The Biggest Bank Robbery of All

Time
The financial system is full of myths, lies and uncertainties.
The German Dr. Ren Zeyer is one of the most outspoken critics
and at the same time an insider with a huge knowledge.
By Felix Abt*

One of Zeyer's best-sellers

The bestseller-author and publicist explains why the markets and the politicians have failed.
And he analyzes the unpleasant consequences for Russia.

He called the financial crisis of 2008 the biggest bank robbery of all time. The German
newspaper Sddeutsche Zeitung calls him the most astute polemicist of Switzerland. His
books reach the bestseller-list of Spiegel, and not only Swiss bankers hate him.
The author and journalist Ren Zeyer is an insider who simply switched sides. For many years
he worked as a consultant, ghost writer and communication wizard for many Swiss banks. That
gives him an in-depth-knowledge of what bankers are able to do. And he hasnt got a high

opinion of them: Most of the bankers have no clue what they are doing. Private bankers are
just sellers of products they dont understand, and in reality nobody can explain what a
Collateralized Debt Obligation squared three is good for. Except that by selling this kind of
financial weapons of mass destruction you can make a huge profit.

When the bankruptcy of the US-investment bank Lehman Brothers caused heavy losses in the
nest egg of thousands of small investors in Switzerland, Zeyer became the spokesman of an
association of more than thousand Swiss victims and started what he calls stir the war drum
and took it on with Credit Suisse, the big Swiss bank that sold later worthless Lehman-papers
to its clients. Banks hate nothing more then bad press. They calculate their reputation loss

and are willing to pay to stop that, Zeyer remembers. So Credit Suisse paid back more than
150 million Swiss francs to these victims. Im rather proud of that, Zeyer says, I only had
words and public attention on my side and as a little fly I made the big elephant Credit Suisse
jump.
Zeyer has two big advantages in his battle as the most outspoken bank critic. He knows the
terminology, he calls that banglish, and he can simplify it so that everybody understands.
You just need some know-how and the clear view, he explains, after all economy isnt
rocket science, its rather trivial. So for example what are derivatives? They are very

complicated and use algorithms hardly anyone understands. But they have one thing in
common: they are betting slips. With derivatives, not one single cent of new value is created.
Its a zero-sum game. What one wins, the other one loses. Therefore its pure gambling.
And after him, the actual financial crisis and in first place the Euro-crisis is just the
consequence of the financial turmoil of 2008. Almost four years ago the total meltdown of the
world financial system was avoided by pumping trillions of tax-payers money into the banks
which were robbed not from outside, but from inside. Now the nations themselves are at the
brink of bankruptsy, theres no longer a lender of the last resort, he adds.

Zeyer, a German who lives in Zurich, likes to cross swords with bankers on talk shows, but it
gets harder and harder to find a banker who wants to debate with me in public, he laughs.
Therefore he publishes beside books almost daily a column in a Swiss Internet-journal. For
many bankers a must-read. Whys that?

There are more than 600 trillion USD in derivatives floating around like a black cloud over our
heads. And almost as many words are written or spoken about the current financial crisis,

Zeyer explains. And because after him economy isnt a science, you find easily a luminary who
explains e.g. that Greece has to leave the Euro immediately, and if not, all hell will break loose
and another financial specialist who says the contrary. And there arent even answers to
most basic questions, like: Why isnt there a sky-rocketing inflation after pouring trillions of
freshly printed money into the financial markets? And how is it possible that the most important

raw material of the world, money, is available for free?

From the current crisis he draws the conclusion that the self-confidence of most of the
economists that economy follows laws and rules and that it can be analyzed with algorithms
and influenced with the right tools like in the natural sciences is obsolete, its mostly trial and
error, like in the beginnings of scientific investigations.

His outlook for the Euro zone is rather pessimistic. He predicts after the failure of the bankers
now a failure of the politicians who cant find a solution for the salvation of the Euro, which he
calls a bad design and a miscarriage. This could have a huge impact on Russia also

because the European community is the biggest trading partner. On the other hand, the
special situation of the Russian financial system with Sberbank as by far the biggest and
mostly state-owned player, rather low internal and external debts gives Russia interestingly
enough a stable and powerful position.
But as far as I can see, he adds, many Russian economists underestimate negligently the
real dimension of the European crisis. The Euro is a dead man walking. Within two years
Europe couldnt solve the rather small problem of a rather unimportant country like Greece,

and wasting time in a crisis is deadly, the price Europe has to pay for that will be really high.
After Spain, Italy and even France are now in a critical situation and there will be no easy way
out. Instead of a good solution theres only the choice between bad and worse.
Its not only a crisis of the so-called free market system, its also a crisis of the whole political
system. That can lead easily to civil war-like situations, and Im not exaggerating, says
Zeyer. So whats his forecast for the near future? Every analyst knows that the perfect
answer is: tomorrow it will rain if not, the sun shines. This way you are always on the safe
side, he laughs. But Im not an analyst. Therefore I say, if I were a Russian bank I wouldnt
invest a single Cent in Eurobonds as long as I cant buy a CDS that works. And dont forget

that investors now are asked to accept voluntarily a haircut which simply means: your money
is gone. And if I were a Russian company I would change my earnings in Euro as soon as
possible into Dollars, Swiss francs or Rubel.
Between Europe and Russia we stand in front of a tide of changing times, Zeyer concludes.
Only a couple of years ago Europe seemed to be stable and prosperous while Russia was in
shambles. Many so-called experts travelled to Russia and gave good advice how things should
be done. And now they look with envy at Russia and have to admit that they cant even solve

their own home-made problems. The times they are a-changin, arent they?
*****
*Felix Abt, the author of this article is a businessman, co-founder and shareholder of several
companies who lived and worked in nine countries on three continents, including in North
Korea. He currently lives in Vietnam
(This article was first published in Russian language in the June
Russian business magazine RBC, here:

http://rbcdaily.ru/magazine/business/562949988487554)

2012

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