[BartSimpson]

Brenda Brenda:

Anyway, it is voted down. They have to figure something else out.

Meanwhile the damage done to the reputations of the world's banking systems is irreparable.

The USA is seeing a virtual bank run in progress as depositors from around the world have started moving their bank deposits into the stock market. CNN this morning estimates that over $180 billion has been pumped into the US markets since the NYSE opened yesterday. CNN's analysts are parroting the party line saying that this is due to the new Fed policies but then over on MSNBC one of their talking heads said what I believe and that it's depositors mostly from Europe acting to protect their assets.

[martin14]

BartSimpson BartSimpson:

Brenda Brenda:

Anyway, it is voted down. They have to figure something else out.

Meanwhile the damage done to the reputations of the world's banking systems is irreparable.

The USA is seeing a virtual bank run in progress as depositors from around the world have started moving their bank deposits into the stock market. CNN this morning estimates that over $180 billion has been pumped into the US markets since the NYSE opened yesterday. CNN's analysts are parroting the party line saying that this is due to the new Fed policies but then over on MSNBC one of their talking heads said what I believe and that it's depositors mostly from Europe acting to protect their assets.

Not surprised, there will be some of that.

I wonder how long the lines are to open new accounts in Switzerland..

[andyt]

What a bunch idiots. It's not going to happen in the US or Switzerland. Neither is asking for a bailout. They're going to buy high priced, in demand shares and then lose as the value drops. Meanwhile of course it hurts the banks, and if anything makes the scenario more likely. Wonder who these people are, ie sophisticated or unsophisticated investors. If the latter they're really going to take a bath.

I'm glad the EU did this - bailing out Russian mobsters would have been unconscionable. Time to go after all the tax havens with whatever means available. But they should also have had the usual suspects take a haircut - ie bond holders, creditors.

[martin14]

$1:

European Commission statement on Cyprus

Since the autumn of 2011, the possibility of assistance to Cyprus under a programme has been under discussion by the Cypriot authorities with the Commission. In July 2012, Cyprus formally asked for assistance under a programme. The need for assistance comes essentially from problems in the Cypriot banking sector which was unsustainably large for the size of the Cypriot economy. However, it was not possible to conclude negotiations on a programme with the previous Cypriot government.

Finally, last Saturday, in the Eurogroup, there was a unanimous agreement between the Member States including Cyprus on a programme that met the conditions fixed by the Member States, the ECB and the IMF, agreeing to lend EUR 10 bn to Cyprus. These conditions included reaching an acceptable level of debt sustainability and the corresponding financing parameters.

Whilst this programme did not in all its elements correspond to the Commission's proposals and preferences, the Commission felt the duty to support it since the alternatives put forward were both more risky and less supportive to Cyprus's economy.

This programme was not accepted by the Cypriot parliament.

It is now for the Cypriot authorities to present an alternative scenario respecting the debt sustainability criteria and corresponding financing parameters.

The Commission has done its utmost to assist Cyprus and to work for a Constructive and managed solution. However, decisions are taken by the Member States and no decision can be taken without their cooperation including Cyprus itself. The Commission continues to stand ready to facilitate solutions and is continuing contacts with Cyprus, the other Member States in the Eurogroup, the EU institutions and the IMF.

Regarding the one off levy on deposits BELOW 100.000 €: The Commission made it clear in the Eurogroup BEFORE the vote in the Cypriot parliament, that an alternative solution respecting the financing parameters would be acceptable, preferably without a levy on deposits below 100.000 €. The Cypriot authorities did not accept such an alternative scenario.

I think the EU isn't moving.




Cypriot Finance Minister in Moscow all day for talks, nothing new.

Putin is understandably pissed he wasn't told about the deposit levy before.
Merkel is understandably pissed off the Cyppies are even talking to the Russians.


Every move the Cypriots make seem to be more desparate than the last.




Banks will be closed until Tuesday next week, some may never re-open.

Bank of Cyprus and Laiki, the two biggest, are probably now already bankrupt.

$1:

Cyprus’s central bank is preparing two bills in the event the government fails to secure financing alternatives by tomorrow, state-run broadcaster CYBC reported, without saying how it got the information.
* Central bank preparing legislation that will curb deposit
outflows when banks reopen: CYBC
* Central bank preparing law on setting up ‘bad bank’: CYBC
* Two laws are to be voted in Parliament in fast-track process
if Cyprus doesn’t secure alternative financing: CYBC
(Bloomberg)By Natalie Weeks and Maria Petrakis

CYPRUS CABINET TO DISCUSS DECREE ON CAPITAL CONTROLS: CYBC

They will pass a law limiting how much you could take out of the bank on
any day.


The Argies did this before:

On 1 December 2001, in order to stop this draining from destroying the banking system, the government froze all bank accounts, initially for 90 days. Only a small amount of cash was allowed for withdrawal on a weekly basis (initially 250 Argentine pesos, then 300), and only from accounts denominated in pesos. No withdrawals were allowed from accounts denominated in U.S. dollars, unless the owner agreed to convert the funds into pesos


For a year.









