Tag Archives: bail-in

Some cycles due in 2015

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So you can be prepared, if you wish, here are some cycles due in 2015. One of them is gigantically important to both the political and financial worlds, so I hope my exposition is clear.

The first cycle is very easy to understand: something economically important really hits the fan every seven years. Going in reverse from here, seven years at a time:

  • 2008, start of the Great Recession, first real estate debt bubble pop;
  • 2001, recession begins as part of 2000-2002 internet/tech stock bubble pop;
  • 1994, worst year for bond markets in modern history;
  • 1987, the famed stock market Crash of ’87;
  • 1980, inflation, the “Misery Index”, start of a major recession that doesn’t go away for three years;
  • 1973, Arab Oil embargo, start of a major recession;
  • […] you get the idea.

The article at this link talks more about this cycle, including the note that the years in this seven-year cycle that coincided with an Autumn solar eclipse (1931 and 1987) had particularly strong events; and 2015 does have two solar eclipses. Again, from the article at the link:

In 1931, a solar eclipse took place on Sept. 12…Eight days later, England abandoned the gold standard, setting off market crashes and bank failures around the world. It also ushered in the greatest monthlong stock market percentage crash in Wall Street history.

In 1987, a solar eclipse took place Sept. 23…Less than 30 days later came “Black Monday” the greatest percentage crash in Wall Street history.

Some great forecasters think that March is a strong candidate for significant financial turbulence in 2015, and there is a total solar eclipse on March 20. And there is a partial solar eclipse on September 13, a better calendar correspondence with the events referenced in the quote above. So maybe we’ll get two strong events this year.

For those of you who believe what you read in the US media, perhaps you are wondering how we could get major financial problems when things are allegedly so “awesome.” Well, sorry to tell you, but even Goldman “doing God’s work” Sachs just admitted that the world economy has gone into contraction:

     It’s Official: Global Economy Back In Contraction For First Time Since 2012 According To Goldman 

(As a side note, Al Jazeera did a great video on true nature of Goldman Sachs. The link is here, but, if you are in the USA, the censors won’t allow you to view the video in the “Land of the Free” US, it’s only playable outside the US. A lot of that type of thing is going on these days. It’s a small part of what has dropped the US down to 49th globally in press freedom; see World Press Freedom Index Plunges – USA Now Ranked #49 Globally.)

If this seven-year cycle repeats in 2015, then I think we can easily predict what the authorities will do since it seems to be the only thing they know how to do when there’s trouble: print more money by creating more debt! But as explained in The deflationary wave intensifies, this strategy has become counter-productive and is locking the world economy in a deadly stranglehold.

Some realize all this and some do not. But this brings us to our second cycle: Martin Armstrong’s Sovereign Debt Big Bang. Here is a slide of Armstrong’s forecasts from a conference in early 1998:

Armstrong1998-Forecast

(Source, from Martin Armstrong’s blog)

These major forecasts all came true. The only one left to go (2015.75 = September 30, 2015) is the Sovereign Debt Big Bang. What it says in that the tide will monumentally shift away from confidence in government bonds starting on September 30, 2015. Currently, confidence in government bonds is so high that people are buying them even with negative interest rates. The easiest way to understand interest rates is that they are the rental charge for lending someone money. So you rent someone $100 and you hope to get back maybe $103, the original $100 plus $3 of rent. But people are now buying government bonds even though they get back less money than what they lent to some government in the first place. They are paying governments to lend them money!

     16% Of Global Government Bonds Now Have A Negative Yield: Here Is Who’s Buying It

That was a few weeks back, at which point JP Morgan calculated that $3.6 Trillion worth of government bonds were paying negative interest rates. Some of the countries involved were Germany, Switzerland, Japan, Netherlands, Sweden, and Denmark. In Denmark, because interest rates went negative, some adjustable rate mortgages are now paying interest to the people who took out the mortgage!

     In Denmark You Are Now Paid To Take Out A Mortgage

Now you might say: Why would anyone buy a government bond with a negative interest rate?!?! When I first said we should expect negative interest rates in More shackles readied for deployment, I did get a few e-mails politely suggesting that I might want to get checked for dementia. Here’s what was said:

The policy is that savers will soon be hit with negative interest rates…So people would have to pay the bank interest on their own savings. So if the negative interest rate were -3%, if you had $100 in your account, you’d have to pay the bank $3 in interest.

