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Cyprus Bailout

Old 03-18-13, 11:15 AM
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Cyprus Bailout

This seems pretty extreme. Yikes.

European markets dive, ATMs emptied amid Cyprus bailout crisis

Yorgos Karahalis / Reuters

By Alastair Jamieson, Staff writer, NBC News
LONDON – Financial markets in Europe fell sharply in early trading Monday following the surprise announcement of a levy on bank accounts in Cyprus as part of a financial bailout.

London's FTSE 100, Frankfurt's DAX and Paris's CAC-40 were down 1.4, 1.6 and 2 percent respectively as of 4:30 a.m. ET as traders' screens showed a sea of red, CNBC reported.

Cypriots and foreign investors emptied ATMs following Saturday’s unexpected 10 billion euro ($13 billion) deal under which savers must surrender up to 10 percent of bank deposits. Banks in Cyprus were due to remain closed because of a public holiday Monday.

Adding to the uncertainty, Greek media reports on Monday suggested Russian energy giant Gazprom might offer Cyprus an alternative to the bailout.

Russian citizens account for the majority of the billions of euros held in Cypriot banks by foreign depositors, and Moscow has already given the Mediterranean country a sovereign loan to ease its financial crisis.

Russia’s president Vladimir Putin criticized the bailout as “unfair, unprofessional and dangerous,” Reuters said, citing a spokesman.

The Economist also criticized the deal, describing it as “unfair, short-sighted and self-defeating.”

The parliament in Cyprus was due to vote Monday on the euro zone package, which was agreed by the European Union and the International Monetary Fund and appeared to contradict assurances that last year’s expensive bailout of Greece was a one-off.

The European market dive echoed earlier falls in Asia. The euro itself fell below $1.29 to its lowest level in three months, CNBC reported.

Markets in Italy and Spain – countries regarded at the highest risk of further financial crisis – saw some of the biggest share falls, particularly in the banking sector.


"It's a Cyprus shock,” Ken Hasegawa, a commodity sales manager at Newedge in Tokyo, told Reuters.

The bailout caused dismay in Cyprus. “They shouldn’t touch the deposits. They’re just killing the people,” 58-year-old Miltiades Papamiltiades, an unemployed former construction worker, told the English-language Cyprus Mail news site. “No-one will ever deposit money again into the banks on the island. It is the end of our economy,” he added.

Of the $90 billion deposits held in Cyprus banks, a little under half is held by non-residents, mostly Russian.

Alex Spilius, of the U.K.’s Daily Telegraph, reported that Cyprus in recent years had become, like off-shore haven Monaco, “something of a sunny place for shady people.” He wrote:

“By 2011, the IMF reported that the assets of Cypriot banks were equivalent to 835 per cent of annual national income. Some of that was down to investment by foreign-owned banks, but most was Cypriot.

This imbalance might have been sustainable had the country’s two largest banks not made loans to the Greek government worth 160 per cent of Cypriot GDP. It has never been clear whether that risk was taken out of ethnic solidarity, or from a presumption that the Greeks knew what they were doing. But in any event, it was disastrous.”

http://worldnews.nbcnews.com/_news/2...ut-crisis?lite
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Old 03-18-13, 11:17 AM
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Re: Cypress Bailout

Huh? They're taking 10% of whatever individuals have deposited in that bank? That will destroy any confidence people had in the banking system.
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Old 03-18-13, 11:22 AM
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Re: Cypress Bailout

Originally Posted by Timber View Post
Huh? They're taking 10% of whatever individuals have deposited in that bank? That will destroy any confidence people had in the banking system.
It's a "tax" on deposits. 6.5% under €100,000, 10% over €100,000.
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Old 03-18-13, 11:27 AM
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Re: Cypress Bailout

Article read.

Cyprus is small. Looks like around 1M people.

How is this justified? Nobody will care, because half of it is expected to be shady Russian money? Do they expect the shady Russian money to stay in Cyprus after this? I could see that, if it's considered a safe haven.

Has this been a long time coming?

Why didn't they just up their taxes a little? Too small of a population and no payroll regulation?
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Old 03-18-13, 11:50 AM
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Re: Cypress Bailout

They're bailing out those goddamn trees. I mean sure they're pretty to look at and they smell nice, but shouldn't they be pulling their own weight?


Oh, you mean the island of Cyprus, where they're shutting down the banks until Thursday so that the citizens can't get their money out before parliament approves the "tax."


never mind.
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Old 03-18-13, 11:54 AM
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Re: Cypress Bailout

Originally Posted by crazyronin View Post
They're bailing out those goddamn trees. I mean sure they're pretty to look at and they smell nice, but shouldn't they be pulling their own weight?


Oh, you mean the island of Cyprus, where they're shutting down the banks until Thursday so that the citizens can't get their money out before parliament approves the "tax."


never mind.
Dang it, Ima usully alright with spelling.

Mods, could you please correct the title?
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Old 03-18-13, 08:18 PM
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Re: Cypress Bailout

Originally Posted by troystiffler View Post
Article read.

Cyprus is small. Looks like around 1M people.

