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Posted: 3/23/2013 8:10:21 AM EDT
[#1]
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The EU wants to take 10% or so of deposits to fund government. However, the Cyprus banks are like every other bank, including the banks here. They keep less than 1% of deposits on reserves. That means 99% of the deposits exist as loaned money in a society flush with debt. The deposit money does not actually exist. You can not take 10% of money when only 1% actually exits. Of course the EU leaders know this, Germany knows this. So what is all of this all about. The money is not actually in those accounts, so what exactly are they trying to do. Am I missing something? Or is this a deliberate attempt to collapse the world financial system? http://www.zerohedge.com/ Cyprus Deposit Levy Vote Delayed, Will Go "Down To The Wire" As Up To 70% Deposit Tax Contemplated For Some |
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Posted: 3/23/2013 8:10:48 AM EDT
[#2]
Bank can always liquidate those assets.
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Posted: 3/23/2013 8:14:41 AM EDT
[#3]
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Fractional Reserve Banking is fine, but only if reserve minimums are reasonable and all institutional assets are valuated and marked to market at COB on a daily basis. Unfortunately, the CONgress critters repealed Glass-Steagall under Clinton, the banks are not required to mark to market (they continue to play pretend and extend) and the K street lobbyists bought off the SEC so there has been little effort to enforcement reserve requirements. Reasonable being the key word. But this is accounting shenanigans: Reserve requirements |
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Posted: 3/23/2013 8:29:25 AM EDT
[#4]
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The EU wants to take 10% or so of deposits to fund government. However, the Cyprus banks are like every other bank, including the banks here. They keep less than 1% of deposits on reserves. That means 99% of the deposits exist as loaned money in a society flush with debt. The deposit money does not actually exist. You can not take 10% of money when only 1% actually exits. Of course the EU leaders know this, Germany knows this. So what is all of this all about. The money is not actually in those accounts, so what exactly are they trying to do. Am I missing something? Or is this a deliberate attempt to collapse the world financial system? http://www.zerohedge.com/ Cyprus Deposit Levy Vote Delayed, Will Go "Down To The Wire" As Up To 70% Deposit Tax Contemplated For Some I'm thinking Putin vetoes that |
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Posted: 3/23/2013 9:00:03 AM EDT
[#5]
If the intent was to destroy the Russian criminal element and thereby the Russian Government, then the revised plan may be a good thing. However, the slippery slope is when a bank, even in Cyprus, can get away with in effect stealing from your money to satisfy government debt, then we are all in trouble eventually.
It would not surprise me in the least if the idea for the 10% depositors tax came from the United States, possibly to test whether it would work. With so many states, including my home state, in so much trouble financially and the economy still basically in the shitter, the federal government (read Obama and the Democrats) are looking for ANY method of forcible taxation/money grabbing to support their massive spending habits. |
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Posted: 3/23/2013 9:05:54 AM EDT
[#6]
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GD understands money creation and banking worse than GuyinFL understands women. ... 
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Posted: 3/23/2013 9:14:00 AM EDT
[#7]
It is always fascinating to read 70 year old rhetoric, with a few words changed to reflect modern sensibilities.
The "international banksters" might no longer be depicted like this: 
...but the basic presentation is unchanged. |
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Posted: 3/23/2013 9:26:59 AM EDT
[#8]
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On the other hand the kind of bureaucratic, banker/academic, crony-net system that makes up the EU establishment of the Western world may really be that stupid. Remember, we're a nation where Tom Friedman and Farid Zakaria are millionaires, and not sitting in a sheltered workshop. |
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Posted: 3/24/2013 3:34:53 AM EDT
[#9]
The Telegraph plays the Iceland card!
Look at Iceland, which, like Cyprus, was awash with Russian money, but, unlike Cyprus, is not in the eurozone. It ended up, when its banks collapsed, with each Icelander theoretically on the hook for an average of $330,000. It decided that, after all, it preferred fishing to banking; it had its own currency. Now it is back on the way to economic health. No such luck for Cyprus. From now on, it will be told what to do by the nations and organisations into whose hands it seems about to surrender itself. It cannot make decisions for its own good.
