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The Worst Case For Big Depositors In Cyprus: 15.26% Haircut
The first proposed haircut on Cypriot deposits, which saw deposits under €100,000 haircut by 6.75%, and those €100,000 and larger (i.e., the "Russian oligarch" pool) trimmed by 9.9% appears to be hours away from renegotiation. The reason is that Europe now is convinced the only reason the bailout proposal would not pass parliament is that the tax on the "common man" deposits is too high, which means it will be revised to 3% or perhaps lower, with the possibility of staggered thresholds, such that deposits under €20,000 remain untouched. This will be decided at a conference call at 6:30 pm GMT when Europe will once again confirm its cluelessness, and inability to make concrete, firm decisions. While none of this will restore confidence in the Cypriot and European banking system, the open question is what will be the Russian impairment - i.e., what is the most that whale deposits can be cut by? We now know the answer, courtesy of this interactive widget from Reuters, which allows one to calculate what the haircut on large deposits would be assuming an X% haircut on smaller deposits. It appears that the worst case for Russians will be 15.26% - this is how much of all Cypriot deposits €100K and higher would be taxed by if there is 0% tax on the small deposits.
Readers are welcome to play with their own assumptions of what is considered "fair" for deposit confiscation in a global socialist regime, below:
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Canary (in the coal mine) Island.
The European Union; one of the most ill-conceived & worst-implemented ideas in the 21 century, and that's saying something...
The answer to the % deposit haircut lies in the % of Russian oil Cyprus relies upon!
Will they now be changing the name of the Columbian necktie to give it some Russian flavor?
Looks like it’s going to be on like Donkey Kong with the Rooskies..
Bearish for Monaco yacht sales.
NWO One World Government... mmmwwaaahahahahaaaaaaa! Only 70 Euro's for a ticket? I should go to this shit.
Nope, all ZH members are accredited members of the media
"Media members: free access with accreditation"
lol
How's this for a title:
"Under the High Patronage of His Serene Highness Prince Albert II of Monaco"
isnt worth it if saves just 1 banker.....
What is it about yuppies, baby boomers and other garden variety of sheeple that love getting a$$ raped so much?
You keep your funds in a western banking institution and you deserve what you get!
it will be revised to 3% or perhaps lower, with the possibility of staggered thresholds, such that deposits under €20,000 remain untouched
Shit. I was hoping the "common man" was about to get his well deserved wake-up bitch slap.
Must be very amusing to wait and see how much foreign people will agree to take from your bank account...
You will find out soon enough.
They must be reviewing Minimum S&P or Dow purchases. Now take your money out of the bank, and buy the S&P, or Autozone
If this is really between the Russian money and the EU, then this is far from over. Do you all think the Russians will give 10% to EU for nothing? what are those nuclear war heads for?
Too clever by half I would say on those Russians.
They wanted a stable jurisdiction for their holding companies and monies and that island with common law
traditions seemed to provide just that. An added bonus ,
they were told, is this is even safer because of EU membership! Well , wrong , welcome back to the EUdSSR !
Problem the miners are so oblivious they think the canary is just sleeping. It'll wake up, just wait.
My niece works at a large banking institution and they are told by their higher ups that whan we the people put our money in their bank, the money then belongs to the banking firm. She has told many customers this inside the bank and they seem to take it all instride. WTF is wrong with this pic? My wife was speechless when she told us, but I had been trying to explain fractional banking to her for years. NOW she is finally starting to see the light.. baa baa bitchez...
Do you not remember the article 5 days ago about the CIA and FBI spying on all USA citizens bank accounts???
They are calculating how much money the USA will earn with this new “tax”. Plus, they will be able to retroactive the “tax” based upon account balances as of 1/1/2013.
This is coming to Amerika and they know exactly how much to “tax” you already!
Shit! I go surfice it to say, that the Global Criminal (Intelligence/Bankster) Crime Sydicates have already had thier noses in The American Peoples Private Accounts.
They're about to "John Corzine" MF Global the whole world.
