Euro Debt Crisis

[ntrader 10]

This thread is for those who like to discuss about the European debt crisis. I am waiting for your thoughts and predictions to help us in successful trading.

[ntrader 10]

Eurozone leaders and the IMF on Saturday announced an unprecedented levy on all deposits in Cypriot banks, as a 10-billion-euro bailout for the near-bankrupt government in Cyprus.

The levy will see deposits of more than 100,000 euros in Cypriot banks hit with a 9.9% charge, under that threshold and the levy drops to 6.75%.

 

Do you believe the cut in deposits will help Cyprus and euro?

[SIUYA 11]

another nail in the coffin trust of government insurance schemes underwriting your deposits.

 

I wonder if it might be argued this is good for the EUR as it signifies that bankrupt banks are not going to be simply bailed out by the rest of Europe. Problem is that it reverses where the risks and rewards are - instead of creditors and bonds holders and shareholders who are meant to take risks for the rewards, the depositors who get little upside get the risks....

some days even your lucky rocketship underpants don’t help.

Edited March 17, 2013 by SIUYA

[ntrader 10]

It is very dangerous what they have decided about Cyprus. Taking money from savers will crush the banking industry throughout the EU, first Cyprus, then Greece, Portugal, Spain, Italy etc..

[SunTrader 10]

(NYTimes) - "Under an emergency deal reached early Saturday in Brussels, a one-time tax of 9.9 percent is to be levied on Cypriot bank deposits of more than €100,000 effective Tuesday, hitting wealthy depositors — mostly Russians who have put vast sums into Cyprus’s banks in recent years. But even deposits of less than that amount are to be taxed at 6.75 percent, meaning that Cypriot creditors will be confiscating money directly from retirees, workers and regular depositors to pay off the bailout tab".

 

What it all means I don't know - except for what the chart says which presently is more down after a short correction maybe.

[ntrader 10]

We must expect other banking systems in peripheral European countries to experience a market imposed additional risk premium after Cyprusdeposit tax.

[zdo 20]

  Quote

Cyprus is a test to see how blatant the expropriation of private assets can become without triggering overthrow and revolution. If the furor dies down soon enough, then the same technique of expropriation will be imposed elsewhere. ...

charles hugh smith-The Deeper Meanings of Cyprus

 

 

Now, Would You Rather Have Your Deposits Confiscated, Or Used By JPMorgan's Prop Trading Desk To Buy Stocks? | Zero Hedge

 

[ntrader 10]

The Cyprus bailout creates risk of money being moved out of other weak eurozone banks, such as Greece, Spain, Portugal, Italy

[SIUYA 11]

  ntrader said:

The Cyprus bailout creates risk of money being moved out of other weak eurozone banks, such as Greece, Spain, Portugal, Italy

 

so they may go broke like they should have been allowed to years ago --- it could be a good solution to stop the repetitive circular flow of money from one bad investment to the next.

 

next stop devastation.

 

I’m learning real skills that I can apply throughout the rest of my life … Procrastinating and rationalizing.

[zdo 20]

...€5.8bn will be stolen (yes, stolen) from 'savers' in Cypriot banks...

 

  Quote

...I suspect with levels of ignorance high amongst populations they haven’t quite woken up to the reality that the state is not in fact here for your protection as it once was and that we all need to take on self-reliance and a heightened sense of responsibility for ourselves.

 

Some notable rule changes of late are subtle but growing in number:

1. The ECB, holders of Athens-law and foreign law Greek debt all received different treatment

2. The Dutch didn’t restructure SNS Reaal paper, they confiscated it

3. The Irish banned lawsuits against the ultimate wind-down of Anglo Irish

4. Portuguese private pensions were confiscated

 

The list is long but you get the idea. Rule-changes are getting ‘regressively’ more creative and sinister. As a friend pointed out to me this as if the “football referee has gone from being a quasi-neutral arbiter, to pulling off his black shirt to reveal a Manchester United one underneath and awarding himself a series of penalties.”

