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Cyprus "Capital Control / Solidarity Fund" Plan 'C' Vote Tomorrow After Rumor Russia Rejects All Proposals

Tyler Durden's picture


Rumors and news continue to play but some slight weakness after-hours (Treasuries at session highs) suggest fears might have legs. While the Cypriot government submits its bank restructuring (good-bank / bad-bank and capital controls) and Solidarity Fund (CCOs), there will be no vote until tomorrow morning Europe time.


All of this after rumors of a 'rejection of all Cyprus government proposals' by Russia was the talk on desks and that more than a few Cyprus MPs believe the bank bill is too strict and needs more discussion. The ECB/ELA deadline looms with the path/hurdles now "Cyprus discussion" - "Cyprus vote" - "Troika analysis" - "ECB / EU Agreement" - and theoretically find a (non-Russian) funder for the CCO - before Tuesday's European open. Stay long Brussels and Nicosia caterers.


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Thu, 03/21/2013 - 16:50 | 3359193 idea_hamster
idea_hamster's picture

They should just hire Aubrey McClendon from Chesapeake to farm out their natgas -- he'll have the whole country all Norway'd up in no time -- or perhaps Iceland'd, we'd have to see.  

As long as he gets his corporate jet, I'm sure he'd be great.

Thu, 03/21/2013 - 16:51 | 3359204 Spider
Spider's picture

Also, go long Russian hitmen...

Thu, 03/21/2013 - 17:00 | 3359245 NotApplicable
NotApplicable's picture

Can someone remind me again... what is a "law" exactly?

Thu, 03/21/2013 - 17:02 | 3359258 redpill
redpill's picture

The only one that matters right now is gravity, cuz this bitch is going down.

Thu, 03/21/2013 - 17:17 | 3359309 camaro68ss
camaro68ss's picture

is this what it looks like when SHTF?

Thu, 03/21/2013 - 17:39 | 3359405 redpill
redpill's picture

Nope not yet.  This was just a teensy little fart drifting in the general direction of the fan.  Everyone will start to smell the stink but still have no idea what's coming.

Thu, 03/21/2013 - 18:29 | 3359599 bigkahuna
bigkahuna's picture

Sad thing is that you're right. People in general are going to be wondering what happened.

Thu, 03/21/2013 - 20:29 | 3359964 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

I wonder when the Russian mob shows up at the front doors of the Cyprus' MPs. "You did what to our money bitch....." Bodies will then float in the Mediterranean.

Thu, 03/21/2013 - 20:31 | 3359966 StychoKiller
StychoKiller's picture

Must be the Russian translation of "Chum" :>D

Thu, 03/21/2013 - 19:21 | 3359809 Groundhog Day
Groundhog Day's picture

This bitch is going down 2% then it's back to the races.  Bernanke's got our back, new paradigm, bla bla bla

Thu, 03/21/2013 - 20:30 | 3359965 StychoKiller
StychoKiller's picture

And RedPill knocks one outa da park!  :>D

Thu, 03/21/2013 - 17:18 | 3359310 max2205
max2205's picture

You have to follow but the makers dont

Thu, 03/21/2013 - 18:12 | 3359541 Cathartes Aura
Cathartes Aura's picture


what is a "law" exactly?

a "law" is merely words created to justify whatever they currently have in mind for you.

always subject to change via "new laws" of course - see "amrka" for examples, and subsequent punitive actions.

of course, I realise you know this,  *nods*

Thu, 03/21/2013 - 17:02 | 3359259 Dr Paul Krugman
Dr Paul Krugman's picture
Cyprus: The Sum of All FUBAR


At this point the Cyprus situation is pretty clear — and clarity does not bring reassurance. In fact, it looks as if Cyprus has managed to combine in one place everything that has gone wrong elsewhere.

1. Runaway banking. Cyprus has a huge banking system — assets around 8 times GDP — based on a business model of attracting offshore money with high rates and good opportunities for tax avoidance/evasion.

I’ve done some asking around, and cleared up something that was puzzling me. Officially, only about 40 percent of the deposits in Cypriot banks are from nonresidents, which would imply resident deposits of almost 500 percent of GDP, which is crazy. But the answer is that I do not think that word “resident” means what you think it means. Some of the money is from wealthy expats living in Cyprus; much of it is from rich people who have resident status without, you know, actually living there. So we should think of Cypriot deposits as mainly coming from non-Cypriots, attracted by that business model.

And the business model only works until there’s a big loss somewhere; since Cypriot banks were investing in Greece and in their own domestic real estate bubble, doom was inevitable. Which brings me to:

2. Big domestic real estate bubble, Spain or Ireland-sized. Not yet fully deflated, which means lots more losses to come. And the combination of the real estate bubble and the income from dodgy banking also led to:

3. Massive overvaluation, with Cypriot prices and costs having risen much more than in the rest of the euro area. In 2008 the current account deficit was more than 15 percent of GDP!

What can be done? First off, Cypriot banks cannot honor their debts, which unfortunately overwhelmingly take the form of deposits. So a default on deposits is inevitable.

As I now understand it, the initial screwup was a joint error of the Europeans and the Cypriots. Europe didn’t want an explicit bank resolution, which would among other things have given clear seniority to small insured deposits; instead, it wanted this essentially fictitious tax scheme. Meanwhile, the Cypriot government still has the illusion that its banking model can survive, and wanted to limit the hit to the big overseas depositors. Hence the debacle of the small-deposit tax.

In the end this probably comes, in some version, to what it should have been from the start — a big haircut on deposits over 100,000.

But even then the situation is by no means under control. There’s still a real estate bubble to implode, there’s still a huge problem of competitiveness (made worse because one major export industry, banking, has just gone to meet its maker), and the bailout will leave Cyprus with Greek-level sovereign debt.

So then what? As a number of people have pointed out, Cyprus is arguably better positioned than Iceland to do an Iceland, because devaluing a reintroduced Cypriot currency could bring in a lot of tourism. But will the Cypriots — who haven’t even reconciled themselves to the end of their round-tripping business — be willing to go there?