Wa-tanga Chupa!
You hit the nail on the head.
Why anyone thinks their finances are safe from govt intrusion and records stealing is just something to always wonder about.
Prolly been watching peoples transactions for everything everywhere in the world for the last ten years. Maybe more.
Is that 50% banking haircut raid coming to a theater near you soon?
"Officials are billing the Cypriot hit on savers as a “fiscal measure” rather than a bail-in, haircut or loss inflicted on depositors in order to wriggle around the EU deposit guarantee law."
As I stated in a post yesterday, the class warfare card wins every time. Carpe Diem 51%'rs.
The Canaries keep piling up, but some people seem to think they are just resting their eyes. http://www.flickr.com/photos/79201873@N08/8568254981/in/photostream
See there, you'll thank them for saving you 4% and sticking it to the other guy.
Until they come back for more in a few months.
Deposits under 100,000 Euros are insured by the State (Cyprus). If any fee was to be levied on those amounts, it should come from the State, whether they have to borrow it or whatever.
If someone has an account with 120,000 Euros in it, the first 100,000 should be immune to any confiscation, and only the extra 20,000 should have the fee levied. And that should be PER BANK, as promised.
If the government of Cyprus cannot raise the money to cover the first 100,000 Euros in an account, they should sell assets (i.e. grant Gazprom the Oil and Gas Exploration Rights, or preferably auction those rights off in an open process that allows other bidders, to insure the best price is received).
Anything less, and the people should rightfully withdraw all of their money from the banking system there. Any shortfalls should be taken from the bank, the bank management, the banks owners, the bank creditors, in that order.
Robin Hood syndrome. All the peasants will be so happy they were only robbed a little.
After all it's for a good cause: the bond holders are spared any losses.
Better honest cut than inflation. At least they will know exactly how much was stolen from them.
So, you believe there is zero inflation in the Eurozone? This is not A or B, this is A plus B.
Russians can't vote in Cypriot elections so you can guess which way this is heading
Sorry Vlad, bend over ...
Aren't our Supremes deciding whether you have to be a citizen to vote in elections? These national borders/citizenship concepts are for the unenlightened racists.
Seems like US markets are shrugging it off. Of course..
That's because Benny is at the printing press right now, also the PPT kicked in too, buying the market up and pushing silver and gold down
"Suddenly, millions of depositors cried out in terror and were silenced."
First tranche 15.26%.
Leaving a second tranche of 24.74% to meet the already announced target of 40%.
Stability ain't stable.
This whole situation is like a wet dream for the elite. They can fuck the two groups of people they hate the most at the same time; middle/working class folks with savings and the Russians.
"This whole situation is like a wet dream for the elite in the western world" - FIXED. What, you really think there are not any "elite" in Russia or the eastern world? LMFAO!!!
Western banker elite is what I meant but thanks for your enthusiastic clarification.
The world has been here before, hedge accordingly.
Interestingly, since we're talking about the Russian elite, it's actually split in two. Part of it has allied itself with the western banker elite and banks in London and the Caribbean. The Russian elite loyal to Mother Russia banks in Cyprus. It's not clear cut like that but that's the general rule is seems.
This could be a teachable moment. Maybe the Russian mob will teach people how to deal with banksters and unscrupulous politicians who steal (from them).
Ha... worse case is about 84.74% too optimistic.
Leaving the €100K accounts alone gives it, at least, the appearance of fulfilling the EU's Deposit Protection Scheme. How much would the big depositors get back if the bank defaulted?
FT Alphaville speculated that the reason smaller account got haircuts was as a jesture to large depositors in an effort preserve Cyprus' offshore banking center status:
"The spin that this is about spanking money-launderers is rubbish. The 9.9 per cent levy will be the cost of doing business for the average CIS corporate shell, as Pawelmorski notes. More to the point, someone clearly balked at increasing the rate above 10 per cent for big-ticket depositors — because why else distribute pain to small holders to make up for it. Someone has an eye on Cyprus somehow maintaining a future as an offshore banking centre."
http://ftalphaville.ft.com/2013/03/16/1425732/a-stupid-idea-whose-time-h...
non event in US markets. all clear to watch price is right on tv. gives talking heads something to give us headaches with. watching futures last night they turned up right when europe markets openned. whats the next black swan? would a mass suicide at the next fed meeting halt this bull or give it more fuel?
