Major Italian Bank Freezes All Customer Accounts

by Alexander Higgins, Alexander Higgins:
‘Financial difficulties’ force Bank Network Investments SpA (BNI) to begin a Bank Of Italy authorized freeze on all customer accounts.
On May 31st Bank Network Investments discretely posted an announcement on their website that they would be freezing all of their customers accounts for 1 month freeze on citing financial difficulties.
The announcement was posted and the bank gave customers 7 days to act before the Bank of Italy approved freeze went into effect.
The bank’s customers are saying they were completely unaware of the notice being posted and are just now finding out about it when they go to the bank or the ATM for the first time.
The media certainly hasn’t reported on it and news of the freeze is only now starting to make its way around the internet after a complaint was posted on the popular Italian consumer rights website Adiconsum along with a photo of a shutdown ATM.
Read More @ AlexanderHiggins.com

Why You Absolutely Must Have Food Supplies, Hard Assets and Reserve Cash

by Mac Slavo, SHTFPlan:

While many refuse to believe that it can happen, evidence for why it is absolutely critical to stock up for hard times and worst case scenarios is and has been staring us in the face for the last several years (never mind the thousands of years of historical precedent).
The latest warning signs are, once again, popping up in Europe and should be taken seriously, as it is only a matter of time before such events play out in the rest of the world, including right here at home:

Via Adiconsum Italia – Translated via Google
BNI depositors unable to make withdrawals / payments, payments of utility bills, mortgage payments, taxes
Peter Giordano, Adiconsum: “Grave of the Bank of Italy’s attitude that takes action without considering the impact on depositors, and especially on single-income families and pensioners”
Read More @ SHTFPlan.com

How many people in Greece now wished that they were prepared...and the Sheeplez Sleep...Spain and Italy you're Next...



We The Sheeplez... is intended to reflect excellence in effort and content. Donations will help maintain this goal and defray the operational costs. Paypal, a leading provider of secure online money transfers, will handle the donations. Thank you for your contribution.

I'm PayPal Verified  

On Capital Controls

What are capital controls? Simply, capital controls are policies which restrict the free flow of capital into, out of, through, and within a nation’s borders. They can take a variety of forms, including:

• Setting a fixed amount for bank withdrawals, or suspending them altogether
• Forcing citizens or banks to hold government debt
• Curtailing or suspending international bank transfers
• Curtailing or suspending foreign exchange transactions
• Criminalizing the purchase and ownership of precious metals
• Fixing an official exchange rate and criminalizing market-based transactions

Establishing capital controls is one of the worst forms of theft that a government can impose. It traps people’s hard earned savings and their future income within a nation’s borders. This trapped pool of capital allows the government to transfer wealth from the people to their own coffers through excessive taxation or rampant inflation… both of which soon follow.

Pimco Reports First Treasury Holding Increase In 2012, First Duration Increase Since October 2011

Overnight, Pimco's flagship Total Return Fund posted its monthly update, with several notable highlights. First, total holdings in the fund rose to a record $260.7 billion, a $2 billion increase over April. Next, following months of consecutive reduction in the firm's Treasury holdings, the TRF reported its first TSY increase, rising from 31% to 35%, a modest number historically, but definitely a change in trend. It also appears that Gross has had his fill of MBS, which as we all know too well by know, is how he plans on frontrunning the Fed's next QE episode. At 52%, it was just a modest decline from the April 53%, and in dollar terms the $136 billion in holdings, is only the second highest ever. Still, it is notable that instead of continuing to load up on MBS, Gross is now "diversifying" into Treasurys. All other asset classes were relatively flat, with margin cash increasing slightly from -18% to -21%, or short $55 billion. Finally, the most interest data point has nothing to do with the portfolio structure, but the duration of holdings: the effective duration rose for the first time since October 2011, increasing from 4.61% to 4.81%. Is Gross finally taking a peek from underneath his shell and going to the long-end?