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Posted: 3/24/2013 3:47:45 AM EDT
[#10]
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I can't decide which is stupider, proposing something as inflammatory as a bank deposit excise tax/confiscation or proposing it then walking away from it as soon as the (easily anticipated) resistance comes up. It's like the people running the EU/ECB are determined to do the absolute stupidest possible thing, at every fork in the road. This is the correct perspective. The entire EU banking system was flawed from its inception and has gradually gotten worse It's a out to collapse, Nd should be fun to watch. Posted Via AR15.Com Mobile |
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Posted: 3/24/2013 4:04:59 AM EDT
[#11]
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Sure it exists. When my folks bought their condo in D.C. last year, they had their bank in Luxemburg electronically transfer money to a title company (or whatever it's called) here in D.C., who then confirmed the money was there, and electronically transferred it to the seller's account when all the paperwork was signed. Technically, in that transaction, no physical money ever changed hands or "existed" - but since we all agree that's how it works, then it works.  That only works because a small percent is actually on reserve and only when just a few use their money. If everybody tried to do that at the same time, the bank would have a run and collpse, because it does not have enough money on the balance sheet. Most of the balance sheet is loans. In your example, cash was not sent, but the money must be on the balance sheet to do it. That balance sheet money for a bank is called the bank's reserves. Most of the time it is less than 1%. Of account balances. The digital world at its best. Our money exists in cyberspace  What's the difference between electrons and IOU's on pieces of paper? At least the electrons are efficient. You want something to really blow your mind, take a look at bitcoin. |
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Posted: 3/24/2013 4:11:06 AM EDT
[#12]
Another truth no one is talking about is that with QE IV?(printing-or the Fed "electronically stimulating" the money supply) they are stealing the value of your money using inflation.
There is going to be hell to pay..... |
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Posted: 3/24/2013 4:13:15 AM EDT
[#13]
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Sure it exists. When my folks bought their condo in D.C. last year, they had their bank in Luxemburg electronically transfer money to a title company (or whatever it's called) here in D.C., who then confirmed the money was there, and electronically transferred it to the seller's account when all the paperwork was signed. Technically, in that transaction, no physical money ever changed hands or "existed" - but since we all agree that's how it works, then it works. That only works because a small percent is actually on reserve and only when just a few use their money. If everybody tried to do that at the same time, the bank would have a run and collpse, because it does not have enough money on the balance sheet. Most of the balance sheet is loans. In your example, cash was not sent, but the money must be on the balance sheet to do it. That balance sheet money for a bank is called the bank's reserves. Most of the time it is less than 1%. Of account balances. The digital world at its best. Our money exists in cyberspace What's the difference between electrons and IOU's on pieces of paper? At least the electrons are efficient. You want something to really blow your mind, take a look at bitcoin. My brother is a huge fan. |
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Posted: 3/24/2013 4:14:01 AM EDT
[#14]
The russkies getting hacked off about this is a big tasty juicy irony sandwich.
When the commies first took over, there was a period just after the revolution where foreign investment was strongly encouraged and actively sought by the commies. They knew they didn't have the hard currency to do what they wanted industrially and they didn't want to build the wealth honestly, so like commies always do, they stole it from those who were gullible enough to believe a commie could be a good investment partner. The "new economic policy" or NEP they called it and a lot of the true believer commies got pissy because they thought the revolution had been betrayed. Then, once a nice big slug of capital had come in search of work, they slammed the trap shut. Russia, you just got NEP'd by Cyprus. How you like that shit now Biyatch? |
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Posted: 3/24/2013 4:15:40 AM EDT
[#15]
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However, the Cyprus banks are like every other bank, including the banks here. They keep less than 1% of deposits on reserves. That means 99% of the deposits exist as loaned money in a society flush with debt. IDK what the banking rules are in Cyprus, but your idea that 99% of the deposits are lent out in the US is simply incorrect. By statute, the US system requires a minimum of 10% reserves. By FedReserve rule the reserve is higher. Last time Ilooked, it was 16%. That may have been changed. If the reserve rules in Cyprus are roughly the same as those in the US, there are sufficient deposits for the government to steal. From what I can find, the reserve deposits are currently required at 10%. That deposit requirement is only a requirement on transaction deposits. All other deposits require a 0% reserve. A transaction deposit is any deposit that is an instrument of transaction, ie. checking accounts. Something that the account holder can directly write an unlrestricted number of checks from. ALL other deposits require 0% reserve. These deposits are any deposits that are not transaction accounts. Examples are SAVINGS accounts, CDs, and all investment accounts, and any account that has checks but limts the number that can be written every month. People can still have immediate access to these moneys but no reserve is required. Taking this into account, the actually reserve of deposits of money are well below 1% assuming it is not negative. Add to that that the majority of reserves of US banks are nothing more than borrowed money from the fed on a ledger that the bank pays interest on and is actually 'stored' at the fed and the entire system is a broke farce. I was being kind when I said less than 1% on reserve. Typically if I deposit $1000 to a savings account, the bank is required to have 0% on reserve. They take that $1000 and use it to pay interest to the fed and borrow many more times that amount to lend out to somebody. If I deposit $1000 into a checking account, most people would conclude the bank keeps $100 and lends out $900 keeping a 10% reserve. In actuality, the bank uses that $1000 as reserve and loans out $9,000 that it borrows from the fed. One can easily see there really are no reserves because the vast majoity of deposits in a bank are not checking accounts, they are CDs and savings accounts and other non-transaction accounts that require no reserves. |
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Posted: 3/24/2013 4:20:15 AM EDT
[#16]
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GD understands money creation and banking worse than GuyinFL understands women. Money is loaned into existence which is why reserve requirements (Deposits and the like) are important. Remember M=1/R Reserve requirements are a farce and is nothing more than being able to pay the check you wrote on a daily basis. It has nothing to do with the solvency of a bank or anything to do with backing loans. See my other post. |
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Posted: 3/24/2013 4:23:12 AM EDT
[#17]
I just want someone to explain to me how a bank with a 100% reserve requirement could function.
