Cyprus' savers to pay up to 10 percent of their deposits - Cyprus' savers bear brunt of unprecedente

[Syed Haider Imam]

BRUSSELS/NICOSIA (Reuters) - The euro zone agreed on Saturday to hand Cyprus a bailout worth 10 billion euros ($13 billion), but demanded depositors in its banks forfeit some money to stave off bankruptcy despite the risk of a wider run on savings.


The eastern Mediterranean island becomes the fifth country after Greece, Ireland, Portugal and Spain to turn to the euro zone for financial help during the region's debt crisis.


In a radical departure from previous aid packages - and one that gave rise to incredulity and anger across the country - euro zone finance ministers forced Cyprus' savers to pay up to 10 percent of their deposits to raise almost 6 billion euros.


Parliament was due to meet on Sunday to vote on the measure, and approval was far from assured.

The decision prompted a run on cashpoints, most of which were depleted by mid afternoon, and co-operative credit societies closed to prevent angry savers withdrawing deposits.
​

http://ca.reuters.com/article/topNews/idCABRE92E02220130316

 

[Syed Haider Imam]

In the early hours of Saturday, Cyprus agreed to a "bailout" with the EU and IMF that is very controversial because it imposes an immediate one-time tax on everyone with money in a Cypriot bank before banks reopen on Tuesday (Monday is a holiday).

The deal still needs to be passed by Parliament and that's not a sure thing.
Ekathimerini has this report:
The Cypriot government is now sweating over a possible rejection by the island’s parliament of the shocking set of measures imposed on Nicosia for the eurozone to bail its economy out of a likely default, announced in the early hours of Saturday.
The Cypriot government is preparing the bill to be tabled in Parliament probably on Sunday in an emergency session, as everything will have to be voted by Monday night for Cypriot banks to open on Tuesday.

​

 

[Syed Haider Imam]

On Tuesday, March 19 we would either choose the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis, which would put a definitive end to the uncertainty and restart our economy.

A possible choice of the catastrophic scenario option would have the following consequences:

1. On Tuesday, March 19, immediately after the holiday weekend, one of the two banks in crisis would cease to operate, since the European Central Bank, following the decision already taken, would terminate the provision of liquidity. The second bank would suspend its work, and neither could avoid collapse. Such a phenomenon would instantly lead 8.000 families to unemployment.

2. The State would be obliged to compensate depositors in response to the obligation regarding guaranteed deposits. The capital required in such a case would amount to about 30 billion euros, which the State would be unable to pay.

3. A proportionate amount corresponding to the deposits of thousands of depositors for deposits over 100.000 Euro, would be led to a vicious cycle of asset liquidation, and these depositors would suffer losses of over 60%.

4. Such an uncontrolled situation would push the whole banking system into collapse with all the attendant consequences.

5. Thousands of small and medium enterprises, and other businesses would be driven to bankruptcy due to their inability to trade.

As a result of the above, the service sector would be led to a complete collapse with a possible exit from the euro. That, in addition to the national weakening of Cyprus, would lead to devaluation of the currency by at least 40%.

The second choice was the controlled management of the crisis, through the decisions taken and which can be summarized as follows:

1. Ensuring the liquidity of the banks and the rescue of the banking system through their recapitalization.

2. Rescuing 8.000 jobs in the banking sector and thousands of others which would be lost as a corollary of not maintaining the operations of banks.

3. Total rescuing of deposits, with just the exchange of a small percentage of savings with shares of the two banks. Currently, these shares do not have their full value, but with the economic recovery they will repay most it not all of the amount that will be cut.
4. This option results in a drastic reduction of public debt, makes it manageable and sustainable and relieves future generations from the burden of repayment.

5. It saves provident and pension funds and avoids taking other tough measures such as wage and pension cuts that were put on the negotiations table.

6. It avoids further recession and the risk of the vicious circle of a second memorandum.

We are not aiming to gloss over the situation. The solution chosen may be painful, but it was the only one that would allow us to continue our lives without adventures. It's a decision that leads to the historic and permanent rescue our economy.

​

 

[Syed Haider Imam]

• Cyprus is the fourth of 17 eurozone states to be granted a bailout by its EU partners and the IMF, after Greece, Ireland and Portugal. Spain has been given EU assistance to rescue its banks but has so far avoided asking for a full sovereign bailout.
  
