Comments on: Cyprus: It’s not over yet http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: PhilDyer http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/comment-page-1/#comment-46427 Tue, 26 Mar 2013 15:55:39 +0000 http://blogs.reuters.com/felix-salmon/?p=21035#comment-46427 Felix, I am wondering if you are familiar to the IMF document that appears to have set the notion of bail-ins into motion.

I would like to spread the word on this as many seem confused as to where this “directive, suggestion, mandate” is coming from. It might be of some value to your readers. Read Pg. 59 of the Document and the following sentence appears: “Ultimately, the breadth of the investment decisions that can be made by the ESM rests upon the decision of its member states, in due consideration of the risks and potential upside or downside inherent in such investments. It will be important to agree and clarify the investment mandate of the ESM, as well as the specifics of ESM recapitalization, including the definition of legacy assets, the pricing of assets, the role of bail-ins, the principle for access, and the design of instruments.”

You many download a copy of it at continentalspeculator.com

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By: KyleDexter http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/comment-page-1/#comment-46420 Tue, 26 Mar 2013 11:01:29 +0000 http://blogs.reuters.com/felix-salmon/?p=21035#comment-46420 This isn’t over yet. Wait till you see what happens to their economy. They are finished!!!
Eventually the entire Euro project will fail.
And you wi see the same problems surfacing in the US in a couple of years……..

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By: Chris08 http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/comment-page-1/#comment-46415 Tue, 26 Mar 2013 02:51:19 +0000 http://blogs.reuters.com/felix-salmon/?p=21035#comment-46415 Imagine you live in a prosperous country, with a lovely climate, beautiful beaches, blue seas. But there’s something funny about this country. It doesn’t have a functioning banking system.

You can put money into your bank, but you can’t get it out again. At least you can, through ATMs, but only in very small amounts.

If you have money on deposit, you can’t take the money out and close the account. And if it’s a time deposit, when it reaches the end of its life, you can’t have the money to spend. You have to roll it over into a new deposit.

You can’t cash a cheque in a high street bank. You can’t pay bills in a high street bank, either. And no high street bank is lending any money, so if you want a loan, forget it. In fact high street banks are not much use.

Your employer pays you in cash, because there are no electronic payments. Which is just as well, really, because you need cash. There are no automated payments such as direct debits, so you pay all your household bills in cash. Credit and debit cards are no longer accepted anywhere, so you buy all your shopping and petrol for your car with cash. You can’t make phone or internet purchases.

If you have more than one account, you can’t transfer money between your accounts. If only one of your accounts has ATM access, once that account is empty, you are stuck with no money.

You can’t go on holiday abroad because you can’t take any money out of the country. Your employer won’t send you abroad on business, either, because you might not come back…..

All the local shopkeepers will only accept cash, not cheques. That’s because they have to pay suppliers in cash, and once you put money in a bank, you can’t get it out again…..But all small businesses are having a very hard time. Shops are closing, businesses going bust, people losing their jobs. You’re not sure how much longer you will keep yours. You’ve taken a pay cut already, even though it means you struggle to pay your mortgage.

It would really help if lots of tourists would visit your beautiful sunny country. But the place is deserted. Tourists are unwilling to come here now….it’s very cheap, but they can only bring cash with them and whatever they bring must stay here – and if they run out of cash they can’t get any more.

This is Cyprus. Or rather, it will be – next week.

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By: MSadowski http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/comment-page-1/#comment-46412 Mon, 25 Mar 2013 20:39:50 +0000 http://blogs.reuters.com/felix-salmon/?p=21035#comment-46412 I have to agree with f.fursty. The wealthiest Russians who had money deposited in Cypriot banks already moved it off the island. Moreover the bulk of the remaining Russian deposits are with the Cypriot subsidiary of VTB, which under this deal are left completely alone.

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By: Chris08 http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/comment-page-1/#comment-46406 Mon, 25 Mar 2013 18:59:17 +0000 http://blogs.reuters.com/felix-salmon/?p=21035#comment-46406 PS If Cyprus were smart it would use this opportunity of frozen deposits to exit the Euro and go back to a national currency. The frozen deposits would be exchanged at some rate for a new local money and then that would be the money of Cyprus. Period. Euroexit. People could then do what they want with the new money.

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By: Chris08 http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/comment-page-1/#comment-46405 Mon, 25 Mar 2013 18:56:10 +0000 http://blogs.reuters.com/felix-salmon/?p=21035#comment-46405 The thing to watch is how long capital controls remain so that Euros cannot be taken out of Cyprus. If they stay on for long (Ireland still has them years later) then Cyprus has really left the Euro zone whatever the official line is. PS If capital controls are removed soon, I would suspect Cyprus would be drained of most of the money there. Euros would flee.

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By: rb6 http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/comment-page-1/#comment-46404 Mon, 25 Mar 2013 18:54:52 +0000 http://blogs.reuters.com/felix-salmon/?p=21035#comment-46404 Hit send by mistake: This is what INSOLVENCY means. And what happens in bankruptcy is an equitable (or inequitable) allocation of whatever assets exist to all those creditors, everyone from retirees to suppliers to janitors to the IRS and on and on. Basically, in many instances, unless your debt was secured by collateral, the court rips contracts up and starts all over again. Just ask the many unions whose members have had to forego all kinds of wage and benefit promises during a bankruptcy proceeding. Whatever contract was in place between the bank and depositors or the bank and bondholders is out the window. My understanding is that the banks offered high interest to lure depositors and made risky investments. Let’s say you manufactured cars and took deposits and promised to deliver a car in 3 months at a given price and your cost of inputs became too high to meet that price. This is kind of what happened, and I have no doubt all kinds of people are going to be really hurt by the aftermath.

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By: rb6 http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/comment-page-1/#comment-46403 Mon, 25 Mar 2013 18:46:32 +0000 http://blogs.reuters.com/felix-salmon/?p=21035#comment-46403 pondliner, calling it skimming does not seem to acknowledge the fact that the money isn’t there. When a company goes bankrupt, all kinds of people are shortchanged, and there is often a domino effect such that even a healthy business can be seriously disrupted if its customers can’t pay, which means it can’t pay its suppliers or make payroll, etc. This is what INSOLVENCY

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By: MyLord http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/comment-page-1/#comment-46402 Mon, 25 Mar 2013 18:07:09 +0000 http://blogs.reuters.com/felix-salmon/?p=21035#comment-46402 Is the reason this is not expected to affect Spain or Italy that there isn’t proportionally enough uninsured money to be worth seizing?

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By: Strych09 http://blogs.reuters.com/felix-salmon/2013/03/25/cyprus-its-not-over-yet/comment-page-1/#comment-46401 Mon, 25 Mar 2013 17:48:25 +0000 http://blogs.reuters.com/felix-salmon/?p=21035#comment-46401 The first comment in this thread, by nirvichara, says “Welcome to communism” and decrys “taking others money without permission”, but if the EU supplied a bailout, that would also be taking other’s money (other taxpayers in the EU, in other EU countries than Cyrpus) and handing it over to feckless banksters who made bad investments. How is that not communism, as well?

Actually, bailoutism is arguably worse than communism because in bailoutism capital gains are privatized and capital loses (by banks) are socialized, so you have the worse of both worlds. At least in a real communist system the ownership of the bank would be socialized and any upside from the bailout would be distributed equitably instead of being concentrated in the hands of bank shareholders and/or employees.

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