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Posted: 3/24/2013 4:24:05 AM EDT
[#18]
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Bank can always liquidate those assets. What assets? Banks don't have assets to liquidate. They have bad commercial paper that the fed is continuing to buy and over valued real estate that the fed is continuing to buy. |
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Posted: 3/24/2013 4:24:45 AM EDT
[#19]
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Sure it exists. When my folks bought their condo in D.C. last year, they had their bank in Luxemburg electronically transfer money to a title company (or whatever it's called) here in D.C., who then confirmed the money was there, and electronically transferred it to the seller's account when all the paperwork was signed. Technically, in that transaction, no physical money ever changed hands or "existed" - but since we all agree that's how it works, then it works. That only works because a small percent is actually on reserve and only when just a few use their money. If everybody tried to do that at the same time, the bank would have a run and collpse, because it does not have enough money on the balance sheet. Most of the balance sheet is loans. In your example, cash was not sent, but the money must be on the balance sheet to do it. That balance sheet money for a bank is called the bank's reserves. Most of the time it is less than 1%. Of account balances. The digital world at its best. Our money exists in cyberspace What's the difference between electrons and IOU's on pieces of paper? At least the electrons are efficient. You want something to really blow your mind, take a look at bitcoin. My brother is a huge fan. It angers me that I didn't mine about ten thousand of them back when that was possible. |
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Posted: 3/24/2013 4:26:07 AM EDT
[#20]
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Sure it exists. When my folks bought their condo in D.C. last year, they had their bank in Luxemburg electronically transfer money to a title company (or whatever it's called) here in D.C., who then confirmed the money was there, and electronically transferred it to the seller's account when all the paperwork was signed. Technically, in that transaction, no physical money ever changed hands or "existed" - but since we all agree that's how it works, then it works. That only works because a small percent is actually on reserve and only when just a few use their money. If everybody tried to do that at the same time, the bank would have a run and collpse, because it does not have enough money on the balance sheet. Most of the balance sheet is loans. In your example, cash was not sent, but the money must be on the balance sheet to do it. That balance sheet money for a bank is called the bank's reserves. Most of the time it is less than 1%. Of account balances. The digital world at its best. Our money exists in cyberspace What's the difference between electrons and IOU's on pieces of paper? At least the electrons are efficient. You want something to really blow your mind, take a look at bitcoin. My brother is a huge fan. It angers me that I didn't mine about ten thousand of them back when that was possible. You can still buy them now while they are relatively cheap. 
I'm going to send my brother $500 to buy me some just for kicks. ETA: With enough video cards, it's still "possible". I'm just not sure it is cost effective. Although with the rapidly increasing value, it will continually become worth it. Once people start devising ways to effectively incorporate them into web stores and such, and if they do, it will be fun to watch. |
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Posted: 3/24/2013 4:27:22 AM EDT
[#21]
I predict that Thursday, when the banks re-open (if they re-open then) there will be a run on the banks and collapse the Cyprus System.
