Cyprus

Cyprus Shifts To Plan ‘DD’ (Douple-Dip The Large Depositors – Leaving The Russians Large Depositors With 50%-Plus Losses!)

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– Cyprus Shifts To Plan ‘DD’ (Douple-Dip The Large Depositors) (ZeroHedge, March 22, 2013):

It seems that the Cypriot government is going full circle on its plans to save its nation and its people. As UK Think Tank Open Europe notes, “it now seems we have come all the way back round to the deposit levy as a solution in Cyprus. Overnight, the EU/IMF/ECB Troika rejected the plans for a Cypriot solidarity fund, particularly one based on pension assets and gas reserve revenues (which German Chancellor Angela Merkel specifically spoke out against).” The new – Plan ‘D’ – (Plan A – Haircuts; Plan B – Beg Russia for Bailout; Plan C – Solidarity Fund) appears to be moar haircuts and double-dip on the large depositors (seemingly what Brussels wants anyway). Plan ‘D’ – a restructuring and bigger deposit levy(a 12.2% tax on deposits above €500,000 or a 9.46% deposit on deposits above €100,000 would yield the necessary €3.5bn) – “may amount to trying to burn the larger depositors twice,” as the plan to shift bad assets to a bad bank (along with the large uninsured depositors) and wound down (meaning 20-40% losses) and still face the initial large-deposit-tax – leaving the Russians large depositors with 50%-plus losses.

Via Open Europe,

Full circle in Cyprus

Thinking about the plan in more detail, it occurred to us that this may amount to trying to burn the larger depositors twice. As we noted in today’s press summary, the plan essentially is to move all the bad assets to a bad bank, along with the large uninsured depositors (€100,000+). These assets would then be wound down or sold off at a large discount with the depositors footing the bill (and taking losses of 20% – 40%). This, along with the merging of Bank of Cyprus and the good bank, is how the recapitalisation costs will be reduced by €2.3bn.

Read moreCyprus Shifts To Plan ‘DD’ (Douple-Dip The Large Depositors – Leaving The Russians Large Depositors With 50%-Plus Losses!)

Jean-Claude Trichet In 2008: ‘For A Small, Open Economy Like Cyprus, Euro Adoption Provides Protection From International Financial Turmoil’

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– The Joke’s On Cyprus After All (ZeroHedge, March 21, 2013):

Oh the irony:

18/01/2008, Trichet: “For a small, open economy like Cyprus, Euro adoption provides protection from international financial turmoil.”

Cyprus: The Bad News: ATM Limits Imposed – The Good News: They Still Have Cash

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– The Bad News: ATM Limits Imposed; The Good News: They Still Have Cash (ZeroHedge, March 21, 2013):

Just as we predicted, it seems Cyprus is rapidly escalating down the path we feared. The latest step:

Cyprus Popular Bank announces restrictions on ATM withdrawal to EUR 260 per customer per day

Bt on the bright side, for the next few hours, they still have liquidity… We just hope the steps we outlined get stalled before this really escalates.

  • *CYPRUS POP SETS DAILY LIMIT OF EU260 ON WITHDRAWALS:KATHIMERINI

 

Cyprus Popular Bank: ‘Only A Few Hours Of Liquidity Left’

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– Cyprus Popular Bank: “Only A Few Hours Of Liquidity Left” (ZeroHedge, March 21, 2013):

It appears, based on government officials, that things are going a little critical in Cyprus. Following rumors of the closure (restructuring) of good/bad bank assets for Cyprus Popular Bank, we get this news:

  • *CYPRUS’S NEOFYTOU SAYS NEW FACTS RELATED TO CYPRUS POPULAR BANK
  • *CYPRUS HASN’T HAD ANY FURTHER NEWS FROM RUSSIA: OFFICIAL
  • *CYPRUS POPULAR BANK HAS “FEW HOURS OF LIQUIDITY LEFT”: OFFICIAL’

Mass Panic In Cyprus: The Banks Are Collapsing And ATMs Are Running Out Of Money

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– Mass Panic In Cyprus: The Banks Are Collapsing And ATMs Are Running Out Of Money (Economic Collapse, March 21, 2013):

