From the desk of
Bill Ramey
4/3/16
COMMENTARY
& OPINION
“Banking Crisis Explodes
in Europe on a Sunday Afternoon: Austria Orders First-Ever Bank “Bail-in”; Takes
Depositors Money for Failed Bank
Sunday,
April 10, 2016 14:57
by
U.S. Reporter
April
10, 2016, 12:00 Noon EDT: “In a move which could trigger a collapse of European
banks, Austria “Bailed-in” a failed bank;
seizing depositor money to pay bank debts, leaving citizens broke. This could be
the actual start of a complete systemic banking collapse in Europe as panicked citizens,
seeing their fellow depositors wiped out in one fell swoop, start pulling their
money out of the banking system. This has “DISASTER” written all over it.
Just
over a year ago, a black swan landed in the middle of Europe, when in what was then
dubbed a “Spectacular Development.” In Austria, the “bad bank” of failed Hypo Alpe
Adria – the Heta Asset Resolution AG – itself went from good to bad, with its creditors
forced into an involuntary “bail-in” following the “discovery” of a $8.5 billion
capital hole in its balance sheet primarily related to ongoing deterioration in
central and eastern European economies.
Austria
had previously nationalized Heta’s predecessor Hypo Alpe-Adria-Bank International
six years ago after it nearly collapsed under the bad loans it ran up when it grew
rapidly in the former Yugoslavia. Having burnt through €5.5 euros of taxpayers’
money to prop up Hypo Alpe, Finance Minister Hans Joerg Schelling ended support
in March 2015, triggering the FMA’s takeover.
This
was the first official proposed “Bail-In” of creditors, one that took place before
similar ad hoc balance sheet restructuring would take place in Greece and Portugal
in the coming months. Or rather, it wasn’t a fully executed “Bail-In” for the reason
that creditors fought it tooth and nail.
And
then today, following a decision by the Austrian Banking Regulator, the Finanzmarktaufsicht
or Financial Market Authority, Austria officially became the first European country
to use a new law under the framework imposed by Bank the European Recovery and Resolution
Directive to share losses of a failed bank with senior creditors as it slashed the
value of debt owed by Heta Asset Resolution AG.
The
highlights from the announcement: “Today, the Austrian Financial Market Authority
(FMA) in its function as the resolution authority pursuant to the Bank Recovery
and Resolution Act (BaSAG – Bundesgesetz über die Sanierung und Abwicklung von Banken)
has issued the key features for the further steps for the resolution of HETA ASSET
RESOLUTION AG. The most significant measures are:
•
a 100% bail-in for all subordinated liabilities,
•
a 53.98% bail-in, resulting in a 46.02% quota, for all eligible preferential liabilities,
•
the cancellation of all interest payments from 01.03.2015, when HETA was placed
into resolution pursuant to BaSAG,
•
as well as a harmonisation of the maturities of all eligible liabilities to 31.12.2023.
According
to the current resolution plan for HETA, the wind-down process should be concluded
by 2020, although the repayment of all claims as well as the legally binding conclusion
of all currently outstanding legal disputes will realistically only be concluded
by the end of 2023. Only at that point will it be possible to finally distribute
the assets and to liquidate the company.
As
part of the announcement, Austria has cut Heta’s senior liabilities by 54 percent
and extended the maturities of all eligible debt to Dec. 31, 2023 to help cover
an 8 billion-euro ($9.1 billion) hole in Heta’s balance sheet. It also wiped out
any residual equity and the junior liabilities as well as any supplementary capital.
The Finanzmarktaufsicht took control of Heta last year in the first application
of European Union rules designed to end taxpayer-funded bank rescues.
“While
the application of the new European recovery and resolution framework for banks
is uncharted territory in both legal and practical terms, we are on target with
the resolution of Heta,” the FMA’s co-chiefs, Helmut Ettl and Klaus Kumpfmueller,
said in the statement. “Orderly resolution is more advantageous than insolvency
proceedings.”
As
Bloomberg writes, dealing with failing banks remains a thorny issue in the EU more
than seven years after the collapse of Lehman Brothers Holdings Inc. Rescues in
Portugal, Greece and Italy carried out before new rules came into force in those
countries prompted protests over unequal or arbitrary creditor treatment. The EU’s
untested Bank Recovery and Resolution Directive, now in force across the 28-nation
bloc, provides rules and tools, including the so-called bail in, to make sure creditors
share the burden.
