Daily Digest

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Daily Digest 3/17 - Bank Runs In Cyprus, The Facts On Fracking

Sunday, March 17, 2013, 10:30 AM

Economy

Shock in Cyprus as savers face bailout levy (westcoastjan)

While Cyprus may be one of the eurozone's tiniest economies - its third-smallest - there could be serious repercussions for other financially over-stretched economies, such as those of Spain and Italy, BBC Business editor Robert Peston writes.

The point of the levy is to warn lenders to banks that they should take care where they place their funds, and avoid banks that overstretch themselves - as Cypriot banks did, he adds.

Why Cyprus' Rescue Matters To Us (westcoastjan)

Partly because there is a widespread view that if caveat emptor should apply to well-heeled lenders to banks, then the lesson has to be taught some time.

And partly because of the hope and expectation that sufficient confidence has returned to economies with weakened banks, especially those of Spain and Italy, that those with big deposits in such banks will not immediately ask for their money back (even if the Cypriot levy could one day turn out to be a very painful precedent for them).

Europe Does It Again: Cyprus Depositor Haircut "Bailout" Turns Into Saver "Panic", Frozen Assets, Bank Runs, Broken ATMs (safewrite)

But it doesn't stop there: a partial "bail-in" of junior bondholders is also possible, as for the first time ever the entire liability structure of a European bank - even if it is a Cypriot bank - is open season for impairments. The logical question: why here, and why now? And what happens when the Cypriot bank run that has taken the country by storm this morning spreads everywhere else, now that the scab over Europe's biggest festering wound is torn throughout the periphery as all the other PIIGS realize they too are expendable on the altar of mollifying voters and investors in the other countries that make up Europe's disunion.

Facing Bailout Tax, Cypriots Try to Get Cash Out of Banks (safewrite)

The move — a first in the three-year-old European financial crisis — raised questions about whether bank runs could be set off elsewhere in the euro zone. Jeroen Dijsselbloem, the president of the group of euro area ministers, declined early Saturday to rule out taxes on depositors in countries beyond Cyprus, although he said such a measure was not currently being considered.

Financial Pearl Harbor, Gold to hit $10,000 per ounce in 21st century? (Arthur Robey)

In this episode of the Keiser Report, Max Keiser and Stacy Herbert ask why China fears currency war. They also look at Johnson & Johnson's big loss on Venezuela's currency devaluation and what this means in a currency war world where major devaluations can happen at any moment. In the second half of the show, Max Keiser talks to Jim Rickards, author of Currency Wars, about which nations are winning the war.

Financialization of Justice: SEC Settles Insider Trading Case With SAC Capital For $600 Million (Arthur Robey)

I think this is a bigger fine than Goldman paid for Abacus. Of course SAC is not as systemically important as Goldman.

Energy

A ‘massive intrusion’: Promise and peril in Trans Mountain pipeline ambitions through B.C. mainland (westcoastjan)

In 2002, Kinder Morgan threaded a 1,300-metre section of the pipeline under the road after seismic tests revealed soil along the river bank, where the pipeline had earlier been moved to accommodate a Home Depot, was subject to “liquefaction,” which made it unstable.

North Dakota's Oil Boom (jdargis)

Underlying northwestern North Dakota is a massive rock formation, referred to as the Bakken shale, which holds an estimated 18 billion barrels of crude oil. When this resource was first discovered in 1951, recovering it was financially unfeasible because the oil was embedded in the stone. Then, around 2008, everything changed, and North Dakota boomed.

The Facts On Fracking (jdargis)

There is no doubt that natural gas extraction does sometimes have negative consequences for the local environment in which it takes place, as does all fossil fuel extraction. And because fracking allows us to put a previously inaccessible reservoir of carbon from beneath our feet into the atmosphere, it also contributes to global climate change.

The Dangers Of Fracking (jdargis)

Hydraulic fracturing, or “fracking”, is the process of drilling and injecting fluid into the ground at a high pressure in order to fracture shale rocks to release natural gas inside.

Obama Will Use Nixon-Era Law to Fight Climate Change (Arthur Robey)

“It’s got us very freaked out,” said Ross Eisenberg, vice president of the National Association of Manufacturers, a Washington-based group that represents 11,000 companies such as Exxon Mobil Corp. (XOM) and Southern Co. (SO) The standards, which constitute guidance for agencies and not new regulations, are set to be issued in the coming weeks, according to lawyers briefed by administration officials.

Great Lakes Experiencing 'New Stresses' (westcoastjan)

Eighteen months ago, the International Joint Commission flagged "chemicals of emerging concern” as a risk to humans and ecosystems.

"The other factor is climate change," Haffner said.

Gold & Silver

Click to read the Gold & Silver Digest: 3/15/13

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to dd@peakprosperity.com. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

3 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2849
Cyprus delays EU bailout debate as MPs baulk at terms

Cyprus delays EU bailout debate as MPs baulk at terms

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2849
Krugman

Why am I thinking of that old saying: "Even a blind hog..."? Here's the link:

Paul Krugman: Cyprus Bailout Will Push Europeans To Stage A Run On Their Banks

R.US's picture
R.US
Status: Member (Offline)
Joined: Aug 31 2009
Posts: 9
Cyprus Game

That's not what it looks like. It's not scary "deposit tax" or introducing "wealth tax." It does not even matter as Cyprus Parliament will vote. The signal is sent.
Why here: eurozone's tiniest economy on isolated island
Why now: Perfect timing for setting up a global run on the banks in Italy, Spain, all over Europe.
Hidden Goal: Let the Cash Wars begin..
The situation should escalate. This will be the reason to to introduce a protection from unjustified run on the banks.  Сash must be punished to protect the Euro. Few stages to be expected:

  • impose the special taxes for cash withdrawal
  • an additional taxes on any cash operational
  • complete outlaw all cash operation except deposits

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