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Early Warning of Irish Depositor Confiscation And Restricted Access
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10-04-2013 12:08pm#1It seems, if this article is correct, that there was a clear warning signal about impending depositor confiscation and restricted access to deposits in Cyprus which effectively devalued Cypriot Euros under 100k by placing capital controls on them.
http://www.oftwominds.com/blogapr13/Cyprus-template4-13.html
It seems that perhaps the well connected core banks pulled most of their money from Cyprus IN ADVANCE of the Cyprus banking lockdown.
Does anyone know how to access this information about Irelands depositor profile over time?0
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Christ.0
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It seems, if this article is correct, that there was a clear warning signal about impending depositor confiscation and restricted access to deposits in Cyprus which effectively devalued Cypriot Euros under 100k by placing capital controls on them.
http://www.oftwominds.com/blogapr13/Cyprus-template4-13.html
It seems that perhaps the well connected core banks pulled most of their money from Cyprus IN ADVANCE of the Cyprus banking lockdown.
Does anyone know how to access this information about Irelands depositor profile over time?
Central banks and BIS will provide the necessary data. Unfortunately, the article is based on adding 2 and Wombat to make BS.
The basic claim of the analysis is that eurozone bank money went massively into Cyprus for the high deposit rates - that is, the rates available in long-term retail deposits, which is not what inter-bank money does, because banks need their cash piles at very short notice. The standard period for interbank lending is overnight - and it's overnight because the bank is closed overnight. The difference between German bank overnight deposits and Cypriot overnight deposits is between 0.55% and 1.1%, the latter reflecting the risk attendant on leaving your money in a Cypriot bank overnight, and hardly tempting for eurozone banks with many times the value of Cypriot bank capital to overnight. Strike one for a very ridiculous claim straight off.
The authors here have not shown either that eurozone money or German money was present in large quantities, nor that it fled preemptively on secret forewarning of the depositor bail-in. Fair enough with the second, since that's what they're trying to show by presenting a mash of unrelated datasets, but not fair enough on the first.
We can get eurozone money figures in the Cypriot banks from the same kind of place we can get them for Ireland - the (Cypriot) Central Bank. Here's their March consolidate banking stats: http://www.centralbank.gov.cy/media/xls/2ndMonetaryFinancialStatMarch2013eng.xls
And here's their deposit profile for the last couple of years:
Year|Month|Domestic residents|Other euro area residents|Residents of rest of the world|Total
2010|Dec.|45,379.3|4,035.3|20,525.2|69,939.7
2011|Jan.|44,915.0|4,150.2|20,588.2|69,653.4
|Feb.|44,285.5|4,209.5|20,596.4|69,091.4
|Mar.|43,719.4|4,485.8|20,488.3|68,693.4
|Apr.|44,446.1|4,732.9|21,606.2|70,785.2
|May|45,877.7|5,104.2|21,861.5|72,843.3
|June|44,254.5|5,429.9|21,390.6|71,075.1
|July|44,539.6|5,463.5|21,401.4|71,404.5
|Aug.|43,724.8|5,247.2|20,856.0|69,828.0
|Sep.|43,728.4|5,295.0|20,778.4|69,801.8
|Oct.|43,968.1|5,281.5|20,420.5|69,670.1
|Nov.|43,130.0|5,418.9|20,509.2|69,058.1
2011|Dec.|43,747.9|5,355.4|20,194.2|69,297.6
2012|Jan.|43,674.9|5,518.6|20,448.4|69,641.9
2012|Feb.|43,386.6|5,773.5|20,439.3|69,599.4
|Mar.|43,457.7|5,858.1|21,397.7|70,713.5
|Apr.|43,582.0|6,139.7|21,880.1|71,601.8
|May|44,259.9|6,425.6|21,776.2|72,461.8
|June|43,560.8|6,605.9|20,605.9|70,772.7
|July|43,463.9|6,451.8|20,650.8|70,566.5
|Aug.|43,410.6|6,274.0|20,981.2|70,665.9
|Sep.|43,316.0|6,173.4|21,204.6|70,694.0
|Oct.|43,482.6|5,988.8|20,836.0|70,307.5
|Nov.|43,156.8|5,819.9|20,964.9|69,941.6
|Dec.|43,316.8|5,322.6|21,518.0|70,157.4
2013|Jan.|42,789.6|4,748.3|20,882.9|68,420.8
|Feb.|42,603.8|3,887.6|20,976.6|67,468.0
So, no, eurozone money is not large, and no, it doesn't all leave before the bail-in. There's a peak in July 2011, which could well be Greeks moving their money into Cyprus around the time of their bailout, and the value has fallen to 60% of that, but is still 96% of what it was at the end of 2010. And the high point is only €6.6bn, which is 9.3% of all deposits in the Cypriot banks. There is no wall of money.
