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Cyprus Deposit Levy Vote Delayed, Will Go "Down To The Wire" As Up To 70% Deposit Tax Contemplated For Some
While GETCO's algos were poised to set off a buying tsunami yesterday the millisecond a flashing red headline hit Bloomberg with even the hint or suggestion that Cyprus is fixed, we said to sit back and relax because Cyprus "will get no resolution today, or tomorrow, and may at best be resolved on Sunday night following yet another coordinated global bailout, (although our money is on a last, last minute resolution some time on Monday when Cyprus is closed but the European markets are widely open)."
As it turns out, we were right, following reports by major newswires that the vote on the deposit levy will only take place (if at all) on Sunday night, after the Eurozone finance ministers' meeting on Sunday.
As it also turns out, and as noted previously, the votes taken yesterday were the easy ones - obviously Cyprus will now need capital controls in perpetuity to slow down the terminal unwind of its banking system which is now, for all intents and purposes, over and will only exist, if at all, entirely though ECB liquidity injections, but the difficult decision - to complete U-Turn on the Tuesday vote just saying no to deposit tax levy - has been delayed.
The reason for the delay? Deciding how to best bring the news to Russian, and other wealthy depositors, that not only will they not have access to their funds for a long, long time, the ultimate haircut on what they thought was safe, easily accessible cash as recently as a week ago, may be a stunning 70%!
From Xinhua:
The Cypriot parliament has postponed a debate on legislation imposing a levy on bank deposits until after a Eurogroup meeting in Brussels on Sunday, parliament sources said on Saturday.
The vote on the bill had been scheduled for Saturday, ahead of a finance ministers meeting to consider a revised bailout for Cyprus, following endorsement of nine bailout related bills at a day-long session of parliament on Friday.
The sources could not say if and when a deposits levy bill will be debated.
Troika technocrats representing the European Commission, the European Central Bank and the International Monetary Fund were at the ministry of finance early on Saturday discussing final details of the bailout.
Cyprus president Nicos Anastasiades was scheduled to fly to Brussels later on Saturday accompanied by leaders of parliamentary parties to plead his position on the bailout but plans may change depending on the outcome of discussions at the ministry of finance.
However his travel to Brussels has been throwing into uncertainty following the postponement of Saturday’s session of parliament.
Cyprus's bid to avert financial collapse will go down to the wire after the island said it would hold a crucial sitting of parliament only after finance ministers of the 17-nation euro zone meet on Sunday.
Cyprus faces a Monday deadline to clinch a 10 billion euro ($13 billion) bailout from the European Union or the European Central Bank says it will cut off emergency funding to the country's stricken banks, spelling certain collapse and potentially pushing the island out of Europe's single currency.
The way the deal is currently structured, all deposits that have EUR 100,000 and less in deposits, which in Cyprus amounts to 361,000 of a total 371,000, will not see a deposit tax, after last week's attempt to impose a 6.75% on all "insured" accounts. However, the same can not be said for the remaining 10,000 belonging supposedly to uber-wealthy Russians, but certainly to people from all over the world, and even Cyprus.
As a result, according to the rapidly shifting plan, depositors with the biggest local bank, Bank of Cyprus, may see losses up to 25%. Per Reuters:
Cyprus is considering a levy of about 25 percent on bank deposits over 100,000 euros ($130,000) in the island's largest local lender, Bank of Cyprus, Finance Minister Michael Sarris said on Saturday
Sarris told reporters that "significant progress" had been made in talks with officials from the European Union, European Central Bank and International Monetary Fund - the so-called 'troika' - and that the discussions may conclude on Saturday evening.
Cyprus' second largest bank, Cyprus Popular Bank, aka Laiki bank, where it appears the bulk of Russian cash is stored, will fare far, far worse with deposit haircuts up to a stunning 70% on the table, and that is after capital controls ease enough to allow for the deposit withdrawals!
Cyprus Popular Bank depositors with more than 100,000 euros will face losses, said Averof Neofytou, deputy president of Anastasiades’s ruling Disy party.
“They will wait for many years before they see what percentage they will get back from their savings -- 30 percent, 40 percent, 50 percent, 60 percent, it will be seen,” Neofytou said during the debate in parliament.
He didn’t say what could happen to larger depositors of other banks.
Nothing good, that's for sure.
But at least the bulk of the population will be spared. The problem is what Russia will do, when the ball is in its court following a vote to impair its citizens which may or may not come, as all political leaders in Russia have made it very clear this is an outright political provocation by Europe targeting purely Russian wealth.
What is also sure, is that any bulk investments in Europe, be they held by Russian, Chinese, or any other oligarchs, will now scramble to get out, knowing quite well their cash is not only no longer welcome in the Eurozone, but most likely will be used to fund bailouts of assorted insolvent European nations. Such as all of them. This could be a very big problem because according to JPMorgan, the share of large or uninsured deposits is about half of total deposits in Euroarea banking system including the peripheral countries.
Should a stealthy "uninsured" depositor run in Europe take place following this weekend, and up to half the funding of European banks go poof - that which until recently was generously provided by the same uberwealthy who are now the target of persecution seemingly everywhere - not all the ELA, LTRO, SMP, OMT, and any other acronym free ECB money in the world will be able to hold the Eurozone together.
In the meantime, those hoping for a Saturday resolution to the Cypriot expropriation of Russian wealth are urged to step back from the computer and go for a walk - it will take a while, and will likely be after the imminent onslaught of fire and brimstone from Russia which now does everything it can - including outright threats at this point - to make it clear that should Europe indeed go ahead and impair its wealthiest depositors by up to 70%, that the European winter 2013/2014 season, will be very long, and very cold.
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The drama in the financial system is wayyyyyyy better than any novel I can remember reading.
Bullish for body bags............
They just need a few days to get the Cypriot legislators new identities before they can flee to South America to evade the ex-KGB death-squads
A group of Keynesians had to measure the length of a flagpole for evidence to support a bailout. They went out to the flagpole with ladders and a tape measure. They proceed to fall off the ladders and drop the tape measure - the whole thing was just a mess.
An Austrian comes along and sees what they're trying to do. He walks over, pulls the flagpole out of the ground, lays it flat, measures it from end to end, gives the measurement to one of the Keynesians and walks away.
After the Austrian has gone, one Keynesian turns to another and laughs. "Isn't that just like an Austrian. We're looking for the height, and he gives us the length."
~~~
Translation: Give us enough time to get all the muppets rounded up on the wrong side of the trade before we flip the switch the other way & take you all to the cleaners...
Faithfully Yours, The Squid
may be a stunning 70%!
Cue up the righteous Rev. Wright's chickens coming home to roost speech.
Minus 70%!
This Is Like Firing A FINANCIAL NUKE At Moscow.
