Europe Considers Wholesale Savings Confiscation, Enforced Redistribution

Tyler Durden's picture




 

At first we thought Reuters had been punk'd in its article titled "EU executive sees personal savings used to plug long-term financing gap" which disclosed the latest leaked proposal by the European Commission, but after several hours without a retraction, we realized that the story is sadly true. Sadly, because everything that we warned about in "There May Be Only Painful Ways Out Of The Crisis" back in September of 2011, and everything that the depositors and citizens of Cyprus had to live through, seems on the verge of going continental. In a nutshell, and in Reuters' own words, "the savings of the European Union's 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis, an EU document says." What is left unsaid is that the "usage" will be on a purely involuntary basis, at the discretion of the "union", and can thus best be described as confiscation.

The source of this stunner is a document seen be Reuters, which describes how the EU is looking for ways to "wean" the 28-country bloc from its heavy reliance on bank financing and find other means of funding small companies, infrastructure projects and other investment. So as Europe finally admits that the ECB has failed to unclog its broken monetary pipelines for the past five years - something we highlight every month (most recently in No Waking From Draghi's Monetary Nightmare: Eurozone Credit Creation Tumbles To New All Time Low), the commissions report finally admits that "the economic and financial crisis has impaired the ability of the financial sector to channel funds to the real economy, in particular long-term investment."

The solution? "The Commission will ask the bloc's insurance watchdog in the second half of this year for advice on a possible draft law "to mobilize more personal pension savings for long-term financing", the document said."

Mobilize, once again, is a more palatable word than, say, confiscate.

And yet this is precisely what Europe is contemplating:

Banks have complained they are hindered from lending to the economy by post-crisis rules forcing them to hold much larger safety cushions of capital and liquidity.

 

The document said the "appropriateness" of the EU capital and liquidity rules for long-term financing will be reviewed over the next two years, a process likely to be scrutinized in the United States and elsewhere to head off any risk of EU banks gaining an unfair advantage.

But wait: there's more!

Inspired by the recently introduced "no risk, guaranteed return" collectivized savings instrument in the US better known as MyRA, Europe will also complete a study by the end of this year on the feasibility of introducing an EU savings account, open to individuals whose funds could be pooled and invested in small companies.

Because when corporations refuse to invest money in Capex, who will invest? Why you, dear Europeans. Whether you like it or not.

But wait, there is still more!

Additionally, Europe is seeking to restore the primary reason why Europe's banks are as insolvent as they are: securitizations, which the persuasive salesmen and sexy saleswomen of Goldman et al sold to idiot European bankers, who in turn invested the money or widows and orphans only to see all of it disappear.

It is also seeking to revive the securitization market, which pools loans like mortgages into bonds that banks can sell to raise funding for themselves or companies. The market was tarnished by the financial crisis when bonds linked to U.S. home loans began defaulting in 2007, sparking the broader global markets meltdown over the ensuing two years.

 

The document says the Commission will "take into account possible future increases in the liquidity of a number of securitization products" when it comes to finalizing a new rule on what assets banks can place in their new liquidity buffers. This signals a possible loosening of the definition of eligible assets from the bloc's banking watchdog.

Because there is nothing quite like securitizing feta cheese-backed securities and selling it to a whole new batch of widows and orphans.

And topping it all off is a proposal to address a global change in accounting principles that will make sure that an accurate representation of any bank's balance sheet becomes a distant memory:

More controversially, the Commission will consider whether the use of fair value or pricing assets at the going rate in a new globally agreed accounting rule "is appropriate, in particular regarding long-term investing business models".

To summarize: forced savings "mobilization", the introduction of a collective and involuntary CapEx funding "savings" account, the return and expansion of securitization, and finally, tying it all together, is a change to accounting rules that will make the entire inevitable catastrophe smells like roses until it all comes crashing down.

So, aside from all this, Europe is "fixed."

The only remaining question is: why leak this now? Perhaps it's simply because the reallocation of "cash on the savings account sidelines" in the aftermath of the Cyprus deposit confiscation, into risk assets was not foreceful enough? What better way to give it a much needed boost than to leak that everyone's cash savings are suddenly fair game in Europe's next great wealth redistribution strategy.

