Bitcoin price craters as panic selloff claims 75% loss from bubble high

(NaturalNews) The bitcoin selloff that began less than 24 hours after I predicted a "disastrous bitcoin crash" has now plummeted nearly 75% from Wednesday's bitcoin high of $266, wiping out over $1.5 billion in valuation for the crypto currency.

As bitcoin skyrocketed in value, I saw unmistakable signs of "irrational exhuberance" kicking in, with bitcoin hypsters starting to talk more like charlatans and cult members than rational investors. So I published an urgent warning and repeated the same warning live on national radio.

The very next day, bitcoin cratered from $266 to $105. Self-deluded bitcoin cultists called this "50% off Wednesdays" and urged everyone to "buy and hold." (Because that's how the con works.)

But the selloff had already picked up steam, and while Thursday saw some support around the $110 - $120 level, by Friday morning the bitcoin bubble accelerated its downfall, plummeting to $61.11, a loss of over 75% from its high.

Bitcoin investors are delusional fools

Even at $61, bitcoin is wildly over-valued. The crypto currency now has almost no practical use whatsoever in the world of e-commerce because its extreme volatility means no large merchant will ever accept it.

Any currency that can drop 60% (or more) in a few hours is not a reliable currency for exchange, period. You can't argue with mathematics, although bitcoin cult members are certainly trying.



Here's a video of the bold bitcoin crash prediction I made on the Alex Jones Show a full day before the crash began, where I said:

Eventually it's going to crash hard. I bet my reputation on that, Alex. I am 100% sure we are going to see a massive bitcoin crash at some point with an ultra-accelerated velocity. It will be the fastest crash of any currency in the history of human civilization. It will be a high-velocity crash. People are buying bitcoins who don't know what bitcoins are and who have no use for them. These are speculators.

Here's the video:

Bitcoin cultists prove they are a band of fools

Immediately after this prediction, I was branded a "conspiracy theorist" and a "doom and gloomer" by the now-crazed bitcoin community which was becoming more delusional and insane by the hour.

Every drop in price was called nothing more than a "buying opportunity" or a "discount," and it was repeatedly stated that bitcoins would keep going sky-high because "20,000 new people are buying bitcoins every day."

In truth, bitcoins became a runaway pyramid scheme. The only purpose for buying bitcoins was to sell bitcoins. The entire market became purely speculative, resembling the tulip bulb mania of 1637. And it was headed for certain disaster.

This is why I wrote, two days before the bitcoin crash:

"Bitcoin has become a speculative bubble now driven primarily by greed and risk rather than utilitarian value... Today, bitcoin looks and feels a lot like the dot-com bubble of 2000... When the bitcoin crash comes, it will be wildly accelerated. The entire thing may unravel in mere hours... Be warned that if you buy bitcoins today, you are essentially playing the lottery because you're joining other greed-driven speculators who are all unwittingly playing out a repeat of the dot-com bubble. A crash seems inevitable."

And then, one day before the bitcoin crash, I wrote:

"Mark my words: Bitcoin is headed for a disastrous crash. All the signs are there. It's undeniable. When speculative investors, driven by greed, flood a particular investment vehicle creating a fast-expanding bubble, a crash is inevitable... Bitcoin has now become a casino. If you are buying bitcoin right now, you are gambling with your money. There's a sucker born every minute... try not to be one of them... If you are buying bitcoins right now and thinking to yourself, "I'm gonna buy today, hold them, and sell at the top!" then look in the mirror and mouth the word "SUCKER" to yourself ten times until it sinks in.

Like everyone else, you will fail to sell at the top. You will ride the losses down to nothing, and you will lose almost everything you put into the system. Why? Because you're only human, and when it comes to the fear and greed of markets, human psychology is pathetically predictable."

Never argue with mathematics

Bitcoin fanboys (i.e. cult members) are learning the hard way that you should never argue with mathematics. If you try to, you will lose.

I wrote previously that I could see a bitcoin crash coming because I knew that 2+2=4. Yes, it was that obvious. But just like all the suckers who lost their shirts in the dot-com bubble and the housing bubble, the bitcoin bubble players thought the laws of economics did not apply to them. They thought they could all become wealthy without expending effort. They were fools.

They were, technically, the "greater fools" always described in market dynamics textbooks. They got suckered by greed while abandoning mathematical reality.

The only way bitcoin could have continues to climb was if more and more people were suckered into the pyramid scheme. But now, with bitcoin's reputation in ruins, no intelligent person is going to buy until the bitcoin price crashes another 75% or so if they do their research, meaning the bitcoin mania has been shattered.

And the bitcoin cult has been exposed as pure delusion.

We should all be happy that bitcoin crashed before it spiraled too far out of control in terms of valuation, otherwise the impact of the crash could have been much, much worse.

Introducing Sh!tcoin

By the way, I'm going to be announcing a brand new virtual currently called "sh!tcoin," where every coin equals exactly one piece of sh!t.

Very strong passwords will be required so that people don't "steal your sh!t" and the people who hold the greatest number of sh!tcoins will be called the "sh!theads."

Learn more: http://www.naturalnews.com/039896_bitcoin_price_selloff_bubble.html#ixzz2QKlijx1J

Millions fear losing job would mean losing home

What would happen if you lose your job? Would you be able to afford your mortgage payments or rent?

Millions wouldn't, according to research by the housing charity Shelter, which shows that one in three workers could not pay for their home for more than a month if they lost their job.
Some 4.4 million people – 18 per cent – said that if they lost their jobs in April and couldn't get a new one right away, they wouldn't be able to pay their rent or mortgage at all.
The squeeze on people's budgets will mean a surge in demand from people at risk of becoming homeless, Shelter predicts.
Campbell Robb, the charity's chief executive, said: "The buffer between having a home and potentially becoming homeless is a single pay cheque.
"The depth of the financial pressure and insecurity felt by people across the country means that millions are living on the edge of a crisis, only secure in their homes for a matter of weeks.
"At the same time, support for people who have lost their homes is being stripped away – it's easy to see why every 15 minutes, another family in England finds themselves homeless."

Yuan reaches record high against the US dollar

Further appreciation predicted, which would fuel inflation on the mainland and in Hong Kong

• 

The yuan jumped to 79.775 Hong Kong dollars per 100 yuan, just near the record of 79.729 on Wednesday.

