Cypress in Default

[shortylickens]

what happens when you lose a bunch of the russian mafia's money?

You beg America to invade.

 

[DucatiMonster696]

http://news.yahoo.com/cyprus-eu-imf-agree-draft-proposal-rescue-banks-002707963.html

Once one casts a covetous eye the future/potential intentions are made clear to everyone involved.

 

[Munky]

They will likely have to put a limit on daily withdraws, such as 100 or 200 Euros a day. This will stop the bank from collapsing from a run.

They will do this, of that I am certain. That's exactly what happened in Argentina. Next up, more draconian measures to prop up the failed banking system, like restricting the import/export of alternative currency and precious metals.

 

[Darwin333]

Yeah thats all very well but if your a Cypriot at the moment what would you rather?

That the banks were allowed to fail and you lose all your money or theres a bail out and you lose 10-20%? At least a bail out is going to give you a chance to stash some.

I would personally be willing to give one tenth of one percent per bankster (board of directors and up) that they hung.

 

[Fern]

what happens when you lose a bunch of the russian mafia's money?

They could squeeze the rest of Europe by jacking up prices on the natural gas etc that Europe depends on receiving from Russia.

I don't believe this has completely played out yet. I suspect repercussions.

I also wonder if Cyprus isn't screwed beyond repair. It seems their 'big business' was their financial institutions holding foreign deposits. That 'golden goose' looks to be dead now.

How badly will Cypus' budget be hit by all the resulting unemployment (increased benefit payments and less individual income tax receipts) and lack of tax revenue from the banks now?

Fern

 

[Darwin333]

It's their game, and people are dumb enough to let them do it, some are even dumb enough to see it as "Right".

And very few of us see it as what it really is, criminal activity that should be prosecuted to the fullest extent of the law.

 

[Jhhnn]

And very few of us see it as what it really is, criminal activity that should be prosecuted to the fullest extent of the law.

The big problem is that we have a system that allows it to happen, so it will. Over and over. The chances of being caught & imprisoned are no deterrent to guys who see themselves as masters of the universe.

We need structural constraints that prohibit profitability in conficts of interest. You know, fleecing the client you supposedly represent.

After the slow dismemberment of New Deal banking & the Clinton Admin, bankers went hog wild under the Bush Admin, their supposed "regulators".

Much of it wasn't illegal, and plausible deniability remains strong all across the whole deal. What happened is that the Financial Elite went on a looting spree, held the economy hostage, and Freedom was part of the ransom. We pay tribute to their victory.

What's more important, whining over the shoulda, or advocating the kind of action that will protect America in the future?

 

[Fern]

And very few of us see it as what it really is, criminal activity that should be prosecuted to the fullest extent of the law.

I'm not sure that investing in Greek bonds is criminal.

The country of Cyprus will have banking laws/regulations. If they violated those they should be prosecuted.

But the simple act of making bad 'bets' isn't generally a criminal act.

Fern

 

[Svnla]

Just saw the story about Cyprus on NPR tonight. One of the ladies said she was a bank employee and she would lose ALL of her pension and her job, part of her meager savings, and she was only able to withdraw 100 Euro per day (if she was lucky to find an ATM with money inside).

Her voice was hoarse and her eyes/face was sadden.

The little people lose again.

CBS News said the people with accounts of $130K or higher "COULD" lose up to 40%. Yike!!!!!

 

[Jaskalas]

Did Europe not have their own version of a Glass–Steagall Act? I say this due to certain attributions of our financial crisis with the repeal of Glass-Steagall. Which, of course, confuses me as to why the rest of the world followed a similar path.

It'd be easier if we could point fingers and suggest we reinstate it, but the problem appears to be larger than United States law. There are banking practices world over that need to be examined for fault and remedies proposed.

Even so, perhaps we could start with Glass-Steagall.

 

[Darwin333]

The big problem is that we have a system that allows it to happen, so it will. Over and over. The chances of being caught & imprisoned are no deterrent to guys who see themselves as masters of the universe.

We need structural constraints that prohibit profitability in conficts of interest. You know, fleecing the client you supposedly represent.

After the slow dismemberment of New Deal banking & the Clinton Admin, bankers went hog wild under the Bush Admin, their supposed "regulators".

Much of it wasn't illegal, and plausible deniability remains strong all across the whole deal. What happened is that the Financial Elite went on a looting spree, held the economy hostage, and Freedom was part of the ransom. We pay tribute to their victory.

What's more important, whining over the shoulda, or advocating the kind of action that will protect America in the future?

While I absolutely agree with the above we still have a penal system in this country which is itself a deterrent. One thing mega rich assholes don't want to do is go to the pokey and its a very strong deterrent to them. They will bend the rules all day every day but they get a hell of a lot more cautious when there is a better than average chance of spending a decade or two in jail.