Truly awesome stuff.

Thu, 03/21/2013 - 17:06 | 3359283 toys for tits
toys for tits's picture

Thanks Captain Obvious for nothing.

They could also lock in the over 100,000 into 5 and 10 year CDs and give them some of the nat gas investments.

Thu, 03/21/2013 - 17:28 | 3359357 camaro68ss
camaro68ss's picture

for once you write something slightly ok Dr.

Thu, 03/21/2013 - 17:36 | 3359397 Dr Paul Krugman
Dr Paul Krugman's picture

Thank you.  I too believe the most rational solution is a big haircut on deposits over 100,000 so to alleviate the burden of the financial system.

Thu, 03/21/2013 - 17:44 | 3359432 camaro68ss
camaro68ss's picture

no thats not what needs to be done and thank you for putting words in my mouth when im slightly Complementing you

Thu, 03/21/2013 - 17:49 | 3359453 Dr Paul Krugman
Dr Paul Krugman's picture

Did you even read my article?

In the end this probably comes, in some version, to what it should have been from the start — a big haircut on deposits over 100,000.

But even then the situation is by no means under control.

Thu, 03/21/2013 - 18:02 | 3359509 falak pema
falak pema's picture

YOu're just repeating the BCG meme; 29%.

Thu, 03/21/2013 - 20:02 | 3359899 slightlyskeptical
slightlyskeptical's picture

Shareholders, then debt holders lose all before any depositor lose a penny. This is the only way.  As such i think it is premature to be talking about depositor haircuts.  See what liquidation brings. if you don't keep the hierarchy of debt in place there will be no trust in the system. 

Thu, 03/21/2013 - 18:55 | 3359517 knukles
knukles's picture

He does that all the time.  Either incapable of consideration or insecure and immature responses similar to adolescent children.
Did the same thing to me the other day.  I repeated one of his assertions proceeded by an "if" as in as he'd suggested, drew a diametrically opposed conclusion and he turned around and stated he was glad I agreed.

Then as in all such cases, he'll ignore the comments and proceed ahead as if all's in perfect agreement.

Not worth the effort.

edit:  I actually think he just wants attention He's lonely.  And the petulant child is the only means by which he knows to garner such....

Thu, 03/21/2013 - 17:47 | 3359444 akak
akak's picture

Funny how you statists have SO many euphemistic terms for theft --- "haircut", "levy", "surcharge", (unavoidable) "fee", anything prefaced by "mandatory", and of course, the all-time favorite, "tax".

One wonders why you do not have the honesty, or integrity, to call a spade a spade. 

Much like the curious after-hours bank closures and "holidays" that oh-so-coincidentally always manage to come on a Friday. 

Thu, 03/21/2013 - 17:55 | 3359487 toys for tits
toys for tits's picture

Can we retire the word "haircut", especially since it doesn't grow back, and call this shit what it is, which is a "scalping"?  

That way we can get the Indians involved as well.

Thu, 03/21/2013 - 20:01 | 3359896 shovelhead
shovelhead's picture

Doesn't it make perfect sense to grab Joe the Grocers money?

After all, he must be the guy who bought billions worth of crap Greek paper.


There will be no credit events...ever. Let's kill Joe instead.

Thu, 03/21/2013 - 20:58 | 3360042 nmewn
nmewn's picture

Ya know akak, I'm giving serious consideration to this anarchism thing. If rules & law don't apply to them, it doesn't apply to us.

And that would apply to ALL rules & law mandated by them.

Fri, 03/22/2013 - 02:15 | 3360922 RichardP
RichardP's picture

Whose guns are bigger?

Thu, 03/21/2013 - 17:49 | 3359455 Mine Is Bigger
Mine Is Bigger's picture

Can they just break all the windows and boost GDP instead?

Thu, 03/21/2013 - 17:59 | 3359489 earleflorida
earleflorida's picture

@ Dr. Paul Krugman

i'll give ya a high-five if you post that comment in tommorows NYT...

perplex'd in florida?

Thu, 03/21/2013 - 17:13 | 3359293 akak
akak's picture

First to junk!

Didn't even need to read the drivel --- I mean, it is Krudman, after all.


EDIT: You're slipping, Paulie --- this post was not nearly as insane as most of yours have been here.  Almost rational, even.  I smell an imposter.

Thu, 03/21/2013 - 17:14 | 3359300 Dr Paul Krugman
Dr Paul Krugman's picture

You are an ignoramus, pirate.

Thu, 03/21/2013 - 17:25 | 3359323 fonzannoon
fonzannoon's picture

and you are a mosquito on the ass of society.

p.s Akak are we cool now about the "safety deposit box" incident?

Thu, 03/21/2013 - 17:35 | 3359386 akak
akak's picture

I don't even remember the incident, fonz, so I guess so!

Thu, 03/21/2013 - 17:36 | 3359398 fonzannoon
fonzannoon's picture

you are on the list of people I don't piss off. So I am glad to hear that!

Thu, 03/21/2013 - 17:59 | 3359498 akak
akak's picture

Fonzannoon, you have me curious about this now.  I honestly don't ever remember getting into any kind of argument or heated debate over safe deposit boxes.

Thu, 03/21/2013 - 17:23 | 3359329 akak
akak's picture

Who are you, and what have you done with the crazy and dishonest Krudman that we all know and have come to loathe?

Thu, 03/21/2013 - 17:26 | 3359345 Dr Paul Krugman
Dr Paul Krugman's picture

Like I have stated many times on this blog:  you all and I agree more than you know.  What we don't agree on is how to resolve the problems; yet we can find agreement if people understand what it takes to supply growth to an economy.

Thu, 03/21/2013 - 17:30 | 3359364 camaro68ss
camaro68ss's picture

And that starts by not QE'ing the economy to death right?

Or is it we need to break hella windows?

Thu, 03/21/2013 - 17:41 | 3359420 Dr Paul Krugman
Dr Paul Krugman's picture

Obviously, if the ECB could implement the measures the Fed has taken they should have, but there is too much interest in austerity to do so; so a haircut on deposits over 100,000 will have to do for now.

