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Former Cyprus Central Bank Head And Senior Fed Economist: "The European Project Is Crashing To Earth"

Tyler Durden's picture


Back in August 2011, one of the most prescient European (ex) central bankers, Cyprus' very own Athanasios Orphanides was optimistic, but with a caveat: "I am optimistic that with the right actions and effort by all we will pull through this," Orphanides told reporters after a meeting with Finance Minister Kikis Kazamias. They were Orphanides' first public comments since warning authorities in a July 18, 2011 letter that Cyprus ran the risk of requiring an EU bailout unless urgent action was taken to shore up its finances." 

Two years later, following endless dithering and pretense that just because the ECB has stabilized the markets, all is well, and "action was being taken" when none was (because in the New Normal the lack of market collapse is somehow supposed to represent structural changes are taking place, which never actually happen), Cyprus is beyond the bailout stage - it is now quite literally on the verge of total collapse. This is also why Orphanides, who recently (and perhaps prudently) quit as Central Banker of Cyprus following a clash with the new communist government (and was replaced by a guy named Panicos), no longer is optimistic. "The European project is crashing to earth,” Athanasios Orphanides told the Financial Times in an interview. "This is a fundamental change in the dynamics of Europe towards disintegration and I don’t see how this can be reversed.

It can't. Which is what we have been saying all along. But it apparently takes a former Federal Reserve senior economist to say the perfectly obvious, and for reality to finally hit front and center.

More from the FT's interview with Orphanides:

This week’s events had made “a mockery” of EU treaties, he added. “It suggests that in Europe not all people are equal under the law.”


“We have seen other eurozone countries, the Netherlands, for instance, put national interests ahead of the European interest by trying to bring down the economic model of countries such as Cyprus or Luxembourg.”


He also called into question the credibility of the ECB’s threat to pull the plug on the Cypriot banking system. On Thursday, the ECB warned that if an EU-IMF rescue programme was not agreed by Monday, it would ban the use of “emergency liquidity assistance” to prop up the Cypriot banking system.


According to Mr Orphanides, about €10bn of ELA is being provided via Europe’s Target2 payments system used by its central banks. “If you say it is no longer authorised, it would force the Central Bank of Cyprus to default on its Target2 obligations. Cyprus would then have to leave the euro area.”


“The ECB will have forced Cyprus out. This is the one thing Mario Draghi doesn’t want to happen – he does not want to be the ECB president who triggers the break-up of the euro. It is painful to watch.”


So far, global financial market reaction to the Cyprus crisis has been subdued. But Mr Orphanides warned that would change. “I don’t think that the full extent of the shattering of the trust that we have seen in this case . . . has been seen fully yet.


“Banks’ funding costs in the [southern eurozone] periphery will rise further – there is no way we will avoid that. This, in turn, will make the recession in the periphery deeper, adding to the misery that the mishandling of the crisis has caused so far.”


“Financial markets are over-influenced by what happens in London or New York – there, the intricacies and processes of European politics are not very well understood.

We couldn't agree more.

As a reminder, Mr Orphanides was governor of Cyprus’s central bank from 2008 until last year, when he was replaced after clashing with the island’s then communist government. As member of the ECB’s governing council, Mr Ophanides’ views were respected because of his background as a senior economist at the US Federal Reserve. He has since returned to academic economics in the US.

We can't wait until the world of very serious economist, some of them even with Nobel prizes, turn on one they proudly praised as their own, as recently as months ago.

In the meantime, Orphanides is absolutely correct.


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Sat, 03/23/2013 - 11:24 | 3365487 overhere2000
overhere2000's picture

The rumors of my death have been greatly exaggerated.  

Sat, 03/23/2013 - 11:38 | 3365512 redpill
redpill's picture

I appreciate the little thumbnail of the Executor's end.


As for the Eurozone, I don't think there was all that much trust to begin with.

Sat, 03/23/2013 - 11:38 | 3365517 otto skorzeny
otto skorzeny's picture

what is that from?

Sat, 03/23/2013 - 11:59 | 3365565 Careless Whisper
Careless Whisper's picture

"The European project is crashing to earth,”

The European Central-Command-and-Control project is crashing to earth, and returning democracy to the European sovereign nations.

fixed it for ya'

Sat, 03/23/2013 - 12:25 | 3365644 TBT or not TBT
TBT or not TBT's picture

With the usual interim nationalistic authoritarian phase, democratic or not so democratic. Europe will revert to form.

Sat, 03/23/2013 - 14:56 | 3366240 TheFourthStooge-ing
TheFourthStooge-ing's picture

Recently leaked video of the European Project:

Sun, 03/24/2013 - 02:03 | 3367713 bigyimmy007
bigyimmy007's picture

Going to be interesting to see the world revert into what it was before bankers and hack politians crammed globalization down our throats.

It's amazing that oligarchs just never learn that nothing is eternal, especially not absolute control of large swaths of people.

Sat, 03/23/2013 - 19:50 | 3367160 Buck Johnson
Buck Johnson's picture

No kidding, Sovereign nations are coming back into being.

Sat, 03/23/2013 - 12:15 | 3365594 McMolotov
McMolotov's picture

The end of Return of the Jedi.

The headline made me think of the song Gronlandic Edit by Of Montreal:

"We fell back to earth like gravity's bitchez, bitchez. Physics makes us all its bitchez."

(Reality is somehow more fucked up than this video.)

Sat, 03/23/2013 - 12:28 | 3365651 disabledvet
disabledvet's picture

this stuff makes me think of this guy:
"every action has an equal and opposite reaction." scientific processes are not balanced (yin/yang) but rather "cross purposed." this is why applying a social scientific construct ("communist government") to an actual population (happy little island people) is REALLY a bad combination. i think the best response is build a bunch of these "and point them in various directions":

Sat, 03/23/2013 - 16:03 | 3366439 hansg
hansg's picture

Star Wars. It is a huge starship ("executor") crashing into an even bigger specimen (the "death star", only recently completed after spending quadrillions of intergalactic credits. Just imagine the amount of economic stimulation this one battle produces!)

Sat, 03/23/2013 - 12:47 | 3365725 Alexandre Stavisky
Alexandre Stavisky's picture

"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.

Sat, 03/23/2013 - 13:07 | 3365806 Renewable Life
Renewable Life's picture

Article Translation:
"Don't hang me, hang the other guys!"

