Winner Takes All: The Super-priority Status of Derivatives

Ellen Brown

Cyprus-style confiscation of depositor funds has been called the “new normal.” Bail-in policies are appearing in multiple countries directing failing TBTF banks to convert the funds of “unsecured creditors” into capital; and those creditors, it turns out, include ordinary depositors. Even “secured” creditors, including state and local governments, may be at risk. Derivatives have “super-priority” status in bankruptcy, and Dodd Frank precludes further taxpayer bailouts. In a big derivatives bust, there may be no collateral left for the creditors who are next in line.

Shock waves went around the world when the IMF, the EU, and the ECB not only approved but mandated the confiscation of depositor funds to “bail in” two bankrupt banks in Cyprus. A “bail in” is a quantum leap beyond a “bail out.” When governments are no longer willing to use taxpayer money to bail out banks that have gambled away their capital, the banks are now being instructed to “recapitalize” themselves by confiscating the funds of their creditors, turning debt into equity, or stock; and the “creditors” include the depositors who put their money in the bank thinking it was a secure place to store their savings.

The Cyprus bail-in was not a one-off emergency measure but was consistent with similar policies already in the works for the US, UK, EU, Canada, New Zealand, and Australia, as detailed in my earlier articles here and here. “Too big to fail” now trumps all. Rather than banks being put into bankruptcy to salvage the deposits of their customers, the customers will be put into bankruptcy to save the banks.


How Thatcher gave Pol Pot a hand

John Pilger


An undated photograph of the genocidal leader Pol Pot

[This article was originally published on 17 April 2000]

Almost two million Cambodians died as a result of Year Zero. John Pilger argues that, without the complicity of the US and Britain, it may never have happened.

On 17 April, it is 25 years since Pol Pot's Khmer Rouge entered Phnom Penh. In the calendar of fanaticism, this was Year Zero; as many as two million people, a fifth of Cambodia's population, were to die as a consequence. To mark the anniversary, the evil of Pol Pot will be recalled, almost as a ritual act for voyeurs of the politically dark and inexplicable. For the managers of western power, no true lessons will be drawn, because no connections will be made to them and to their predecessors, who were Pol Pot's Faustian partners. Yet, without the complicity of the west, Year Zero might never have happened, nor the threat of its return maintained for so long.

Declassified United States government documents leave little doubt that the secret and illegal bombing of then neutral Cambodia by President Richard Nixon and Henry Kissinger between 1969 and 1973 caused such widespread death and devastation that it was critical in Pol Pot's drive for power. "They are using damage caused by B52 strikes as the main theme of their propaganda," the CIA director of operations reported on 2 May 1973. "This approach has resulted in the successful recruitment of young men. Residents say the propaganda campaign has been effective with refugees in areas that have been subject to B52 strikes." In dropping the equivalent of five Hiroshimas on a peasant society, Nixon and Kissinger killed an estimated half a million people. Year Zero began, in effect, with them; the bombing was a catalyst for the rise of a small sectarian group, the Khmer Rouge, whose combination of Maoism and medievalism had no popular base.

After two and a half years in power, the Khmer Rouge was overthrown by the Vietnamese on Christmas Day, 1978. In the months and years that followed, the US and China and their allies, notably the Thatcher government, backed Pol Pot in exile in Thailand. He was the enemy of their enemy: Vietnam, whose liberation of Cambodia could never be recognised because it had come from the wrong side of the cold war. For the Americans, now backing Beijing against Moscow, there was also a score to be settled for their humiliation on the rooftops of Saigon.


The brutal face of neocolonialism in Afghanistan

Bill Van Auken

US Secretary of State John Kerry has made a series of public statements ostensibly in mourning for the 25-year-old Foreign Service officer Anne Smedinghoff—one of five Americans, including three soldiers, killed in a Taliban car bomb attack in Afghanistan’s southern province of Zabul on Saturday.

The death of someone so young is tragic, as it has been for nearly 2,200 American troops killed in 11 years of war and occupation. Yet Kerry’s remarks aim not so much at comforting grieving family members and friends, as at justifying and defending the war that cost this young woman’s life.

He said that the death presented “a stark contrast for all of the world to see between two very different sets of values.” On the one hand, he said, was “a brave American … determined to brighten the light of learning through books written in the native tongue of the students that she had never met, but whom she felt compelled to help,” while on the other, were “cowardly terrorists determined to bring darkness and death to total strangers.”

The same day that Anne Smedinghoff lost her life, a US airstrike killed at least 18 people, including 11 children ranging from a few months to eight years old. Six women were badly wounded in the attack. Kerry uttered not a word of sympathy for the loss of these young lives, nor for the parents left to grieve them. Needless to say, the death of 11 children received not one one-hundredth of the coverage given to that of the American diplomat in the US media, which, as always, is contemptuous of Afghan lives.


Health topic page on womens health Womens health our team of physicians Womens health breast cancer lumps heart disease Womens health information covers breast Cancer heart pregnancy womens cosmetic concerns Sexual health and mature women related conditions Facts on womens health female anatomy Womens general health and wellness The female reproductive system female hormones Diseases more common in women The mature woman post menopause Womens health dedicated to the best healthcare
buy viagra online