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Wed, 02/12/2014 - 22:30 | 4430831 jcia
jcia's picture

Socialism works

#irony

Wed, 02/12/2014 - 22:33 | 4430834 Jam Akin
Jam Akin's picture

Coming soon to a theatre near you.

 

Wed, 02/12/2014 - 22:35 | 4430857 VD
VD's picture

KRIMINAL SKUM

Wed, 02/12/2014 - 22:51 | 4430898 Soul Glow
Soul Glow's picture

The IMF October publication "Taxing Times" states on page 49 that - 

 

The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”— a one-off tax on private wealth—as an exceptional measure to restore debt sustainability.  The appeal is that such a tax, if it is implemented before avoidance
is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair). 

Page 49, "A One Off Capital Levy"....

Taxing Times:

http://www.imf.org/external/pubs/ft/fm/2013/02/pdf/fm1302.pdf

Wed, 02/12/2014 - 22:58 | 4430935 surf0766
surf0766's picture

Those who implement the tax will of course exempt themselves...

Wed, 02/12/2014 - 23:17 | 4430942 Soul Glow
Soul Glow's picture

Speaking of taxes, there is literature in that document about VAT.

Wed, 02/12/2014 - 23:34 | 4431038 CH1
CH1's picture

We'll see if the Europeans have the guts to do anything about it.

Lord knows the Americans haven't gotten off their asses.

Wed, 02/12/2014 - 23:43 | 4431066 johnQpublic
johnQpublic's picture

any one off levy or savings confiscation is gonna seriously fuck up my mattress, possibly leaving it lopsided

well, at least its not at the bottom of the lake with everything else

Wed, 02/12/2014 - 23:53 | 4431093 JLee2027
JLee2027's picture

Stealing will boost the economy...who knew? Will miracles never cease.

Thu, 02/13/2014 - 00:19 | 4431141 LMAOLORI
LMAOLORI's picture

 

 

In the Netherlands they are going to force the bankers by law to swear to God that they will be good.

 

"Bankers who fundamentally object to invoking God’s name can instead pledge: “This I declare and promise.”

 

(I wonder how many will be taking that out?  They also don't clarify if it's the God of Darkness)

Thu, 02/13/2014 - 03:18 | 4431432 macholatte
macholatte's picture

 

 

From each according to his abilities, to each according to his needs.

Karl Marx

 

The oppressed are allowed once every few years to decide which particular representatives of the oppressing class are to represent and repress them in parliament.

Vladimir Lenin

 

Political power grows out of the barrel of a gun.

Mao Zedong

 

Ideas are more powerful than guns. We would not let our enemies have guns, why should we let them have ideas.

Joseph Stalin

 

 

Thu, 02/13/2014 - 06:11 | 4431570 fuu
Thu, 02/13/2014 - 07:05 | 4431598 GetZeeGold
GetZeeGold's picture

 

 

 

We just need to kill another million people.....any volunteers?

 

China, Cambodia, Russia, Cuba....those guys were hacks.....we'll do it right this time.

Thu, 02/13/2014 - 07:45 | 4431645 Vagabond
Vagabond's picture

How to start a bank run 101.

Thu, 02/13/2014 - 08:07 | 4431663 Gief Gold Plox
Gief Gold Plox's picture

Hows this in any different than a too-complex-for-sheaple-to-realize form of slavery?

Oh, wait... I get it. Baaa - Baaaa.

Thu, 02/13/2014 - 12:06 | 4432373 Zymurguy
Zymurguy's picture

If everyone went to the bank this weekend and demanded their money, the banks would crash.  We hold WAY more power than we think.

Thu, 02/13/2014 - 17:43 | 4433914 kaiserhoff
kaiserhoff's picture

Good Point.

Silly me.  I was hoping this was from the ONION. 

Well, it's from the Idiot brainless trust in Belgium.  Same Difference.