By Incentivizing Debt, We've Guaranteed Debt-Serfdom and Stagnation

Incentivize debt, and you end up relying on debt as a sustitute for productivity and income. Increase debt, and there's not enough income left for productive investments that might boost income. Incentivize debt via making interest tax deductible, and you create a self-reinforcing feedback of a rising share of declining income being devoted to interest payments. With demand and borrowing both suppressed by debt-serfdom, demand for housing, goods and services declines. Borrowing more to consume simply speeds the cycle of rising interest and falling net incomes. Incentivize debt and you create multiple overlapping death spirals. We are seeing the death-spirals play out in a fractal manner, from households to nations to entire regions. High debt levels lead to high interest payments which lead to low investment and savings rates which lead to lower productivity which leads to stagnation of income, consumption and investment: in other words, a death spiral.

Meanwhile In Switzerland...

..... The entire bond curve through the 5 year point is now negative (for the first time ever). At this rate, courtesy of the FX peg and the SNB's free put option, whereby EURs are converted into CHFs at a furious pace even as the facade of a collapsing Eurozone is itself crumbling, and the proceeds are use to buy Swiss bonds ever further into negative territory, we may soon have an entire bond curve trading at negative territory. Which, paradoxically, would lead to that Keynesian wet dream: the more debt Switzerland issues, the more money it would make courtesy of negative interest expense, literally, and the faster it would pay down its debt. Curiously, this may not be a bad offset to losses that the SNB is currently experiencing due to its currency peg. And some thought bizarro world was a sitcom construct.

The Spanish 'Legal-Arbitrage' Bond Trade Is On

As subordination and the inevitable cram-down of European sovereign debt becomes increasingly clear, the 'legal-arbitrage' that we were first to point out back in January in our Subordination 101 post (which worked out extremely well for Greek PSI holdouts), is beginning to be priced into Spanish debt also. As we pointed out yesterday (here and here), being long non-local-law Spanish bonds against a short in a well-matched local-law Spanish bond offers significant upside should things start to get really-ugly (as opposed to the current just-ugly) in Europe. It seems obvious to us that, arbitrage aside, bond portfolio managers should be seeking out these non-local-law bonds and swapping into them (as part of their Fiduciary duty to their investors) if their mandates force them into owning Spanish bonds. In the meantime, as is clear from the chart below (and noted that liquidity/sourcing of the non-local-law bonds is tough but that's why you pay your bond broker so much) that the 'trade' or swap is beginning to be positioned (and especially the last two days where the non-local-law bond has actually risen in price as the local-law bond has crashed).

"Uganda Is Not Spain"

Nobody can forget how over the weekend Spanish PM Rajoy told economy minister de Guindos to keep a stiff upper lip, and that, lest someone forget, Spain is not Uganda. Two days later nobody is laughing: Spanish bond yields just pushed to Euroarea records, Fitch just downgraded the bulk of Spanish banks, and it looks like Spain may need a second bailout before the details of the first one are even ironed out. However, one entity is not amused. Uganda. Or perhaps, is very amused, depending on one's perspective.

The ‘Lesser Of Two Evils’ Con-Game

Lesser Of Two Evils?  There’s No Such Thing…
First of all, asserting that there is such a thing as a “lesser of two evils” is an act of naivety.  It relies on a very dangerous assumption; that one can somehow quantify which candidate is going to hurt the country less.  I’ve even read essays by people who pretend they can mathematically delineate the “more evil” of the evils!  Not surprisingly, their “logic” invariably leads them to proclaim the lesser evil to be the candidate of the party they happen to belong to.  Ignorant Republicans always see the Democrat as the greater evil, while ignorant Democrats always see the Republican as the ultimate monster. Here’s some math for you:  there are two candidates for President of the United States, one is a cannibalistic serial killer who plans to murder 20 more people with his own hands while in office.  The other is a cannibalistic serial killer who only plans to kill 19 innocents personally.  Which candidate do you support?
The correct answer is NEITHER.

What Does European Credit Know That Stocks Don't?

European credit markets are near one-week wides, having tumbled dramatically since yesterday's open. Investment grade credit is leading the charge followed by senior financials as professional investors look for macro protection - we suspect ahead of this weekend's election. However, European equities are modestly higher from yesterday's close and remain higher than Friday's close. Credit markets had their own dead-cat-bounce at the open this morning but that has since faded significantly, so for now, as we have said again and again 'credit anticipates and equity confirms', it seems credit is seeing something a little less sanguine ahead for now. In the meantime, Spanish and Italian sovereign debt is pushing higher in yield (Spain +74bps from yesterday's open to euro-era record highs) and Swiss 2Y rates have hit a new record low at -36.6bps.

