Britannia Radio

Cyprus crisis reveals sorry state of many banks!

                 How to protect YOUR money!



by Mike Larson


                 
                                
Dear A




A lot of ink has been spilled on the Cyprus crisis this  week. And my colleague Tom Essaye did a great job covering many of the particulars.   He also discussed  the very real possibility of contagion selling and bank runs spreading to other  parts of Europe.
But to me, the single most important fact about the  crisis is that it reveals the sorry fundamental state of so many banks both  here and abroad. It also confirms what many of us have suspected all along ...
Specifically, by moving to raid the bank accounts of  Cypriots rich and poor, European policymakers have proven that they can — and  will —  stick it to even bank depositors in  an attempt to maintain the status quo and prop up failing institutions. And  THAT is a huge new precedent you need to be aware of, and take steps to avoid  becoming the next victim!
"Sacrosanct" depositor money tapped,
   setting a very dangerous precedent!
Let's stop  pretending what happened in Cyprus is anything but attempted government confiscation of  the people's money. Cypriot policymakers were told by the International  Monetary Fund, the European Union, and the European Central Bank (the so-called  "troika") that they needed to raise 5.8 billion euros on their own. In return,  the troika would cough up 10 billion to bail the country and its banking system  out.



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Since Cyprus  didn't have that kind of money laying around, it was forced to cook up a plan  to raid depositor funds. One idea was to grab 6.75 percent of all depositor  balances between 20,001 and 100,000 euros, and 9.9 percent of all funds above  the 100,000-euro threshold. That plan was rejected, and a whole host of other solutions — from "good  bank/bad bank" splits, to pension fund raiding, to a last-minute bailout from  Russia — have been proposed as alternatives.
But you  simply can't put a genie this big back in the bottle! Up until this point in  the European debt crisis, depositor funds were generally considered  sacrosanct.  One reason is that Europe  ostensibly has a 100,000-euro deposit insurance scheme, similar to FDIC  insurance here in the U.S.
But it's not  a pan-European guarantee program — it's at the national level. That means if  your country's government is broke or under pressure because of a lousy  economy, troubled banking sector, huge debts and deficits, and so on (Cyprus ...  Greece ... Spain ... Italy, etc.), that guarantee isn't worth the paper it's  printed on!
Why anyone  agreed to keep their money in Cypriot banks up until last weekend — knowing  what they did about the banking system's problems — is beyond me. And why  anyone would keep money in OTHER weak European banks ... or own their shares,  preferred stock, or bonds ... is also beyond me.




The Bank of Cyprus was first rated weak by  Weiss Ratings on 4/10/2012 and was given an "E-" on 12/6/2012.


I mean, isn't  it clear by now that European policymakers — just like our policymakers a few  years ago — will basically bend any rule, grab any cash they can, devalue any  currency they have the power to devalue, and otherwise shaft their citizens to  prop up their banker buddies?
How to take action to protect YOUR funds —    even profit as this crisis unfolds!
The good news  is, you don't have to be at the mercy of capricious policymakers. You don't have  to keep your money in lousy banks, either abroad or here at home. You can  identify at-risk institutions by using tools such as those provided by our  Weiss Ratings division! Our
  ratings arm  grades more than 7,100 domestic banks currently, and began publishing ratings  on 498 international banks in April 2012.



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Each and  every institution is ranked on a simple-to-understand scale of A-to-E. The  lower the letter grade, the worse shape the bank is in, based on an objective  analysis of its stability, earnings, capital level, asset quality, and more.
How on-target are the ratings? Well,  consider that I urged you just a few  weeks ago to consider snapping up your copy of my blockbuster new report — "Winners and Losers in the Great Global Banking Crisis of 2013-2014."
That report specifically named Bank of Cyprus and Cyprus  Popular Bank as extremely weak, with "E-" ratings!
Meanwhile, I explained  how to profit from declines in the shares of three European banks that trade  right here in the U.S. I said these banks were vulnerable if the European bank  crisis were to flare up again because they were fundamentally weak.
Sure enough,  shares of two of those banks just plunged to their lowest levels since  mid-November. Shares of another one appear to be rolling over right on  schedule. And what about my suggested "buys"? One targeted bank stock just hit  its highest level since September, while another just hit its highest level  since it started trading here in the U.S. in 1995!
Bottom line:  If you own banking shares or bonds, or have your money deposited in weak banks  here or abroad, I believe you're taking significant risks with your money. To  get a better handle on that risk, I urge you to consider my latest report.
Better yet:  I've arranged with my publisher to cut the price of that report in HALF given  the urgency of the current situation. That means the report, normally $299, will  set you back just $149. All you have to do is click here or call  my customer service staff at 1-800-291-8545 to get your hands on it — before  more governments come gunning for their citizens' money!
Until next time,

Mike





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