Cyprus bail out deal

carpejugulum

It will be interesting to see what they are going to do to curb the inevitable bank runs.
Limits to withdrawals and transfers is only going to be the start of it.

Amberman

hmmm wrote: »

Ah yeah, there's the sign of a stable currency. Please, convert my Euros into your libertarian fantasy chocolate money.

What on earth would you want to convert a Euro, which can be

• expropriated at will
• printed into oblivionshould it prove necessary, despite what the laws say
• subject to capital controls
• subject to broke and incresaingly desperate government oversight
• is a fiat currency

into something which...

• is completely annoymous if desired
• Is not subjected to capital controls
• cannot be expropriated by politicians
• Whose supply grows at a predefined rate
• Exists on a distributed peer to peer network
• Is completely outside government control, inflation and intervention
• Is growing in value v's traditional currencies at an incredible rate

Why indeed. :rolleyes:

darkhorse

hmmm wrote: »

so that Russian mobsters can continue to get 5% interest by laundering their money through Cypriot banks?

And you have proof of this?

Scofflaw

Enough with the Bitcoin promotion, thanks.

moderately,
Scofflaw

Scofflaw

darkhorse wrote: »

And you have proof of this?

It's not easily provable, for obvious reasons (that is, if it was easily provable, it wouldn't be laundering), but it is commonly accepted as being the case by nearly all financial media.

On the other hand, as long as the levy is hitting both the just and the unjust alike, it's not a justification, because what's happening is not a seizure of suspected criminal assets, but a levy on depositors to bail out the banks they have their deposits in.

cordially,
Scofflaw

Rightwing

darkhorse wrote: »

And you have proof of this?

Well it's widely accepted to be the case. 50% of deposits in Cyprus are Russian, what % of that is money laundering etc I'm not sure anyone knows.

The dilemna the Cypriot government face is, if the Russians do withdraw their money, the banks will go under.

It now looks like the Cypriots are trying to sell their gas and other assets to the Russian government. What a mess.

Chucky the tree

moon_man wrote: »

is that per bank account ?

100 k is not a lot of money to any decent sized business , are they supposed to be happy to loose their money

lol, so it's better for them to lose it all? That's bizarre logic.

Kaiser2000 wrote: »

What do I want?

How about we stop blindly following the diktats of an increasing undemocratic, unaccountable institution that is pushing more and more of the people it supposedly serves into economic servitude so that "business as usual" can be maintained.

The EU project in its current form has come to its end and it's really because despite linking all their computers and financial institutions together, the average citizen hasn't ever quite bought into the idea - and without that the whole thing was never going to work.

It's time to step back and take stock. Simply put the nations of the EU are still too different and nationalistic to effectively work together - which is why we have tonnes of legislation and red tape, but very little leadership from any of the member states.. and what there is is determined to continue on a path that can only ever lead to failure.

At this point I genuinely believe it's a case of when the whole mess collapses, not if, and just how much damage will have been done before then and what will the aftermath be for those average citizens who will bear it hardest.

You must be a politician with that automatic response to go on long winded rant while avoiding the question.

Sponge Bob

Sponge Bob wrote: »

The Cypriot banks will stay closed UNTIL there is a final settlement. That could take days.

And I was right.

http://www.bloomberg.com/news/2013-03-19/eu-said-to-discuss-cyprus-capital-controls-longer-bank-holiday.html

European policy makers are in Cyprus discussing further capital controls and the extension of a bank holiday through to the end of the week, said a European official familiar with the talks.

In fact Cyprus could run out of cash by the middle of next week as the Cypriot Central bank runs out of €€s. It cannot easily print a raft of notes to keep up with the demand at the ATMs.

But they have enough to keep the ATMs stocked till the weekend.

_Kaiser_

Sponge Bob wrote: »

And I was right.

http://www.bloomberg.com/news/2013-03-19/eu-said-to-discuss-cyprus-capital-controls-longer-bank-holiday.html



In fact Cyprus could run out of cash by the middle of next week as the Cypriot Central bank runs out of €€s. It cannot easily print a raft of notes to keep up with the demand at the ATMs.

But they have enough to keep the ATMs stocked till the weekend.

