Euro Area in ‘Deep Trouble’: Eurogroup Discussed Cypriot Euro Exit, Threatens to Cut Funding

zerohedge‏@zerohedge3 min LSE’s de Grauwe Says Euro Area in ‘Deep Trouble’

zerohedge‏@zerohedge11 min Russia's Klepach says Cypriot situation unlikely to be resolved soon. So... March 25 deadline ixnay?

erohedge‏@zerohedge23 min Euro Official On Cyprus: "Markets Believe We Will Find A Solution, This Might Not Be The Case"

http://www.zerohedge.com/news/2013-03-21/euro-official-cyprus-markets-believe-we-will-find-solution-might-not-be-case-we-have

zerohedge‏@zerohedge11 min Russia's Klepach says Cypriot situation unlikely to be resolved soon. So... March 25 deadline ixnay?

Gregor Peter‏@L0gg0l1 min RT @NickMalkoutzis: #Tsipras: #Greece is not behaving like the motherland for Cypriots but the step mother

The following is from Ann Barnhardt (barnhardt.biz)

March 17, 2013: Cyprus is MF Global on a national, retail banking scale. Corzine absolutely blazed this trail. The particulars are almost exactly the same. Both MF Global/Corzine and Cyprus were failing entities, both took massive, uber-leveraged risks on European sovereign debt, both swept sacrosanct customer money when the house of cards finally collapsed under the weight of its own math.

The indefensible zeroes and ones were instantly swept from the computer servers and customers were locked-out of their accounts.

Interestingly, both were goaded on and enabled by the same people. Corzine was a crony of the Obama regime, which is operationally a Chicago-based phenomenon, as are the regulators of the futures industry, along with the CME group itself.

Cyprus was goaded, overseen, and then “harvested” by the International Monetary Fund, which is chaired by Christine Legarde, who is a Chicago player, and who actually was a partner at Baker & McKenzie before being placed at the IMF by the Obama regime and bankster oligarchy. Cyprus was Christine Legarde’s play, and Legarde is in the Chicago oligarch circle.

This will happen here. It already has with MF Global, Cyprus is testing the national, retail banking level, and then it will happen here. They might go straight to bank holidays here, as Warren Pollock has been talking about for over 18 months now, or they may do a levy confiscation like this on retirement accounts.

If you have any money exposed to the financial system, you’re just stupid. That’s it. Bottom line.

March 18, 2013: ‘This (Cyprus) opens up enormous possibilities...for the Administration.’

Thus spoken on CNBC this day.

A couple of points. First, there STILL is confusion about these confiscations, dating back to the MF Global theft. People are still trying to say that the money that was/is confiscated, both from the MF Global customers and the Cypriot bank accounts is somehow “investment” capital.

No, no, no, no, no.

If you deposit money in a custodial account, you are NOT investing in the brokerage firm or in the bank. The MF Global customers were not investors in MF Global or sharing in any way in MF Global’s proprietary trading profits. The people of Cyprus are not investors in their banks. The people of Cyprus who deposited money in the bank were not signing on to a share in an uber-leveraged scheme involving repos and credit default swaps on Greek sovereign paper.

THEY WERE PEOPLE WHO SIMPLY DEPOSITED THEIR MONEY, THEIR PROPERTY IN CURRENCY FORM, THE FUNGIBLE PROXY FOR THEIR LABOR AND CREATIVE CAPACITY WHICH THEY HAD ACCUMULATED, INTO A SACROSANCT, INSURED, CUSTODIAL DEMAND DEPOSIT AND/OR TIME DEPOSIT ACCOUNT.

The MF Global accounts were the same - they were fully-backed demand deposit accounts that were used to margin the account holder’s futures and options positions. They were the sole, private property of the account holder and MF Global had ZERO ownership interest in that customer money.

Do you know why people used to keep fairly large balances in brokerage accounts like MF Global? Because before MF Global, brokerage accounts were guaranteed 100% by the exchange. No maximums. If a firm failed, the purpose and role of the exchange was to backstop and guarantee the firm with zero liquidity interruption. And, remembering that on the day MF Global imploded and the customer funds were swept and wired to JP Morgan, the Chicago Mercantile Exchange had an emergency slush fund of over EIGHT BILLION DOLLARS ready to go, the fact that the customers were not made INSTANTLY whole by the Chicago Mercantile Exchange is totally nefarious and criminal regardless of the circumstances.