PUTIN Not Like...
It won't be so bad, Russian mafia are VERY forgiving.
lol.
"It hurts doesn't it. You can't believe what fell. All your dreams...uuuhh...dashed. Hopes down the facking drain. Your fate is sitting right beside you."
http://www.youtube.com/watch?v=YFF3E0Aqdlc
Don't splash the pot...
"" What is also sure, is that any bulk investments in Europe, be they held by Russian, Chinese, or any other oligarchs, will now scramble to get out, knowing quite well their cash is not only no longer welcome in the Eurozone, but most likely will be used to fund bailouts of assorted insolvent European nations. Such as all of them. This could be a very big problem because according to JPMorgan, the share of large or uninsured deposits is about half of total deposits in Euroarea banking system including the peripheral countries. ""
RUN To GOLDIE, My Little Bitchies...
AND ... The REAL GOLD, Not The Fantasy GOLD Allegedly At The LEMY Or FED ...
http://www.youtube.com/watch?v=QBml1XZDg3w
If I lived in the EU..., I would be splitting wood this weekend, getting ready for next winter.
Fuck NEXT winter !!!
Gazprom provides 30% of the natural gas to Europe all YEAR long!
http://www.bloomberg.com/news/2012-10-31/gas-golden-age-darkens-in-europe-on-u-s-coal-energy-markets.html
Even after a wave of renegotiations, most prices for gas from Russia’s OAO Gazprom (OGZD), which meets about a third of the EU’s needs through contracts tied to oil, were revised down no more than 10 percent, Bros said. Disputes remain with RWE AG (RWE), Germany’s second-largest utility, and Polskie Gornictwo Naftowe i Gazownictwo SA, the Polish gas company known as PGNiG.
How long does Europe survive WHEN, not if, Gazprom shuts down the pipelines?
If they go ahead with the Suicide Plan for Cyprus, then ...
"... the share of large or uninsured deposits is about half of total deposits in Euroarea banking system including the peripheral countries."
The ONLY problem remaining is the rest of EU BANKS can NEVER re-open without MASSIVE capital controls being put in place first.
If I was a Russian oligarch, I would be getting ready to make a real mess out of the EU.
But that’s just me.. we all know those particular Russians are languid and easily rolled..
Be Ready For OVERNIGHT 2500. GOLD...
AND ... Ooops, Ben Shalom Can't Seem To Locate The GOLD Under NYC Street...
" the ultimate haircut on what they thought was safe, easily accessible cash as recently as a week ago, may be a stunning 70%!"
Is 70% still considered a haircut? At what point does it becoming a fleecing/shearing?
10% is a haircut. 40% is a scalping. I believe the word you're looking for is amputation.
Let's just say that when amputation occurs, especially with Russians, there will always be blood loss...lots of blood loss.
This whole debacle has had at least one advantage, the middle class in Europe is starting to get really worried now, at last... they might just have enough time left to withdraw their savings from the banking system and convert them to money you can't print... last one out is a sucker.
I thought getting Corzined and Madoffed was bad enough but getting Cyprused takes the Kissel.
Pure, Naked, State sanctioned... Theft.
Only people who DONT want to be bankers should be allowed to be bankers...
Jesuits maybe...
Jesuits,...HA!
The only group more evil than the banksters.
You might create a new breed of arch villian jesuit bankers.
no need for this:
it's been already done and works great:
http://www.bibliotecapleyades.net/vatican/esp_vatican37.htm
LOL you guys are living in the 16th century. Today's Jesuits are a joke. The order is gasping for its last few breaths, literally. The average age of its members is around 70, if not older.
today's vatican is a joke. vatican is gasping for its last few breaths, literally. the average age of vatican's members is around 70, if not older.
No parallel. The Jesuits are a religious order, which needs new members to keep alive. It's not getting any new members, and so is dying. The Vatican is a bureaucracy, which can replenish itself from any number of sources.
oh, i see. my bad. according to you, the jesuits have not replenished their ranks since 27 September 1540 (472 years ago): http://en.wikipedia.org/wiki/Jesuit_order
the Jesuits are not a joke. they are within the epi-center of this whole debacle -dont kid yourself - the same group since 1500's have destablized countries, started wars and left piles of dead people in their wake - they are aligned with Fascists the world over
Papal Nunzio to the German Nazi organization - Monsignor Pacelli ( who then became Pope Pius XII) - in the 20/30s worked out the Ledochowski Plan with the Furhrer chamberlain Papen - Father Staempfle a Jesuit wrote Mein Kampf as the ghost writer for Hitler
the catholic church and Jesuits as their maurading band of merry men in particular have long history of alliance with Fascists - in Spain, Portugal, France, Germany, Italy, Croatia, Argentina and they hate democracy
with the acendancy of the new Pope - a Jesuit with Fascist ties in Argentina - just when the world order is in motion for the great restructuring is not by chance
Gold, silver, platinum, palladium...
"Diversification in Precious Metals"
http://tinyurl.com/awapx5l
Bitchiez.
Clean it up! This is Zero Hedge!
I wonder what percentage of the ECB bailout cash is going to have to be set aside to pay the security service bills of CY politicians and bankers?
You don't think that the Troika are the ones needing protection?
I don't pretend to know how far and wide the spider web of professional and personal relationships extends in this case. I'm simply pointing the the obvious front line actors in this dilemma. My point, of course, is that I believe this situation is very dangerous, indeed.
http://cf.chucklesnetwork.agj.co/items/7/7/6/4/5/yo-dawg-i-heard-you-lik...
The ramifications of Cyprus to Russia is no doubt extremely complicated. Putin and others may want to thwart the offshore flow and hiding of money. Having that money in Russian banks could mean better oversight and control of it by the Russian government. The ECB might be playing the bad cop, making Putin the good cop to many in Russia who are less than happy with the Russian mafia and the oligarchs.
To finally stick to their word rather than lose all credibility, they will work through the logic and settle on 100% .... but remember, it's only a one-time confiscation.
Jobs in banking to spike for one month before sinking to multi-year lows.
Strange, how history repeats despite all today's electronic innovations. At the core of the system still resides trust and human nature. No wonder so many swore off banks after 1929. No wonder deposit insurance was created as a plausible reason to trust again ... reset the pins so the game can continue.
And you think 1/10 oz. of silver can never again represent one day's pay?
"Strange, how history repeats despite all today's electronic innovations"
it's one of the main reasons i like the Bible...It's like a manual for the human race
It's something about these "bodies" we walk around in that causes us to do the same stupid shit over and over, forever and forever...
the stomach? (gotta keep filled) the unit? (gotta keep filling)
Technology changes, governments change, societies change, economies change, etc. What doesn't change is human nature. It's what stays constant when all the "expert opinions" contradict eachother. Even if you understand no emotions besides fear and greed you'll still stand a pretty good shot and figuring out what's likely to happen (again and again and again).