The yuan reached a record high yesterday as the central bank fixed its midpoint against the US dollar at the strongest level ever.
That sparked anticipation of further appreciation this year and stoked inflationary pressure on the mainland and Hong Kong.
The People's Bank of China set the midpoint at 6.2506 yuan per US dollar - up from the fixing of 6.2578 on Thursday - ahead of a visit by US Secretary of State John Kerry to Asia. The yuan jumped to 79.775 Hong Kong dollars per 100 yuan, just near the record of 79.729 on Wednesday.
China often allows the yuan to appreciate faster before visits by officials from Western countries, who usually push for exchange rate liberalisation.
However, the yuan is set to strengthen this year. Inflows of capital are expected to generate higher demand for the yuan than last year as the mainland economy recovers, economists said.
"In 2013 we'll see greater risks of capital inflows to China, rather than two-way movements in the yuan exchange rate or capital outflows as last year," said Chang Jian, an economist at Barclays Capital. Barclays expects the yuan to strengthen 2 per cent against the greenback this year, after considering China's intention to protect exporters in the still shaky economic recovery.
The yuan rate in the spot market touched 6.1903 per dollar yesterday, the highest since 1994. The yuan spot rate has risen 0.6 per cent so far this year, after hitting highs in the past couple of weeks.
Economists at Standard Chartered forecast the spot rate for yuan would reach 6.18 by the end of June and 6.10 by the end of this year. They said China was unlikely to follow Japan in depreciating its currency, as Japanese exporters are not its major competitors.
Nathan Chow, a DBS Bank economist, expects the strengthening of the yuan to continue to put pressure on inflation in Hong Kong because the city's currency is pegged to the US dollar.
"The inflationary pressure caused by the yuan appreciation is inevitable, as Hong Kong imports a variety of goods, such as food and medical supplies, from the mainland," Chow said.
A 1 per cent rise in the yuan would result in a 0.05 percentage point increase in Hong Kong's consumer inflation, the Monetary Authority says.

This article first appeared in the South China Morning Post print edition on Apr 13, 2013 as Yuan at record high to US dollar

the great global tax grab is already underway

Submitted on 04/12/2013 19:34 -0400
http://www.zerohedge.com/contributed/2013-04-12/great-global-tax-grab-already-underway

The world will soon be facing a tsunami of defaults on bad debts. This will include municipal or local government defaults such as the one now occurring in Stockton California, governments “defaulting” on promises they’ve made to the people (Social Security, Medicaid), a default on the social contract between society and politicians such as the one in Cyprus (a default on the notions of private property and Democracy), stealth defaults on debts in the form of inflation and finally, of course, outright sovereign defaults.

However, the last option will be sovereign defaults; all other options will be tried first. The reason for this is that sovereign bonds are the senior most collateral posted by the banks for their hundreds of trillions of Dollars worth of derivatives bets.

The minute an actual sovereign default occurs in Europe, Asia or the US, then the large global banks will all be vaporized. End of story.  As is now clear, the Central banks do not care about ordinary citizens. They only care about propping up the big banks.

This is why Cyprus decided to default on the social contract with its people and steal their funds rather than simply instigating a formal default. And it’s why in general we’re going to see Governments implementing more and more theft in the form of “taxes” (Cyprus called its theft a tax) in the future.

This will be sold to the public as either an attempt to tax those with a lot of money because it’s only fair that they put in more to bailout the nation OR as a form of financial terrorism e.g. “either you take a 7% cut on your deposits and the bank stays afloat or the bank crashes and you lose everything.”

This will be spreading throughout the world, GUARANTEED.

Spain, Canada (which allegedly has the safest banks in the world), and New Zealand have already begun discussing confiscation schemes for depositors in the event of a banking crisis.

As Cyprus has shown us, when push comes to shove, rule of law goes out the window. I fully expect that when things get really bad in the financial system the money grabs will come fast and furious. Foreign accounts, including possibly even Gold held aboard, will come under attack. Heck, the US got Switzerland to throw its 300-year-old banking secrecy out the window…

The Swiss bank Wegelin is to close, after admitting that it helped about 100 US clients evade paying taxes.

The news that Switzerland's oldest private bank will cease to operate has potentially huge implications for Switzerland's entire banking sector, and for the long tradition of Swiss banking secrecy.

Thirteen other Swiss banks are under investigation by US authorities, among them Credit Suisse, a bank now termed "too big to fail" by the Swiss government.

When Wegelin's managers pleaded guilty in a New York court, the case was watched with mounting horror by the financial communities in Zurich and Geneva.

Many had expected Wegelin to continue to try to fight the case. For months, the bank had failed to turn up in court, saying the summons had not been delivered correctly.

Instead, Wegelin's guilty plea included the admission that it intentionally opened accounts for US citizens to help them avoid tax.

http://www.bbc.co.uk/news/business-20909168

If you’re an individual investor worried about what Europe’s Crisis really means for your portfolio, we’ve published a FREE Special Report outlining exactly that. It’s titled, What Europe Means For You and Your Savings.

In this report, we outline the risks Europe’s banking crisis holds not only for those in Europe, but for savers around the world. We also explain how this crisis will most likely unfold, including which areas are most at risk in the financial system. And we cap it off by listing multiple backdoor plays on Europe that investors can use to profit from Europe’s Crisis.

You can pick up a FREE copy here:

http://gainspainscapital.com/what-europes-collapse-means-for-your-savings/

Thank you for reading!

Graham Summers

The Entire Economy Is a Ponzi Scheme

Ponzinomics

Bill Gross, Nouriel Roubini, Laurence Kotlikoff, Steve Keen, Michel Chossudovsky, the Wall Street Journal and many others say that our entire economy is a Ponzi scheme.
Former Reagan budget director David Stockton just agreed:
So did a top Russian con artist and mathematician.
Even the New York Times’ business page asked, “Was [the] whole economy a Ponzi scheme?”
In fact – as we’ve noted for 4 years (and here and here) – the banking system is entirely insolvent. And so are most countries. The whole notion of one country bailing out another country is a farce at this point. The whole system is insolvent.
As we noted last year:

Nobel economist Joe Stiglitz pointed out the Ponzi scheme nature of the whole bailout discussion:

Europe’s plan to lend money to Spain to heal some of its banks may not work because the government and the country’s lenders will in effect be propping each other up, Nobel Prize-winning economist Joseph Stiglitz said.
“The system … is the Spanish government bails out Spanish banks, and Spanish banks bail out the Spanish government,” Stiglitz said in an interview.
***
“It’s voodoo economics,” Stiglitz said in an interview on Friday, before the weekend deal to help Spain and its banks was sealed. “It is not going to work and it’s not working.”

[The same is true of every other nation.]
Credit Suisse’s William Porter writes:

“Portugal cannot rescue Greece, Spain cannot rescue Portugal, Italy cannot rescue Spain (as is surely about to become all too abundantly clear), France cannot rescue Italy, but Germany can rescue France.” Or, the credit of the EFSF/ESM, if called upon to provide funds in large size, either calls upon the credit of Germany, or fails; i.e, it seems to us that it probably cannot fund to the extent needed to save the credit of one (and probably imminently two) countries that had hitherto been considered “too big so save” without joint and several guarantees.***

As Nouriel Roubini wrote in February:

[For] problems of that magnitude, there simply are not enough resources—governmental or super-sovereign—to go around.