Thu, 02/13/2014 - 19:37 | 4434329 macholatte
macholatte's picture

 

Five to one, baby, one in five
No one here gets out alive now
You get yours, baby, I'll get mine
Gonna make it, baby, if we try

The old get old and the young gets stronger
May take a week and it may take longer
They got the guns but we got the numbers

-- The Doors

Fri, 02/14/2014 - 05:14 | 4435739 cnmcdee
cnmcdee's picture

Frederick Bastiat's - The Law

Is more pertinent today than when it wrote it in the 1850's

Thu, 02/13/2014 - 17:49 | 4433931 Bryan
Bryan's picture

No, incorrect.  If everyone went to the banks at once, the government would declare a 'bank holiday' and close them all down by executive order.  You don't get your money 'on demand.'  You get it when they say you can have it.  And they'll say it's not really yours anyway, so get out of the bank line and go home and think about that for a while.

Thu, 02/13/2014 - 18:29 | 4434096 The Longest Call
The Longest Call's picture

Retirement accounts are next!  Hold your gold..

http://perpetualassets.wordpress.com/2014/01/29/physical-possession-of-i...

Fri, 02/14/2014 - 05:06 | 4435731 cnmcdee
cnmcdee's picture

Do you honestly think if they do a bank confiscation that *anyone* is going to keep any money in them that they can hide?  This will balloon the underground economy 100x. 

Barrack (I work for Saudi Arabia) Obama will waste no time to do the same thing, the 'Obama Freeze' is coming.

Don't worry about trying not to take up the resistance against the tyrannical elite that must be overthrown.  Eventually they will have confiscated all your wealth and all your possessions, and all your jobs so there will be nothing left *but* the fight.  And fight you all will because there will be no other option or simply starve under their repression.

Thu, 02/13/2014 - 17:53 | 4433960 dojufitz
dojufitz's picture

Friday night 7.30pm - 'Cunts from History'? History Channel.

Thu, 02/13/2014 - 19:15 | 4434257 zaphod
zaphod's picture

Did Lenin really say that? If so then I'm shocked that I agree with something from him.

Thu, 02/13/2014 - 20:58 | 4434613 WhackoWarner
WhackoWarner's picture

Does not surrise me that you are surprised.  Part of the boogey man socialist propoganda negates any real consideration of the undlerlying thought.  I am no Lenin fan. No Mao fan but the original thought was there; the observation of the future of capitalism being corrupted as we now see; was there.....there is no capitalism in USA anymore.

 

 

Thu, 02/13/2014 - 22:00 | 4434874 Tijuana Donkey Show
Tijuana Donkey Show's picture

American capitalism=Flow of money from the states to the capital. 

Thu, 02/13/2014 - 21:04 | 4434614 WhackoWarner
WhackoWarner's picture

sorry double post.

 

But is it not curious that the few times I post here my finger pad (which I have disabled as I use my mouse)  my finger pad becomes active such that my typing results in weird shite and I have to reset it every time....

Just saying.

Thu, 02/13/2014 - 07:15 | 4431618 chunga
chunga's picture

Translation:

When the bankers steal everyone's money there will be no consequences for them on this earth; as usual.

Thu, 02/13/2014 - 07:25 | 4431624 mvsjcl
mvsjcl's picture

Money (savings) they steal, wealth they leave alone.

Fri, 02/14/2014 - 07:16 | 4435833 GetZeeGold
GetZeeGold's picture

 

 

The Book of Corzine 1:25

Thu, 02/13/2014 - 07:54 | 4431649 neidermeyer
neidermeyer's picture

Chunga , haven't seen you in ages ,, I'm heading back into court to ass rape OCWEN with WF's production TRUSTEE data... wish me luck.

Thu, 02/13/2014 - 10:09 | 4431910 swmnguy
swmnguy's picture

I have no idea what your situtation with OCWEN is, but they are scum-suckers.  I bought my house in November 2009.  It had been foreclosed in 2006.  It went through a few hands, and then I bought it.  The guy who lost the house in 2006 was murdered in a pawnshop robbery in September 2009.  Apparently, he had a 1st mortgage, and at least 1 other 2nd mortgage, whether a HELOC, or I have no idea.  Anyway, every month I get a letter to him from OCWEN, trying to get money from the 2nd mortgage.  I've sent them, anonymously and in their own Business Reply envelope, printouts of the guy's newspaper obituary and news stories of his murder.  They still keep sending dunning notices.  This on a house that was foreclosed on 8 years ago, and the borrower was permanently foreclosed over 4 years ago.  Obviously they know he's dead, and they're just looking for a name to attach to the account, to go after on discharged debt.