"The fact had gone all abroad that the foreign crank who carried million-pound bills in his vest pocket was the patron saint of the place. That was enough. From being a poor, struggling, little hand-to-mouth enterprise, it had become celebrated, and overcrowded with customers."
Tailors, tinkers find the day to day fabrication of real goods tedious. Rise with real fabrication. Fractionalization, hypothecation, paper and digital unbacked and unredeemable money enforced by bully boys with guns and legal tender laws. Presto Million pound notes.
A good commander keeps his core well-defended with best troops. Outer ring of defence is manned by mediocre warriors and pickets. Hence EU project was intended to fail. Pushed forward to absorb the first shocks and protect more vital interests.
http://www.eastoftheweb.com/short-stories/UBooks/MilPou.shtml
I concur; but the way things are going maybe the Russian oligarchs should take the deal, because if this goes on for another couple days they are going to owe the Cypriot banks instead of getting a haircut. Still, that haircut has risen by well more than 50%, smells like a little payback from Frau Merkel.
Repost from late last night. Would appreciate some help on this.
I'm curious to find out what is the status of offshore and domestic Investment Companies doing business in Cyprus. There are many European, Ukrainian, Russian, Jordanian and American funds and investment trusts that have exposure to the Cypriot crisis. Billions have been invested in these funds. Will they be subject to capital controls as well? Will they experience any impairment? In order to do business in country, a Cyprus domiciled bank must be used as custodian and/or pay agent. I am sure there are some offshore fund company execs who aren't going to get a whole lot of sleep this weekend.
Contagion anyone?
Below is from the Central Bank of Cyprus with links to all IF's doing business in Cyprus.
It must be noted that the Central Bank of Cyprus recognises, for the time being, only Private Investment Schemes which have up to 100 investors. Such Schemes must appoint a Custodian which must be a Cyprus bank, unless specifically exempt by the Central Bank of Cyprus. It must also be noted that Private Schemes which do not have a physical presence in Cyprus, must appoint a company to carry out the administration work of the Scheme. The said company must be based in Cyprus and be approved by the Central Bank of Cyprus.
The IF sector in Cyprus comprise of all International Collective Investment Schemes (ICIS) which are regulated and supervised by the Central Bank of Cyprus, investment companies which are listed on the Cyprus Stock Exchange and any other investment fund resident in Cyprus.
The List of IFs maintained by the Central Bank of Cyprus, which is updated on a quarterly basis, can be found below.
http://www.centralbank.gov.cy/media/xls/LIST_OF_IFS_FOR_PUBLICATION_REF....
And here
http://www.centralbank.gov.cy/media//pdf/CLSE_LIST_20_03_13.pdf
There have been several comments, probably more, on ZH the last couple of days noting that one of the last cards Cyprus has left to play is pulling the derivatives trigger by not taking the EU deal; now that Putin has left the table (at least on the deal at hand) they can't play the EU off Russia, so they're left with lighting that fuse. And you'll need time and boatloads of lawyers to figure out which entities are under capital controls, and the markets won't wait for those ultimate judicial dispositions. The question is, is Cyprus a Lehman model for the EU or is it not? The next question is, can anyone really know the answer to that question until the EU pulls the plug? So how can the EU not do the deal in the next 72 hours? It's another existential burp in this sorry shit parade.
This is so contrived
If by contrived you mean intentional, then I might agree. If by contrived you mean fake, well that's were we part company on definition.
Ultimately, this is about CDS, and NOT triggering it. That is why banks don't fail these days, but rather they are bailed out, and the value of their shares are reduced to .01 and then reverse split 100:1. You see, bankers in Brussels sprout have determined that it is not fair for them to have to pay out on the $200 trillion in derivatives that they have sold, and that it is moar fair for selected classes of people to bail out each and every bank that tanks. In this case, the EU has decided that fair is ex KGB agent billionaires paying for it all, when usually it is EVERYBODY THAT CARRIES CURRENCY IN THEIR POCKET that has to pay the bill [via dilution and inflation].
And while everyone talks about Cypriot depositors and protecting them, the real depositor outflow has almost certainly already begun, those outflows being of very rich people who are clicking away with their mouse to move their money out of Europe. Later on, we will get to the story about depositors fleeing banks as seen through cameras at cash machines ...but that will more likely be the end of this story...not the beginning.
So is it "contrived." Maybe. This is a test of the system to see if it can handle a nation leaving the Eurozone, and further a test to see if banks will EVER have to pay out on mountains of CDS sold to unsophisticated corporations and banks.
Good post.
Here's a theoretical way out for Cypress:
A. If someone wants their funds immediately, 70% loss
B. If they are willing to wait X months, 50% loss
C. Wait Y months, 25% loss
D. Wait Z months (with a trickle withdrawal rate for living expenses), 0% loss
I don't know the needed values for X,Y, and Z, but the idea is that if the banks are anywhere close to solvent, it should be possible in theory to unwind their derivatives over time to refund depositors with some modest level of bailout from a third party. If this is not possible, it simply means (reveals) that the zero netting concept is false (as ZH has suggested) and the world is insolvent.
In that case, all the talk is just delay: Let the games begin!
I wouldn't blur the lines between contrived and inevitable too much. The Euro experiment is failing but the reason is not likely that someone is actively sabotaging an otherwise good system. The system was flawed from the beginning. The outcome, therefore, is much more a case of inevitability than contrivance.
To Nodebt...Since when did they start allowing concise, intelligent introspect to be posted here on ZH?
The system is working perfectly - exactly to specification as engineered!
This is, after all, the only outcome of Debt Money Tyranny weaponized with fractional reserve lending and then blown to bits with derivatives.
Detb Money Tyranny
http://www.keepandshare.com/doc/4768883/debtmoneytyranny-6-1-pdf-60k?tr=77
This is a Sun Tzu Art of War operation to use financial fraud to conquer the Western nations as they use our wealth and name to conquer nations that don't allow Debt Money Tyranny within their borders.
In terms of those WHO set this system up, it isn't a flaw, IT IS SPECTACULAR SUCCESS - INCLUDING THE FALSE NARRATIVE THAT IT IS A "FLAW."
The Big Bad obviously has a self interest in being known as the "Big Dope," because society's don't hang dopes who looted than and destroyed liberty within their boarders.
The solution is intellectual self defense on a mass scale - a so called mental anti-virus that goes viral. Anything short of that is the seal to our doom.
The first step is to clearly understand the WHO, the WHAT and the WHY of how our "schooling" system was engineered to removed education and critical thinking and to socialize us into relying on authorities financed by the Debt Money Tyrants.