European officials are openly admitting that the two largest banks in Cyprus are “insolvent“, and it is now being reported that Cyprus Popular Bank only has “enough liquidity to cover the next few hours“.  Of course all banks in Cyprus are officially closed until Tuesday at the earliest, but there have been long lines at ATMs all over Cyprus as people scramble to get whatever money they can out of the banks.  Unfortunately, some ATMs appear to be “malfunctioning” and others appear to have already run out of cash.  You can see some photos of huge lines at one ATM in Cyprus right here.  Some businesses are now even refusing to take credit card payments.  This is creating an atmosphere of panic on the streets of Cyprus.  Meanwhile, the EU is holding a gun to the head of the Cyprus financial system.  Either Cyprus meets EU demands by Monday, or liquidity for the banks will be totally cut off and Cyprus will be forced out of the euro.  It is being reported that European officials believe that the “economy is going to tank in Cyprus no matter what“, and that it would be okay to let the financial system of Cyprus crash and burn if politicians in Cyprus are not willing to do what they have been ordered to do.  Apparently European officials are very confident that the situation in Cyprus can be contained and that it will not spread to other European nations.

Unfortunately, European officials are losing sight of the bigger picture.  If the largest banks in Cyprus are allowed to fail, it will be another “Lehman Brothers moment“.  The faith that people have in banks all over Europe will be called into question, and everyone will be wondering what major European banks will be allowed to fail next.

Read moreMass Panic In Cyprus: The Banks Are Collapsing And ATMs Are Running Out Of Money

‘Financial Fascism’ – Financial Terrorism – Stealing Your Money! (Video)

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YouTube Added: 21.03.2013

Grandmother In Cyprus Receives Valuable Advice From Russian Economist Grandson

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– Grandmother in Cyprus receives valuable advice from Russian economist grandson (Tavern Keepers, March 21, 2013):

An elderly resident of Pathos in Cyprus has been doing something odd for the past few weeks.  Every Friday she goes to the bank and withdraws all of her money, then returns it on Monday.  When asked why she gave the following statement to bank employees:

“My son is an economist in Russia and he has been telling me, if something happens with the Cypriot banks, it will happened on the weekend. He told me to withdraw the money every Friday.”

She was laughed at by the bank employees, but now unlike most of the country she has access to her money while the banks in Cyprus stay closed until at least Tuesday of next week.  While the Cypriot legislature did not pass a bill that would have taken between 6.75% and 10% of bank deposits, who knows what desperate politicians will do now to get their fix of financial aid from the IMF.  At least one person won’t be affected, thanks to a caring grandson.

Source: http://www.news.gr/kosmos/paraxena/article/51055/h-giagia-poy-hxere-gia-to-kypriako-koyrema.html

Regulator: Cyprus Popular Bank To Be Shuttered … UPDATE: Central Bank Denies

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– Cyprus Popular Bank To Be Shuttered (UPDATE: Central Bank Denies) (ZeroHedge, March 21, 2013):

UPDATE: Cyprus Central Bank says hasn’t been informed of closure (and then back-pedals)…

  • *CYPRUS CENTRAL BANK HASN’T BEEN INFORMED, TAKEN SUCH DECISION
  • *CYPRUS CENTRAL BANK SAYS REORGANISATION NOT SAME AS CLOSURE

Refuting earlier comments from the regulator that Cyprus Popular Bank would not be shuttered, CYBC is reporting (following the failure to sell it to the Russians) that the bank is to be shut down, split into good-bank-bad-bank, and that deposits under EUR100,000 will be protected.

  • *CYPRUS POPULAR BANK TO BE SHUT DOWN, STATE-RUN CYBC SAYS
  • *CYPRUS POPULAR BANK TO BE SPLIT IN GOOD, BAD BANKS: CYBC
  • *CYPRUS POPULAR BANK ASSET PROCEEDS TO BE RETURNED TO DEPOSITORS
  • *CYPRUS POPULAR BANK DEPOSITS OF LESS THAN EU100,000 GUARANTEED

Of course, we await the re-refutation but for now it seems the latest news trumps the regulators ‘lies’ earlier.

National Government Planning Cyprus-Style Solution For New Zealand

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– National planning Cyprus-style solution for New Zealand (Green Party of Aotearoa New Zealand, March 19, 2013):

The National Government is pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts, the Green Party said today.

Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.

“Bill English is proposing a Cyprus-style solution for managing bank failure here in New Zealand – a solution that will see small depositors lose some of their savings to fund big bank bailouts,” said Green Party Co-leader Dr Russel Norman.

“If a bank fails under National’s plan, all depositors will have their savings reduced overnight to fund the bank’s bail out.”

