White House 'closely monitoring' Cyprus bailout effort

"I'm not going to comment on markets," Carney said. "You might see if Treasury officials will comment on them. I would simply say that we have long said that a strong stable Europe is in the interests of the United States."

The White House spokesman also declined to answer when asked generally if the White House had a general reaction to the Cyprus plan, under which the government would take 9.9 percent from all deposits in the nation's banks.

Ask the GM bond holders. It already happened here.

Government debt crisis, after Rethugs ran up the debt
#43 | POSTED BY NUTCASE

Come on NUTCASE you can do better than that. Greek Cypriots are Rethugs? If you had blamed it on the Ottomans I could buy that as it is a history of poor governance that brought Cyprus to this point. The banks are not backed with bonds like most financial organizations so there are no bond holders to fleece only depositors.

Daylight robbery in Cyprus will come to haunt EMU

One's first reflex is to gasp at the stupidity of the EU policy elites, but truth is that most EU officials handling the Cyprus crisis know perfectly well that their masters have just set the slow fuse on a powder keg – and they can only pray that it is slow.

The decision to expropriate Cypriot savers – even the poorest – was imposed by Germany, Holland, Finland, Austria, and Slovakia, whose only care at this stage is to assuage bail-out fatigue at home and avoid their own political crises.

What is clear is that Angela Merkel will not risk defeat in the elections in September by ceding a single vote to Social Democrats determined to hold her feet to the fire over a bail-out for "Russian oligarchs, money-launderers, and tax evaders" in Cyprus, or by ceding votes to the new anti-euro party Alternative fur Deutschland. She will look after her own political interests, and all the rest is humbug.

The danger may not be immediate but if the economies of Portugal, Spain, and Italy languish through this year in deep slump with no green shoots of recovery starting to sprout in the second half – as many fear – this new dispensation will be tested. The fatal precedent of haircuts for depositors will start to matter a great deal. Hell hath no fury like a saver robbed.

Looks like they are not a dumb as they look in Cyprus

Cyprus's Parliament Rejects a Tax on Bank Deposits

Cyprus's parliament overwhelmingly rejected a tax on bank deposits as a condition of an international bailout.

Thirty-six members of the 56-seat parliament voted against the measure, while 19 abstained.

Meanwhile a government source told CNBC that the country's finance minister Michael Sarris had tendered his resignation. The source said his resignation had not been accepted by Cyprus's president.

But, I'm glad you understand the Banker's current plan is to fleece people who saved. After all where else can you get the money if you can't print it?
#47 | POSTED BY NUTCASE

Where is the difference in what almost happened in Cyprus and what Ben Bernanke has done to Americans. Qualitative easing has taken at lease 5% per year out of the American savings? If your in the market the 14,000 DOW we see now is not the same as 14,000 DOW prior to QE1?

Keynes proved a century ago that austerity does not work.
#47 | POSTED BY NUTCASE

The issue with you fair weather keynesian's is you only support the part of Keynes that supports your spending.

If we are going to be Keynesians in the downturn, we have to be Keynesians on the way up again. That means a speedy return to surplus … I want to explain how one of the 20th Century's great thinkers, John Maynard Keynes, helped us find the answer, in the process influencing the Government's response to both the global downturn and our strategy for the recovery. More broadly, I want to describe how economic policy informs the delivery of not just responsible management but a modern progressive agenda. Most importantly, I want to make the point that being a Keynesian means supporting a counter-cyclical fiscal policy with government making room for the private sector when economic growth is strong.

One important aspect of Keynes' work that has been deliberately under-emphasised by conservative critics is that phrase "counter-cyclical" – because it implies the opposite of the critics' claim that Keynesian policies constitute a recipe for ever-increasing rates of public spending as a proportion of GDP.

once growth and prosperity have been restored, they have an equal responsibility to restrain public expenditure, budget for surpluses and reduce debt in climbing out.

#51 | POSTED BY BEN_BERKKAKE

Thanks it amazing how few people get this.

#54 | POSTED BY CORKY

Still deluding yourself that Democrats and Clinton had nothing to do with it?

#55 | POSTED BY CALIFCHRIS

I don't know where Ben got that but this might help some

The second chart show the effect of QE.

Serious question -- would a realistic person here in the U.S. cash out their bank savings account in light of what's happened in Cyprus?
#56 | POSTED BY CALIFCHRIS

No as long as you are under the $250,000 FDIC Deposit Insurance Coverage for Banks. Comes down to the "Full Faith and Credit clause"

#60 | POSTED BY CORKY

Who passed on regulating derivatives? Dems also voted to start Afghanistan and the Deficit in 2007 was down to 161 billion before Queen Pelosi too over.