Thu, 03/21/2013 - 18:16 | 3359545 knukles
knukles's picture

Well that's sure a fucking expansive policy...

Thu, 03/21/2013 - 21:12 | 3360082 nmewn
nmewn's picture

Sheer Keynesian brilliance.

Apparently in Cyprus 100k is rich, while here its somewhere north of clearly this gives every right for government to break its own laws and everyone below that level can breathe a "collective" sgh of relief for now.

Until next year...or the year everyone can see, government has its own interests clutched firmly to its heart...its the Keynesian

Thu, 03/21/2013 - 17:31 | 3359369 fonzannoon
fonzannoon's picture

Let's start with a debt jubilee, then we can talk about growth.

Thu, 03/21/2013 - 17:38 | 3359403 Dr Paul Krugman
Dr Paul Krugman's picture

A big haircut on all deposits over 100,000 will help here, but more will need to be done to fix the problem.

Thu, 03/21/2013 - 21:04 | 3360062 ziggy59
ziggy59's picture

Based on very flawed, it wont work.
The banks need to be closed down after the citizens get their money out.
The people that created and keep this disaster going need to be justiced, and not Just us..

Thu, 03/21/2013 - 17:39 | 3359396 akak
akak's picture

I agree that our economy can not more forward until aliens invade the earth, and after our unsuccessful war against them, march on all six of their legs to the the Bureau of Engraving and Printing (after breaking all of its windows) and fire up those printing presses at Warp 8 speed.

Thu, 03/21/2013 - 18:52 | 3359701 slightlyskeptical
slightlyskeptical's picture

Nah. We need aliens to come to show us how to properly advance our society. i would imagine profit based economics is not very high on their list. Just so we are clear, profit is not the same of incentive based compensation.

Thu, 03/21/2013 - 17:50 | 3359467 Mine Is Bigger
Mine Is Bigger's picture

Alien invastions?

Thu, 03/21/2013 - 18:46 | 3359674 slightlyskeptical
slightlyskeptical's picture

I agree we agree on some points. I am ok with printing our way out of this. i think we should just print our govt funding every year.  Print to pay off the national debt.  We need to cut the whole interest expense out of the govt equation.

 We also need to print to buy out the mortgage market. Refinance with all, freeing up a few hundred dollars per family each month. This can be done without costing the govt a dime over time. This will immediately stimulate demand, jobs, etc.

Then let social security and govt pension funds take control of the mortgage origination market. Book entry the current SS debt to the Fed which after the above, has simply become an accounting entity. This would relieve taxpayers from having to provide SS's interest income as well.

The banks, at this point who cares? We would have the government pumping in more money each year to provide growth. They can return to being custodians rather than hedge funds. Those that fail will just be paying the price of doing poor business.

We need a reset that rids of us of fractional reserve banking and debt based money, then we can worry about growth.

Thu, 03/21/2013 - 18:10 | 3359531 knukles
knukles's picture

Talk about ad hominem attacks
You fucking hypocrite

Thu, 03/21/2013 - 17:23 | 3359332 NotApplicable
NotApplicable's picture

Slipping? I dunno, it's quite a feat of dedication to get that verbose for a mere troll.

Of course, I don't ever bother reading them. Still though, the reactions are funny at times.

Thu, 03/21/2013 - 17:19 | 3359315 ziggy59
ziggy59's picture

Why do you have Dr. In front of your name? You seem to have learned nothing and therefore you cant teach..and Dr. means teacher...

You are a fraud on many levels, but you have convinced a select few.

Im convinced...

Youre an idiot

Thu, 03/21/2013 - 17:24 | 3359335 Dr Paul Krugman
Dr Paul Krugman's picture

If it will be all ad hominem attacks today, and no debate, then I won't waste my time here.

Thu, 03/21/2013 - 17:25 | 3359342 teolawki
teolawki's picture

Is that a promise?

Thu, 03/21/2013 - 17:26 | 3359343 fonzannoon
fonzannoon's picture

It probably will. Go watch the Jim Grant interview with Maria and learn something.

Thu, 03/21/2013 - 17:29 | 3359359 Meat Hammer
Meat Hammer's picture

Is ad hominem your favorite smart-guy term?  You got your lunch money stolen a lot, didn't you?

Thu, 03/21/2013 - 17:42 | 3359414 akak
akak's picture

I think it is his semi-surreptitious way of admitting that he is in fact a homo.


(Not that there's anything wrong with that.)

Thu, 03/21/2013 - 20:37 | 3359976 BTFDemocracy
BTFDemocracy's picture

Maybe we should leave Krugman alone, after all if Krugman really reads Zerohedge site and has any sense of logic, it is clear that he can't speak the truth because special interests tell him not to. He would not have a job if he spoke positively about the gold standard, all money is debt, theft through inflation, history & elimination of the federal reserve, etc. A Banker's spoke person, put there to implant fiction that favors the banking elite.

I would like to see him reference/link to Zerohedge in one of his posts. HA!

Thu, 03/21/2013 - 17:43 | 3359429 toys for tits
toys for tits's picture

I responded and with a plan that you didn't acknowledge. So here's the long version and we can try again.  Banker types should like it although I'll probably be junked here.

First, leave all deposits under €100,000 untouched. Hitting those deposits was by far the biggest mistake of the Cyprus plan as originally envisaged, and everybody would be extremely happy if guaranteed depositors could be kept whole.

Second, term out everybody else by five years, or ten if they prefer.

That's it! That's the whole plan, and it's kinda genius. If you have bank deposits of more than €100,000, they will be converted into bank CDs, with a maturity of either five years or 10 years - your choice. If you pick the longer maturity, then your CD will be secured by future Cypriot gas revenues, which could amount to hundreds of billions of dollars.

And if you have sovereign bonds, they too will be termed out by five years, giving Cyprus a bit of breathing room to get its act together.