John Taylor Gatto is a diamond in this regard... a true American hero.
Another Brick in the Wall #1
http://www.gnosticmedia.com/john-taylor-gatto-interview-another-brick-in...
Another Brick in the Wall #2
http://www.gnosticmedia.com/john-taylor-gatto-interview-another-brick-in...
Once one realizes one has had their intellectual abilities systematically yoked such that one doesn't possess the tools to consistently distinguish between reality and unreality, the next step is to find a systematic method for separating reality from unreality.
That's the first three of the classical liberating (free!) arts... the Trivium.
http://triviumbinder.blogspot.com/
Audio section
http://triviumbinder.blogspot.com/p/audio-section.html
Reality: Base Data known, Logic known, Contradictions identified and removed, fallacies identified and removed.
Unreality: Base Data unkown or hidden, Logic unkown or hhidden, Contradictions not identified nor removed, fallacies not identified nor removed.
Anytime someone seals off the prerequisite data and logic... a red flag should go up indicatiinng potential deception in progress and the knowledge that what is being claimed can't be known by the hearer.
"If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be. The functionaries of every government have propensities to command at will the liberty and property of their constituents. There is no safe deposit for these but with the people themselves; nor can they be safe with them without information. Where the press is free, and every man able to read, all is safe. " Jefferson, Thomas
You have the tyrant blue print right there:
1. Produce functionally ignorant people - the schooling system is working wonders... Even high IQ people have been duped into believing things they've never researched on their own... and once emotionally invested, they lack the integrity to question their prior commitment. A+ grade
2. Transfer power to the federal government for centralized control. Take away the rights and liberties of the people.
3, Withhold information - especially how to think critically and the key mechanisms used to control populations (debt based monetary fraud).
4. Enslave the press by buying it up with Debt Money Tyranny proceeds.
5. Passive reading is what the mental slave does - read the manual of his master and do the bidding. Active literacy, though, that is what Jeffersion must have had in his mind.
Well said, cdad.
I have a different take - there is no way to save the system, it is a debt Ponzi and the engineers who created it knew when they did so.
The reason they haven't collapsed the system, which will happen with 100% certainty, is because there has been trillions in cash to loot from ignorant populations.
Why crash the system when one has $x cash and $y debt when they can have $10x cash and $1/10 debt?
They don't mind the 10% devaluation because their share of the pie increases 50% - for a net 40% gain while jacking everyone else.
When the looting opportunities vanish, so will the system. That bankrupts the world and... well, their debt holdings turn into real property and their cash turns into real property for pennies on the dollar!
"Alchemy" indeed!
The monetary system is prima facia fraud:
Debt Money Tyranny Exposed
http://www.keepandshare.com/doc/4768883/debtmoneytyranny-6-1-pdf-60k?tr=77
Send this link to everyone you know - it exposes the fraud and the true concentration of power - AND IT AIN'T GOVERNMENT, PEOPLE.
Government is the curtain, Biggest Finance Capital, the money definers and controllers, are Oz, by design!
Government and the mega corporations are pieces on the Grand Chess Board, BFC is the Grand Chess Master!
They learned from history - in this case the French Revolution.
If I was a betting man, I would wager that if the derivatives are triggered they will simply be ignored by the big boys on the losing side of the trade. Derivatives depend on the rule of law to be enforced - somehow the party on the losing side is coerced into paying up. But the rule of law doesn't exist any more, so the losers won't pay.
Unlke GM bondholders ...
... some of the people holding the winning side of the derivatives positions CONTROL countries with nuclear weapons.
It is kind of hard to "simply be ignored by the big boys on the losing side of the trade" when you can reduce the financial zone of an offending country or two into their component atoms ...
... and then turn around and lay the blame on "terrorists".
My thought is that the definitions of the situation will be interpreted so the derivatives don't get triggered. Like when the Greek bonds took a large haircut and yet it wasn't declared to be a default.
My thought is you are under estimating the likely reaction of some of the parties on the non-ECB side of these derivatives.
In the Greek instance, all sides were composed of meterosexual effetes willing to be rolled because they are not the type of people who can do anything about it.
In the case of a Russian oligarch ... telling him regardless of the 'protection he thought he had' (i.e. derivatives) "the situation will be interpreted so the derivatives don't get triggered" is an excellent first step to seeing your loved ones disemboweled before your eyes ... and then things will escalate quickly to the worse after that opening 'denouemont'.
I grew up around the Italian mafia. The first time I had a gun pointed at me (age 16) was by a 'touchy' mafia soldier because I wasn't bright enough to disappear at his first glance of disapproval in my direction.
The Russians make the Italians look like a Jane Austen afternoon tea party by comparison.
The troika are out of their fucking minds if they think a "hair cut" of the "dirty Russian money" will result in any thing other than a shit storm of HURT.
They are all losers... Dead men walking...
Yep, you can't collect if everyone is bankrupt. I suspect, the derivative card, once it is played, will be the great bank consolidation card. They will bring the whole house of cards down, and reorganize (cannibalize) into a handful of global banks, that control everything and everyone.
As long as they aren't using Cypriot banks I fail to see the problem. UBS isn't going to fail because of Cyprus...Cyprus is going to fail because of Cyprus. That thing is a true MOUNTAIN of worthless Greek debt. The Russians will get "the banks" and a lesson in "why a corporate bond market matters more than money" and that will be that. The problem arises if other depositors in Europe now understanding that there savings are at great risk in ANY European financial institution start pulling the bulk of their holdings out and move the money to Japan and the USA. "Long Nissan." move along...
Yet they are required to use banks in Cyprus as custodian and/or pay agent.
really? where's the rule of law Alaric? http://en.wikipedia.org/wiki/Alaric_I i mean..."My God...if we lose Cyprus we're screwed!" doesn't have the right ring to it. how do they get their electricity? http://www.eac.com.cy/EN/Pages/Home.aspx mmmm. yummmy.
Japan? I'm not going to send my money there to be debased to zero
no, no. "you send your money there so it isn't stolen." debasement is the least of your worries right now. http://www.youtube.com/watch?v=fW6SiquXjTk
Interesing thing happened yesterday. Tried to deliver some securities to 908 and we got DK'd on about $6mm. Client got back to us.................................
The bank that funded the trade was in Cyprus, and the ECB and the Cyprus Central Bank couldnt do anything because of the banking holiday. Pretty much said, "Please hold them til the 26th."
This could def excalade quickly
Thanks for the info. Interesting. Had to look up the 908 (Citibank) though.
They are going to have to have the Chemo too. Oops.I mean haircut
Capital controls are generally prohibited by the EU rules on the common market. They can only be implemented in times of emergency. In this case, the ECB has to agree to them (which they already have). However, even under these conditions, they may only be implemented for 6 months. This means that by October, any capital controls are illegal under EU rules.
