Juggling Dynamite

The latest Cyprus “deposit tax” fiasco is just the next step in 5 years of wrong-headed global policy moves which have continually moved to preserve and support private investors (bond and stockholders) in bankrupt financial institutions at the expense of regular people and the real economy. Politicians and bankers have colluded to shift the crippling costs of bailing out their financial mismanagement and outright fraud on to taxpayers and now deposit holders.

Steve Keen, professor of economics at the University of Western Sydney, argues that if you destroy the trust depositors have in their bank accounts then you destroy the oil of capitalism. Here is a direct link.

Bart Chilton, Commodities Futures Trading Commission, explains why he’s going after a high frequency trading practice (HFT) that artificially boosts volume. Here is a direct link.

Mohamed El-Erian, Pimco CEO and co-CIO, discusses the controversial bailout plan for Cyprus which would tax bank deposits, and explains how the proposal has inflamed the situation by including small depositors.
Here is a direct link.

Also see El-Erian’s summary re Cyprus developments and potential outcomes here: What you should know about the Cyprus controversy.

Meanwhile Archbishop Chrysostomos, the island’s influential spiritual leader, has called for Cyprus to leave deposits intact, leave the eurozone and readopt its former currency, the Cyprus pound. See: Cypriot authorities in revised deal talks