Do that, say Buchheit and Gulati, and you manage to reduce the size of the needed bailout by more than the €5.8 billion that Cyprus is currently planning to raise with its tax on bank deposits - and you don't touch anybody's principal at all. To be sure, the new CDs, which would be tradable, would surely trade at less than par: there would be a present-value haircut on deposits over €100,000. But that's going to happen anyway. And at least in this case patient depositors will have a chance of getting all their money back in full - with interest. And, most importantly, guaranteed depositors will remain unscathed.

Thu, 03/21/2013 - 20:40 | 3359995 StychoKiller
StychoKiller's picture

As long as you leave the "honey" in the safe, the eaters WILL try to steal it!  End fractional reserve banking, end of discussion.

Thu, 03/21/2013 - 20:22 | 3359950 ziggy59
ziggy59's picture

Go debate with the master

Thu, 03/21/2013 - 17:22 | 3359326 algol_dog
algol_dog's picture

Why doesn't Apple just buy the whole Island, debt and all, and move it's tax free operations over there ...

Thu, 03/21/2013 - 17:43 | 3359402 Pseudo Anonym
Pseudo Anonym's picture

just out of habit, there will be some that will junk your contribution (which is spot on)  w/o reading

Thu, 03/21/2013 - 17:54 | 3359483 Karl von Bahnhof
Karl von Bahnhof's picture

Have a strange feeling you could be almost real Dr. P. K.

Thu, 03/21/2013 - 17:57 | 3359491 slightlyskeptical
slightlyskeptical's picture

That is a good synopsis. Ultimately what should happen will happen. The real estate situation is easy. Domestic loans immediately go to lira. Foriegn loans will be offered to be settle in Lira, refuse the offer and courts will just refuse to foreclose. Once the mortgages are in hand, refinance them with the people at affordable terms. ECB will try to drive down the Lira but if you force them to accept Lira as payment at a Cyprus set rate, then maybe not so much.

Owe the banks a little money and you are in trouble, owe them a ton and you can make the rules.

Thu, 03/21/2013 - 18:27 | 3359595 Buck Johnson
Buck Johnson's picture

They need to, thats the only way they can come out of this.  With a reduced new currency and hope to start all over again.  And I began to suspect about what you said who was a resident or not one in Cypris.  Because if you truly did the numbers and the population is around 1.1 million maybe, maybe they have an age group that are in there working years to be 250,000 (I'm being generous).  The rest are retires and such.  I bet people pay extra money to be a resident to have the protection and other fringe benefits.  I bet most of the money (90%) is from residents who are from other countries calling themselves Cypriots.

Thu, 03/21/2013 - 23:33 | 3360646 yogibear
yogibear's picture

Iceland did the correct procedure. They defaulted. Period! With all debts gone they start from a clean slate.

Thu, 03/21/2013 - 17:04 | 3359272 waterwitch
waterwitch's picture

Let Boris fly the drones

Thu, 03/21/2013 - 17:18 | 3359312 Ned Zeppelin
Ned Zeppelin's picture

Although those Saudi hitmen are no slouches either if you mess with one of their boys, as the Colorado prison chief found out.  Of course, in this country we found out Saudis operate with complete impunity on 9/11.


Thu, 03/21/2013 - 16:59 | 3359243 McMolotov
McMolotov's picture

Politicians, bankers, and bureaucrats sitting around a table, whacking each other off, isn't going to fix anything. Time to let it all burn down.

Thu, 03/21/2013 - 17:12 | 3359298 McMolotov
McMolotov's picture

It's the slow death of fiat, good doctor, and it wants to take us all with it.

Thu, 03/21/2013 - 19:02 | 3359736 slightlyskeptical
slightlyskeptical's picture

Exactly what it is. Fed is just extending the pain to protect it's lackies the best it can. I think a reset over the weekend, for all nations is in our best interest. Everyone who gained from the illicit system will be hair-cutted (in vogue) and those caught in it can escape. Once the power to create debt nased money is gone, then those who can truly benefit society will rise to the top.

Thu, 03/21/2013 - 17:24 | 3359336 akak
akak's picture

Krugman: The Sum of All Rears

Thu, 03/21/2013 - 16:50 | 3359199 toys for tits
toys for tits's picture

Putin just invested in Steven Seagal's sports complex in Moscow.  The only way he'll invest in Cyprus' banks is if they put octagon rings in all the lobbies.

Thu, 03/21/2013 - 16:56 | 3359209 Mercury
Mercury's picture

Does Plan 'C' stand for Corzine?

Thu, 03/21/2013 - 16:55 | 3359216 SheepDog-One
SheepDog-One's picture

Plenty of time to slip in some polonium 210 cocktails tonite! Beware Russian caterers!

Thu, 03/21/2013 - 16:54 | 3359220 Wile-E-Coyote
Wile-E-Coyote's picture

I like the Russians I might fucking emigrate.

Thu, 03/21/2013 - 17:08 | 3359290 toys for tits
toys for tits's picture

The chicks are hot. (SFW)

Thu, 03/21/2013 - 17:26 | 3359344 Wile-E-Coyote
Wile-E-Coyote's picture

Yeah until they get to 30 then they kind of explode.

Thu, 03/21/2013 - 17:45 | 3359437 McMolotov
McMolotov's picture

Treat 'em like cars and trade in for a new one every few years.

Thu, 03/21/2013 - 17:50 | 3359463 SmittyinLA
SmittyinLA's picture

ya baby, don't just emigrate but FUCKING EMIGRATE or be like Gerard DePardu emigrate without actually moving, Emigrate in name only EINO or FEINO

Thu, 03/21/2013 - 16:54 | 3359221 Dr. Engali
Dr. Engali's picture

If only we had some sort of distraction...........

Thu, 03/21/2013 - 16:56 | 3359228 SheepDog-One
SheepDog-One's picture

Great time for NASA to release a story about a giant meteor about to hit us any minute!

Thu, 03/21/2013 - 17:01 | 3359257 nonclaim
nonclaim's picture

Only to get actually hit by a much smaller one no one saw coming from the other direction... they should rename that one Cyprus. It hit Russia too...

