Awol Posted March 25, 2013 Author Share Posted March 25, 2013 This is the myth that AWOL seems to be playing into as well. The EU and the Cypriot government are not 'taking' anyone's money, there is no 'bank robbery'. What happened is that Cypriot banks (much like 'Icesave' in Iceland) offered generous rates of returns on savings which attracted foreign investors, including Russians who parked their savings in the country. Question. If that Russian money is - as is being insinuated - all dodgy, why aren’t criminal investigations being launched to trace the provenance of the funds prior to seizing 100% of it (which is allowed under EU law) and therefore averting the need for any bailout at all? The Russian argument seems like a red herring to divert from the obvious – depositors are being made to pay ahead of the banks that are exposed to Cyprus.The Cypriot banks then took that money and lost it investing in Greek bonds. Yes they did, because as part of the Greek bailout the same Troika of the EU, ECB and IMF, imposed “haircuts” on the creditors of the Greek banks, in this case the Cypriots, in turn tipping their banks over the edge. Why one wonders, aren’t the Troika now imposing the same loses on the creditors of the Cyprus banks instead of raping the depositors? What’s that, the creditors includes big German banks? Well colour me shocked… So most of the EU’s 10 billion for Cyprus will never actually leave Frankfurt and just be sent to other German banks, instead of them taking the hit on their stupid investments – as the Cypriot banks were forced to. Meanwhile Stavros and Spirios are left grabbing their ankles instead because, let’s face it, what are they going to do about it? Meanwhile in order to recycle 10 billion around Frankfurt Cyprus is going to receive a massive dose of austerity, huge tax rises, runaway unemployment, endure the wholesale sell off of public sector assets and has lost in one week about 40-50% of their GDP generating industry – i.e. the financial sector. They will remain stuck in the Euro (so no devaluation possible to make them more competitive), have no way to service the new debts being racked up and will no doubt require yet another bailout ‘X’ weeks or months hence. Meanwhile, the delivery of this “bailout” (akin to being thrown a breeze block whilst drowning) is conditional on there not being a Parliamentary vote in Cyprus to approve it. This has been achieved by the clever wheeze of re-structuring the two biggest Cyprus banks instead of the little guy’s money being taken as a tax - which by definition has to be lawful and approved through legislation. Good solid EU stuff, **** democracy, we WILL get what we want. This article from Zero Hedge is also worth reading, apparently the bank freeze has only applied to some (read, the little guy) while those with the power and influence have been getting their wonga out of Cyprus while the plebs are protesting in the streets. Cash Exodus From Cyprus Surges Despite Bank Closures, Capital Controls If that shift of cash has been significant (and doubt it will be billions on the basis that if you have the juice to get around the law then you won’t be wiring pocket change to safety) then the bailout will already come up short as it is based on the amount that was “supposed” to already be in the system. So, how long before this merde is coming to Italy, Spain, Portugal or Ireland? Impossible you'd think, because the EU says Cyprus is a special case? Au contraire: Are your deposits in Irish banks safe? Might the government reach into your deposit accounts for a levy? Oh yes, in the past week Labour’s chairman of the Oireachtas finance committee Ciaran Lynch and Fine Gael’s jobs minister, Richard Bruton have both indicated that a levy on sub-€100k could be on the cards despite the existence of the sub-€100k guarantee. There seems to be a feeling that the guarantee only applies if a bank is allowed to go bust, but if there was an intervention before the bank was actually liquidated then all depositors including those with sub-€100k deposits would face “levies” despite the existence of the deposit guarantee scheme. Minister Bruton said on radio today that Cyprus imposing a levy on sub-€100k deposits was “in the remit” of the Cypriot government. The experience of this Government taking €1.88bn from private pensions between 2011-2014 to fund the Jobs Initiative (mostly the reduction in VAT on certain services), would also make you ill-at-ease that the Government would regard as sacred the guarantee for sub-€100k depositors. I find it hard to believe LL, that you are arguing for the protection of bankers over the man in the street – and having over 100K in the bank doesn’t mean you either rich or a crook. Plenty of anecdotes doing the rounds online about Brit’s who are going to lose many many 1000s because they were exchanging contracts on property, businesses etc. when their Cypriot accounts were “frozen”. I accept there is always a hazard when you decide to put your money in one place and sometimes shit just happens. However, what we are seeing now imo is the abandonment of any pretences that government actions from 2008 onwards have been designed to do anything other than protect banks at the expense of oridnary people, and a shit sandwich is a shit sandwich, no matter which end you are eating it from. This is a not over, not by a long way. Link to comment Share on other sites More sharing options...
