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Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?

 
Saddletramp
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03/20/2013 08:49 AM
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Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
I was reading some comments from European Technocrats today regarding the decision by Cyprus to withdraw from the ECB Bailout of Cypriot Banks, when a certain comment by the German Finance Minister caught my eye.

It doesn't seem like much, just a word change, but legally it makes all the difference in the world.

So when you open an account at a bank, are you a Depositor? Or are you an Investor?

Because Depositors are protected by Insurance and Regulations regarding how the bank can use your funds...

Investors are not afforded these same protections...


This was the change in classification they used to steal billions from account holders at MF Global, a commodities trading firm. Now they want to use that same precedent in Banking...

It seems small, but this is a wholesale change in classification of account holders and it will have a tremendous impact on the future of banking around the world!!!

SNIP

"In a situation like this, when an insolvency looms, then the creditors have to participate if they want to avoid an insolvency. If you want to avoid that, then the investors in the bank have to make a corresponding contribution. Whether that's a 'bail in' or a levy, that's for Cyprus to decide itself."

Read more: [link to www.foxbusiness.com]

drevil

Last Edited by Saddletramp on 03/20/2013 08:51 AM
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."

"We don't rent pigs!"
Anonymous Coward
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03/20/2013 09:00 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
The chosen are making it impossible to navigate the landscape theiyve created to skin the rubes.
Nothing means anything unless they deem it so.

In effect EVERYONE saving money is investing it in some way for the future.
Making this distiction is only the first step in a process that takes it all, legitimized by a piece of paper that has no other authority.
You cant win any game when your opponent makes all the rules and is judge and jury
Anonymous Coward
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03/20/2013 09:01 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Investors are insured-----> SIPC
Anonymous Coward
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03/20/2013 09:03 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Neither..

.. I'm with Jesus.
Anonymous Coward
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03/20/2013 09:06 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
BY DECEPTION WE MAKE WAR
Saddletramp  (OP)

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03/20/2013 09:07 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Investors are insured-----> SIPC
 Quoting: Anonymous Coward 36347272


Really...how did that work out for those "investors" in MF Global?!?!?

And you don't have SIPC on your account/investment at the bank, you have FDIC, which does not protect investors!
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."

"We don't rent pigs!"
Saddletramp  (OP)

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Puerto Rico
03/20/2013 09:09 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
The bottom line is this, when they repealed Glass-Steagall they removed your classification as a "Depositor"...you are now an Investor, it's just that no one bothered to tell you...

And, as an investor, you are getting an absolutely shit return on your money!
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."

"We don't rent pigs!"
Anonymous Coward
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United States
03/20/2013 09:15 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Such government guarantees or programs like FDIC are moral hazard. They give depositors a false sense of security their money is safe or guaranteed. It all works as long as things are going well but as soon as there is a crisis and the majority of people or a large minority (20%?) want their money back the cracks in the facade begin to appear.

Nothing beats real risk, when depositors are forced to realize they are taking a risk whenever they put their money in a bank they are forced to do their own due diligence to determine if the risk is worth the return. Why have banks gotten away with lowering their interest rates on deposits to near zero? Because people think the government has their back, there is no risk, when in reality there is always risk.
Anonymous Coward
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03/20/2013 09:21 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Such government guarantees or programs like FDIC are moral hazard. They give depositors a false sense of security their money is safe or guaranteed. It all works as long as things are going well but as soon as there is a crisis and the majority of people or a large minority (20%?) want their money back the cracks in the facade begin to appear.

Nothing beats real risk, when depositors are forced to realize they are taking a risk whenever they put their money in a bank they are forced to do their own due diligence to determine if the risk is worth the return. Why have banks gotten away with lowering their interest rates on deposits to near zero? Because people think the government has their back, there is no risk, when in reality there is always risk.
 Quoting: Anonymous Coward 961432


Edit: make that minority size of 10% or less depending on what the bank's reserve ratios are. Some banks are leverage far higher than 10%.

.
Anonymous Coward
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Philippines
03/20/2013 09:22 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
does it really matter?

does it?

does any of it?