Sat, 03/23/2013 - 11:25 | 3365491 NewThor
NewThor's picture

Many things are crashing to Earth.

Ragnorak is gonna be all sparkly with fire.

Vaya con Dios,

you beautiful 



Where u at NASA...errrr...spaceX?

Sat, 03/23/2013 - 11:55 | 3365555 maskone909
maskone909's picture

Dood if thats your vid u are pretty fuckin funny. Nice editing good work

Sat, 03/23/2013 - 12:08 | 3365587 NewThor
NewThor's picture

Thank you sir. 

I think it's dandy for an 8 hour turn around.

I'm spending more time on a video that deals with the...


...I have my ideas.

But. Did you guys know I front ran Nasa on the 8th?

I beat them by 5 hours.

The Sun really is acting Jim Morrison strange.

And, a cosmic event that changes everything

would sum up the monetary and fiscal policy

of every government since the 80's.

Though. If those fuckers knew,

those fuckers will pay for it.

forever +1 beyond the singularity.




Sat, 03/23/2013 - 12:53 | 3365753 new game
new game's picture

rather go poof from a hot rock than a room of rocks slow bleeding me of liberty...

Sat, 03/23/2013 - 11:28 | 3365493 swissaustrian
swissaustrian's picture

Luxembourg (and the Irish fund landscape as well as UK funds) is gonna be killed by new EU regulations on investment fund manager compensations. They'll limit bonuses (performance fees) to double of the basic salary, that's totally gonna destroy incentives to have great returns:

Sat, 03/23/2013 - 11:42 | 3365528 DoChenRollingBearing
DoChenRollingBearing's picture

It looks like all the havens (in Europe anyway) are going to get shut down.

Sat, 03/23/2013 - 12:03 | 3365568 CrazyCooter
CrazyCooter's picture

I see it a little differently; there is no capital left in the system. The desperation seems really obvious. This is showing up first in Cyprus because of the leverage relative to the size of the economy.

I would further note that this was cited recently on ZH for those applying logic and grade school arithmetic:

I just mention this again because often I get busy at work and simply miss articles in mass and don't have time to go back several days or more to play catch up.

In my layman's mind, I sort of see this whole thing like this ...  with the pawning of an an asset to Bank A for cash by anyone, where Bank A pawns the asset to Bank B for cash, where Bank B pawns the asset to Bank C for cash, where Bank C pawns the asset to Bank D for cash, where Bank D pawns the asset to Bank E for cash, ... , where Bank ZZ pawns the asset to bank AAA for cash.

Question: When bank X fails, who owns the asset? In fact, WHERE is the asset?

Conclusion: The bank still knows where the deposits are ...



Sat, 03/23/2013 - 12:33 | 3365668 disabledvet
disabledvet's picture

to me this whole thing started with the collapse of the Doha, Qatar property market. "suddenly things got serious." next up "the Arab Revolt." then came Greece. then the Fukushima nuclear disaster. Now the Canadian property bubble appears to be deflating. China clearly slowing. and now the EU itself. still that's some fine bangin' ivories there...

Sat, 03/23/2013 - 12:37 | 3365687 DoChenRollingBearing
DoChenRollingBearing's picture


Two observations Cooter:

1)  You lay out the slipperiness of "what is money"...

2)  There is still capital around, much of it in hiding.

Sat, 03/23/2013 - 12:57 | 3365769 new game
new game's picture

they spied a pile of money that seemed unattended.

boris is not happy, plebs pissed, and now money terror game.

take 1/3 and choas or fucking buzzsaw job.

damned the torpedoes i say...

Sat, 03/23/2013 - 22:09 | 3367468 All Risk No Reward
All Risk No Reward's picture

Financial Art of War:

1. $100k mortgage created from nothing secured by house; $200k in the bank

2. Bank goes under

3. Economy collapses

4. Jobs lost

5, Can't pay mortgage

6. Home foreclosed on by bank

7. Bank bought for pennies on the dollar by TBTF front bank for Biggest Finance Capital - the definers of money as debt and the controller/operators of the system.

Big Finance Capital left citizen homeless as surely as if the Nazis or Stasi stopped by, pointed a gun at their head and told them to get lost.  The only difference is the looted person doesn't really understand that they were looted.

Debt Money Tyranny

How to be a Crook

War is all about deception
~Sun Tzu

The best warriors never have to fight
~Sun Tzu


Sat, 03/23/2013 - 13:12 | 3365814 thisandthat
thisandthat's picture

Like they need great returns to get the bonuses...

Sat, 03/23/2013 - 11:30 | 3365501 Schmuck Raker
Schmuck Raker's picture

"...a guy named Panicos"

Truth is indeed funnier than fiction.

Sat, 03/23/2013 - 11:33 | 3365508 Tao 4 the Show
Tao 4 the Show's picture

Yes. And now Orphanides will be orphaned by the club?

Sat, 03/23/2013 - 11:45 | 3365530 toys for tits
toys for tits's picture

I heard that they're tapping Crash Gordon to replace Bernanke.

Sat, 03/23/2013 - 11:47 | 3365535 Tinky
Tinky's picture

are you Margot Kidder?

Sat, 03/23/2013 - 12:22 | 3365588 El Oregonian
El Oregonian's picture

No, the EU is now officially Rip Torn...


Sat, 03/23/2013 - 12:45 | 3365719 disabledvet
disabledvet's picture

one of my all time favorite hollywood characters. here he is robbing a bank actually:
he was awesome in Men in Black of course...but this was the most under rated show i think in television history:

Sat, 03/23/2013 - 12:13 | 3365598 s2man
s2man's picture

Well, he who panicos first, panicos best. Perhaps Cyprus will be ok.

Sat, 03/23/2013 - 11:32 | 3365503 atomic180
atomic180's picture

900M Euro put, Tyler if you could is this fact or fiction and who's the WHALE that placed this bet...

Sat, 03/23/2013 - 11:54 | 3365551 tinsmith
tinsmith's picture

Soros, that sneaky bastard.

Sat, 03/23/2013 - 12:13 | 3365599 El Oregonian
El Oregonian's picture

Yes, and using the mind-numbing Commu-Bots as unwitting accomplices...

