Bank Run In Ivory Coast

Tyler Durden's picture

Last August, Anthony Ward's Amajaro fund tried, and failed, to corner the cocoa market. He may have been half a year early, as the country may soon let cocoa speculators (at least those on the long side) finally enjoy their day in the sun. After an ongoing political crisis has left the country with two presidents, neither of which is willing to abdicate power peacefully, and technically bankrupt the latest development is the logical: a countrywide bank run. The Globe and Mail reports that the world's largest exporter of cocoa, which has now effectively been isolated by the global banking system, following its technical default on $2.3 billion in bonds, is seeing bank after bank shut down as residents are scrambling to withdraw whatever money is available in the financial system. "A third bank shut its doors Wednesday amid a political crisis in
Ivory Coast, as residents in the commercial hub lined up at banks to try
to withdraw their savings amid rumours of a cash shortage. British
bank Standard Chartered confirmed in an e-mail Wednesday that it had
suspended its operations in Ivory Coast, joining two other banks, BICICI
and Citibank, and the regional stock exchange. Hundreds of people marched from one bank to the next in downtown Abidjan
Wednesday afternoon, trying to find a working bank machine.
" Well, not really a bank run. More like a bank march. However, unlike Egypt, we don't anticipate the government (one of the two), to start flying in hundreds of millions in currency to placate the mob.

From Globe and Mail:

“They say all the banks are going to close,” said high school guidance counsellor Albert Kramo. “I've been to three banks today to try and get out some money before it's too late.”

Crowds formed outside of several banks which swung their large metal gates closed in order to prevent the front doors from being rushed.

Two months after a contested presidential election that led incumbent leader Laurent Gbagbo to refuse to cede power, international financial pressure supporting his opponent, Alassane Ouattara, has finally made its presence felt.

“Money is drying out,” said business risk analyst Lydie Boka, manager of the France-based firm StrategieCo. “We live in a globalized world, and Gbagbo is trapped.”

Of thirteen banks visited in Abidjan Wednesday, 11 were open for business, though only four had working banking machines, according to an Associated Press tally.

A manager at the Ivorian Chamber of Commerce and Industry said he was certain nearly every bank would close in coming days. He asked not to be named because of the sensitivity of the issue.

Unfortunately for Ivory Coast citizens, deposed president Gbagbo apparently was unable to plunder enough gold in time, nor to make sure he has a working NetJets fractional share.

The Central Bank of West African States, known by its French acronym BCEAO, endorsed Mr. Ouattara's victory in November's election nearly two months ago but didn't succeed in cutting Mr. Gbagbo off from state coffers until it fired its president, a close Gbagbo ally accused of funnelling money to his friend, in January.

Mr. Gbagbo reacted by seizing the central bank's offices in Ivory Coast, but the electronic financial regulation system, controlled from the head office in Dakar, Senegal, was cut off.

“Gbagbo has been trying to use the BCEAO offices in Abidjan as a central bank,” Ms. Boka said, “but international banks cannot deal with this ad-hoc central bank because of the sanctions, so they're simply shutting down.”

Which is not to say that senior level executives are not leaving the country. They most certainly are:

Meanwhile, bank managers have been quietly leaving the country ever
since the BCEAO threatened criminal proceedings against any bank doing
business with Mr. Gbagbo's central bank, said a Western diplomat who
asked not to be named because he is not permitted to speak with the
media. Two managers were stopped at the airport this weekend, the
diplomat said, and prevented from leaving by police officers loyal to
Mr. Gbagbo.

And while we are not certain how likely a spillover effect to regional African nations will be once the country's people finally decide they have had enough and become truly violent, one thing is certain: cocoa, which recently was trading at one year highs, and over 20% YTD alone, is poised for material gains. Bottom line: BTFD in chocolate... if one materializes.


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Pladizow's picture

Give me my goat and chicken now, Im taking them home!

DoChenRollingBearing's picture

Bank runs make my paranoia meter´s needle tick higher...  I guess I will take a few thousand more out of the bank when I get back. But, what to do with it?

yabyum's picture

DoChen, Dollar to doughnuts you will buy more PM's, maybe a gun? More ammo? God knows I would.