This is crazy. Most people alive today think governments never default on their debt.  But that’s just plain wrong. Here is a chart showing country debt defaults going back to 1800. And this chart only shows those countries that have defaulted at least four times, the rest are not shown. Note that the list includes supposed stalwarts like Germany:

Sov20140731_default

(Chart source, from The Economist.)

What Armstrong is saying–and he has been saying it since the 1990’s and has strong mathematical/historical models backing up his forecast–is that, near the end of this year, the world at large is finally going to wake up and understand the insanity of all this government borrowing. Not all at once, but relentlessly. They will see that most if not all countries are not going to pay back what they borrowed. They can’t. They don’t have the money. Greece is the first country to forthrightly admit it. One of the pompous Eurocrats threatened Greece last week, saying “If you don’t do what we say, Greece will go bankrupt.”  To which the Greek Finance Minister Yanis Varoufakis replied, “Greece is already bankrupt.”  (Straight truth! From a politician! Finally! Maybe that will become a trend!)

So what will this do to those who own all these government bonds? Who does own them anyway? For one, most of what is called capital at banks is government bonds. So there go the banks: no capital, insolvent. (Watch out for the upcoming bail-ins if you still keep money in banks.) Insurance companies and both government and private pension funds are huge holders of government bonds. So there goes insurance, and pensions. A well-placed German friend says that several European insurance companies are on the verge of bankruptcy. All of the assets of the US Social Security system, for example, are US government bonds: that’s all they own!

And somehow, the financial system has come to accept government bonds as collateral for other loans and bets. The $1 Quadrillion (that’s 1,000 Trillions) world derivatives casino market floats on a thin veneer of government bonds as “collateral” for these bets. Before the US defaulted on its debts in 1971 when Nixon said they were no longer payable in currency backed by gold, as previously promised, but now were backed by promises alone, collateral meant something real. For example, when you have a mortgage, your house is the collateral. A car is the collateral for an auto loan. But now in the financial world, someone’s promise to pay back a loan that they can never repay counts as collateral for even more loans. This is insane. Starting later in the year, a lot more people will start to understand that. That’s the nature of this Big Bang cycle. And there will be major repercussions. We talked about the demise of banks, pensions, and insurance. The derivatives collapse will take down all the brokerages and investment banks. So where will people get money?

Governments love to hide the truth about their historical defaults on their debt. Thus everyone is taught that the “cause of the Great Depression” of the 1930’s was the 1929 stock market crash. Total BS. The stock market crash wiped out stock speculators. That wasn’t a truly big deal. What took down thousands of banks were defaults on government bonds they and their customers were holding. Let’s look at that government bond default chart again. This time there is a red box around the worldwide wave of country debt defaults in the early 1930’s that wiped out thousands of banks and millions of savers:

Sov20140731_defaultBox

Get it? That’s what’s coming up again, only this time it will be worse. Way worse. There’s been far more borrowing, far more leverage, and all of it is floating on paper and electronic currencies and promises. The link to reality–gold–was removed in 1971.

World-Debts

Now some people say all this unpayable debt can be wiped off the books in a debt jubilee, like they used to do in Old Testament times. Well that’s true. It can. The problem is that anyone who put money in a bank account needs to realize that they have loaned that money to the bank. It’s a debt of the bank, they owe you money. And your deposit is backed by government debt, not by actual cash. So, if there were a debt jubilee, no one would have any money in their bank account anymore. Same for businesses, so no business would be able to write a paycheck to anyone. ATM’s would not be able to dispense any cash. Credit cards would no longer work. All of the money in the world is someone’s debt to someone else. So a debt jubilee would mean there was no money.

So now, do you want a debt jubilee? Of course not. But we are going to get one anyway. Not on purpose. By accident. Starting in a big way later this year.

Why can anyone be confident that this is true? Well first, go back and look at the rest of the predictions on Armstrong’s slide from 1998. Second, it’s already starting to happen. Greece, Argentina, Puerto Rico–the dominoes are starting to fall. Japan is a financial basket case, there is no way they can repay their debts, and they have the second largest pile of government debt on the planet. The whole world has gone wild for debt!