Surely that has to be illegal though? The people have (presumably lobbied their elected officials and) had their say, and now they're denied access to THEIR OWN money until the EU imposes something else on them to limit its own exposure.

Rightwing

Talk they will go back to the cypriot £ if there is not a resolution found soon.

Sponge Bob

Kaiser2000 wrote: »

Surely that has to be illegal though? The people have (presumably lobbied their elected officials and) had their say, and now they're denied access to THEIR OWN money until the EU imposes something else on them to limit its own exposure.

It is amatter of logistics, I don't think Cyprus has the printing capacity. A rescue of sorts is on the way so don't worry.

http://www.bloomberg.com/news/2013-03-19/u-k-air-force-flies-1-million-euros-to-troops-in-cyprus.html

The U.K.’s Royal Air Force is flying 1 million euros ($1.3 million) to Cyprus for military personnel stationed on the island to ensure they don’t run out of cash.

Irish Notes, probably. Certainly not printed in England.

The Cypriots cannot go back to the Cypriots £ , it would tank faster than any levy would cost. Well over 30% I should think.

KyussBishop

They may go back to a local currency, but I don't think they would tie it to GBP like they did before; they would undoubtedly take a big hit through redenomination and the subsequent devaluation, but would it be a bigger hit than they would take, being crushed under the weight of the EU's current botched plan?

Very painful in the short term, but they may end up better off long-term, unless their bargaining power improves (and there is speculation they have some options there).

nice_guy80

if Cyrpus banking system and currency goes south, watch the price of gold soar

oscarBravo

Kaiser2000 wrote: »

Surely that has to be illegal though?

Illegal for a business to keep its doors closed in the knowledge that to open for business would result in bankruptcy?

ArmaniJeanss

Kaiser2000 wrote: »

Surely that has to be illegal though? The people have (presumably lobbied their elected officials and) had their say, and now they're denied access to THEIR OWN money until the EU imposes something else on them to limit its own exposure.

The key thing which some people don't seem to realise is that the money is not there, its gone, disappeared, kaput. Its not in a vault or stored in bank safes to which the people are being denied access - the bank safes are empty, the vaults are gathering nice layers of dust.

The people attempting to come up with a solution are being vilified for their initial attempt to ensure that ~90%/95% of the money reappears in the banks books.

_Kaiser_

oscarBravo wrote: »

Illegal for a business to keep its doors closed in the knowledge that to open for business would result in bankruptcy?

But your argument then is that Joe and Mary Cypriot should just "do without" in the interim because of their bank's bad business decisions.

Regardless of the impact to the business, it's not their (the bank's) money to hold against the will of their customers, and if those customers would rather stuff it all under their beds that's their choice.

As we've seen here, the banks don't give a damn when the shoe is on the other foot, so why should Joe Cypriot Public do them any favours here?

zom

Sponge Bob wrote: »

The Cypriots cannot go back to the Cypriots £ , it would tank faster than any levy would cost. Well over 30% I should think.

I don't think so - they will recover faster than Iceland did (if we can say they already did). Cyprus has a quite investment scope and economy backgrounds (tourism).

oscarBravo

Kaiser2000 wrote: »

But your argument then is that Joe and Mary Cypriot should just "do without" in the interim because of their bank's bad business decisions.

No: my argument is that the consequences of the banks opening for business would quite likely leave Joe and Mary Cypriot begging to be able to turn back time and pay 6% of their savings to avert the disaster.

Regardless of the impact to the business, it's not their (the bank's) money to hold against the will of their customers, and if those customers would rather stuff it all under their beds that's their choice.

As has already been pointed out, the money doesn't exist. The banks aren't holding onto money; they're staying closed to prevent people trying to take their non-existent money and crashing the entire Cypriot economy.

Doesn't anyone watch "It's a Wonderful Life" anymore?

Rightwing

Germany's finance minister has warned that it is unclear whether the banks in Cyprus will ever be able to open again.




Banks in Cyprus have been shut since Saturday to avoid a run while the tiny Mediterranean country tries to negotiate a rescue for its economy.
Wolfgang Schaeuble said two of Cyprus's big banks are being propped up solely by emergency liquidity from the European Central Bank that is contingent on all sides agreeing on a rescue package.
"Someone needs to explain this to the Cypriots," Mr Schaeuble told German public television ZDF.
Politicians in Cyprus have voted to reject a bailout deal that would have seized up to 10% of bank deposits to prevent a collapse of the country's banks.