 

Cyprus ? Oh the Irony!? - Hinde Capital

 

... not one gd thang has been fixed in EU... or in JePaN ... or in USSA... or in PRC... or in...

my quo- trust has long been low... more and more people will 'suddenly' come upon reasons for their 'trust' to drop... like more Cypressioning... quo requires a quorum... the 'matrix' requires a quorum... dropping past a certain 'quorum' threshold of distrust and...

charles hugh smith-What's Supposed to Happen, and What Might Happen: 3 Baseline Scenarios

or worse

 

...and locally, 80% of the readers will walk away from this post thinking I'm sour and negative

[zdo 20]

  Quote

...

And doctors have to use antibiotics more carefully to prevent more germs from developing into dangerous superbugs.

 

Infections With 'Nightmare Bacteria' Are On The Rise In U.S. Hospitals : Shots - Health News : NPR

[zdo 20]

More from Cyprus ? Oh the Irony!? - Hinde Capital

  Quote

...

First equity, then subordinated debt, then deposits and senior bonds together, take the hit in that order. The creditor structure has been up-ended and more than merely tweaked over the last few years.

...

 

Think it can't happen in a 'province' near you ??

Add to the list of recent 'precedent' - In the US, this long running creditor structure was broken in the GMC restructuring...bond holders got knocked out of the line for the unions in the name of "shared sacrafice"

 

The USg is positioning to 'buy out' your 401k and other 'retirement funds'... 'buy out' is the propagandiz nice way of saying 'take over'

[SIUYA 11]

Dont worry Zdo, no one thinks you are sour and negative .....its just some of us have seen continual bears over the years always saying the same thing even when the market booms. ....eventually they are right.

Some of us have been skeptical of the whole system but figure you just have to play the game as its played.

What I do thank you for is some of the good links, you provide.

 

...........

Re: the Cyprus banks - its an interesting one that everyone claims the government is now stealing the money......technically these banks were probably insolvent many months/years ago, and they should have wound most of them up, burnt the bond holders and share holders and returned as much of the deposits as possible.....reduced the debt yadda yadda. If anything the politicians are to blame for being hoodwinked by the bankers, but the politicians are not the ones walking away with the money.

 

The fear of letting the system collapse means the collapse is likely to be worse and smellier after the carcass has been hanging around in the the sun....and the risk of contagion certainly grows.

 

By feeding the superbugs who have evolved, the situation has probably gotten worse. (linking )

I think the banks that have survived have shown their books are as big as ever, they have learnt nothing.....nor have many people....same conclusion the Hinde report has reached.....

The bugs are the bankers, the doctors are the politicians.....

 

now that is sour and negative!

 

I guess we get the politicians we deserve.

As the philoshowpher child Calivn says;

 

“Do you believe in the devil? You know, a supreme evil being dedicated to the temptation, corruption, and destruction of man?”

“I’m not sure that man needs the help.”

[Vinayak 10]

Cyprus Bail Out became the Center of Attention

 

On Monday morning after much angst during the weekend, investors braced up for the proposed bail out of the banking system in a slightly lesser known and seldom talked about country called Cyprus. The banking sector in Cyprus lacks funds and needs a large amount of assistance. The current proposal is to tax depositors and this was a bad one at that as it resulted in a major run on the banks in the island nation.

The tax, as it is so called, is targeted for savings and checking accounts and is a method for Cyprus to raise money from depositors overseas.

 

The newest unfolding story in the Euro debt crisis

 

The plan was amended and voted on this afternoon Cyprus time and it has managed to improve the Cypriot standing as a banking center. For instance, Japanese stock markets after initially taking a dive when the news came out have since rebounded. The same could be said for indices across the globe.

So this too has come to pass. Now we will have to shift our focus from the island of Cyprus to the serious issues in Greece, Spain and Italy.

[zdo 20]

re:

  SIUYA said:

... it could be a good solution to stop the repetitive circular flow of money from one bad investment to the next. ...