Thu, 03/21/2013 - 18:03 | 3359512 Wile-E-Coyote
Wile-E-Coyote's picture

I would welcome a Meteor even the fucking bankers couldn't dodge that one.

Thu, 03/21/2013 - 16:58 | 3359238 kito
kito's picture


Thu, 03/21/2013 - 17:04 | 3359269 McMolotov
McMolotov's picture

Sweet Jesus, what a depressing fucking list that is. Sports, gambling, Lululemon, dead porn stars, celebrities with famously large tits...

We've likely arrived at our evolutionary dead-end, people.

Thu, 03/21/2013 - 17:15 | 3359303 kito
kito's picture

the good news for all pm holders is that when gold reaches number one on google hot KNOW its time to cash in for farmland.......  ;)

Thu, 03/21/2013 - 17:12 | 3359296 ziggy59
ziggy59's picture

Not me... Im bailing out providentmetal, apmex, tulving, and mile franklin

Thu, 03/21/2013 - 20:34 | 3359970 knukles
knukles's picture

Kito, do you realize that the Second Law of Thermodynamics suggests that evolution as professed by modern scientists (sic) suggesting greater order and advancement is in error?
The Second Law suggests that the universe tends toward decreasing order as opposed to the statist, socialist dream.... so there really should be no surprise as to the trends becomingly increasingly irrelevant with respect to man's survival. 


Just thought I might cheer up everybody's day a bit.

Thu, 03/21/2013 - 17:02 | 3359262 Esso
Esso's picture

Slightly off topic, but the CNBS website is broken.

It showed stawks down and gold & silver up.

Oh wait! This is April 1, right? Wotta great joke they played! Haha.

Thu, 03/21/2013 - 17:15 | 3359304 toys for tits
toys for tits's picture

+1 lol

Thu, 03/21/2013 - 16:55 | 3359223 nonclaim
nonclaim's picture

Any idea if top bank officials are still around? All I hear is about politicians playing cards.

Thu, 03/21/2013 - 20:47 | 3360010 StychoKiller
StychoKiller's picture

Some think they're playing poker, some think Rummy, most are gonna end up playing "Go Fish!"

Thu, 03/21/2013 - 16:55 | 3359225 RacerX
RacerX's picture

wake me up at plan K.

Thu, 03/21/2013 - 17:19 | 3359314 waterwitch
waterwitch's picture


Thu, 03/21/2013 - 20:35 | 3359973 knukles
knukles's picture


Thu, 03/21/2013 - 16:56 | 3359229 Hero Protagonist
Hero Protagonist's picture

Cyprus needs to learn how to abstract the truth.  By keeping interests rates at 0%, the Fed is stealing a lot more from depositors than the Cypriot parliament is proposing and you don't see people in the streets in the US.  Grow up and learn how the big boys/girls do it. Sheesh.

Thu, 03/21/2013 - 17:33 | 3359380 NotApplicable
NotApplicable's picture

Parliament lacks the magic checkbook required to properly manage ZIRP, and they aren't yet prostrated enough for the ECB to do it for them.

Thu, 03/21/2013 - 16:56 | 3359232 Sutton
Sutton's picture's been four and a half years without "good bank/bad bank" nonsense.

Thu, 03/21/2013 - 17:00 | 3359247 The Invisible Foot
The Invisible Foot's picture


Thu, 03/21/2013 - 17:00 | 3359248 besnook
besnook's picture

putin has discussed and agreed to some kind of deal. he would never let this opportunity go without some advantage. it could be as simple as using cyprus as a proxy for a takedown of the euro and eurozone in exchange for guarantees of a russian bailout when the mission is accomplished or putin calculated a denial of aid would accomplish the same thing with no russian fingerprints but the looming specter of the russian mob secretly "counseling" the cypriots to make the right decisions.

Thu, 03/21/2013 - 17:23 | 3359330 optionsman
optionsman's picture

no. there is no deal. the Russians correctly assessed that letting this situation unfold as it may has only positive outcomes for the Russian Government. I'd say this is a truly a perfect storm and in large part self inflicted by inept Eurocrats. Now Germany and ECB cannot reverse what has been done or said, the Russians are happy to sit on the sidelines. but come we have not yet heard of the Chinese or Brazilians contemplating a rescue? ;) it's never too late for this nonsense and I am sure between now and close of business tomorrow we are going to hear something like that. If not, at least we may end up finding out how OMT works ;)........

Thu, 03/21/2013 - 20:37 | 3359981 knukles
knukles's picture

Unless they offer him a full time long term lease on a warm deep water port.

Thu, 03/21/2013 - 20:49 | 3360015 StychoKiller
StychoKiller's picture

And R. Mugabe rides to the rescue with Trillionz of Z-Dollas!

Cyprus is NOT Uganda! (Italy, Spain, Argentina, etc)

Thu, 03/21/2013 - 17:03 | 3359251 eduard khil
eduard khil's picture

We still got a little way to go folks...haven't even had the first "China. To bail out Cyprus" headline yet.

Thu, 03/21/2013 - 17:27 | 3359350 alex_g
alex_g's picture

Cyprus has gas, not oil.  Can't really ship it, so China is not interested.

Thu, 03/21/2013 - 17:01 | 3359254 Catullus
Catullus's picture

Can we get another hedge fund manager out there to tell us how much he doesn't give a fucj about Cyprus and that he's hyperbullish on stuff and things?

Thu, 03/21/2013 - 17:02 | 3359263 km4
km4's picture

Krugman’s Bad Math on Cyprus Nice takedown of Kruggles by Yves Smith

Domestic housing loans are €12.6 billion or about 60% of GDP. By contrast, in the US, residential mortgages (including on multifamily units) are about $10.8 trillion versus a GDP of $15.8 trillion, or 68% of GDP, so Cyprus does not seem all that out of line, particularly when you consider that is has a very large retiree population (as in mortgages are supported by past savings, not current earnings which are included in GDP).