Amberman

Actually Keiser, as mental as this sounds, it IS the banks money.

In our current financial system, all deposit money held by a bank is owned by the bank. Depositors simply have a claim on it as a creditor.

The bank records the deposit amount as a liability on their books. The actual cash is an asset.

http://en.wikipedia.org/wiki/Deposit_account

"The banking terms "deposit" and "withdrawal" tend to obscure the economic substance and legal essence of transactions in a deposit account. From a legal and financial accounting standpoint, the term "deposit" is used by the banking industry in financial statements to describe the liability owed by the bank to its depositor, and not the funds that the bank holds as a result of the deposit, which are shown as assets of the bank."

When you make a deposit in a bank, you give ownership of the funds to that bank.

_Kaiser_

Rightwing wrote: »

Germany's finance minister has warned that it is unclear whether the banks in Cyprus will ever be able to open again.




Banks in Cyprus have been shut since Saturday to avoid a run while the tiny Mediterranean country tries to negotiate a rescue for its economy.
Wolfgang Schaeuble said two of Cyprus's big banks are being propped up solely by emergency liquidity from the European Central Bank that is contingent on all sides agreeing on a rescue package.
"Someone needs to explain this to the Cypriots," Mr Schaeuble told German public television ZDF.
Politicians in Cyprus have voted to reject a bailout deal that would have seized up to 10% of bank deposits to prevent a collapse of the country's banks.

There's a real war being fought again in Europe in the last few years, but this time it's not with tanks and planes and guns - it's with 1's and 0's in computers.

Better for the environment I suppose, but I think we'll all be worse off when the electronic dust settles.

Sponge Bob

zom wrote: »

I don't think so - they will recover faster than Iceland did (if we can say they already did). Cyprus has a quite investment scope and economy backgrounds (tourism).

Meh. They may have lots of gas, they ,may NOT have lots of gas. They need ca$h€€€h NOW and have offered to ringfence some gas revenue against the haircuts in future.

They really needed to find that gas 5 years ago with revenue in prospect by now.....sure Ireland has LOOOOOOAAAADS of oil and it didn't save us did it????

Happyman42

Wolfgang Schaeuble said two of Cyprus's big banks are being propped up solely by emergency liquidity from the European Central Bank that is contingent on all sides agreeing on a rescue package.
"Someone needs to explain this to the Cypriots," Mr Schaeuble told German public television ZDF.
Politicians in Cyprus have voted to reject a bailout deal that would have seized up to 10% of bank deposits to prevent a collapse of the country's banks.

How do you seize money that is not there? (as claimed here)

Scofflaw

KyussBishop wrote: »

They may go back to a local currency, but I don't think they would tie it to GBP like they did before; they would undoubtedly take a big hit through redenomination and the subsequent devaluation, but would it be a bigger hit than they would take, being crushed under the weight of the EU's current botched plan?

Very painful in the short term, but they may end up better off long-term, unless their bargaining power improves (and there is speculation they have some options there).

No, I think we can pretty much categorically state that if Cyprus returned to the Cypriot £, the devaluation it would suffer would be more than the (currently debated) % of the levy, even for those subject to the highest rates of the levy.

It's not a high bar, after all - you're only talking about a devaluation of 5-10% to make a larger impact than the levy, and that's pretty much the smallest conceivable devaluation. Nor is it at all likely that the foreign depositors would prefer a forced conversion to CYP£ and the attendant devaluation over the levy - which may of course be the point, but probably isn't.

cordially,
Scofflaw

Amberman

Happyman42 wrote: »

How do you seize money that is not there? (as claimed here)

They don't actually "seize the money", its a book keeping exercise that reduces the banks liabilities by x% (mitigating the need for a bigger bank bailout)...putting them on a path to "sustainability" . Thats the theory.

Good luck when the banks open and the bank runs start and their asset base shrinks by God knows how much...putting the banks in an even worse position.

Talk about an own goal!

zom

Happyman42 wrote: »

"Someone needs to explain this to the Cypriots,"

Too late dear Bankers! The precedence already happened (Iceland) and we all KNOW it can work...