Which brings us to a third “cycle of interest’ for 2015. What else floats on a sea of debt? Real estate prices! This cycle was described before here:

As examples, due to his real estate cycle work for the US, he was telling clients–in the 1990’s to give them ample time to act–to be out of all US real estate investments by February, 2007; that real estate prices would then fall from 2007 into 2012, then rise into 2015 in a snapback rally that would sucker a lot of people back into real estate, and then fall again through 2033.

Well here we are in the snapback real estate rally into 2015. So many have forgotten the 9 million US foreclosures and the 7 million US households that are still “under water” on their mortgages. All the signs of a bubble are back, though now some are already starting to dissipate as real estate prices in some of the bubbliest areas roll over:

     Southern California home sale volume for January slowest since 2008: The stalemate accelerates with Orange County seeing a monthly median price drop of $28,500.

The bubble is stronger than ever in countries like Canada, Australia, and the UK. Unless people request it by sending me e-mails saying they want it, I’m not going to do a detailed post on real estate. I doubt it will change anyone’s mind, so it probably isn’t worth it. But when the biggest debt bubble the world–and perhaps the galaxy–has ever known pops, and governments are falling left and right, real estate prices will be hammered. And those falling governments will be desperately raising property taxes to try to stay afloat.

And anyone who agrees with people who say that “debt doesn’t matter,” like Dick Cheney from the right or Paul Krugman from the left, is going to get quite an education over the next few years. Actually, we all will. Which is good, in my view. Humanity badly needs to understand which actions have real value and which do not.

It’s Bail-In time

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The posts Upcoming Thefts by Big Money and Update on Metals, Deposit Confiscation, and Capital Controls explained how the authorities have made is perfectly clear that their new Bail-In regimen would confiscate deposits from regular folks in an attempt–which will ultimately fail–to keep the bankrupt banks and bankrupt governments afloat. I enter as evidence the bankruptcy of the City of Detroit. Ellen Brown has written an excellent post on the topic that everyone should read, especially anyone who tends to think the current financial/legal/political system is a trustworthy custodian.

What’s happening is this: in the Detroit bankruptcy, the banks have been ruled to have “super-seniority,” that is, the banks get taken care of first, everyone else comes after that. Why? Because the banks sold Detroit derivatives and the banks got Congress to pass a law in 2005 that derivatives have seniority over all other obligations. So Detroit’s pensioners–the retired firefighters, police, water workers, garbage collectors, etc.–will get whatever crumbs might or might not be left after the super-senior derivative sellers and senior bondholders get their take. The first proposal had pensions being cut to ten cents on the dollar.

The banks convinced Congress that derivatives are “systemically important” so that’s how they got this super-seniority scam in place. Since there are over $700 trillion worth of derivatives out there in the world and that’s more than 10 times larger than then entire world economy, that means the banks will ultimately get all of everything before anyone else gets any of anything every time there is trouble. And there will be a lot of trouble. Particularly if they start a big war. Think about it: we have a system where money is debt and almost all countries and banks have way too much debt and the banking and government debt system is cross-linked to all financial institutions and pension funds and insurance companies across the globe. What will that look like when institutions in one country decide to not pay the institutions in another country because the two are at war, or since no one will be sure which countries will be left standing at the end of the war, everyone will gets suspicious about the value of everyone else’s currency? Trouble will take on entirely new dimensions. And we’ve all been told who has seniority in terms of dibs on assets, and that “who” is not you and me.

Or from another vantage point, please consider this: it has taken over a year for the bankruptcy trustee for MF Global, which stole $1.6 billion from its depositors, to even figure out where the money is. And he has only been able to figure out where 80% of it is. Not because anyone was hiding it, but because assets now get lent to someone who lends them to someone else who lends them to someone else…and so forth. This is how complicated the financial system has become. Think about what this will look like when the amounts are literally millions of times larger than MF Global and spread across the globe in countries which are no longer on speaking terms.

And as a friend just pointed out to me in an e-mail, it’s really now in the banks’ best interest to have cities like Detroit go bankrupt so that the banks can get all of their money from derivatives right away.