Where, then, do our 'analysts' get their large figures from, and why do I say they're mashing together incompatible datasets? Because they're using the data on MFI deposits in the Cypriot banks - that's their second figure - without any reference to whether those deposits are eurozone or not. You can't do that, because it doesn't prove anything about eurozone banks.
And heck, there's even data available straight from the same source that shows a breakdown of the deposits from other eurozone sources:
Year|Month|General Govt|Other financial intermediaries|Insurance corporations and pension funds|Non-financial corporations|Households|Other|Total
2010|Dec.|4.8|119.3|89.8|947.5|2,873.9|4,030.5|4,035.3
2011|Jan.|4.1|105.0|89.3|910.2|3,041.6|4,146.1|4,150.2
|Feb.|2.8|107.9|85.2|887.7|3,126.0|4,206.7|4,209.5
|Mar.|2.2|225.4|83.6|842.6|3,331.9|4,483.5|4,485.8
|Apr.|2.0|202.9|106.3|886.2|3,535.5|4,730.9|4,732.9
|May|3.1|199.4|106.9|872.8|3,921.9|5,101.1|5,104.2
|June|2.4|218.6|108.5|852.8|4,247.5|5,427.4|5,429.9
|July|5.1|229.6|110.3|790.3|4,328.2|5,458.4|5,463.5
|Aug.|5.4|272.7|100.1|752.9|4,116.2|5,241.8|5,247.2
|Sep.|4.7|341.9|109.9|762.1|4,076.5|5,290.3|5,295.0
|Oct.|4.3|287.8|112.1|735.4|4,142.0|5,277.3|5,281.5
|Nov.|5.0|311.8|122.1|745.7|4,234.4|5,413.9|5,418.9
2011|Dec.|3.5|285.0|126.9|754.5|4,185.5|5,351.9|5,355.4
2012|Jan.|5.9|302.6|128.0|759.5|4,322.5|5,512.7|5,518.6
2012|Feb.|5.5|260.9|129.0|782.1|4,595.9|5,767.9|5,773.5
|Mar.|3.7|277.4|131.5|763.1|4,682.4|5,854.4|5,858.1
|Apr.|4.1|521.5|132.1|792.5|4,689.5|6,135.6|6,139.7
|May|3.8|306.6|82.0|840.4|5,192.9|6,421.8|6,425.6
|June|3.9|298.5|80.6|814.3|5,408.7|6,602.1|6,605.9
|July|3.1|308.9|81.4|885.9|5,172.3|6,448.7|6,451.8
|Aug.|2.4|286.8|81.5|861.6|5,041.7|6,271.6|6,274.0
|Sep.|2.2|329.4|82.0|824.5|4,935.2|6,171.1|6,173.4
|Oct.|1.9|272.4|81.0|799.4|4,834.1|5,986.9|5,988.8
|Nov.|1.6|267.6|76.1|774.7|4,699.9|5,818.3|5,819.9
|Dec.|3.5|193.5|71.9|736.1|4,317.5|5,319.0|5,322.6
2013|Jan.|2.4|194.7|71.4|671.0|3,808.9|4,746.0|4,748.3
|Feb.|1.0|181.1|71.6|621.9|3,012.0|3,886.6|3,887.6
So, how much eurozone bank money? Oh, easily €500 million at peak. Million, not billion. In banking terms, feck-all. And yeah, they start winding even that down when it's clear Cypriot banks are in trouble, a year ago.
The article, not to put too fine a point on it, is concocted from irrelevant datasets and presented in a terribly cloak and dagger way to make it seem that the authors are showing you something "they" would rather you didn't know. In fact, I doubt "they" care, because it's utter drivel.
And yes, I suspect the Reggie Middleton stuff on Russia Today is likewise drivel. At some point, you;re really going to have to stop buying complete cr@p simply because it's presented as an "alternative" "analysis". It's an alternative all right - an alternative to reality.
cordially,
Scofflaw0 -
Central banks and BIS will provide the necessary data. Unfortunately, the article is based on adding 2 and Wombat to make BS.
The basic claim of the analysis is that eurozone bank money went massively into Cyprus for the high deposit rates - that is, the rates available in long-term retail deposits, which is not what inter-bank money does, because banks need their cash piles at very short notice. The standard period for interbank lending is overnight - and it's overnight because the bank is closed overnight. The difference between German bank overnight deposits and Cypriot overnight deposits is between 0.55% and 1.1%, the latter reflecting the risk attendant on leaving your money in a Cypriot bank overnight, and hardly tempting for eurozone banks with many times the value of Cypriot bank capital to overnight. Strike one for a very ridiculous claim straight off.
The authors here have not shown either that eurozone money or German money was present in large quantities, nor that it fled preemptively on secret forewarning of the depositor bail-in. Fair enough with the second, since that's what they're trying to show by presenting a mash of unrelated datasets, but not fair enough on the first.
