The Bank Runs In Greece Will Soon Be Followed By Bank Runs In Other European Nations

The bank runs that we are watching right now in Greece are shocking, but they are only just the beginning.  Since May 6th, nearly one billion dollars has been withdrawn from Greek banks.  For a small nation like Greece, that is an absolutely catastrophic number.  At this point, the entire Greek banking system is in danger of collapsing.  If you had money in a Greek bank, why wouldn't you pull it out?  If Greece leaves the euro, all euros in Greek banks will likely be converted to drachmas, and the value of those drachmas will almost certainly decline dramatically.  In fact, it has been estimated that Greek citizens could see the value of their bank accounts decline by up to 50 percent if Greece leaves the euro.  So if you had money in a Greek bank, it would only make sense to withdraw it and move it to another country as quickly as possible.  And as the eurozone begins to unravel, this is a scenario that we are going to see play out in country after country.  As member nations leave the eurozone, you would be a fool to have your euros in Italian banks or Spanish banks when you could have them in German banks instead.  So the bank runs that are happening in Greece right now are only a preview of things to come.  Before this crisis is over we are going to see bank runs happening all over Europe.

If Greece leaves the euro, the consequences are likely to be quite messy.  Those that are promoting the idea that a "Grexit" can be done in an orderly fashion are not being particularly honest.  The following is from a recent article in the Independent....

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http://theeconomiccollapseblog.com/archives/the-bank-runs-in-greece-will-soon-be-followed-by-bank-runs-in-other-european-nations

Richard (RJ) Eskow - Bill Clinton, Boehner, And Some Other Rich White Guys Had A "Summit" And Agreed: It's Your Fault

This week a bunch of rich white guys held a "Fiscal Summit" and agreed that:

1. Despite the fact that unemployment is causing untold suffering for millions of people, it's not very important.

2. Despite the fact that wage stagnation is destroying the middle class, that's not important either.
3. Despite the fact that we need the social safety net more than ever after what they've done to the economy, it's expendable.
4. Despite the fact that our government can borrow money at record low rates and use it to put people to work, thereby ending the recession and jumpstarting the economy, that option's not even worth discussing.
5. Despite the fact that these men all possess great power, wealth, and/or influence, everything that's wrong with the economy is your fault.
6. Since it's all your fault, you better get ready to pay up.

Oh, and one other thing:

7. They're all very smart and very brave. It's too bad the rest of you people are such jerks.

Any questions? Let's hope not, because they're all busy men and it's great golfing weather this week in DC.

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http://www.ourfuture.org/blog-entry/2012052015/bill-clinton-john-boehner-and-some-other-rich-white-guys-just-decided-its-all-

Richard (RJ) Eskow - Jamie Dimon's JPMorgan Chase: Why It's the Scandal of Our Time

They're missing the point. When CEO Jamie Dimon announced that JPMorgan Chase had incurred at least $2 billion in losses from risky, unsecured, derivatives-types trading, it uncovered the scandal of our time once and for all.

The Chase disaster gives us a much-needed a glimpse into our corrupt political system, its Wall Street paymasters, and the media voices that allow people like Dimon to escape scrutiny.

The JPMorgan Chase story is the story behind the financial crisis that has thrown millions of people out of work. It's the story behind our ever-growing wealth inequity. It's the story behind Washington's inability to prosecute criminal bankers, regulate reckless ones, and propose the economic solutions the rest of us urgently need.

Predictably, the pundits who aid and abet people like Jamie Dimon are dismissing this story's importance, pointing out that $2 billion (it could become much more) pales against the $19 billion in profit Chase reported last year.

But it was potentially $2 billion earned through crime. And more importantly, this story isn't just about Chase's errors and crimes. It's much bigger than that.

Besides, $19 billion in a single year? That's a big part of the story, too.

The Case Against Chase, its CEO, and its accomplices is too big to cover all at once. Here are the aspects of this under-reported story we plan to address in the days and weeks to come.

The Firm

Depending on the day and the measurement used, JPMorgan Chase is now the largest or second-largest bank in the world. Its Japan operation alone has been cited by that nation's regulators as a systemic risk because of its size.

