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Hey RBS: This Is Not Another Greek Bank Run, We Promise
Sorry, we just can't resist. It's just too easy when dealing with the best and most erudite, if only just massively nationalized, bank in the world. Ever. Yet what is much more relevant, this story explains just why the US is taking the capital flight control measures we discussed recently. Too bad Greece did not have the foresight to institute comparable controls when it had the chance.
From the Telegraph, presented without commentary.
Greek banks hit by wealthy citizens moving their money offshore
Greek banks are being hit by a wave of redemptions as the country's most wealthy citizens and corporations look to move their money offshore or to international financial institutions perceived as safer homes for their assets.
Wealthy Greeks and companies have been clamouring to move their cash deposits
to banks such as HSBC or France's Société Générale, which operate large
branches in the country. They are among those to have received several
billion euros of new money in recent weeks. [What? No RBS?]
HSBC's private banking in the country is understood to have been flooded with
business, while the local operations of several other major international
banks have already seen large inflows of money. A spokesman for HSBC
declined to comment.
Eurozone countries are still at loggerheads on bailing out the southern
European nation, with Germany believed to be in conflict with other
countries in the single currency over how much interest to charge on the
emergency loans package. Germany wants interest rates of 6pc to 6.5pc, with
other countries willing to accept 4pc to 4.5pc interest.
More than €3bn (£2.6bn) of deposits held by Greek households and companies
left the country in February, while in January about €5bn of deposits were
moved out, according to the latest figures available from the Bank of Greece.
Switzerland, the UK and Cyprus have been the largest recipients of the money,
with the wealthiest Greeks looking to move their deposits to Swiss banks
accounts to escape the more punitive tax measures many fear will be
introduced in the wake of the country's economic crisis.
John Raymond, a banks analyst at CreditSights, said that on a visit to Athens
last week capital flight was the number one issue worrying most Greek
bankers. "The banks themselves are concerned by it because they can't
get funding elsewhere at the moment," he said.
"Greek banks won't be able to increase lending volumes if deposits don't
increase, and a continued deterioration in their deposit base will lead them
to cut back lending even more, stifling real economic growth."
Recent bond issues by the Greek government have struggled to find much demand
and fears are growing that the country could become the first Western nation
to default on its debt, stoking fears among Greeks over the stability of not
just the country's banks but the entire economy.
"Most bankers say they are worried about the stability of Greece and
Greek banks. This combined with the tax issue is making many people nervous
about keeping their money in domestic banks or within the country,"
said Mr Raymond.
»
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If they were smart they'd leave as well. Wealthy people don't tend to last long in revolutions.
Wealthy people prefer to consume popcorn and make wagers on the winners and losers during revolutions.
And thus why I warned people that IF you had the means and can handle the losses from the Rangel exit tax, becoming an expat and getting the HELL OUT of the United States now is a wise idea.
The action of implementing capital controls is usually a prerequisite for a currency devaluation.
Well Pangolas isn't getting asylum in Germany.
Call the fire department it looks like we have a Greece fire. Oh wait i forgot G-pap your just told the IMF to go F*uck off and the Germany are asking too much risk premium at +300 Bps. In that case too use a slogan made famous by Enron traders "Burn Baby, Burn."
My Greek relatives are thinking about an impromptu vacation to the US..
Good move! Out of the Greece fire and into the bonfire....
I'm not endorsing it! I'd reccomend they go to Myanmar.. I hear they're bankless and loving it.
I would endorse Singapore, even Hong Kong. But not a nutcase dictatorship. But if they want to stay in Europe, head to Norway. At least there they have a clue....
"There is no spoon"--TD
It's donation day. Outstanding, bitches.
Well, who ya gonna believe? Your own damn eyes or a third-tier toxic asset cum dumpster?
"Greek banks hit by wealthy citizens moving their money offshore"
And right into the slimy tenticles of the Vampire Squid. Just who do they think runs those off shore banks.
According to Barney Frank, the only safe place for US citizens to safeguard their money is at the US Treasury. Any place else and your money is subject to confiscation by the IRS, and any state and local tax authorities.
So, why not re-distribute your wealth today and save yourself the trouble of re-distributing your wealth tomorrow where the cost will be even more substantial due to any new tax laws conjured up by Congress.
Their moving their money and it's not coming back any time soon. And it doesn't build confidence when the countries rich are leaving.
The traditional solution to capital flight would be to, oh, I dunno, offer higher interest rates on savings commensurate with the risk.
It's a good thing that in this the best of all possible worlds, such actions have become unnecessary.
Nice Marla.
One wonders why Switzerland seems to be a price taker these days instead of a price maker in the (disclosure etc.) rules making market.
The rich Greeks don't need banks; they need bullion. Real money when all else fails.
Maybe they can borrow the money to get it :)
I wonder how long the money flight can go until it trips one of the Greek banks into undercapitalization? A major bank insolvency would be a nice addition to the whole Greek comedy.
Don't want to be landlocked in the coming diaspora. Get a nice pad on an island nation: Bermuda, Bahamas, lots of pretty mommas. Montigo, buy stay the hell away from the Fl keys (lots of underwater mortgages, and FL is a big gun state, hint hint). The poor and desperate will have a couple days sail to get at you and your riches.
Your brown-skinned labor force may begin to rise up however, so ensure your island has adequate agricultural production; and isn't entirely dependant on imports. The Grey Poupon will of course need to come from off-island though. The computer game, Tropico, comes to mind.
In order to win the game, you (the dictator) needs to maintain your people (the proletariet) in a modicum level of living to stave off rebellion. You cram the poor bastards onto the shitty side of the island, and build up the nice, non-fucked up side with resorts, beach villas, casinos, etc. Meanwhile, the shitty side is built up with canneries, cigar factories, low-rent hosing and the inevitable shanty towns. Look into the game, it's fun.
Greece is merely domino one when it comes to default and social uprising. Uk, French and German banks are massively exposed to the PIIGS. Just a matter of time before deleveraging/loss taking 2.0 begins. World stocks await a huge b**ch slap.
Furthermore, the country is preparing to raise $5 billion to $10 billion through a bond offering aimed at U.S. investors now that appetite for Greek paper appears to have declined elsewhere. WSJ.
Buy,Buy,Buy
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