Creditors
were not happy, and Heta became a battleground of what the first BRRD implementation
would look like. “At the heart of the issue is 11 billion euros of Heta’s debt that’s
guaranteed by the province of Carinthia, which owned Heta’s predecessor until 2007.
Those guarantees blunt the intent of the new rules because they mean the losses
imposed on bondholders become a claim on Carinthia, which says it can’t pay them.
Sunday’s haircut means the province faces claims of about 6.4 billion euros, the
FMA said.”
Carinthia’s
attempt to neutralize the guarantees by buying up the bonds at a discount was rejected
by bondholders led by Commerzbank AG and Pacific Investment Management Co. last
month. The creditors, who say that Austria should pay up if Carinthia can’t, also
sued in a German court, arguing the BRRD’s rules don’t apply to Heta.
The
announcement ushers in the next, and even more contentious phase of creditor negotiations:
after initially ruling out a second offer, Austrian officials this week smoothed
the way for new negotiations to avoid years of litigation. Gaby Schaunig, Carinthia’s
finance secretary, said she will review a recent creditor proposal and that “any
out-of-court solution is better than the legal route.”
According
to Bloomberg, some of the creditors are planning to make an offer to Austria that
would result in a payout of 92 cents on the euro, a person familiar with the bid
said Saturday. It’s unclear how many creditors support the offer. On Tuesday, representatives
for both sides will also meet in London for talks, according to a report in Der
Standard. Many creditors have rejected any haircut as an option over concerns how
such an example could impact their investments in comparably impaired financial
companies. Others are more willing to negotiate.
Some
creditors had already challenged the FMA’s decision to apply European bank resolution
rules to Heta. Answering the objections, the FMA said the wind-down remains “fully
binding,” adding that creditors are now free to appeal to Austria’s federal administrative
court: “Challenges may be submitted to the FMA against the emergency administrative
decision of 10.4.2016, which sets out the significant resolution actions under BaSAG,
within three months. If applicable, the FMA will initiate ordinary administrative
proceedings, will recognize and examine the submitted challenges and will then issue
an administrative decision in relation to the challenge procedure.”
Changes,
if any, to today’s decision will likely take years to pass through the Austrian
court system. In the meantime, the precedent has been set and we expect many more
banks to follow suit in “bailing in” their senior debt creditors, and ultimately
– if there is not enough value to satisfy claims – depositors.
Putting
this is layman’s terms, a bank in Austria named Hypo Alpe Adria, failed. It was
taken over by an authority to deal with such failures, that authority being named
Heta Asset Resolution AG. But the bank’s failure was so massive, it wrecked Heta
Asset Resolution AG too!
There
are stockholders in Heta Asset Resolution AG including Depositors. The stockholders
are “preferred” creditors, and Depositors are “subordinated” creditors. The stockholders today found out that they will
only see 46 cents on the dollar- AND WILL RECEIVE THAT THROUGH STOCK IN THE FAILED
COMPANY! Depositors found out today, they
likely will get: NOTHING.
This
is how Europe deals with bank failures under laws passed after the Lehman Brothers
collapse in 2007-08. THE SAME RULES ALSO
NOW APPLY INSIDE THE UNITED STATES!
Think
about that for a moment. All the money you
have saved in your retirement accounts IRA/401-K and the like… wiped out in one
fell swoop. FDIC Insurance… no more. This
is the new game. And your life’s work and
hard-earned savings are the prize.
The
fact that such a thing was announced on a SUNDAY AFTERNOON is astonishing; governments
NEVER do things like this. Why a Sunday? Because they know this is going to cause
massive turmoil as people all over Europe rush to take their money out of banks
starting tomorrow, and Bank Stocks utterly PLUMMET as stockholders see they are
no longer protected as “creditors” to Banks.
This
could be the actual start of a complete systemic banking collapse in Europe as panicked
citizens, seeing their fellow depositors wiped out in one fell swoop, start pulling
their money out of the banking system. This has “DISASTER” written all over it.
No
longer “here it comes”, folks… here it IS. You were warned, repeatedly!