Tax havens are dead, everything that is not in a safety box is taxable.
The progressive tax idea is intended to get popular opinion for the idea.
There are certainly far more small depositors than large ones. Let the few
(wealthy) pay for the many. Where did I hear that before? That mentality,
although popular with the voting masses, always leads to capital flight and
eventually to higher unemployment.
Fun Redshield calculator, courtesy of their agent Reuters - Theft from thy neighbor.
I left it at 14.95%.
On a serious note, more likely than not, there's going to be a threshold, below which, accounts are untouchable, like, say, 25k.
This wreaks of a tax haven war -- something else seems to lurk behind the curtain... keep digging Tyler...
Run the tax to 25% and all small depositors will get an infusion, courtesy of the Russians. That'll pass.
If this near 16% haircut for YOUR fucking money isnt enough to start murdering the thieving bastards, well, I dont know what the fuck it'll take then.
You try and nick near 16% of my money, I would do you in without fucking hesitating.
Thieving fucking ponces. Have at the cunts Cypriots, these fuckers are taking the right piss.
Burn this fucker down.
That is why they must first take your guns.
It's coming so you better take it out now.......
According to my college textbook, banks are just intermediaries between those who have excess of available funds and those who have shortage of funds. They are necessary and beneficial.
Hey, why not take it all? They're just a bunch of Russian mobsters, right? Is some "regular" people suffer laogn with them, so what? Either way we get the money.
Applying socialist logic, anyone whioc is not us and has <100k stole it somehow, so why not take it to put to good use?
Everyone over there is missing the big picture.
Assuming the 'tax' succeeds as plan, there will be runs on the banks thus necessitating more funding.
They're just postponing the inevitable unless the Fed gives them them enough money to wind down the troubled banks while keeping all depositors whole.
exactly! as soon as those bitches open there will be a massive exodus and the pos banks will be worse off then when they started!
It looks like the foot dragging continues. Playing games like this seems like the equivalent of pouring gas on a slow burning fire.
Update: The highly-anticipated vote on a new one-off bailout bank deposit tax has been postponed for a second day in a row by Cyprus' parliament until tomorrow, Tuesday 19th, reports the state broadcaster
Still nobody asking why the money is coming from depositors before equity is wiped, preferred is wiped, bonds are wiped.
FknBllsht
How do you "tax" depositors who would be fully insured under Deposit Insurance to prevent the Default they are insured against ?
There is a major LOGIC FLAW. The WACC for Banks must rise to account for Expropriation Risk
Polonium-210....its whats for dinner! I would be really careful in my decision making process if I were a Cyrus banker or politico.
Its not wise to mess with the Russians as we have seen what they can do when they get PO'd.
8.525%
Yours and Mine
Dear Valued Client,
I am sorry to inform you that this morning the United States Government has confiscated 40% of your brokerage account. Your account which was worth $500,000 on Friday is now worth $300,000. I am also sorry to inform you that in order to free up the $200,000 taken, the government has sold your most highly appreciated positions. This will result in another $50,000 in capital gains taxes. While this is troubling be assurred that not all is bad. Since you now own shares of (insert TBTF bank here). we feel that you will make this "tax" up in no time, as this capital stripped bank, is now much better off than it ever was. Just remember (insert Nick Murray quote here), so just sit back and don't worry about anything.
Now take a breath of relief. This has not happened here yet. However it has happened in Cyprus to a smaller degree. What this means is that the rule of law has become obsolete. The bankers will win at any cost, even if it means ruin for the masses. As such it is time to completely remove any risk-on from your portfolio.
How could this type of letter not be flying out all over the place?
You forgot this:
Affectionately yours, Jaimie Dimon.