CI Posted March 25, 2013 Share Posted March 25, 2013 I bet they wished they'd just taken the 9% haircut The only winners are those with 100k or less who lose nothing 1 Link to comment Share on other sites More sharing options...
Stevo985 Posted March 25, 2013 VT Supporter Share Posted March 25, 2013 I bet they wished they'd just taken the 9% haircutThe only winners are those with 100k or less who lose nothing So the majority? (at a guess) Link to comment Share on other sites More sharing options...
CI Posted March 25, 2013 Share Posted March 25, 2013 By number yes but not by volume of cash, particularly a few billion laundered Russian money But also innocent local high wealth individuals and business is hit Link to comment Share on other sites More sharing options...
Genie Posted March 25, 2013 Share Posted March 25, 2013 This billions of illegal Russian cash seems to be quite common knowledge Link to comment Share on other sites More sharing options...
The_Rev Posted March 25, 2013 Share Posted March 25, 2013 I'm not sure about illegal, but it is incredibly suspicious. Link to comment Share on other sites More sharing options...
maqroll Posted March 25, 2013 Share Posted March 25, 2013 The interesting subtext to all this is Germany acting aggressively against Russian interests...seems old enmities are hard to shed. Link to comment Share on other sites More sharing options...
Awol Posted March 25, 2013 Author Share Posted March 25, 2013 The interesting subtext to all this is Germany acting aggressively against Russian interests...seems old enmities are hard to shed. Talk on twitter of the Kremlin potentially freezing German assets in Russia. Nothing really attributable source wise yet but reinforces your point. UBS bank already claiming Cyprus will probably need a second rescue package and the EU is calling this the model for future bailouts... ...Is it a bird? Is it a plane? No, it's capital flight*! *from Spain, Italy, et al. Link to comment Share on other sites More sharing options...
Jimzk5 Posted March 25, 2013 Share Posted March 25, 2013 This single currency was never going to work. Ducking stupid idea. Out of intrest, how many countries have gone bankrupt before? (Countries involved in WW I&II excluded) Link to comment Share on other sites More sharing options...
CI Posted March 25, 2013 Share Posted March 25, 2013 Iceland Link to comment Share on other sites More sharing options...
Jimzk5 Posted March 25, 2013 Share Posted March 25, 2013 Iceland Yeah, due to this recession that has been happening for 6 years now, and will go on for a few years yet. This euro currency has done more harm than good. Link to comment Share on other sites More sharing options...
maqroll Posted March 25, 2013 Share Posted March 25, 2013 Have African nations scrapped plans for the Afro? Link to comment Share on other sites More sharing options...
chrisp65 Posted March 25, 2013 Share Posted March 25, 2013 I bet they wished they'd just taken the 9% haircut The only winners are those with 100k or less who lose nothing I'm not sure the plebs have won anything, all they've done is keep enough money to move off Cyprus. Jobs and prospects in Cyprus are about to to a bit limp. There won't be many millionaires that had all their money in one place, so they'll still be millionaires. Link to comment Share on other sites More sharing options...
snowychap Posted March 25, 2013 Share Posted March 25, 2013 (edited) Have African nations scrapped plans for the Afro?Yep - worries about future haircuts, apparently. Edited March 25, 2013 by snowychap 1 Link to comment Share on other sites More sharing options...