Can you not see that no matter what anyone does or does not do it is all crashing sooner or later?

Face it. It is all over.
Saddletramp  (OP)

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03/20/2013 09:22 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Such government guarantees or programs like FDIC are moral hazard. They give depositors a false sense of security their money is safe or guaranteed. It all works as long as things are going well but as soon as there is a crisis and the majority of people or a large minority (20%?) want their money back the cracks in the facade begin to appear.

Nothing beats real risk, when depositors are forced to realize they are taking a risk whenever they put their money in a bank they are forced to do their own due diligence to determine if the risk is worth the return. Why have banks gotten away with lowering their interest rates on deposits to near zero? Because people think the government has their back, there is no risk, when in reality there is always risk.
 Quoting: Anonymous Coward 961432


You're right to an extent, but prior to, and even immediately following, the Repeal of Glass-Steagall, there were also tight regulations on how banks could use depositor funds...

They could not be invested in the Stock Market, they could be loaned out or excess could be put into "Fed Funds" which could be liquidated and returned to the depositor with very short notice...

These regulations continue to this day for Community & Regional Banks, however the National and Multi-National banks play by an entirely different set of rules...

No amount of paper showing otherwise will convince me that J.P. Morgan and Bank of America aren't betting depositor funds on Stocks, Commodities, and Derivatives...

These banks simply don't have enough "Investor" accounts to cover the gargantuan bets they've placed in these markets!!!

Last Edited by Saddletramp on 03/20/2013 09:37 AM
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."

"We don't rent pigs!"
Anonymous Coward
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South Africa
03/20/2013 09:26 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
You can watch them take every step and you can follow it to where you already know its going to go, an excuse to take everything you have.

Or you can try to stop watching
Saddletramp  (OP)

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03/20/2013 09:26 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
does it really matter?

does it?

does any of it?

Can you not see that no matter what anyone does or does not do it is all crashing sooner or later?

Face it. It is all over.
 Quoting: Anonymous Coward 11560876


Actually it does matter, because if people begin to understand that the paradigm has shifted, and that the old rules of banking no longer apply, then they will demand safe havens to store their cash and they will force a solution to this manufactured problem...
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."

"We don't rent pigs!"
Anonymous Coward
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North Macedonia
03/20/2013 09:27 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
broke
Anonymous Coward
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Philippines
03/20/2013 09:29 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
does it really matter?

does it?

does any of it?

Can you not see that no matter what anyone does or does not do it is all crashing sooner or later?

Face it. It is all over.
 Quoting: Anonymous Coward 11560876


Actually it does matter, because if people begin to understand that the paradigm has shifted, and that the old rules of banking no longer apply, then they will demand safe havens to store their cash and they will force a solution to this manufactured problem...
 Quoting: Saddletramp


you are in for a surprise

paradigms have no bearing on what is coming
Anonymous Coward
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03/20/2013 09:30 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Investors are insured-----> SIPC
 Quoting: Anonymous Coward 36347272


Really...how did that work out for those "investors" in MF Global?!?!?

And you don't have SIPC on your account/investment at the bank, you have FDIC, which does not protect investors!
 Quoting: Saddletramp

That's funny c n I'm in a credit union so technically I'm an invested but my money is protected by the fdic
Saddletramp  (OP)

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Puerto Rico
03/20/2013 09:32 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Investors are insured-----> SIPC
 Quoting: Anonymous Coward 36347272


Really...how did that work out for those "investors" in MF Global?!?!?

And you don't have SIPC on your account/investment at the bank, you have FDIC, which does not protect investors!
 Quoting: Saddletramp

That's funny c n I'm in a credit union so technically I'm an invested but my money is protected by the fdic
 Quoting: Anonymous Coward 31593934


Are you?!?!?
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."

"We don't rent pigs!"
Saddletramp  (OP)

User ID: 736969
Puerto Rico
03/20/2013 09:33 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Thanks for the Pin guys...

hf
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."

"We don't rent pigs!"
Anonymous Coward
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United States
03/20/2013 09:34 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Neither..

.. I'm with Jesus.
 Quoting: Anonymous Coward 1982145


then you're COMPLETELY fucked
Anonymous Coward
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United Kingdom
03/20/2013 09:36 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Neither..

