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Euro Official On Cyprus: "Markets Believe We Will Find A Solution, This Might Not Be The Case"
While the market levitation courtesy of the Fed, BIS and BOJ continues unabated to give the impression that all is well, allowing empty momentum-chasing chatterboxes to say that Cyprus is not a big deal because... well, look at the market (and real traders the chance to quietly dump existing risk positions), the artificial, centrally-planned calm during the storm may be ending. The reason comes from none other than the Eurogroup, whose deputy finance ministers held a conference call last night, and whose transcript has been seen by Reuters.
Here are the highlights.
Euro zone finance officials acknowledged being "in a mess" over Cyprus during a conference call on Wednesday and discussed imposing capital controls to insulate the region from a possible collapse of the Cypriot economy.
Not very confidence boosting. But then again, with confidence in Cyprus now gone, the time for damage control is long gone. Sure enough, it just goes from bad to worse:
"The (Cypriot) parliament is obviously too emotional and will not decide on anything, if Cyprus does not even feel that they can attend the call it is a big problem for us," the French representative said, according to the notes seen by Reuters.
"We have never seen this."
"Ring-fencing" is back, and so are Lehman references.
The official also referred to the need to resolve Cyprus's two biggest banks, both of which are close to collapse, and mentioned the possibility of Cyprus leaving the euro zone.
In the event of an exit, the official said steps needed to be taken to "ring-fence" the rest of the euro zone from the impact and to ensure there was no contagion to Greece.
Bad news for locals: your economy is done, so may as well drag the entire Eurozone down with you:
"The economy is going to tank in Cyprus no matter what," the notes quoted him as saying. "Restrictions on capital will probably be imposed," he said, adding that further conference calls would be organised in the coming days.
And the punchline:
"Markets believe that we will find a solution and that we will provide more money and this might not be the case," one of the participants on the call said
Hint to those confused: the market is not at all ignoring Cyprus. The central banks manipulating the market are doing their best to make it seem the market is not affected by a development which not even politicians have any idea how to negate as everything is now in unchartered territory. Of course, if and when control of the market is lost, that's when things get really interest.
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Choice, IMO.
In reference to a Joint document laying out how to handle the failure of a " Globally Active, Systemically Important,Financial Institutions" aka To Big To Fail.....
"The FDIC and Bank of England appeared aware that many obstacles still remain, most notably regarding cross-border issues. Legal frameworks would need to mesh to allow bail-ins, and authorities would need to find a way to force counterparties to extend stays on termination to foreign operations during resolution. "The FDIC and the Bank of England continue to work to ensure that their respective resolution strategies will be fully operational," the document said.
http://www.centralbanking.com/central-banking/news/2230932/boe-and-fdic-...
It appears that the "Bail-in" clause for retail depositors has always been a "legal" option, in the UK and most of the EU, just not acknowledged until Cyprus default.
http://www.bankofengland.co.uk/publications/Documents/news/2012/nr156.pdf
“The only good is knowledge and the only evil is ignorance.”
? Socrates
GS down $3.29, JPM down .58, C down .63
FAS down 3.49
FAZ up .21 Buy after 5:1 reverse split on 04/02?
{ yawn }
Do the Eurogroup now claim to have discovered intelligent life at the committee level?
Highly contentious.
The government and the people have until Tuesday to think about whether to accept the tax and lose up to 10% of their savings or refuse and lose the lot. A no brainer really. The dreaded Troika has got them by the goolies.
I would take the cut and take every penny out of the bank and short the euro.
Ring-fence the rest of the euro zone from the impact and to ensure there is no contagion from Cyprus' collapse?
Laurence D. Fink says no big deal.
New Global Colapse terminology: PIIGCS
new PIIGS terminology : EUROZONE
CPIIGS
There, fixed it for you.
We are all living in Cyprus.
Someone explain to me how you can unilaterally impose such a tax.
A big problem I see beyond the obvious that has been stated:
Most people use bank accounts as "working capital"...you know to pay bills etc. Therefore what is in the account on one day is not what is in there the next. If they decide that "deposits" include checking and savings accounts than that is a can of worms they won't be able to resolve. For example: if it is based on a certain date, one person may have gotten a bonus etc. Even if the lower limit is $20,000, what about the person who saved money to purchase a house and their down payment is part of that? What about someone who just inherited a certain amount of money? There are so many scenario's that prevent applying the tax in an equitable manner that it would take forever to resolve it. What if one guy bought his house the week before.....is he free? What about corporate or partnership assets? None of which even gets into the issue of double taxation or those who were tipped off before the banks closed and withdrew large amounts of cash prior?
In the bigger picture, as soon as the rest of Europe understands this, they will be taking money out en masse to prevent suffering the same fate. And what are the chances that any Cypress resident would put money back into the bank? If they confiscate any depositor money, there is no way to put the genie back in the bottle for Euro members....and Japan should be on watch because once their crisis gets full blown, there is no country with the ability to bail them out.
Default now, why you still can.
Solution? 4what?
What goes around, comes around. Be prepared.
you know... in purely relative terms... and just for the sake of perspective...I wonder if it has occurred to ANYONE in the entire fucking EU "Official Hierarchy" that possible massive Euro destabilization could easily be avoided for a MEASLY 5 billion euros.
ESPECIALLY after all the hundreds of billions of euros they've literally poured into Portugal, Greece, Ireland, soon to be Spain and Italy.
Really?
I urge you all to view this clip to see what the scum from the Ecb think of the great unwashed masses.http://www.liveleak.com/view?i=85c_1363743687
EZ finc ministers and everybody else in the EU only have an interest in what happens to Cyprus's economy, its banks and the Cypriot people including depositors/savers to the extent it affects the rest of the EZ/EU. If there was no risk of contagion etc, they'd have walked already.
I want to see and hear all the claims that this is a "one off" and a "special case" LIKE EVERY ONE OF THESE HAS BEEN.
If anyone has any money in any EU bank after this, they DESERVE THE LOSS.
the bulls get fed, the bears get fed, but... the [hog squealing]pe`op`o`ple`s-- get slaughtered!