This page has been archived and commenting is disabled.
Impact Imminent?
Zero Hedge has the latest Cyprus update - There is no parliamentary support in Cyprus for any bail-in deal. Tyler Durden begs the question:
Neither we, nor anyone else, has any idea what comes now.
The folks at FTAlphaville have some thoughts on the state of play:
A bank run spreading to Spain looks a non-starter in the short term.
The risk of any wider bank run looks pretty small so far, with market reaction relatively benign.
I've been following the Press coverage of Cyprus, the talking heads are saying that Cyprus is a manageable issue. Nothing to worry about at all.
I'm going to disagree with FTA and the TV folks. The chances of a bank run have never been higher. Tyler's right. We're looking at a black hole.
The "Other" scenario for Cyprus is a shell shocker. Forget the shareholders or the senior bond guys - they will end up with Dick's hat band. Those Russians who were at risk of losing as much as 15% of their deposits - They get zip too. At best, they are getting an IOU. That IOU will have a value of 10 cents on the dollar.
Those small depositors that were going to get hit for an unfair loss of 6% now face a vacuum. Their bank statements may not reflect a loss of principal, but they won't be able to withdraw a dime from those accounts. The local banks will remain closed, when they do reopen those deposits will be converted to some new currency. It's possible that the new currency will be the Turkish Lira. You thought the poor folks in Cyprus were getting a bad deal on Monday? Wait till Friday before you pass judgement.
What happens if Cyprus does a "drop out" of the EU? That result immediately makes a lie of Mario Draghi's words that the Euro was Uber-Ales. This is precisely what Super Mario said "would never happen".
If Cyprus goes turtle and leaves the Euro, the credit spreads on peripherals will widen. This sets up a market "call" on the ECB. But remember, for Mario Draghi to give the market the "put" that it will demand, the government's of Spain and Italy will be forced to get down on their knees and beg the gods in Brussels and Berlin for a helping hand. To do that means that they would have to have very harsh terms imposed on them. An IMF team would run the finances of the countries involved.
Given that there is zero chance that Italy and Spain will do the necessary begging, the value of the promised Draghi "put" is now zero.
There is a chance that something can be done to stop what looks like a slide into an abyss. Those chance are now well below 50-50. The markets/seers are calling for a soft landing, while at the same time that outcome is looking less and less likely. The markets seem poorly positioned for what could result in a crisis. And this story is running at hyper speed. That' a very bad combo of events. Seat belts on - Impact Imminent!
»
- advertisements -
I will take a bet of 8 april fools day fishes with anybody that :
1° Cyprus stays in EU and accepts a deal along the lines already discussed.
2° THe Ruskis will fall into line after huff n puff; all theatre of absurd.
3° THere will be NO shock waves that are generated either in euro zone or in USA from this basket case.
4° That plane load of money sent by the UK gets heisted by the UK navy as a one off wealth tax on their government, for "extreme post combat traumatic shock" compensation suffered in rampant front line action, motivated by the thought of losing all their savings by their personnel; after intense, unfruitful hand to hand struggles with crosslegged and frigid ATM machines.
I am not dreaming and I haven't just woken up.
If I lose the reality will be worth being called a total april fool fest and I'll go sleep with those fishes; no help required.
If there is NO fallout from these current events, we shall conclude that the system is indeed fire proof and somewhat trustworthy.
But I have serious, serious doubts that they can contain all these variables you mentioned above.
This IS the catalyst or nothing is.
The resolution to the crisis will be so complex and opaque, that nobody will be able to analyze it, or criticize it. That will prove, beyond doubt, that the PTB will always have everything under control. (This is what has solved the California debt crisis, the Detroit debacle, etc. ) Walkluere, you're right: there will be no catalyst, and the show will go on throughout our lifetimes.
you see the capitalist system coming down for a 10 billion shortfall in EU budget and some ruffled feathers in the political circles of a corrupt and bankrupt island that has no issue other than negotiate with Mr Moneybags?
I can see it coming down for Italy or Spain going ballistic...not CYprus.
But one fish went rotten : they voted against.
btfd ducklings, just more btfd
"I've been following the Press coverage of Cyprus, the talking heads are saying that Cyprus is a manageable issue. Nothing to worry about at all.