ArmaniJeanss

Happyman42 wrote: »

How do you seize money that is not there? (as claimed here)

An analogy would be if you need €200 to feed your family this week.
I am the only one willing to lend you money but decide that all you will be able to repay is €180.
I leave it up to you if you accept the deal to decide whether the eldest kid takes a bigger food hit or whether its proportional across your family, or maybe you decide to let the toddlers keep full food allowance whilst everyone else takes a bigger hit.

In this case it could be said that I am seizing €20 of your food. Though you don't actually have any food at the moment.

Sponge Bob

Look, the Cypriots have only tied up around as much €€€s as are washed through GERMANY every year.

http://www.dw.de/germany-a-safe-haven-for-money-laundering/a-16343313

Annually, about 50 to 60 billion euros ($65 billion to $78 billion) that stem from illegal activities such as blackmailing, drug or arms trading are whitewashed through legal businesses, estimates the trade union representing German police investigators.

and

They say they are able to manage criminal prosecution in the banking sector, but state surveillance and control should be extended into other parts of the industry. But so far this idea hasn't received the necessary political backing, said criminalist Sebastian Fiedler.

So Frau Merkel won't prosecute these launderers...who might they be????

According to experts of the Organization for Economic Cooperation and Development (OECD) and the European Commission in Brussels, it's more than necessary to step up the game. Both institutions have repeatedly accused Germany of not doing enough to counter money laundering......According to a study published by the Tax Justice Network that examined 70 countries, Germany is one of the biggest havens for tax evasion - ranking even before Switzerland, the Cayman Islands, Luxembourg or Jersey.

never mind them eejits , whose money is being laundered??

Even the trade of CO2 emission certificates is now being used as a means for money laundering.

Ahh Green Money Laundering, how German . But whose MONEY???

According to the BKA's report, transactions from Italy, Russia, Ukraine and Belarus caught the investigators' attention.

Just like Cyprus so.

zom

ArmaniJeanss wrote: »

An analogy would be if you need €200 to feed your family this week.
I am the only one willing to lend you money

The point is - you're not the only one. And in fact you're the one who hanged out with bandit who invaded my house 40 years ago. How could I trust you?

ArmaniJeanss

zom wrote: »

The point is - you're not the only one. And in fact you're the one who hanged out with bandit who invaded my house 40 years ago. How could I trust you?

In my fairly limited understanding of the situation, I don't think there are a plethora of lenders queueing up to lend Cyprus money for this recapitalisation. Theres only one deal in town afaik?

mlumley

CptMackey wrote: »

Heaven forbid that the banks should be resposible for their mistakes. But alas this is Europe and in Europe the people pay. Socialism for the rich and capitalism for the poor.

+1

mlumley

Scofflaw wrote: »

way.

That's largely a reflection of the results of the previous left-wing responses to crises like these, which historically have not been good results, because the response of the left to crises tends to involve killing the goose that lays the golden eggs, whereas the right-wing response doesn't.

cordially,
Scofflaw

I am not up on economics, but I thought that taking away the spending power of the "poor" man, kills everything. It's us spenders that keep the economy going, I think?

Scofflaw

mlumley wrote: »

I am not up on economics, but I thought that taking away the spending power of the "poor" man, kills everything. It's us spenders that keep the economy going, I think?

One part of a connected system. Without the banking system and the markets, there would be much less for you to spend your money on, because far fewer enterprises would get funding. And deposits are more on the capital and investment side than the spending side.

cordially,
Scofflaw

JOB93

zom wrote: »

Too late dear Bankers! The precedence already happened (Iceland) and we all KNOW it can work...

Has it worked? Iceland has another parliamentary election this year and it's doubtful that either of the current coalition partners will get back in, even as a junior coalition partner. At the last election, they won 51% of the vote together, at the moment, they are polling at 22% together so clearly Icelandic people are not happy with how things happened in the country. I wouldn't call their story a success without going to talk to local people and asking how much their lives have unimproved since the crisis.

http://www.irishtimes.com/business/economy/europe/iceland-questions-its-model-on-handling-crisis-1.1319615

Even Iceland's central bank governor questions what they did

Amberman

Shocker! Governments how take charge in the depths of a depression are unpopular. Their economic stats look ok though. http://www.bloomberg.com/news/2012-09-26/is-remedy-for-next-crisis-buried-in-iceland-view-correct-.html

KyussBishop

Scofflaw wrote: »

No, I think we can pretty much categorically state that if Cyprus returned to the Cypriot £, the devaluation it would suffer would be more than the (currently debated) % of the levy, even for those subject to the highest rates of the levy.

