Cyprus surprise - Cypriot depositors to take a 'haircut'

antrobus

ILW wrote: »

I cannot see why they wanted all the poor insolvent countries in in the first place.

CLAPTON wrote: »

the EURO is part of the federalist political dream; it had little to do with reality or economics

in the 'good' times it didn't matter; now we have bad times and it does matter

What that man said.

I expect the Germans (or indeed the French etc for that matter) didn't realise how insolvent some countries were. Or would be once the SHTF.

BobQ wrote: »

Are you suggesting this was a relatively inconsequential small scale experiment prior to the real thing with Spain?

That's exactly what I believe the Sunday Telegraph is suggesting. Mind you, it's only a piece of gossip.

Thrugelmir

Graham_Devon wrote: »

She is. In that way she wants it done.

Then you need to understand German politics. Merkel does not have a majority. The opposition parties in parliament have said that they will vote down any attempt to directly bail Cyprus out. Merkel has no options but to play hard ball as has nothing to offer.

Mrs_Bones

I can't at this point see Merkel still being in power after the elections in Autumn. Hasn't every other leader in the euro-zone since the credit crunch been thrown out as soon as the people have had a chance to vote. Merkel has been the power house in sorting out bail out terms and pushing for austerity in return. Will her departure signal a change of direction?

Ed_Zep

HAMISH_MCTAVISH wrote: »

From Osborne's VAT hike (which will cost most UK residents more over the term of this parliament that this one-off levy will cost most Cypriots) to Roosevelt's confiscation of all privately held gold in the USA in the 30's, as well as confiscation from Australian Gold owners in the 50's and UK Gold owners in the 60's,

I used to like UK Gold in the 90's.

dryhat

Why haven't the "bondholders" been hurt in all of this is a question many have asked (on this thread and elsewhere).

The real reason is, of course, that the banks holds most of the bonds.

They have been selling them to eachother for years.
And betting eachother on whether they will pay out or not.
And daring eachother to pay or not pay out.
And then having another bet on who will or won't pay out.
And it doesn't matter either way because the government will pay out.
And it improves gdp.

Welcome to the derivatives market.


What is a bond? you may ask, and what does it actually represent?

I will tell you...

A bond is the bank saying to a government "I want the fruits of your people's labour for the rest of their life so I can win this bet"

That is our "economy" that we have heard is improving.
QE and low interest rates have facilitated this charade.

Global gdp (that is all of us working our socks off and some barely surviving after doing so) is only $60 trillion , yet these crooks have gambled $600 trillion.

And they want us - and our children- to make up the shortfall.

They can f*ck off.

Sampong

RUSSIA COULD RETALIATE TO CRISIS
A former Kremlin adviser warned today that Russia could retaliate to the Cyprus crisis, with its investors having around €30billion in bank account deposits on the island.
Alexander Nekrassov said that Russians will ‘suffer very badly’ from a big levy on bank accounts and that Moscow make look at ways to punish to the EU, reported the Observer.
He said: ‘There are a number of large German companies operating in Russia. You could possibly look at freezing assets or taxing assets. The Kremlin is adopting a wait and see policy.’

http://www.dailymail.co.uk/news/article-2298337/Cyprus-crisis-Panic-buying-ahead-deadline-seal-EU-bailout-wealthy-savers-face-losing-FIFTH-money.html

Who do you think you are kidding Mrs Merkel.
If you think the Kremlin's on the run.

grizzly1911

Sampong wrote: »

http://www.dailymail.co.uk/news/article-2298337/Cyprus-crisis-Panic-buying-ahead-deadline-seal-EU-bailout-wealthy-savers-face-losing-FIFTH-money.html

Who do you think you are kidding Mrs Merkel.
If you think the Kremlin's on the run.

Or they could switch off the gas or make it extremely expensive.

http://news.bbc.co.uk/1/hi/world/europe/4637034.stm

Generali

dryhat wrote: »

Why haven't the "bondholders" been hurt in all of this is a question many have asked (on this thread and elsewhere).

The real reason is, of course, that the banks holds most of the bonds.

They have been selling them to eachother for years.
And betting eachother on whether they will pay out or not.
And daring eachother to pay or not pay out.
And then having another bet on who will or won't pay out.
And it doesn't matter either way because the government will pay out.
And it improves gdp.

Welcome to the derivatives market.


What is a bond? you may ask, and what does it actually represent?

I will tell you...

A bond is the bank saying to a government "I want the fruits of your people's labour for the rest of their life so I can win this bet"

That is our "economy" that we have heard is improving.
QE and low interest rates have facilitated this charade.

Global gdp (that is all of us working our socks off and some barely surviving after doing so) is only $60 trillion , yet these crooks have gambled $600 trillion.

And they want us - and our children- to make up the shortfall.

They can f*ck off.

No, a Government bond in a democracy is people voting for goods and services to be provided without them being paid for. Governments then force banks and pension funds to own those bonds with solvency laws and by interest rate manipulation through central bank control of the monetary base.

Look at the fuss that is made when someone suggests that the Government live within its means. 'Dangerous extremists that threaten 100 years of progressive policies' or some such self serving rubbish.

Thrugelmir

antrobus wrote: »

If I was in charge of Luxembourg I'd be worried. If I had a business in Luxembourg (like say Amazon) I'd be working on my disaster recovery plan.

Ebay is based in Luxembourg due to its 15% VAT rate.

Probably employs a dozen people to keep the accounts and forward the remaining cash onto the Cayman Islands.

Mr_Mumble

Deal done. Major bulletpoints:

1. Likely 100% loss for Laiki bank deposits over 100,000 Euros (amounting to a total of 4.2bn Euros) .

2. Up to 40% loss for Bank of Cyprus deposits over 100,000 Euros

3. No vote in the Cypriot Parliament because wording has changed and there will be no 'tax'/'levy' imposed. The perversity of this is even starker when you consider the Dutch, Finnish and German parliaments will get to vote on this deal! Though, of course if the Dutch do vote the wrong way I'm sure the powers that be'll make them vote again until they get the correct answer or just change the wording a bit.

Also, the Cypriot president was chartered a private jet to the talks by the European Commission - the EC that non-Euro members also pay for - I've yet to any semblance of thanks for the British taxpayer's gift here.