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Monday, 12 December 2011

Rumor Of Swedbank Failure Results In Second Latvian Bank Run In One Month

Two weeks ago we presented pictures of a bank run in Latvia after one local bank had been found to do just what MF Global is alleged of doing - gross commingling. To wit: "If anyone is wondering why the collapse of MF Global after the discovery of its commingling and theft of client funds was the single worst thing that could happen to market confidence, then look no further than the small Baltic country of Latvia where precisely what Jon Corzine's firm did to its clients, has happened at the bank level. Businessweek reports: "Lithuanian prosecutors issued an arrest warrant for Vladimir Antonov and Raimondas Baranauskas who are former shareholders of Bankas Snoras AB. Both men are suspected of embezzlement and document forgery, the Prosecutor General said in a statement on its website today. Baranauskas is also suspected of accounting fraud and abuse of authority, it said." Kinda like Jon Corzine, if not by the actual authorities, then by everybody else....Depositors can withdraw 50 lati a day beginning today for the rest of the week, said Krumane at a pressconference." At today's rate this is about $95. Which is why what happened next, as shown in the pictures below, was to be completely expected, and is a perfect indicator of the collapse in liquidity and credibility of our own system where commingling, unlike in Latvia, goes unpunished." Sure enough, as nothing has changed, either in Latvia or the US, things just got worse. Following a rumor in Latvia that the large Swedish bank Swedbank is about to collapse, Latvia has just experienced its second bank run in under a month...more

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