As Roubini wrote in February:

“We have decided to socialize the private losses of the banking system.

***
Roubini believes that further attempts at intervention have only increased the magnitude of the problems with sovereign debt. He says, “Now you have a bunch of super sovereigns— the IMF, the EU, the eurozone—bailing out these sovereigns.”
Essentially, the super-sovereigns underwrite sovereign debt—increasing the scale and concentrating the problems.
Roubini characterizes super-sovereign intervention as merely kicking the can down the road.
He says wryly: “There’s not going to be anyone coming from Mars or the moon to bail out the IMF or the Eurozone.” [Others have made the same point.]
But, despite the paper shuffling of debt at the national level—and at the level of supranational entities—reality ultimately intervenes: “So at some point you need restructuring. At some point you need the creditors of the banks to take a hit —otherwise you put all this debt on the balance sheet of government. And then you break the back of government—and then government is insolvent.”

Peak Demographics?

Indeed, population may be the biggest ponzi scheme of all. Specifically – as we’ve pointed out for years – rapidly-aging populations in the developed world will exert a big drag on the economy.
The Global Mail notes:

Half the world, including almost all the developed world, now is reproducing at below replacement level. A generation from now, according to United Nations Population Division projections, less than a quarter of the world’s women – most of them in Africa and south Asia – will be reproducing at above replacement rate. And those UN forecasts are probably on the high side, for reasons we’ll come to later.
And as the birth rate has plunged in developed nations, and the native-born population has begun to shrink and rapidly age, governments and business have sought to make up the numbers by importing people to prop up their economies. It’s all they know how to do, for our economic system is, at its base, a giant Ponzi scheme, dependent on ever more people producing and consuming ever more stuff.
But what happens if that all stops? What happens when you get an ageing, shrinking population that consumes less?
“The answer to that question is that we don’t know because it’s never happened before,” says Peter McDonald, professor of demography and director of the Australian Demographic and Social Research Institute at the Australian National University.
***
“We’re certainly operating a Ponzi scheme in Australia,” says Dr Bob Birrell, an economist and migration expert from Monash University.
“Our growth is predicated on extra numbers… [and] more of our activity is going into city building and people servicing, which do not directly produce many goods that can be traded in overseas markets.
***
Half the world is facing the problem of low fertility, and Australia, with its massive program of importing people, is providing an extreme example of one approach to the conundrum.
In a nutshell, the problem is this: lower fertility rates mean older, less innovative and productive workforces. More importantly to the Ponzi economic order, older, stable or declining populations consume less. So growth requires either importing people, or exporting stuff, or a combination of the two. Orthodox economics simply can’t cope otherwise.
Europe as a whole has been reproducing at well below replacement rate for close to 40 years. The last period for which UN data showed Europe’s total fertility rate above the replacement rate was 1970-75.
Europe’s contemporary demographics give new meaning to the descriptor ‘the old world’. The continent’s average person is over 40 now. By 2050, if things continue on trend, the average European will be 45.7. If one takes the UN’s “low variant” projection, he/she will be over 50 years of age.
And the low variant now looks closer to the mark. Fertility rates had actually rebounded a little over recent years, the result of a bit of “catch-up” after a shift over several previous decades in which women delayed child-bearing. But the European recession has set fertility rates plunging again.

Jamie Ferguson/The Global Mail

The recession’s effects will likely linger for decades, in lower rates of earnings and savings, and also in reduced fertility.
***
Last year, Forbes magazine, that most reliable voice of the economic orthodoxy, laid the blame for Europe’s economic decline squarely on its citizens’ failure to reproduce in adequate numbers, in an article headlined What’s Really Behind Europe’s Decline? It’s The Birth Rates, Stupid.
The Forbes piece was unequivocal: the biggest threat to the European Union was its low fertility rate.
***
The piece ended with a dire warning that unless Club Med managed to induce people to have more babies, catastrophic economic consequences would flow for all of Europe and maybe the world.
***
As Thomas Sobotka, one of the authors of a 2011 study on population trends by the Vienna Institute of Demography, told the Guardian newspaper, massive cuts in social spending would only exacerbate the problem.
“This may prolong the fertility impact of the recent recession well beyond its end. It could lead to a double-dip fertility decline,” he said.
But when it comes to fertility declines, Asia takes the cake.
Japan, Singapore, South Korea, Taiwan, Macau, Hong Kong, and most importantly China currently all have fertility rates lower than those of Europe.
***
China’s and Korea’s are about to start falling, if they haven’t already.
“I’m pretty pessimistic about the east-Asian situation,” says McDonald. “I think those countries find it very difficult move in the right direction of supporting work and family, in particular, reducing work hours.
“We are now talking about some 30 per cent of Japanese women not getting married.”
“I saw a couple of people from the Japanese government give a paper recently, essentially accepting this as an inevitability – a low birth rate forever,” he says.
It’s the same all over Asia.
***
Hong Kong has a birth rate of 1.09, which is on track to see its population almost halve in a generation. Taiwan is at 1.10; China, 1.55; Thailand, 1.66; Vietnam, 1.89. Even Indonesia’s fertility is just above replacement rate, at 2.23, and is falling fast. Malaysia and the Philippines are still growing pretty quickly, as are the south-Asian countries, which may give them a competitive edge for a few decades – and a growing export industry of people. But it is not projected to last more than a few decades.
Let’s return to America. The United States also is reproducing at below replacement rate, and its birthrate has declined sharply in recent years.
***
The US birth rate not only fell to its lowest level ever in 2011, but the greatest decline was among immigrant women.
***
In the longer term, the world will have to adjust its economic system to cope with the novel concept of less. Fewer people, less consumption, lowered need for resources, energy, housing, roads, you name it.

Indeed, smart curmudgeons like Jeremy Granthan and Chris Martensen think that we have not only “peak” demographics, but also peak resources.

There’s HOPE

The above is admittedly depressing. But the reality is that there’s hope.
We can have a very bright future, indeed … if we switch from the status quo to something smarter. For example, see this and this.
For example, we can cut out the middlemen in the banking and political realms … and prosper.
And as we’ve previously noted about energy:

The current paradigm is that energy is produced expensively by governments or large corporations through gigantic projects using enormous amounts of money, materials and manpower. Because energy can only be produced by the big boys, we the people must bow our heads to the powers-that-be. We must pay a lot of our hard-earned money to buy electricity from them, and we can’t question the methods or results of their energy production.
Our life will become much better when we begin to understand that energy is all around us – as an ocean of electromagnetic forces and as a byproduct of other processes in the form of heat, pressure, etc. – and all we need do is learn how to harvest it.