Strangely, there are no celebrations in Nicosia today

[ShepherdsDog]

cheaper holidays in Cyprus now?

[martin14]

ShepherdsDog ShepherdsDog:

cheaper holidays in Cyprus now?

Soon, very soon.

[martin14]

http://www.reuters.com/article/2013/03/ ... vrit=56943


Analysis: ECB prepared to let Cyprus go, protect others

$1:

The European Central Bank is prepared to cut off funding to Cyprus and let the Mediterranean island succumb to financial meltdown if it has to, confident it has unlimited firepower to protect the rest of the euro zone.

Cyprus propelled the 17-nation bloc into uncharted waters on Tuesday by rejecting a proposed levy on bank deposits as a condition of a 10 billion euro ($12.9 billion) EU bailout.

Without the aid, much of it to recapitalize Cypriot banks, the ECB says they will be insolvent, and it requires banks to be solvent for them to receive central bank support.

Denied these funds, Cyprus would be left staring into a financial abyss.

For the rest of the euro zone, the ECB has a suite of policy tools at its disposal to prevent contagion - with bond purchases and unlimited liquidity offers to the fore.

ECB chief Mario Draghi has his ability to create new policy tools constrained by resistance in Germany, where business newspaper Handelsblatt last week ran a front-page picture of him under the headline: "The poisoned gift: how ECB President Mario Draghi is saving the euro and ruining savers".

Bundesbank chief Jens Weidmann opposed Draghi's bond-buy plan - he sees it as simply financing governments - but he is open in principle to funding measures like the so-called LTRO the ECB used a year ago to funnel banks 1 trillion euros of cheap money.

Given that, the ECB probably has no need to dream up new crisis measures and before it even deploys its existing ones, it will try to work with governments to reassure bank depositors.

"The contagion risk is a run on banks in other countries," said Andrew Bosomworth, senior portfolio manager at Pimco, the world's largest bond fund.

"Verbal intervention from the ECB and governments can help, such as a commitment that guaranteed deposits are sacrosanct. Operationally, it also means keeping the ATMs full."

Draghi calmed markets last July by promising "within our mandate, the ECB is ready to do whatever it takes to preserve the euro". He backed up that vow by unveiling a plan to buy countries' bonds if they met certain conditions.

Now, a reassuring message to depositors needs to be supported with efforts to make sure the euro zone financial system is lubricated properly.

The ECB is already offering banks unlimited liquidity with loans up to 3 months, and reserves the option to provide them with more funding certainty over a longer horizon by laying on another 3-year funding operation, as it did a year ago.

COMMUNICATIONS OFFENSIVE

In a statement issued late on Tuesday, the ECB underlined its position: "The ECB reaffirms its commitment to provide liquidity as needed within the existing rules."

Draghi has also deployed his lieutenants to reassure depositors, with ECB policymaker Joerg Asmussen saying no other euro zone country has a banking sector like Cyprus.

Deutsche Bank economist Gilles Moec said the ECB commitment to provide liquidity, combined with Asmussen stressing that Cyprus's banking sector is unique, showed it was ready to support healthy banks in the rest of the euro zone.

"The subtext is 'we reaffirm that we cannot fund a bank that is insolvent'. You can also read it as: 'as long as a bank is solvent, we will continue to provide liquidity'," Moec said.

So far, there have been no signs of bank customers getting worried elsewhere in the euro zone, part of a worst-case scenario that could also see a spike in government bond yields.

To guard against a bank run, euro zone national central banks must make sure bank notes are available to stock up cash machines - though the ECB and euro zone policymakers will be hoping Cyprus can still agree a rescue and no such scenario comes to pass.

For a spike in bond yields, the ECB could use its new bond-purchase plan - dubbed Outright Monetary Transactions (OMT) - to buy potentially unlimited amounts of a country's bonds and push down its borrowing costs.

The catch is that a country must first agree to an aid plan of reforms and austerity measures. The Cyprus case has highlighted just how difficult agreeing such a program can be.

"Even if the principle of OMT is still there and valid, all the drama about Cyprus may remind people that the bar to get OMT is actually higher than they probably think," said Moec.

HARD LINE

By stressing that it stands ready to provide liquidity "within the existing rules", the ECB is standing firm.

The central bank is not ready to bend for Cyprus.

As its governing council gathered for a mid-month meeting on Wednesday, Asmussen pressed Cyprus to agree to an aid plan:

"We can provide emergency liquidity only to solvent banks and ... the solvency of Cypriot banks cannot be assumed if an aid program is not agreed on soon, which would allow for a quick recapitalization of the banking sector.

With Cyprus sovereign bonds ineligible for use as collateral for ECB refinancing operations due to their low credit ratings, the Cypriot central bank is providing banks with Emergency Liquidity Assistance (ELA).

These emergency loans are more easily available, but the ECB's Governing Council must approve provision of ELA. It reviews banks' eligibility every two weeks and needs a two thirds majority to stop these funds.

"If really need be, the euro zone would likely choose to let small Cyprus go and focus on containing the damage instead of softening the conditions to such an extent that much bigger countries than Cyprus could be encouraged to reject their own current bailout terms," said Berenberg Bank's Holger Schmieding.