Corzined!
I call BS, the original solution will be retained because there was no contagion.
There is no contagion, at least not yet, because the market is "hopeful" the revision will allow the vote to actually pass parliament.
No one panicked in Italy and Spain, that is all the troika needed to know. So back to Plan A.
"... assumptions of what is considered "fair" for deposit confiscation in a global socialist regime..."
'Fair' would be to let Cyprus deal with her own banks, and let large depositors as well as bond holders deal with the consequences they surely thoroughly contemplated before committing millions and billions to some Turkish island currently occupied by some Greeks.
High time to end the bank bailouts. All of them!
Sheeple/muppets 15% now, 50% later and the rest later. All is well. Go back to sleep while we steal your money.
The banksters.
The European farce somehow has no effect on the US farce. Trading opens, oil spikes almost $2 and nat gas continues its week long insanity up nearly $.40 in a week Not to mention the equity ramp job. Somebody wants oil at $93 and nat gas at $4 and is determined to get that price to stick.
As long as the US market is open, nothing will be allowed to go down until the Blankfein, Dimon, and the rest of the criminal syndicate say so.
If any market index is down more that .25% the Fed will buy it back up.
Short's can be held open a fraction of a day. Longs otherwise.
Bernanke and the Fed ensure the market is rigged buying all the dips. They own the market in stealth.
Not appearing on their books but on their member bank's books.
Clever.
The only way Fed is powerless is when confidence in the US dollar is lost. Not much Bernanke and all the Fed's clowns can do when nations worldwide rush to dump their dollars and refuse to take it for trading.
Claw back interest paid on deposits. Not a tax, its a recovery of unearned income.
OK. No Problem. 15% hair cut in Germany oil and gas supply.
The Putin Put is coming...
So, let me get this straight: I saved all my money, and put it in the bank where it's supposed to be safe, cuz I don't trust the markets. You come and lock me out and steal my money from my bank account to pay for debts that you incurred w/o my consent? Meanwhile, all the Banking Phuckers got bailouts and a headups that this was coming... I say "Hang 'em high". Bring it. I'll take my chances... who dies first, me or the banker/politicians. There's 300 million of us, and only 1000 or so of them. Die you criminals.
Just took settled cash out of broker account. Sorry to miss this great stock market run up. My chickens are still laying and not lying as opposed to the bankers who are still lying and trying to lay off their wonderful "derivatives" to the next sucker. Who is that next sucker again now that Cyprus is bust...I mean Russian/Cypriot depositors are bust?
now all they have to do is use the final over 100k on balances on dec 31 2012 to get the bucks from the insiders who started their frontrunning insider info based withdrawals.
jan was the first month of net withdrawals in cyprus deposits, feb numbers not available yet,(bloomberg)
and when the first half of march comes out.... there will be a list of who knew who ahead of time...
bet a nickel those details never surface.
Coming to a bank near you, bailouts and bonuses for crooked bankers, politicians and socialists. Once again, another central planning plan has worked wonders for the citizens and we have proof beyond any doubt that more debt provides wealth and prosperity.
from CS : Not sure how I missed this earlier but the Governor of the Cyrpiot Central Bank is called Panicos. You could not make it up
The proper solution is the old one.
Let the banks fail.
Liquidate all 'assets' of the bank.
100% haircut for >100K euro's
Use to pay off <100K euro insured accounts
Use the remander to take a Carnival Cruise
.... The Honorable John Corzine comes to mind, I wonder if Cyprus called him in for some consulting work. Did the MF accounts ever get their 85% ?
This should have been a no-brainer. Standard deposit insurance was for up to 100,000 and they should have inputed the haircut of 15.6% or whatever on deposits above that and been done with it. There would have been no violation of trust, the deposit insurance agreement would have been kept, and no moral hazard with arbritrary changing of rules to appease larger depositors.
I don't understand how the great leaders could botch something this simple so badly. It is almost like they wanted to create a crisis or else there was some sort of political force to try to appease the large holders which reeks of corruption.