SENATOR: "Banks Still Owe Us For The Bailouts!"

"Hank Paulson is the world's greatest salesman.  We gave $700 billion to Wall Street and nobody cares."
New interview.  Inhofe beats on Paulson.
Luke Rudkowski of We Are Change interviews Senator James Inhofe about his opposition to TARP and martial law threats he received from Henry Paulson.
Not stopping TARP was my biggest failure.

"Think about how big it was -- $700 billion given to an unelected bureaucrat, with no accountability, to do anything he wanted with it.  Can this happen?  It did."

More quotes:

• The banks still owe us about $250 billion.
• I'm still mad at all the Republicans for voting for TARP.
• You're the first person in 5 years that's even mentioned it.
• That thing was $700 billion, and nobody cares.

AMBUSH: Paulson Confronted On The Streets Of NYC

Kyle Bass: "I'd Much Rather Own Gold Than Paper"

We've moved to an ideology of unlimited printing.

"I'm perplexed as to why gold is as low as it is.  The largest central banks in the world have all moved to an unlimited printed ideology.  If monetary policy is the only game in town, then we're all in for a world of trouble."

--
From Bloomberg:
Trust in Gold Not Bernanke as U.S. States Promote Bullion
Distrust of the Federal Reserve and concern that U.S. dollars may become worthless are fueling a push in more than a dozen states to recognize gold and silver coins as legal tender.  Arizona is poised to follow Utah, which authorized bullion for currency in 2011.  Similar bills are advancing in Kansas, South Carolina and other states.
Read more here...

Kyle Bass: The Best Way To Get Paid Back By Fannie

German Man Got Caught Allegedly Trying To Sneak A Half-Ton Of Gold And Silver Out Of Greece

Imdb

This is not said man.

A German man was arrested at Athens International Airport after allegedly attempting to smuggle half a ton of gold and silver out of Greece, the BBC reports. The man was trying to board a Lufthansa flight back to Germany when the airline uncovered nearly 1,000 lbs. of what the BBC calls silver "tablets" in a cargo container.
Customs officials subsequently found 15 lbs. of gold and about $400,000 in banknotes.
It's an ironic development given Greece has long demanded further reparations from Germany over damages sustained during World War II.
This week, reports emerged that Greece will soon demand $261 billion in compensation, including sums taken from the Bank of Greece by German forces, the BBC says.

Read more: http://www.businessinsider.com/german-caught-smuggling-gold-from-greece-2013-4#ixzz2QKbiI6YV

Royal Bank of Scotland VP arrested in Moscow on $10mn fraud charge

Edited time: April 12, 2013 18:26

AFP Photo / Warren Allott 

 

 

 RBS Vice President Vsevolod Glukhovtsev has been charged with fraud in a Moscow court after being arrested at his home the day before. The banker allegedly hoodwinked investors to finance fake construction projects in Montenegro.
"Glukhovtsev has been charged with fraud," The Russian Interior Ministry’s Department for the Central Federal District told Interfax.
The investigators claim as soon as money was transferred to accounts of Montenegrin companies controlled by Glukhovtsev he then took the money, and provided clients with fake reports saying they owned business or property abroad. Investors did not receive promised dividends and the assets they supposedly owned did not exist or were registered for a third party, according to the Interior Ministry.
Glukhovtsev allegedly provided his investors with fake business reports which led them to believe they owned business or property abroad. Investigators say they have evidence Glukhovtsev spent the investment dollars on real estate, luxury sports cars, art and jewelry.
"According to the preliminary information alone, investigators suspect V. Glukhovtsev has received over 300 million roubles from private citizens and companies to purchase property and invest in construction in Montenegro," Interfax reported.
Interfax first reported RBS, one of the world’s top five banks, as Glukhovtsev’s employer, and said the fraud charges are “in no way” connected to the bank’s operations.
Currently five people in Moscow have been identified as victims of the fraud scheme, and likely more will surface as the investigation unfolds. 
Russian news source tvc.ru has identified one of the victims as Sergey Kardashev, the president of ABN AMRO Bank. Kardashev lost earnings on his intellectual property, an Interior Ministry employee said.
“I spoke to him, reassigned patents to the project. I received and initial payment, and then, somewhere around two years ago, these royalties stopped coming. When I found out about it, it turned out that he was going to renew the patents in his name. The process was already under way and due to law enforcement, it was suspended, and to date I have not lost the patents at all,” Kardashev told tvc.ru.
Glukhovtsev’s activities may not be limited to Russia and Montenegro. Police have reported he also has a Ukrainian passport in his name.
“It’s possible he committed illegal acts in this country,” said a Ukrainian police source.
Glukhovtsev is a jack of many trades- banker, investor, hotel magnate with property on the Adriatic coast, a casino owner, and even a writer.

DIMON ADMITS: Breaking The Law 'Is A Problem At JPM'

Following the rules is not easy for Jamie.
Dimon warns more sanctions are coming for JPMorgan.
Jamie Dimon warns that JPMorgan, which is under regulatory orders to tighten internal controls, will face more sanctions in the coming months.  Dimon comments on the London Whale, criminal investigations into activities at the bank, illegal foreclosures, money laundering and the threat of cyber attack.

Here's why Jamie is warning shareholders:

NYT: JPMorgan Faces Multiple Criminal Investigations

Woman finds extra $100,000 in safety deposit box, but bank takes cash and offers no explanation

Kathleen Ricigliano wants her bank, where she’s had an account for 40 years, to be honest with her about the extra $100,000 found in her safety deposit box and where it went after a manager walked away with it.

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Corey Sipkin/New York Daily News

Kathleen Ricigliano and Joe Valinoti were surprised to find what they estimated to be $100,000 in their safety deposit box at Sovereign Bank. A manage walked off with the cash and the pair never heard what became of the money.