After this horseshit...who would keep any more money there than necessary.... |
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Posted: 3/24/2013 4:27:37 AM EDT
[#22]
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I just want someone to explain to me how a bank with a 100% reserve requirement could function. It can not. If they actually had reserves it probably could function, but they don't actually have reserves. |
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Posted: 3/24/2013 4:31:59 AM EDT
[#23]
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Sure it exists. When my folks bought their condo in D.C. last year, they had their bank in Luxemburg electronically transfer money to a title company (or whatever it's called) here in D.C., who then confirmed the money was there, and electronically transferred it to the seller's account when all the paperwork was signed. Technically, in that transaction, no physical money ever changed hands or "existed" - but since we all agree that's how it works, then it works. That only works because a small percent is actually on reserve and only when just a few use their money. If everybody tried to do that at the same time, the bank would have a run and collpse, because it does not have enough money on the balance sheet. Most of the balance sheet is loans. In your example, cash was not sent, but the money must be on the balance sheet to do it. That balance sheet money for a bank is called the bank's reserves. Most of the time it is less than 1%. Of account balances. The digital world at its best. Our money exists in cyberspace What's the difference between electrons and IOU's on pieces of paper? At least the electrons are efficient. You want something to really blow your mind, take a look at bitcoin. My brother is a huge fan. It angers me that I didn't mine about ten thousand of them back when that was possible. You can still buy them now while they are relatively cheap.
I'm going to send my brother $500 to buy me some just for kicks. ETA: With enough video cards, it's still "possible". I'm just not sure it is cost effective. Although with the rapidly increasing value, it will continually become worth it. Once people start devising ways to effectively incorporate them into web stores and such, and if they do, it will be fun to watch. Gpu mining is no longer profitable, fpga mining is barely so, and about a PetaH/s worth of processing power in custom Asics is about to come online. I'm waiting atm because I think the price will crash when that happens, at which point I'll buy in. I'm watching LTC also. Eta the price is over 65USD/1BTC now. It's doubled in the last couple of weeks, and there is some speculation that the Cyprus situation has something to do with it. |
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Posted: 3/24/2013 4:33:14 AM EDT
[#24]
I started a thread on Bitcoin. Come party.
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Posted: 3/24/2013 4:36:35 AM EDT
[#25]
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The revised plan (as of this morning) is as follows: 1. Exempt deposits up to 100,000 euros (the EU deposit-insurance limit) from any kind of levy. 2. Offload the Greek branches of the two largest Cypriot banks to the Bank of Pireaus (a private Greek bank) without touching any deposits therein. 3. Wipe out the equity holders and bondholders of the Cypriot banks. 4. Levy a tax of anywhere from 20% to 100% on deposits in the Bank of Cyprus in excess of 100,000 euros. (This will hit the Russian depositors particularly hard.) 5. Split the Laiki Bank into a "good" bank with all the viable assets, and a "bad" bank (which would presumably go out of business) containing all the troubled assets. Wow, sounds like an awesome plan. Especially the part about the potential of wiping out Russian government money as well as that of very wealthy, very powerful russian businessmen who's wealth comes from, well, lets just say not exactly above board transactions. Nope, nothing bad could come from that idea. This is like TARP, the GM bailout and a hardy screwing of one of the most powerful and ruthless governments in the world all rolled into one. Wars have been started over much less. |
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Posted: 3/24/2013 4:58:31 AM EDT
[#26]
In the scale of the world economy, this is a "little" financial problem. But it reminds me of the "little" political problem (assassination) that started World War I...