I'm going to disagree with FTA and the TV folks. The chances of a bank run have never been higher. Tyler's right. We're looking at a black hole."
"These are not the droids you are looking for..............move along......"
"There is a chance that something can be done to stop what looks like a slide into an abyss. Those chance are now well below 50-50. The markets/seers are calling for a soft landing, while at the same time that outcome is looking less and less likely. The markets seem poorly positioned for what could result in a crisis. And this story is running at hyper speed. That' a very bad combo of events. Seat belts on - Impact Imminent!"
There is also a chance that frogs will grow wings so they dont bump their ass when they jump. But I think it is significantly less than 50-50.
They should exit the Euro alright and seize every penny of bank deposits to use buying every bit of gold, silver, platinum they can grab with leverage at spot and then sit back and watch Benny B and his ECB banksta niggas print print print. When the system flushes (in a few days or hours) They can convert those seized deposits into a new gold back currency and live happily ever after. What happens to JPM's infinite silver short in that scenario I wonder.
What I have been saying weakly all week -- the Cypriot people turned down the best offer they would ever get (unless the EU caves and supplies more cash, in which case their game of chicken worked).
After default, Cypriots will end up with a new currency at a discount to their old Euros of much more than 10%, and their country will be a Russian colony, independence lost.
Probably geopolitics played a big role in the EU even caring about Cyprus. It's not that important to the EU as an economy, but to have a Russian colony in the Med, and Russian control over yet another natural gas resource the Europeans could use, was no doubt seen as unfortunate.
Remember the CDS market is now bigger than what is what in 2009. Those morons didn't take it apart when they had the chance. Cyprus going tits up in some fashion is no big deal. But, it's the massive leverage that some small shop is using that get's blown up on a default that starts the chain reaction. I see that NBG is now trading way under $1. This is NOT good. It looks like Cyprus will drag Greece down fro the final count!
There's some poetic justice in that, the GGB circle-jerk comes (pardon for the carpet) full circle.
"But, it's the massive leverage that some small shop is using that get's blown up on a default that starts the chain reaction."
That's how the cookie crumbles, apparently.
Kyle Bas said JPM tried to sell him half a billion of 1-yr Japan default risk for *1 b.p.*
So yes we are back right where we were in 2008...
Train Wreck Style: http://www.youtube.com/watch?v=LjhGMs-iclM
There is no need for a bank run when you are being taxed through a negative real return. Boiling frog and all that.
The black Cygnet that hatched Friday, is growing into a lovely swan fast.
It was a desperate move from the start, we can all agree.
Had they be clear from the onset, hard numbers on the table, it would have been acceptable, perhaps, but instead they took everyone for an idiot with made up stories of fairness and shared responsibilities.
But of course it can be so much uglier we don't know half of it yet...
Chase's online banking was offline for a time last night. Which is not to suggest anything truly amiss, just interesting timing.
Nobody has mentioned so far: if the Russian mob loses money, won't they quite effectively pursue deadly retribution from those they deem responsible for the losses? One can imagine hit teams already en route to Germany with certain bankers and technocrats scheduled for more or less exemplary demises.
There was a note in the media about this item this AM.
In addition to the outage of which you speak, a number of mobile banking customers were getting a zero balance in the application.
Apparently they have it fixed.
Rumor has it every flight from Russia to Cyprus is packed with hard faced burly men carrying empty suitcases.
Alot of high priced hookcers looking to expand their business and bring a new meaning to the term happy ending
optimist.
Turned on CNBC for the lunchtime show.
The fear in their eyes was palpable.They looked just like they did back in 2009.
Watch out below.
I hope and pray that every one of those shills and Quislings suffers hard, and suffers deep, and suffers long.
They won't suffer in the least, so start hoping for something else.
Nonsense. They are all diehard defenders of the status-quo power structure, so of course they are going to suffer, along with it.
"defenders of the status-quo power structure, so of course they are going to suffer, along with it."
Yes they are indeed the defenders. And they have been defending the status-quo successfully for 800 years. Not sure why you think anything is going to change in the current round of coordinated decline and opportunistic looting, but I'm curious to hear your argument.