Vote for Silver 2012

from TruthNeverTold :

What is the market telling us that Bernanke and the Fed will do next?

by Brett Heath, MineWeb.com
Given the effect Ben Bernanke’s non-statements have had on gold and silver prices a technical analysis of the markets indicates what the Fed’s policy will likely be.

As fiduciaries our job is to forecast which asset classes have the highest probability of increasing in value with the least amount of risk. Since late 2008, irrational market behavior has increased due to the monetary interventions by central banks. Herein lies the problem. The rules of the game have changed and we must change the way we look at the markets as well.
Governments around the world have been using their central banks to extend the life of the current economic system. Confirmation of this behavior is evident in the diminishing number of foreign buyers of US debt, yet we are at record low yields.
Read More @ MineWeb.com

Divide and Rule a Danger as Greek Political Tensions Rise

by Brit Dee, The Daily Sheeple:
The far-right politician who repeatedly slapped a female left-wing opponent live on television is in hiding, with police claiming not to know his whereabouts.
Ilias Kasidiaris, a spokesman for the ultranationalist Golden Dawn party, last Thursday threw a glass of water over a Syriza politician before slapping KKE communist Liana Kanelli three times during a live morning television show. He was then reportedly locked in a room at the television studio but managed to escape, subsequently issuing a statement saying he intended to sue the two women he had attacked for “provoking” him.
A state prosecutor issued a warrant for Kasidiaris’s arrest on charges of grevious bodily harm, and he was also due to appear in court today on charges relating to an unconnected attack on a student five years ago. He has instead disappeared and police claim they cannot find him.
Read More @ TheDailySheeple.com

Spanish Bail Out Banks on German Vote

from Wealth Cycles:
Rumors of a bank bailout, months before a bank bailout, are counterproductive, because it admits the need, putting upward pressure on the interest rate at which Spain can borrow funds. Here is Spanish Prime Minister Mariano Rajoy on the 28th of May:

“There will be no rescue of Spanish banks.”

Rajoy denied needing external help for months, before deciding to ask frantically for external help in the middle of last week, and then, according to the media,“officially” filing for help again on Saturday. The help Rajoy desires is to prolong the jobs of Spanish bankers whose banks have gone broke. A capitalist would allow broke banks to go into bankruptcy, allowing prudent lenders to take their place. Sadly, capitalism has fallen to socialism across all political boundaries. The fact is, after all of the bluster, it costs both Spain and Italy more to loan money today than it did last week.
Read More @ WealthCycles.com

History of the Gold Standard in the 20th Century – James Rickards

from CaseyResearchFan :
At the latest Casey Research Conference, “Recovery Reality Check” in Weston, Florida.James Rickards, senior managing director of Tanget Capital Partners and author of “Currency Wars: The Making of the Next Global Crisis,” talks about inflation and the gold standard in the 20th century

Roubini Tells Europe to Stop ‘the Savings Madness’

by Lisa Rowland and Antonia Oprita, CNBC:
Governments in Europe should lower taxes and increase salaries to boost growth rather than insisting on austerity and continued saving, famous economist Nouriel Roubini told a German newspaper in an interview on Tuesday.
Roubini also said the German government should give its citizens incentives to go on holiday in countries in the south of Europe that were affected by the debt crisis to help those states recover.

Some leaders in major European countries have already shifted their rhetoric from austerity to growth, as tax increases and cuts in government spending have exacerbated the economic downturn, causing deep recessions in some euro zone countries. But Germany still insists on austerity as a way to bring budgets under control.

“The savings madness must be stopped. Governments must lower taxes and increase wages. Europe needs growth,” Roubini told popular newspaper Bild.