I only kill chickens and wheat's picture

Keep in a fire proof safe. FRN's will command respect for

many months if we had bank runs here. The sheeple will take some

time to grasp the reality of paper value. Physical FRN's are

a very small portion of money supply, even if they crank

up the real presses. Hell the mint can't keep with silver

eagles. I've got a good supply of "junk" silver, 90% quarters

How you gonna break an oz of Silver for purchasing things

if it's worth 50 plus dollars.

Ancona's picture

It will spread like a wildfire. The people realize that these dictators have looted the nation and want to preserve tehir wealth in any way they can.

The same thing needs to happen here in America. Shut the fuckers down.

william the bastard's picture

Bernanke's a gem ain't he?

cougar_w's picture

What a clusterfuck. We can see how much of finances is based on agreements. Who is the central bank? Who owns the nation's gold reserves? Who prints the money? Who can leave the country with any wealth in their pocket?

Thank goodness, in America we can answer all these questions clearly. /sarc

I Am The Unknown Comic's picture

Now I know where all the chocolate easter bunnies are being held. Some people say the bank vaults are empty of chocolate and that there are only foil wrapped turds shaped as chocolate bunnies inside the vaults. Hmmm.....

StychoKiller's picture

Careful, some of those bunnies might really be chocolate-covered tungsten! :>D

LoserTrader's picture










cougar_w's picture






LoserTrader's picture




DonnieD's picture






LFMayor's picture

Give it about 3 days before the pangas come out and the butchering starts.

lsbumblebee's picture

Interesting article on these bank runs: political unrest is being engineered in Muslim dominated countries to benefit Western banks:

"Islamic banks have been eating into Rothschild profits in the Middle East because: they don’t charge interest (Shariah Law), they are growing very rapidly among the world’s exploding Muslim populations, and (in these catastrophic economic times) they are more stable than western banks."

cxl9's picture

Oooooh, a bank-run thread. I'll add my anecdotal experience. I live in Mexico. A couple weeks ago I sent my señorita into a large Banamex bank branch in Tijuana to pick up about 6000 pesos (about $500) in cash that I had transferred in. There was a long queue of people waiting, and a bank employee came out and announced that they had run out of money and would only be accepting deposits. Once their cash supply was replenished they would resume processing withdrawals. They went down the line of grumbling people and asked for any deposits. After about a half-hour they had enough money to resume normal operation and my señorita got her money. When she told me the story I was flabbergasted. How would a large bank run out of cash? (Banamex is part of Citigroup.) Why would they admit it? And why would people standing in line with cash be willing to part with it at that point? Simply amazing. True story, though.

cougar_w's picture

Let's see:

Option 1: An IOU from the Bank backed by Citi, OR;

Option 2: Cash in your pocket on the sidewalk in Tijuana.

I suppose the idea is that the Bank will strong-arm the next depositor to get you your money. It's a gamble. They must have a lot of faith in the thugs at the Bank, or maybe in our thugs here in the US.

gdogus erectus's picture

Baaa-a-a-at's unbelievable!

MarketTruth's picture

It matters not the country you live in, ask yourself which do you trust the most: Your hard-earned savings in a bank or gold and silver bars in your hands.

Lord Koos's picture

Once again, savers and workers get fucked.

And time to stock up on dark chocolate...

downwiththebanks's picture

A big issue here is the corruption of the Cote d'Ivoire elections, which were basically run by the "international community" specifically to install the IMF's little Uncle Tom, who goes by the name Outarra.

Gbagbo is no saint - he was Uncle Sam's boy only a decade ago - but this campaign is about White Capital destroying Black Africa.

Divide and conquer, using religion whenever possible.  Same as it ever was.

serotonindumptruck's picture

Not sure how relevant this might be, however the fact that China has been showing such great interest in the African continent might make this report worth passing on...

Abuja (AFP) Feb 11, 2011 - West African bloc ECOWAS criticised South Africa on Friday over a decision to send a "warship" to Ivory Coast, saying it was not notified of the move during the country's post-election crisis. James Victor Gbeho, president of the ECOWAS commission, this week said South Africa had sent the ship to Ivory Coast, but Pretoria's ambassador here said it was a support vessel dispatched to the region and not meant for any military purpose. The 15-member Economic Community of West African States (ECOWAS) has threatened to use force to oust Ivory Coast strongman Laurent Gbagbo if peaceful efforts to have him step down fail.

Coldfire's picture

Keeping savings in a bank is Snooki-stupid.