concussed, by the new power shift. What is their exact place in it? Will it last? Will America come roaring back? Can she? Does she have the political will, the human capital, the old capability?

It is a world in a new kind of flux, one that doesn’t know what to make of America anymore. In part because of our president.

“We want American leadership,” said a member of a diplomatic delegation of a major U.S. ally. He said it softly, as if confiding he missed an old friend.

“In the past we have seen some America overreach,” said the prime minister of a Western democracy, in a conversation. “Now I think we are seeing America underreach.” He was referring not only to foreign policy but to economic policies, to the limits America has imposed on itself. He missed its old economic dynamism, its crazy, pioneering spirit toward wealth creation—the old belief that every American could invent something, get it to market, make a bundle, rise.

The prime minister spoke of a great anxiety and his particular hope. The anxiety: “The biggest risk is not political but social. Wealthy societies with people who think wealth is a given, a birthright—they do not understand that we are in the fight of our lives with countries and nations set on displacing us. Wealth is earned. It is far from being a given. It cannot be taken for granted. The recession reminded us how quickly circumstances can change.” His hope? That the things that made America a giant—”so much entrepreneurialism and vision”—will, in time, fully re-emerge and jolt the country from the doldrums.

The second takeaway of the week has to do with a continued decline in admiration for the American president. Barack Obama‘s reputation among his fellow international players has deflated, his stature almost collapsed. In diplomatic circles, attitudes toward his leadership have been declining for some time, but this week you could hear the disappointment, and something more dangerous: the sense that he is no longer, perhaps, all that relevant. Part of this is due, obviously, to his handling of the Syria crisis. If you draw a line and it is crossed and then you dodge, deflect, disappear and call it diplomacy, the world will notice, and not think better of you. Some of it is connected to the historical moment America is in.

But some of it, surely, is just five years of Mr. Obama. World leaders do not understand what his higher strategic aims are, have doubts about his seriousness and judgment, and read him as unsure and covering up his unsureness with ringing words.

A scorching assessment of the president as foreign-policy actor came from a former senior U.S. diplomat, a low-key and sophisticated man who spent the week at many U.N.-related functions. “World leaders are very negative about Obama,” he said. They are “disappointed, feeling he’s not really in charge. . . . The Western Europeans don’t pay that much attention to him anymore.”

The diplomat was one of more than a dozen U.S. foreign-policy hands who met this week with the new president of Iran, Hasan Rouhani. What did he think of the American president? “He didn’t mention Obama, not once,” said the former envoy, who added: “We have to accept the fact that the president is rather insignificant at the moment, and rely on our diplomats.” John Kerry, he said, is doing a good job.

Had he ever seen an American president treated as if he were so insignificant? “I really never have. It’s unusual.” What does he make of the president’s strategy: “He doesn’t know what to do so he stays out of it [and] hopes for the best.” The diplomat added: “Slim hope.”

This reminded me of a talk a few weeks ago, with another veteran diplomat who often confers with leaders with whom Mr. Obama meets. I had asked: When Obama enters a room with other leaders, is there a sense that America has entered the room? I mentioned de Gaulle—when he was there, France was there. When Reagan came into a room, people stood: America just walked in. Does Mr. Obama bring that kind of mystique?

“No,” he said. “It’s not like that.”

When the president spoke to the General Assembly, his speech was dignified and had, at certain points, a certain sternness of tone. But after a while, as he spoke, it took on the flavor of re-enactment. He had impressed these men and women once. In the cutaways on C-Span, some delegates in attendance seemed distracted, not alert, not sitting as if they were witnessing something important. One delegate seemed to be scrolling down on a BlackBerry, one rifled through notes. Two officials seated behind the president as he spoke seemed engaged in humorous banter. At the end, the applause was polite, appropriate and brief.

The president spoke of Iran and nuclear weapons—”we should be able to achieve a resolution” of the question. “We are encouraged” by signs of a more moderate course. “I am directing John Kerry to pursue this effort.”

But his spokesmen had suggested the possibility of a brief meeting or handshake between Messrs. Obama and Rouhani. When that didn’t happen there was a sense the American president had been snubbed. For all the world to see.

Which, if you are an American, is embarrassing.

While Mr. Rouhani could not meet with the American president, he did make time for journalists, diplomats and businessmen brought together by the Asia Society and the Council on Foreign Relations. Early Thursday evening in a hotel ballroom, Mr. Rouhani spoke about U.S.-Iranian relations.

He appears to be intelligent, smooth, and he said all the right things—”moderation and wisdom” will guide his government, “global challenges require collective responses.” He will likely prove a tough negotiator, perhaps a particularly wily one. He is eloquent when speaking of the “haunted” nature of some of his countrymen’s memories when they consider the past 60 years of U.S.-Iranian relations.