Sat, 03/23/2013 - 12:03 | 3365578 swissaustrian
swissaustrian's picture

Does anybody have a reliable source for that?

Sat, 03/23/2013 - 12:14 | 3365610 DeadFred
DeadFred's picture

Everything is copy/paste that I see. Maybe Tyler will shed some light but it's likely a hoax or baseless rumor. Too bad.

Sat, 03/23/2013 - 12:22 | 3365635 atomic180
atomic180's picture

GS hedges in the VIX but I woulden't PUT it past them JPM or possible Deutsche Bank

Sat, 03/23/2013 - 11:34 | 3365506 DoChenRollingBearing
DoChenRollingBearing's picture

Cyprus is another example of why it is dangerous to have all your money in banks...  Everyone should own some precious metals: gold, silver, platinum, palladium...  It's diversification!  But, diversification within the PMs is worth thinking about too.

"Diversification in Precious Metals"

Sat, 03/23/2013 - 11:42 | 3365525 Ancona
Ancona's picture

Actually, Cyprus is an object lesson on the failure of the EU. This is what happens when you cede power to unelected technocrats who then enact capricious and arbitrary laws, then proceed to break them because it suits them to do so. They have decided to sacrifice Cyprus in whgat I see as the ultimate, arrogant act of retruibution as punishment for not doing their masters bidding. Personally, I hope the whole fucking thing comes down in a giant smoking heap.

Sat, 03/23/2013 - 11:47 | 3365534 DoChenRollingBearing
DoChenRollingBearing's picture

Ancona writes:

"Actually, Cyprus is an object lesson on the failure of the EU. This is what happens when you cede power to unelected technocrats who then enact capricious and arbitrary laws, then proceed to break them because it suits them to do so."

Yes, bureaucrats enacting capricious and arbitrary laws is the problem.  And we see it here, big time, as well.  It may be that The End will indeed be very messy, as the technocrats will not yield the power to make arbitrary decisions as they please...

Sat, 03/23/2013 - 14:07 | 3366073 Ghordius
Ghordius's picture

guys, guys, this brawl is between elected national leaders, remember?

Sat, 03/23/2013 - 12:14 | 3365602 Charles Wilson
Charles Wilson's picture

Ancona stated:

"This is what happens when you cede power to unelected technocrats who then enact capricious and arbitrary laws, then proceed to break them because it suits them to do so..."

For Americans reading this, this is called, "Whistling past the graveyard".

Our government has used this system for years.  The Congress, the "Legislative Branch", creates a Bureaucracy such as the EPA and cedes Administrative Power to the Executive Branch to provide the Bureaucrats and scaffolding to run the Show.

The entire Charade has now become a funnel for $$$ to be given to chosen Political Groups and to question this process is to be met with, "SO you WANT to DESTROY THE ENVIRONMENT!!!"

Don't do too much "Tsk, tsk,,tsk, Oh, those poor little people in Cyprus..." with your morning coffee and your morning read.  'N don't look over your shoulder, 'cause there's already some stranger from the Executive Branch already lookin' over yours.



Sat, 03/23/2013 - 12:20 | 3365627 DoChenRollingBearing
DoChenRollingBearing's picture

CW, please trust me on this point, but I believe Ancona is well aware of US bureaucrats' power to injure and even destroy business and freedom here in the USA.

Preaching to the choir here...

Sat, 03/23/2013 - 15:03 | 3366258 Charles Wilson
Charles Wilson's picture


My Post was not AGAINST Ancona.  No offense intended and I hope I am preaching to the choir.  Sometimes, however, I wonder with the Snarks floating around here.

Annnd, I have had experience with the Demons at the EPA.  Positively Dreadful people.

Look at it this way.  Suppose I had a 1976 RE-5 rotary engine Suzuki with oil cooled rotor that I wanted to convert to an air cooled rotor with Roller Bearings instead of Plain Bearings.  Shouldn't I be able to find someone SOMEWHERE with roller bearing knowledge who could help me?  Why should I have to fill out an Evironmental Impact Statement to do that?



Sat, 03/23/2013 - 12:10 | 3365590 Silver Garbage Man
Silver Garbage Man's picture

Everyone should have lots of precious metals

Sat, 03/23/2013 - 12:17 | 3365618 DoChenRollingBearing
DoChenRollingBearing's picture

Silver Garbage Man  writes:

"lots of precious metals"

Correctamundo!  I am not at the point (yet anyway) where I can say that having money in the bank IS diversification for me, LOL...

Sat, 03/23/2013 - 11:52 | 3365516 20-20 Hindsight
20-20 Hindsight's picture

Sure, whatever.  Everything will come crashing down... some day, any day now.  Does anyone really think that this mess won't be fixed yet again?  "Fixed" is the operative word here.  

Be sure to expect Dow to pursue its glorious ascension to heaven, as if nothing happened.  As someone wrote recently, a nuclear bomb could flatten Washington DC and the markets would still find some reason to levitate.  

On Monday morning, Cypriots will be so relieved to learn that they only lose about 10 % of their savings... and the markets will be happy that the sheeple are happy.  And so goes the story...


Sat, 03/23/2013 - 12:17 | 3365616 disabledvet
disabledvet's picture

market will probably sell off on the news that "they've only been partially obliterated."

Sat, 03/23/2013 - 12:19 | 3365623 toys for tits
toys for tits's picture

The Dow has become as relevant to forecasting these credit induced financial crises as the BLS's unemployment rate. 2008 was after the fact as well as now with Cyprus.  The only thing we can glean from it is whether a company is in trouble, but not a country.

After the fact, we'll see running for the door, so we need to look outward and not lose faith just because the Hindenburg is getting higher.


Sat, 03/23/2013 - 13:52 | 3366013 chubbar
chubbar's picture

If DC got flattened (assuming just the politicians were there) don't you think the markets would have good cause to go up?

Sat, 03/23/2013 - 11:39 | 3365519 Fix-ItSilly
Fix-ItSilly's picture

So Ophanides has responsibility for building Cyprus' reckless financial structure that now needs triage or it implodes.  He sounds like the arsonist giving informed play by play for the TV audience.  I suggest ZeroHedge take away this speaker's platform.

Sat, 03/23/2013 - 11:50 | 3365541 Global Hunter
Global Hunter's picture

I think it is relevant when people from the inside/establishment begin to turn and give their perspective on the very system that served them so well for so long. 