Regarding, your question about investment funds. I don't know the answer. I guess the troika apparatchiks haven't thought about these issues either.
Yeah, well, according to the Maastricht treaty, fiscal deficits over 3%, and sovereign debt exceeding 60% of GDP, also are illegal.
How did that work out? How many eurocrats went to jail for violating those limits by a country mile?
"It's nice to be king."
It's so sad to see people talk about laws as if they actually meant anything. IMO, this crisis will be the means to achieve the tighter union that they couldn't get via the ballot box.
Also known as "muddling through."
Xactly. As I have been saying for a while:
If the grand Euro unification plan fails, it will set the one-world order/currency agenda back 100 years or 1.5 - 2 generations.
We should expect that Europe's unification (economic AND political) will be defended to lengths we dare not imagine... My guess is that the former's failure will be used as justification for the latter, as you suggest.
The only thing that will determine whether political unification or dissoultion happens in the end will be the people's temerity in fighting for national sovereignty over federalism (and a new feudalism).
I agree. Cyprus, for such a small country has quite the convoluted financial system and there are many variables to address. One question leads to many more.
And on a related subject...
Why did JPMorgan open a liquidity/money market fund in Cyprus one month before the banking crisis, after closing one in Europe 8 months earlier, in July 2012.
http://mobile.bloomberg.com/news/2012-07-06/jpmorgan-shuts-europe-money-...
As I dig deeper into the various filings in Cyprus one that stands out is a UCIT (Undertakings for Collective Investment in Transferable Securities) approved for marketing in the Republic of Cyprus, by the Cyprus SEC, on 11 Feb 2013. A UCIT is basically an open-ended fund which allows cross-eurozone marketing, once approved by a member state.
The aforementioned fund of which I am referring was set up by JPMorgan.
JPMorgan Liquidity Funds
http://www.cysec.gov.cy/mutual_funds_6_en.aspx
The investment was considered by the CSEC to be an umbrella scheme with 8 funds and was marketed through two Cyprus banks.
1. Australian Dollar Liquidity Fund
2. Euro Government Liquidity Fund
3. Euro Liquidity Fund
4. Sterling Liquidity Fund
5. US Dollar Current Reserves Fund
6. US Dollar Government Liquidity Fund
7. US Dollar Liquidity Fund
8. US Dollar Treasury Liquidity Fund
It's marketing network is as follows:
Cyprus Popular Bank Public Co Ltd
EFG Eurobank Cyprus Ltd
JP Morgan Asset Management (Europe)
Did JPM have advanced actionable knowledge of what was to transpire in Cyprus? Or, in their infinite wisdom and through thorough analysis, did they feel that it was the most optimal time to go back into Cyprus? Did JPM have a sudden belief that there would be a resurgence in Cyprus's economy? Or did JPM know that the Cyprus banking system was going to implode, and the EU and the ECB were going to exact draconian measures on the Cypriot banking clientele?
I do not know. But what I do know is that JPM took full advantage of an opportunity to gather millions, if not billions, in new assets prior to the door slamming on the Cyprus banking system.
yes they did. "and that's their job." and "the Troika" now has a "eurogroup." these people are the REAL killers not the Russians, not the Turks, not the Americans. "open channels of communication" is what Cyprus needs to focus in on now. it's all they have in my view. this was as attack in my view...one that was a surprise and meant to "send a message"...not least to the American President who had been planning his first trip to Israel for months. (Secretary of State Kerry had traveled to all the major European capitals prior to. Why was he not informed here?) Needless to say the Russians are surprised as well...but if you act precipitously and unilaterally here i would argue STRONGLY that you're making a BIG mistake. you need to find out what "the Eurogroup" in fact is. good luck with that of course. i will defer to the "it's all Merkel" meme that is presented here "with authority"...for now. But i can see Spain, Egypt, parts of France, Greece, Tunisia...all sorts of private players (Goldman, JP, that huge Italian Insurance group, Spanish banks? who knows...) who could be part of "something" meant to disrupt "for disruptions sake." that doesn't sound like Germany to me which is fully invested in the euro-zone's continued existence. and unlike anyone else they have a "out" for their money via return to the d-mark. "the nuclear option" is on the table in my view.
I love ZH. You can't find this stuff anywhere else. But once you go down that first rabbit hole only to discover there are even more rabbit holes inside, it starts to fuck with you, man. Why oh why didn't I take the blue pill?
I immersed myself in this research last night just to see how deep the Cyprus abyss really is. I feel I'm only scratching the surface. The number of offshore-open-ended funds, domestic funds, ICIT's, UIV's and hedge funds with a presence in Cyprus is mind boggling. It is so disproportionate to the relative size of the Cyprus economy.
What a mess...
AlaricBalth said:
Thank you for taking the time to dig into it. I appreciate not only that you've done so, but also that you're sharing what you find.
In addition to the sheer number of rodent holes you're finding, I believe it's likely that more than a few of them have been deliberately created with multiple obfuscatory layers of complexity. You're bound to run across interesting things that you simply won't have time to chase after, as well as other interesting things which, due to being so convoluted, will burn up a lot of time.
By all means, if you find something good which looks like it will take too long for you to put together, bring more eyes to bear upon it by posting here and/or sending a heads-up to the tips [ at ] zerohedge.com tipline.
There was an article somewhere mentioning that the Cypriot president told his buds to get their money out. Would this JPM fund be a vehicle for doing that?
First doc has been pulled down ... WOW is my reaction to the second .pdf.
Cross-links galore, from the usual suspects (KPGM, GS, etc) and the hidden dollar and euro valuations are probably giganormous. This begs the question of just How are the funds going to be accessed - choices are electronic and physical. In the first case, bankruptcy will be immediate - physicality seems impossible. WTFTD?
So what direction will the Fed take? According to the Bernank, it's simply an insignificant matter right now. Where is he this weekend, anyhow. No SST anymore.
Banking holiday Monday somewhere, perhaps in your back yard. Just to sort things out before we reopen, you understand - no worries, everything will be OK.
Hellofajob there, Brownie, oops, Bernankie.
This just in - clusterflock of swans on the way. Take cover to avoid falling stuff.
Blah, blah. It will pass. Life will be harder for wealthy Cypriots and Europe is saved once again. I see a 400 point jump on Monday. Tuesday, we can look for the next crisis that absolutely cannot be saved by inventing more money. And then that will be "fixed" too. Move along!
ZH on the money again.
Unpat...you will need to add a large list the of Trioka technocrats!
LONG POLONIUM - 110
LONG Antonov an-124 and AKMs
LONG white parachutez and Ultramarine Berets
"VDV - Hello from the sky!"
https://www.youtube.com/watch?v=OlQ6KqTlyfk
Boris has gone quite?
