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'Too big to fail' suddenly becomes 'too crooked to save'

Section: Daily Dispatches

Bloomberg: Saving Cyprus Means Nobody Safe as Europe Breaks More Taboos

... Europe's crisis fighters are spreading the net wider as taxpayers across northern Europe balk at the cost of rescuing their cash-strapped neighbors. That shows there may be few taboos left, said Charles Goodhart, emeritus professor at the London School of Economics.

"They will swear black and blue that Cyprus is a unique case but so was Greece," he said in a telephone interview. "You can talk about the inviolability of insured deposits but the problem now is would anyone believe you."

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Reuters: After Cyprus, Euro Zone Faces Tough Bank Regime, Eurogroup Head Says

"What we've done last night is what I call pushing back the risks," Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup of euro zone finance ministers, told Reuters and the Financial Times hours after the Cyprus deal was struck.

"If there is a risk in a bank, our first question should be: 'OK, what are you in the bank going to do about that? What can you do to recapitalize yourself?' If the bank can't do it, then we'll talk to the shareholders and the bondholders. We'll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders," he said.

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Sprott Asset Management's John Embry interviewed by King World News

"The problem that goes unremarked, because nobody wants to talk about it, is the amount of debt in the world. Egon von Greyerz has referred to it on several occasions, and it must be roughly $200 trillion. This is in a world economy that would be about $70 trillion per year. When you superimpose on that another at least $1 quadrillion of derivatives, many of which are seriously mispriced and are just riddling the banking system, there are no solutions to this."

For the complete interview:

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Mining entrepreneur and gold trader Jim Sinclair interviewed by King World News

"Let's just suggest that an entity has a significant amount of money in two or three different banks well above the basic guarantee. That entity is going look to move that money out of the banks and into something solid. They don't want anybody taking all of that money, or even a haircut of it, because the banks in fact have not run their business correctly.

"What happened today is that one bank was not saved because it was 'too crooked to save.' Now how can you rely on 'too big to fail' when we know all of the big banks are crooked? How do we know that 'too big to fail' cannot be changed to 'too crooked to save?'"

For the complete interview:


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