I wonder if that’s why Detroit isn’t getting a bailout from the State or Federal governments–that the banks want their money now.

And the City of Detroit gets relief from its debts. So government and banks bail in (steal!) the money from regular folks, game set and match. Ah, the public-private partnership in action!

It’s dangerous out there folks. Please take action accordingly. Soon!

From Ellen’s post, The Detroit Bail-In Template: Fleecing Pensioners to Save the Banks:

In Cyprus, the depositors were “bailed in” (stripped of a major portion of their deposits) to re-capitalize the banks. In Detroit, it is the municipal workers who are being bailed in, stripped of a major portion of their pensions to save the banks.

Bank of America Corp. and UBS AG have been given priority over other bankruptcy claimants, meaning chiefly the pensioners, for payments due on interest rate swaps they entered into with the city. Interest rate swaps – the exchange of interest rate payments between counterparties – are sold by Wall Street banks as a form of insurance, something municipal governments “should” do to protect their loans from an unanticipated increase in rates. Unlike ordinary insurance, however, swaps are actually just bets; and if the municipality loses the bet, it can owe the house, and owe big. The swap casino is almost entirely unregulated, and it is a rigged game that the house virtually always wins. Interest rate swaps are based on the LIBOR rate, which has now been proven to be manipulated by the rate-setting banks; and they were a major contributor to Detroit’s bankruptcy.

Derivative claims are considered “secured” because the players must post collateral to play. They get not just priority but “super-priority” in bankruptcy, meaning they go first before all others, a deal pushed through by Wall Street in the Bankruptcy Reform Act of 2005. Meanwhile, the municipal workers, whose pensions are theoretically protected under the Michigan Constitution, are classified as “unsecured” claimants who will get the scraps after the secured creditors put in their claims. The banking casino, it seems, trumps even the state constitution. The banks win and the workers lose once again.

Ellen’s full post is here.

Upcoming Thefts by Big Money

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The insatiable banking/corporate/political crony network that has stolen so much from people in the past has some new schemes in store. First on the docket is the bail-in, where reckless banks with huge losses will be kept afloat not by the general base of taxpayers, but by those who have lent them money. And as mentioned in Update on Metals, Deposit Confiscation, and Capital Controls, depositors are definitely grouped into the class of those who have “lent” money to these banks. As in Cyprus, if a bank fails and the regulators decide that depositor money will be confiscated, the depositors receive some stock in the bank in exchange for their money. We’ll see later in this post just how well that is working out for people in Cyprus. But first, let’s establish that bail-ins are definitely the new thing:

     It Can Happen Here: The Confiscation Scheme Planned for US and UK Depositors

Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds…  

Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.”  The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price?…

No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive.

     Wealthy bank depositors to suffer losses in EU law

A draft European Union law voted on Monday would shield small depositors from losing their savings in bank rescues, but customers with over 100,000 euros in savings when a bank failed could suffer losses.

     Asmussen clarifies EU Parliament: savers must bleed for bank rescue

     Japan to adopt ‘bail-ins,’ force bank losses on investors if needed, Nikkei says

     Land Of The Rising Bail In: Deposit Confiscation Coming To Japan Next

Other countries have hopped on the bail-in bandwagon, but you get the idea.

To absolutely confirm that bail-ins are coming, the next story is about an organization called ISDA preparing for how to handle bail-ins. Why is this important? Because the following is a list of the voting members of the ISDA Determinations Committee:

  • Bank of America N.A.
  • Barclays Bank plc
  • BNP Paribas
  • Citibank, N.A.
  • Credit Suisse International
  • Deutsche Bank AG
  • Goldman Sachs International
  • JPMorgan Chase Bank, N.A.
  • Morgan Stanley & Co. International plc
  • UBS AG

That is the rogues gallery of derivatives trading on this planet. And what is this Determinations Committee determining? Who gets what on all of the derivative bets placed with respect to any bank that gets a bail-in. In other words, there will be bets that the bank will fail, bets that the bank will survive, bets on the bank’s bonds, etc. etc., and these guys are now setting the rules for who gets what after a bail-in. If these folks think it’s necessary to protect themselves relating to bail-ins, then gee, I wonder if everyone else ought to do the same?:

     New CDS trigger event proposed to tackle bail-in

ISDA is consulting on a proposal to add another credit event for financial credit default swaps in order to adapt to sweeping changes in regulation that will give supervisory authorities the power to bail-in the debt of floundering institutions.

