And Scene: Big Cypriot Depositors Facing Complete Wipe Out

Tyler Durden's picture

9.9%? 30%? 60%? 80%? Nope - according to the latest from Reuters, the cash-on-cash return to all uninsured depositors in the healthy, i.e., only remaining big Cyprus bank, will be a big, fat doughnut.

In what appears to be drastically worse than many had hoped (and expected), uninsured depositors in Cyprus' largest bank stand to get no actual cash back from their initial deposit as the plan (expected to be announced tomorrow) is:

  • 22.5% of the previous cash deposit gone forever (pure haircut)
  • 40% of the previous cash deposit will receive interest (but will never be repaid),
  • and the remaining 37.5% of the previous cash deposit will be swapped into equity into the bank (a completely worthless bank that is of course.)

So, theoretically this is 62.5% haircut but once everyone decides to 'sell' their shares to reconstitute some cash then we would imagine it will be far greater. Furthermore, at what valuation will the 37.5% equity be allocated (we suspect a rather aggressive mark-up to 'market' clearing levels).

Critically though, there is no cash. None. If you had EUR150,000 in the bank last week (net of insured deposits which may well be impaired before all is said and done) you now have EUR0,000 to draw on! But will earn interest on EUR60,000 (though we do not know at what rate); and own EUR56,250 worth of Bank of Cyprus shares (the same bank that will experience the slow-burn leak of capital controlled outflows).

It seems, just as we warned, that the deposit outflow leakage that we discussed did indeed weaken the situation of the large banks significantly.

As Reuters adds, the toughening of the terms will send a clear signal that the bailout means the end of Cyprus as a hub for offshore finance and could accelerate economic decline on the island and bring steeper job losses.

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toys for tits's picture

Come on Cyprus Parliament, grow a pair and tell the Troika to fuck off.

udecker's picture

I read somewhere else "how is it possible that the Cypriot banks haven't burned to the ground and politicians and bankers aren't hanging from streetlamps?"

My question: how is this, in any way, acceptable?

Van Halen's picture

You mean hanging the bankers or taking the money, or both?

sunaJ's picture

And thus we see, boys and girls, how statists get from your money to their money with ne'er a single shot fired.  Boiling frogs, all.

smlbizman's picture

did they get to keep the towels....they will be good for the tears....

kaiserhoff's picture

I have no idea what's going to happen in Euro-land, and I don't want to know,

but I'm pretty sure a handful of well placed snipers could turn this situation on a dime.

Handful of Dust's picture

Bankers get 100% Bonus;

Depositors get Zero.

Signs of the times.

cifo's picture

"the end of Cyprus as a hub for offshore finance"

I am guessing the other offshore hubs will soon come to an end as well.

barliman's picture


Let's answer all of these at once:

  • Come on Cyprus Parliament, grow a pair and tell the Troika to fuck off.
  • "how is it possible that the Cypriot banks haven't burned to the ground and politicians and bankers aren't hanging from streetlamps?"
  • You mean hanging the bankers or taking the money, or both?
  • And thus we see, boys and girls, how statists get from your money to their money with ne'er a single shot fired. Boiling frogs, all.
  • but I'm pretty sure a handful of well placed snipers could turn this situation on a dime.

Look through the following and note how closely it matches the Senate Democrats proposals:

In Cyprus, only licensed gun owners34 30 32 may lawfully acquire, possess or transfer a firearm or ammunition Compare

Genuine Reason Required for Firearm Licence Applicants for a gun owner’s licence in Cyprus are required to prove genuine reason to possess a firearm, for example, hunting, target shooting, collection, personal protection35 Compare

Minimum Age for Firearm Possession The minimum age for gun ownership in Cyprus is 18 years35 Compare

Gun Owner Background Checks An applicant for a firearm licence in Cyprus must pass background checks which consider criminal, mental and domestic violence35 records Compare

Reference Required for Firearm Licence In Cyprus, third party character references for each gun licence applicant are not required3 Compare