We can get eurozone money figures in the Cypriot banks from the same kind of place we can get them for Ireland - the (Cypriot) Central Bank. Here's their March consolidate banking stats: http://www.centralbank.gov.cy/media/xls/2ndMonetaryFinancialStatMarch2013eng.xls
And here's their deposit profile for the last couple of years:
Year|Month|Domestic residents|Other euro area residents|Residents of rest of the world|Total
2010|Dec.|45,379.3|4,035.3|20,525.2|69,939.7
2011|Jan.|44,915.0|4,150.2|20,588.2|69,653.4
|Feb.|44,285.5|4,209.5|20,596.4|69,091.4
|Mar.|43,719.4|4,485.8|20,488.3|68,693.4
|Apr.|44,446.1|4,732.9|21,606.2|70,785.2
|May|45,877.7|5,104.2|21,861.5|72,843.3
|June|44,254.5|5,429.9|21,390.6|71,075.1
|July|44,539.6|5,463.5|21,401.4|71,404.5
|Aug.|43,724.8|5,247.2|20,856.0|69,828.0
|Sep.|43,728.4|5,295.0|20,778.4|69,801.8
|Oct.|43,968.1|5,281.5|20,420.5|69,670.1
|Nov.|43,130.0|5,418.9|20,509.2|69,058.1
2011|Dec.|43,747.9|5,355.4|20,194.2|69,297.6
2012|Jan.|43,674.9|5,518.6|20,448.4|69,641.9
2012|Feb.|43,386.6|5,773.5|20,439.3|69,599.4
|Mar.|43,457.7|5,858.1|21,397.7|70,713.5
|Apr.|43,582.0|6,139.7|21,880.1|71,601.8
|May|44,259.9|6,425.6|21,776.2|72,461.8
|June|43,560.8|6,605.9|20,605.9|70,772.7
|July|43,463.9|6,451.8|20,650.8|70,566.5
|Aug.|43,410.6|6,274.0|20,981.2|70,665.9
|Sep.|43,316.0|6,173.4|21,204.6|70,694.0
|Oct.|43,482.6|5,988.8|20,836.0|70,307.5
|Nov.|43,156.8|5,819.9|20,964.9|69,941.6
|Dec.|43,316.8|5,322.6|21,518.0|70,157.4
2013|Jan.|42,789.6|4,748.3|20,882.9|68,420.8
|Feb.|42,603.8|3,887.6|20,976.6|67,468.0
So, no, eurozone money is not large, and no, it doesn't all leave before the bail-in. There's a peak in July 2011, which could well be Greeks moving their money into Cyprus around the time of their bailout, and the value has fallen to 60% of that, but is still 96% of what it was at the end of 2010. And the high point is only €6.6bn, which is 9.3% of all deposits in the Cypriot banks. There is no wall of money.
Where, then, do our 'analysts' get their large figures from, and why do I say they're mashing together incompatible datasets? Because they're using the data on MFI deposits in the Cypriot banks - that's their second figure - without any reference to whether those deposits are eurozone or not. You can't do that, because it doesn't prove anything about eurozone banks.
And heck, there's even data available straight from the same source that shows a breakdown of the deposits from other eurozone sources:
Year|Month|General Govt|Other financial intermediaries|Insurance corporations and pension funds|Non-financial corporations|Households|Other|Total
2010|Dec.|4.8|119.3|89.8|947.5|2,873.9|4,030.5|4,035.3
2011|Jan.|4.1|105.0|89.3|910.2|3,041.6|4,146.1|4,150.2
|Feb.|2.8|107.9|85.2|887.7|3,126.0|4,206.7|4,209.5
|Mar.|2.2|225.4|83.6|842.6|3,331.9|4,483.5|4,485.8
|Apr.|2.0|202.9|106.3|886.2|3,535.5|4,730.9|4,732.9
|May|3.1|199.4|106.9|872.8|3,921.9|5,101.1|5,104.2
|June|2.4|218.6|108.5|852.8|4,247.5|5,427.4|5,429.9
|July|5.1|229.6|110.3|790.3|4,328.2|5,458.4|5,463.5
|Aug.|5.4|272.7|100.1|752.9|4,116.2|5,241.8|5,247.2
|Sep.|4.7|341.9|109.9|762.1|4,076.5|5,290.3|5,295.0
|Oct.|4.3|287.8|112.1|735.4|4,142.0|5,277.3|5,281.5
|Nov.|5.0|311.8|122.1|745.7|4,234.4|5,413.9|5,418.9
2011|Dec.|3.5|285.0|126.9|754.5|4,185.5|5,351.9|5,355.4
2012|Jan.|5.9|302.6|128.0|759.5|4,322.5|5,512.7|5,518.6
2012|Feb.|5.5|260.9|129.0|782.1|4,595.9|5,767.9|5,773.5
|Mar.|3.7|277.4|131.5|763.1|4,682.4|5,854.4|5,858.1
|Apr.|4.1|521.5|132.1|792.5|4,689.5|6,135.6|6,139.7
|May|3.8|306.6|82.0|840.4|5,192.9|6,421.8|6,425.6
|June|3.9|298.5|80.6|814.3|5,408.7|6,602.1|6,605.9
|July|3.1|308.9|81.4|885.9|5,172.3|6,448.7|6,451.8
|Aug.|2.4|286.8|81.5|861.6|5,041.7|6,271.6|6,274.0
|Sep.|2.2|329.4|82.0|824.5|4,935.2|6,171.1|6,173.4
|Oct.|1.9|272.4|81.0|799.4|4,834.1|5,986.9|5,988.8
|Nov.|1.6|267.6|76.1|774.7|4,699.9|5,818.3|5,819.9
|Dec.|3.5|193.5|71.9|736.1|4,317.5|5,319.0|5,322.6
2013|Jan.|2.4|194.7|71.4|671.0|3,808.9|4,746.0|4,748.3
|Feb.|1.0|181.1|71.6|621.9|3,012.0|3,886.6|3,887.6
So, how much eurozone bank money? Oh, easily €500 million at peak. Million, not billion. In banking terms, feck-all. And yeah, they start winding even that down when it's clear Cypriot banks are in trouble, a year ago.