 

 

and re: this whole 'package' / 'bail-in'

Anyone who ‘deposits’ money in a bank is ‘loaning’ the money to the bank… and the bank can leverage, looze, it,,,whatever… however, this particular haircut is that gov’t taking ‘depositer’s property … it is theft … whether the intent is to ‘save’ the bankrupt banks or not… imo crime to offset crime is still crime… and imo this is also not a "solution to stop the repetitive circular flow of money from one bad investment to the next" at all...

[SIUYA 11]

yes - its a crime (and we know people argue everything the govt does is a crime), but how was the problem not solved before - that is where the crime took place. The fact that all the other laws designed to be upheld get ignored.

The fact that if these banks are insolvent and still being allowed to trade.

In any other business directors would be struck off, the companies closed. Now its a matter of trying to save whats left......

The intent of the solution might not be to stop the rounds of crappy investments - it might be to try and pretend to punish those hiding their criminally attained and retained assets in the Cypriot banks but maybe they might have some good results, if people pull their money, get scared and it f...ks the economy but fixes the problems.....yes unlikely as the other issues remain, but unintended consequences might occur. (my optimistic mind)

 

(A similar idea of the state killing a man for murder to stop other murders????)

 

 

A joke I found supposedly doing the rounds....

 

“The Russian government is worried about the behavior of Cyprus, where members of the Russian government have been hiding money from the Russian government.”

[ntrader 10]

Eurozone governments are "essentially blackmailing" Cyprus, said Anthanasios Orphanides, former governor of the Cypriot central bank, as he warned against the "slow death of the European project".

[SunTrader 10]

"Many Russian bloggers are certain that the tax proposal is specifically aimed at corrupt Russian bureaucrats and capitalists. “Germany, France and Great Britain have decided to resolve Cyprus’s, and some of the EU’s, debt problem at the expense of Russian criminals and corrupt bureaucrats,” wrote Valery Morozov, a businessman who fled Russia after accusing Kremlin officials of corruption, in his LiveJournal blog. “The policies of Putin and his inner circle, based on criminal ethics and not laws or citizens’ interests, had one day to clash with the political and economic interests of the rest of the world.”

[zdo 20]

  SunTrader said:

...tax proposal is specifically aimed at corrupt Russian bureaucrats and capitalists. “Germany, France and Great Britain have decided to resolve Cyprus’s, and some of the EU’s, debt problem at the expense of Russian criminals ...policies of Putin and his inner circle, based on criminal ethics and not laws or citizens’ interests, had one day to clash with the political and economic interests of the rest of the world.”

 

No doubt Cyprus is a hot spot for untaxed 'black money' and 'they' would love to get their hands on some of it to help with the 'bailout'. But most likely going after the 'black money' has just been part of their 'cover story' from the beginning... to cover that this is extreme, desperate, and blatant socialist theft - period.

Imo, no matter what the stories and reasons provided, there is no way this can be authentically justified...

 

To illustrate…what if I live in Miami and I have (criminal) Russian and Columbian neighbors? When ‘they’ go after them for their ‘black money’, my Walcoveru checking accounts get 'Cyprusted' too ... because I happened to have over the threshold balance in the account that week?

 

 

... back to the larger perspective...

[ame=http://www.youtube.com/watch?v=8BZzrls480E]Why We've All Been Cyprus'd Already & How We Can Stop Being Cyprus'd in the Future - YouTube[/ame]

[zdo 20]

“… a mere USD 5.8 billion”

  Quote

…

The idea of a one-off wealth tax, however, is not new. Several research reports have pointed in recent years to the fact that the desperate need for funding in the public sector could - and probably will - eventually lead to confiscation of wealth in a monumental scale. Boston Consulting Group suggested in a recent report that about 29 percent of ALL private wealth, not just deposits, will eventually be likely to be confiscated to cover the debts already incurred. … So we had better get used to seeing our money being appropriated by money-hungry politicians. This is just the beginning. The cat is out of the bag, no matter if this particular deal should fall apart.

