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In the beginning there was Cyprus. - 3/17/2013 12:01:07 PM

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NOT FOR TAZZY - a ZH moment.

Cyprus. It's beginning.

Today, lots of people woke up in shock and horror to what happened in Cyprus: a forced capital reallocation mandated by political elites under the guise of an "equity investment" in insolvent banks, which is really code for a "coercive, mandatory wealth tax." If less concerned about political correctness, one could say that what just happened was daylight robbery from savers to banks and the status quo. These same people may be even more shocked to learn that today's Cypriot "resolution" is merely the first of many such coercive interventions into personal wealth, first in Europe, and then everywhere else.

For the benefit of those people, we wish to point them to our article from September 2011, "The "Muddle Through" Has Failed: BCG Says "There May Be Only Painful Ways Out Of The Crisis", which predicted and explained all of this and much more. What else did the September BCG study conclude? Simply that such mandatory, coercive wealth tax is merely the beginning for a world in which there was some $21 trillion in excess debt as of 2009, a number which has since ballooned to over $30 trillion. And with inflation woefully late in appearing and "inflating away" said debt overhang, Europe first is finally moving to Plan B, and is using Cyrprus as its Guniea Pig.

For those who missed it the first time, here it is again. Somehow we think many more people will listen this time around:

For the rest of the story.

Also note, Russia has dispatched warships to the Med. Cypriot banks hold a bit of Russians money. Coincidence?

_____________________________

“We all know it’s going to end badly, but in the meantime we can make some money.” - Jim Cramer, CNBC

“Those who ‘abjure’ violence can only do so because others are committing violence on their behalf.” - George Orwell

RE: In the beginning there was Cyprus. - 3/17/2013 12:25:30 PM

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not looking good for Monday.

As Citi's Steven Englander suggested earlier, the developments in Cyprus will lead to EUR selling and USD, CHF, GBP, NOK and SEK buying (in that order). He adds, the issue is whether to believe that the Cyprus levy on depositors is one-off, but depositors and investors elsewhere could easily see this as another in a string of ‘one-offs’ and react badly. The risk-return to depositors in countries with weak banking systems may not favor taking the risk that Cypriot banking system was so unique that such a levy would never be considered elsewhere. The levy on deposits ostensibly covered by deposit insurance may also undermine confidence in weak banks. The question is whether this becomes a full-blown crisis or a mini-crisis. For now, as FX markets open, it appears EURJPY is getting hammered (from 124.47 close to 121.6) implying S&P futures will open down around 30 points. We are sure Abe is watching closely...

_____________________________

“We all know it’s going to end badly, but in the meantime we can make some money.” - Jim Cramer, CNBC

“Those who ‘abjure’ violence can only do so because others are committing violence on their behalf.” - George Orwell

(in reply to Yachtie)

RE: In the beginning there was Cyprus. - 3/17/2013 1:17:37 PM

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Now there is a fun development.

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That's why people with no sense of humor have such an inflated sense of self-importance.

(in reply to Yachtie)

RE: In the beginning there was Cyprus. - 3/17/2013 2:13:24 PM

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They've really stepped in it this time -
From the FT: "a revised deal being discussed in Nicosia, with the blessing of the European Commission, would shift more of the burden on to deposits larger than €100,000, according to officials involved in the talks. Under a controversial deal struck with international bailout lenders in the early hours on Saturday, a 6.75 per cent levy would be imposed on all deposits under €100,000 while accounts over that threshold would be hit with a 9.9 per cent levy. The depositor levy was demanded by a German-led group of creditor countries to bring down the bailout’s price tag from €17bn.... Officials involved in last night’s talks said the changes in the levy’s rates were in flux, but they could see the higher rate increase to as much as 12.5 per cent while the smaller deposits could be about 3.5 per cent."

People in the EU should have great confidence in their banks, bankers and politicians now.

Finally, we can only hope that the next European (in whatever Monetary Union or Disunion format it is then) winter, is mild. Because Gazpromia may just decide to hike gas costs by 5%... or 6.75%.... or 9.9%.... or 99.9%.... Who knows? After all, Gazpromia Russia - which just happens to be Europe primary external source of crude and gas, has a green light to make up its own rules on the fly.

Piss off the Russians. Smart.

_____________________________

“We all know it’s going to end badly, but in the meantime we can make some money.” - Jim Cramer, CNBC

“Those who ‘abjure’ violence can only do so because others are committing violence on their behalf.” - George Orwell

(in reply to Yachtie)

RE: In the beginning there was Cyprus. - 3/17/2013 2:29:58 PM

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quote:

ORIGINAL: Yachtie

For now, as FX markets open...