Sat, 03/23/2013 - 12:02 | 3365576 Fix-ItSilly
Fix-ItSilly's picture

It is not relevant until he takes responsibility for the mess he helped to create.  Until then, what Ophanides writes should be catalogued as bereavement and a lack of responsible self-accountability for his culpability in trashing his people.  He surreptitiously exposed his nation to foreign financial interests while delivering the risk to his people.

Sat, 03/23/2013 - 12:13 | 3365604 sangell
sangell's picture

At the root of all this was the equal treatment sovereign bonds received under EU banking rules. They were considered 'risk free' for bank capitalization purposes and this flawed policy created the cross contamination of  public finances with Euro bank capitalization. It was idiotic to allow a bank to hold Greek government bonds on the same terms as German or Dutch government bonds yet that is what the Eurozone allowed and what EMU required.

Sat, 03/23/2013 - 12:54 | 3365758 kaiserhoff
kaiserhoff's picture

Well said, sangell, the fallacy of equivocation,

Treating unequal things as equal.

Why does Maxine Waters leap to mind?

Sat, 03/23/2013 - 14:13 | 3366096 Carl Spackler
Carl Spackler's picture


And such is what also makes Basel II/III such a laughable schema for measuring and comparing financial institution capitalization levels...the fallacy of equivocation.

There is another way to look at it... as the stresses on a mechanism intensify, the arbitrage opportunity is created by the fallacy of equivocation, and this  starts to look like a very interesting position to take from a risk/reward perspective  (ala Kyle Bass in the 2007 US mortgage bubble).

Sat, 03/23/2013 - 15:22 | 3366332 Fix-ItSilly
Fix-ItSilly's picture

At the root is bad banking practices.  Equal treatment for different nations' bonds is but an enabler of bad banking practices.  You still need the reckless acts, in this case years of Orphanides leadership, to destroy a nation.

Sat, 03/23/2013 - 12:27 | 3365649 Anusocracy
Anusocracy's picture

A penitent Keynesian Sinner is better than a practicing Keynesian Sinner.

Sat, 03/23/2013 - 11:57 | 3365560 machineh
machineh's picture

Orphanides wrote one of the clearest explanations of Taylor rules, which the U.S. Fed uses in setting interest rate policy:

Probably you haven't read it. (It has equations with Greek letters in it.)

Where is your learned paper, Silly?

Sat, 03/23/2013 - 15:17 | 3366315 Fix-ItSilly
Fix-ItSilly's picture

Yet when Orphanides was given the reins of power, he screwed his people.  Worship his paper, if you want to, but recognize his awful leadership has destroyed his country.

Sat, 03/23/2013 - 11:40 | 3365520 otto skorzeny
otto skorzeny's picture

I don't think any brilliant writer of fiction could make this stuff up.

Sat, 03/23/2013 - 11:41 | 3365522 bnbdnb
bnbdnb's picture

Since 2008, I have been amassing massive amounts of available credit, and buying tradeable goods with cash. Can you guess why?

Sat, 03/23/2013 - 13:51 | 3366005 Nehweh Gahnin
Nehweh Gahnin's picture

Because you're JPM?

Sat, 03/23/2013 - 16:12 | 3366475 bnbdnb
bnbdnb's picture

Pretty close...

Sat, 03/23/2013 - 17:31 | 3366725 slightlyskeptical
slightlyskeptical's picture

Because you want to have credit that is not available once you run out of cash? You should be buying the goods on credit because debt won't mean much soon. Cash will be king.

Sun, 03/24/2013 - 00:12 | 3367622 bnbdnb
bnbdnb's picture

Cash will be frozen first.

Sat, 03/23/2013 - 11:42 | 3365523 sandiegoman
sandiegoman's picture

Either way Cyprus is fucked. Leave and see a currency devalued dramatically or stay and have your cash confiscated.

Contagion will start low and the speed up dramatically. Bear Stearns to Lehman was 6 mos. I'll give this one 4 mos. since the learning curve should help.

Sat, 03/23/2013 - 11:42 | 3365524 sharonsj
sharonsj's picture

Last April I sent an email to an acquaintance who works with Gerald Celente, telling him I'd gotten a blast of information about the Eurozone (I am psychic and occasionally receive some pretty interesting "messages").  I was listening to a Max Keiser interview with a European economist while playing Solitaire on the computer, and not really paying attention, when I was told Greece--and hence the rest of Europe-- was experiencing extreme fear and panic.  I also got that the Eurozone would not hold together and would continue for some time going up in flames as well as going down in flames.

My acquaintance said Celente agreed with me.  Then I got a phone call from another friend asking me about the Eurozone--a subject that never interested her before.  She said that the New Age devotees in her area were abuzz with the possibility that Europe would fall apart by a particular date in May when some payment or other was due.  I told her it would not happen so soon.

So here we are, almost a year later, and things are still falling apart.  It's pretty clear that no one has the money to bail out these banks again, nor are citizens willing to do it again.  At some point the rest of the world is going to realize how their economies and finances are also screwed, although I don't expect our regular media to explain it to us here in America.  The Fed's attempt to prop up our banks as well as theirs isn't going to work, but I expect the politicians to keep pretending otherwise.

For some time now, I have felt the best way to survive is to put my money into tangible assets and I advise everyone else to do the same.

Sat, 03/23/2013 - 12:36 | 3365680 Kinskian
Kinskian's picture

What's coming is a forced political union of the EU countries. How many painful steps are involved in getting there remains to be seen. Millions dead in two world wars was the price the globalists paid with others' blood for their Balfour Declaration, League of Nations and eventually the UN. Cyprus isn't going to derail the globalist dream.

If a political solution emerges to save the people from the globalist plan, it will come from southern Europe, just as it did before.

Sat, 03/23/2013 - 11:45 | 3365532 Bicycle Repairman
Bicycle Repairman's picture

What is a "money haven" doing inside the EU to begin with?  It makes no sense.

Sat, 03/23/2013 - 11:49 | 3365540 Tao 4 the Show
Tao 4 the Show's picture

No,no,no. - you misread. The funds went to money HEAVEN.

