Cyprus surprise - Cypriot depositors to take a 'haircut'

N1AK

spacey2012 wrote: »

It is not a boat, it is people money they worked for.
Stop preaching in to stupidity.
Your reputation as the board mouthpiece for the EU is getting a bit tiresome.

I'm flattered that you think I have enough recognition to have a reputation for anything on here. You don't; which as your only noticeable qualities in the last few posts has been childish postings and a complete absence of considered thought is probably fortuitous.

Someone works hard to buy a boat as well; they and other assets don't grow on trees :rotfl:

ChiefGrasscutter

But if you had the boat issured for the full sum then you would tell the salvage Co' where to stick it. - or tell them to ring the insurance company and argue the percentage with them more likely! (This is actually how it does work for large ships)

This point may strangely be relevent for the bondholders in the Cypriot banks who it seems are not being 'haircutted'. I postulated yesterday that this was because they were mostly French and German and no, we couldn't have that could we, depsite savings accounts ranking higher in terms of security than bondholders.

However it could also be worry that the major EU institutions holding the bonds would have been insured against default via the CDO market and forcing that market to pay out on bank bond default is certainly something to be avoided at all costs. It all becomes more complex deciding when is a bond partial restructing/writedown is a 'default' and when it is not - we have been down that road before with the Greek bank bonds.

Further into the mix is that Cyprus is in quite a strategic location for the Middle East both from intelligence eavesdropping point of view and for actual military bases. Letting the Russians get too much of a toe hold on the place is rather undesirable.

IronWolf

N1AK wrote: »

Did you learn to debate on the internet because puerility of that level certainly implies it. By that same, mentally deficient, logic tax is stealing because people earned it :rotfl:

If you had a £20,000 boat which was starting to sink (and you couldn't stop it) then someone came along and offered to save it if you gave them 10% of its value you'd be incredibly stupid to say no and call it theft.

If someone came along, shot holes all over my boat, then demanded 10% to save it from sinking, I'd be pretty p*ssed yes.

Generali

ILW wrote: »

If your government had sold you the boat with a cast iron assurance that it would not sink, then you may feel robbed.

It appears that the boat not the promise is cast iron.

StevieJ

It is not a lot different than low interest rates and relatively high inflation.

Graham_Devon

This is merely falling down into differences of opinion now. A lot of it stemming from peoples position on the EU itself.

Clearly some people think the Cypriots somehow deserve it as part of their place in the crisis. I can't agree with that. Many of these are just normal folk. Decisions have been made on their behalf just like decisions are made on our behalf here.

I don't really think it's fair to state that the Cypriot people themselves are asking for the bailout or that the Cypriot people themselves have created this mess.

This mess has been created by the EU and how the EU has functioned. It's being cleared up by the EU, and (solely in my opinion) they are going about it in a dictator type of way which has stunned many.

I'm not sure Cypriots themslves are to blame for putting their money in the bank on the high street and not investigating it thoroughly beforehand. Considering the amount of fraud that's gone on under the noses of the regulators, it's nigh on stupidity to expect the bloke in the street to have examined the risks before deciding to use the high street bank local to him to save some money.

This isn't just effecting savings accounts either. It's effecting current accounts too. Any normal accounts with a balance will see money withdrawn. So if someone has just €200 in a current account, €13.50 will be removed.

I cannot, and will not stand on the side of the EU on this one and pretend that this is somehow OK, or somehow the Cypriots have a voice and asked for this themselves.

Greece didn't get treated like this. Italy didn't get treated like this. Spain didn't get treated like this. Ireland didn't get treated like this.

Sure, you could ask where the money comes from if the Cypriots don't pay. But my answer would be "the same place that the money came from for Greece, Spain and Ireland". If that money has run out, then time to end the EU project. It's not the fault of the Cypriots. That's the fault of the EU.

Graham_Devon

StevieJ wrote: »

It is not a lot different than low interest rates and relatively high inflation.

Other than being different in every single way possible....no.

ILW

StevieJ wrote: »

It is not a lot different than low interest rates and relatively high inflation.

The difference is that this was previously illegal (still)? and done whilst the banks are closed.

ruggedtoast

Aside from the Cypriot people, who I feel very sorry for; there sure are going to be a lot of angry Russian gangsters walking around Cyprus at the moment.

John_Pierpoint

This might turn out to be something more like "Lloyds Open Form" rescue.
Complete with "General Average" imposed on everyone sailing in the good ship Cyprus.

Average in Marine Insurance Terms is "an equitable apportionment among all the interested parties of such an expense or loss."

1. General Average stands apart for Marine Insurance. In order for General Average to be properly declared, 1) there must be an event which is beyond the shipowners control, which imperils the entire adventure; 2) there must be a voluntary sacrifice, 3) there must be something saved.

The voluntary sacrifice might be the jettison of certain cargo, the use of tugs, or salvors, or damage to the ship, be it, voluntary grounding, knowingly working the engines that will result in damages.
"General Average" requires all parties concerned in the maritime venture (Hull/Cargo/Freight/Bunkers) to contribute to make good the voluntary sacrifice. They share the expense in proportion to the 'value at risk" in the adventure.

http://en.wikipedia.org/wiki/Marine_insurance

http://en.wikipedia.org/wiki/Lloyd%27s_Open_Form

Perhaps as disinterested bystanders we in the UK could adjudicate in the case of cruise ship Cyprus hitting the rocks.

Be very worried that Captain Dave, when he was appointed did say "we are all in this together".