On the bright side, the ongoing financial disaster in the EU has been the only thing propping up the U.S. Dollar.

K.

(in reply to Yachtie)

RE: In the beginning there was Cyprus. - 3/17/2013 2:42:24 PM

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quote:

ORIGINAL: Kirata

quote:

ORIGINAL: Yachtie

For now, as FX markets open...

On the bright side, the ongoing financial disaster in the EU has been the only thing propping up the U.S. Dollar.

K.

Oh wonder of wonders...

A theologists,a criminologists and now an economist......

Thank god we have folks in charge who actually care what happenes and aren`t content to just gripe.

~~~~~~~~~~~~~~

http://www.reuters.com/article/2013/02/01/us-markets-forex-idUSBRE9070IW20130201

"Euro broadly stronger, U.S. dollar up on yen after jobs data"

_____________________________

"As for our common defense, we reject as false the choice between our safety and our ideals"

President Obama

(in reply to Kirata)

RE: In the beginning there was Cyprus. - 3/17/2013 3:09:05 PM

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"The move to take a percentage of deposits, which could raise almost 6 billion euros, must be ratified by parliament, where no party has a majority. If it fails to do so, President Nicos Anastasiades has warned, Cyprus's two largest banks will collapse.

One bank, the Cyprus Popular Bank, could have its emergency liquidity assistance (ELA) funding from the European Central Bank cut by March 21.

A default in Cyprus could unravel investor confidence in the euro zone, undoing the improvements fostered by the European Central Bank's promise last year to do whatever it takes to shore up the currency bloc.

"A meeting of parliament scheduled for 1400 GMT on Sunday was postponed for a day to give more time for consultations and broker a deal, political sources said. The levy was scheduled to come into force on Tuesday, after a bank holiday on Monday.

BREAKS A TABOO

Making bank depositors bear some of the costs of a bailout had been taboo in Europe, but euro zone officials said it was the only way to salvage Cyprus's financial sector, which is around eight times the size of the economy.

European officials said it would not set a precedent"

http://www.reuters.com/article/2013/03/17/us-cyprus-parliament-idUSBRE92G03I20130317

~~~~~~~~~~~~~~~~~~~~

Seems reasonale...

"Do they want the bailout or what?

_____________________________

"As for our common defense, we reject as false the choice between our safety and our ideals"

President Obama

(in reply to Owner59)

RE: In the beginning there was Cyprus. - 3/17/2013 3:28:32 PM

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The value of the dollar measured by exchange rates and Treasury yields is undermined by the growing U.S. debt. The only reason our monetary policy hasn't led to an inflation rate that would eat us alive is that the EU is in just as much trouble. The EUR/USD exchange rate has ranged between 1.20 and 1.50 since around 2009. By 2011, as the predicted runaway dollar inflation persisted in refusing to materialize, gold and silver hedges toppled and neither metal has gone anywhere since.

K.

< Message edited by Kirata -- 3/17/2013 3:40:44 PM >

(in reply to Owner59)

RE: In the beginning there was Cyprus. - 3/17/2013 3:38:01 PM

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There are many ways to measure the dollar or any currency.

It`s value "going up" because of what it`s measured against a falling currency, tells only a small part of the picture.

The article,full of catch phrases and code words like "political correctness" makes me think it`s just one more Euro-bashing POV......like so many of our conservatives,just boiler plate con-rhetoric.

Can you honestly say the author cares about the EU?

I do,just out of knowing that when they do better,we do too.

< Message edited by Owner59 -- 3/17/2013 3:39:41 PM >

_____________________________

"As for our common defense, we reject as false the choice between our safety and our ideals"

President Obama

(in reply to Kirata)

RE: In the beginning there was Cyprus. - 3/17/2013 5:02:00 PM

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FR,

This thread has required an astonishing amount of cleanup. Certain posters should check their mailbox shortly.

Meanwhile, please return to the topic and do not make other posters the topic.

(in reply to Owner59)

RE: In the beginning there was Cyprus. - 3/17/2013 5:46:23 PM

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Like Greek Cyprus is a guide to the whole of the EU.

Zero Hedge..... ? Really guys surely you can do better than that.

(in reply to VideoAdminChi)

RE: In the beginning there was Cyprus. - 3/17/2013 7:26:42 PM

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quote:

ORIGINAL: Politesub53

Like Greek Cyprus is a guide to the whole of the EU.

I'm sure there are all sorts of differences, Polite, but a sovereign country, up to it's eyeballs in unsustainable debt, deciding to just help themselves to the accumulated money in the banks that are about to fold?

The problem isn't us using it as a guide to understanding the EU financial troubles, but the other countries in trouble using it as a guide to resolving their issues.

It will be interesting to see how this unfolds.