Well, we have that in common.

He seemed to use his eloquence to bring a certain freshness, and therefore force, to perceived grievances. That’s one negotiating tactic. He added that we must “rise above petty politics,” and focus on our nations’ common interests and concerns. He called it “counterproductive” to view Iran as a threat; this charge is whipped up by “alarmists.” He vowed again that Iran will not develop a nuclear bomb, saying this would be “contrary to Islamic norms.”

I wondered, as he spoke, how he sized up our president. In roughly 90 minutes of a speech followed by questions, he didn’t say, and nobody thought to ask him.

Source

Credit card firm cuts off nation’s No. 1 gun store — for selling guns

SEPTEMBER 26, 2013
By PAUL BEDARD

A subsidiary of Visa, a key Obama campaign donor, that specializes in credit card transactions has abruptly stopped servicing the nation’s largest gun store after four years because the store sells guns, a fact the owners never hid.

Hyatt Gun Shop of Charlotte, N.C., told Secrets that the subsidiary, Authorize.net/CyberSource, simply sent an email to owner Larry Hyatt to announce that it was suddenly breaking off the business relationship. The reason: “The sale of firearms or any similar product.”

The company email said that gun sales violated a section of the service agreement the two signed over four years ago and after Hyatt went into detail about its sales and products — and name.

“We’ve never seen anything like this,” said Justin Anderson, Hyatt’s marketing director. He said it took a week and thousands of dollars to line up a “gun friendly” credit card processor for online sales.

The brushoff of Hyatt’s business has sparked a national boycott effort against Authorize.net and parent company CyberSource organized by the website Grass Roots North Carolina. “It looks like the small but noisy anti-gun crowd has gotten to what must be a jelly-spined PR department at CyberSource and Authorize.Net. Either that, or leadership at these companies have simply become anti-gun all on their own,” said the website in announcing the boycott.

Anderson suspects that the company, purchased by Visa in 2010, got cold feet dealing with a leading gun seller and he said that he’s heard of other gun stores being dropped. The company had no immediate comment.

The sudden move comes just two weeks after the Washington Navy Yard shootings which were followed by a plea for more gun control from President Obama.

Several Visa executives contributed to the president’s re-election campaign. Their total was $21,780, according to the Center for Responsive Politics.

Below is the short email notice from Authorize.net:

Dear Hyatt Gun Shop Inc,

Authorize.Net LLC (“Authorize.Net”) has determined that the nature of your business constitutes a violation of Section 2.xiv of the Authorize.Net Acceptable Use Guidelines and Sections 3.3 and 11.3 of the Authorize.Net Service Agreement (the “Agreement”). These sections include, but are not limited to, the sale of firearms or any similar product. Accordingly, pursuant to Section 4 of the Acceptable Use Guidelines, your ability to access and use the Authorize.Net Services will be terminated on September 30, 2013.

Paul Bedard, The Washington Examiner’s “Washington Secrets” columnist, can be contacted at pbedard@washingtonexaminer.com.

Source

Senate Republicans actually do have the votes to stop Obamacare

By Robert Romano

“I want to be absolutely crystal clear — any bill that defunds Obamacare is dead. Dead.”

That was Senate Majority Leader Harry Reid (D-Nev.) telling reporters last week that there would not be the votes to pass a House Republican plan to defund the health care law via the continuing resolution.

Something he and his colleagues might consider, however, is that that really cuts both ways.

Republicans have 46 members in the U.S. Senate, more than enough to defeat cloture on any continuing resolution that will ultimately result in Obamacare being funded.

To do so, they will first have to block a parliamentary maneuver by Reid to proceed to the continuing resolution in a manner that will allow the defund Obamacare language to be stripped out with a simple majority vote.

According to Breitbart.com’s Matthew Boyle, “They could refuse to grant cloture in the first place until a unanimous consent agreement is reached in the Senate that any amendment added to the bill post-cloture would also be subject to a 60-vote threshold. They could also require Reid to fill what is known as the ‘amendment tree,’ a list of amendments that is the maximum of what could be considered on a bill, with amendments other than that one, before agreeing to grant cloture.”

But, reports Boyle, Senate Minority Leader Mitch McConnell (R-Ky.) refuses to commit to using all the tools in his parliamentary toolbox to do just that. He would be well advised, however, that consciously voting to proceed to any bill that invariably winds up funding Obamacare — even if the amendment to strip the defund language is to be agreed to post-cloture — is just the same as proceeding to a bill where the defund language had already been removed.