 

What astonishes me is that such an important and extreme move is risked for such a modest prize. The slow realisation that confiscating our money will be the next move in the debt crisis has been made very acute by this blatant move. The most important game changer in years and the most frightening tool in the tool box has been pulled out in the open for a mere USD 5.8 billion. The impact could trigger massive asset capital flows and asset devaluations to the tune of hundreds of billions. The loss of trust will be…

Is Cyprus deposit levy the first sign of widespread wealth tax? | Tradingfloor.com

 

“… a mere USD 5.8 billion”

fkn BenB could show a little kindness and fix that with a few mouse clicks...

[ntrader 10]

Euro started the session very strong at 1.3036 now, after rumors about an agreement in Cyprus bailout, probably a levy of 40% on deposits above 100.000

[ntrader 10]

The Cyprus bailout euro rally is already over, eur/usd now down to 1.30 after hitting 1.3055

Cyprus remains at risk of default despite its EU bailout deal, which is credit negative for all eurozone countries, says Moody's.

[zdo 20]

  ntrader said:

Cyprus remains at risk of default despite its EU bailout deal....

 

All the countries on the planet that have high debt to 'gdp' ratios remain at risk of default, despite all the old,new,and coming bailout 'deals'...

 

  Quote

…

It seems the Troika is waging a successful class warfare propaganda battle against the Cypriot people and parliament. They have made robbing people's private bank accounts acceptable as long as it only happens to the wealthy.

 

…

But do average citizens and small depositors make out better in this deal? The Troika and the Cyprus parliament are no longer demanding a "fee" from average depositors, they'll now take their financial freedom instead by implementing harsh capital controls to keep depositors from moving their money freely, and they took control of pensions ...

...

Activist Post: International Bankster Enslavement Plan Revealed to Cyprus Over the Weekend

 

 

 

...

 

Trick question - Do you think 'germany' is a loan shark?

[SIUYA 11]

  zdo said:

 

Trick question - Do you think 'germany' is a loan shark?

 

more like the cleaner......

http://en.wikipedia.org/wiki/Cleaner_(crime)

[zdo 20]

Some Cypression thoughts...

 

…Amid rumors the ‘russians’ have already “used an array of techniques to access their money” - before the cyp banks ‘re-open ‘

(makes sense … it’s better to take a surreptitious 1-2% haircut than a ‘legal’ 20 – 40% haircut)

 

 

 

  Quote

…

At the end of the day, every EU solution/bailout/ intervention hinges on whether or not Germany will write the check.

 

The EBC can promise this and that, but unless Germany’s signature is on the check, all of this is just posturing and verbal intervention.

…

Graham Summers

 

 

 

 

  Quote

[Cypression] may be merely the latest ploy by the legacy status quo to achieve one simple thing: force depositors across the continent (and soon, world) to pull their money out of a malevolent, hostile banking system and push that money into stocks, or simply to spend it.

neocynic ‘Tyler Durden’

Is This The Diabolical "Master Plan" Behind Crushing Europe's Depositors | Zero Hedge

 

 

You probably already heard about this… (and most will continue to trust tightly to "all is well")

  Quote

Savings accounts in Spain, Italy and other European countries will be raided if needed to preserve Europe's single currency by propping up failing banks, a senior eurozone official has announced.

…

Mr Dijsselbloem argued that the lack of market contagion surrounding Cyprus showed that private investors could now be hit to pay for bad banking debts. …

http://www.telegraph.co.uk/finance/financialcrisis/9952979/Cyprus-bail-out-savers-will-be-raided-to-save-euro-in-future-crises-says-eurozone-chief.html

 

 

 

 

  Quote

What is the robbing of a bank compared to the founding of a bank?

Berthold Brecht

 

Edited March 26, 2013 by zdo
edit! while you still can ! ;)