Sat, 03/23/2013 - 11:51 | 3365545 DoChenRollingBearing
DoChenRollingBearing's picture

Indeed, it makes no sense, but IIRC there were several of them (some of the below are not in the EU, but they are in Europe):

Andorra, Liechtenstein, The Vatican, Luxembourg, Switzerland, Austria (sort of)...

Some think that these small out of the way places were good for the Elites to hide some money.  Instead, it may have been that mostly dirty money went there.

Sat, 03/23/2013 - 12:51 | 3365744 disabledvet
disabledvet's picture

Prague is a big one actually. "they also have their own currency." if the d-mark suddenly appears "that's another big winner." indeed even if it doesn't.

Sat, 03/23/2013 - 12:01 | 3365572 machineh
machineh's picture

Makes no sense? Are you kidding?

Have you ever heard of Luxembourg, Liechtenstein, Netherlands, Ireland, Jersey, Guernsey, Isle of Man, City of London ... shit, I could go on, but why bother?

You need to get out more.

Sat, 03/23/2013 - 12:49 | 3365733 Bicycle Repairman
Bicycle Repairman's picture

No doubt there are a few of them.  Note that Ireland and Cyprus have blown up so far.  Would the EU prefer these havens blow up inside or outside the EU?

Are the Caymans part of the US?

Sat, 03/23/2013 - 12:52 | 3365748 disabledvet
disabledvet's picture

not yet...but maybe soon.

Sat, 03/23/2013 - 16:35 | 3366544 Ghordius
Ghordius's picture

is Delaware...?

Sun, 03/24/2013 - 00:23 | 3367637 Carl Spackler
Carl Spackler's picture

Incorrect equivocation.

Delaware allows an American to minimize certain state-level tax burdens not the federal-level tax burden (which applies in all 50 U.S. states).


Sat, 03/23/2013 - 11:51 | 3365546 Groundhog Day
Groundhog Day's picture

Team Bernake will be working overtime this weekend sending US funds electronically to bailout Cyprus.  MUST. MAKE.  ES.  AND.  DOW.  MOVING  HIGHER

Sat, 03/23/2013 - 12:08 | 3365586 otto skorzeny
otto skorzeny's picture

why do they give a shit-it's just a few clicks on the keyboard. at least the spanish had to go through the trouble of shipping gold and silver from The New World to Europe to keep their dying empire alive.

Sat, 03/23/2013 - 11:53 | 3365547 hotrod
hotrod's picture

Who cares about this, U.S. Senate passed a budget, 1st time in 4 years, World markets rally cry.  Passed it at 4am, (hard workin). Does not balance the yearly deficit but surely will make everyone forget about taking their money out of the banks.  Oh is that why they passed it so quickly.

Sat, 03/23/2013 - 11:58 | 3365562 tornado_watch
tornado_watch's picture

Passing the continuing resolution to keep the gov't funded is not the same as passing a budget. The House and Senate each passed separate budget bills that are about as close together as the euro zone is to solvency. Their is no middle ground on a real budget, which they are still saying maybe comes with the debt ceiling debate. In the meantime, we are still where we have been for the last several years: under a continuing resolution because it turns out that Congress like to pay itself. 


Sat, 03/23/2013 - 12:03 | 3365580 machineh
machineh's picture

The sequester rocks.

After April 15th, they start laying off IRS workers!

Kinda like pulling cops off the beat in the Tenderloin ...

Sat, 03/23/2013 - 12:12 | 3365595 otto skorzeny
otto skorzeny's picture

it's a wash- cliff claven and the US postal service will keep 6 day delivery and that massive drain on the treasury.

Sat, 03/23/2013 - 12:20 | 3365625 Bingfa
Bingfa's picture

And wait till Obamacare gets underway...


          Folks paying their own insurance are already getting raped

Sat, 03/23/2013 - 12:29 | 3365653 DoChenRollingBearing
DoChenRollingBearing's picture

And it will keep getting worse each year.  Obamacare is an extremely complicated law that I took my best shot at last year when it was passed.  My take, incomplete as it was (my second most read article):


Obamacare would be a great story for an expert to contribute here, Tyler!  The topic is worthy of someone who knows what they are doing, not just a PM-minded Bearing...

Sat, 03/23/2013 - 12:45 | 3365723 machineh
machineh's picture

Here is an aspect that might interest you:

For those expatriated who live abroad, the mandate for obtaining United States-based health insurance plans does not apply to you if you live outside of the US for more than 330 days out of the year. Instead, the IRS new tax code will treat expatriates as though they maintain the minimum required health coverage.

To qualify, you must be eligible for the foreign earned income exclusion. This exclusion lets US expatriates skip paying taxes on up to $91,500 of their income. You will still have to pay taxes on any income that exceeds this level. This includes the Medicare tax, which the new bill has also mandated an increase of one-half of one percent for anyone earning more than $200,000 as an individual or $250,000 jointly.

It's almost like they're paying you to leave ... and get cheaper (or free) health coverage abroad.


Sat, 03/23/2013 - 12:02 | 3365579 Arrowflinger
Arrowflinger's picture

People on the cusp of taking their money out pay no attention to the monkeys in the capitols.

Sat, 03/23/2013 - 11:56 | 3365557 tornado_watch
tornado_watch's picture

Maybe my chronology is off, but seems to me that the Troika lit this fuse a long while back. From the IMF celebrating the strength of the Cypriot system in '09, to the ECB killing Greek bond holders (except themselves of course) and in turn sending Cypriot to the precipice, and now the IMF / EC / ECB showing up to push them over the edge. They are staring at depression either way, and the long memory of bureaucrats means if they stick in the currency the euro nobs will keep taking their pound of flesh every day, every year just to make sure Cypriots have learned their lessons. Better to dump out, take the quick by deep recession, devalue the pound and start banking all the FX from those cruise ships, and perhaps start partnering up on the E&P side to get some jobs flowing. 

Sat, 03/23/2013 - 11:59 | 3365558 Son of Loki
Son of Loki's picture

...and this guy gives an optimistic scenario!

Sat, 03/23/2013 - 11:57 | 3365561 dick cheneys ghost
dick cheneys ghost's picture

Gee, I wonder just who it is that does not want the Russian Mafia bailed out..........lemmy think here..............

Sat, 03/23/2013 - 12:00 | 3365571 Arrowflinger
Arrowflinger's picture

Manufacturers of winter clothing and blankets?