And bearish for gold and silver, which may crash more than 30% next week and reach 0 by the end of the month.
The EU shot itself in the foot.
Cyprus will shoot itself in the head.
What is wrong with these people?
Unstated in the article is that they STILL are protecting €2 billion worth of bank bonds, at the expense of depositors.
Who ARE those masked bondholders? Nobody will even say. Maybe it's classified.
Inverting the creditor heirarchy by legislative fiat destroys the rule of law.
Cyprus is branding itself as a looter nation. So be it.
Cyprus is legislating at the point of a gun.
The Eurozone is establishing itself as a looter co-op as ZH pointed out in the article.
Only a terrorist would ask such a question.
It's not necessarily the actual bond holders they are trying to protect.
The bonds could very easily be repo'd or otherwise pledged elsewhere, but if you couple a mild eurozone bank run, with counter-party uncertainty in the wholesale debt markets- because someone might have some steaming turds on their balance sheet that are no longer guaranteed by their "system" -- then you have a recipe for disaster (and Jack Lew is a pencil dick not a BSD, no one is going to take him seriously if he tries to pull a Hank Paulson impersonation).
Meanwhile Bill Dudley continues to blow smoke (perhaps b/c he inhaled a bit strongly) about how the Dumb-Fuck Financial Reform law makes the wholesale markets better, safer, (or something...)
http://www.newyorkfed.org/newsevents/speeches/2013/dud130201.html
Read somewhere those bonds are held by the EU as collateral.
I think Mel Brooks summarized their capacity for strategic thinking quite succinctly-
http://www.youtube.com/watch?v=AjPBp6DOwgU
Thanks for the trenchant analysis. I'll be sure to mull it over.
eigenvalue said:
Cool. I'll buy all of it.
BTW, the end of the next trading week (Friday) and the end of the month are only a couple days apart. Is something big scheduled for Saturday?
I'll give you +1. But please explain.
Would you like that explanation in 'English' or 'Troll-ESE'?...
English would be preferred. He/she/it said to short PM's Thursday night...and turned out to be right. Could be dumb luck. Might be something more. Part of my Heretic Oath is being willing to listen to those espousing heresy toward the current heresy. Or heresy squared.
Let's see what he/she/it has to say.
The silver inventory at Comex has increase from 100 million ounces to the current 160 million. The seasonal demand for gold from India and China is coming to an end. Do you think bullion banks will miss this chance to attack precious metals?
Interesting point and something I hadn't thought of. +1. Thank you.
For a follow on question, don't you think that the demand for PM's being generated by the Cypridiocy would offset that?
OK, I'll stop kidding. I can see that you don't read SLV's annual reports. Actually the argument that the increase in silver inventory at Comex is actually bullshit. Comex added 2 more warehouses in 2011 and 2012 and SLV has allowed deposit in New York to create shares. Thus the increase in inventory may actually be the SLV silver.
But the argument that seasonal demand is coming to an end is true. If you follow the gold market in Asia closely, you will know that. Cyprus is NOT a big deal in my opinion but if there is a panic, the TPTB will not refrain from intervening the PM market. We saw it in 2008. Of course, the assumption is that the TPTB still have a lot of gold and silver at their diposal.
In the past, big surges in PM prices occur in autumn and end in Spring. We are already in Spring now. That's not a good sign for PM bugs.
Keep in mind that most of the increase in SLV are being used to maintain the margin on JPM shorts and may be a better reason for the continued increase in the Comex inventor in the face of very healthy demand for silver and gold ( gold in march especially). There is every reason to believe that JPM is "creating" silver through their custodian position to enhance the inventory numbers.Giving the impression more silver exists than actually exists. London has zero restraints on re-hypothecation and that is where the JPM custodial agreement resides.
The US Mint has yet to release 5oz America the beautiful coins, they have run out of planchets twice already, sales are higher than ever and at current demand should exceed annual domestic production.
Here's an idea... Let's just build all the sub-terranian vaults in co-located way [and/or with subway lines ~ that are closed to the public on Sundays ~ that run right by a secret back door]...
~~~
That way, all the vaults in the world can be brimming with inventory [within 24 hours notice] any time an inspection is required...
Thank you @eigenvalue. +1. Interesting analysis and I appreciate your taking the time to provide it.
Zero! Fuck, I better sell and accumulate those few dollars that are left in circulation.
The comments you leave here are completely absurd.
I call BS. Since when have rich people gotten their capital straight out confiscated? Since never. And these are rich people with ready access to assassins. No f'ing way. They will be made 100% whole. One way or another.
This is a feel good story for the "little man" who is definitely getting nutted. "Don't feel bad, look how bad it was for the big depositors. Here, have a Kleenix."
If Eurocrats start dropping like Iranian nuclear scientists, I'll change my mind.
It's not about "rich people" it's about being the right kind of rich people with the right friends who are the bigger kleptocrats with the most power. If the guy above you can get out, through hook or crook or connections, without getting clipped he'll put on his running shoes and leave you to the wolves.
Being thrown to the wolves is for little people.
You know...Wars have started over less.
To assume the wealthiest people in the world are one big, happy, monetary family seems pretty nieve to me.
They aren't. WWI & WWII are a case in point. But even wolves know that sheep, not wolves, are food. As long as there's sheep, it's sheep on the menu.
BAAAAAAAAAAAAAAA!!
nieve = a clenched or closed hand.
Bullish Polonium 210
I like the word "Haircut" as an euphemism for "Theft". It has such a pleasant ring to it...
Is a mugging called "heavy petting" in Newspeak?
Do those guys with the shaved heads get haircuts?
yea, bloody f'g mess.
or scalped.
And guillotines.
Did anyone consult Warren Buffoon on this Russian hit job? Someone's on the hook for life insurance payouts.
I'm in two minds...
WHO woundn't want be invaded by these VDV Russkies, if the vid below is anything to go by?
https://www.youtube.com/watch?NR=1&v=I78LxV8WnlA&feature=endscreen
PS.. this songs sucks mute is helpful!
In other words, they are going to steal all the money in the banks. That will cause small businesses to go under that had money in the banks for bills against merchandise, etc. They will cause a collapse of the businesses in Cyprus, besides taking the Russians money.
How are businesses going to be able to transfer money for goods that are owed? What about the big businesses there from foreign companies? Are they applying capital control with them? If balances are not able to be transferred then how will gas/oil etc be paid for in big amounts?
As a small business owner I can tell you how Credit Cards work. The credit card processing company auto deposits the money in your bank account...which is now not accessible??? That can't last too long.
