Next Up For Cyprus: Depression

Tyler Durden's picture

From SocGen:

Depression for Cyprus: Our Cypriot GDP forecast entails a drop of just over 20% in real GDP by 2017. This forecast had already factored in much what was agreed, but did not account for the additional uncertainty shock generated by the past week’s appalling political mess. Risks are clearly on the downside and Cyprus will in all likelihood require additional financial assistance further down the road. Accounting for less than 0.3% of euro area GDP, any downward revision to Cyprus will be barely visible on the euro area aggregate.

So much for the hope of recreating Iceland, and actually growing in 2-3 years. Congratulations Cyprus - you may have a depression for the next four years, but at least you have the (and helped Merkel win the September election).

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Holleyman's picture

They will still have deposits less than 100,000 to raid for next time

eigenvalue's picture

Do you think anybody with a brain would still put his money at a Cypriot bank? 

mayhem_korner's picture



Delete "Cypriot" and you have yerself a viral bumper sticker, amigo.

Urban Redneck's picture

Not wise to park a car with such a bumper sticker in front of your own house...

ziggy59's picture

Yes, Gray matter can be present without much function...
Just ask the Honey Boob cheerleaders, watchers, etc. BTW shes being exported... Her retarded show is being sent to Europe..

Its more funner to be walking, talking brain dead

kaiserhoff's picture

I was a small town CPA before I started teaching, and always maintained a few tax clients.

This will destroy all small business on the island.  It's only a matter of time.  Cash is just another form of inventory for many of us.

The companies not caught in the initial rape, will die a slow death from no demand and uncollectible receivables.

JUST SAY NO, CYPRUS,  Or better yet, tell them to go straight to hell.

NoDebt's picture

They can't say no.  There won't even be a vote.  It's done.

Agreed, they're toast.  As their economy shrinks they will have less tax base to support the debts they owe on the bailout and..... well, this won't be the last bailout for Cyprus, just as Greece had multiple rounds.

TheBird's picture

Well you get the prize today. It is about time that people wake up and realize that when they put ("place") money in a bank account they are in effect lending it to that bank to use in any manner of ways.

I was very glad to read this: "Cyprus Popular Bank, 84 percent owned by the government, will be wound down. Those who will be largely wiped out include uninsured depositors and bondholders, including senior creditors. Senior bondholders will also contribute to the recapitalization of Bank of Cyprus. "

That is a definite step in the right direction and is what should have been done in Greece. Bond holders should not be bailed out. Depositors in excess of the "insured" limit likewise knew their money was at risk.

I remind any of you with brokerage accounts with large sums of money to verify exactly who is insuring your account, their credit worthiness and up to what dollar amount they are insuring. Flee first, ask questions later.

Bunga Bunga's picture

Correction: Do you think anybody with a brain would still put his money in a bank?



laomei's picture

Anyone with half a brain is draining out those accounts the instant the banks reopen.  

Super Broccoli's picture

they can't : cap control !

mayhem_korner's picture



Secondary markets might get around those.  A little sugar (or a loaded Glock) goes a long way to having the keepers look the other way.  That's how Congress 'works'.  :D

laomei's picture

Euros is euros, there's always ways around it, even easier when you don't have to exchange.  Fake invoices are easy as hell, even easier is using cards and merchant accounts to move money around (while taking a hit on fees of course)

tonyw's picture

Plus anything else they can raid or tax, such as pensions & property....

King_of_simpletons's picture

Too bad. Cyprus doesn't have the Fed. They would at-least have a depression where the stock market keeps going up and the media cheerleads a "growing economy" and fake employment news.

ziggy59's picture

Depression contagious... Im depressed no banksters paid...but some Light shines since
The Ferryman is ALWAYS paid..

Beam Me Up Scotty's picture

Bullish for big pharma!! They have lots of pills you can pop to "cure" depression!!

MFLTucson's picture

It doesnt matter, they got Gold lower and that was the plan of these fucking gangsters all along.  Print money, add debt and play fucking games, they call that a fix?

Its_the_economy_stupid's picture

90% reduced to beggary.

machineh's picture

Cyprus will in all likelihood require additional financial assistance further down the road.

Bailout II, bItCHeZ!

Didn't anyone read the minutes of the last meeting in Greece?

fonzannoon's picture

Where are all the boots on the ground reporters in Cyprus interviewing their citizens?

CNBS announced they now feel it's best to "move on" from Cyprus and discuss more important things. Thank god they only skanked uninsured deposits. Anything else could have created a stir.

This may be the last time we see gold at these prices. You know damn well people are now scrambling for real assets.

mikla's picture

They only came for the Cypriots, so I said nothing.

kito's picture

Which people fonz?? The uber wealthy already have lots of islands to escape and the rest of the world is swimming in debt......ask the average American if they would rather spend 3000+ bucks on a down payment for a new car lease or two gold coins, they will choose the new debtmobile....tptb are following classic ray dalio deleveraging scheme and they intend to pull it off .........and it is all on the backs of the average citizen.......these citizens are not running out to buy real assets....they will continue to get sheared.......

fonzannoon's picture

You are probably right Kito. This is one of the few times where they left the slaughterhouse doors open while the rest of teh sheep were grazing a few feet away.