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Posted: 3/24/2013 5:34:40 AM EDT
[#27]
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The revised plan (as of this morning) is as follows: 1. Exempt deposits up to 100,000 euros (the EU deposit-insurance limit) from any kind of levy. 2. Offload the Greek branches of the two largest Cypriot banks to the Bank of Pireaus (a private Greek bank) without touching any deposits therein. 3. Wipe out the equity holders and bondholders of the Cypriot banks. 4. Levy a tax of anywhere from 20% to 100% on deposits in the Bank of Cyprus in excess of 100,000 euros. (This will hit the Russian depositors particularly hard.) 5. Split the Laiki Bank into a "good" bank with all the viable assets, and a "bad" bank (which would presumably go out of business) containing all the troubled assets. These plans keep getting worse and worse every day. Those Russian depositors are not going to stand still for their million or billions being expropriated. Just what do these Euroclowns think these Russians with suspect accounts did to raise their funds....under the table stand up comedy routines....selling Mary Jane to local college kids....running an illegal bingo games? Kidnapping, human trafficing, arms dealing, murder for hire, and a shit-ton worse things than that. Do these Euroclowns think that these black-hearted bastards will set still for their blood-soaked money being stolen by some third rate government drones and some bankers? |
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Posted: 3/24/2013 5:42:10 AM EDT
[#28]
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I don't understand. The Greek govt can not print money like the fed reserve. So what good does it do to take imaginary digits in a computer and transfer them to the govt? They can't spent it. It desn't exist. Most of it is tied up in most likely bad debts. It's about the balance sheet. Just like private businesses that have bonds issued, banks need to meet virus covenants. It's not about piles of money...it's about a balance sheet that demonstrates that those covenants have been met. As long as the numbers add up on paper, that is all that matters. No one is physically inspecting a warehouse to ensure that gold bars and shrink wrapped batches of $100 bills are sitting on pallets in wait of distribution. Welcome to fiat currency...wealth is measured by ledgers....not tangible, physical items. This is all a shell game...no one (on the receiving side) is planning to spend the money.....it's just a mechanism to transfer supposed (unrealized) wealth from one party to another. |
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Posted: 3/24/2013 5:42:39 AM EDT
[#29]
As easy and satisfying as it would be to indulge in schadenfreude over the potential losses inflicted on the Russian oligarchs, the EU establishment is little better.
In fact the idea of the EU establishment inveighing against corruption, lack of transparency and undemocratic processes is kind of a sick joke. Their whole model of governance is based on an undemocratic establishment presiding over massive transfers of wealth by entirely opaque processes. Basically little different than Russia since the collapse of Communism. The only people I can spare any sympathy for are the (rapidly dwindling) European middle-class but no one seems to speak for them, apart from some marginalized figures like Silvio Berlusconi, the FN in France, Pope Benedict, Nigel Farange and the Fidesz Party in Hungary. |
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Posted: 3/24/2013 5:48:50 PM EDT
[#30]
Ironic comment from Der Spiegel:
Merkel disapproves of the Cypriot proposal, which involves bundling state assets into a "Solidarity Fund" that includes the country's retirement fund to back bond issues. According to reports on Friday, she is not alone. The troika, made up of the European Commission, the European Central Bank and the International Monetary Fund, agrees with her assessment.
The chancellor is particularly frustrated by the lack of communication with Cypriot leaders even as the situation worsens dramatically. Some in her party have even used the word "autistic" to describe Nicosia's apparent unwillingness to communicate with Berlin. "What we have never experienced before is that, over a period of days, there has been no contact with the EU or with the troika," Merkel reportedly told the parliamentarians. The EC, ECB and IMF complaining about unresponsive and indecipherable financial schemes? Say it ain't so... |
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Posted: 3/24/2013 5:55:18 PM EDT
[#31]
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It is always fascinating to read 70 year old rhetoric, with a few words changed to reflect modern sensibilities. The "international banksters" might no longer be depicted like this: http://tuesthureng121.files.wordpress.com/2009/10/jewish-stereotype.gif?w=128&h=150 ...but the basic presentation is unchanged. Geeee, your anti-semitism isn't showing at all 
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Posted: 3/24/2013 6:00:10 PM EDT
[#32]
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It is always fascinating to read 70 year old rhetoric, with a few words changed to reflect modern sensibilities. The "international banksters" might no longer be depicted like this: http://tuesthureng121.files.wordpress.com/2009/10/jewish-stereotype.gif?w=128&h=150 ...but the basic presentation is unchanged. Geeee, your anti-semitism isn't showing at all I think he was making the point that the "jewish banker" stereotype is still alive and well, although being presented in a newer format... not making the stereotype himself. |
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Posted: 3/24/2013 6:00:26 PM EDT
[#33]
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It is always fascinating to read 70 year old rhetoric, with a few words changed to reflect modern sensibilities. The "international banksters" might no longer be depicted like this: http://tuesthureng121.files.wordpress.com/2009/10/jewish-stereotype.gif?w=128&h=150 ...but the basic presentation is unchanged. Geeee, your anti-semitism isn't showing at all You're really on the ball there. Impressive. |
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Posted: 3/24/2013 6:04:24 PM EDT
[#34]
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If there were not federal insurance for deposits and a policy of bailing out banks that get themselves in trouble, the fractional reserve system would probably sort itself out rather quickly as banks making risky loans and using ever-lower reserve ratios would fail and people would flock to more conservatively run institutions. Let the market sort it out. Yep, Moral hazard created by FDIC. .gov should just make reserve requirements higher than 10%, b/c 10% becomes closer to 1% was the money circulated between the banks around and around. So as one poster pointed out, reserve requirements are actually 10%, but it also true that more lik e99% of the the "money" in the system only exists as ledger money, not actualy cash money due to the circle jerk between banks as one man's loan becomes another man's deposit and back again. |
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Posted: 3/24/2013 6:11:11 PM EDT
[#35]
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Some great facts here: Just as I was getting used to thinking of Cyprus as the Mediterranean clime where Hezbollah agents go to spy on ‘the Jews’ and Rami Makhlouf is granted citizenship, I awaken to the fact that future of the eurozone may in fact depend on the good graces of Vladimir Putin. An island nation with a ten percent corporate tax rate and no-questions-asked banking protocols is hardly the new “sick man of Europe,” as it’s been called. It’s a national Rick’s Cafe, where everyone professes himself shocked, shocked to discover that illicit or suspect activities have been going on all this time.