I would think if you were a small business owner in Cypress you would set up an account in oh I don't know maybe Germany to have your credit card sales deposits go to. Money is already fleeing Cypress indirectly I would bet.
'I would think if you were a small business owner in Cypress you would set up an account in oh I don't know maybe Germany to have your credit card sales deposits go to.'
Good thinking. Much easier to wire euros into Cyprus (which is welcomed) than to wire them out.
Problem is that Cyprus credit card holders are going to be severely restricted on what they can spend outside Cyprus. Probably around €1,000 a month ... beyond that limit, 'transaction declined.'
Simply put "they won't." Cyprus looks a lot like the USA in 2008 "but more easy to manipulate." remember that scene in Goodfellas when they "took over the restaurant because it was the slow season and they needed a short term loan to tide them over"? Next thing you know "The Boyz" are in your joint playing cards, drinking your booze, getting free food and girls and making a mess of the place. Next thing you know your kaput and the place is being burned down for the insurance money. So much for that payday loan "at 40 percent." take a look at Syria Cyprus...that's "the Russian plan in action."
.
...and we still haven't reached the chapter where wives and daughters of eurocrats vanish in the night, whisked off to be sold as sex slaves to saudis.
What happens in Cyprus will not stay in Cyprus.
Is does seem like now would be a good time for Iran to test Critical Mass.
Uh-oh,
Sex slavery means UN Peacekeepers are in the hood.
A refresh of the 'Taken' script springs to mind..... I'm sure these ex-KGB types have lots of old 'comrade' contacts from Albania now I think about it.
Here's an interview with a former treasury official (King world news) that is interesting in that he believes the Cypriots should reject the levys and make the banks take the writedowns.
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/22_Former_US_Treasury_Official_-_Threats,_Cyprus_%26_Massive_Crisis.html
Large, rich tycoons leaving the banking system could only be uber bullish for gold.... Which means we should see it go down another 50 points! Such is life in our Groundhog Day existence where every year is 1984.
Cash economy here we come. Got Gold and or Silver?
We're being head-faked. The final news report will be nothing like the predictions.
The "experts" will be shocked.
I totally forgot about the oligarch and super wealthy money in other countries that where being hidden. As the article said if you're a rich person and hiding money and see that in Cyprus thos same type of people losing 30, 50 or 70 percent of their money you would think about moving your money back home or out of the EU. I truly hope that Cyprus takes door number three and default and bring back their devalued currency and get out of the EU. Because the EU is soon to be dead and the longer they stay on this sinking ship the more of the chance they will drown on it.
I think it's about time for some unscheduled Russian Naval exercises to begin in the Mediterranean.
Whatever will happen in Cyprus, has likely been decided behind the scenes, in the off-the-radar but important meeting in Moscow between Vladimir Putin and EU Commission President José Manuel Barroso - who is the real key figure in the EU with the most direct connections to all the 'shadow powers' in and behind the EU governments.
For some reason, this colossally important summit meeting between Putin and Barroso, has been under the media radar, here is one place:
http://english.ruvr.ru/2013_03_22/Putin-and-Barroso-discuss-future-relat...
The Barroso - Putin meeting was going on right as Cyprus was in Moscow negotiating with the Russians and learning what they should do.
At this point Cyprus is in most ways a passenger, and very likely simply carrying out the role that Russia is recommending to them after Putin's deal with Barroso.
Whatever Cyprus ends up in or out of the euro-zone or the EU itself, Putin and Barroso have likely okayed the deal ... even if that means Russia raising gas prices to Europe to cover whatever gets lost to Russian companies with a Cyprus 'plan' or default.
Also of great importance is the raiding of Christine Lagarde's apartment, directly after she pressed the Cyprus idiocy the previous weekend. It is worth looking at what Jim Sinclair has been saying as to why this happened.
There is also Ben Bernanke essentially announcing he would leave the US Federal Reserve at the end of his term in some months ... Sinclair says this is directly a result of the Cyprus blunder backed by US politicians, but against the US and other central bankers.
In short maybe this -
The Cyprus 'plan' idiocy the previous weekend, contained two major blunders by Germany and the Lagarde IMF, both of whom were acting as agents of the Americans.
The first blunder was that of trying to seize Russian money, without consulting and involving Putin as had been promised.
The second blunder was trying to seize insured customer bank deposits as a test confiscation of assets ... But they were doing this much too early, when the world's central bankers, Bernanke and perhaps Mario Draghi as well, felt that maintaining the illusion that deposits are 'safe' was essential to maintaining the global money-printing Ponzi scheme.
The Cypriot politicians know the EU is not whom they need to please, it is Russia, hence the absolute zero of votes for the EU plan early in the week, and ignoring the 'Troika' for most of the week.
The higher level of EU internal politics, also saw the huge error, the immense danger to the whole EU banking system, and to relations with Russia, the EU's 3rd biggest trading partner, and to how costly gas will be to heat Europe next winter.
That is why Lagarde's flat was suddenly raided as a years-old ancient 'investigation' was suddenly revived, to show Lagarde she was being brought down, like the way her US patrons did to Strauss-Kahn so crudely ... and likely why Draghi is in hiding ... and why the Troika is being brought down a notch in the public eye.
According to Jim Sinclair, Ben Bernanke sees the Cyprus mess as essentially blowing up all the work he had been doing for the last several years, trying to keep the whole Ponzi going for a few years longer. Sinclair says that is why Bernanke suddenly called it quits, washing his hands of everything, only hoping the collapse of the dollar will not happen in the months he has left in office.
Putin has won the round ... Barroso likely traded whatever Putin had asked. Now we will learn in the coming week what is the end product of the Barroso - Putin deal.
It is entirely possible that Putin saw his best play not as an overt rescue and moving-in on Cyprus immediately ... but letting Cyprus semi-collapse and leave the euro-zone, as a harsh 'lesson' to be taught the EU for their arrogant insolence in trying to steal Russian money. Russia can move in a little later, at fire-sale prices ... he remains the 'daddy' of Cyprus, with the tens of Russian billions, locked up now in Cyprus under the new capital controls.
Barroso likely swallowed and accepted whatever terms Putin offered. Alternative gas sources from the Levant will not be online for several years ... Putin needs to be mollified by the EU, even if that means fragmenting the euro-zone as the price to be paid.
And the global Ponzi scheme is indeed in quite a bit of extra danger now. The process of financial entropy has greatly accelerated. Ben Bernanke seems not to want to even play anymore, after Lagarde and the Germans and Dutch, and his own fellow American politicians, blew up his game with their foolish extortion.
Draghi is likely wondering what to do. He sees the writing on the wall for the southern countries leaving the euro, and his colleague Bernanke abandoning ship. Draghi may not have an answer yet. He is perhaps watching for the consequences of the Barroso-Putin deal to unfold.