As for the size of the banking sector relative to GDP, Krugman seems scandalized that the banking sector is so large relative to its economy. Yes, this is a risky model, and Cyprus made the mistake of being overly dependent on one huge client, Russia. But Cyprus is hardly alone in being a financial center with banks that are a big multiple of GDP. Luxembourg is the really extreme case here, with a banking sector at over 20x GDP. England’s banking sector is 6x GDP. Swiss banks were 6.8x GDP in 2010 (Switzerland has forced much higher equity requirements on its banks, so its balance sheets have shrunk since then). Singapore also has an outsized banking sector. But let us remember that the EU has also set out to trash the Cyprus banking sector pretty much overnight with the deposit garnishing threat. It is important to recognize that while a restructuring was necessary, the severity of the crisis and the degree of damage that will be inflicted on the economy was not.

This is not to underplay Cyprus’s problems. But it would help to depict them accurately.


Thu, 03/21/2013 - 17:03 | 3359265 sabra1
sabra1's picture

An elderly resident of Pathos in Cyprus has been doing something odd for the past few weeks. Every Friday she goes to the bank and withdraws all of her money, then returns it on Monday. When asked why she gave the following statement to bank employees:

“My son is an economist in Russia and he has been telling me, if something happens with the Cypriot banks, it will happened on the weekend. He told me to withdraw the money every Friday.”

She was laughed at by the bank employees, but now unlike most of the country she has access to her money while the banks in Cyprus stay closed until at least Tuesday of next week. While the Cypriot legislature did not pass a bill that would have taken between 6.75% and 10% of bank deposits, who knows what desperate politicians will do now to get their fix of financial aid from the IMF. At least one person won’t be affected, thanks to a caring grandson.

Thu, 03/21/2013 - 17:35 | 3359394 NotApplicable
NotApplicable's picture

But, other than paying bills electronically, why would you put it back on Monday?

Thu, 03/21/2013 - 17:05 | 3359277 stant
stant's picture

this black swan has hard points under its wings

Thu, 03/21/2013 - 17:06 | 3359279 lolmao500
lolmao500's picture

How come the US doesn't give Cyprus their own ``Russian proposal``?? We bail you out and you give us all your NG/OIL reserves?

Thu, 03/21/2013 - 17:10 | 3359292 ziggy59
ziggy59's picture

Its not in the scheme of things..

Thu, 03/21/2013 - 17:39 | 3359406 NotApplicable
NotApplicable's picture

And it's not like this all happened by accident, either.

Benron supports the EU (read: banks) via the back-door swap lines. Governments? Well there's politics to be played in order to generate a facade of legitimacy (read: mandate).

Thu, 03/21/2013 - 17:10 | 3359294 Yikes
Yikes's picture

You're forgetting who is sitting in the White House.  Fossil Fuel?  Bah!

Thu, 03/21/2013 - 17:21 | 3359319 Al Huxley
Al Huxley's picture

Maybe it's cheaper just to 'restore freedom and democracy' to them at some point.

Thu, 03/21/2013 - 17:45 | 3359431 Esso
Esso's picture

Hells yeah! I hear there's al-Queefers in Cyprus! Eeeek! Terriers!

Send in the NATO  bombers.

Thu, 03/21/2013 - 18:30 | 3359610 HardlyZero
HardlyZero's picture

If any country has dibs I think UK is probably in the top 5 in line, they would like the gas too.

In 1878, as the result of the Cyprus Convention, the United Kingdom took over the government of Cyprus as a protectorate from the Ottoman Empire. In 1914, at the beginning of World War I, Cyprus was annexed by the United Kingdom. In 1925, following the dissolution of the Ottoman Empire, Cyprus was made a Crown Colony.

The Royal Navy Cyprus Squadron (RNCS) was a Royal Naval Squadron based on the Mediterranean island of Cyprus. It was formed in February 2003 in support of Operation Telic, the U.S.-led invasion of Iraq, and disbanded in April 2010. The squadron comprised two P2000-class patrol ships, HMS Pursuer and Dasher; these ships were reassigned to the Clyde Naval Base at Faslane in 2010.

The ships were based at Akrotiri Mole near RAF Akrotiri and were employed in the protection of visiting ships and other British Forces Cyprus equipment designated as high value. The Squadron was also employed in Internal Security patrols of the Sovereign Base Areas (SBA), and training for visiting Royal Navy ships. They had a secondary role supporting the police and customs and excise of the Sovereign Base Area

Just depends who gets first dibs or grabs the land and assets.

Turkey says they will block all natgas exploration as Turkey says its either "theirs" or they have been making such demands for centuries.

Thu, 03/21/2013 - 17:06 | 3359281 Fuh Querada
Fuh Querada's picture

Cypriot ministry of phynance

The russian caption says:" transparent walls-windows. You can see who is working and who isn't"

Thu, 03/21/2013 - 17:07 | 3359285 debtor of last ...
debtor of last resort's picture

Cyprus is just another Greek island. Same shit all over again.

Thu, 03/21/2013 - 17:12 | 3359297 Tsar Pointless
Tsar Pointless's picture

Okay, fine.

But what does this have to do with my NCAA bracket?

Thu, 03/21/2013 - 17:17 | 3359306 km4
km4's picture


Libertarian777 4 hours ago

 The economy improved slightly when America was removed from the gold standard, but would remain in depression for many more years.  The problem was the government was keeping prices too high - prices could have fallen while remaining on a gold standard and the economy would have improved similar to the 1920 recession, but the government would rather keep prices high and erode the real purchasing power through inflation rather than have prices fall. 

By going off the gold standard, the government no longer has to rely on the people to finance its activities, it can print as much money as it wants.  This is a huge shift in power from the people to the government.  We the people now suffer from inflation due to government money printing.  It is the government and wall street that get first access to printed money, while the people who produce real goods and services get the new money last and suffer a reduction in their standard of living.

Thu, 03/21/2013 - 17:18 | 3359311 Seasmoke
Seasmoke's picture

there must be a Maiden Lane , somewhere on that island !!!

Thu, 03/21/2013 - 17:20 | 3359317 AnonymousCitizen
AnonymousCitizen's picture

Imagine a world with no banks.