What we have had is, as I think you put it, the biggest fleecing ever and the criminals that did it have had complete impunity. No criminal charges, no investigations of any substance, not even a clawback of their ill-gotten gains. That in and of itself is actually an incentive to continue said criminal activity since it, so far, has been done virtually without risk.

The rule of law is supposed to apply to all of us equally but right now it does not. This is not a partisan issue as it has spanned both Republican and Democrat administration. This is a "both sides have been bought the fuck off and by and large the people have been fooled by those sides so they haven't brought out the pitchforks and torches" issue.

I understand that when I say "both parties" it includes one that almost everyone on here, including yourself at times, will defend but it doesn't change the fact. It is an undeniable and very provable fact that the banksters committed an absurd amount of criminal actions that led us to this. It is further undeniable that neither party has told the justice department, that works for them, to investigate and prosecute said crimes. Both sides can keep whatever excuses they want to come up with for not doing so, as far as I am concerned the rule of law must apply to all equally or none at all.

You or I would have been thrown under the jail for just talking about doing what these assholes do on a daily basis yet they continue to operate with complete impunity. Until your side and the other side agree to put your differences aside and focus on this one single issue, equally applying the rule of black letter and longstanding law, it will only get worse. As I said, we have quite literally given them incentive to do continue doing it.

 

[Munky]

Man, the socialists are really coming out of the woodwork in this thread. "Yar' those big bad rich people, how dare they keep their money and not share it with the rest of us! It's all the republicans fault!!!!111!!!11"

Meanwhile, Obama filled his staff with cronies like Timmy G and Larry Summers who directly participated in precipitating the meltdown of 2008, and not a word from the social justice mob.

 

[DucatiMonster696]

While I absolutely agree with the above we still have a penal system in this country which is itself a deterrent. One thing mega rich assholes don't want to do is go to the pokey and its a very strong deterrent to them. They will bend the rules all day every day but they get a hell of a lot more cautious when there is a better than average chance of spending a decade or two in jail.

What we have had is, as I think you put it, the biggest fleecing ever and the criminals that did it have had complete impunity. No criminal charges, no investigations of any substance, not even a clawback of their ill-gotten gains. That in and of itself is actually an incentive to continue said criminal activity since it, so far, has been done virtually without risk.

The rule of law is supposed to apply to all of us equally but right now it does not. This is not a partisan issue as it has spanned both Republican and Democrat administration. This is a "both sides have been bought the fuck off and by and large the people have been fooled by those sides so they haven't brought out the pitchforks and torches" issue.

I understand that when I say "both parties" it includes one that almost everyone on here, including yourself at times, will defend but it doesn't change the fact. It is an undeniable and very provable fact that the banksters committed an absurd amount of criminal actions that led us to this. It is further undeniable that neither party has told the justice department, that works for them, to investigate and prosecute said crimes. Both sides can keep whatever excuses they want to come up with for not doing so, as far as I am concerned the rule of law must apply to all equally or none at all.

You or I would have been thrown under the jail for just talking about doing what these assholes do on a daily basis yet they continue to operate with complete impunity. Until your side and the other side agree to put your differences aside and focus on this one single issue, equally applying the rule of black letter and longstanding law, it will only get worse. As I said, we have quite literally given them incentive to do continue doing it.

The issue is a more complex than just politicians or political parties being bought off. When governments around the world have grown their debts to such huge levels that a rise in interest rate payments alone would put a sovereign's solvency in danger you begin to understand that this is not so much an issue of politicians being bought off (even though many are and have been) but a understanding that if they down't play the game of moving from one economic bubble (induced via loose and easy monetary policies and interest rate manipulation, all of which emboldens risk taking in the marketplace which then allows for and induces the formation of these bubbles in the market place) to another they are toast.

However the issue as of late has grown so huge that today it is a world wide phenomena with industrialize nations who have a Faustian pact with central bankers and the banking industry to continue the distortions which prop up "Too big to fail" and economic bubbles which grow and grow to the point in which their implosion in one nation potentially can threaten other bubbles formed in other nations.

So in the end yes these guys wont go to jail until industrialize nations around the world decide to not play the game of debt building and money supply and interest rate manipulation with these central banks. Furthermore since the point of removing ourselves of the semi-gold standard in the 1970's to the end of the dollar hegemony (where we in the 80's-90's pledge to keep the value of the dollar stable) around 2000 these issues have only grown in scale and magnitude. Notice though how even in this crisis investors and savers all seek stability and safety which should demonstrate that a sound monetary policy in general is the wisest long term course for any nation rather then playing the interest rate and money printing game to fuel the debt ball because eventually that is a loosing proposition.


Edit: A good example of how the Fed's loose and easy money policy is enfact really hurting everyone else but is also enriching those at the top. The cure that was given to save thees cancerous banks was and is a poison pill to all those who cannot benefit from the cheap money policy and that is basically everyone under the "1%" of the wealthiest. When money is devalued you hurt those with the least ability to benefit from the low cost of debt.

http://finance.yahoo.com/news/us-wealth-inequality-getting-feds-142856917.html

Wealth Inequality Getting the Fed's Attention

True, the Fed may not be able to directly reduce inequality. But some economists say the Fed has done its part to increase inequality in recent years. Monetary easing has benefited asset prices. And the top 1 percent owns an outsized share of assets-especially stocks.