Yet, Senate Republicans appear to be content with playing dumb and pretending they will be voting to proceed to legislation that defunds Obamacare — when everyone already knows it in the end it will not.

For example Senate Republican Whip John Cornyn (R-Tex.) said, “It doesn’t seem to make much sense to vote ‘no’ on a bill that contains the defund-ObamaCare provision. I don’t know anybody in our conference who’s for ObamaCare, so I think they’d vote ‘yes’ to get on a bill to defund it.”

That doesn’t sound like Senate Republicans are really committed to the defund strategy. But even if they aren’t — Sen. Richard Burr (R-N.C.) called it “the dumbest idea I’ve ever heard of” — there is another case to be made for waging a filibuster.

It would strengthen the GOP’s hand. When it is clear that there are neither the votes to fund Obamacare nor to defund it in the Senate, it would force Reid and the White House to the negotiating table.

While many observers have suggested that Reid and Obama will never compromise, history suggests otherwise.

The continuing resolution passed in March 2011 was a compromise largely negotiated by House Speaker Rep. John Boehner (R-Ohio) that resulted in some small cuts to the budget. Sequestration was another compromise in exchange for raising the debt ceiling by $2.1 trillion in August 2011. The tax deal in December 2012 was yet another compromise in exchange for avoiding the so-called fiscal cliff.

This speaks not only to the willingness of Democrats to make a deal, but also to the utility of Republicans using these leverage points, whether they be continuing resolutions, debt ceiling increases, or otherwise, to achieve major concessions.

As Sen. Ted Cruz noted on Fox News in an interview with Neil Cavuto, “I know for sure that you lose 100 percent of the battle that you begin by surrendering, and all these Republicans who say we can’t win, if they want, these various pundits who want us to surrender, that will make sure we can’t win.”

Cruz is right. Consider the alternative offered by the Washington, D.C. establishment, which frowns upon any confrontation over the continuing resolution or debt ceiling. They fear anything that smacks of a government shutdown or risks default. They would apparently just have Obamacare opponents simply capitulate.

But surely to constituents of Republican senators — who have sworn up and down they oppose Obamacare — submission to a law that will force them onto government-run, taxpayer-funded health insurance is untenable.

They will intuitively understand what this fight is all about, and come 2014, 2016, and subsequent election cycles, they will likely collect political scalps, or attempt to, of any senator whom they perceive forced them onto Obamacare.

In a stark warning to senators, Americans for Limited Government President Nathan Mehrens defined the choice facing the so-called deliberative body: “The message for the Senate is very simple: If you vote to fund Obamacare via the continuing resolution, you will own the health care law. If you vote to invoke cloture on a continuing resolution that funds Obamacare, you will own it.  And if you vote against a continuing resolution that defunds Obamacare, you will own it, too.”

So, the choice belongs to each and every senator. They can stand with the American people, and block cloture on any continuing resolution that funds Obamcare, or they can roll over and let it be implemented.

But they would be well-advised that should they surrender, the American people will not forget — and they are not forgiving.

Robert Romano is the senior editor of Americans for Limited Government.

Related Posts:

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While Congress Is Fighting Over ObamaCare, Obama is Planning His Next Attack On America

By Asylum Watch

Barack Obama is not about to be a “Lame Duck” President if he can help it. He promised to bring about the fundamental transformation of America and to force American energy costs to skyrocket. He has done a pretty good job of meeting his goals so far, but he is not done with us yet.

AZ Leader at Inform the Pundits has an excellent post up on how President Obama and his EPA storm troopers plan to force electricity costs in America to skyrocket. In that post, he provides a link to the President’s “Climate Action Plan“ and a link to  new EPA regulations proposed on Friday. Let’s take a look.

President Obama’s Climate Action Plan

The preamble is taken from President Obama’s 2013 Inaugural Address (Emphasis added):

“We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity. We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms.
The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition, we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries, we must claim its promise. That’s how we will maintain our economic vitality and our national treasure — our forests and waterways, our croplands and snow-capped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared.”

– President Obama, Second Inaugural Address, January 2013

Please note the bits I put in bold. The “overwhelming judgment of science” is a scam. Check out this Inform the Pundit article. And, look at this quote from another Inform the Pundit article:

Claims of increased “extreme weather” events are being disproved by scientists. Not only are U.S. hurricanes in decline, but so are tornadoes, droughts, and floods.

That article is full true information backed up by good sources. But the truth never stopped Barack Obama before and it won’t stop him now. So, let’s see what he and his EPA storm troopers have in store for us. Oh, and that “sustainable energy sources” sounds a lot like Agenda 21, doesn’t it?

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