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European "Rumor Leak, Denial" Trading Pattern Is Back
We already reported earlier that the only bid in the overnight session, aside from that of central banks of course, was courtesy of hopes that Russia would victoriously step in and gloriously deja vu bail out Cyprus from the clutches of a despotic (for lack of a better word) Germany. This happened moments before Russia explicitly denied any agreement between Russia and Cyprus was reached. So, in the aftermath of a brief glimpse of reality courtesy of FedEx which slashed its economic outlook across the board leading some to expect an outright decline in full year S&P earnings, what is a foundering insolvent status quo regime to do? Why regurgitate the same old already refuted rumor of course. Sure enough: "Kathimerini Cyprus reported that an agreement has been reached in principle for Russian investors to buy Cyprus Popular Bank (Laiki) in a deal that would reduce Cyprus' funding needs by 4 billion euros." Unsourced, unfounded, idiotic (because why would Russia buy a bank which will be promptly rendered insolvent by the deposit bank run that follows moments after it finally reopens). That was enough, however, to send the EURUSD soaring....
... and for us to comment on this as follows:
Here we go again with the European rumors ramping EUR, denied 20 minutes later
— zerohedge (@zerohedge) March 20, 2013
We overestimated the response time: 10 minutes later, just as we predicted, all has been denied:
- CYPRUS GOVERNMENT SPOKESMAN DENIES REPORTS OF DEAL TO SELL CYPRUS POPULAR BANK CPBC.CY TO RUSSIAN INVESTORS
And EURUSD tumbles:
Welcome back European pre-denial rumormonger: we missed you.
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For fuck sakes just leave the fucking euro.
FRANCE is terrified of its banks imploding. French banks hold Bonds in Cypriot Banks and are heavy into Greece. The Cyprus situation is simply the extension of the Greek problem and Cypriots do not want to get screwed over like the Greeks - this time Russia is involved because it is a logical trading centre for Russians doing business in the MIddle East and in shipping. Cyprus will try to use Russia to squeeze France which is the main cause of the problem as it tries to squeeze Germany into bailing out French banks
c'est la levy
More and more this is reminding me of the domino scene from V for Vendetta. Everything IS connected.
http://www.youtube.com/watch?v=GPfI9oxZuEo
There are $100 billion in deposits in Cyprus. As the German FinMin said, the banks are INSOLVENT. Now, the depositors of said $100 billion are not bacteria, they understand that, upon opening, all the cash will flee Cyprus. Everybody by now understands this. In my opinion they will not see a dime from those deposits, they are gone to money heaven (aka Greek bonds per the advice of the Germans in 2010).
Russia will not bail out Cyprus simply because it can`t. Any such move would cause blowback for Putin at home, as most Russians know the money in Cyprus was obtained by raping and pillaging what was left of the former Soviet Union. This will not fly with the Russian people.
I think the Cyprus story is behind us now, the money is gone.
Cyprus was a major hub for business in Europe, anyone who wanted to evade taxes, VAT, fiscal authorities, used a Cyprus account, or a Cyprus company. Now all those "smart" people got screwed. The Germans are trying to make a point, if you try to evade our taxes we will fuck you.
"The Germans are trying to make a point, if you try to evade our taxes we will fuck you."
I disagree. These stupid Keynesians don't understand that real people actually react to changes in their environment. Their models only work in perfect world conditions. And these conditions are anything but perfect. The Germans are NOT trying to make a point about evading taxes. It would have been very difficult to sell a Cypriot bail-out to the German people if there were no concessions from the Cypriots themselves. This is about political survival (German elections coming up) and not revenge on the evil Russians. Besides, if these banks implode, what do you think will happen to German banks?
All these banks have so much junk on their balance sheets that if one goes so go the rest. These Eurocrats weren't expecting bank runs but now they have them. This clusterfuck is not going to end well.
"Any such move would cause blowback for Putin at home, as most Russians know the money in Cyprus was obtained by raping and pillaging what was left of the former Soviet Union. This will not fly with the Russian people."
Oh really? Russian people (except some oligarchs) have no influence on Mr.Putin' decisions. Does Russians know of what is cyprus'd money origin, or no - this is doesn't matter. Opposition to Putin just add few episodes to their score, watchdogs have to do some additional job in social media's - thats all. and business people understand the problem with Cyprus (how it affects to Russian economy)
I think, that we will see very interesting scenarios running next days... Mr.Putin have to "save this savings", because there are also a lot of government money too (VTB, Sberbank). And, I think, he (and his oligarchs) is ready for some unexpected moves.
maybe that's why they are searching the IMF chiefs house???
http://rt.com/news/lagarde-search-flat-tapie-533/
Wow, is this her DSK moment? Punishment for fucking up? She gave the Cypriot confiscation plan her blessing.