The oligarchs may cut the first check, but they’ll still have the last laugh. Russian wealth now accounts for a third of Cyprus’ entire banking sector, with Russian commercial, institutional, and individuals’ deposits – some 31 billion USD – exceeding Cyprus’ GDP. Much of this money is thought to have been stolen or laundered. There are, according to a leaked and much-discussed German intelligence assessment, around 40,000 shell companies in Cyprus, all registered with no background checks as to where their capital came from. Wow. If all of that is true...Holy shit. |
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Posted: 3/24/2013 6:13:21 PM EDT
[#36]
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When a dozen or so of the people that thought this hare brained scheme up are found in trunks of cars, it won't be such a 'good idea' after all.
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I'm thinking Putin vetoes thatQuoted:
http://www.zerohedge.com/
The EU wants to take 10% or so of deposits to fund government. However, the Cyprus banks are like every other bank, including the banks here. They keep less than 1% of deposits on reserves. That means 99% of the deposits exist as loaned money in a society flush with debt. The deposit money does not actually exist. You can not take 10% of money when only 1% actually exits. Of course the EU leaders know this, Germany knows this. So what is all of this all about. The money is not actually in those accounts, so what exactly are they trying to do. Am I missing something? Or is this a deliberate attempt to collapse the world financial system? Cyprus Deposit Levy Vote Delayed, Will Go "Down To The Wire" As Up To 70% Deposit Tax Contemplated For Some |
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Posted: 3/24/2013 6:19:26 PM EDT
[#37]
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Ironic comment from Der Spiegel: Merkel disapproves of the Cypriot proposal, which involves bundling state assets into a "Solidarity Fund" that includes the country's retirement fund to back bond issues. According to reports on Friday, she is not alone. The troika, made up of the European Commission, the European Central Bank and the International Monetary Fund, agrees with her assessment.
The chancellor is particularly frustrated by the lack of communication with Cypriot leaders even as the situation worsens dramatically. Some in her party have even used the word "autistic" to describe Nicosia's apparent unwillingness to communicate with Berlin. "What we have never experienced before is that, over a period of days, there has been no contact with the EU or with the troika," Merkel reportedly told the parliamentarians. The EC, ECB and IMF complaining about unresponsive and indecipherable financial schemes? Say it ain't so... There aren't really any "good guys" in this situation, at least as far as my limited understanding of events and personalities allows me to comment. It looks like a game of financial musical chairs. |
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Posted: 3/24/2013 6:28:05 PM EDT
[#38]
Cyprus has been on limited banking for at least a week, hasn't it? There's going to be a run or riots...
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Posted: 3/24/2013 6:30:34 PM EDT
[#39]
This can't end well ...
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Posted: 3/24/2013 6:31:29 PM EDT
[#40]
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95% of Russia's government finance accounts run get washed, siphoned, and embezzled through Cyprus. Big losses if Cyprus doesn't get fixed. FIFY Quoted:
Cyprus has been on limited banking for at least a week, hasn't it? There's going to be a run or riots... I think Cypriots will pull an Arfcom and Get Both. |
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Posted: 3/24/2013 6:31:53 PM EDT
[#41]
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Some great facts here: Just as I was getting used to thinking of Cyprus as the Mediterranean clime where Hezbollah agents go to spy on ‘the Jews’ and Rami Makhlouf is granted citizenship, I awaken to the fact that future of the eurozone may in fact depend on the good graces of Vladimir Putin. An island nation with a ten percent corporate tax rate and no-questions-asked banking protocols is hardly the new “sick man of Europe,” as it’s been called. It’s a national Rick’s Cafe, where everyone professes himself shocked, shocked to discover that illicit or suspect activities have been going on all this time.