Now the total integral failure of the brokerage paradigm has occurred in the retail banking paradigm. All deposits in the EU *were* insured up to 100,000 Euro, just like the farcical FDIC insurance. Now everyone knows that it is all total cow poop, just like the guarantees on brokerage accounts has been proved multiple times to be total cow poop.

Oh, and the oligarchs are trying to call this a “tax”. Um, no. Taxes are passed by legislatures. This is Christine Legarde and some German bureaucrats arbitrarily, forcibly confiscating private bank accounts. Any “law” passed ex post facto in Cyprus will merely be a show trying to make it appear that this is not the arbitrary tyranny that it is.

Finally, I don’t care how much Russian money laundering is going on in Cyprus, and yes, I know it is huge. This is totally beside the point. Just because criminal money laundering is happening through Cypriot banks doesn’t mean that anyone has the right to confiscate the money of innocent Cypriots. The whole Russian money laundering excuse is a total red herring. Look, the nation with the largest absolute quantity of money laundering is the United States of America. Think HSBC. Think Wachovia. Think Washington Mutual. Think Bank of America. Does that mean that every bank account in the entire country can be levied - and not just in the banks with the money laundering but EVERY ACCOUNT IN EVERY BANK IN THE NATION? Of course not.

Bottom line: I shut down my brokerage firm precisely because I knew that there was no longer any rule of law and that customer money was totally indefensible. Now the same thing has happened in the retail banking sector and Obama regime cronies are openly declaring on national television that across-the-board private property confiscations are being regarded as “opening up enormous possibilities.”

DO NOT sit around and wait for your money, be it in retirement accounts, stock accounts, money market accounts or even in simple bank accounts or CDs, to be stolen. There is probably going to be a small reaction lag as the low-information populaces of the Southern European countries (Greece, Italy, Spain, Portugal) are slow on the uptake of what has happened, but it won’t last forever. Once Guido in Naples gets his head around this, the Eurozone will be O.V.E.R. And the the US banks carrying HUNDREDS OF TRILLIONS OF DOLLARS in leveraged European sovereign debt over-the-counter derivatives will implode into a black hole-esque singularity at the speed that information can cross the Atlantic Ocean, which AIN’T VERY DARN LONG, kids.

**If you haven’t seen it already, I have an 8-part, 2.5 hour YouTube presentation recorded just recently in November 2012, explaining exactly these topics on YouTube. Click on the link that says “YouTube” on the left to go to my YouTube Channel homepage. Part 1 of the econ presentation should be at the top of the list.

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Ann Barnhardt has been warning Americans since the MF Global fiasco two years ago. She even shut down her commodities brokerage as she could no longer trust the system to protect depositors.

One article quoted an EU official at the “emergency” round table regarding the Cyprus crisis(aren’t all EU round tables “emergency” ones these days?) as saying:

“[We’re] trying to do everything within the powers to limit any unauthorized outflows.”

Now what exactly would an “unauthorized outflow” be? Uh, would that be anything like ME trying to withdraw MY money? Why, yes. I do believe that’s what an “unauthorized outflow” would be.

I tell you, nobody in their right mind would be keeping more than a month’s worth of bill money in ANY PIIGS bank after this. If they do, they deserve to lose all of their money.

BTW, one of the officials said Cyprus is screwed with or without any EU bailout. The banks are gonna be emptied out one way or the other, or more likely, they’ll just close their doors forever. That’s what the Cypriot citizens don’t get. They can take the EU bailout an lose 7%/10% of their money, or they can reject it and lose ALL of their money.

Yet another case of the consequences of running out of other people’s money. A scenario that’s becoming all too frequent in the socialist “economies” of southern Europe. And which will become the norm. Probably within three years, the PIIGS will all abandon the Euro, go bankrupt, everyone’s savings will be wiped out, and they’ll enter a new dark age, with each eventually choosing a “strong-man” “government” to restore order.

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