The article, not to put too fine a point on it, is concocted from irrelevant datasets and presented in a terribly cloak and dagger way to ma4ke4 it seem that the authors are showing you something "they" would rather you didn't know. In fact, I doubt "they" care, because it's utter drivel.
And yes, I suspect the Reggie Middleton stuff on Russia Today is likewise drivel. At some point, you;re really going to have to stop buying complete cr@p simply because it's presented as an "alternative" "analysis". It's an alternative all right - an alternative to reality.
cordially,
Scofflaw
Thats all very well but what about AIB in terms of solvency? Teh Indo says it's debt write downs are only 18% of its loan book. Incredible numbers some say. Would you trust them? I wouldn't.0 -
Scofflaw, thanks for taking the time to put that together. I'll address it below, but I'd just like to say this. Reggie Middleton has made some dramatic, correct calls. Two spring to mind...one was his Lehman prediction, the other was the top in Apple stock, which he called correct...to the quarter...almost a year before anyone else saw it while every hedge fund in the world was piling into it.
Maybe you should check his record before dismissing him so casually.0 -
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ooops...edit went wrong...see below.0
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Central banks and BIS will provide the necessary data. Unfortunately, the article is based on adding 2 and Wombat to make BS.
Can you elaborate?The basic claim of the analysis is that eurozone bank money went massively into Cyprus for the high deposit rates - that is, the rates available in long-term retail deposits, which is not what inter-bank money does, because banks need their cash piles at very short notice. The standard period for interbank lending is overnight - and it's overnight because the bank is closed overnight.
Ok, thats just plain wrong. Banks have different durations like anyone else. Not all their money is overnight.The difference between German bank overnight deposits and Cypriot overnight deposits is between 0.55% and 1.1%, the latter reflecting the risk attendant on leaving your money in a Cypriot bank overnight, and hardly tempting for eurozone banks with many times the value of Cypriot bank capital to overnight. Strike one for a very ridiculous claim straight off.
What was the difference between a standard deposit rate in Cyprus and Germany? It wasn't half a percent, I can tell you that.The authors here have not shown either that eurozone money or German money was present in large quantities,
I think you're missing the point. They arent saying that European money exc Cyprus was large...they are saying that it shrank with almost perfect timing. You seem to be saying that the deposit quantity as a percentage of the depositor base must be large to matter to the depositors. It doesn't.nor that it fled preemptively on secret forewarning of the depositor bail-in.
It did flee...and most of it fled before the crisis. Thats a fact.
Now, were they warned? They are definitely guessing at this point, but the timing does seem suspect to me. Doesn't it look suspect to you?Fair enough with the second, since that's what they're trying to show by presenting a mash of unrelated datasets, but not fair enough on the first.