How is this justified? Nobody will care, because half of it is expected to be shady Russian money? Do they expect the shady Russian money to stay in Cyprus after this? I could see that, if it's considered a safe haven.

Has this been a long time coming?

Why didn't they just up their taxes a little? Too small of a population and no payroll regulation?
Well, the Shady Russian Money can go to The Bahamas where American Shady Money currently resides.
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Old 03-18-13, 08:22 PM
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Re: Cypress Bailout

Originally Posted by Ky-Fi View Post
Dang it, Ima usully alright with spelling.

Mods, could you please correct the title?
I was just about to move it to Other because I thought it was probably about Miley Cyrus.
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Old 03-19-13, 09:08 AM
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Re: Cyprus Bailout

Latest word is that the Cypriot Parliament will be rejecting the bailout.
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Old 03-19-13, 01:37 PM
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Re: Cypress Bailout

Originally Posted by Timber View Post
Huh? They're taking 10% of whatever individuals have deposited in that bank? That will destroy any confidence people had in the banking system.
I would be pulling everything out of banks.
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Old 03-19-13, 01:41 PM
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Re: Cypress Bailout

Originally Posted by superdeluxe View Post
I would be pulling everything out of banks.
Hard to do when the banks are closed and they're limiting ATM withdrawals.
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Old 03-19-13, 08:10 PM
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Re: Cyprus Bailout

Here in America, BofA or Chase or whoever would just change the amount of money charged for withdrawing money and sit back and laugh.

----------------------------------

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-------> $20

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Please note, a $10 processing fee will now be processed for every $20 withdrawn.

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Old 03-19-13, 09:47 PM
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Re: Cyprus Bailout

Well, if the latest info is accurate, Cyprus has refused a bailout, and if they can't come up with ~6 billion in few days, they will leave the EU and go their own currency.

Then they can print their money like the US does. And, like we do, just keep racking up debt, spending more, printing more money, etc, until nothing can save them from a catastrophe.
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Old 03-20-13, 05:51 AM
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Re: Cyprus Bailout

It's warm and comforting just to think of that going on forever.
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Old 03-20-13, 09:55 AM
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Re: Cyprus Bailout

Last night I read that everything was fine because the ECB caved and stated they would provide funds to keep the banks liquid, then this morning I read an ECB statement saying they can only provide funds if a plan is agreed to very soon and Cyprus is looking for a Russian bailout, possibly in exchange for off shore drilling rights.

Even though parliament strongly rejected the savings tax plan I can't imagine there won't be a run on the banks whenever they open.
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Old 03-20-13, 12:09 PM
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Re: Cyprus Bailout

Originally Posted by wmansir View Post
Even though parliament strongly rejected the savings tax plan I can't imagine there won't be a run on the banks whenever they open.
Which is why they're not going to open until some agreement has been reached. Whether it's a bailout or Cyprus leaving the euro (and perhaps the EU?) is an open question, but I'm betting that the ECB will blink.
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Old 03-20-13, 12:14 PM
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Re: Cyprus Bailout

I think regardless of whatever agreement is reach money is coming out of those banks the day they open.
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Old 03-20-13, 12:53 PM
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Re: Cyprus Bailout

I'm surprised we haven't seen EU-wide bank runs at this point. If they can void depositor insurance in Cyprus, they can void itin Spain or Italy or France, too.
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Old 03-20-13, 01:02 PM
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Re: Cyprus Bailout

Originally Posted by JasonF View Post
I'm surprised we haven't seen EU-wide bank runs at this point. If they can void depositor insurance in Cyprus, they can void itin Spain or Italy or France, too.
I'm not terribly surprised, because it went down in flames.
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Old 03-20-13, 01:27 PM
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Re: Cyprus Bailout

Europe would be in even worse economic shape if China wasn't propping it up.
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Old 03-20-13, 02:22 PM
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Re: Cyprus Bailout

Stock Market is doing great today.
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Old 03-20-13, 10:52 PM
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Re: Cyprus Bailout

Wall Street's performance seems less and less relevant as time goes on.
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Old 03-21-13, 05:08 AM
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Re: Cyprus Bailout

IMF and Euro commission rejected a Cyprus proposal to tap pension assets and sell off banks, and the Russian deal is stalled. ECB has set a new deadline of Monday for a deal after earlier suggesting the country had hours, not days.

Banks will remain closed until Tuesday and parliament is working on rules to prevent a run on the banks when they open. Without restrictions one bank official estimated up to 10% of funds will be withdrawn when they reopen, but others say it could be higher.
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Old 03-21-13, 08:18 AM
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Re: Cyprus Bailout

Originally Posted by wmansir View Post
IMF and Euro commission rejected a Cyprus proposal to tap pension assets and sell off banks, and the Russian deal is stalled. ECB has set a new deadline of Monday for a deal after earlier suggesting the country had hours, not days.

Banks will remain closed until Tuesday and parliament is working on rules to prevent a run on the banks when they open. Without restrictions one bank official estimated up to 10% of funds will be withdrawn when they reopen, but others say it could be higher.
only 10%? are the other people not paying attention?
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Old 03-21-13, 08:48 AM
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Re: Cyprus Bailout

Perhaps they're on "holiday"?
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