Any more Lib balloon lies I can pop for you?

#62 | POSTED BY CORKY

You may be the perfect Democrat. Completely oblivious to data and facts but right there when it time to toss out some lib dogma.

Gramm-Leach-Bliley (Securities Modernization Act of 2000)
#77 | POSTED BY NUTCASE

Gramm-Leach-Bliley AKA Financial Services Modernization Act of 1999 is very different than Commodity Futures Modernization Act of 2000.

Gramm-Leach-Bliley does away with Glass–Steagall Act. Which was already in progress when CitiBank and Travelers insurance were allow to merge earlier in the Clinton administration (which should have been illegal).

#77 | POSTED BY NUTCASE

You did a pretty good job but you can't look past your bias's to find the truth. I have in the past posted the campaign money that passed into the senate and house prior to this and it is clear that laws can be had by the highest bidder. I'm not at a computer with sound tonight but Clinton's signing ceremony for the Commodity Futures Modernization Act of 2000 is on You Tube and leaves no doubt that he was all in on this one and he has a lot of company

Gramm's version of things. Some where in the middle lives the truth.

Phil Gramm Says the Banking Crisis Is (Mostly) Not His Fault

Now these laws are under fire, cited by critics -- mostly but not exclusively on the political left -- as major precipitating causes of the financial meltdown. And while both were signed into law by Bill Clinton, Gramm has taken the most heat.

So the American Enterprise Institute, a right-leaning think tank, invited Gramm in Friday to make his case and take some questions. The crowd was heavy on the conservative Washington notables --

ll he and the Clinton Administration were trying to do with the 2000 bill, he claimed, was establish that interest-rate and currency swaps -- two relatively uncontroversial forms of over-the-counter derivatives -- couldn't be regulated as futures by the CFTC. At the time, credit-default swaps weren't on the radar, and the bill didn't prevent the Securities and Exchange Commission or bank regulators from stepping in with new rules.

One force was a Federal Reserve interest-rate policy that was appropriate for the previous "inventory cycle" recessions since World War II, but didn't fit at all the collapse of a speculative bubble in the stock market in 2001 and 2002. Consumers, and the housing market, weren't in a recession at all -- and the Fed's super-low rates precipitated a bubble. "We inadvertently stimulated an industry that was already in boom conditions," Gramm said. "This changed everything. It changed consumption behavior, it changed lending behavior."

Instead, he said they were simply part of a decades-long, bipartisan push -- from Capitol Hill, the White House, the Department of Housing and Urban Development (HUD) and even bank regulators -- for ever more mortgage lending on ever easier terms.

The result was an environment in which official Washington seemed to believe that no home loan could be a bad home loan. "What we did and what we started was not just to push banks to make marginal loans, but to give them an excuse and to give them regulatory cover," he said. "Countrywide became HUD's poster child for what a good lender was like."

The Great Deregulator has thus become a believer in regulation, at least in the messed up mortgage market. That's because the alternative to concluding that the mortgage market is in need of serious reform, Gramm said, is to conclude that financial capitalism doesn't work. And he's nowhere near ready to conclude that.

Clinton and the Dems made the mistake of trusting the Rethugs
#84 | POSTED BY CORKY

That is with out a doubt one of your weakest deflections. So we are to assume from your statement that Dems are not as smart as Republicans?

#83 | POSTED BY NUTCASE

Again your knowledge in this area is very impressive I would just like you to see the that when we play our little us and them games the real power in Washington. DC, "big money" gets it's way, from Goldman Sacks to the Tides Foundation everyone has an agenda. When you can get something as sweeping as the repeal of Glass–Steagall Act and you do in in broad daylight, I do blame the politicians but I also blame us. I know I didn't even know that was going on in Washington back then. I don't think that is true now but in ten years will we look back at the drone business going on today and say what the heck was Washington doing?

Bonds are an investment, and investments are inherently risky.
#86 | POSTED BY SNOOFY

The rule of law is clear. In a bankruptcy primary bond holders are made whole first. This is the foundation of raising capital. In the White Houses "organized bankruptcy" pension obligations and the Union were made whole ahead of suppliers and bond holders.

Bet there were some crapped undies on this mistake, Kind of funny in a sick way.

Chase Customers See Bank Balance Reduced to Zero
Millions of Chase Bank customers were affected by an unfortunately timed glitch which resulted in their checking and savings accounts showing a zero balance for several hours yesterday, prompting many to take to Twitter and express panic that their money had been stolen.

Reaction to the glitch was undoubtedly made more intense by the fact that the top global news story yesterday was about how residents of Cyprus were facing a mandatory "tax" that would see 10 per cent of their savings plundered for a banker bailout.