“The Reserve Bank is in the final stages of implementing a system of managing bank failure called Open Bank Resolution. The scheme will put all bank depositors on the hook for bailing out their bank.

“Depositors will overnight have their savings shaved by the amount needed to keep the bank afloat.

Read moreNational Government Planning Cyprus-Style Solution For New Zealand

New Zealand Government Now Planning A Cyprus-Style Confiscation To Fund Bank Bailout

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– New Zealand Government Now Planning a Cyprus-Style Confiscation to Fund Bank Bail Out (IntelliHub, march 20, 2013):

Many people around the world were relieved to learn yesterday that a proposed measure to fund a bailout in Cyprus was not approved by the local government.

The proposed plan would tax every single person in the country with a bank account, forcing them to fund a bank bailout that shouldnt even be happening in the first place.

However, fears that other governments may take similar measures have now been proven to be well founded, as the New Zealand government is considering a similar approach.

According to Scoop:

“The National Government are pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts, the Green Party said today.  Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.”

Read moreNew Zealand Government Now Planning A Cyprus-Style Confiscation To Fund Bank Bailout

Eurogroup Official On Cyprus: ‘Markets Believe We Will Find A Solution, This Might Not Be The Case’

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– Euro Official On Cyprus: “Markets Believe We Will Find A Solution, This Might Not Be The Case” (ZeroHedge, March 21, 2013):

While the market levitation courtesy of the Fed, BIS and BOJ continues unabated to give the impression that all is well, allowing empty momentum-chasing chatterboxes to say that Cyprus is not a big deal because… well, look at the market (and real traders the chance to quietly dump existing risk positions), the artificial, centrally-planned calm during the storm may be ending. The reason comes from none other than the Eurogroup, whose deputy finance ministers held a conference call last night, and whose transcript has been seen by Reuters.

Here are the highlights.

Euro zone finance officials acknowledged being “in a mess” over Cyprus during a conference call on Wednesday and discussed imposing capital controls to insulate the region from a possible collapse of the Cypriot economy.

In detailed notes of the call seen by Reuters, one official described emotions as running “very high”, making it difficult to come up with rational solutions, and referred to “open talk in regards of (Cyprus) leaving the euro zone”.

Not very confidence boosting. But then again, with confidence in Cyprus now gone, the time for damage control is long gone. Sure enough, it just goes from bad to worse:

Read moreEurogroup Official On Cyprus: ‘Markets Believe We Will Find A Solution, This Might Not Be The Case’

Is The Euro A Currency Or A Prison? (Wall Street Journal)

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– Euro: Currency Or Prison? (ZeroHedge, March 20, 2013):

The following Wall Street Journal article deserves to be read in its entirety…

Authored by Vincent Cignarella, originally posted at WSJ Market Beat,

Is The Euro a Currency or a Prison?

Wearing the disguise of austerity, the euro has emerged as the gatekeeper of what is fast becoming a debtors’ prison.

The Troika of the ECB, IMF and European Commission acting in concert have become more like another Troika–of judge, jury and executioner–for any nation within the euro zone that dares not follow the letter of budgetary imposition.

The latest country bound by these handcuffs: Cyprus.

Read moreIs The Euro A Currency Or A Prison? (Wall Street Journal)

Cyprus Banks To Reopen Next Tuesday At Earliest As CAPITAL CONTROLS Become Reality

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– Cyprus Banks To Reopen Next Tuesday At Earliest As Capital Controls Become Reality (ZeroHedge, March 20, 2013):

We can only hope that nobody will be shocked that the greatly overhyped Friday Cyprus bank reopen has been postponed.

  • CYPRUS BANKS EXPECTED TO REMAIN CLOSED THROUGH END OF WEEK:CYBC

And since March 25, Monday, is another Cyprus bank holiday, “Greek Independence Day” (from whom? Certainly not the Troika), it means Cypriot banks will now remain closed at least until next Tuesday and likely far longer. In the meantime, since TV cameras can’t show lines of people at their freindly neighborhood bank, which will have been closed for over a week, the propaganda machine will blast full bore how because the market is pushed higher by the Fed, any fears of bank runs can be forgotten. Actually instead of “can”, replace with “must.”

But since banks have to reopen at some time, at which point the inevitable bank runs will become reality, the already discussed Plan B is now taking shape:

  • CYPRUS CABINET TO DISCUSS DECREE ON CAPITAL CONTROLS: CYBC

It remains to be seen if a country can’t have a bank run in the New Centrally-Planned and Despotic Normal, if there is simply a law saying it is now illegal to pull or transfer more than €100 of cash per day.