  
• The plan will leave the tiny island nation facing a more manageable debt burden. Its debt already stands at about 87% of GDP and is forecast to rise to 100% in 2020.
• Over the course of last year, gross domestic product in Cyprus fell by 2.4%, and latest forecasts show further contraction this year and next.
• Unemployment hit 12% last year and is forecast to rise to over 14% in 2014.
  
• Russia has come to Cyprus' aid in the past, providing a €2.5 billion loan in 2011 to shore up government finances. Russia is expected to take part in the new rescue, possibly by extending its existing loan or reducing interest payments.
  
  
• Cyprus is the EU's smallest state, accounting for just 0.2% of output. But experts were worried that a default could destabilize the European financial system.
  
• "Neither the Cypriot government, nor the eurogroup of EU finance ministers wants to see a eurozone member default, threatening catastrophic contagion for other financially troubled member states," IHS Global Insight country analyst Charles Movit wrote in a note last week.
  

 

[Syed Haider Imam]

With ZERO percent bank return, How does it feel when Government takes away 10% from your deposit?One Question may haunt
Vulnerable European countries ( PIGS countries ) ...........Keeping money in banks.......(hmm)

 

[nuzhatghazali]

I knew when I will open the thread , I will have to scroll down five or six posts down , mean while I will take a yawn and then …. then I will forget what I have to write?:35:

 

[Syed Haider Imam]

I knew when I will open the thread , I will have to scroll down five or six posts down , mean while I will take a yawn and then …. then I will forget what I have to write?:35:

It's because i leave nothing to comment about...Comprehensive coverage...You know what i mean.
This is financail thread, not many people comment on it. It's for their knowledge and less research for the readers. Kind a read only thread,,,,,,,,,,,

 

[AsifAmeer]

Some interesting tweets coming from Jim Rickards who is challenging Zerohedge who claims this event is a game changer. While Rickards maintain that its just a series of events and does not stand out individually.

Anyone who thinks/thought that a EUROZONE was a great idea should study this case. Eurozone - an idea of centralization in the 80s/90s, should make any European embarrassed.

I am of the view that Pakistan, too should have different currencies, each for every province. Let them compete on the grounds of policies and economics.

 

[Star Gazer]

Some interesting tweets coming from Jim Rickards who is challenging Zerohedge who claims this event is a game changer. While Rickards maintain that its just a series of events and does not stand out individually.

Anyone who thinks/thought that a EUROZONE was a great idea should study this case. Eurozone - an idea of centralization in the 80s/90s, should make any European embarrassed.

I am of the view that Pakistan, too should have different currencies, each for every province. Let them compete on the grounds of policies and economics.

This idea is perhaps the most radically different that I have heard in the context of a solution to a financial problem.
Mostly it is considered implausible.

 

[Syed Haider Imam]

Some interesting tweets coming from Jim Rickards who is challenging Zerohedge who claims this event is a game changer. While Rickards maintain that its just a series of events and does not stand out individually.

Anyone who thinks/thought that a EUROZONE was a great idea should study this case. Eurozone - an idea of centralization in the 80s/90s, should make any European embarrassed.

I am of the view that Pakistan, too should have different currencies, each for every province. Let them compete on the grounds of policies and economics.

You have very poor point of view which is not realistic, i am wondering ...Why?
Anyhow, we were discussing about US market in your thread.
Now, stock market got an excuse and markets were already very expensive. Must anticipated correction is on the way.
I am very eager to see how stock market and Gold will react on Monday.

Members of this forum were warned with before. Let's see how market behave on Monday.
US future will open on Sunday evening.

 

[AsifAmeer]

My comment on different currencies for different provinces - its not only applicable but actually healthy. It dissipates systemic volatility. It more democratic. Suppose Punjab screws up its economy, people can move to Sindh if things get really bad. This idea is a complete opposite to the EUROZONE. If you do not agree with the idea of a centralized Currency Banking state (EU), this idea of multiple currencies within 1 nation should thrill anyone!