_____________________________

If you lose one sense, your other senses are enhanced.
That's why people with no sense of humor have such an inflated sense of self-importance.

(in reply to Politesub53)

RE: In the beginning there was Cyprus. - 3/17/2013 8:09:27 PM

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AH the collapse is coming, thank god.

(in reply to TheHeretic)

RE: In the beginning there was Cyprus. - 3/17/2013 8:35:29 PM

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quote:

ORIGINAL: Politesub53

Zero Hedge..... ? Really guys surely you can do better than that.

Daily Beast work for you, Polite?

After Cyprus Bank Bailout, Depositors Race to Withdraw Their Cash. Is the Rest of Europe Next?

quote:

As you probably already know by now, the banking system of Cyprus has imploded, and Europe has stepped in to provide, not a "bail-out", but a "bail-in": the banks get a capital infusion, but the depositors have to take a haircut, losing between 7-10% of the value of their bank account. That's not exactly what they're calling it, of course; it's a "special bank levy" of 6.75% on accounts up to 100,000 (the limit for deposit insurance) and about 10% on accounts above that limit.

< Message edited by TheHeretic -- 3/17/2013 8:36:32 PM >

_____________________________

If you lose one sense, your other senses are enhanced.
That's why people with no sense of humor have such an inflated sense of self-importance.

(in reply to Politesub53)

RE: In the beginning there was Cyprus. - 3/17/2013 11:37:20 PM

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quote:

ORIGINAL: TheHeretic
quote:

ORIGINAL: Politesub53

Zero Hedge..... ? Really guys surely you can do better than that.

Daily Beast work for you, Polite?

Yeah really, like it isn't on every fucking newswire in the world. If the Daily Beast isn't any better, here's a UPI link:

http://www.upi.com/Top_News/World-News/2013/03/18/Cyprus-rescue-creates-bank-run-turmoil/UPI-73981363588200/

K.

< Message edited by Kirata -- 3/17/2013 11:39:26 PM >

(in reply to TheHeretic)

RE: In the beginning there was Cyprus. - 3/18/2013 3:43:43 AM

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I'd tell you Euro's to lock and load, but...

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(in reply to Kirata)

RE: In the beginning there was Cyprus. - 3/18/2013 4:00:38 AM

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quote:

ORIGINAL: subrob1967

I'd tell you Euro's to lock and load, but...

_____________________________

If you lose one sense, your other senses are enhanced.
That's why people with no sense of humor have such an inflated sense of self-importance.

(in reply to subrob1967)

RE: In the beginning there was Cyprus. - 3/18/2013 5:00:26 AM

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Jeee....after all the whining and fake crying about liberals taking pleasure over republican-Iraq-get-thousands-killed culpability,then doing that very thing themselves,taking pleasure with someone else`s pain.

Not sure the party that killed our economy and are the most pissed it`s rebounding....should be taking pleasure in someone else`s economic problems.....

But what else makes emotional black hole-negative types feel better, than to drag others down too.....?

_____________________________

"As for our common defense, we reject as false the choice between our safety and our ideals"

President Obama

(in reply to TheHeretic)

RE: In the beginning there was Cyprus. - 3/18/2013 5:04:10 AM

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Nice to see you all jumping aboard the good ship Clueless. Here is a link as to the cause.

http://www.bbc.co.uk/news/business-16290598

The IMF is also involved in the bailout, Greek Cypriots can either say no to the loan, or accept the terms. Before you, collectively, start carping on about the government grabbing cash, remember they were voted in to fix the crisis.

Finally, why should the rest of the EU bail out Russian money launderers and unbridled capitalism. there has been a massive building boom of holiday homes, even holiday villages. The IMF etc are going after the wrong people though, it should be the bond holders and not ordinary savers.

http://www.bbc.co.uk/news/business-21812853

(in reply to TheHeretic)

RE: In the beginning there was Cyprus. - 3/18/2013 5:17:25 AM

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quote:

ORIGINAL: Politesub53

Nice to see you all jumping aboard the good ship Clueless. Here is a link as to the cause.

http://www.bbc.co.uk/news/business-16290598

The IMF is also involved in the bailout, Greek Cypriots can either say no to the loan, or accept the terms. Before you, collectively, start carping on about the government grabbing cash, remember they were voted in to fix the crisis.

Finally, why should the rest of the EU bail out Russian money launderers and unbridled capitalism. there has been a massive building boom of holiday homes, even holiday villages. The IMF etc are going after the wrong people though, it should be the bond holders and not ordinary savers.

http://www.bbc.co.uk/news/business-21812853

_____________________________

"As for our common defense, we reject as false the choice between our safety and our ideals"

President Obama

(in reply to Politesub53)

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