Sat, 03/23/2013 - 11:59 | 3365564 Arrowflinger
Arrowflinger's picture

When is it going to occur to depositors that, if documents can be forged and worthless derivatives created by banks to steal money on the asset/loan side of the books with  total impunity, they can also be forged to steal money on the liability/deposit side with similar impunity? After all, "Law Enforcement" has taken the position that the banks are always right and the customer is always wrong. When people realize that their local bank execs were up to their eyeballs in this and are in no way constrained from stealing their money, the financial ponzi will simply go supernova.

Local banks feign innocence, want to pretend they were absent from the looting, and want us to think that they are not beneficiary of ZIRP.

They provoke wrath, if you know how to read a FDIC caller report.



Sat, 03/23/2013 - 12:14 | 3365609 otto skorzeny
otto skorzeny's picture

a small time thug still makes you a thug.

Sat, 03/23/2013 - 12:00 | 3365570 overhere2000
overhere2000's picture

It seems the banksters want you to pay up-front (confiscation), or pay back-end (exit and devalue). You pay either way.


Either way I think there needs to be a Hobbesian clause in any financial institution doing business on this planet.

Sat, 03/23/2013 - 12:10 | 3365589 Tao 4 the Show
Tao 4 the Show's picture

The real secret behind all this, the one nobody wants to admit publicly:

With fiat currency so badly abused through derivatives, regulation breakdown, etc., it has increasingly detached from reality. The amount of so-called money far exceeds any reality of actual wealth on the planet. Thus, most of the money people think they have is already a fiction. It doesn't exist.

For years now, the game is simply musical chairs to see who can come out with some kind of wealth from this worldwide fantasy. Eurocrats and others anguish over solutions that are mathematically impossible, trying to pretend some mockery of integrity by not wanting to print more fiat.

The secret is some, really most people in the world, will lose. The loss has already occurred. All the fuss is simply about who loses how much and when. It's really pitiful when you realized that people sweated to build wealth, represented part of their efforts in fiat digits, and now watch as those digits represent only what some bozos decide in their fantasy negotiations

Sat, 03/23/2013 - 12:10 | 3365591 kaiten
kaiten's picture

I wish i got 1 euro anytime someone predicts the end of euro. What a comfortable live i could live.

Sat, 03/23/2013 - 12:24 | 3365638 AnAnonymous
AnAnonymous's picture

Actually, tieing 'americans' to their predictions through money is a sure way to either shut up and expose oneself to their congenitate violence.

'Americans' know that predictions like that are hot air. But they have to fill the gap, they can not face 'americanism' as it is.

Better to sink in propaganda rather facing the face of 'americanism'

Sat, 03/23/2013 - 12:32 | 3365666 DoChenRollingBearing
DoChenRollingBearing's picture

"congenitate"   ...   ???

Yet, making predictions IS a mug's game...

Sat, 03/23/2013 - 12:48 | 3365732 machineh
machineh's picture

He meant 'hermaphrodite.'

That is, I think I disagree.

Sat, 03/23/2013 - 14:09 | 3365763 akak
akak's picture

No, I think he meant "the sum of all hypocritizenistic inabilities to self-indict of Chinese Citizenism citizens eternal roadside crapmongering nature."

Sat, 03/23/2013 - 15:22 | 3366331 TheFourthStooge-ing
TheFourthStooge-ing's picture

No, I think he meant microgenitalate, a common affliction for Chinese citizenism citizens with tiny pee pee, so small, so very tiny.

Sat, 03/23/2013 - 15:45 | 3366393 akak
akak's picture

And yet still so very crusty, very much not something.

Sat, 03/23/2013 - 12:49 | 3365712 akak
akak's picture

Actually, trying to tie hypocritical Chinese citizenism citizens to their predictable anti-American hate through logic  is a sure way to either shut them up and expose oneself to their congenitate mental violence.

Chinese citizenism citizens know that predictions like that are hot air. But they have to fill the gap, they can not face their own grossly polluted, unfree, overconsumptionalizing reality as it is.

Better to sink in algebraic coconutistic tomfoolery rather than facing the face of polluted, roadside-crapping Chinese citizenism reality.

Alas, alas, two plus two times alas, just have to bear with AA shit.

Sat, 03/23/2013 - 12:51 | 3365746 machineh
machineh's picture

With congenitate osculatory violence, is possible for Chinese citizenism advanced degree holders to self-copulate.

Sat, 03/23/2013 - 12:59 | 3365766 akak
akak's picture

You have heretoby gripped the nub of the Chinese Citizenism mattering thing, which is very crusty, very much something in its obscurantatory offuscationalizing hypocriticality.

That is just what that is.  No more, possibly less.

Sat, 03/23/2013 - 13:51 | 3366007 nmewn
nmewn's picture


Ah yes, the aroma of free form chinese citizenism shitizen un-mattering style, equating to thousands of rotting pig carcasses floating through Shanghai on a hot day, the stench assaulting the facing face of that city's chinese shitizen politburo predictors of dreamy life of chinese citizenism shitizen on pig shitizen farmers farm.

Sat, 03/23/2013 - 15:36 | 3366368 TheFourthStooge-ing
TheFourthStooge-ing's picture

Ah, ah, evertheneverless, AnAnonymous Chinese citizen expedition river pig fishing undertaken vigourrously. Many fine specimens onto shore conveyed with much times decompositionary the partial extent limit. Ox cart given with full capacity in the restaurant transportings.

River pig free harvest salvageable brings the luck for stuffing most popular item the menu prosperously.

Sat, 03/23/2013 - 15:46 | 3366399 akak
akak's picture

Chinese river pig: the other white fetus meat.

Sat, 03/23/2013 - 15:52 | 3366416 TheFourthStooge-ing
TheFourthStooge-ing's picture


Chinese river pig: the other white fetus meat.

It does not matter that if it is only 10 pc of the whole or 90 pc of the whole.

Consumptionism, Chinese citizenist consumptionism, that is the mettle, the matteringest bit.

Sat, 03/23/2013 - 12:16 | 3365613 JR
JR's picture

Here is the essence of M.E. Synon’s essay today in the Irish Daily Mail, an incredible blueprint of how the Cyprus developments mirror the architecture of Communism.