Domestic Violence and Firearms Where a past history, or apprehended likelihood of family violence exists, the law in Cyprus stipulates3 that a gun licence should be denied or revoked Compare

Firearm Safety Training In Cyprus, an understanding of firearm safety and the law, tested in a theoretical and/or practical training course is not required3 for a firearm licence Compare

Limit on Quantity, Type of Ammunition A licensed firearm owner in Cyprus is permitted to possess only ammunition suitable for the intended firearm36 Firearm Registration Compare

Civilian Gun Registration In Cyprus, the law requires37 that a record of the acquisition, possession and transfer of each privately held firearm be retained in an official register Compare

Gun Dealer Record Keeping In Cyprus, licensed firearm dealers are required37 to keep a record of each firearm or ammunition purchase, sale or transfer on behalf of a regulating authority Compare

State-Owned Firearm Records In Cyprus, State agencies are required38 to maintain records of the storage and movement of all firearms and ammunition under their control

jmk's picture

You can store precious metals outside the US. I've done it.

Google Safewealth. They are located in Montreux, Switzerland. I have been dealing with them for years. They can introduce you to a safe bank. There are only two in Switzerland--one in Zurich, the other in Basel. You can store metal and cash currency notes completely outside the banking system.

This is something that you need to do soon--time's running out.

i_fly_me's picture

Ahem, no offense, but at the farthest, I will be storing *my* wealth within one decompression stop of my hands.

Panafrican Funktron Robot's picture

"safe bank"

You, my friend, have introduced a dangerous oxymoron into your argument here.  In Switzerland, no less!  You are placing your wealth at the very heart of darkness, expecting it to still be there if "shit gets real".  My friend, you need to get your gold as far the fuck away from Switzerland as humanly possible.  

azusgm's picture

Waiting for the Texas Bullion Vault.

Buck Johnson's picture

Your nuts to even be doing anything with Switzerland.  That country has made a deal with the US essentially to give up any information on US people who have accounts (and so believed to be evading taxes).  Who's to say that they won't give up information on who's holding precious metals in their facilities, especially if they pass some form of confiscation law.  I also agree with you Tyler, I believe that the under 100,000 "insured" deposits is a joke.  I don't think they are as insured as the Cyprus govt. is telling (sorry the banks, the govt. has been quiet).  If it was why still have capital controls and only allowing up to 300 euros a day out of the bank and no wiring out of the country.  Thats because they don't have enough money for all the accounts and if they don't have the money for the accounts, they definitely don't have the money for the insurance.



jeff montanye's picture

sounds like the new york fed's reply to germany when they asked for "their" gold back.  

i'm soon to be 65 and, while i hoped for maybe a couple more decades of life, i have had a reasonable run.  it's the children and the grandchildren that i pity in the times ahead when there will be so few places and ways to hide from the oppressors.  handguns against hellfire armed drones?  mercy.  

Papasmurf's picture

"Safe bank" is a contradiction of terms.

bunnyswanson's picture

The Take Down of Glass-Steagall (over 1 hour).  This happened before.  Why is anyone surprised?  Reenacting Glass-Steagall should be discussed.  Video includes clips from early 1900s.  Very interesting.  Agreeing with everything isn't necessary (LaRouche).

Tegrat's picture

No one get's it. There is no banker anywhere getting this money. The EU and it's *government* officials are the creators, the facilitators, enforcers and recipients of this confiscation. ZH is filled with lunatics who think that the people this is about greed of a few bankers, when it's all about incompetent government spenders.




luckylongshot's picture

Now thats just straight out naive. Why don't you go check who owns the central bank in your country and then when you discover it is a group of private bankers, try to figure out for yourself how a crisis like this could have happened without their involvement. Alternatively you can look up Milton Friedman and how and why he laid the balme for the 1930s depression at the feet of private bankers. Alternatively you can think through the implications of private bankers controlling the money supply as it will lead you to the realisation that it means they control the politicians....then return to blaming the politicians and realise what that means.