Thu, 03/21/2013 - 17:30 | 3359365 optionsman
optionsman's picture


can someone explain why we need the banks? why do we need the money managers?

I look for a less obvious answer than rob us of our hard earned money......

Thu, 03/21/2013 - 22:23 | 3360275 newengland
newengland's picture

Hundreds of years ago, a brilliant mind named Bauer changed his family name to Rothschild, for the 'red sign' hung over his store front in Frankfurt, Germany, where he was a money changer. Many complain about money, but he had the audacity to risk all, and take a LITTLE profit. He was despised by those who took money from him, and did not bear his risk.

Years later, he founded zionism.

I want his family and descendents to look upon my New England where their forbears came in the 1700s and look upon our soul which was the only people NOT to give up jews to the Nazis in WWII, and think this:

Love our own. The Tora says so. 

Right. Wrong. Indifferent. Love our USA. We made it.

Zionism is not good for jews - or the USA. Best we stay home with the Constitution and Declaration of Independence, the Bill of Rights.

Apart from that: eat your soup and stop this bloody fighting with shysters abroad. Enough, already. We have everything we need here in this USA. I am sorry for other people's troubles. It is their troubles. Keep it there. Not here.

The problem with people who travel first class is that they rarely pay for it, 'options man', perhaps resentful at your losses.

Thu, 03/21/2013 - 21:49 | 3360240 newengland
newengland's picture

Why? So dirt people can rape and rob each other without the pretense of paper money? You are very silly if you think that human nature is defined by paper money.

There are people with character, and there are hateful bastids. Same as it ever was. 

Thu, 03/21/2013 - 17:21 | 3359321 max2205
max2205's picture

Corizine would have gotten splattered by this one if he survived MFG.  Oh wait. ...

Thu, 03/21/2013 - 21:47 | 3360222 newengland
newengland's picture

JP Morgue and Goldman Sacks had a French poodle that yapped, and got its ass kicked.

Cyprus is a feud among Class A gangsta bankstas, and they prefer it that way. Enjoy the show. It's more fun than a killer thriller book of fiction.

Thu, 03/21/2013 - 17:23 | 3359333 Grimbert
Grimbert's picture

ECB: You have to find €5bn if you want us to lend you €10bn so that you can have the €15bn you need to pay your debts.

Cyprus: Who is this €15bn owed to?

ECB: Our friends the banks.

Cyprus: Where did they get the money from to lend to us in the first place?

ECB: They magicked it out of thin air. You find the cash and they will magic it away when they get it. Well the €5bn anyway, remember we just magicked €10bn of that.

Cyprus: So they never actually lent us anything in the first place. I don't think we owe anyone anything. We'll magic the money away ourselves, thank you.


Oh. Unfortunately all our bank depositors think the money in their accounts really exists. Who's going to tell them? 

Thu, 03/21/2013 - 17:39 | 3359409 lolmao500
lolmao500's picture

Cyprus accepts this crap, they become the new Greece... their debt to GDP ratio will go up to 90% to 140% OVERNIGHT... then it'll get way worse when everybody says FUCK IT when the banks reopen.

Thu, 03/21/2013 - 17:27 | 3359353 optionsman
optionsman's picture

did they stress test Cyprus banks a few months ago? did they pass? cannot recall. but if yes and yes are the answers to these questions, another vote of confidence in the system ;)

Thu, 03/21/2013 - 17:29 | 3359360 infinity8
infinity8's picture

The only way this entire Cyprus situation makes any sense to me is as a test.

Thu, 03/21/2013 - 17:45 | 3359439 swabeyjw
swabeyjw's picture

The issue is not banks. It is the structure of monetary systems. Perhaps goverment non-earned revenues should be limited two flows. One is a tax on all interest charged and the other is the right to print into existence the equivalent dollars to all interest charged. They could choose to print less in high inflation and then would have less to spend - both actions would be a pull back on inflation.

Thu, 03/21/2013 - 18:27 | 3359482 falak pema
falak pema's picture

Well, poor Cyprus, after Nein, Nein, nein...its gonna be Niet, Niet,niet!

What a lousy  world this is; nowhere to run to.

Back to eating humble pie and accepting the Austerity plan of Ron Paulian philosophy : nobody is TBTF and ECB applies that philosophy to Cyprus and eviscerates its bankrupt banks. 

You lost bigtime Cyprus bankstas, now you pay and if you do, we save your sheeple.

Merkel is Ron PAul's sista! And the Cypriots hate her for it! 

I guess the <100000 E rule will be applied to be in line with accross board EU deal. 

Thu, 03/21/2013 - 18:06 | 3359522 One eyed man
One eyed man's picture

How can the Euro claim to be a viable reserve currency when it has an existential crisis every few months?

Even IF they somehow manage to avert this Cyprus crisis, you can bet your bottom euro that they'll be back at it again in a few months.

Thu, 03/21/2013 - 18:15 | 3359557 Monkeyfister
Monkeyfister's picture

Dear Cyprus--

Before signing anything, please consider the Iceland Option.

Barring that, please consider the Julian Carlton option.

Sincerely yours,


Thu, 03/21/2013 - 21:43 | 3360206 newengland
newengland's picture

Cypriots knew damn well that Russian oligarchs who stole from poor Russians were parking their money in Cyprus.

You are an idiot if you have a nanosecond sympathy for Cypriots.

'First they came'.... 

Thu, 03/21/2013 - 18:50 | 3359688 rockraider3
rockraider3's picture

The Russians sure don't want to be swapped out of the Euro and into a new currency, and devalued into the ground (they would be better off with the 20% tax/confiscation).  However, they will step up and bail-out Cyprus, without a doubt.  They just haven't exacted their pound of flesh yet.  First round of negotiations never leads to a deal.  Cyprus will cave, and the Russians will fund, and get all the explorations rights they want and then some.

Thu, 03/21/2013 - 19:05 | 3359738 Nadaclue
Nadaclue's picture

Here is more fun to add to the Cyprus equation.