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Something is not kosher in Borough Park.
An honest old lady found $100,000 and turned it in.
Now Kathleen Ricigliano, 81, would like her bank, where she’s had an account for 40 years, to be just as honest with her.
“In the second week of February, I went to Sovereign Bank at 4823 13th Ave. here in Borough Park with my boyfriend, Joe Valinoti,” says Ricigliano. “I’ve lived in the same house in Borough Park since I’m 13, and I’ve been banking at this location for 40 years. They keep changing the name of the bank. But I never had any problems.”
Until now.
That morning, Ricigliano and Valinoti filled out forms for a safe-deposit box to store valuables.
RELATED: DUMPSTER DIVER TURNS IN $3,800 FOUND IN TRASH
“The box was in Joe’s name, but we both got keys to Box 770,” says the widow, who raised four kids in the neighborhood. “We didn’t bring our valuables with us that first day.”
Two weeks later, on March 1, the pair returned with their valuables and were escorted down to the vault by branch manager Paul Vigliotti, who used his key as Ricigliano simultaneously turned her key in the cover of Box 770. Vigliotti removed the 3-foot-long safe deposit box from the shelf.
“Paul showed us into a private transaction room,” she says. “No camera. He handed me the safe deposit box that felt bottom heavy.”
“Lopsided,” says laconic Joe Valinoti.
“So inside the private room, I stuck my hand inside the box and I felt all this paper,” she says. “I pulled out a roll of paper. It was fat, round, all $100 bills bound with rubber bands.”
“Then a whole bunch of rolls of cash tumbled down to this end of the box,” says Valinoti. “My eyes bulged. My heart raced.”
RELATED: AUSTRALIAN TEEN MODEL BUSTED IN $300G BANK THEFT
“I thought I was gonna have a stroke,” says Ricigliano. “I never in my life saw that much money. Had to be $100,000.”
Kathleen Ricigliano did the honest thing.
“I got the manager, Paul Vigliotti, and told him this wasn’t my money,” she says. “Paul asked if I was sure it wasn’t mine. I said I get my Social Security direct deposited at Sovereign. I know what’s mine and what’s not. He thanked me over and over, praising my honesty. Then he took the safe deposit box into another room. Alone.”
“He went in alone with our box of cash,” says Joe Valinoti.

Comstock; Graphic Illustration by New York Daily News

Ricigliano and Valinoti never received word from the bank as to what happened to the money.

That sounds about as kosher as ham and cheese.
“I have no idea if there were cameras in that room,” says Ricigliano. “After that, Vigliotti wouldn’t tell me anything. I asked if he counted it. He wouldn’t say. I asked for a receipt, proving I turned in that money. He refused. I asked what would happen to the money. He said, ‘It goes to higher-ups.’ He was kinda rude after that, dismissed me.”
RELATED: DIONNE WARWICK FILES FOR BANKRUPTCY
Kathleen Ricigliano went home and heard in stereo from family and friends that a “Finders Keepers Law” in New York State says if the rightful owner of turned-in property isn’t located within a certain period of time, the property reverts to the honest finder.
A few days later, she went back to Vigliotti. “He wouldn’t tell me anything,” she says. “He was very abrupt with me. He says to me, ‘You sound like you want a reward or something.’ I says, ‘Matter fact, I do.’ ”
Kathleen Ricigliano sure deserves one.
I called Paul Vigliotti to ask about this sweet, old lady who turned in $100,000 at his bank.
“I can’t give you any information on anything bank-related,” Vigliotti said.
I asked if he could tell me how much was found. Or if he took the box of cash alone into a private room. He told me to contact the Sovereign legal department. I asked if he could give me the number.
RELATED: OLD KEY OPENS BOX OF FAKE MONEY
“We’re not allowed to give that number out,” he said.
And hung up. Not even a single kind word for an honest 81-year-old customer who turned in $100,000. A spokeswoman in the corporate office said she can’t comment on those matters.
As for finder’s keepers, the state personal property law says found property must be turned over to police. If unclaimed after a year, it reverts to the finder. But there’s an exception — of course — for banks. Especially property found in safe deposit boxes, which must be held by the bank for 15 years. If it’s still unclaimed, the state gets it.
Okay, that’s an awful law that won’t encourage many to be as honest as Kathleen Ricigliano. But it’s the law. It’s also a simple, honest answer that Paul Vigliotti could have told an honest old woman.
“I don’t have regrets about being honest,” says Kathleen Ricigliano.
“I do,” says Joe Valinoti.
“But I regret that I didn’t hold onto that money until they located the rightful owner,” says Ricigliano. “Because I got no receipt. I’m not accusing anyone of anything, but all the stonewalling makes you wonder if someone isn’t being as honest as I was.”
Which would not be kosher in Borough Park.
dhamill@nydailynews.com

Cyprus forced to find extra €6bn for bailout, leaked analysis shows

Less than a month after deal was agreed bailout bill has risen to €23bn – larger than entire year's output from country's economy

The government will bail-in Bank of Cyprus creditors, sell €400m of gold reserves and renegotiate a loan with Russia. Photograph: AFP/Getty Images

Cypriot politicians have reacted with fury to news that the crisis-hit country will be forced to find an extra €6bn (£5bn) to contribute to its own bailout, much of which is expected to come from savers at its struggling banks.
A leaked draft of the updated rescue plan, which emerged late on Wednesday night, revealed that the total bill for the bailout has risen to €23bn, from an original estimate of €17bn, less than a month after the deal was agreed – and the entire extra cost will be imposed on Nicosia.
Visiting Athens, the Cypriot parliament's president, Yannakis Omirou, said the tiny island nation had been "served poison" by its EU partners.
Cyprus's politicians had already faced intense domestic political pressure for agreeing to impose hefty losses on savers at two struggling banks to fulfil its eurozone partners' original demand that they contribute €7bn.
But after a more detailed "debt sustainability analysis" showed that the black hole in the island nation's finances is far deeper than first thought, the total cost for Cypriot taxpayers and depositors has now been set at €13bn, with €10bn to come from its eurozone partners and the International Monetary Fund. The €23bn overall bill is larger than an entire year's output from the Cypriot economy.
Jonathan Loynes, of thinktank Capital Economics, said the rising cost echoed the pattern in other bailed-out states. "They don't know where there might be more black holes: I wouldn't be that surprised if there were to be another shock in the next week or so," he said.
The new draft bailout plan, which will be discussed at a meeting of finance ministers in Dublin on Friday, underlined the botched nature of the initial agreement, which was hurriedly cobbled together in March and had to be redrawn after the Cypriot parliament rejected the idea that depositors holding less than €100,000 – whose savings are meant to be insured – would face deep losses.
A new decree that will remain in place for seven days lifts all restrictions on transactions under €300,000 to re-energise cash-starved domestic businesses that had difficulty paying suppliers and employees. Moreover, the daily limit on transactions outside of Cyprus not requiring prior approval is raised from €5,000 to €20,000.
However, a daily cash withdrawal limit of €300 remains in place, as well as a ban on cashing cheques. The decree also introduced a new restriction on opening new accounts in banks where customers had never done business before.
Much of the extra €6bn is expected to come from savers – though Cyprus is also expected to be forced to sell €400m of gold reserves, renegotiate the terms of a loan with Russia, and impose losses on Bank of Cyprus creditors. There was also a suggestion that holders of €1bn worth of Cypriot government bonds could be urged to agree to a debt swap, reducing the country's repayments. That could signal a messy period of negotiation and uncertainty.
"Instead of solidarity from our European partners we have been served poison," said Omirou.
In Nicosia, the island's divided capital, the reaction was no less ferocious, with many predicting that the sheer burden of the bailout for a country whose economy is shattered would inevitably spur calls for Cyprus to leave the single currency.
"We will resist. Every alternative scenario for the exit of our country from the troika and the memorandum now has to be studied," said Giorgos Doulouka, spokesman of the main opposition Akel party. "They are eating us alive. What Greece suffered in three years, Cyprus is experiencing in a matter of weeks. All the extra measures that the government will now have to take will be at the expense of ordinary people. It is outrageous."
It also emerged on Thursday that Mario Draghi, president of the European Central Bank, has waded into the increasingly febrile debate about the country's future, by warning the government in Nicosia against ditching the governor of its central bank, Panicos Demetriades. In a letter to the president, Nicos Anastasiades, Draghi warned that sacking a central bank governor without due cause is against EU law.
Some analysts pointed out that the projections for Cyprus's economy on which the bailout plans are based could prove to be over-optimistic, as has repeatedly been the case in Greece, potentially prompting a fresh bailout.
Cyprus's economy is expected to suffer a deep recession, with GDP contracting by 8.7% in 2013, and 3.9% next year. However, a government spokesman in Nicosia last week suggested the downturn this year could be far deeper, perhaps up to 13%, which could throw the bailout plans off course within months.
Simon Derrick, chief currency strategist at BNY Mellon, questioned the projection that the economy would recover within two years, recording growth of 1.1% in 2015. "Why would confidence return and make people want to put money into Cyprus?" he said. "The economy is three things – banking, property and tourism. You're not going to rebuild an offshore banking industry in Cyprus; and in tourism it's competing against Turkey, where the currency is down 50% since mid-2005."
Capital controls imposed to prevent deposits flooding out of the country look likely to stay in place for some time, at least until the hefty "levy" is imposed on savers to recoup the costs of the rescue. "The history of these things is that once you have got capital controls, it's extremely difficult to get rid of them," said Loynes.

