Tags

, , , ,

So here is my thinking….they aren’t charging Serfs like us for the honor of parking our cash in checking accounts but rather large institutions parking cash over 50mm. the first question I always ask when I see something extremely unusual is, WHY? Here is my thoughts and I have an anecdotal story below and I will dig for more facts. The European sovereign debt crisis is coming to a tipping point. The banks in europe are undercapitalized severely and depositors are fleeing for safety. This is the equivalent of a bank run. I think there is a real possibility that this stealth bank run can start a domino effect of bank collapses in Europe even before Greece which is going to default actually forces banks to take haircuts…they have no FDIC like system over there and the people are not going to lose whats left of their worthless savings. We have a problem on our hands and its about to get a whole lot worse.

<<<<<<< SHYT IS GOING DOWN.  BEWARE >>>>>>>

Aug. 4 (Bloomberg) — Bank of New York Mellon Corp ., the world’s largest custody bank, will charge institutional clients a fee for “extraordinarily high” cash deposits to stem a flight of capital into the safety of bank deposits.
“I’ve never seen this happen, not in 25 years,” Gerard Cassidy, an analyst with RBC Capital Markets in Portland, Maine, said in an interview. Other banks may follow BNY Mellon’s lead, Cassidy said. Investors are seeking the safety of bank accounts as concern increases that the global economy may relapse into a
recession and Europe’s sovereign debt crisis may worsen.

An FDIC rule passed in 2008 providing unlimited insurance to non-interest bearing transaction accounts expired last year and was replaced by a provision  in the Dodd-Frank Act, which extends the insurance through Dec. 31, 2012.      “I suspect more banks will do this for their wholesale customers, saying we love you guys but every dollar you put in here costs us money,” said Bert Ely, a banking consultant in
Alexandria, Virginia. “I’m not sure that this has ever happened in the U.S.”

Story from Greece:

In one of the biggest banks in the centre of Athens a clerk is explaining how his savers have been thronging to pull out their cash.

Wary of giving his name, he glances around the marble-floored, wood-panelled foyer before pulling out a slim A4-sized folder. It is about the size of a small safety-deposit box – and those, ever since the financial crisis hit Greece 18 months ago, have become the most sought-after financial products in the country. Worried about whether the banks will stay in business, Greeks have been taking their life savings out of accounts and sticking them in metal slits in basement vaults.

The boxes are so popular that the bank has doubled the rent on them in the past year – and still every day between five and 10 customers request one. This bank ran out of spares months ago. The clerk leans over: “I’ve been working in a bank for 31 years, and I’ve never seen a panic like this.”

Official figures back him up. In May alone, almost €5bn (£4.4bn) was pulled out of Greek deposits, as part of what analysts describe as a “silent bank run”. This version is also disorderly and jittery, just not as obvious. Customers do not form long queues outside branches, they simply squirrel out as much as they can. Some of that money will have been used to pay debts or supplement incomes, of course, but bankers put the sheer volume of withdrawals down to a general fear about the outlook for Greece, one that runs all the way from the humble rainy-day saver to the really big money.

Advertisements