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Fed Governor Stein Warns When A TBTF Bank Fails, Depositors Will Be Cyprus'ed

 It took quite a bit of rhetoric by other very serious people to talk down his comments and give the impression that the S&P is not about 50% overvalued. Today, Stein has managed to stick his foot in his mouth for the second time in a row, and do what virtually nobody in the status quo is capable of: tell the truth.

In a speech titled "Regulating Large Financial Institutions" Stein made something very clear: if and when a TBTF fails, and since this time is not different, and a failure is only a matter of time, depositors will lose everything (courtesy of some $300 trillion in gross unnetted liabilities which once there is a counterparty chain failure, suddenly become very much net and immediately marginable - a drain of cash), which now that Cyprus is the template, is to be expected. Not only that but Stein makes it all too clear that part of the Dodd-Frank resolution authority guidelines, a bailout is no longer an option.

1 Comments in Response to

Comment by Petunia Skrebbles
Entered on:

Great.  I am glad he said it and not some conspiracy theorist who is proving to be right about everything they said was going to happen for the past 10 years.   SO HERE IS HOW YOU DEAL WITH THIS.

In talking with my family owned small bank,  they said they would not comply with any instructions that were theft or illegal.  So PULL YOUR MONEY FROM THE BIG INTERNATIONAL BANKS, CHASE, B OF A, CITIBANK, WELLS FARGO, ETC. CANCEL ALL CREDIT CARS WITH THOSE SAME BANKS  AND DEPOSIT THE FUNDS AND OBTAIN NEW CREDIT CARS FROM SMALL FAMILY OWNED BANKS OR STATE BANKS.   The big banks will go down and the small banks will survive on our side, and that will be the end of that.

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