So in re-inflating stocks, the Fed has contributed to the uneven recovery. The wealth of the wealthy is largely back to precis levels, while the rest of America is still climbing back. The Bank of England released a report this summer stating that 40 percent of the stock-market gains from the BOE's quantitative easing program had gone to the wealthiest 5 percent of households.

 

[Incorruptible]

Maybe if they didn't have so much big government and these idiotic social programs then they wouldn't have this problem. Teaches a lesson to the idiots who want big government.

 

[Darwin333]

I'm not sure that investing in Greek bonds is criminal.

The country of Cyprus will have banking laws/regulations. If they violated those they should be prosecuted.

But the simple act of making bad 'bets' isn't generally a criminal act.

Fern

I was speaking more about the actions of our own banksters and betting on the fact that theirs did much of the same BS.

The very fact that they are in this mess *should* indicate that they didn't follow some law or regulation.

 

[Slew Foot]

is the Cypress parliament bulding located on a hill? because those guys are insane in the brain.

 

[monovillage]

http://www.zerohedge.com/news/2013-...ready-quietly-withdrawn-all-their-cash-cyprus

Yesterday, we first reported on something very disturbing (at least to Cyprus' citizens): despite the closed banks (which will mostly reopen tomorrow, while the two biggest soon to be liquidated banks Laiki and BoC will be shuttered until Thursday) and the capital controls, the local financial system has been leaking cash. Lots and lots of cash.

Alas, we did not have much granularity or details on who or where these illegal transfers were conducted with. Today, courtesy of a follow up by Reuters, we do.

The result, at least for Europe, is quite scary because let's recall that the primary political purpose of destroying the Cyprus financial system was simply to punish and humiliate Russian billionaire oligarchs who held tens of billions in "unsecured" deposits with the island nation's two biggest banks.

As it turns out, these same oligrachs may have used the one week hiatus period of total chaos in the banking system to transfer the bulk of the cash they had deposited with one of the two main Cypriot banks, in the process making the whole punitive point of collapsing the Cyprus financial system entirely moot.

From Reuters:

While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.



No one knows exactly how much money has left Cyprus' banks, or where it has gone. The two banks at the centre of the crisis - Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus - have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia's Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks' largest depositors.

 

[Rebel44]

Just saw the story about Cyprus on NPR tonight. One of the ladies said she was a bank employee and she would lose ALL of her pension and her job, part of her meager savings, and she was only able to withdraw 100 Euro per day (if she was lucky to find an ATM with money inside).

Her voice was hoarse and her eyes/face was sadden.

The little people lose again.

CBS News said the people with accounts of $130K or higher "COULD" lose up to 40%. Yike!!!!!

Last time I checked pensions and deposits under 100K € will not be affected.

 

[Franz316]

Maybe if they didn't have so much big government and these idiotic social programs then they wouldn't have this problem. Teaches a lesson to the idiots who want big government.

Do you even know why Cyprus is in the situation its in?

Hint: it's not what your preconditioned response thinks it is.

 

[Svnla]

Last time I checked pensions and deposits under 100K € will not be affected.

"subject to change".

At the beginning of the crisis, people were allowed to with draw money but then less and less each passing day.

More info about pension = http://www.ipe.com/news/president-of-cyprus-vows-to-protect-accrued-pension-benefits_50854.php

According to its 2011 annual report, Laiki's main pension fund had assets of €21.5m, down €18m over the end of 2010.

This compared with benefit obligations of €310m at the end of 2011.

I know I would not be a happy camper if I live in Cypruss now.

 

[DCal430]

Last time I checked pensions and deposits under 100K € will not be affected.

No deposits under 100, 000 are not affected, but bank employee pensions are gone.

 

[waggy]

good god. cyprus is totally fucked.

sad that its the poor that are getting fucked hard.

 

[frowertr]

No deposits under 100, 000 are not affected, but bank employee pensions are gone.

So what if I have 101,000 in the bank but my friend only has 90,000 in the bank? They tax me the 40% or whatever it is and now I have less than my friend in the bank who didn't get taxed at all?

Wow...

 

[monovillage]

good god. cyprus is totally fucked.

sad that its the poor that are getting fucked hard.

"The problem with socialism is that sooner or later you run out of other people’s money" – Margaret Thatcher, Prime Minister of Great Britain

 

[nextJin]

So what if I have 101,000 in the bank but my friend only has 90,000 in the bank? They tax me the 40% or whatever it is and now I have less than my friend in the bank who didn't get taxed at all?

Wow...

I would have thought that they would tax everything over the 100k so in your case they would take 40% of 1,000.

If not then it would be incredibly stupid which wouldn''t surprise me.