It's not a high bar, after all - you're only talking about a devaluation of 5-10% to make a larger impact than the levy, and that's pretty much the smallest conceivable devaluation. Nor is it at all likely that the foreign depositors would prefer a forced conversion to CYP£ and the attendant devaluation over the levy - which may of course be the point, but probably isn't.

cordially,
Scofflaw

Well, undoubtedly it would be worse than the immediate effects of this levy, but I'm more thinking about what's going to happen after that, as Cyprus will (at the least) be entering a very long and slow protracted grind, as their economy deleverages their debt load, and probably a bank-run of some extent (no matter what they do) causes further damage, and (maybe, not sure) puts their banking system right back in serious trouble almost immediately.

The long-run effects of the current course of action, 'might' be worse than a straight exit (but there's not really a good way to tell, since it's still so up in the air), even if the short-term effects of an exit would be very severe.

JOB93

Who cares about economic stats, what's important is whether people are happier in their new post financial apocalypse, or whether they would have been better off if the banks had been saved (Granted this was never going to happen with Iceland, they were just too small). Too much emphasis is placed by governments on statistics rather than people's welfare. What does 7.8% GDP growth mean for the average Chinese worker?

You can have 99% employment but if your wages buy you a lot less than when you had 90% employment, is that better?

http://www.guardian.co.uk/world/2012/nov/23/iceland-recovers-voice-financial-crisis

Inflation, which reached almost 20% during the crisis, is still running at 4.2%. Households are still heavily indebted (a recent article stated the collective equity of homeowners aged 31-45 has fallen from 100bn ISK down to -8bn), the krona is worth between 40% and 75% of its pre-2008 value.

Amberman

JOB93 wrote: »

What does 7.8% GDP growth mean for the average Chinese worker?

I don't know, rapidly accelerating wages, increased disposable income and a real shot at the middle class maybe?

https://americancenturyblog.com/wp-content/uploads/IN-FLY-74589v3_chart.gif

JOB93

Does it? Statistics don't lie but they can deceive. Just because the average wage is increasing doesn't mean most people are better off. There could be growing income inequality. At 7.8%, their wages should double in just under 9 years (rule of 70). Do you really think factory workers and graduates like those below are going to be able to buy twice as much stuff as they can now in 9 years?

http://thediplomat.com/whats-next-china/china%E2%80%99s-highly-unequal-economy/

A growing middle class is also absent among recent college graduates. According to the Ministry of Education, only 68 percent of college graduates in 2010 were able to find permanent employment. Even among those who found employment, wages were often no better or sometimes even worse than those for migrant workers in factories. Unlike the rest of the world, however, China enjoyed a spectacular 10 percent growth rate. This impressive growth, however, didn’t translate to high paying jobs for college graduates. In major cities, many college graduates live as an ‘ant tribe,’ packed tightly in small dormitory rooms with four or more roommates.

Amberman

JOB93 wrote: »

Does it? Statistics don't lie but they can deceive. Just because the average wage is increasing doesn't mean most people are better off. There could be growing income inequality. At 7.8%, their wages should double in just under 9 years (rule of 70). Do you really think factory workers and graduates like those below are going to be able to buy twice as much stuff as they can now in 9 years?

http://thediplomat.com/whats-next-china/china%E2%80%99s-highly-unequal-economy/

If the past trends persist, then yes, I do. The average income has gone from 9000 yuan in 2004 to 26,000 yuan in 2012...almost treble.

Wages can grow strongly while income inequality also grows strongly. Its not one or the other.

bbsrs

KyussBishop wrote: »

They may go back to a local currency, but I don't think they would tie it to GBP like they did before; they would undoubtedly take a big hit through redenomination and the subsequent devaluation, but would it be a bigger hit than they would take, being crushed under the weight of the EU's current botched plan?