Markets are completely artificial globally! They arent signaling anything. Markets going up or doing has frankly become completely meaningless, unless you are a primary dealer for any of the major central banks. Did you want Carl Levin's senate hear about JPM? b@sturds not only lied, "tweaked" their models to hide risk, publicly stated lies in conferences. If JPM's books on derivatives are openned, game's up! So its not going to happen. I cant find the article where Rob Kirby has dissected JPM's derivatives book and shown it swell $72 trillion in 1 month of 2008. That was the black monster hiding in the sea of equity markets.
http://paperboat.studiopod.com/2013/01/12/

You have very poor point of view which is not realistic, i am wondering ...Why?
Anyhow, we were discussing about US market in your thread.
Now, stock market got an excuse and markets were already very expensive. Must anticipated correction is on the way.
I am very eager to see how stock market and Gold will react on Monday.

Members of this forum were warned with before. Let's see how market behave on Monday.
US future will open on Sunday evening.

 

[Syed Haider Imam]

My comment on different currencies for different provinces - its not only applicable but actually healthy. It dissipates systemic volatility. It more democratic. Suppose Punjab screws up its economy, people can move to Sindh if things get really bad. This idea is a complete opposite to the EUROZONE. If you do not agree with the idea of a centralized Currency Banking state (EU), this idea of multiple currencies within 1 nation should thrill anyone!


Markets are completely artificial globally! They arent signaling anything. Markets going up or doing has frankly become completely meaningless, unless you are a primary dealer for any of the major central banks. Did you want Carl Levin's senate hear about JPM? b@sturds not only lied, "tweaked" their models to hide risk, publicly stated lies in conferences. If JPM's books on derivatives are openned, game's up! So its not going to happen. I cant find the article where Rob Kirby has dissected JPM's derivatives book and shown it swell $72 trillion in 1 month of 2008. That was the black monster hiding in the sea of equity markets.
http://paperboat.studiopod.com/2013/01/12/

well, Leave the currency debate for some other time. Right, we should focus on developing story. EURO is down 1.35%
[h=1]CYPRIOT PRESIDENT ADDRESSES NATION: We Were Given Two Options Like Blackmail style[/h]

 

[Syed Haider Imam]

Future Market

Gold Opened Bullish.......+ $12 at opening. Let's see if there is a short squeeze then it could shoot + 100 dollars within days.

For GOLD.... $ 1697.30 is the first resistance. Should 1700 be bettered, though, we will target 1791.16
Dow.............Future Market - 119
S&P 500.......................... - 15 ( around 1.00% )

ZERO HEDGE is expecting S&P to open - 30 points. Let' s see how it shape up when Asian and European markets open.

 

[Syed Haider Imam]

ZERVOS: 'This Is A Nuclear War On Savings And Wealth

This is a nuclear war on savings and wealth - something that will likely crush animal spirits. This is a policy move you expect from a dictatorial regime in sub-Saharan Africa, not in an EMU member state. If the European governments can clandestinely expropriate 7 to 10 percent of their hard working citizen's precautionary savings after the close of business on a Friday night, what else are they capable of doing? Why even hold money in a bank account? Are they trying to start a bank run?

 

[Syed Haider Imam]

 

[AsifAmeer]

Just saw a quote for Bitcoin... $48.9x

well, Leave the currency debate for some other time. Right, we should focus on developing story. EURO is down 1.35%
CYPRIOT PRESIDENT ADDRESSES NATION: We Were Given Two Options Like Blackmail style

 

[Syed Haider Imam]

Just saw a quote for Bitcoin... $48.9x

Could you please explain BITcoin?

 

[AsifAmeer]

http://www.siasat.pk/forum/showthre...COIN-Must-Watch-for-any-Pakistani-in-Pakistan

Could you please explain BITcoin?

 

[Syed Haider Imam]

http://www.siasat.pk/forum/showthre...COIN-Must-Watch-for-any-Pakistani-in-Pakistan

Bro, you don't seem to be in real game / market.

 

[AsifAmeer]

real market? Let me know when you find a real market.

I closed major parts of my trade in 2008 and then 2009, winding down my puts on Citi and other banks. Since then I have never exceeded 10% of my capital in the markets, other than shorting a few stocks here and there.

I hope you arent "in the real game".

Bro, you don't seem to be in real game / market.