Thursday, November 10, 2011

VIDEO - Silvio Berlusconi Resigns On His Own TV channel

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Italian prime minister Silvio Berlusconi confirms his resignation in a phone interview on his own channel after the approval of a budget law. The 75-year-old billionaire, the Italian republic's longest-serving prime minister, went to see president Giorgio Napolitano after watching his support in the lower house of parliament fall well below the number required for an outright majority.  His control of parliament had become a crucial element in the eurozone's raging debt crisis as investors in Italy's debt fretted over the country's ability to implement the austerity measures needed to cut its deficit.

Italian 10-year yields went straight north following the vote.

Berlusconi Resignation Rumor - Private Bank Accounts Will Be Raided By New Italian Government

As you will read in the excerpt below, it wouldn't be the first time in recent memory that private bank accounts were raided by a replacement Socialist government in Italy.
Potential capital flight out of Italy
The consensus seems to be that a “technical government” can step in, implement the reforms required by the European Union and reverse the growing credit crunch affecting Italian bonds.  This is, in my humble opinion, complete and utter nonsense.
After 10 years out of office, the opposition bloc will do its darn best to regain power through snap elections. And if the center-left were to win, their agenda would consist of the only thing they have known since 1945: increasing taxes on the rich and redistributing the money for their own benefit. There is nothing further from the mind-set of Berlusconi’s opponents than the concept of fiscal restraint.
But even assuming a “technical government” is installed for a few months, it could cause even more damage than a center-left regime.  Just ask any Italian who had a bank account — any bank account — on July 11, 1992, and who woke up to find that 0.6% of its balance had been seized overnight by executive order. The stunt came courtesy of then-Prime Minister Giuliano Amato, a leader of the Socialist party under whom many of the current slate of left-of-center politicians were trained and indoctrinated.
And before anybody begins to doubt that such a fiscal maneuver won’t happen again, only Italians who believe in unicorns are dismissing the talk that this time the levy will amount to 2% of account balances above €100,000.
I know many readers will view the above as a piece of conservative ranting, and I will proudly confess to that. But there is a very real financial horror story embedded in the policies proposed by the current opposition bloc. Just as it happened in the early to mid-’70s, tax increases, drive-by account raids and most of all the feelings of vengeance accumulated by the left over their time spent in political irrelevance, are likely to scare capital en masse out of Italian financial institutions just at a time when these banks are least capable of withstanding a run on their deposits.
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CHART OF THE DAY - The Scariest Jobs Chart Ever

This is what happens after a 20-year debt bubble fueled by two irresponsible Fed Chairman and their insatiable love for low interest rates.
Source - Calculated Risk
A comparison of every post-WWII recession, and look at the progression of job losses from the beginning, down to the trough, and then through the comeback.  As you can see, this recession hasn't been like any other.

New Study Proves Many U.S. Corporations Pay Zero Taxes, Seniors Are 47 Times Richer Than Those Under 35 (LINKS)

Bank Of America Overdraft Lawsuit: Judge Approves $410 Million Settlement

MIAMI — A federal judge on Monday gave final approval to a $410 million settlement in a class-action lawsuit affecting more than 13 million Bank of America customers who had debit card overdrafts during the past decade.
Senior U.S. District Judge James Lawrence King said the agreement was fair and reasonable, even though it drew criticism from some customers because they would only receive a fraction of what they paid in overdraft fees. The fees were usually $35 per occurrence.
"It's really undisputed that this is one of the largest settlements ever in a consumer case," said Aaron Podhurst, a lead attorney for the customer class.
The settlement became final a week after Charlotte, N.C.-based Bank of America backed off a plan to charge a $5 monthly fee for debit-card purchases. The outcry prompted other major banks, including JPMorgan Chase & Co. and Wells Fargo & Co., to cancel trial tests of their own debit card fees.
Bank attorney Laurence Hutt said 13.2 million Bank of America customers who had debit cards between January 2001 and May 2011 would get some payment. Those who still have accounts would get an automatic credit and the others would get a check mailed to them. No one would have to take any action or fill out any paperwork.
Barry Himmelstein, an attorney for customers who objected to the deal, said he calculated that the bank actually raked in $4.5 billion through the overdraft fees and was repaying less than 10 percent. He said the average customer in the case had $300 in overdraft fees, making them eligible for a $27 award – less than one overdraft charge – from the lawsuit.
"It's $4.5 billion that's gone missing from people's accounts," Himmelstein said.
Hutt said only 46 customers filed formal objections to the settlement and 350 decided to opt out, meaning they could take separate legal action on their own.
"It's very easy for people to say on the sidelines, `I could do better,'" Hutt said. "Never is a settlement at 100 percent of what somebody thinks they can receive at trial. It's always a compromise."

Customers will receive a minimum of 9 percent of the fees they paid through the settlement, Hutt added. The bank has already paid the money into an escrow account.
The lawsuit claimed that Bank of America processed its debit card transactions in the order of highest to lowest dollar amount so it could maximize the overdraft fees customers paid. An overdraft occurs when the account doesn't have enough money in it to cover a debit card transaction. Similar lawsuits have been filed against more than 30 other banks.
Despite the settlement, Bank of America insists there was nothing improper about the processing sequence. New regulations enacted following the recent financial crisis prohibit banks from charging overdraft fees on debit cards without first getting customer permission.
Many of the objections concerned the fees for the team of class-action attorneys, which would amount to about $123 million. Lawyers for people opposed to the settlement said that amount should be cut down by at least $50 million, with the money going back to the wronged customers.
"The best use is to provide compensation to the class members," said Elliott Kula, who represents some of the objectors.
But King sided with the plaintiffs' attorneys, noting that they spent thousands of hours on the case and achieved "a superb result" for the customers.
"I don't see anything about this case that's simple or garden variety," the judge said.
Another complaint concerned missing records for customers from 2001 through 2003, which has made them impossible to identify. The settlement will take about 14 percent of the total – representing an estimate for the fees paid by those customers – and put the money into nonprofit financial literacy programs.
In addition, the 32 original named plaintiffs who represented the larger class will get bonuses of up to $5,000 each, $2,500 each if both plaintiffs are a married couple.
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