Barroso is NOT Obama. He does not represent Europe which is in fact a mosaic with many different national interests. i would rather believe that a Merkel-Putin deal has been struck behind the scenes. Germany is the paymaster after all.
Merkel is NOT the power.......as Bank Guy said, the "deal" will come from the Bankers NOT Merkel. She's purely a convenient puppet.
Ask yourself why Netanyahu (with Obama present) just apologized to Turkey for murdering nine people on a Gaza aid boat (including an American citizen).
With the Greek side of Cyprus financially neutered, Turkey back on board with Israel, Syria soon to be ruled by U.S. proxies (so the thinking goes), and the landlocked Palestinians deprived of sea claims, the ducks are in a row for rich Israel to become an even richer Mediterranean oil power.
The Cypriots' Aphrodite gas field is just a staged distraction. With no capital to exploit it, and facing billions in costs for deepwater drilling and delivery infrastructure, they'll have to sign over most of their interest to their U.S. joint venture partners. Conveniently, after taking over the British military bases in Cyprus, global cop NATO will have a front-row seat to keep intruders out (as well as to 'incentivize' the occupied Cypriots in those gas exploration deals).
It's 2003 deja vu: as with the 'Iraq cakewalk' ten years ago, Israel and the U.S. think they have the whole combustible region neatly teed up to ring their cash registers.
WHAT COULD POSSIBLY GO WRONG?
Yup........Turkey needed for the greenlight.......check.
Cyprus would act as a US outpost by providing military bases for safeguarding the gas acreages between the island and Israel, while in proximity with Turkey, through which a pipeline network will be transporting oil from Iraqi Kurdistan, all while the former perspective Russian naval base of Tartus and subsequent entry into the Mediterranean power game, for the aforementioned superpower, is being rendered obsolete by the convenient destruction of Syria, leaving thusly the US as the dominant authority of the Euroasian bridge and the defacto energy supplier of Europe.
With every coastal periphery of the now mostly 'defunct' states surrounding the Mediterranean sea, either proxy-controlled and 'under construction', or by enjoying strategic partnerships with the US, such as Israel, Egypt, Libya, Syria, Turkey, and I'll conjecture that Cyprus should be counting as the latest addition, it would seem that pieces are aligning rather too conveniently for an upcoming geostrategic dominance.
If I were a gambling man that is.
.
That's why Barroso likely swallowed and accepted whatever terms Putin offered. Obama would have bent over and accepted whatever terms Putin offered.
I hate to point out the obvious, but Obama doesn't represent the States' interests very well, just his own federal Capitol.
The timing of the raid on Legarde's flat is directly related to the expiry of Sarkoskys immunity. It was 24 hours later and had nothing to do with Cyprus. The rest of your stuff is crap too.
+1
now "poor Sarkozy" is being hauled in and may have lost his political future for relection in 2017 a la Putin, as the judges have inculpated him for possible trial on Bettencourt corruption for his 2007 election funds.
His image is now damaged in public eyes.
Great analysis, I would suggest that since all these leaders get their marching orders from the same cabal, Bernanke is not wringing his hands, nor Draghi hiding. They all have parts to play, actors on a global stage.
The Elites are not afraid to crash the system (their withdrawl of liquidity in 1928 starting the great depression and concurrently the great aggression). You cannot lose, what you can print and create at will. This is about the slow return to feudalism.
Capital control and the confication of personal wealth in the name of debt resolution is just another way to create an even playing field where everyone is impoverished. Crazily, most people will go along, because they have been conditioned to debt repayment, but ignorant of risk management and its' consequences.
Don't worry, there will be bread and circuses and you will cheer when you are lucky enough to snag a loaf.
'Putin saw his best play not as an overt rescue and moving-in on Cyprus immediately ... but letting Cyprus semi-collapse and leave the euro-zone, as a harsh 'lesson' to be taught the EU for their arrogant insolence in trying to steal Russian money. Russia can move in a little later, at fire-sale prices.'
Precisely. Why be a victimized bankruptcy creditor, when you can provide collateralized debtor-in-possession financing after the crack-up, with an equity kicker?
Likely the Hillary 2016 campaign has a similar plan: let Obama tax depositors to pay for ACA, then move in as their 'savior.'
http://hilldabeast.com/hillpics/dr_evil_hillary.jpg
you forget one thing : Barroso is Merkel's boy today and that lady is NOT on the same page as Putin. Think again.
This is deeper than that; Germany wants Russian hot money to be regulated now and past hanky panky paid for upfront in Cyprus. Period. That is now accross the board dictat to Cyprus and the Ruskis must lump it.
Putin has a capitalist model which has money stashed OUT of Russia and pulled in when its required on his Oligarchy agenda. Otherwise it sits in the west. And Merkel knows that. That shows Putin is not 100% owner of Russia. And that the economy of his local network is up to its necks in debt, as its a very short term, corrupt model. It requires much foreign expertise and investment. So Merkel can play poker with Putin; its not just one way the strategic gas link.
She, as lead Eu player, has a stronger long term hand than he; as there are rivals to his local gang in Russia, whereas German model is now what all Europe looks to as the best model.
It would seem to me that many Russians still don't trust their government, oligarchs or not, because of past transgressions. They hold their money in Euros and not Rubles because they deemed it safer (prior to this). Russia has the EU by the energy shorthairs.
Merkel is not going to do anything she's irrelevant. She is watching from the sidelines and that is what is making her angry; her input is meaningless. Barosso looks like the type to try to play both sides but he's also impotent. All bark no bite.
The currency wars are bigger than both of them. There is no turning back now. It may quiet down a bit for a while but the volcano is just priming for the pyroclastic event.
merkel grew up in east (communist) germany: http://en.wikipedia.org/wiki/Merkel
who knows where her loyalties are at the end of the day...
I think your analysis is highly complex but needs some more emphasis on Barroso's meeting with Putin...
Recall that Barroso is an ex-Maoist ...and once a commie, always a commie. He probably agreed things with Putin to further stitch-up the EU and further his own ideological agenda of creating the EUSSR with an invitation to Russia to join later on. That would please Merkel too since she also has some very very dodgy connections with Russia that few people inside Germany or elsewhere want to talk about.
Barroso is an errand boy. The most important dialouge would be between Putin's & Erdogan's henchmen, and Cyprus needs to be good bitch and just tight until she's told what to do.
Caving into the demands of the Troika troglodytes is actually good for neither Cyprus nor the Eurozone.
So what has Barroso given Putin, Poland.................. ahhh East Germany?
If the new deal imposes such savage cuts to depositors I think it is more likely the deal will get voted down again. Either way the banks will be destroyed.
Were you or JW first?
I can't help but think Lagarde had a gun to her head.