The oligarchs may cut the first check, but they’ll still have the last laugh. Russian wealth now accounts for a third of Cyprus’ entire banking sector, with Russian commercial, institutional, and individuals’ deposits – some 31 billion USD – exceeding Cyprus’ GDP. Much of this money is thought to have been stolen or laundered. There are, according to a leaked and much-discussed German intelligence assessment, around 40,000 shell companies in Cyprus, all registered with no background checks as to where their capital came from. Wow. If all of that is true...Holy shit. From the little I know, that has been orders of magnitude better a write-up than anything people have posted in here thus far. |
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Posted: 3/24/2013 6:37:36 PM EDT
[#42]
Looks like the confiscations are on again: Guardian link.
Cyprus told: take bank levy or leave euro - President, eurozone finance ministers and bailout troika hold emergency meeting as €100 limit imposed on ATM withdrawals
The European Central Bank has threatened to cut off funds propping up Cypriot banks on Monday, precipitating the island's exit from the euro if agreement was not reached on Sunday night at the emergency meeting between eurozone finance ministers, the president of Cyprus Nicos Anastasiades, and the bailout troika of the IMF, European Commission and the ECB. |
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Posted: 3/24/2013 6:39:02 PM EDT
[#43]
Quoted:
Quoted:
Quoted:
Some great facts here: Just as I was getting used to thinking of Cyprus as the Mediterranean clime where Hezbollah agents go to spy on ‘the Jews’ and Rami Makhlouf is granted citizenship, I awaken to the fact that future of the eurozone may in fact depend on the good graces of Vladimir Putin. An island nation with a ten percent corporate tax rate and no-questions-asked banking protocols is hardly the new “sick man of Europe,” as it’s been called. It’s a national Rick’s Cafe, where everyone professes himself shocked, shocked to discover that illicit or suspect activities have been going on all this time.
The oligarchs may cut the first check, but they’ll still have the last laugh. Russian wealth now accounts for a third of Cyprus’ entire banking sector, with Russian commercial, institutional, and individuals’ deposits – some 31 billion USD – exceeding Cyprus’ GDP. Much of this money is thought to have been stolen or laundered. There are, according to a leaked and much-discussed German intelligence assessment, around 40,000 shell companies in Cyprus, all registered with no background checks as to where their capital came from. Wow. If all of that is true...Holy shit. From the little I know, that has been orders of magnitude better a write-up than anything people have posted in here thus far. This is where you go ahead and post the little you know. I know nothing, and am struggling to find the logic in these actions. |
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Posted: 3/24/2013 6:41:23 PM EDT
[#44]
Quoted:
I don't understand. The Greek govt can not print money like the fed reserve. So what good does it do to take imaginary digits in a computer and transfer them to the govt? They can't spent it. It desn't exist. Most of it is tied up in most likely bad debts. I'm guessing this is a play to open up Cyprus's gas to other parties. Edit: quoted the wrong post, but you get the idea. |
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Posted: 3/24/2013 6:47:52 PM EDT
[#45]
I still think Germany is going to reissue the mark in my lifetime.
I'm on record having said that in early 2001.
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Posted: 3/24/2013 6:48:40 PM EDT
[#46]
I've heard of two possible outcomes from the Cyprus crisis that are quite interesting to consider:
1. That the banks stay closed to prevent a full bank run, until such time that Cyprus can establish its own currency and pull out of the Euro. This marks the beginning of the end of the Euro as it exists today. 2. The Russians step in and 'save' Cyprus. In return they get a stake in Cypriot gas reserves, and/or a military base on the island. Which will happen? Hard to say. If all the Russians want is a stake in the gas, a deal can probably be struck...but if the price is a base on the island, probably not. With the Turks squatting on the northern half of the island, and two British bases on the southern half, Cyprus can't possibly think introducing a third foreign player into the mix is a good idea. And if they can't work with the Russians at all? Leaving the Euro (and quite possibly the EU) would be the smartest move in the long run. The Cypriots (and the Greeks, and possibly Italy and others) aren't really cut out for currency union, and the sooner they realize this and move on, the better. |
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Posted: 3/24/2013 6:54:10 PM EDT
[#47]
ahh but they are all paper...
some stories have it that enough of the cyprus banks paper is held by the ECB that if they straigh up default it kills the WHOLE ECBS actual reserve money... but if they shift some more IOUs and bonds around no crashy... or not... so many lies involved.... |
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Posted: 3/24/2013 7:03:31 PM EDT
[#48]
News just said Cyprus cut a deal for a bailout, but no details yet.