Ramey comments:
What
a crock of bureaucratic and banking BS aimed at exonerating the guilty parties. In layman's language, what is needed is public
hangings of, not only the bankers that have betrayed the public trust, but the politicians
that have covered for them. This is piracy,
clean and simple, and should be handled as such.
April 10, 2016
US Scientist Confirms Russian Fears Of New Planet, Warns Will Affect Earth
Soon
By: Sorcha Faal, and as reported to her Western Subscribers
A new appendix added earlier today to the massive
Aerospace Defence Forces (ADF) report relating to the mysterious new planet confirmed
to be in the outer reaches of our solar system says that an American scientist has
confirmed many of its findings and further stated that our Earth is now under direct
threat as this celestial body could begin to harm our Earth this month.
As we had previously reported (Mysterious
Planet Ejected From Black Hole At Center Of Galaxy Warned Could Soon Impact Earth),
the ADF has become increasingly “alarmed” at the threat this mysterious new
planet poses to Earth from the time it was first discovered by the National Aeronautics
and Space Administration (NASA) in 2005 to the final confirmation of its existence
by California Institute of Technology (Caltech) scientists in January.
Adding to Russia’s fears about this mysterious
planet was the secret NASA information about it supplied to Federation authorities
by NASA computer expert Lloyd Albright (in 1999) and US astronaut and Navy Captain
Lisa Nowak (in 2007) that was so fearful Albright hid himself in cave and Nowak
told her Russian interviewers “they won’t tell anyone the truth” and “I’ve
never believed the Bible, but now I have to”
The new appendix added today, this report says,
comes from Daniel Whitmire, PhD, retired Professor of Physics from the University
of Louisiana, who in a scientific paper written for Oxford University’s Monthly
Notices of the Royal Astronomical Society claims that this mysterious planet, he
calls by the ancient Sumerian name of Nibiru, has “all but arrived
to our neck of the woods” and that the destruction brought about by its “gravitational
trickery” will take place this month, as it’s done numerous times before, every
time it passed us by.
Doctor-scientist Whitmire and his colleague,
John Matese, first published research on the connection between this mysterious
planet and mass extinctions on Earth in the journal Nature in 1985, this report
continues, and which, this past January, Caltech researchers estimated its size
as being about 10 times the mass of Earth.
However, this report notes, though both Doctor-scientist Whitmire and Caltech
researchers agree that this mysterious new planet now exists in our solar system,
they disagree on its present orbit.
ADF scientists in their report though note
that the “orbital mechanics” of this mysterious planet are less to be considered
than the “electromagnetically caused chaos” it will represent in our solar
system—which on Earth, they say, could be manifested in violent and increasing earthquakes,
massive volcanic explosions, and weather disasters caused by changes (increase/decrease
of sun spots) to our Sun, not to mention the hundreds, if not thousands, of asteroids
that could impact Earth.
Important to note, this report appendix concludes,
is that unlike Western scientists who adhere to the non-proven gravitational theory
of our universe, Russian scientists ascribe to the electrical theory creating for
these two bodies of experts an “incompatible gulf” of knowledge that cannot
ever be bridged.
April 10, 2016 © EU and US all rights reserved. Permission to use this report in its entirety
is granted under the condition it is linked back to its original source at WhatDoesItMean.Com.
Freebase content licensed under CC-BY and GFDL.
ALERT
Sloppy Cover-up! Yellowstone’s Supervolcano on the
Brink of Unleashing Utter Destruction
Friday, April 8, 2016 9:03
Shocking update from Tom Lupshu:
With alarming changes occurring on a daily basis at Yellowstone they have now literally
cut out all possible public knowledge to the Earthquake data not only at Yellowstone
but all Earthquake data. No data will be released in real time any longer. Even
if it has a time stamp it will not be reliable data. The game is now Rigged! They
are using this method to completely shut down all alternative media and third party
bloggers and reporters. Only Individuals with their own equipment underground will
be able to get real time data.
We have all known for quite some
time that the USGS was censoring Earthquake data but now they are officially taking
it to the next level. Information leaked from a meeting has surfaced and now any
and all Earthquake data will be controlled. This is not occurring for no reason
either.
Big changes are coming and they
all know it because they are witnessing it first hand daily.
Stay At The Ready…
Ramey
comment:
Is the prophetic message of "Total
destruction of America" starting to make more sense?
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