Portugal’s elder statesman calls for 'Argentine-style' default

Portugal's leading elder statesman has called on the country to copy Argentina and default on its debt to avert economic collapse, a move that would lead to near certain ejection from the euro.

A protester holds a flare during a demonstration in Lisbon last year Photo: AFP

 

 

 

Mario Soares, who steered the country to democracy after the Salazar dictatorship, said all political forces should unite to “bring down the government” and repudiate the austerity policies of the EU-IMF Troika.

“Portugal will never be able to pay its debts, however much it impoverishes itself. If you can’t pay, the only solution is not to pay. When Argentina was in crisis it didn’t pay. Did anything happen? No, nothing happened," he told Antena 1.

The former socialist premier and president said the Portuguese government has become a servant of German Chancellor Angela Merkel, meekly doing whatever it is told.

“In their eagerness to do the bidding of Senhora Merkel, they have sold everything and ruined this country. In two years this government has destroyed Portugal,” he said.

Dario Perkins from Lombard Street Research said a hard-nosed default would force Portugal out of the euro. “It would create incredible animosity,” he said. “Germany would be alarmed that other countries might do the same so it would take a very tough line.”

Mr Perkins said all the peripheral states are “deeply scared” of being forced out of EMU. “They fear their economies would collapse, which is ridiculous. But in the end voters are going to elect politicians who refuse to along with austerity as we are seeing in Italy, and the EU will lose control,” he said.
Raoul Ruparel from Open Europe said Portugal had reached the limits of austerity. “The previous political consensus in parliament has evaporated. As so often in this crisis, the eurozone is coming up against the full force of national democracy.”
The rallying cry by Mr Soares comes a week after Portugal’s top court ruled that pay and pension cuts for public workers are illegal, forcing premier Pedro Passos Coelho to search for new cuts. The ruling calls into question the government’s whole policy “internal devaluation” aimed at lowering labour costs.
A leaked report from the Troika warned that the country is at risk of a debt spiral, with financing needs surging to €15bn by 2015, a third higher than the levels that precipitated the debt crisis in 2011. “There is substantial funding risk,” it said.
In a rare piece of good news, eurozone finance ministers agreed on Friday to extend repayment of rescue loans for Portugal and Ireland by a further seven years, reducing the pressure for a swift return to markets.
Brussels said both countries are “still highly vulnerable” to forces beyond their control, and deserve a “strong signal” of support. Critics say it is too little, too late. Fast-moving events on the ground now have a will of their own.

Kyle Bass: it’s the beginning of the end for Japanese bonds

Kyle Bass, managing partner at Hayman Capital Management, told Bloomberg TV’s Stephanie Ruhle and Erik Schaztker on “Market Makers” today that he thinks “it’s the beginning of the end” for Japanese bonds. He said, “When I started sharing our views more globally it was the middle of 2010 and I said I believe the stress would begin to show itself in the next three years. Pretty much three years in, we’re close, and the stress is beginning to show.”



@BLOOMBERG TELVISION

Bass on Japan:

“I actually think it’s the beginning of the end…When you have 20 years of pro-cyclicality of thought manifesting itself in the way that it has in Japan…I am not naive enough to think I can predict the end of a 70-year debt super cycle with any kind of precision, but looking at the changes in the qualitative perception of the participants is something that I think is key to the situation and we saw a big change on Friday.”

“When I started sharing our views more globally it was the middle of 2010 and I said I believe the stress would begin to show itself in the next three years. Pretty much three years in, we’re close, and the stress is beginning to show. Maybe that was luck at the time, but now when you ask the timing–look everyone wants the crystal ball and it’s really difficult to predict this, but what you can do is follow where I think the stresses are going to show in the marketplace, but more importantly, you have to get into the heads of the participants because they all have a collective sense of fatalism. When you do the quantitative analysis here, you know they are insolvent. Everyone who owns the bonds knows they are insolvent. It’s a question of how long they can hang on. What changes their views are a multitude of variables, but it’s really important to follow any change in those views. When you see things like Argentina, Greece, Cyprus, Ireland, Italy–you see how fast things go from perfectly stable to completely unstable. In this case I think it will happen more quickly because of the 20 year buildup.”
On Hayman Capital having strong performance overall when it has a trade that, even if it’s right, takes a while:
“When we think about the globe, I think about positioning. When you invest in a fiduciary like myself or someone else, you want someone that has the courage of their convictions. You want someone that is not particularly dogmatic. And if they are, you want to think about risk management. It is really important to size things properly. So far, knock on wood, I think you have to be as thoughtful as you can possibly be on the construct of the position and not set yourself up for many years of losses until something like this happens.”