Again, just because the European smart money was a small portion of the depositor base doesn't mean that the smart money doesn't care about their money.We can get eurozone money figures in the Cypriot banks from the same kind of place we can get them for Ireland - the (Cypriot) Central Bank. Here's their March consolidate banking stats: http://www.centralbank.gov.cy/media/xls/2ndMonetaryFinancialStatMarch2013eng.xls
And here's their deposit profile for the last couple of years:
Year|Month|Domestic residents|Other euro area residents|Residents of rest of the world|Total
2010|Dec.|45,379.3|4,035.3|20,525.2|69,939.7
2011|Jan.|44,915.0|4,150.2|20,588.2|69,653.4
|Feb.|44,285.5|4,209.5|20,596.4|69,091.4
|Mar.|43,719.4|4,485.8|20,488.3|68,693.4
|Apr.|44,446.1|4,732.9|21,606.2|70,785.2
|May|45,877.7|5,104.2|21,861.5|72,843.3
|June|44,254.5|5,429.9|21,390.6|71,075.1
|July|44,539.6|5,463.5|21,401.4|71,404.5
|Aug.|43,724.8|5,247.2|20,856.0|69,828.0
|Sep.|43,728.4|5,295.0|20,778.4|69,801.8
|Oct.|43,968.1|5,281.5|20,420.5|69,670.1
|Nov.|43,130.0|5,418.9|20,509.2|69,058.1
2011|Dec.|43,747.9|5,355.4|20,194.2|69,297.6
2012|Jan.|43,674.9|5,518.6|20,448.4|69,641.9
2012|Feb.|43,386.6|5,773.5|20,439.3|69,599.4
|Mar.|43,457.7|5,858.1|21,397.7|70,713.5
|Apr.|43,582.0|6,139.7|21,880.1|71,601.8
|May|44,259.9|6,425.6|21,776.2|72,461.8
|June|43,560.8|6,605.9|20,605.9|70,772.7
|July|43,463.9|6,451.8|20,650.8|70,566.5
|Aug.|43,410.6|6,274.0|20,981.2|70,665.9
|Sep.|43,316.0|6,173.4|21,204.6|70,694.0
|Oct.|43,482.6|5,988.8|20,836.0|70,307.5
|Nov.|43,156.8|5,819.9|20,964.9|69,941.6
|Dec.|43,316.8|5,322.6|21,518.0|70,157.4
2013|Jan.|42,789.6|4,748.3|20,882.9|68,420.8
|Feb.|42,603.8|3,887.6|20,976.6|67,468.0
The table ends in Feb 2013...but you can clearly see that other Euro residents massively cut their exposure since June 2012...reversing a well established trend.So, no, eurozone money is not large, and no, it doesn't all leave before the bail-in.
It doesn't have to be large to matter to the depositors, and it doesnt ALL have to leave for the article to be wrong.VThere's a peak in July 2011, which could well be Greeks moving their money into Cyprus around the time of their bailout, and the value has fallen to 60% of that, but is still 96% of what it was at the end of 2010. And the high point is only €6.6bn, which is 9.3% of all deposits in the Cypriot banks. There is no wall of money.
No one said there was.Where, then, do our 'analysts' get their large figures from, and why do I say they're mashing together incompatible datasets? Because they're using the data on MFI deposits in the Cypriot banks - that's their second figure - without any reference to whether those deposits are eurozone or not. You can't do that, because it doesn't prove anything about eurozone banks.
And heck, there's even data available straight from the same source that shows a breakdown of the deposits from other eurozone sources:
Year|Month|General Govt|Other financial intermediaries|Insurance corporations and pension funds|Non-financial corporations|Households|Other|Total
2010|Dec.|4.8|119.3|89.8|947.5|2,873.9|4,030.5|4,035.3
2011|Jan.|4.1|105.0|89.3|910.2|3,041.6|4,146.1|4,150.2
|Feb.|2.8|107.9|85.2|887.7|3,126.0|4,206.7|4,209.5
|Mar.|2.2|225.4|83.6|842.6|3,331.9|4,483.5|4,485.8
|Apr.|2.0|202.9|106.3|886.2|3,535.5|4,730.9|4,732.9
|May|3.1|199.4|106.9|872.8|3,921.9|5,101.1|5,104.2
|June|2.4|218.6|108.5|852.8|4,247.5|5,427.4|5,429.9
|July|5.1|229.6|110.3|790.3|4,328.2|5,458.4|5,463.5
|Aug.|5.4|272.7|100.1|752.9|4,116.2|5,241.8|5,247.2
|Sep.|4.7|341.9|109.9|762.1|4,076.5|5,290.3|5,295.0
|Oct.|4.3|287.8|112.1|735.4|4,142.0|5,277.3|5,281.5
|Nov.|5.0|311.8|122.1|745.7|4,234.4|5,413.9|5,418.9
2011|Dec.|3.5|285.0|126.9|754.5|4,185.5|5,351.9|5,355.4
2012|Jan.|5.9|302.6|128.0|759.5|4,322.5|5,512.7|5,518.6
2012|Feb.|5.5|260.9|129.0|782.1|4,595.9|5,767.9|5,773.5
|Mar.|3.7|277.4|131.5|763.1|4,682.4|5,854.4|5,858.1
|Apr.|4.1|521.5|132.1|792.5|4,689.5|6,135.6|6,139.7
|May|3.8|306.6|82.0|840.4|5,192.9|6,421.8|6,425.6
|June|3.9|298.5|80.6|814.3|5,408.7|6,602.1|6,605.9
|July|3.1|308.9|81.4|885.9|5,172.3|6,448.7|6,451.8
|Aug.|2.4|286.8|81.5|861.6|5,041.7|6,271.6|6,274.0
|Sep.|2.2|329.4|82.0|824.5|4,935.2|6,171.1|6,173.4
|Oct.|1.9|272.4|81.0|799.4|4,834.1|5,986.9|5,988.8
|Nov.|1.6|267.6|76.1|774.7|4,699.9|5,818.3|5,819.9
|Dec.|3.5|193.5|71.9|736.1|4,317.5|5,319.0|5,322.6
2013|Jan.|2.4|194.7|71.4|671.0|3,808.9|4,746.0|4,748.3
|Feb.|1.0|181.1|71.6|621.9|3,012.0|3,886.6|3,887.6So, how much eurozone bank money? Oh, easily €500 million at peak. Million, not billion. In banking terms, feck-all. And yeah, they start winding even that down when it's clear Cypriot banks are in trouble, a year ago.