.. I'm with Jesus.
 Quoting: Anonymous Coward 1982145


then you're COMPLETELY fucked
 Quoting: Anonymous Coward 34893579


Say the son of cabal.
Anonymous Coward
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United States
03/20/2013 09:36 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Such government guarantees or programs like FDIC are moral hazard. They give depositors a false sense of security their money is safe or guaranteed. It all works as long as things are going well but as soon as there is a crisis and the majority of people or a large minority (20%?) want their money back the cracks in the facade begin to appear.

Nothing beats real risk, when depositors are forced to realize they are taking a risk whenever they put their money in a bank they are forced to do their own due diligence to determine if the risk is worth the return. Why have banks gotten away with lowering their interest rates on deposits to near zero? Because people think the government has their back, there is no risk, when in reality there is always risk.
 Quoting: Anonymous Coward 961432


You're right to an extent, but prior to, and even immediately following, the Repeal of Glass-Steagall, there were also tight regulations on how banks could use depositor funds...

They could not be invested in the Stock Market, they could be loaned out or excess could be put into "Fed Funds" which could be liquidated and returned to the depositor with very short notice...

These regulations continue to this day for Community & Regional Banks, however, the National and Multi-National banks play by an entirely different set of rules...

No amount of paper showing otherwise will convince me that J.P. Morgan and Bank of America aren't betting depositor funds on Stocks, Commodities, and Derivatives...

These banks simply don't have enough "Investor" accounts to cover the gargantuan bets they've placed in these markets!!!
 Quoting: Saddletramp


True enough. I remember watching that 40 minute piece on Brooksley Born a couple years ago where she warned regulators and congress repeatedly about the systemic risk of an unregulated derivatives market.

I think FDR enacted Glass-Steagall during the first great depression in an effort to curb such banking activities that were tagged with causing many of the same problems at the time.

But to me, it just speaks volumes of how our government and corporate structure has hallowed out the real economy. We went from a production powerhouse after WWII exporting far more than we imported to a nation that consumes far more than we export, in fact exporting debt to pay for our consumption.

For banks to operate under traditional banking standards they need an organic base of depositors to make loans into a growing, producing economy. Since that real growth disappeared sometime in the mid 80's the banks have relied on exponentially increasing leverage or financing to maintain profits and market share.

The transition from formal lending houses to one of speculative trading firms using depositors money, with implicit government guarantees for bailouts should their bets go sour (TARP) has been an evolutionary process in line with our degrading economy.

It shows we are in the end stages of our superpower status transitioning to more of a third world banana republic relying on debt and bailouts to maintain our level of consumption - standard of living.

$0.02

.
Saddletramp  (OP)

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Puerto Rico
03/20/2013 09:41 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Such government guarantees or programs like FDIC are moral hazard. They give depositors a false sense of security their money is safe or guaranteed. It all works as long as things are going well but as soon as there is a crisis and the majority of people or a large minority (20%?) want their money back the cracks in the facade begin to appear.

Nothing beats real risk, when depositors are forced to realize they are taking a risk whenever they put their money in a bank they are forced to do their own due diligence to determine if the risk is worth the return. Why have banks gotten away with lowering their interest rates on deposits to near zero? Because people think the government has their back, there is no risk, when in reality there is always risk.
 Quoting: Anonymous Coward 961432


You're right to an extent, but prior to, and even immediately following, the Repeal of Glass-Steagall, there were also tight regulations on how banks could use depositor funds...

They could not be invested in the Stock Market, they could be loaned out or excess could be put into "Fed Funds" which could be liquidated and returned to the depositor with very short notice...

These regulations continue to this day for Community & Regional Banks, however, the National and Multi-National banks play by an entirely different set of rules...

No amount of paper showing otherwise will convince me that J.P. Morgan and Bank of America aren't betting depositor funds on Stocks, Commodities, and Derivatives...

These banks simply don't have enough "Investor" accounts to cover the gargantuan bets they've placed in these markets!!!
 Quoting: Saddletramp


True enough. I remember watching that 40 minute piece on Brooksley Born a couple years ago where she warned regulators and congress repeatedly about the systemic risk of an unregulated derivatives market.