“But above all, there is what happened over the night of the 15th on the sealed-off upper floors of the European Council building. It was the best illustration yet of why a former senior European Commission economist now refers to the EU as the New Soviet Union: the treatment of the President of Cyprus that night showed just how the power over the member states has shifted away from democratic control and into the hands of the unelected elite of a transnational European empire. And what happened to the Cypriot president that night could happen to any Taoiseach.”

Sat, 03/23/2013 - 12:34 | 3365675 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1  

Nice find.  Watch the EU become the EUSSR...

Sat, 03/23/2013 - 14:00 | 3366049 css1971
css1971's picture

They thought that voting mattered? This is just naive. People are only just starting to realise that the he who pays the piper calls the tune. DOH.

Sat, 03/23/2013 - 16:40 | 3366566 Ghordius
Ghordius's picture

"unelected elite"? This spat involves parliaments

Sun, 03/24/2013 - 00:26 | 3367641 Carl Spackler
Carl Spackler's picture

and those whom the parliament really works for are another form of the "unelected elite" (the other form being the Eurocrats)

Sat, 03/23/2013 - 22:55 | 3367527 SHRAGS
SHRAGS's picture
Great link JR, it follows the lines of Damon Vrabel's "Captial Machine" theory covered in six parts: Debunking Money Damon Vrabel - 1 Myth and Machiavelli 1 of 6 Damon Vrabel 
Sat, 03/23/2013 - 12:25 | 3365624 PUD
PUD's picture

1. Anything uttered by a banker (current or former) should be treated as pure raw steaming bullshit

2. Any "fix" that does not include a new monetary system not built on debt, the elimination of fractional reserve banking, the use of credit as money and the goal of perpetual growth via debt based no fix at all.

Almost everyone has this delusional notion that there is some magic combination of deck chairs on the Titanic that will save the ship...they are wrong. Re-capitalize all the fuck you want but so long as the agenda and objectives of the system remain the same the end is assured.

Sat, 03/23/2013 - 12:58 | 3365773 disabledvet
disabledvet's picture

maybe they have a singing frog?

Sat, 03/23/2013 - 14:49 | 3366222 Quick
Quick's picture

Pud -

Xcellent Post

TPTB are trying to fix a debt based system when they know the truth is it cannot be fixed. What happens when cyprus needs another bailout next year - How many did Greece need ? and is Greece fixed ? for that matter is any country reducing debt levels ?

Creating more debt does not get rid of a debt problem !!

The end of debt based currency is close at hand - best be ready for it.

Sat, 03/23/2013 - 12:22 | 3365631 magpie
magpie's picture

I know this doesn't belong on a financial site, however it is worth the lulz

"Who puts the merk in Europe? Angela Merkel, a Cancerian born on 17th July 1945. She is the Chancellor of Germany and has been called the de facto leader of the European Union. Forbes calls her the world’s second most powerful person.

In February and March 2013, Merkel has Mercury Madness in her solar Ninth House, which rules her relationship with foreign countries and global leaders. And of course, what will undoubtedly be Mercury Madness in the European Union.

Imagine a market where people set up a stall three different ways, three different times. Imagine a market where a price is set, then changed, then changed again. Imagine a market which has three different sets of rules. That’s what Merkel will be dealing with."

Sat, 03/23/2013 - 12:21 | 3365632 AnAnonymous
AnAnonymous's picture

That 'american' overestimates the weight of Cyprus. 'Americans' could barely put that country on a map.

Ironically, as 'americans' have to keep obeying their eternal nature, the very fact they have to push forward the likes of Cyprus to try to keep up the illusion only exhibit more how much their propaganda is cheap.

Cyprus triggered disaster scenario is only reported because there must be a front story to cover and fulfill the 'american' duty: consuming.

The report of it only exists to satisfy the gloom and doom appetite as 'americans' are compelled to do the 'american' thing. Better to focus on Cyprus rather than admitting that nothing that was predicted has happened so far. Or worse, reporting about things that are happening, the very things 'americans' do not want to speak of and are ready to cover with everything and anything, like a claim that Cyprus's fate has bearing on the EU, EMU or the world.

Sat, 03/23/2013 - 13:58 | 3366037 akak
akak's picture

Supersize my citizenism!

Sat, 03/23/2013 - 15:57 | 3366426 TheFourthStooge-ing
TheFourthStooge-ing's picture

Dog Fight/Move. Guaranteed speedery ticket.

Sat, 03/23/2013 - 14:51 | 3366223 formadesika3
formadesika3's picture


You are correct in only one point. The propaganda value of Cyprus consumes 'americans' ability beyond their own favored status within boundaries it sets for itself upon the world map.

This scenario plays out well; either it has nothing to show for its efforts. Then its marching orders call for "americans' eternal nature to withstand scrutiny of the 'american' middle class who are always in charge.

Let us not forget Chinese inability to respond by turns to citizen complaints of corruption such as knowing low friends in high places. The Confusian ideal hypocritizes its own. A front story exists to cover the 'american' thing gleeflully diverting consumption from the Little Emperor to the Big Emperor and vice versa. All is well on the superficiate peripheral. Alas, these radicates play out poorly after serious reflection that all claims have an 'american' origin.


Sat, 03/23/2013 - 15:50 | 3366410 TheFourthStooge-ing
TheFourthStooge-ing's picture


Let us not forget Chinese inability to respond by turns to citizen complaints of corruption such as knowing low friends in high places. The Confusian ideal hypocritizes its own.

This is an option on the Chinese Communautist Citizenism table as they maintain an expansionist policy, can not do otherwise. Therefore bankers will be welcome as bankers and imperialists form a dynamic duo based on a mutually blobbing up relationship.

Must be around 200 people involved. Far fringe extremistic lunatics...

Sat, 03/23/2013 - 16:21 | 3366487 akak
akak's picture

When the algebraic coconuts of Chinese citizenism crackedpottery begin to fall, as the season is, the harvest cannot be delayed.  Attempts to do otherwise fail in the making.  Thus we see the fruit of it.

This as the case, all belligerent scrapegoatery onto 'americans' is the employment option of choice.  When avalanches of roadside nightsoil begins to impede the commutation of indentured laborers to their locked sweatshops, the weakending of the inability to self-indict must be halted.  Cyprus is of no concern.  In Chinese Citizenism, the casting of group aspersions is all.  The mattering thing recedes to beyond.