For further proof, those who are well-connected are already working to make sure that they are exempt from the torture of a bail-in:

     EACH wants CCP exemption from bail-ins 

Rest assured that there will be bank failures because the big ones have gone back to the methods that precipitated the financial crisis on the first place. They are again selling CDOs, one of the primary culprits in 2008:

     ‘Frankenstein’ CDOs twitch back to life

And they are once again granting what are called “covenant-lite” loans.

And in new depths of scum-sucking bottom-feeding, banks are so desperate for capital and profits and bonuses that they are now pursuing people upon whom they foreclosed to make up the difference between the mortgage loan amount and the price the banks were able to get for the house when they sold that house after foreclosure:

     Lenders seek court actions against homeowners years after foreclosure

For Jose Santos Benavides, the ordeal of losing his home was over.

The Salvadoran immigrant had worked for years as a self-employed landscaper to make a $15,000 down payment on a four-bedroom house in Rockville. He had achieved a portion of the American dream, earning nearly six figures.

Then the economy soured, and lean paychecks turned into late mortgage payments. On Aug. 20, 2008, one year after he bought his dream home for $469,000, the bank’s threat to take his house became real via a letter in the mail. Just four days before the bank seized the property, he moved out, along with his wife and their two young children.

That wasn’t the worst of it.

In November, more than three years after the foreclosure, he was stunned to learn he still owed $115,000 — with the interest alone growing at a rate high enough to lease a luxury car.

“I’m scared, you know,” Benavides said. “I can’t pay.”

The 42-year-old is among the many homeowners being taken to court by their lenders long after their houses were taken in foreclosure. Lenders are filing new motions in old foreclosure lawsuits and hiring debt collectors to pursue leftover debt, plus court fees, attorneys’ fees and tens of thousands in interest that had been accruing for years.

From that Washington Post article, here is a chart that shows that, in some states of the US, the banks have 40 or more years after the foreclosure to go after former “homeowners” upon whom they foreclosed:

wpdeficiencytimeframephoto2So the banks engaged for years in seriously questionable lending practices, packaged up mortgages they knew would fail into “securities” that they sold all over the world, created fake documents and had them robo-signed to accomplish foreclosures, and now they can hound people for decades for what the banks say are their losses on these mortgages. With interest. And attorneys fees. I wonder who created such a legal system. As Bank of America employees reported:

     ‘We were told to lie’ – Bank of America employees open up about foreclosure practices

Employees of Bank of America say they were encouraged to lie to customers and were even rewarded for foreclosing on homes, staffers of the financial giant claim in new court documents…

“To justify the denials, employees produced fictitious reasons, for instance saying the homeowner had not sent in the required documents, when in actuality, they had,” William Wilson, Jr., a former underwriter for the bank, wrote in his statement.

As a side note on Europe, rumor has it that the infamous EU Finance Minister Jeroen Dijsellbloem, the one who correctly stated in public that the Cyprus bank action was a template for future bank resolutions, is pressing EU officials to try to preemptively resolve the problem of insolvent EU banks via deposit confiscation. And he wants to do that soon. So far, all attempts to fix EU bank problems have been band-aids that temporarily covered over the real problems; none have come close to a real solution, and we’ll get to the reason for that below. But if you have any notion that EU banks are solvent, then read this comment about Deutsche Bank by a former US Federal Reserve Bank President:

     Deutsche Bank “Is Horribly Undercapitalized… It’s Ridiculous” Says Former Fed President Hoenig

A top U.S. banking regulator called Deutsche Bank’s capital levels “horrible” and said it is the worst on a list of global banks based on one measurement of leverage ratios. “It’s horrible, I mean they’re horribly undercapitalized,” said Federal Deposit Insurance Corp Vice Chairman Thomas Hoenig in an interview. “They have no margin of error.” Deutsche’s leverage ratio stood at 1.63 percent, according to Hoenig’s numbers, which are based on European IFRS accounting rules as of the end of 2012.

