by Ted Bauman
The Sovereign Investor
Imagine that, just before you read this article, you received an email from a financial institution where you have a substantial trading account…
The email said other accounts had been hacked, but not yours. Nevertheless, the financial institution was deducting 36% of your holdings and replacing them with shares in its parent company — shares that you can’t trade. You just have to hold them and hope for the best.
How would you feel? How do you feel just imagining it?
Probably a lot worse than the clients of Cypriot banks, who had to forfeit between 6.75% and 9.9% of their account holdings as part of the infamous “bail-in” of 2013. Besides the fact that the percentage is much larger, your bail-in was totally unexpected. Nobody saw it coming.