This is the that, for which Citizenisms of floating river pig varieties must be cast out.  Desperate times call for congenitate measures of all things.  Offuscation being the parangong of hypocritizenistic methods, more will be on hand.  One would be foolishnesses to ignore the obvious.

When the volume of internet crapmongery begins to seek symmetry with the neck-high levels of Chinese citizenism roadside nightsoil, nay, upping it even, is this not evidence of Chinese citizenism failure to sufficiently blob-up the offuscational means?  Where else can one project to the exterior?  Much a matter to bite!

Nowtherewith, the parangong of monolizing the speeching means and extorting the river pork will be nowhere seen.  Banishment does the reason and the facts of him.  But back he will be, as is his eternal nature.

Alas, alas, alas, cube root of 64 alas, a fried tiger penis in the hand is worth two in the roadside bushes.

Sat, 03/23/2013 - 23:41 | 3367577 TheFourthStooge-ing
TheFourthStooge-ing's picture

akak saying this commentated:

Desperate times call for congenitate measures of all things.

Reality is a nasty mother though.

Reminds that verisimilitude present desperate times concurrent with fabled past desperate times. Eternal Chinese citizenism nature poured compulsions on Chineses to give measurings to Chinese citizenist congenitate dictature.

This coined dicovery of 2.54cm worm or, giving the imperialismist label, inchworm.

Sat, 03/23/2013 - 12:23 | 3365637 Bunga Bunga
Bunga Bunga's picture

The EURO death star is failing, let's build another one.

Sat, 03/23/2013 - 12:24 | 3365642 sangell
sangell's picture

"Disintegration" can happen quite quickly therefore every Eurozone country needs to be ready to have 'alternative' money ready against the day the Euro no longer exists.

Sat, 03/23/2013 - 12:25 | 3365643 walcott
walcott's picture

bitch until they print bitchez...

Sat, 03/23/2013 - 12:27 | 3365648 Bunga Bunga
Bunga Bunga's picture

but you can't print bitchcoins.

Sat, 03/23/2013 - 12:42 | 3365710 McMolotov
McMolotov's picture

Remember, on ZH it's "bitchcoinz."

Sat, 03/23/2013 - 20:24 | 3367238 walcott
walcott's picture

or a "bitchcoinz bitchez" that is.

Sat, 03/23/2013 - 12:26 | 3365647 f16hoser
f16hoser's picture

I'm not gonna lie to ya, Gravity (debt) is a mother fucker.....

Sat, 03/23/2013 - 12:30 | 3365655 Tao 4 the Show
Tao 4 the Show's picture

Everyone enjoys your (Beijing-version) sunny disposition (Ananon). Are you able to spew enough to create that 300+ pollution index single-handedly?

Sat, 03/23/2013 - 12:39 | 3365683 steve from virginia
steve from virginia's picture




Another sacrifice made by stupid humans on the altar of the almighty automobile.


The euro is an energy price hedge, so is the euro-zone. The euro has failed like all the other energy price hedges ... done in by high- and relentlessly increasing real energy costs.


That is, relative to other goods petroleum prices are increasing ... and will continue to do so until consumption is bankrupted ... then fuel supply becomes unaffordable.


Other fuel price hedges include asset price bubbles fueled by cheap credit, cheap credit itself, offshoring of labor, automation/robots, futures price manipulation ... so was World War Two, Japan's and Germany's energy price hedges were invasions of oil producing neighbors.


All to provide sustenance to the wonderful automobiles, the axle around which the entire bit of 'moderne' theater revolves.


All of these hedges have failed or will fail: they have done so because fuel once wasted is gone forever. Consumption increases with nothing to show for it, without any discussion allowed about it.


Now is the endgame of the funny-money tricks. Money is stolen from citizens to pretend that fuel prices are affordable ... rationalize that!



Sat, 03/23/2013 - 13:30 | 3365908 Shell Game
Shell Game's picture

@Cars from Virgina:

Cars. You really ought to begin to consider cars and the imact of cars on this car-centric planet. The great secret of the Ponzi is cars.  For if it weren't for cars, we wouldn't be in this mess. At all. I urge you, research cars...

Sat, 03/23/2013 - 12:49 | 3365742 Miss Expectations
Miss Expectations's picture

PULL IT (Larry Silverstein)

Sat, 03/23/2013 - 12:59 | 3365777 q99x2
q99x2's picture

And those are the results of EU banksters. Man we're in for some real problems over here. These F'Kers are preparing to kill us.

Sat, 03/23/2013 - 13:27 | 3365892 holgerdanske
holgerdanske's picture

It takes a thief to catch a thief!

I think a person can only do so much to reform, or resign.

It could well be that he has done more than most would have been able to.


At least he resigned. A man of principle.

There are unfortunately too few of those!

That is why we are in the mess we are in today!

Sat, 03/23/2013 - 13:42 | 3365967 NoTTD
NoTTD's picture

His name, Orphanides, is about to prove prophetic.

Sat, 03/23/2013 - 14:18 | 3366112 Ghordius
Ghordius's picture

"Financial markets are over-influenced by what happens in London or New York – there, the intricacies and processes of European politics are not very well understood." I also could not agree more and yet from my perspective ZH shares many (understandable) NY/CoL prejudices

particularly when it comes to the EUR project, and at large about the motivations and traditions on the continent

Cyprus leaving is a good reason for every country to rethink it's stay - not a reason to storm the exits

evidence: the different approach to panics like bank runs et al

Sat, 03/23/2013 - 14:24 | 3366125 IMA5U
IMA5U's picture

market is going to rip


Sat, 03/23/2013 - 14:46 | 3366203 Its_the_economy...
Its_the_economy_stupid's picture

If by "destroy incentives to have great returns" you mean lying, cheating, stealing then yes it will.

Sat, 03/23/2013 - 14:59 | 3366255 gwar5
gwar5's picture

EU is crashing to Earth and they are now more dangerous than ever. Gird loins over there but don't take any real shit from them, it's all bluff.

Sat, 03/23/2013 - 21:20 | 3367375 bilejones
bilejones's picture

“We have seen other eurozone countries, the Netherlands, for instance, put national interests ahead of the European interest by trying to bring down the economic model of countries such as Cyprus or Luxembourg.”


I should hope so.

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