CI Posted March 25, 2013 Share Posted March 25, 2013 Cyprus is a pretty **** place what with the north / south landgrab issues and now this euro meltdown mess . Not a place I'd want to be. Link to comment Share on other sites More sharing options...
LondonLax Posted March 25, 2013 Share Posted March 25, 2013 Question. If that Russian money is - as is being insinuated - all dodgy, why aren’t criminal investigations being launched to trace the provenance of the funds prior to seizing 100% of it (which is allowed under EU law) and therefore averting the need for any bailout at all? The Russian argument seems like a red herring to divert from the obvious – depositors are being made to pay ahead of the banks that are exposed to Cyprus. I wasn't insinuating the money was dodgy. I find it hard to believe LL, that you are arguing for the protection of bankers over the man in the street – and having over 100K in the bank doesn’t mean you either rich or a crook. Plenty of anecdotes doing the rounds online about Brit’s who are going to lose many many 1000s because they were exchanging contracts on property, businesses etc. when their Cypriot accounts were “frozen”. I am saying that this action IS protecting the man in the street over the banks. This whole situation is akin to Icesave in Iceland, not the bailout of the Greek government. Understandably the bailout of a private bank which lost money is being treated differently to the bailout of a national government which ran up too much debt. In the Icesave scenario the banks were allowed to go bust and depositors got nothing back, the man in the street was shafted and told 'sorry there's always a risk when investing'. The British government decided to pay out to savers up to 40k worth though there was no obligation to but investors from counties without deposit protection lost everything. The same thing has happened in Cyprus. Their banks went bust and can't pay back depositors. The EU has stepped in and said they will protect small investors to the tune of 100k but the bad bank will have to go to the wall (as capitalism dictates). I am pretty sure you yourself were arguing that the banks should have been allowed to go to the wall during the 2008 crash with only the statutory deposit protection honored by the tax payer rather than the whole bank bailed out by the tax payer and allowed to continue. Now this very thing is happening in Cyprus you are complaining about it. There were three scenario responses for the EU and IMF to this situation: 1) Do nothing - Let the banks go bust and depositors lose all their money 2) Bail out deposits to the statutory 100k limit and let the banks wind down and their creditors (including depositors) take a hit 3) Do what the Irish and UK governments did and agree to spend tax payer money socialising the losses of banks that have gone bust and guarantee all their obligations. Option 2 was the only logical decision and what should have happened to the Irish banks and to RBS in this country as well. Link to comment Share on other sites More sharing options...
saturdaygig Posted March 25, 2013 Share Posted March 25, 2013 Can somebody explain this to me using the simplest terms. Treat me like a simpleton, please. Here I am with €65.000 in a Cypriot bank account. Go. You put it in there because of the 5% tax free rate, yes? On the assumption such a thing was possible risk-free? So if your money has been there 5 years you're 13% to the good vs uk savers. And they want 6% of it now. Hardly a game changer. (I assume we're role playing, here....) Link to comment Share on other sites More sharing options...
snowychap Posted March 25, 2013 Share Posted March 25, 2013 Emily wosserface on Newsnight has just said that the banks are shut for 'another three days'. So that's until next Tuesday then (allowing for easter)?An aside: Farage is to be interviewed later in the programme about immigration - though, looking at how he's dressed, it may actually be about a future eponymous role in a Quentin Crisp biopic. Link to comment Share on other sites More sharing options...
chrisp65 Posted March 25, 2013 Share Posted March 25, 2013 ha ha, it's Dirk Farage 1950's private dick 1 Link to comment Share on other sites More sharing options...
Awol Posted March 26, 2013 Author Share Posted March 26, 2013 I am saying that this action IS protecting the man in the street over the banks. Link to comment Share on other sites More sharing options...
Recommended Posts