Optimusprime's picture

I agree with you.  But you can see how a certain simple-minded naivete, when exposed to libertarian doctrine (it's always the state to blame!), might think this,  And I say this as an attentive and admiring reader of Nock's Our Enemy, the State.

Kobe Beef's picture

Leviathan is bad enough on its own. Now it's married to Mammon. Their offspring is evil incarnate. "What rough beast slouches toward Bethlehem" indeed.

Xibalba's picture

where's all the 'trust our civilized system' pumpers now?  

Wile-E-Coyote's picture

You got it boiling frogs.

DO you think the gun polishing faggots in USA will be any different?

We got guns; USA, USA the pussies will hand them in when asked.

What's the point of buying ammo when you shove it up your own ass.

Rebel emasculated pricks.

A Nanny Moose's picture

...and what would you have them do? Create the same conditions that led to a Robspierre, or Lenin?

Project much?

ChrisFromMorningside's picture

If my choice is between Robespierre and Louis XIV, I'm on Robespierre's side.

If my choice is between Lenin or Nicholas II, I'm with Lenin. 

As Bane said in TDKR "I'm necessary evil."

lewy14's picture

The sovereign - the annointed, crowned head - had much less power than any modern megalomaniacal secular totalitarian fuckwit.

E.g., the current American President complains he's not a king or the politburo chairman - but those individuals have to do more political heavy lifting, backslapping, palm-greasing and cajoling than the American President these days (the office, not the occupant, is the object of my observation here).

Faced with a choice of lesser evils... none of the above. Every evil claims it's "necessary".

r e s i s t

Kobe Beef's picture

Whatever faults Louis XIV had, he was not a mass murderer. Whatever faults Nicholas II had, he was not a Chekist. If you do not understand history, you should refrain from making historical judgements. Why would you align yourself with traitors, terrorists, torturers, and mass murderers? Evil is not some pithy line from an overrated movie. Embrace it at your own peril.

wkwillis's picture

Actually, he was a mass murderer, which is why he was killed.

Note that Louis XIV enslaved Arabs to the galleys and Africans to the colonies (death rates in the Caribbean sugar plantations were far higher than in kindly America), taxed everybody except the nobles and government officials heavily (About 1% of the population was tax free) and killed, arrested and imprisoned (death rates in typhus infested jails were high) and murdered many people in ways that the historians employed by the upper class did not bother to record. When America formed an alliance with Louis XIV, it was like Roosevelt doing a deal with Stalin.

The revolution got rid of all that, freed the slaves (except where the British and then Napoleon could stop them), and established the rule of law. And it took the simultaneous invasion of France by all Europe to get the French to put Napoleon in charge.

Twain put it bluntly. The Revolution killed enough people to fill one graveyard, the Monarchy killed enough people to fill all of France.


Communism Killed 100,000,000 and all I got was this lousy T-shirt

DirkDiggler11's picture

It's more than obvious that this "Coyote" doesn't live in the South. If he did, he would know that the men in the South aren't just talking out their asses like the Coyote is, they are preparing to have to take their country back by force.
This Coyote must live in NYC, where your chief central planner mayor Bloomburgstein can tell you what you can have and when you can have it. Maybe your good mayor can give you a reach-a-round tonite for your being such a cooperative citizen there Coyote .......

hannah's picture

coyote is just a troll. some people will turn in their guns some wont.....the one that dont will probably have 10k rounds in their prep already as well as their neighbors and relatives.

Big Slick's picture

'Cept COYOTE is right.  You're already taking it up the tailpipe, southern boy, by accepting ZIRP like a nice quiet sheeeeep

Panafrican Funktron Robot's picture

I would suggest that Texas has been actively seceding from the union.

Lednbrass's picture

If you have land, weapons, have and produce your own food, and live in a community of thousands of heavily armed people that are much the same in a region full of such communities who fucking cares?

