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Why today's Cyprus bailout could be the start of the next financial crisis

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© Petros Karadjlas/AP
Line up and get your euros while you can!
It is a bad day to have your money deposited in a bank in the Mediterranean island nation of Cyprus. And it may just mean some bad days ahead for the rest of us.

Early Saturday, the nation reached an agreement with international lenders for bailout help. Part of the agreement: Bank depositors with more than 100,000 euros ($131,000) in their accounts will take a 9.9 percent haircut. Even those with less in savings will see their accounts reduced by 6.75 percent. That's right: Anyone with money in a Cypriot bank will have significantly less money when the banks open for business Tuesday than they did on Friday. Cypriots have reacted with this perfectly rational reaction: lining up at ATM machines to try to get as much money out in the form of cash before the money they have in their accounts is reduced.

What makes this important for people who couldn't locate Cyprus on a map is this: It is one of the 17 nations using the euro currency, the fact that it's a lot closer to Beirut than to Paris notwithstanding. European officials have spent the past six years moving heaven and earth to ensure that no depositors with the continent's banks suffer a loss despite the financial strains the banks have been under.

Most dramatically, the Irish government in the fall of 2008 backstopped its banks, putting its public finances through a wringer. Even as the Greek economy has fallen into depression and Spanish bank losses on real estate have reached dangerous levels, the European Central Bank and the continent's government have ensured that bank deposits were safe. They have feared that if depositors in any country were forced to take losses, it would spark a destructive cascade of withdrawals across Europe.

So is Cyprus different?

Snakes in Suits

Cyprus bank levy: UK to compensate troops and government workers

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George Osborne: "People who are doing their duty for our country in Cyprus will be protected from this Cypriot bank tax"
The UK will compensate any British troops in Cyprus hit by plans to introduce a bank levy as part of a £9bn EU bailout, the chancellor has said.

British government workers would also be protected, George Osborne said.

Under the bailout, account holders in Cyprus with up to 100,000 euros would pay a one-off levy of 6.75%; higher deposits would suffer a 9.9% levy.

The move could affect many of the 3,000 UK military personnel in Cyprus, and up to an estimated 25,000 expatriates.

Safe

Watch out: Your 401(k) is being targeted

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© iStockphoto/ThinkStock
While attending a terrific symposium recently on the retirement challenges women face, I came away with a stark realization: Washington has a bull's-eye on every American's 401(k).

The Women's Institute for a Secure Retirement (known as WISER), a nonprofit dedicated to improve the long-term financial security of women, had brought together administration officials, the savviest Capitol Hill insiders and retirement analysts working at financial services firms and think tanks.

Ignoring the Retirement Crisis

Speaker after speaker described how so many Americans - women in particular - lack the financial resources needed to retire, what Sen. Tom Harkin, a Democrat from Iowa, called "one of the most underreported crises" in America. We heard scary statistics, including that 48 percent of Americans have less than $10,000 in savings.

Pistol

Growing number of states eye bills to defy federal gun laws

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Shortly after voters in Colorado and Washington State approved measures that legalized the recreational use of marijuana, President Obama told Barbara Walters that his Justice Department would not prosecute pot users in these states.

"We've got bigger fish to fry," Obama said.

Although the state measures defy federal law, it appears Barack Obama is giving each state a pass on this issue.

But, will Obama also respect states that pass legislation in defiance of federal law when it comes to firearms?

On March 12 and 14, the Senate Judiciary Committee passed both Sen. Charles Schumer's (D-NY) "Fix Gun Checks Act," which would criminalize all private firearm sales and Sen. Dianne Feinstein's (D-CA) "Assault Weapons Ban."

These bills have a long way to go before they become law - if they ever do - but states across the nation are introducing their own legislation to preemptively defeat any new federal gun laws.

Dollar Gold

Depardieu denies he quit 'sad France' for tax reasons

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© AP
French actor Gerard Depardieu has given his mother country a verbal swipe
Calling France a "sad" place led by an uninspired government where people are "fed up", actor Gerard Depardieu dealt his former country a healthy dose of criticism Saturday, but denied he left for tax reasons.

In an interview with local Belgian television channel Notele filmed on Saturday and to be uploaded onto the site www.notele.be, the 63-year-old star of "Cyrano de Bergerac" and "Green Card" observed that the problem with France is "especially the lack of energy".

"France is sad and I think the French are fed up. The lack of conviction... It seems that the government doesn't know how to do its job."

About French President Francois Hollande, he said: "It's his first time, he never held a ministerial post. He just had the Correze, which is in deficit," referring to the central in-the-sticks region where Hollande made his early political career.

Depardieu sparked bemused annoyment from the French and ire from politicians when he accepted President Vladimir Putin's offer of Russian citizenship and a new passport late last year in a move that was widely perceived to be a refusal to pay taxes.