So the banks take @two thirds of their deposits, 521m down to 181m the dumb money, pension funds, take less than half, the even dumber money, non fin corps, take 25%.
So the lesson is...watch the banks...yes?
So you are saying that they are just smarter, the smart money? Is that right? Fine. That's what I thought too. I'm not convinced they were "tipped off" to be honest. I just thought they saw the writing on the wall first.
FYI, €500m in good money collateral is not peanuts to most European banks at this point, considering they are levered at 26/1. That represents the equity in positions worth €13 billion.
Which makes my thread title a valid one.
If yu want to know which banking systems are in trouble, look at outflows from the smart money, the European banks, which may be just smart or may be talking to the right people, who knows.
Either way, they to be the canary in the coal mine...so it doesn't really matter if they are getting tipped off or not.
Where can we see what the European banks are doing in Ireland?0 -
Amberman, the core banks have wound down their positions almost everywhere outside their own countries at almost exactly the same rate, and over the same period, that they've wound down their Cypriot holdings. The article is complete bunkum based on shoddy misuse of statistics, and no amount of credulous clutching at straws can save it.
cordially,
Scofflaw0 -
Can you show me where you got the data for that please Scofflaw? I wasn't aware of that.0
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It wasn't exactly a secret that Cypriot banks were in trouble in June 2012The table ends in Feb 2013...but you can clearly see that other Euro residents massively cut their exposure since June 2012...reversing a well established trend.
http://www.bbc.co.uk/news/world-europe-185418200 -
and yet most people left their money in them...while the banks were running for the hills.0
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Can you show me where you got the data for that please Scofflaw? I wasn't aware of that.
Central Banks - every eurozone central bank has consolidated balance sheets for their banks. Spanish banks, Irish banks, Cypriot banks all show similar patterns of withdrawal of eurozone money from periphery banks over the period where periphery banks have been known to be in trouble.
If the eurozone banks had been forewarned about the Cypriot bail-in a year in advance, there would have been no eurozone bank money in the Cypriot banks come the bail-in. Sure, some more may have fled in the month leading up to the bail-in, but that's not the article's claim - the article's claim is that the plan had been mooted to eurozone banks a year in advance. The "proof" the article offers for this claim about eurozone banks are figures that don't relate to eurozone banks, while the pattern shown in the central bank figures for eurozone banks is nothing that requires a special explanation. They also claim that eurozone bank money was there because hoo boy the Cypriot banks offered juicy interest rate differentials, which for the interbank market is simply not the case.
This is a case of you having to want to see something, and then claiming that it's a possible explanation for the available facts, even though those facts are adequately explained by a general movement of core eurozone bank money away form the periphery, and do not require a conspiracy theory.
cordially,
Scofflaw0 -
and yet most people left their money in them...while the banks were running for the hills.
Most people will have likely had their money in term deposits - because of the high interest rates offered by the Cypriot banks' term deposits - making them harder to move. Banks don't do that, for that reason.
cordially,
Scofflaw0 -
Because the thread title is "early warning of Irish depositor confiscation" it desevres to be mentioned that liabilities of the Irish banking system (and every other banking system under the Euro) are nothing like Cypriot banks.
Cypriot banks' balance sheets were depositor funded, which in banking is something of a golden objective. The only downside to of that is when a bank is recapitalised, there's not enough marketable debt to "bail in" to meet capital requirements.
That kind of liability structure does not apply in Ireland or anywhere else outside of Cyprus and Greece. If I were a Greek depositor i would be worried about a deposit levy right now. But if I had enough savings to be considered anything but a burden on Irish banks, I reckon I'd feel pretty safe depositing my money here - even in the event of another round of Irish bank recapitalisation.
So people who are warning of an imminent or possible "confiscation" of Irish deposits need to say why it is they are making those kinds of suggestions imo.0 -
Most people will have likely had their money in term deposits - because of the high interest rates offered by the Cypriot banks' term deposits - making them harder to move. Banks don't do that, for that reason.
cordially,
Scofflaw
You say on one hand, everyone and their dog knew the banks were in trouble, and on the other, than most people tied their money up with the banks in term deposits.