Kick their ass!

Thu, 02/13/2014 - 11:37 | 4432254 Chief KnocAHoma
Chief KnocAHoma's picture

The lender knows exactly what they are doing. If they were to acknowledge the debtor was in fact dead, then they would also have to acknowledge their loan is in fact dead and remove that asset from the balance sheet. Talk about mark to fantasy!

Thu, 02/13/2014 - 11:44 | 4432285 swmnguy
swmnguy's picture

Not to mention, who knows how many derivatives this dead guy's loan is a part of.  A steaming, fetid, decomposing part.  No worries; the Fed has bought it up by now.  So we're all paying this dead guy's HELOC.  Too bad he spent it sheetrocking the basement and putting in a hot tub, which did nothing but cause mold in the basement and cracking the 90 year-old cement floor.  I've fixed it all now, but that was money well and truly flushed down the drain.  Ahh, but the derivatives live on, dead or undead.

Thu, 02/13/2014 - 17:54 | 4433968 WarPony
WarPony's picture

BAC has been sitting on "tons" of properties, some due for '07, '08 & '09 with no f/c sale date set.  Can't defuse the bomb without blowing themselves up I guess.  Oh yeah, OCWEN is the worst miserable f'n servicer out there.

Thu, 02/13/2014 - 11:45 | 4432295 swmnguy
swmnguy's picture

Oh, and no way OCWEN is the lender.  The worthless debt has no doubt been sold around a few times, and OCWEN probably bought the rights to collect it any-old-how for a fraction of a penny on the nominal dollar.  If they can get $500 out of the dead guy's sister for a debt she in no way owes on money she never saw, they're miles ahead.  (Disclosure-I have no idea if the dead guy has a sister.  Never met the fellow.  I did buy the most-expensive title search, and the highest-coverage title insurance when I bought the house).

Thu, 02/13/2014 - 19:37 | 4434326 Max Cynical
Max Cynical's picture

Swnguy, just file an address change for the debtor/deceased with the USPS using the OCWEN return address.

Thu, 02/13/2014 - 11:14 | 4432157 LawsofPhysics
LawsofPhysics's picture

They cannot steal what they don't possess.  Only one rule applies now; When fraud is the status quo, possession is the law.

Thu, 02/13/2014 - 18:22 | 4434076 Cacete de Ouro
Cacete de Ouro's picture

securitize feta cheese and make it smell like roses..

So that's what the Eurocrats in Brussels, Frankfurt and Strasbourg do all day

Thu, 02/13/2014 - 00:21 | 4431163 Anusocracy
Anusocracy's picture

The portion of the economy that is occupied by the thieves, sure.

For the pathetic idiots that can't see through the government con, not.

Thu, 02/13/2014 - 10:56 | 4432080 Handful of Dust
Handful of Dust's picture

Re-education, confiscation, Bail-ins, Bail-outs...

It's only Fair.

Thu, 02/13/2014 - 01:02 | 4431249 Unknown User
Unknown User's picture

First they will rebrand it and institute it on global scale.

 

 

Thu, 02/13/2014 - 01:34 | 4431320 Lore
Lore's picture

"FUCK THE EU...BEFORE IT FUCKS U"

Thu, 02/13/2014 - 10:20 | 4431962 DeadFred
DeadFred's picture

What's with all the negativity waves around here. They're not actually stealling your money, you'll get shares in some co-proprosperity project or something. Plus the fact that it's involuntary isn't going to be news.

Thu, 02/13/2014 - 17:46 | 4433927 kaiserhoff
kaiserhoff's picture

Because Obama, 

and because the government knows exactly what you should be doing with your money.

Some things are too stupid for words.  Doesn't mean they won't happen.

Just too stupid.

Thu, 02/13/2014 - 00:30 | 4431182 world_debt_slave
world_debt_slave's picture

asses as in fat asses

Thu, 02/13/2014 - 01:03 | 4431254 G.O.O.D
G.O.O.D's picture

Cant get up, batin..

Fri, 02/14/2014 - 05:10 | 4435733 cnmcdee
cnmcdee's picture

We'll see if the Europeans have the guts, guns to do anything about it.

Lord knows the Americans haven't gotten off their asses.

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