Unbelievable: just as after Munich in 1938, the mobsters decide to take the whole lot.
Surely now the time has come to stop these maniacs
This is the gist: you will recall I broke
the news from banking sources last week about how enormous the leakage
of big money had been from Cyprus banks in the two days before B-am-B’s
Nazis railroaded the Cypriots into a room and said “Give us the money or
your banking system gets it”. You will recall also that I said I was
100% certain that the Eunatics would stifle any news about the cash
exodus until the deal was over. You will probably also remember that I
reported on yet more money leaving by Cyprus bank branches abroad,
because the the EC is too dumbfuck uncommercial to grasp that this was
going to happen.
Well, now we know the full cost of leaking
and incompetence to the real people of Cyprus: Then this morning the
20%-40% seizure of the depositor’s money, which was the range that had
been discussed, was revealed by the Finance Minister Michael Sarris in
Cyprus to be more like an 80% expropriation and a timeline to get any money back of six to eight years. For which read, “100% and never”.
Today the Sudentenland, tomorrow Czechoslovakia.
But it gets worse. The representatives of
the Eurozone finance ministries released a document this morning stating
that Cyprus was not the template for future bail-outs. The
Cyprus smash-and-grab was led and driven by Djisselbloem and Amunssen –
Dutch and German respectively. When asked about this eurozone finance
ministers’ denial doccy, Dazzlebomb said he knew nothing about it. So
although Jeroen Divertblame is the Chairman of the FinMins Group, he told reporters it was nothing to do with him, and he hadn’t a clue what they were on about.
Angela Merkel has invested quite a lot of
time trying to convince the German in the Strasse over the last two days
that their money in German banks is safe. Today a poll, conducted by
the Forsa Institute for Stern Magazine and RTL television, revealed 54%
of Germans do not trust Merkel’s recent assurances that their savings
are safe. Only 41% do believe their deposits are safe. The SPD
may be about to pull off the political comeback of all time. The Germans
may have managed not to lose face – but they are losing their faith.
Still, the EC Panzers will, I’m sure, lumber on. Today Czechoslovakia, tomorrow Poland.
________________________
When Is A Euro Not A Euro
A euro is not a euro
...Capital controls are being imposed as part of the [Cyrpus] deal. While this is legal according to the Treaty on the Functioning of the European Union (TFEU Art. 63, 65 and 66), it creates a situation in which a Cypriot euro is not equal to a euro of any other member country from an economic perspective. In fact, while euro bank notes in Cyprus are still worth the same amount as in other countries, in a market for euro deposits, a euro in a Cypriot bank account would now most likely not be trading at par with those of other member states.
Moreover, at the moment markets are being told that these capital controls are only temporary. But we are wondering how such capital controls could eventually be lifted with no obvious cure of the underlying problem, i.e., the risk of a bank run. With the aforementioned template in place and the necessity of a second bailout looking likely as a result of the economic shock currently rippling through the country, depositors are strongly incentivised to take out their money as soon as capital controls were to be lifted. In fact, this might already be in evidence, as we hear that large Russian deposits have been moved out of the country via foreign subsidiaries of Cypriots banks, who did not seem to have been restricted by the same capital controls as domestic banks. This is likely to increase the pain for the local Cypriot population, even more so now that the local bank holiday has been extended for two more days.
Since every guarantee is only worth as much as its guarantor, we would expect that in absence of a European wide deposit guarantee (which for political reasons and the aforementioned template look very unlikely) these capital controls are likely to stay for longer than originally planned.
Unless this vicious circle is broken, this attempt to save the euro could ironically even become the template of how a member state could leave the currency union.
...
Drifting apart
There is another development that eventually could become a serious threat to the long-term existence of the euro. Its roots lie in the fact that the euro has always meant different things to different people. It would be too simple to reduce this to one dimension, but the role of the ECB and how it balances its priorities of price stability versus financial stability is just one example.
So while in good times the euro seemed to have managed to be all things to all people, now in economic distress, the difference in believe of what is needed to keep the currency alive are becoming a lot more visible. As a result, inner European resentment is increasing, with the core being blamed for too little help under too strict conditions and the periphery sometimes perceived to be too reluctant to change.
This is dangerous, since without the general acceptance of the strings attached to the common currency, the risk is that the euro loses its appeal to both sides.
Source
banzai7
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