Seems people are really stupid.0 -
A bubble in property lending and depositing funds are not mutually exclusive. There was a belief that Irish banks could withstand the crash/ the return to planet Earth for Irish real estate/ the soft landing (as applicable)0
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Cody Pomeray wrote: »Because the thread title is "early warning of Irish depositor confiscation" it desevres to be mentioned that liabilities of the Irish banking system (and every other banking system under the Euro) are nothing like Cypriot banks.
Cypriot banks' balance sheets were depositor funded, which in banking is something of a golden objective. The only downside to of that is when a bank is recapitalised, there's not enough marketable debt to "bail in" to meet capital requirements.
That kind of liability structure does not apply in Ireland or anywhere else outside of Cyprus and Greece. If I were a Greek depositor i would be worried about a deposit levy right now. But if I had enough savings to be considered anything but a burden on Irish banks, I reckon I'd feel pretty safe depositing my money here - even in the event of another round of Irish bank recapitalisation.
So people who are warning of an imminent or possible "confiscation" of Irish deposits need to say why it is they are making those kinds of suggestions imo.
I think the main reason people are concerned about it is two fold.
1. Irish banks aren't telling the truth about their condition. (see the video above for more info)
2. If they require another bailout, it no longer seems impossible that depositors will be hit. http://uk.reuters.com/article/2013/04/10/uk-eu-banking-bailin-idUKBRE9390NJ20130410
So to connect a few dots for you. Irish banks are in such bad shape that they are lying to cover up their true health, there looks likely to be a law to bail in everyone in the event that banks blow up, and the least effected (so far) will be those depositors under 100k, who, while not getting an actual hair cut, will probably lose a large degree of access to and control over their money, just like in Cyprus.
All things taken together, this scenario doesn't look far fetched at all.0 -
I think the main reason people are concerned about it is two fold.
1. Irish banks aren't telling the truth about their condition. (see the video above for more info)
2. If they require another bailout, it no longer seems impossible that depositors will be hit. http://uk.reuters.com/article/2013/04/10/uk-eu-banking-bailin-idUKBRE9390NJ20130410
So to connect a few dots for you. Irish banks are in such bad shape that they are lying to cover up their true health, there looks likely to be a law to bail in everyone in the event that banks blow up, and the least effected (so far) will be those depositors under 100k, who, while not getting an actual hair cut, will probably lose a large degree of access to and control over their money, just like in Cyprus.
All things taken together, this scenario doesn't look far fetched at all.
It's not a far-fetched scenario, but it's completely different from the far-fetched claims in the original article. As to the potential problems with Irish banks, I don't doubt there are some, but I doubt they're of the sort "detected" by Reggie Middleton. The image of careful detective work is somewhat dispelled by mixing up AIB and Anglo in the first place - it suggests the kind of excitable grabbing at semantic differences that characterises 9/11 'analyses' or Freeman legal theory.
cordially,
Scofflaw0 -
It's not a far-fetched scenario, but it's completely different from the far-fetched claims in the original article. As to the potential problems with Irish banks, I don't doubt there are some, but I doubt they're of the sort "detected" by Reggie Middleton. The image of careful detective work is somewhat dispelled by mixing up AIB and Anglo in the first place - it suggests the kind of excitable grabbing at semantic differences that characterises 9/11 'analyses' or Freeman legal theory.
cordially,
Scofflaw
Why not? He rang the bell early on Lehman and a few others. His team seems to have its finger on the pulse from what I can see, and banking is their bread and butter.
Eidt: I just saw the mistake he made to which you are referring. It was spotted and corrected by him and his readership publically pretty fast.0 -
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I'll have to take your wordfor it. I'm in a lecture and can't watch the video.I think the main reason people are concerned about it is two fold.
1. Irish banks aren't telling the truth about their condition. (see the video above for more info)
No, it's not impossible that depositors would be hit some day in the same way that it's not impossible that one of us could get run over by a double decker bus. On balance, I think both eventualities are very unlikely.2. If they require another bailout, it no longer seems impossible that depositors will be hit.
The depositor scenario is unlikely because the Irish banks have adequate marketable debt upon which to make a request for 'participation' in a capital raising exercise. Our banking system has been heavily funded with debt from both the markets and institutional donors, which would be unlikely to 'run out' before additional capital needs were met.
Admittedly, the market and official slices of our bank liabilities 'cake' are small in European terms, and our deposit base is large. But given the amount of capital likely to be required, that still shouldn't be a major concern.0 -
Cody Pomeray wrote: »The depositor scenario is unlikely because the Irish banks have adequate marketable debt upon which to make a request for 'participation' in a capital raising exercise.