Deutsche Bank is the biggest player in the world in the risk-laden derivatives market. At last count, they had $73 trillion in derivatives outstanding, which is over twenty times the size of the German GDP, so if Deutsche Bank has a derivatives blow up, it’s unlikely that Germany or anyone else would be able to afford to make good on their losses. After all, $73 trillion is larger than the entire world GDP.

And why is it that, as stated above, there have been no attempts to really solve EU bank problems?  It’s very simple: too much debt was issued to buy assets (e.g., real estate), pushing up the price of those assets to unrealistic levels. There are real losses that need to be taken, and no one wants to take the losses. All involved prefer to pretend that there are no such losses, so they use near-zero-interest bridge loans, accounting lies, and round robin I’ll-lend-your-bank-money-to-buy-your-government-debt-and-you-use-the-proceeds-to-bail-out-your-bank games to mask the truth. With non-performing loans at EU banks at record highs and growing by the day, good luck with that.

But here is the problem with bail-ins, the latest and great “fix” for the financial system: so far, they don’t work.  Let’s look at the infamous Cyprus case: they stole a lot of deposits and in return, gave people stock in the bank. But few want to keep their money in that bank anymore. Even with strong limits on daily withdrawals from the Cyprus banks, people are persistently removing their money from those banks:

     Cyprus Bank Deposits Plunge By Most Ever During “Capital Controls” Month

Here’s what the trend of withdrawals from the Cyprus banks look like:

Cyprus Bank Deposits Seq Change

That’s more than $6 billion being withdrawn in April, after the March bail-in. So that bank stock that people received in return for their “expropriated” deposits? Must be worth a fortune. If people still received stock certificates as a matter of course, at least these could be framed as memorabilia, yet another testament to the financial follies of humanity. But it’s all just electronic entries these days. Switch a few bits and bytes and then who owns what?

And the whole Cyprus action is breaking down anyway:

     The Cyprus Bail-In Blows Up: President Urges Complete Bailout Overhaul

Cyprus’ President Nicos Anastasiades has realized (as we warned), too late it seems for the thousands of domestic and foreign depositors who were sacrificed at the alter of monetary union, that the TROIKA’s terms are “too onerous.” Anastasiades has asked EU lenders to unwind the complex restructuring and partial merger of its two largest banks…

Not that the bail-outs actually worked either. Despite the fact that the EU leaders touted each of the first three Greek bailouts as the final fix, Greece now needs a fourth:

     Greece Has One Month To Plug A €1.2 Billion Healthcare Budget Hole

Think Cyprus is the only country that will need a repeat bailout (as the FT reported earlier)? Think again. Cause heeeeere’s Greece… again…. where as Kathimerini reports, a brand new, massive budget hole for €1.2 billion has just been “discovered.

And here’s another nice theft tactic. Well, nice if you are the bank. The Bank of Ireland just doubled the interest rate on existing floating rate mortgages where the fine print allowed them to do so:

     Bank Of Ireland Doubles Mortgage Rates, Homeowners Fear More To Come

And expect to hear a good deal more about wealth taxes in the coming months:

     German ‘Wise Men’ push for wealth seizure

Professors Lars Feld and Peter Bofinger said states in trouble must pay more for their own salvation, arguing that there is enough wealth in homes and private assets across the Mediterranean to cover bail-out costs. “The rich must give up part of their wealth over the next ten years,” said Prof Bofinger.

And last but not least, you know all that money sitting in retirements accounts? Multiple countries have nationalized such accounts in recent years. People like former Republican Administration insider Catherine Austin Fitts have been warning people that US politicians salivate when they contemplate getting their hands on that pool of $18 trillion.

OK, just three final (brief!) comments:

1. You’ve heard the old saying about someone who “wants your money in their pocket.” The problem here is most people’s money is already stored in “their pocket,” that is, it’s already being held by the institutions that want to grab it.

2. That thing about the banks going after people for more money after they have already foreclosed on them? Too bad we don’t have a Charles Dickens around to dramatize this type of behavior, maybe then people would get the depth of depravity in this system.

3. Tread carefully out there, folks, it looks like acceleration spares nothing, so I think you want to be real careful about “wait and see.” You know my view: banks are for transaction accounts, not savings.

Next time we’ll cover another big pile of electronic money, brokerage accounts.