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View Diary: Bank Run in Cyprus, Will it Spread to Southern Europe? (322 comments)

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  •  That's not the point. The point is that this (3+ / 0-)
    Recommended by:
    Dburn, Joieau, Cliss

    is an attack on Cyprus's poorer people BECAUSE their banks take part in the same banking practices that are also in the core. None of the other bailout countries were forced to do this.

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Sun Mar 17, 2013 at 06:57:02 PM PDT

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    •  As others have stated, Cyprus is a 'small' country (4+ / 0-)
      Recommended by:
      Dburn, Joieau, upstate NY, Cliss

      and is in the 'hinterlands' of 'society'.  This is a trial balloon.  If the big banks get away with this confiscation, they WILL make this part of the future agreements with other countries.  The big banks have reached the point where they are not going to just take the word of the country gov't that that country will 'grow' out of its economic problems.  The banks are going to want a pound of flesh before giving out an ounce of loan, in addition to the interest on the loans.  I'm reading it as something similar to the mortgage insurance payments that banks require on mortgages that have less than a 20% down payment.

    •  The other bailout countries (1+ / 0-)
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      Cliss

      apparently don't operate as offshore laundry facilities for dirty money from the Russian and Ukrainian mafias. Its banks also hold the liquid life savings and income for expats from Britain and elsewhere. And the savings of the slightly over 1 million citizens of the country.

      I haven't figured out what Cyprus did to get itself into enough debt to Germany to NEED a bailout from the ECB. I mean, the banks have plenty of money. Which is why the ECB has ordered the Cypriot government to seize money out of the people's accounts. If there were no money in the banks and the wealthy citizens had moved theirs to more traditional hiding places (like Switzerland, which you may note is NOT part of the EU/ECB system), then the ECB would simply have ordered austerity imposed on the population just as they did for Greece and Ireland and Spain.

      At any rate, Cyprus can't be that much in debt. It's holding multi-billions in ill-gotten gains for two of the biggest criminal organizations on the continent. Dirty laundry, so to speak, which should be well more subject to seizure than the savings of the average Cypriot family. The fact that the ECB is aiming at the average family's savings and not at the mobs highlights the trial balloon nature of this move. I guess we'll see how it all works out when the decisions are made.

      Meanwhile, I'd be moving my money (if I had any) outside the EU/ECB system entirely, right now. I expect there are lots of people all over the EU who are doing that very thing.

      •  Do you know about Luxembourg (1+ / 0-)
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        Joieau

        and Austria? How are they different? Both those countries recently killed an EU law for bank transparency. These are regular practices all over Europe.

        Look at the Luxembourg banking sizes compared to the size of the country.

        Cyprus is a surplus nation in Europe--it sends more money to the EU than it takes. It is not in great debt. It's problem is that the banks were forced to take 50% haircuts on heavy loans to the banks in the European periphery, and Cyprus, to prevent collapse of these banks, guaranteed their assets. Ie. same story as Spain and Ireland. Countries with low debt and low debt to GDP that were done in by their banks.

        There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

        by upstate NY on Mon Mar 18, 2013 at 06:52:25 AM PDT

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        •  So... because Cyprus banks (1+ / 0-)
          Recommended by:
          upstate NY

          are doing so well with all that dirty mob money and the life savings of expats and Cypriots, they're being dinged to cover bailouts to other countries in worse shape?

          And if so, when can we expect German citizens to have 7-10% of their bank accounts confiscated to cover those bailouts? How about the rest of relatively 'rich' northern Europe?

          •  I might have misstated something. (0+ / 0-)

            The bailout is about the gov'ts guarantees to the banks, which sunk gov't finances. In other words, this is like Ireland. Cyprus USED TO BE a surplus country. Until the banking crisis.

            Spain and Ireland are similar in that they too had low dent to GDP. Spain even had a surplus as well.

            The bailout covers Cyprus's own bailout of its banks.

            The irony here is that the Cypriot banks have no senior paper. They simply aren't leveraged that way. They have 100% deposits for all loans that are out, and they don't sell much in bonds. They are clearly simply taking a small % of the outsized deposits, half of them from Russians.

            All I'm pointing out is that these banks are like the banks in Luxemborg. In that country, which is at the heart of the EU in more ways than one, people make an incredibly high average wage largely because the banks serve as recycling mechanisms for money looking to find a secret home.

            But the incentive here will also be to have wealthy people looking to deposit funds in core banks.

            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

            by upstate NY on Tue Mar 19, 2013 at 07:18:44 AM PDT

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