Sorry this will be a quick and dirty post with little or no effort at
editing for grammerz etc. So back off spelling Nazi.
(Possibly) there is an agreement in the works for Cyprus that eliminates the need for a Parliamentary vote because it's "not a tax". At minimum we are looking at winding up one crappy bank and transferring the deposits of under 100K into another crappy bank and those evil Russian guys who are all obviously guilty of something or other and deserve everything that's coming to them by way of some percentage confiscation.
The good people at Goldman are reassuring their clients not to worry as this sort of stuff will only happen in Cyprus. Mr. O’Neill of Goldman: “I am sure it will not set a precedent.”
Ooookay Jim and why is that? Jim didn't say exactly why. But y'know he's tall, white and has an nice accent so he must be right. On the other hand those Russian guys are short, swarthy and talk funny so you just know they are up to no good.
Anyway I am pretty sure the news feeds will be risk on risk off for the next 24 hours. What we do know will happen is someone is going to get shafted and it's probably the Russian guys.
What we do know is there was a stress test on these banks this year and they passed despite paying their depositors 5% interest.
Pop quiz: What other small European country with a banking system bloated to many levels beyond it's GDP was handing out 5% interest? And what happened to said country?
The only difference between the other country in question and Cyprus was these bankers were running the obvious Ponzi didn't back their countries politicians by buying govt bonds.
Cyprus is one big awful self contained circle of deceit and that is why no one in the Union has any sympathy for them. The Govt was borrowing money from a Ponzi scheme in order to sustain itself. The Ponzi was being fed by greed from abroad who relied on assurances from auditors that all was well.
As Martin Armstrong likes to point out when the EU was being formed the debt was never shared as it was in the USA formation. But the original members had strong economies and stable currencies so it wasn't that big a deal initially. Once the EU was formed pressure was felt by non members to join so that they could access the markets without borders and also access the loans, grants etc for infrastructure to bring them up to speed. In order for the peripheral countries to join they had to lie about their finances which was OK until the credit dried up and in 2008 and now all those lies are catching up with them.
So back to the pop quiz. If anyone guessed Beerstein you were wrong. It was Iceland. Iceland's politicians said "Nein". (They said it in German because no one understands a word they are saying in whatever weird language they speak). Unless Europe is willing to fund Cyprus once they have taken the Russians money and the inevitable run on their banks occurs then Cyprus will have no option but to abandon the Euro and go grovelling to Russia again (who already gave them €2.5 billion loan at an annual interest rate of just 4.5 percent) As the old saying goes if you owe me a 100 Dollars you have a problem but if you owe me 2.5 billion Euros I have the problem.
Pop Quiz:
1. What does Cyprus do for a living?
2. Who are their nearest neighbors and do they get along?
3. How many people know how to shoot in Greece and Cyprus
4. How far have property prices fallen in Greece since 2008?
5. What Greek Island still has a decent tourist industry and high property prices
6. What will the Greeks, Spanish, Italians etc with more than grocery money in their accounts be thinking right now?
Answers:
1. They sell T-Shirts and operate Ponzi schemes
2. The Turks invaded with the sanction of the CIA and control half the island
3. All of them. There is a draft in Greece.
4. 35 to 50 percent with a 95% drop in the number of properties sold.
5. Mykynos. I'll let you come to your own conclusions why.
6. Equity if they have real money or stability for those with just money.
(Possibly) there is an agreement in the works for Cyprus that eliminates the need for a Parliamentary vote because it's "not a tax". At minimum we are looking at winding up one crappy bank and transferring the deposits of under 100K into another crappy bank and those evil Russian guys who are all obviously guilty of something or other and deserve everything that's coming to them by way of some percentage confiscation.
The good people at Goldman are reassuring their clients not to worry as this sort of stuff will only happen in Cyprus. Mr. O’Neill of Goldman: “I am sure it will not set a precedent.”
Ooookay Jim and why is that? Jim didn't say exactly why. But y'know he's tall, white and has an nice accent so he must be right. On the other hand those Russian guys are short, swarthy and talk funny so you just know they are up to no good.
Anyway I am pretty sure the news feeds will be risk on risk off for the next 24 hours. What we do know will happen is someone is going to get shafted and it's probably the Russian guys.
What we do know is there was a stress test on these banks this year and they passed despite paying their depositors 5% interest.
Pop quiz: What other small European country with a banking system bloated to many levels beyond it's GDP was handing out 5% interest? And what happened to said country?
The only difference between the other country in question and Cyprus was these bankers were running the obvious Ponzi didn't back their countries politicians by buying govt bonds.
Cyprus is one big awful self contained circle of deceit and that is why no one in the Union has any sympathy for them. The Govt was borrowing money from a Ponzi scheme in order to sustain itself. The Ponzi was being fed by greed from abroad who relied on assurances from auditors that all was well.
As Martin Armstrong likes to point out when the EU was being formed the debt was never shared as it was in the USA formation. But the original members had strong economies and stable currencies so it wasn't that big a deal initially. Once the EU was formed pressure was felt by non members to join so that they could access the markets without borders and also access the loans, grants etc for infrastructure to bring them up to speed. In order for the peripheral countries to join they had to lie about their finances which was OK until the credit dried up and in 2008 and now all those lies are catching up with them.
So back to the pop quiz. If anyone guessed Beerstein you were wrong. It was Iceland. Iceland's politicians said "Nein". (They said it in German because no one understands a word they are saying in whatever weird language they speak). Unless Europe is willing to fund Cyprus once they have taken the Russians money and the inevitable run on their banks occurs then Cyprus will have no option but to abandon the Euro and go grovelling to Russia again (who already gave them €2.5 billion loan at an annual interest rate of just 4.5 percent) As the old saying goes if you owe me a 100 Dollars you have a problem but if you owe me 2.5 billion Euros I have the problem.
Pop Quiz:
1. What does Cyprus do for a living?
2. Who are their nearest neighbors and do they get along?
3. How many people know how to shoot in Greece and Cyprus
4. How far have property prices fallen in Greece since 2008?
5. What Greek Island still has a decent tourist industry and high property prices
6. What will the Greeks, Spanish, Italians etc with more than grocery money in their accounts be thinking right now?
Answers:
1. They sell T-Shirts and operate Ponzi schemes
2. The Turks invaded with the sanction of the CIA and control half the island
3. All of them. There is a draft in Greece.
4. 35 to 50 percent with a 95% drop in the number of properties sold.
5. Mykynos. I'll let you come to your own conclusions why.
6. Equity if they have real money or stability for those with just money.
1 comment:
The Bankers Poem:-
The Banks they call it a "holiday".
They steal your money and run away
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