1) Germany has a naval base in Cyprus, Russia would like second Med port in the area as well. The Germans can be asked to vacate with three months notice.

2) The Russian Gov is pissed off not only because their Oligarchs are getting hosed, the Russian Gov also has money in Cyprus or more correctly, agencies of the Gov have their money there.   --From Investment Watch--

Here is the translated link to # 1 above, below is the piece.

Here is a picture of the area relevant to economic zones.


Presence comparable with Germany wants Moscow to Cyprus 
Claims Russia seem to include the use of Cyprus for military purposes, to further strengthen its presence in the Mediterranean
The use of Cyprus for military reasons seems to pursue the Russians.Apparently the base available in Moscow Tartous, Syria does not fully cover the strategic plans for the wider Mediterranean region and, therefore, seek alternative ways to consolidate the presence of its navy and aviation, into a sea extremely important for both the surface and the seabed. The issue seems to have returned in recent days because of the need which has come to Nicosia to revive its relations with the Russian capital and has already been done, according to our information, some shocks and soundings from the Russian side. established by Russians Besides, do not keep secret its plans for the region. A few days ago, Admiral Viktor Tsirkof issued a statement announcing that the Russian Navy began to establish a task force, to be installed permanently in the Mediterranean, to protect, he said, the Russian interests in the region. The power will permanently patrol the Mediterranean. Anonymous sources, even talked about ten warships and two utilities, which use ports in Syria, Greece and Cyprus. It is, essentially, as reported on the revival of the fleet available in the country (5th Mediterranean Squadron), the era USSR.

  Short and long term
goal of the Russians, it seems, is to allow the Navy to find refuge in Cypriot ports, while making use of air base "Papandreou" in Paphos. Not necessarily to create a basis, corresponding to that held in Syria, which, but the potential traffic and filling in calm waters. At the same time, such an agreement would provide long term in Moscow will protect their financial interests, if the Russians eventually acquire a significant role in liquefying natural gas terminal. Germans are Russians seem to require essentially military presence in Cyprus, similar to Germany available on our island. As part of their action in UNIFIL (United Nations Interim Force in Lebanon), the Germans have a bilateral agreement with the Republic of Cyprus, under which they can anchor in Limassol to Paphos and land use even territory of the Republic, for operational reasons, such exercises. Unless, however, it seems that Germany uses these accesses and its national interests, paper could utilize in our economic negotiations. Information indicates, indeed, that the agreement is of such nature that may be unilaterally terminated by giving three months. Possible activation of this provision will definitely worried Berlin, in the light of developments.


Thu, 03/21/2013 - 21:40 | 3360192 newengland
newengland's picture

Putin and Brits will always do deals over eejit teeny countries, eg Cyprus. Cheers, dahlink.

Thu, 03/21/2013 - 21:01 | 3360057 ziggy59
ziggy59's picture

A Safe and a Shotgun or Publicly-owned Banks? The Battle of Cyprus
by Ellen Brown

I need to restock some shells

Thu, 03/21/2013 - 21:36 | 3360168 Manipuflation
Manipuflation's picture

Speaking of Russians, this is my brother-in-law Evgeny Ostapenko.  I shit you not.  I can only offer a huge Congratulations to Evgeny.  I heard about this quest some time ago but rather dismissed it as a "whatever" sort of thing. 

The moral of the story is this:  Do you really want to piss these people off?  I was recently told by a different Russian that Cypriots are the "laziest fucks on the face of the Earth.  Fuck them.".(loose translation there)

From RT

Thu, 03/21/2013 - 21:38 | 3360172 newengland
newengland's picture

Tried to tip you off, but you just wouldn't have it, would you munchkins.

On the table: gas.

All else is political theater. The French bint Lagarde IMF is no better than the French sodomite DSK. Idiots. Tsk. Europe, always fanning French ego. Ridiculous.

I must admire patriot Putin for how well he is playing his hand thus far.

Thu, 03/21/2013 - 22:02 | 3360299 Manipuflation
Manipuflation's picture

That you did newengland and as you will recall I stated that Russia would bail out Cyprus but that they would take their pound of flesh for it via England a few days back.  Now there is the BP deal.  Putin knows what the fuck he is doing.  It appears that my intel is very good when it comes to Russia.  Russians do not think like Westerners and they are good at chess. 

Thu, 03/21/2013 - 22:12 | 3360341 newengland
newengland's picture

Let's wait and see who bails out what, friend. 


There are more things in heaven and earth, Horatio,
Than are dreamt of in your philosophy.
William Shakespeare"Hamlet", Act 1 scene 5
Maybe it's best to hold fire on the money for the moment before believing any political bull$hit.


Thu, 03/21/2013 - 23:30 | 3360592 Manipuflation
Manipuflation's picture

Thank you newengland and I respect your well thought out opinions and observations as well.  Yes, you are correct that we can not know all of the details but it is odd that the BP deal is occurring right now and under the terms outlined.(and not outlined)  The money transfer is occurring exactly there in that deal would be my guess.  I do not have THAT good of intel one else here does either.

One thing we do know, or at least I do for sure, is that Putin will protect his oligarchs because that is his power base.  It's cronyism all the way there but it is not Western style cronyism.  The Russian oligigarchs are like family to each other in varying degrees whereas Western style oligarcharism is to "rip each others throats" as the Russians like to say.

I appreciate the Shakespeare quotation as one does not usually observe the occurrence of such on ZH.  Myself, I prefer Ambrose Bierce simply because he was, and still is, spot on most of the time.  The Devils Dictionary was prescient.  In 1999, I bought a whole case of the paperback version and started handing them out to friends and family.  People, mostly Americans in this case, would respond with a "what the fuck is the matter with you" look on their face.  Well, now they ask me for investment advice and my only reply is that I already gave it to them many years ago.  Nothing has changed.

I hope you enjoy at least a few of the Bierce quotes chronicled here newengland.(not that we are "brainy" or even making a claim to be so)  Some of the quotes are just so true. 

Do NOT follow this link or you will be banned from the site!