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Posted: 3/24/2013 7:06:41 PM EDT
[#49]
Quoted:
Quoted:
Quoted:
Quoted:
Some great facts here: Just as I was getting used to thinking of Cyprus as the Mediterranean clime where Hezbollah agents go to spy on ‘the Jews’ and Rami Makhlouf is granted citizenship, I awaken to the fact that future of the eurozone may in fact depend on the good graces of Vladimir Putin. An island nation with a ten percent corporate tax rate and no-questions-asked banking protocols is hardly the new “sick man of Europe,” as it’s been called. It’s a national Rick’s Cafe, where everyone professes himself shocked, shocked to discover that illicit or suspect activities have been going on all this time.
The oligarchs may cut the first check, but they’ll still have the last laugh. Russian wealth now accounts for a third of Cyprus’ entire banking sector, with Russian commercial, institutional, and individuals’ deposits – some 31 billion USD – exceeding Cyprus’ GDP. Much of this money is thought to have been stolen or laundered. There are, according to a leaked and much-discussed German intelligence assessment, around 40,000 shell companies in Cyprus, all registered with no background checks as to where their capital came from. Wow. If all of that is true...Holy shit. From the little I know, that has been orders of magnitude better a write-up than anything people have posted in here thus far. This is where you go ahead and post the little you know. I know nothing, and am struggling to find the logic in these actions. Everything I do know was covered in that article, it then offered much more details and analysis. This, compared to the other articles, that always seemed to be too focused on the ECB, and all but ignoring the dirty dealings that Cyprus has been well known for up to this point. As I stated back on the 16th in this thread: http://www.ar15.com/forums/t_1_5/1456152_Cyprus_to_do_a_one_time_tax_on_savings_accounts_to_avoid_bankruptcy.html&page=3 Imagine that, a country founded by and run by crooks, and they choose theft as a solution to their woes. Say it aint so!
LOL at the earlier poster which suggested Cyprus was not a third world country. Cyprus makes Greece look like an icon of western civilization. People are to busy tripping over themselves with schadenfreude towards the Eurozone to step back and pay attention to what and how Russia fits into this puzzle, their motivations, and how they stand to benefit by helping "resolve" the situation. I also added some editorializing in this thread: http://www.ar15.com/forums/t_1_5/1459089_Well__the_Russian_Bear_is_a_wee_bit_ticked_off_now_over_the_Cyprus_issue_.html&page=1 Cyprus is the weakest link in the EU and Eurozone. It's very existence stands as testimony to EU (and American) hypocrisy, and remains a convenient wedge between NATO and the EU. Russian crooks (state and non-state) are not only is happy to use it to clean money, but Russia only stands to benefit from the publicizing of its corrupted dealings and and "generosity and patience" it shows in helping to "understand" and resolve the crisis. |
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Posted: 3/24/2013 7:13:22 PM EDT
[#50]
Quoted:
Quoted:
100% exist, only a small percentage of actual currency is "on hand" for withdraw.
The deposit money does not actually exist. You can not take 10% of money when only 1% actually exits. No most of the money is invested. These investment assets are mainly invested in Greece. Probably in the form of institutonal lending. The bank actually has less assets than total deposits right now because these investments went belly up. This is why the bank is insolvent. It is calculated that the 16 billion bail out will make the balance sheet almost whole, but any more losses relating to other assets will just return the bank to insolvency. This is where the uncertainty comes from. There are still investments that are prsumed to be good right now, but if any go south, then its belly up....again. The bailout doesn't fix the problem, it just gets them back on track. As far as liquid assets. Cash reserves. The bank should have a percentage of deposits reserved as cash. This currency but may not be actual paper. With electronic transactions and interbank exchanges, the ECB is likely tha "bank's bank" and keeps track of the banks euro balances. If the bank needs more physical cash, the ECB would deduct the amount from your balance and issue the bills. But much of it is tracked electronically. In the US, we have the federal reserve. Fed wires just transfer the money from bank1 to bank2 within the Fed reserve system. If a bank need cash, the reserve ships out the notes to the bank. (and then deducts that amount from the reserve balance.) |
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