“It’s really important to think about the capital at risk in your strategy and the construct of how you put these kinds of hedges into place. We have 90+% of our money is long–long U.S. structured credit, U.S. mortgages, U.S. stocks–they majority of our capital is long.”
On structured credit and the importance of being very liquid in the long side:
“Believe it or not it’s really liquid right now. With Bernanke pinning rates at zero and the entire world continues to chase yield. Our indices are being led by utilities and things that don’t particularly lead us into new highs, it’s because of their dividend yield. So the whole world continues to chase yield. Structured credit and even mortgage credit are one of the most liquid areas in the marketplace today. People can’t get enough of them. Even in subprime credit, 97% of the 20,000 line items are still rated below investment grade. They’re still junk. The ratings-based buyers aren’t even there yet. The money is being misallocated by the printing press.”
On gold:
“We have always had a position in gold. When you think about the largest central banks in the world, they have all moved to unlimited printing ideology. Monetary policy happens to be the only game in town. I am perplexed as to why gold is as low as it is. I don’t have a great answer for you other then you should maintain a position.”
On George Soros’ recent statements that he’s losing interest in gold:
“George has been a much better investor than I over the years. When you think about the global monetary base, it is north of $70 trillion. All the gold in existence is around $7-8 trillion. There might be $1.2-1.3 trillion of investable gold. At some point in time, I would much rather would own gold than paper. I just don’t know when that time is.”
On whether he’d rather own gold than U.S. treasuries:
“I do. If something happens in Japan like we think it is going to happen, I think U.S. Treasury nominal yields will go negative in a flight to quality. maybe gold moves up and Treasuries actually get much stronger for all the wrong reasons, not as an endorsement of U.S. fiscal policy because it is the only place money has to go…If monetary policy is the only game in town, we are all in for a world of trouble. That is the way we see it.”
On residential mortgage-backed securities:
“That investment is working…The various concentric circles surrounding housing not getting worse, which is how we think about it. We are not expecting it to get materially better, just not to get worse. The services sectors, the new mortgage insurance companies, the things that are actually asymmetric investments you can make around the housing market not worsening are where the majority of our long side of our portfolio is.”
On the future of Fannie and Freddie:
“I have no clue…We decided to just exit, thinking about them when you meet with both sides of the aisle, they both want a bullet in their head. Typically when that happens you get a bullet in your head. The second thing we were thinking about, if you remember there was a proposal to start raising the g-fees. There is a way for the U.S. Treasury to get paid back all of the money they’ve pumped into Fannie and Freddie if they start raising g-fees.”

Read more at http://investmentwatchblog.com/kyle-bass-its-the-beginning-of-the-end-for-japanese-bonds/#hkd25CBI32g7Iy5H.99

ROGERS: 'The Govt Will Take Our Pension Plans Next'

'Anything they know about, they will easily take.'
Talk of retirement account seizure begins at 3:50.

They'll certainly find some way to take our money when things get bad in a few years.  They always have before.

---
Transcript
Discussing the Cyprus banking collapse, Jim said, "It’s been condoned now by the IMF, the European union, and everybody else in sight -- that a government in need can take assets.  We all knew they could tax us.  But this is the first time that I’m aware of, that they’ve gone in and taken bank accounts. They took gold from people in the U.S. in the 1930′s.  But I’ve never heard of them taking bank accounts.  Now they’re doing it.  So be careful."
When asked if bank account confiscation will be going worldwide, Jim said, "Well, it’s now in their bag of tricks, but yes, they can do anything they want too now. I for one am worried andI’m taking preparations.  Who knows if I’m right or not, but I’d rather be safe than sorry as all of those people who had money in Cyprus have learned.  They thought they had a normal bank account… but now it’s been [taken] with the sanctions of many governments and institutions."
"If people have money in any account, anywhere in the world, cut it down to under the guaranteed amount.  They might take that too someday when things get desperate, because the precedent has been set, but that’s where I would start if I had money in the bank anywhere in the world."
"I suspect what will happen in America, is they will take our pension plans next.  401k plans, IRA’s, and pensions plans which the government knows about may be next.  Their rationale would be, ‘Well most people haven’t been doing well in their IRAs and pension plans for the past several years, so we’re going to help you.  We’re going to take your pension plan and give you government bonds so that you have a guaranteed return.”
"That’s how they’ll rationalize taking our money.  They know where all the pension plans are because we have to report it, so they’re easily accessible by governments.  They know where they are, what they are, and they’ll be able to snatch them away.  Who knows what they’ll do, but they’ll certainly find some way to take our money when things get worse.
They always have before."

Quantitative easing and low interest rates have damaging side effects, warns IMF

Central banks around the world were last night warned that emergency action taken to prop up fragile economies could have damaging side effects.
The International Monetary Fund said ultra-low interest rates and ‘unconventional’ measures such as quantitative easing have ‘contributed to financial stability in the short term’.
But the Washington-based watchdog warned that risks ‘are likely to increase the longer the policies are maintained’.

Advice: The IMF (whose managing director, Christine Lagarde, is pictured) has asked central banks like the BoE to consider the impact of their policies

Central banks have slashed interest rates to record lows and pumped huge sums of cash into economies since 2008 to stop recession turning into depression.
Interest rates in Britain have stayed at 0.5 per cent since March 2009 and £375billion of newly-created money has been injected into the economy. ‘The prolonged period of low interest rates and central bank asset purchases has improved some indicators of bank soundness,’ said the IMF in its latest global financial stability report.
‘Policymakers should be alert to the possibility, however, that financial stability risks may be shifting to other parts of the financial system, such as shadow banks, pension funds and insurance companies.

 

‘The central bank policy actions also carry the risk that their efforts will spill over to the other economies.’
The report added: ‘Despite their positive short-term effects for banks, these central bank policies are associated with financial risks that are likely to increase the longer the policies are maintained.’
The Fund said the emergency aid has allowed banks to delay repairing their balance sheets. It also warned that ‘policy missteps’ – as policies such as quantitative easing are unwound – could wreak havoc in financial markets. But it said there should be no change of tack ‘until the recovery is well established’.

No cap on payday loan interest rates hints new government watchdog

The new government watchdog has hinted that it will not put a cap on the interest rates of payday loans because consumers could be 'worse off'.
In a report published yesterday the Financial Conduct Authority (FCA) said that restricting choice for consumers could mean that some are unable to get credit entirely, causing a far greater problem.
Payday loans have been criticised for trapping customers into a spiral of debt with their sky high interest rates – sometimes up to 4,000 APR.

