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20 years ago Pickerhead traveled to Russia some, and even then, the movement of suitcases of cash from Moscow to Cyprus was legendary. Streetwise Professor explains how the looting of Cyprus bank depositors by the EuroProject is a direct hit on Russians. His post is titled; Cyprus: The essence of FUBAR (F__ked Up Beyond All Recognition).
If you’ve been waiting your entire life to witness the pure, un-adulturated, distilled essence of FUBAR, your dreams have been answered: for behold Cyprus!
For in one fell swoop, the with their monster mash of a bailout-bail-in of Cyprus, the Eurotards have succeeded in: gutting the rule of law and due process; riding roughshod over democratic institutions; increasing the risk of a catastrophic bank run in the event any Eurozone country (e.g., Spain) is believed to need to seek assistance; and sparking a huge diplomatic row with Russia. Well played! Well played, indeed!
For those dwelling under a rock: as part of a 10 billion euro bailout for Cyprus, the Euros (meaning primarily Germany) required the imposition of a tax on deposits in Cypriot banks: a 6.75 percent tax on deposits below 100,000 euros, and 9.99 percent on deposits above 100K euros.
The bail-in essentially guts deposit insurance, which allegedly protects deposits below 100K. A run on Cypriot banks is almost inevitable, because who is to say that this haircut is the last? What’s worse, depositors in other peripheral banks have to take seriously the prospect that they will be similarly expropriated, in the event that their banks and/or sovereigns (to the extent this distinction has any meaning) require a Eurozone bailout. …
… All in all, it is hard to imagine how the Eurocrats could have played this any worse. They didn’t really solve Cyprus’s debt problem. They made it all the harder to deal with debt and banking problems outside of Cyprus. They committed a major foreign policy blunder. A truly amazing trifecta.
One final thought. This points out the absurdity of the Euro project. If tiny Cyprus is too big to fail, if the effects of its default would be so horrible that the Euro mandarins feel it necessary to take such a desperate and dangerous measure to prevent it, how can the Euro be anything but an absurdity?
More on Cyprus from Ambrose Evans-Pritchard in Telegraph, UK.
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.
This latest debacle has caught me on the hop, literally, since I am in Tokyo learning about Abenomics, so let me just make a few quick points before going off for a pint of sake.
The EU creditor states have at a single stroke violated the principle that insured EU bank deposits of up $100,000 will be guaranteed come what may, and in doing so they have more or less thrown Portugal under a bus.
They appear poised to seize large sums from Russian banks – €1.3bn from state-owned VTB alone, and therefore from the Kremlin – prompting the condign riposte from Vladimir Putin that the action is “unfair, unprofessional and dangerous.”
They have demonstrated that the rhetoric of EMU solidarity is just hot air, that they will not force their own taxpayers to share a single cent of clean-up costs for the great joint venture of monetary union – in which northern banks, insurers, pension funds, and indeed governments, were complicit.
Their refusal to pay is entirely understandable in one sense – and if I were a German taxpayer, I would not care to swallow these losses either – but then the leaders of these creditor countries can hardly expect the world to believe that they will in fact do whatever it takes to hold EMU together. Quite obviously, they will not. …
Walter Russell Mead examines the Detroit detritus. Here’s how he sums it up.
… The best way to stop future tragedies like this is to enforce the law. From voting fraud to corrupt relations with contractors and financiers to fraudulent accounting on pensions, many American cities are being run more like criminal conspiracies than anything else. And the cost isn’t just the money the politicians steal, or the inflated profits that those doing business with a crooked city can earn or even the sweetheart deals with public sector unions who function as part of the machine. It is the shambolic education offered to generations of poor kids, the lack of protection for person and property, the burden of a government that is both costly and ineffective and the enterprises and jobs such a government kills or drives away: corrupt big city machines may be the most important single civil rights issue in America today.
This is not, repeat not, a black thing. Historically, most of America’s worst urban machines have been white criminal enterprises. Often in American history, a combination of identity politics, fear and hopes of getting scraps from the machine have prevented poor people in the cities from organizing against their criminal masters. In the past it was often progressives and middle class reformers, some of the same ethnicity as most of the victims, others from different groups, who banded together to drive out the crooks. The criminals did their best to smear the reformers and identity politics was part of their shtick. Tammany Hall accused its critics of being anti-Catholic or anti-Irish bigots. Prosecutors who attacked the mafia were called anti-Italian. And so it goes.
Urban machines have a legitimate place in American politics. New waves of immigrants into urban America — whether from Europe, Asia, Latin America or the rural South — benefit from organizing to protect their economic and political issues. The machines allow them to assert themselves, claim a share of city patronage and business, and direct city resources to communities that might otherwise be overlooked.