You can't say that until you know who big the capital raising would need to be.0 -
So the banks take @two thirds of their deposits, 521m down to 181m the dumb money, pension funds, take less than half, the even dumber money, non fin corps, take 25%.
So the lesson is...watch the banks...yes?
So you are saying that they are just smarter, the smart money? Is that right? Fine. That's what I thought too. I'm not convinced they were "tipped off" to be honest. I just thought they saw the writing on the wall first.
FYI, €500m in good money collateral is not peanuts to most European banks at this point, considering they are levered at 26/1. That represents the equity in positions worth €13 billion.
Which makes my thread title a valid one.
If yu want to know which banking systems are in trouble, look at outflows from the smart money, the European banks, which may be just smart or may be talking to the right people, who knows.
Either way, they to be the canary in the coal mine...so it doesn't really matter if they are getting tipped off or not.
Where can we see what the European banks are doing in Ireland?
If you were to use that logic you'd be better off just following the rating agencies. They're the ones who determine how risky a bank is, which is the measure used to determine the amount of capital a bank lending to that bank needs.0 -
Peter Matthews put the figure at €30 billion, and that is the highest estimate I've seen to date.You can't say that until you know who big the capital raising would need to be.
There are about €85 billion of debt securities in the Irish banking system, including the IFSC.
It would be difficult to levy €30 billion out of that. It would be impossible to levy it if you only include "domestic" banks.
In that scenario, and if it were a thing that the Governors of the ESM refused to provide any capital directly, and a €30 billion recap were called for, yes it's possible that large depositors would have to participate.
That's really the natural order of things, though, isn't it. It probably should happen in that eventuality imo.
I still think it's unlikely.0 -
Why not? He rang the bell early on Lehman and a few others. His team seems to have its finger on the pulse from what I can see, and banking is their bread and butter.
Eidt: I just saw the mistake he made to which you are referring. It was spotted and corrected by him and his readership publically pretty fast.
Nothing I can say can prevent you believing this particular source if that's what you want to do - and it seems it is something you want to do.
But for this or any source, the reliability question is not "have they ever been right?" but "how often have they been wrong?".
cordially,
Scofflaw0 -
Nothing I can say can prevent you believing this particular source if that's what you want to do - and it seems it is something you want to do.
But for this or any source, the reliability question is not "have they ever been right?" but "how often have they been wrong?".
cordially,
Scofflaw
Agreed. Hes been right more than enough to be credible. For example, he's said many times that the EU Government and Troika estimates were off in banking matters and the final costs would be far higher. He did this with Bankia IIRC and called them on the deposit for equity swap.
Troika estimates are NEVER right...so presumably, you don't find them credible by your own logic. If so, welcome to the other side of the boat!0 -
So if the banks go will they grab all depositors funds even the ones in Goverment savings.0
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There is no such thing as a troika forecast AFAIK, the troika, individually, are three massive organisations with huge forecasting obligations.Troika estimates are NEVER right...so presumably, you don't find them credible by your own logic. If so, welcome to the other side of the boat!
They don't have the luxury of (a) making the entirety of their views known - there may need to be an element of chatting up the market or (b) only pronouncing on reasonably safe bets, they have to forecast, even where there are a whole range of hidden variables. Anecdotally, I agree that the troika are often wrong but you are not comparing like with like here.0 -
Agreed. Hes been right more than enough to be credible. For example, he's said many times that the EU Government and Troika estimates were off in banking matters and the final costs would be far higher. He did this with Bankia IIRC and called them on the deposit for equity swap.
So that's one thing (I'm taking it on faith here that you're correct). Out of just how many predictions, would you say? Has he made only one prediction, for 100% reliability? Two, for 50%? Three, for 33%? Or does he pretty much make a number of predictions a day, like ZeroHedge, the vast majority of which are both wrong and forgotten?Troika estimates are NEVER right...so presumably, you don't find them credible by your own logic. If so, welcome to the other side of the boat!
Admittedly, I consider the IMF forecasts just that - forecasts - but funnily enough, they also consider them forecasts, which is why they offer alternative scenarios. They are not, on the other hand, errors of fact or analysis.
The numbers that eventually come out are rarely the exact same as those predicted, but, as has already been said, it's a very different ball game to "ha ha I've spotted something on page 43 which totally gives the game away!".
cordially,
Scofflaw0 -
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Amberman, the core banks have wound down their positions almost everywhere outside their own countries at almost exactly the same rate, and over the same period, that they've wound down their Cypriot holdings.
cordially,
Scofflaw
Not true according the ECB stats...check it out for yourself. Ireland has lost close to 60% of the smart money, other countries have lost 85%+, some have lost a third or less, and the timing of the withdrawals differs quite a bit from country to country.
Click the link above and change the country and then look at the charts for direct comparisons between countries. You'll quickly see that there isn't any across the board uniformity in scale or timing of withdrawals.0
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https://www.youtube.com/watch?v=7gwCdgmTttU
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