U-turn: New government watchdog, the FCA, hinted yesterday that it won't use new powers to put a cap on payday loan interest rates.

Last year, the government accepted a change to the Financial Services Bill to give the FCA new powers to cap interest rates and restrict the availability of payday loans from April 2014.
However, yesterday's report signaled that the FCA may not use these powers to regulate the industry in such a way. It came in a report on 'behavioural economics' which the regulator said it will take into consideration when identifying areas it should look at.

The FCA said: 'Many consumers use payday loans because, despite high APRs, that is the only source of credit available to high-risk borrowers in emergencies.
'They might be made worse off by caps on APRs or restrictions on how often they can borrow if they reduce availability to some consumers.

Caps: MP Stella Creasy has been campaigning for a cap on the total cost of payday loan credit since 2010.

'Indeed, usury laws and similar provisions have been cited as an example of regulatory failure
driven by regulators’ own behavioural biases.'
The current payday loan regulator, the Office of Fair Trading, launched a crackdown on the industry last month.
The OFT ordered 90 per cent of the industry to change their business practices – if companies fail to comply they will face losing their consumer credit licenses.
A cap on payday lending rates has been championed by Labour MP for Walthamstow Stella Creasy who has been campaigning on the issue since 2010.
Last week, she said: 'For too many consumers, the only people who will lend to them at the moment are these legal loan sharks. There is no competition for their business. That is why a cap on the total cost of borrowing makes more sense than relying on affordability assessments which leave lenders to decide what consumers can pay.
The Government is clearly out of touch with the way this industry works and is giving it a free pass to push millions more into debt by not setting out what a is fair price for credit as they do in most other countries.'

 

Big Banks Worth More to Investors Broken Up Into Components than as Giant Conglomerates

Shareholders Join Bankers, Economists, Financial Experts, Regulators and the American People In Calling for a Break Up of the Giant Banks

The president of the Federal Reserve Bank of Dallas, Richard Fisher, has long said that the component parts of the biggest banks would be “worth more broken up than as a whole.”
Last year, Crain’s New York estimated that Citi’s component parts are worth 40% more than Citigroup’s current market price.
Forbes’ Robert Lezner argues:

The proper solution obviously is to break-up the banks into their stand-alone parts. Without government pressure, voluntarily, strategically, with the proper stated purpose of benefiting the banks shareholders, who have not gotten anywhere near back to the price of the their shares in late 2006 or 2007. (C is selling at 5% of its peak price; BAC at 25%, GS at 60%) I’m told there are hints of this solution bubbling amongst the bank analyst fraternity.
Spin off the asset management division that manages several hundred billion of other people’s money into a public company that will have the multiple of a T. Rowe Price, or a BlackRock, which will have a transparent cash flow and sell at some price-earnings multiple higher than a bank today and behave according to the way the stock market behaves. It would be regulated by the SEC and be dependent on its own performance and not a bunch of financial activities with leverage that few can understand, much less put a dollar value on.
Then, spin off the consumer banking operation into a separate stand-alone business. Its profit margins will be transparent as the spread between the bank’s borrowing costs and the yield on the loans or mortgages it finances. I’d be willing to bet these operations, with more predictable earnings and a steady dividend would also sell at greater than 10 times earnings. These spin offs would be regulated by the Federal Deposit Insurance Commission (FDIC), which might well strongly suggest a cap on the leverage that can be used of between 10 and 15 times.
Thirdly, the wholesale banking operations, the collateralized loans, the derivative positions, the futures, puts and calls would be in their own unit. Investors and analysts and regulators would be able to evaluate these institutions more rationally, especially if they are forced to disclose more exactly what they are doing globally and with whom.

Now, analysts at even the giant banks themselves are starting to agree.
Bloomberg reported yesterday:

Shareholders at the biggest U.S. banking conglomerates may demand breakups if valuations remain depressed, according to analysts at Wells Fargo & Co. (WFC)
So-called universal banks such as Bank of America Corp., Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) are trading at a 25 percent to 30 percent discount to more-focused competitors, analysts led by Matthew H. Burnell wrote in a research report today. Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS), which concentrate on investment banking, trading and money management, are within 8 percent of the estimated value of their parts, the analysts wrote.
***
“If regulators and/or legislators don’t demand it, shareholders could also intensify demands to ‘break up the banks.’ ”
***
Burnell’s team calculated that pieces of Bank of America are worth 41 percent more than their tangible book value, a measure of how much shareholders would receive if the firms’ assets were sold and liabilities paid off.
Citigroup should get a 24 percent premium, JPMorgan should get 69 percent and Goldman Sachs should be valued at 19 percent more than tangible book, the analysts said.
Citigroup, ranked third by assets and based in New York, and Bank of America, ranked second and based in Charlotte, North Carolina, trade at about 14 percent and 7 percent less than tangible book value, according to data compiled by Bloomberg.
JPMorgan, the biggest U.S. bank by assets, and Goldman Sachs, the fifth-biggest, trade for 28 percent and 9 percent more than tangible book value, respectively. The valuation for the two New York-based companies compares with the 281 percent premium fetched by Minneapolis-based U.S. Bancorp (USB), the nation’s largest regional bank.
New York-based Morgan Stanley should be valued at a 13 percent discount to tangible book value, compared with the current discount of about 19 percent, the note said.
***
Michael Mayo, CLSA Ltd.’s bank analyst, wrote in a separate note yesterday that shareholders in the biggest firms are more likely to agitate for changes than in prior years.
“Almost every large investor from our meetings and conversations over the past four months agrees that bank managements should be held more accountable and more often intend to vote against directors, compensation plans, and other actions,” Mayo wrote in an April 9 research note.

In a separate story yesterday, Bloomberg noted:

JPMorgan Chase & Co. (JPM), the largest U.S. bank by assets and the top investment bank by fees, is questioning the so-called universal bank model’s future.
Top-tier investment banks are “uninvestable at this point with a risk of spinoff from universal banks,” JPMorgan analysts led by London-based Kian Abouhossein wrote in a research note today. They cited potential rule changes and curbs on capital and funding.

Who Wants to Break Up the Big Banks … And Who Wants to Maintain the Status Quo?

Financial experts, economists and bankers say we need to break up the big banks.
The overwhelming majority of Americans want to break up the giant banks as well.
Given that shareholders are now starting to understand that breaking up the giants would be better for their own portfolios, the power of the markets may finally weigh in to split up the too big to fail banks.
So who is is against breaking up the giant banks?
Apparently, the only people opposing a break up are the handful of welfare queens – er, I mean current top corporate brass – who mooch off the public to reap insane windfalls, and the bought and paid for D.C. politicians who make money hand over fist by literally pimping out the American people to their buddies.
And see this.