But unchecked and uncontrolled, these machines have a tendency to go over the line. Graft proliferates; crony appointments degrade the quality of governance to the point that city administration is no longer able to function. This is where the reformers come in, pushing back against the tendency of political machines to jump the shark, imposing some limits and discipline on what goes on. Partly because today’s progressives are moral cowards who have allowed themselves to be shamed by the race card, this process of balance and reform didn’t really get underway in Detroit (and perhaps elsewhere) until enormous damage had already been done.
By overlooking the corruption and a mafia thinly disguised as a political party for so long, the authorities of the United States deprived the citizens of Detroit of the equal protection of the law. That must not happen in our other cities; municipal government in this country needs to be much more transparent, and law enforcement really needs to crack down.
Without this, all the federal block grants or social programs in the world will not help those trapped in the inner cities escape poverty and get the education and skills they need to build the kind of future all Americans want.
This is the pre-eminent civil rights problem of our day and is devastating minority communities throughout the country. Our political establishment, our university faculties and fashionable intellectuals, our newspaper editorialists, our legal profession and our clergy stand essentially silent; it is the silence of shame.
Robert Samuelson says our country is becoming one vast old-age home.
… We don’t need a charm offensive; we need a candor offensive. The budget debate’s central reality is that federal retirement programs, led by Social Security and Medicare, are crowding out most other government spending. Until we openly recognize and discuss this, it will be impossible to have a “balanced approach” — to use one of President Obama’s favorite phrases. It’s the math: In fiscal 2012, Social Security, Medicare, Medicaid and civil service and military retirement cost $1.7 trillion, about half the budget. If they’re off-limits, the burdens on other programs and tax increases grow ever greater.
It’s already happening. The military is shrinking and weakening: The Army is to be cut by 80,000 troops, the Marines by 20,000. As a share of national income, defense spending ($670 billion in 2012) is headed toward its lowest level since 1940. Even now, the Pentagon says budget limits hamper its response to cyberattacks. “Domestic discretionary spending” — a category that includes food inspectors, the FBI, the National Weather Service and many others — faces a similar fate. By 2023, this spending will drop 33 percent as a share of national income, estimates the Congressional Budget Office. Dozens of programs will be squeezed.
Nor will states and localities escape. Federal grants ($607 billion in 2011) will shrink. States’ Medicaid costs will increase with the number of aged and disabled, which represent two-thirds of Medicaid spending. All this will force higher taxes or reduce traditional state and local spending on schools, police, roads and parks.
The budget debate may seem inconclusive, but it’s having pervasive effects. Choices are being made by default. Almost everything is being subordinated to protect retirees. Solicitude for government’s largest constituency undermines the rest of government. This is an immensely important story almost totally ignored by the media. One reason is that it’s happening spontaneously and invisibly: Growing numbers of elderly are simply collecting existing benefits. The media do not excel at covering inertia. …
You might have seen the recent reports of ancient mummies with hardened arteries and concluded lifestyle choices offer little help in preventing the disease. Not so fast says Whole Health Source blog.
… However, I do want to make a few key points about the study and its interpretation. First, all groups had atherosclerosis to a similar degree, and it increased with advancing age. This suggests that atherosclerosis may be part of the human condition, and not a modern disease. Although it’s interesting to have this confirmed in ancient mummies, we already knew this from cardiac autopsy data in a variety of non-industrial cultures (2, 3, 4, 5).
The more important point is that atherosclerosis does not equal heart attack. Atherosclerosis is an important risk factor, but extensive cardiac autopsy studies have suggested that traditional cultures with near-zero heart attack incidence have coronary atherosclerosis (6, 7, 8, 9). Although they tend to have less atherosclerosis than industrial populations when adjusted for age, differences in atherosclerosis alone cannot explain their remarkable resistance to heart attacks: other factors must be involved. These could include the tendency of the blood to clot, the tendency of atherosclerotic plaque to rupture, and perhaps the diameter of the coronary vessels.
Some have used the mummy paper to argue the view that it’s silly to try to eat like our ancestors because they got sick just like we do. The paper does not support this view, for two reasons. First, as I said previously, atherosclerosis is not the only risk factor for heart attacks, and we have extensive cardiac autopsy data from multiple non-industrial cultures indicating that the actual rate of heart attacks was very low, even when adjusted for age (10, 11). And second, although arterial calcification was common in all cultures represented by the mummies, it was less common in the coronary arteries, where it matters most for heart attack risk. ..