Very painful in the short term, but they may end up better off long-term, unless their bargaining power improves (and there is speculation they have some options there).

Would a country whose main industry is tourism be better off with a weaker currency than that of visiting tourists. Why did they even want to join the euro in the first place?

pipie

Amberman wrote: »

They don't actually "seize the money", its a book keeping exercise that reduces the banks liabilities by x% (mitigating the need for a bigger bank bailout)...putting them on a path to "sustainability" . Thats the theory.

Good luck when the banks open and the bank runs start and their asset base shrinks by God knows how much...putting the banks in an even worse position.

Talk about an own goal!

Apparently legislation is being drafted to "curb the outflow" of cash from the banks when they do open..

Amberman

Hardly surprising that they'd have to legislate to impose capital controls...are they going to do it in all of Europe? They probably should. Who in their right mind would keep money in one of the PIIGS countries now? Anyone with a substantial savings account in Ireland should think long and hard about what they are doing.

Scofflaw

Amberman wrote: »

Hardly surprising that they'd have to legislate to impose capital controls...are they going to do it in all of Europe? They probably should. Who in their right mind would keep money in one of the PIIGS countries now? Anyone with a substantial savings account in Ireland should think long and hard about what they are doing.

Because we're suddenly about to need a second bailout?

amused,
Scofflaw

Amberman

Scofflaw wrote: »

Because we're suddenly about to need a second bailout?

amused,
Scofflaw

I suppose it depends on your risk profile. Me, I prefer to be cautious.

Edit to say: Its a prisoners dliemma type situation. The moves made by the Eurocrats have created a lot of uncertainty. Ireland certainly isn't out of the woods, especially if people in Ireland start to withdraw their money to protect themselves against arbitrary Troika confiscation (and I think many will). I've been answering PM's today about "the electronic currency that cannot be mentioned".

In that situation, banks runs start slowly, then gather speed, further impairing the banks...and he who defects first wins.

Now, is that situation really so far fetched in Ireland, Spain, Italy, Greece, Portugal...and even France...considering the Pandoras box the idiots in Brussels have opened? I don't think so.

Scofflaw

EU Commission statement:

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.

For the Commission, that's almost impolite about Cyprus.

cordially,
Scofflaw

Scofflaw

Amberman wrote: »

I suppose it depends on your risk profile. Me, I prefer to be cautious.

There's a wide borderland between caution and paranoia. Speaking of which, where is the supposed market panic this should be generating? Is everybody all panicked out, or was this already factored in?

cordially,
Scofflaw

Amberman

Theres a world of difference between panic and sensible forward planning. Its at times like these that you need a cool head, to measure the risks and rewards.

I for one can't see a single reason to risk it when it's so painless, fast and easy to swerve the risk totally.

Maybe you can give me a reason to leave cash in periphery banks??

Scofflaw

Amberman wrote: »

Theres a world of difference between panic and sensible forward planning. Its at times like these that you need a cool head, to measure the risks and rewards.

I for one can't see a single reason to risk it when it's so painless, fast and easy to swerve the risk totally.

Maybe you can give me a reason to leave cash in periphery banks??

Had I wanted to be a financial advisor, that's presumably what I would have done with my life. As it is, I didn't.

Politically, on the other hand, I can't see this being wanted as a precedent, and from my own perspective, it seems to me the likely safest place for your money is in your own domestic banks, because one feature of the more dramatic bank actions in this crisis has been that when the chips are down, national governments have looked after their own citizens' money first, while foreign investors have had to get in line. Plus it's a lot easier to chase your money through the courts in your own jurisdiction.

And if you're shopping around for a place for your money, don't think for an instant that someone won't characterise you as a foreign speculator, to make themselves feel better about whatever they're about to do to you.

cordially,
Scofflaw

Amberman

Scofflaw wrote: »

There's a wide borderland between caution and paranoia. Speaking of which, where is the supposed market panic this should be generating? Is everybody all panicked out, or was this already factored in?

cordially,
Scofflaw

I actually think this is broadly positive in the medium term for the markets generally, but especially sovereign bonds...ignoring the knee jerk reaction. A massive pool of good collateral has just been made available to keep this thing going...good European collateral had become as rare as hens teeth.