Will The Banking Meltdown In Cyprus Be A ‘Lehman Brothers Moment’ For All Of Europe?

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– Will The Banking Meltdown In Cyprus Be A “Lehman Brothers Moment” For All Of Europe? (Economic Collapsde, March 19, 2013):

Cyprus lawmakers may have rejected the bank account tax, but the truth is that the financial crisis in Cyprus is just getting started.  Right now, the two largest banks in Cyprus are dangerously close to a meltdown.  If they fail, depositors could end up losing virtually all of their money.  You see, the banking system of Cyprus absolutely dwarfs the GDP of that small island nation.  Cyprus is known all over the world as a major offshore tax haven, and wealthy Russians and wealthy Europeans have been pouring massive amounts of money into the banking system over the last several decades.  Yes, those bank deposits are supposed to be insured, but the truth is that there is no way that the government of Cyprus could ever come up with enough money to cover the massive losses that we are potentially looking at.  This is a case where the banking system of a nation has gotten so large that the national government is absolutely powerless to stop a collapse from happening.  If those banks fail, depositors may end up getting 50 percent of their money or they may end up getting nothing.  We just don’t know how bad the damage is yet.  And considering the fact that many of the largest corporations and many of the wealthiest individuals in Europe have huge mountains of cash stashed in Cyprus, the fallout from a banking collapse could potentially be absolutely catastrophic.

So Cyprus needs to come up with some money from somewhere in order to keep that from happening.

Basically, there are three options at this point…

Read moreWill The Banking Meltdown In Cyprus Be A ‘Lehman Brothers Moment’ For All Of Europe?

Cyprus Parliament Rejects European ‘Bailout’ Proposal: Calls Germany’s Bluff

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– Cyprus Parliament Rejects European Bailout Proposal: Calls Germany’s Bluff (ZeroHedge, March 19, 2013):

Just as we predicted yesterday, the Cyprus bailout vote has not passed parliament in a move that was merely there to force Germany’s bluff.

  • CYPRUS BANK LEVY BILL DEFEATED WITH 36 VOTES AGAINST
  • CYPRUS BANK LEVY BILL DEFEATED WITH 19 ABSTENTIONS
  • CYPRUS PARLIAMENT VOTED IN SHOW OF HANDS IN NICOSIA
  • ANASTASIADES FAILS TO SECURE VOTES FOR DEPOSIT LOSS BILL

What happens now, nobody knows. Prepare for a litany of very angry headlines out of the inner sanctum of Europe’s despotic chambers. Hopefully Pisani can explain it all.

Europe’s Final Gambit: 20%-30% Haircut For Oligarchs To Force A Russian Bailout

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– Europe’s Final Gambit: 20%-30% Haircut For Oligarchs To Force A Russian Bailout (ZeroHedge, March 19, 2013):

It now seems sure that the ongoing discussion in Cyprus’ government will see a “no” vote as the WSJ is reporting a rather stunning gamble by the Cypriots (and by Cypriots we mean European leaders) to force the Russians to bear the brunt of the cost of the bailout. The non-resigned Cypriot FinMin is heading to Russia to propose a deal that includes imposing a 20% to 30% levy on Russian-held deposits in Cypriot banks, which could cost them billions of euros. In exchange, Russia will be given equity in Cyprus’s future national gas company and some additional strategic benefits in the sector, while Russian investors would be given control of the board of directors at Cyprus’s banks. The apparent quid pro quo in this deal does nothing to hide the fact that private property was stolen and while pointing fingers just at the Russians may play well for PR purposes, it is described as “a long shot” as the Kremlin notes, “it’s practically impossible to talk without knowing details.”

Via WSJ,

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The official said that Michalis Sarris, who is being accompanied by a delegation of businessmen, is going to propose a deal that includes imposing a 20% to 30% levy on Russian-held deposits in Cypriot banks, which could cost them billions of euros. In exchange, Russia will be given equity in Cyprus’s future national gas company and some additional strategic benefits in the sector, while Russian investors would be given control of the board of directors at Cyprus’s banks.

Read moreEurope’s Final Gambit: 20%-30% Haircut For Oligarchs To Force A Russian Bailout

Daniel Hannan Urges Cyprus To ‘Default, Devalue, And Decouple’ Itself Back To Growth

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Which is the best option for Cyprus actually, BUT then the banksters would be completely screwed and wiped out.