Now if you're gonna argue with somebody, at least argue with their points please.
Hint: CNBC has not been around anywhere near 800 years. (no matter how haggard they look)
Unless Ben prints.
The value of those bonds is a fart in a hurricane compared to his treason so far.
I hate to admit it, but the Bald Jew is the one NOT in panic mode.
Why do I think I've seen this B movie before?
Maybe the US Gov wishes to buy Cyprus with Ben's money.
Another bullshit. What are you talking about? collapse, abyss? What a fucking nonsense. The whole thing is 5 billion dollars worth
(it is even not a spare change for Ben or Mario). The only real complication that I see is Russian mafia. If not them, Cyprus would already capitualated. The honest solution of the crisis should be collapse of Cyprus banks and depositors with bank insurance (i.e.
with deposits less than 100000 euro) fully compensated with others getting whatever will be left. Of course, it will never happen.
I think in the end of the day Cypriots will realize that what is offered to them is the best outcome under circumstances. Germans will hardly badge and give away Russian mafia 5 billion dollars. It will be the end Merkel as a politician.
How much Cash do you hold in the Bank? Let's suppose that you are in the USA.
Let's suppose that Obama, tommorow, declared a Bank Holiday and declared that he was going to make your Bank solvent. Let's suppose that he figured that, oh, 50% of your savings was needed to do that. Are you okay with that? No?
If it can happen in Cyprus then it can happen here in the USA. How safe are your deposits?
You may give the Government all sorts of unwarranted trust. That is up to you. But the IMF and ECB just tipped their hand and I see the cards that they are holding. I, as many others, do not like what I see.
You may say that it cannot happen here. You may be in denial about that. Well in Normal Times I might agree. But these times are far from Normal Times. I have not ever, once in my Five Decades of living, ever read about anything like this. This event is so extraordinary that it is unfathomable that it could happen. But it happened.
So what are you going to do about it? Continue to trust an Untrustworthy Government as the USA has proven out to be?
I am getting paid next to nothing for my deposits in the Bank. If my Government can steal them at will then why should I continue to place my capital at risk to the Government theft? I am actually debating removing all of my cash. Do you think that others just may be considering it?
Can you spell B-A-N-K---R-U-N?
I need a larger mattress.
As noted by many, the amount is not the issue here. The blatant undermining of depositor property rights though, WILL undermine the entire system over time.
Of course, in my mind, the system cannot help but to destruct, so as always, they choose how and when they do it in order to get the maximum advantage from the carnage.
NA is right. The $ (pick your favorite fiat) is not the problem.
A well known idiom about a straw and a camel jumps to mind.
The FED will print. Cyprus will be "saved". This ends in wheelbarrows, like always.
"The FED will print. Cyprus will be "saved". This ends in world war, like always." - FIXED.
Ends in World War III ??? We are already engaged.
First comes Currency War, then comes Financial War, then comes the Bombs, Missiles and Bullets flying in the Hot War.
I have seen this Movie before. But somehow I am not so sure that it will end as well for the USA this time around.
I just did not like the Mushroom Clouds at the end of the last Movie.
Hell, Moochelle could do Cypress out of the household accounts...,
but they might have to cancel the Easter Egg Hunt.
moochelle does cyprus, quick, get the mind-bleach
Wookie with her mouth stretched WIDE open
Bring it the fuck on Bruce. Only then will compensation (in what form that may be) return to people who's labor is actually worth a shit.
FYI bruce, today's market moves are occuring despite the purchase operations for today. Notice that there is no POMO scheduled for tomorrow.
http://www.newyorkfed.org/markets/tot_operation_schedule.html
Expect The Great and Powerful Draghi to make a statement about doing whatever it takes before day end...algos go crazy...Dow hits 15K.
Agree with you Bruce that the Hour May Be at Hand
Other consequence scenarios though ...
An effective Russian take-over of Cyprus (and potentially of Greece) involving all of the offshore oil and gas potential of those two countries (hundreds of billions)
Russians back-stop the new restored sovereign Cyprus currency ....