The ones really taking the beating are the Greeks who moved their money to Cyprus to get what was left out of Greece.
Augustus, those were the unsophisticated Greeks going to Cyprus...the small fish.
The wordly and experienced Greeks moved their wealth to London two to three years ago, and purchased West-end London real estate in abundance.
Move you money into sterling. They need some money to fill the trade balance gap and the growing deficit.
See and watch how Cameron is surendering. While Zerohedge distract you with irrelevant Cyprus.
Joy Nigel Farage while his banker friends and UK goverment is burning foreign investors money
Undo, undo......dammit UNDO!!!
Nothing is fucked here....you're being very un-dude
You must work for CNBC. I hear they hand out free Prozac like it's candy over there.
Hey, give 'em what they want
Can we not just turn it off and turn it on again?
If the majority of the funds/money being "held" by these banks is Russian, I'd say they own the fucking bank already. Something about not biting the hand that feeds you comes to mind.
Welcome to the Wednesday Whipsaw. We will be having a great time today separating you from your dirty money.
So sit back and enjoy the ride, it's gonna be fun.
pods
No POMO's today. Surprised the futures are being ramped so hard.
@mdtrader
They gotta ramp it now before volumes pick up in the open. A little bit of ES goes a long way for the SPY.
First day of Spring (for Northern Hemi)! Chauncey Gardner says there will be growth!
Chauncey looks alot like Wing Commander Mandrake.
These false rumours have only one purpose - suck in stupid buy volume for the big boys to sell into. Crash is coming.
Denial is irrelevant, markets are still higher than before the rumor. Gold is lower, so everything is going as planned.
"tanquam ex ungue leonem" (we recognize the lion by his claw) ... Goldmaaaaaannnnnnnnn
Not until Cyprus is a smoking crater. After that, a bailout could be comparitively cheap what with all the additional concessions Russia could extract. Chess it is.
I cant wait to watch a live webcast as the banks open in Cyprus. I mean if i lived there, i'd be pulling my money out...everyone will, and it'll rock the markets, get out while you can.
Sorta like Black Friday at Victoria's Secret.
http://www.youtube.com/watch?v=9FQ9MAXSdYY
"French authorities carry out search of Paris apartment of IMF chief Lagarde in Paris"
Do not be alarmed. Do not adjust your television sets. This is not a test...this is merely a rerun of a certain DSK soap opera...
this is the price of failure. We do not tolerate failure.
We hope to bring you more soon! Meanwhile...please be aware...there is no such thing as a "Russian Investor" ...do not be hoodwinked. Please check back soon.
She was clearly framed.
http://www.telegraph.co.uk/finance/financial-crime/9942794/French-police-raid-IMF-chief-Christine-Lagardes-flat-in-Bernard-Tapie-probe.html
She is going down like the one she replaced except this time it is with 2 male midgets in leather chain speedos.
au contraire, mon frere...deux lesbian midgets s'vous plait...this is 2013.
DSK go down>>>??? not on your life! C'est impossible!
Typical pull back off the 50 line... but always fun to see the counter intutive old's (news...)
http://www.spiegel.de/international/europe/ecb-may-cut-emergency-funding...
Berlin still trying to strongarm Nicosia:
"For anyone who somehow missed the message, ECB Executive Board member Jörg Asmussen spelled out the potential consequences on Wednesday in an interview with influential German weekly Die Zeit. The ECB, he said, "can only provide emergency liquidity to solvent banks." He made clear that he has doubts that Cypriot banks are solvent."
Right. Because the ECB is such a stickler for rules and proper procedures, instead of grasping clumsy thugs who make it up as they go.
US Dollar is likely to head higher.
http://bullandbearmash.com/chart/dollar-sharply-higher-euro-falls-1/
The Euro has been in a major decline since 2011. Conditions are much worse in Europe today.
bullandbearmash.com/chart/euro-monthly-falls-4-wave-3-commences/
Doesn't matter, it pushed the US stock market futures up 6 handles. Mission accomplished.
Cyprus is just an EU gift to the Russians in return for security of natgas supply.
For what it’s worth: the Russians will not help Cyprus. Cyprus banks will fail officially. EU has to honor the up to 100k guarantee on deposits. The Russians will use the situation to point out why it is not only legally questionable to avoid paying taxes but that it also does not make for a sound financial decision. Either way, the Russian Government stands to gain even if just from weakening of the real wealthy. In Cyprus, once the banks fail the Russians can use the well know script to scoop up the banks dirt cheap, not for billions but perhaps a few millions and with that gain access to all assets that these banks hold. The EU does not want Cyprus banks to start selling off assets on their books. Why? Perhaps they don’t want to disclose how OMT works. Well, the Russians may help shed some light on that after all.
Save Ferris oooops....Save Cyprus!