Also in the case of a default and devaluation investing in physical silver and gold would give you the best protection for your assets and their value.

Flashback:

– Venezuela Launches First Nuke In Currency Wars, Devalues Currency By 46%!

– Belarus Devalues Its Currency By 56% Overnight, Against Every Currency Out There:

Luckily for those who held their “money” in the form of gold and silver, they just got an instantaneous 56% value preservation and a relative boost in their purchasing power with just one central bank announcement.

– Belarus Central Bank Halts Sales Of Gold For Roubles

Got physical gold and silver (not stored in the banking system)?

– Daniel Hannan Urges Cyprus To “Default, Devalue, And Decouple” Itself Back To Growth (ZeroHedge, March 19, 2013):

“Either Cyprus is going to have to find the money to fund the bailout, or it’s going to have to leave the Euro – to default, devalue, and decouple,” is the cold hard truth that UK MEP Daniel Hannan explains in this brief clip. Neither of these paths, he goes on to say, is an easy one, but he believes “there is no doubt the second of them is the less painful – allowing Cyprus to price itself back into the market and start exporting its way back to growth again.”

There are no good outcomes for a country as indebted as Cyprus is, “but if I were a Cypriot member of Parliament, I would vote now to go back to an independent currency as the least painful of the various difficult options.” Hannan then makes a fantastic point, “in the rest of Europe, we have measured the cost of monetary union in unemployment, deflation, poverty, and emigration; in Cyprus that wasn’t enough, they have had to gouge the savers directly,” and so the Cypriots who claim to want to stay in the Euro can now quantify the cost of that shackle, as he reminds us that , “you don’t have to be a Russian oligarch to have EUR 100,000 in the bank,” as he concludes, “the really interesting question is – who’s next?”

Now that the precedent has been set (that governments can come after what is in your savings account) what country is safe?

Is Bitcoin the New Safe-Haven Currency? Bitcoins Surge After Cyprus Bank Raid

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– Is Bitcoin the New Safe-Haven Currency? Bitcoins Surge After Cyprus Bank Raid (Activist Post, March 19, 2013):

Is Bitcoin now a safe haven currency?  It wasn’t long ago when it was considered merely an interesting crypto-currency to buy illegal drugs on Silk Road. Now, citizens all over Europe appear to be flocking to Bitcoin as the European finance vultures circle above.

Read moreIs Bitcoin the New Safe-Haven Currency? Bitcoins Surge After Cyprus Bank Raid

Former Cyprus Central Bank Head Anthanasios Orphanides: ‘EU Is Blackmailing Cyprus Government’ (Bloomberg Video)

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MUST-SEE!

– EU Is Blackmailing Cyprus Government: Orphanides (Bloomberg, March 19, 2013):

March 19 (Bloomberg) — Anthanasios Orphanides, former Central Bank of Cyprus Governor, considers the proposed Cyprus bank depositor tax a form of blackmail against the government of Cyprus. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

Cyprus Now Set To Vote Against Bailout, Ruling Party To Abstain Guaranteeing Failure To Ratify ‘Bail-In’

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– Cyprus Now Set To Vote Against Bailout, Ruling Party To Abstain Guaranteeing Failure To Ratify “Bail-In” (ZeroHedge, March 19, 2013):

It appears that Cyprus is now ready to escalate, following news now coming fast and furious, that the Parliament will go ahead and vote after all, but not in a good way as even the Cypriot ruling party, formerly the only party willing to vote Yes on the Bail-In, would abstain according to Dow Jones, which means there is no support at all in the Cypriot parliament for the deposit haircut proposal.

We can only pray that Bob Pisani explains what happens next because neither we, nor anyone else, has any idea what comes now.

Cyprus Finance Minister Resigns, President Refuses To Accept Resignation

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– Cyprus Finance Minister Resigns, President Refuses To Accept Resignation (ZeroHedge, March 19, 2013):

Update: President Anastasiades rejects FinMin Sarris’ resignation. Unclear what happens next.Things just took a turn for the much worse following this news from Market News:

  • CYPRUS FINANCE MINISTER SUBMITS RESIGNATION – SOURCES
  • MARKET NEWS CITES SOURCES ON CYPRUS FINANCE MINISTER

Unclear if German FinMin Schauble will promptly step in to fill this latest sovereign vacancy.

Desperation time for the NY Fed to preserve the market green and give the impression that all is under control, when the rats are now actively leaving the Titanic.