I think FDR enacted Glass-Steagall during the first great depression in an effort to curb such banking activities that were tagged with causing many of the same problems at the time.

But to me, it just speaks volumes of how our government and corporate structure has hallowed out the real economy. We went from a production powerhouse after WWII exporting far more than we imported to a nation that consumes far more than we export, in fact exporting debt to pay for our consumption.

For banks to operate under traditional banking standards they need an organic base of depositors to make loans into a growing, producing economy. Since that real growth disappeared sometime in the mid 80's the banks have relied on exponentially increasing leverage or financing to maintain profits and market share.

The transition from formal lending houses to one of speculative trading firms using depositors money, with implicit government guarantees for bailouts should their bets go sour (TARP) has been an evolutionary process in line with our degrading economy.

It shows we are in the end stages of our superpower status transitioning to more of a third world banana republic relying on debt and bailouts to maintain our level of consumption - standard of living.

$0.02

.
 Quoting: Anonymous Coward 961432


I'm in complete agreement with that...

But people should understand, you are still afforded many of these protections with community & regional banks (Though I have no doubt if the SHTF the FDIC would quickly put investor status on you rather than depositor status even at these banks)

The Nationals & Multi-Nationals are now SO BIG, they are in an entirely different classification of Financial Institution...they are essentially treated like they are part of the government.
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."

"We don't rent pigs!"
Anonymous Coward
User ID: 961432
United States
03/20/2013 09:51 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
The Nationals & Multi-Nationals are now SO BIG, they are in an entirely different classification of Financial Institution...they are essentially treated like they are part of the government.
 Quoting: Saddletramp


For sure, people say the government should do something! Well I agree the first thing the government should do is allow the TBTF banks to fail, liquidate their mal-invested debt and break them all up, making any real assets they might have available to smaller banks.

Break em up.

.
Anonymous Coward
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03/20/2013 10:05 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Investors are insured-----> SIPC
 Quoting: Anonymous Coward 36347272

And you don't have SIPC on your account/investment at the bank, you have FDIC, which does not protect investors!
 Quoting: Saddletramp


Wrong, I have SIPC!

But, I fully understand, the whole fkn thing is illusionary. We're totally fucked, and no one can do a fkn thing about it.

Unless of course you have any bright ideas!?!?
Anonymous Coward
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South Africa
03/20/2013 10:08 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Bankers are guaranteed profits, that's why they buy the politicians.

Of course, for them to get paid handsomely if at all, you have to pay for their losses.

You will not win playing their game with them.
As long as they keep you sending in your money you will never be able to mount any defense that matters.
Anonymous Coward
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03/20/2013 10:25 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
If I'm getting half a percent interest, I'm a depositor.
Anonymous Coward
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03/20/2013 10:35 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Neither..

.. I'm with Jesus.
 Quoting: Anonymous Coward 1982145


BUT jesus is also a saver
Saddletramp  (OP)

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Puerto Rico
03/20/2013 10:44 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
If I'm getting half a percent interest, I'm a depositor.
 Quoting: Little Bee


Yeah that's kindof a shit return for an "Investment" isn't it?!?!?
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."

"We don't rent pigs!"
Mickeyblue
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United States
03/20/2013 10:44 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
The court has already ruled that our deposaits can be taken for their election and used for their reckless investments and we cannot get them back. As far as FDIC, back when the firt bank failed we only had 53B in money to over deposits and that first bank required 9B of that and then sometime later they borrowed 250B to cover deposits but we have trillions of dollars so do the math.
Mickeyblue
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03/20/2013 10:44 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
deposits
violet star
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03/20/2013 10:51 AM
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Re: Wholesale Changes In Banking On Our Doorstep: Are You A Depositor, Or Are You An Investor?!?!?
Neither..

.. I'm with Jesus.
 Quoting: Anonymous Coward 1982145


On the spacecraft?
On a clear night its easy to see - its really bright.
Are you the one flashing the lights when I ask for proof?





GLP