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http://www.opednews.com/articles/Jamie-Dimon-s-JPMorgan-Cha-by-Richard--RJ-Esko-120515-853.html

Siv O'Neall - "We do not want to die in the rubble of neoliberalism!"

It seems perfectly clear that Roosevelt didn't implement the various reforms to get out of the Great Depression from any excessive sense of charity (even though he was most likely a basically sound man) but really in order to save Capitalism. That's a well-known fact and Pierre Larrouturou's founding of Roosevelt 2012 does not to me make him a Messiah. However, through his reforms, FDR did save millions of people from lives in poverty, hunger and misery. He implemented new work relief programs - the WPA (Work Projects Administration) and also banking reforms, the 'Emergency Banking Act' and several other social reforms.

If, however, you hesitate to call Roosevelt a people's man (as I do), just compare Roosevelt to Obama or his predecessors! And when, for that matter, would a revolutionary man or woman be elected President of the United States? It's clear that Roosevelt was a realist, not a flaming revolutionary.

Systems often hold longer than we think, but they end up by collapsing much faster than we imagine. "In those few words, the former chief economist of the IMF International, Kenneth Rogoff, sums up the situation of the global economy. As the Governor of the Bank of England, he asserts that "the next crisis may be worse than 1930" ...

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http://www.smirkingchimp.com/node/43160

Elizabeth Warren - Wall Street Waging 'Guerrilla War' on Financial Regulations

Elizabeth Warren speaking on CNN stated that the issue embodied by JPMorgan Chase CEO Jamie Dimon is a symptom of the regulation-avoiding power that financial behemoths have to take on risks and let the public take on the consequences.

"This isn't personal to Jamie Dimon. It's what's been going on ever since Dodd-Frank passed. There's been a guerrilla war out there in which the largest financial institutions have been doing everything they can to make sure that financial regulations don't get put in place. And if they do get put in place, that they're loaded with loopholes and not very effective. There's been a lobbying army hired by these financial institutions because they really don't want to have any oversight," stated Warren.

“The problem is a combination of size and attitude. They’re too big, there’s too much power concentrated in just a handful of institutions but it’s also that they have the attitude of leave us alone, we’ll manage our risks internally, we’ll take care of it all ourselves, we’ll come back to you only if things go wrong and we need some help and we need a bailout. We can’t run an economy that way. We can’t run a country that way. We have to stand up as a people and say, 'No more of this.'"

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http://www.commondreams.org/headline/2012/05/14-2

Shelly Bernal - Wall Street and Their Purchased Representatives

How is it that two years after passage of the much acclaimed Dodd-Frank Wall Street reform (four years after economic crash), Too Big To Fail (TBTF) institutions are not only bigger, but also too big to regulate and too big to jail? Don’t be fooled into believing that because a law has been passed by Congress and signed by the president, it has actually been implemented.

Keep in mind that Congress controls the funding for the federal regulators who are charged with carrying out the reform — Commodity Futures Trading Commission and Securities Exchange Commission. What would possess members of Congress, who bragged about banning banks from gambling with taxpayer money, to force regulators to strategically surrender significant rules by threatening budget cuts?

Answer: their livelihoods. Yes, the very livelihood of a member of Congress is indeed in the hands of the TBTF financial institutions. What better motivation is there than your career and financial future of your family? The financial sector is far and away the largest source of campaign contributions to federal candidates and parties, with insurance companies, securities and investment firms, real estate interests, and commercial banks providing the bulk of that money. In this 2012 election cycle alone, this industry has already donated $122 million to campaigns of members of Congress.

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http://www.nationofchange.org/wall-street-and-their-purchased-representatives-1336827827

Yves Smith - Colleges as Merchants of Debt

Student loan debt slavery is even worse than you probably thought. The Grey Lady tonight has a long, informative story, “A Generation Hobbled by the Soaring Cost of College“, that early on presents the stunning tidbit that 94% of the recipients of bachelor’s degrees borrowed in order to pay for it. The Times doesn’t report what average debt levels are in this cohort, but the average across all borrowers, per the New York Fed, is $23,000. Remember, this total includes graduates who have have been paying down debt, meaning they’ve amortized principal and almost certainly had borrowed less on average to complete school.