Eye 2

Iraq deaths: 1,455,590

Iraq Deaths Estimator

The number is shocking and sobering. It is at least 10 times greater than most estimates cited in the US media, yet it is based on a scientific study of violent Iraqi deaths caused by the U.S.-led invasion of March 2003.

Remind visitors to your site of the awful human costs of continued war by posting the Iraqi Death Estimator on your website.

Whistle

Whistleblower accuses government of neglecting suicidal veterans and suppressing science

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© Wikipedia
A leading epidemiologist says that the Department of Veterans Affairs, charged with caring for millions who have served their country, neglected assisting suicidal veterans who participated in longitudinal studies and never released important research data on the exposure of Gulf War, Iraq and Afghanistan veterans to toxins, inhalational hazards and burn pits.

Dr. Steven S. Coughlin, a former principal investigator at the VA's Office of Public Health, is testifying before Congress today that supervisors threatened to remove him from a study when he asked for mental health providers to contact the suicidal veterans. Some veterans were eventually contacted, but others were not, according to Coughlin.

"I urge this Committee to direct VA to immediately identify procedures to ensure that veterans who participate in VA large-scale epidemiologic studies receive appropriate follow-up care so that this tragedy is not repeated," he said in testimony provided to me.

The hearing, held before an investigative and oversight panel of the House Committee on Veterans' Affairs, is taking a broad look at the care provided for Gulf War veterans. In addition to Coughlin, among those testifying are experts on Gulf War Illness, a chronic multi-symptom condition that is characterized by headaches, fatigue, widespread pain, gastrointestinal problems and cognitive difficulties. It is estimated to affect as many as 200,000 Gulf War veterans, and critics of the VA argue that the agency has focused on stress-related causes for the illness instead of wartime environmental exposures.

In a statement, the VA said that it "has a decades-long history of conducting world-class research studies that meet accepted and rigorous scientific standards. Research on the health of Gulf War Veterans has been and continues to be a priority for VA. The Department depends on this research to inform our decisions and guide our efforts in caring for Gulf War Veterans. All allegations of malfeasance are taken seriously and are investigated fully."

Dollars

U.S. providing $114 million in aid to Syrian rebels

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The Obama administration is providing the Syrian opposition with $114 million in aid, more than previously revealed, to help topple Bashar Assad, U.S. Ambassador Robert Ford told Congress on Wednesday.

Ford briefed House appropriators in a closed-door hearing following Secretary of State John Kerry's announcement last month that America would provide $60 million in direct food and medicine assistance to the Syrian Opposition Coalition. The aid, Ford said, is in addition to $54 million in communications gear and other aid already offered to "disparate Syrian opposition groups across the country to build a network of ethnically and religiously diverse civilian activists."

"Preserving national unity and laying the foundation for a free Syria that respects the rights of all its citizens is essential if we are to secure a Syria that helps rather than threatens stability in the heart of the Middle East," Ford told the committee, according to his opening statement, which was obtained by The Hill. "Collapse and fragmentation of the Syrian state or its takeover by extremists would worsen the risks associated with chemical weapons security, terrorist bases, and new refugee flows inundating neighboring states. Those outcomes would directly threaten our interests."

Bad Guys

At least 50 French citizens 'waging jihad in Syria'

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© AFP Photo
A leading French anti-terror judge has told French media he is worried about the implication of large numbers of French Muslims heading to Syria to fight a holy war against the Damascus regime.

As many as 80 French citizens are fighting with rebel groups in Syria, according to a report in French daily Le Figaro published Wednesday.

The number is far higher than the "handful" said by French Interior Minister Manuel Valls to be operating alongside Islamists in Mali, or the estimated number of Frenchmen who went to Bosnia, Iraq or Afghanistan to wage "jihad", or Muslim holy war.

Le Figaro quoted two such fighters. One, named only as Djamel, said he was fighting the "infamy" of the Bashar al Assad regime in a conflict that the United Nations estimates has claimed more than 70,000 lives in two years.

The second, Abdel Rahman Ayachi, had "returned to the land of his ancestors to spread Islam ahead of the anticipated collapse of the [Assad] regime," the newspaper said.

Radar

Rebels use China missiles to shoot down Syrian army helicopters

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Chinese-made missiles have been used to shoot down two Syrian army helicopters, state media reported on Thursday, adding their performance could boost the international sales appeal of Chinese weapons.

The Global Times, a tabloid with close links to the ruling Communist Party, said a pair of videos posted on the internet by Free Syrian Army rebels showed two Mi-8/17 helicopters being shot down by Chinese shoulder-launched missiles.

The paper said it was not known how the rebels, who have been fighting to topple the Syrian government of President Bashar al-Assad for the past two years, obtained the missiles.

But it said the success of the FN-6 weapons, which it said were developed by China Aerospace Science and Technology Corporation, could lift the overall image of China's defence products.

"In regards to export prospects, Chinese weapons need to engage in more conflicts to prove their value," Daniel Tong, identified as the founder of the Chinese Military Aviation website, told the newspaper.