No more wiggle room, because other countries are watching.

[ShepherdsDog]

Them and the other Greeks should be cut adrift

[martin14]

ShepherdsDog ShepherdsDog:

Them and the other Greeks should be cut adrift

I think it is a big part of the reason why the Cypriots are getting
roughed up a bit.

To send a message out.

[Brenda]

ShepherdsDog ShepherdsDog:

cheaper holidays in Cyprus now?

And that is exactly why Greece and Cyprus are where they are now.
They became an expensive (compared to what it was) holiday destination when they became part of the EU. Dumb dumb.

[Jonny_C]

I heard something on CBC to the effect that the Cypriot GDP is 1/2 of 1% of the Euro Zone GDP. That kind of puts a perspective on it.

Edit - incorrect acronym

[martin14]

Brenda Brenda:

ShepherdsDog ShepherdsDog:

cheaper holidays in Cyprus now?

And that is exactly why Greece and Cyprus are where they are now.
They became an expensive (compared to what it was) holiday destination when they became part of the EU. Dumb dumb.

And, amazingly, the Greeks actually lied through their teeth
to get into the Euro.


Greek stupidity has no end.

[martin14]

Jonny_C Jonny_C:

I heard something on CBC to the effect that the Cypriot GNP is 1/2 of 1% of the Euro Zone GNP. That kind of puts a perspective on it.

Little less actually, 0.2%

[martin14]

If you wonder why the EU is paying hardball...

$1:

Cypriot "no" inspires Greeks to rail against austerity


ATHENS, March 20 | Wed Mar 20, 2013 11:09am EDT

(Reuters) - Greeks and opposition parties inspired by the Cypriot rejection of an unpopular bailout deal urged Athens on Wednesday to stand up to foreign lenders whose demands have resulted in repeated rounds of austerity that have made Greek life a misery.

Cyprus's parliament on Tuesday rejected a levy on bank deposits demanded in return for aid, raising the spectre of a default for the island nation that could mean enduring wave after wave of spending cuts and tax rises, just like Greece.

"See what Cyprus did? We are proud of them," said Fey Papadopoulou, 22, a university student. "They should be an example for our politicians, who have succumbed to every demand."

Cyprus pleaded with Russia on Wednesday for a five-year extension and lower interest on an existing 2.5 billion euro ($3.22 billion) loan and 5 billion euros in new loans after voting down a euro zone plan for a 10 billion euro bailout.

"The Cypriots set an example to follow," left-leaning Eleftherotypia said in its leading editorial. "How can the Cypriots say 'no' and we can't even reject a single property tax?", ran a headline on Greek television channel Antenna.

Greece, which first sought aid from European Union and the International Monetary Fund in 2010, has yielded to demands for harsh austerity measures that have slashed household income by almost a third and sent unemployment up to a record 26 percent.

"Cyprus said 'No' on our behalf too," said Odysseas Panagiotou, a 45-year old clerk. "It's about time that our traitors - politicians - say a big 'No' to the troika demands."

The "no" vote from Nicosia comes just days before Athens and its lenders resume delicate talks on the implementation of the country's bailout, with creditors pushing Athens to respect past pledges to fire civil servants and stick to unpopular tax rises.

MERKEL'S STRATEGY

Whether Athens - which in the past has ignored riots and mass protests to approve austerity packages and avert bankruptcy - will be swayed by the latest outcry depends on whether Cyprus ends up bankrupt or finds a solution elsewhere, analysts said.

"If Cyprus goes bankrupt, then the government's argument that we must stay on the austerity path will be reinforced, but if it wins better bailout terms the main opposition's arguments will be stronger," said Thomas Gerakis, head of Marc pollsters.

Prime Minister Antonis Samaras's government - which has been scrambling to assure Greeks that their bank deposits are not at risk due to the Cypriot crisis - said late on Tuesday it supported Cyprus's choices.

But Greece's anti-bailout opposition, including the radical leftist Syriza party, rushed to accuse him and Finance Minister Yiannis Stournaras of bowing to the austerity demands of German Chancellor Angela Merkel.

"After the Cypriots' proud 'no', Mr. Samaras and Mr. Stournaras are the most faithful adherents of Ms. Merkel's strategy," said a statement from Syriza, Greece's most popular party according to a MARC/Alpha survey published on Tuesday.

"The Cypriot parliament shows the way of real negotiation, which no pro-bailout government in Greece even considered."

Syriza also interpreted a statement late on Tuesday by the European Central Bank to continue funding Cypriot banks within existing rules, as a sign of weakness on the part of creditors.

"And just like that, we found out that another way is possible," Syriza deputy Rena Dourou tweeted a few minutes after the ECB statement was released.

These fuckers have blown 320 Billion Euros, changed nothing, and now complain
and protest gold mines creating thousands of jobs.





If the EU blinks at the last minute, the Euro is fucked.

[martin14]

zerohedge ‏@zerohedge 30m

US Total debt: $16,749,269,587,407.53, up $13 billion,

or 2 broke Cypruses, since yesterday.