Contrast this “certain to be higher on average than $23,000″ for new graduates with their earning power, or more accurately, lack thereof. The Times article also mentions a Rutgers survey which seems to have some sample bias or underreporting of borrowing (of 2006-2011 graduates, only 55% of the respondents said they had borrowed to help fund college, and the median reported debt level was $20,000). The 2009-2011 graduates’ income averaged $27,000. In addition, only half said that their job required a college degree.

This juxtaposition confirms that colleges, like the financial services industry, have become increasingly extractive: whatever financial benefits accrue to getting an undergraduate education, they are more and more captured by the schools, though their ability to persuade students to go into hock to get a degree. And like late housing bubble borrowers, more are defaulting early on, meaning the loans were badly underwritten (ie, many should probably have never been made because it the odds of default were high):

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http://www.nakedcapitalism.com/2012/05/new-york-times-on-student-loan-debt-slavery.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Robert Reich - How J.P. Morgan Chase has Made the Case for Breaking Up the Big Banks and Resurrecting Glass-Steagall

J.P. Morgan Chase & Co., the nation’s largest bank, whose chief executive, Jamie Dimon, has lead Wall Street’s war against regulation, announced Thursday it had lost $2 billion in trades over the past six weeks and could face an additional $1 billion of losses, due to excessively risky bets.

The bets were “poorly executed” and “poorly monitored,” said Dimon, a result of “many errors, “sloppiness,” and “bad judgment.” But not to worry. “We will admit it, we will fix it and move on.”

Move on? Word on the Street is that J.P. Morgan’s exposure is so large that it can’t dump these bad bets without affecting the market and losing even more money. And given its mammoth size and interlinked connections with every other financial institution, anything that shakes J.P. Morgan is likely to rock the rest of the Street.

Ever since the start of the banking crisis in 2008, Dimon has been arguing that more government regulation of Wall Street is unnecessary. Last year he vehemently and loudly opposed the so-called Volcker rule, itself a watered-down version of the old Glass-Steagall Act that used to separate commercial from investment banking before it was repealed in 1999, saying it would unnecessarily impinge on derivative trading (the lucrative practice of making bets on bets) and hedging (using some bets to offset the risks of other bets).

Dimon argued that the financial system could be trusted; that the near-meltdown of 2008 was a perfect storm that would never happen again.

Since then, J.P. Morgan’s lobbyists and lawyers have done everything in their power to eviscerate the Volcker rule — creating exceptions, exemptions, and loopholes that effectively allow any big bank to go on doing most of the derivative trading it was doing before the near-meltdown.

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http://www.nationofchange.org/how-jp-morgan-chase-has-made-case-breaking-big-banks-and-resurrecting-glass-steagall-1336830881

Sam Pizzigati - No Country for Rich Men

Back in 1863, a short story took the American reading public by storm. Edward Everett Hale's The Man without a Country told the tale of a poor treasonous soul sentenced to spend the rest of his life endlessly sailing the world in perpetual exile, as a prisoner aboard Navy warships

Today's awesomely affluent are just as transient — by choice.

Take Facebook co-founder Eduardo Saverin. This billionaire renounced his U.S. citizenship in 2011, a move perfectly timed to potentially save him hundreds of millions in taxes when Facebook goes public.

Saverin has plenty of company. The number of Americans who formally renounced their U.S. citizenship soared to 1,780 last year from 235 in 2008.

The spark for this surge? U.S. tax officials ave been clamping down on overseas tax evasion. This bit of unpleasantness has some wealthy Americans, such as the Brazilian-born Saverin, cutting their ties to dear old Uncle Sam. They simply pay a $450 paperwork fee and an "exit tax" on unrealized capital gains, if they hold assets worth over $2 million or have paid over $151,000 to the IRS in any recent year.

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http://www.otherwords.org/articles/no_country_for_rich_men

Police Taking Cash from People, just because….