Most of the sheep probably did not bother to even look up.

I do believe the wealthy people are scrambling to get their hands on Cash, metals and land.

I think the media will successfully twist people's minds into accepting that anything that is not government insured, has open season on it.

There also is no doubt in my mind that wherever this money flows (cash,metals, land etc) will be next up for confiscation because in the end it is all just dirty money. The sheep should rest assured that the governments are on top of it.

kito's picture

for what its worth....i know several people who make mucho bocu bucks in the financial industry.............they have owned real assets for years and years regardless of the current situation.......and they dont see this ending badly........they see it as classic playbook economic downturn strategy......and i dont sense any urgency in them to do anything else but to profit from the bernank......................

fonzannoon's picture

So those guys own real assets. If there is some major collapse, they will be fine. If there is no major collapse, they will be fine. I'd rationalize the whole thing and just continue to play along if I was them as well.

kito's picture

egg-actly......wealthy people have always had a diverse portfolio of real estate, art, wine, etc......they are protected regardless.............they also have a rock solid faith in the way things are being carried out........................PLAY ON!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

fonzannoon's picture

How about the people out there lucky enough to have a few bucks, but certainly are not at that wealthy level?

What to do?

Rentenmark's picture

I agree with much of what you say kito.  However, we must remember that the rules will be changed to suit the needs of TPTB, just as they were in Cyprus.  Think you are safe in land?  They will tax it.  Think you are safe in PMs?  They will confiscate and make them illegal.  Think your acres of crops are yours?  Not unless the good of the people comes first and it is confiscated.  Think your stash of cash is safely out of the bank?  Not if they go electronic and install capital controls.

The point being we must do what we can to protect ourselves and hope that they cannot get all of which was taken out of the system.  Good luck to all!

MachoMan's picture

The slaughterhouse analogy is a bit off...  I'll posit that they simply have an "open door" policy at the slaughterhouse...  and the sheep simply come to them.  Granted, the folks at the slaughterhouse let a few dogs loose every once and a while to rile them up...  maybe even conjure a coyote...  or let the mean kid pester them with a bb gun...  but make no mistake, the final decision to enter is with the sheep...  there is no direct force necessary.

fonzannoon's picture

good point. Agreed completely.

MachoMan's picture

Simplified down to that one single point, it's the scariest aspect of everything, economic and political... 

smlbizman's picture

rt has people on the street...if u just watched cnbs all you saw was a nice set of tits and a bent face.......but they are making noise in the streets...

toys for tits's picture

I'm depressed for Cyprus.

They stated that the Troika's goal is for the banking sector to come in line with the rest of EZ by 2018.  It'll be down to that level by the end of this year.

fonzannoon's picture

Toys you were right that this was a big deal. The markets may not ever react to anything consequential again. Right now as the sea looks nice and calm on the surface you can't tell that there is a tsunami racing along underneath.

One thing these announcements have absolutely proven to me is this. When the time comes there will be no major selloff in the market. None. Anyone patiently shorting these markets for years now will not be rewarded. The market, like these banks, will just close on Friday and not open again.

toys for tits's picture

That is an important observation about banks and markets. Just keep on saving for you and yours.

It is nice to see these headlines in the MSM, even if it's on the opinion page.

Euro Bailouts: Savers Be Warned - Your Money's Not Safe

MachoMan's picture

The markets do react to everything...  It's just that on the worst days, we break even...  and then the remainder is irrational exuberance/fluffing.

Mercury's picture

How does their banking sector not go to zero here?

mayhem_korner's picture



The same way everything else works...MAGIC.

SmallerGovNow2's picture

that's a great question.  capital controls will just make it go to zero slower...

kito's picture

ultimately they will allow the release of larger amounts of money, but only for the purchase of domestic real estate and/or big ticket items.....this allows the flow of money out of the banks to appease the people but into the cyprus economy.................................if you have some extra spending cash....your best bet is to be on a plane to cyprus to purchase real estate.....because prices will go up once the bidding begins....................

Racer's picture

And if only they had had the courage to do an Iceland if could have all been soooo different.

valley chick's picture

you are joking right?  Did you see all those people lined up in front of ATM machines?  They are the willfully ignorant and confident the result will be the same in other countries as people are raped of their cash. 

Ghordius's picture

I wonder if the protesters on the Cypriot streets would agree - remember, they were led by bank employees. further, Icelanders were presented with a way more painful set of options, if you look into the details

mayhem_korner's picture

Risks are clearly on the downside and Cyprus will in all likelihood require additional financial assistance further down the road.


Show me the list of countries, apart from our heady comrades in Reykjavik, that wouldn't correctly complete the sentence.

machineh's picture

That's today's big question:


Nominations are now being accepted.

Super Broccoli's picture

France ! that's when you'll first hear "to big to bail" :-)