As for the EU, it is indeed the moment when the Mediterranean countries might leave the euro-zone as well (tho not the EU, which is reasonably likely for Cyprus, maybe Greece)
But at the same time, Draghi and the ECB will do 'whatever it takes' to prop up the German, and maybe French banks ... print up several trillion of quantitative easing ... what they should have done a while ago, but domestic politics blocked
Now the Germans will be faced with banks and insurance companies collapsing, they will agree to print ... Merkel will turn on a dime to save her political behind, just like with her conversion from Stasi Communism to pro-American capitalism
---
Appreciate all your work Bruce
You know if you had had a black secret account, maybe you would not have been so financially hit in your experience of the American divorce-extortion legal system
On the other hand, maybe you always did have a secret account, but of course cannot admit it still living in the USA ... I have enjoyed Swiss banking and I can't imagine you not enjoying it as well
BK, do please consider leaving the USA before it's too late ...
There was no conversion, there was only deception. East Germany's Merkel was head of that country's Communist Youth, her father a high ranking Communist. These things you know, but what you apparently don't is that the "collapse" of Communism in the Soviet Uinon and Eastern Europe was a deception planned long in advance. Merkel is acting neither cynically nor pragmatically. She is acting like the high-ranking Communist Party member she is. She is taking instructions from Moscow.
http://thefinalphaseforum.invisionzone.com/index.php?showtopic=44
Well Obummber did tell Putin's surrogate (Medev or whatever his name is) that he needed to get reelected to be more flexible. The global map is being redrawn.
'Medvedev', which I believe is Russian for ‘dead man walking’.
First, why would Russia want Greece or Cyprus? (the Russians are no fools, those gas reserves are NOT proven reserves and "possible reserves" are not that large compared to say Iran or Iraq) These type of countries are to expensive to hold and Russia crossed that bridge in circa 1989,.
Second, with UN having buffer zones in Cyprus (aka armed forces) and the UK having a large base there, do you think they will just look the other way while Russia strolls in... and what do you think will be the response of NATO? What do you think Turkey is going to do??? No I don't think soooo....
Third, if the Euro goes down, I think the whole system will take a shock that it may not recover from... (complex systems, just in time inventories and a "locked up" global financial system are very bad) I doubt any big player wants to see this happen, "the devil you know versus the one you don't", much risk to both Russia and China in pushing this over the edge.
No, they will fuck around on the side lines but I doubt they will "intentionally" kick the legs out from under this chair. (doesn't mean the chair will not fall).
It will be very interesting to see how this plays out.
It wouldn't be the first country to have both western and Russian bases in it's territory.
I don't think the Mafiya plans that far forward. They are probably thinking "We can take over all the banks in Cyprus for 20 billion Euros... which we will be paying to ourselves... we can make that back in a week... then we will own the banks and can do whatever we like.... "
The Russians don't 'hold' countries anymore...they use economic and geopolitical leverage to do deals favorable to their interests. in August 2009, Turkey and Russia signed an agreement to construct a gas pipeline intended to run from Ceyhan in Turkey to Ashkelon in Israel, via a transit station in Karpasia in Turkish Cyprus. The sionists believe that the Cypriot offshore fields are within their 'sphere of influence.' They intend to be major players in any development, and tie the production into the Russian-Turkish deal. The Russians have no problem making deals with israel, nor do the Turks, posturing aside...
NATO is a collection of Sionist client states with a common policy designed to protect it's interests. They are not a critical factor here...but their collective bankruptcy is. The israelis will falter quickly without continued Euro-merikan subsidy...and the Russians are prepared to step in and bail out Cyprus - for a price - namely, a free hand in dictating common European energy policy(a speed end to Merikan coal exports!) The Russians will also offer the Turks an alternative to a collapsing NATO Alliance membership...a strategic partnership with dynamically growing Eastern trade nexus that have way more juice than anything they dying west can offer.
Everything's on the table right now (including re-unification-which the sionists oppose) ...it's just a stationary moment when everybody sucks in a deep breath, then begins to process the obvious...the bankster overlords of the west have just thrown in their last hand...Turkey and Russia are deep in processing the ramifications...and rewards!
tomorrow the chips fly where they may!
Isn't that how Red Dress fell and resorted to fowl language ? Ask Bruce , he was there.