ZIRP away, it only speeds the inevitable collapse of the urban centers which is a good thing as far as I'm concerned. Hell, the faster they pump out so much money the faster government scrip becomes useless.  Your world will end, not ours and the sooner the better. We aren't accumulating 0's and 1's in bank computer systems or stocks, we accumulate land, food, tools, fuel, and arms.

JOYFUL's picture


... Your world will end, not ours and the sooner the better...

siren call of the seceder.

To have gone to all the trouble of accumulating land, food, tools, fuel, and arms... in anticipation of some kind of Merikan Civil War 2.0 - without considering the intervening 150 years - leaves you as little more than re-enactors...hobby enthusiasts dressing the part of the soldier of bygone days, when the worst to fear was a gunshot wound or errant cannonball. 

Many of you last redoubters are smart enough to know who were the shadowy players behind the scenes who set up the circumstances for that, and other, phony wars which always profit few at the expense of the many. Their inheritors have used that intervening time to learn from past victories and defeats, to hone their skills and lessen the chances of successful resistance to their schemes. Tis a grand, all-encompassing plan they have mustered to kill that resistance -once and for all.

Cyprus is a key measure of their strategy...and success. Why, many ask, so little resistance to this rape and pillage? Yet you never look up a the sky, the phony aerosol clouds of mind-numbing toxins that are sprayed down daily to enter your bloodstream, and in combination with all the other toxic miasma in everything else...everywhere else...slowing grind down the will to resist, and the ability to think clearly. They have destroyed resistance this way.

And your enclave will escape these enemy weapons? You have underestimated your enemy, and the malice of their intent...and played into their hands by doing so. "Your world"??? Our world. One people. One hope. We, the Europoid peoples, will stand, or fall, together.

It is painful enough to discover with what unconcern they speak of war and threaten it. I have seen enough of it to make me look upon it as the sum of all evils. Stonewall Jackson

BooMushroom's picture

Shorter JOYFUL:

Land, food, fuel and guns are worthless because chemtrails.

JOYFUL's picture

All the above are very useful...

in the correct location.

DangerClams's picture

Bloomie's handing out reach-arounds?  Sweet!


You obviously have never been to the South nor understand Southerners.  We still retain the individualistic and rebellionous nature of the founding fathers.  We won't give up our weapons and there isn't enough paramilitary units in the United States to reocupy and pacify the South. Goncontrol will only lead to another civil war and a breakaway of the "free" states.  Im in Texas and I gurantee there are at least a half million people here who own firearms and won't give them up. I was at a gun show last month where the line was 1/2 mile long to get in. The NRA has a sponsored event in Houston on May 4,5th. You want to see what you are truly dealing with, come to this show

Pseudo Anonym's picture

either that

hanging the bankers or taking the money, or both?

or what commenter paper crusher ( ) proposed the other day should happen to those who corzine customer funds (ffwd to 02:59):

and i approve of that type of treatment

Wile-E-Coyote's picture

Why the fuck are not people burning the country down. WHY?

Croesus's picture

It's not a depositor's a fucking decapitation:




An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company into equity. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself — thus , the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.”

newengland's picture

Yep. That is what will be.

All the moneychangers will screw each other.

Easter said there was a better way...not the way taken by moneychangers' pets, apparently.

The un-Federal no-Reserve Board is a foreign corporation of zionists who hate Christians and the Republic.

hannah's picture

coyote - i think your comments should be what YOU HAVE DONE LATELY. you are the biggest pussy when you state 'why havent the people..'....fuck complaining about other people doing shit...what have you done.

Slartebartfast's picture

Because the people who took the beating are all in the 1%.  The 99% doesn't have over 100,000 in savings.  None of them.  Their money is safe.  It's the 1% (below the bankster level anyway) that got fleeced.  Nobody likes them anyway.

Just wait until next Tuesday when 3/4 of the Cypriots find out their employer has gone out of business over the weekend because all their working capital was stolen.  80% unemployment overnight.  And no capital to rebuild anything with.  This is going to be truly epic.