Read More @ CNBC

Banks are an Endangered Species

from Azizonomics:
In the long run, all the hullabaloo about the various global banking crises is just hot air.
The old establishment banks — the ones that have been bailed out this week in Spain, and in 2008 in America — are unnecessary middlemen. This is because of the ludicrous spreads from which they profit. They borrow from central banks and from depositors at absurdly low rates of interest (that’s what ZIRP is all about) and lend at vastly higher rates. What useful function does it serve? At one time, banks generated value by being wise lenders, lending to businesses that they determined would add value. Today they prefer gamble up even bigger profits in the zero-sum derivatives casino and shadow banking whorehouse, requiring frequent bailouts when such schemes go awry. They are dinosaurs that offer no real value to their shareholders, their customers, or to society.
And for all their claims of systemic importance, for all the bailouts, all the whining, all the pontification they are gradually being sidelined by other forms of intermediation, specifically peer-to-peer lending wherein lenders and borrowers are matched directly often via the internet. The lender gets interest, the borrower pays interest, but because there is no middleman taking a (huge) cut both rates are more favourable — the borrower pays less interest, the lender receives more interest.
Read More @ Azizonomics.com

How China Will Use the Yuan to End the US Dollar Standard

By Dan Denning, Daily Reckoning.com.au:
The most interesting news over the long weekend wasn’t to do with the Spanish bailout. The most interesting news is that China is moving to internationalise its Yuan currency. The steps are gradual, mind you, but in the long game of global power through monetary conquest, every step is progress toward the goal. The goal is ending the US dollar standard.
The tiny step China’s regulators took last week should promote more liquidity in yuan denominated trading. Specifically, China now allows Chinese banks to conduct non-principal exchange currency swaps. That might not sound like a big deal, but it’s a start.
First, a non-principal exchange currency swap is when two parties (Chinese banks) reach an agreement to exchange interest rate payments on their respective loans. The loans are denominated in separate currencies (US dollars and yuan). The exchange – not of the principal on the loans but just the interest – is a way for Chinese companies to hedge foreign currency exposure.
Read More @ DailyReckoning.com.au

Gold Deposits Of USD 1 Billion To Be Collected By Turkish Bank

from GoldCore:
The risk of contagion remains real and European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro zone capital controls as a worst-case scenario should Athens decide to leave the euro.
While the technicals are poor, the fundamentals remain sound with the euro zone debt crisis far from resolved. Indeed, the euro zone debt crisis will likely morph into the global debt crisis in the coming months when markets turn their attention to the Chinese property bubble and the poor fiscal position of Japan, the UK and the US.
Market watchers are waiting for the Greek elections on June 17, and also the Group of 20 financial summit plus the US Fed’s policy meeting next week.
Turkiye Is Bankası AS, Turkey’s biggest bank by assets, plans to collect $1 billion of gold in its deposit accounts by the end of the year, citing deputy chief executive officer Erdal Aral.
As much as 5,000 metric tons of gold is stored “under the mattress” in Turkey, Aral said, according to the Istanbul-based newspaper. Gold deposit accounts have surged to 13.6 billion liras ($7.4 billion) from 3.1 billion liras within the past year, according to data released by the banking regulator, Aral was quoted as saying.
Gold has always been seen as money and as a store of wealth in Turkey and now the country is leading the way with regards to the remonetisation of gold in the 21st Century.
Read More @ goldcore.com

Is The Fed Getting Ready to Juice Once Again?

by Brett Heath, Dollar Vigilante:
As fiduciaries our job is to forecast which asset classes have the highest probability of increasing in value with the least amount of risk. Since late 2008, irrational market behavior has increased due to the monetary interventions by central banks. Herein lies the problem. The rules of the game have changed and we must change the way we look at the markets as well.
Governments around the world have been using their central banks to extend the life of the current economic system. Confirmation of this behavior is evident in the diminishing number of foreign buyers of US debt, yet we are at record low yields.
Foreign Holdings of US Treasury Securities
Source:  http://www.treasury.gov/resource-center/data-chart-center/tic/documents/mfh.txt
Without the largest buyers in the treasury market to soak up the ever-increasing supply, we know the Fed must inevitably intervene and fill that gap again. This brings us to the Fed’s bond buying programs, each more cleverly named than the last.
Read More @ DollarVigilante.com


We The Sheeplez... is intended to reflect excellence in effort and content. Donations will help maintain this goal and defray the operational costs. Paypal, a leading provider of secure online money transfers, will handle the donations. Thank you for your contribution.

I'm PayPal Verified