Baltic Dry Index. 912 +13
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“There
is no precedent for what would happen if Cyprus rejected the conditions. Our
best guess is that Europe would give Cyprus a brief and final chance to rethink
and vote again.”
Holger
Schmieding, chief economist at Berenberg Bank.
To misquote the famous New York City, Daily News headline of 1975, “Cyprus to Germany, Drop
Dead.” Yesterday brave tiny Greek Cyprus voted down Germany’s attempt at outright
bank robbery, saving for now a fig leaf of legal cover for the European banking
system. But the damage is already done. The Eurozone is no longer a safe place
to bank. Brussels’ usual response to democracy in action when they get the
wrong result, is to make the hapless errant electorate vote, and revote again,
until the voters comply with Brussels diktat. But that doesn’t work in a
situation like this, where a yes vote for Brussels, would just confirm that
bank robbery is now OK in the Eurozone, and is now part of official policy.
With tiny Cyprus treated as a vassal state, what hope is
there for any of Euroland’s other micro nations? As president Putin of Russia
said, just fly the German flag over the palace. Cyprus should call Germany’s
bluff and leave the EMU, reissue the Cyprus Pound, and let Germany take all the
blame for the Club Med contagion that follows. The rich miserly northerners
will quickly find that their effort to
try to steal bank depositors 5.8 billion euro, merely bought them in to
a much bigger bailout that ends with the end of the euro. Stay long physical
precious metals.
The article below, pretty much sums up all that has gone
wrong in the botched Cyprus bailout that wiped out all faith in the ECB and the
European banking system.
"Can't anybody here play this game?"
President Putin, with apologies to Casey Stengel.
Cyprus rescue in chaos as bank levy rejected
Brussels' grip slipped on its eurozone rescue strategy as Cyprus rejected the conditions for its €10bn (£8.6bn) bail-out, and appeared to turn to Russia for help instead.
In
a vote in Cypriot parliament last night, not a single politician voted for the
proposed bank levy, which was designed to raise the €5.8bn needed to secure a
vital €10bn cash injection from Europe and the IMF. President Nicos
Anastasiades, led the rebellion by abstaining. There were 19 in abstentions and
36 votes against.
---- Meanwhile, the Cypriot finance ministry said its boss had gone to Moscow. Government sources also said the Cypriot government was considering asking Midde East investors for help. Cypriot banks will be closed for the fourth day today. The Royal Air Force flew €1m in cash to Cyprus for army personnel.
The
European Central Bank said it would continue to provide liquidity to Cyprus
under existing rules.
But the
confusion caused equities to fall across Europe while traders ditched the euro
amid fears of a fresh banking crisis. In Italy the MIB dropped 4.6pc, the
French CAC fell 1.3pc, the German DAX slid 0.8pc.
The worse hit was Spain’s
IBEX fell 2.2pc as traders feared its banks would be first to suffer any
contagion. The yield on 10-year gilts fell to their lowest level this year as
traders sought a safe haven. Luis de Guindos,
Spain’s finance minister,
scrambled to reassure investors. “Deposits of under €100,000 are sacred from
the point of view of the bloc’s rules and Spanish rules,” he said. Luc Frieden,
Luxembourg’s finance minister, told Bloomberg: “We will make sure that deposits
in Europe are safe.” He added that the fisasco could “not be seen as destroying
the confidence that people have” in the European financial system.
---- President Anastasiades has called an emergency meeting of political leaders this morning, the fifth day since the government and the euro group thrashed out the rescue plan. The original plan, backed by the EU, the European Central Bank and the IMF, was for Cyprus to raise €5.8bn from a tax of 6.75pc on all desposits under €100,000 and 9.9pc above that level. The parliamentary vote was delayed twice while changes were inserted to protect deposits of under €20,000. However, the move has been widely condemned as tearing up the EU’s pledge to guarantee deposits up to €100,000.
Sharon
Bowles, chairman of the European Parliament’s economic committee, said the
ECB’s authority had been damaged.
----
The former
Governor of the Central Bank of Cyprus, Anthanasios Orphanides, said there had
been a “very serious blunder by European governments that are essentially
blackmailing the government of Cyprus to confiscate the money that belongs
rightfully to depositors in the banking sector in Cyprus...What we are
witnessing is the slow death of the European Project.” Gervais Williams of
Miton Capital Partners said: “My worry is that the Cyprus announcement will
change the behaviour of large depositors. And that is the thin end of a very
worrying wedge.
More
With Germany getting the lion’s share of the blame in
this very European fiasco, I wouldn’t want to be a German tourist planning to
visit Club Med or Russia this year. The waiter spitting in their drink is
likely to be the least of their problems. In Moscow better take along a Geiger
counter. Russian oligarch’s didn’t steal all that money hidden in Cyprus just
so Chancellor Merkel could steal Berlin’s cut. German products in Russia will
soon be getting a dose of China’s Japan love.
With the Cyprus bank
robbery blunder a continuing event, we will give today’s last word to Reuters.
Whatever now occurs it won’t be good for Cyprus, with parallels to Iceland now
surfacing. Perhaps Cyprus could apply to become part of Russia.
“Why
do I rob banks? Because that's where the money is."
Chancellor
Merkel, with apologies to “Slick” Willie Sutton.
Cypriot banks on brink in Icelandic flashback
DUBLIN/NICOSIA |(Reuters) - A small island on the edge of Europe teetering under the weight of its bust banks. Sound familiar?
Like Iceland and Ireland before it, Cyprus is battling to prevent an outsized and overextended banking sector from dragging the country into the ground.
---- But the experiences of Iceland and Ireland show that however Cyprus decides to deal with its crisis, pain is in store.
While Reykjavik let banks fail and introduced capital controls, making financing its economy difficult, Dublin nationalized most of its financial sector, helping to quadruple its debt burden and ensuring years of austerity.
Both countries are growing again, but underlying problems remain with households in both nations still swamped in housing debt, Irish unemployment stuck at 14 percent and Iceland fearful of lifting its capital controls for fear of a damaging outflow of foreign funds.
---- Cyprus' troubles stem from its exposure to Greece and the huge losses its two largest banks, Bank of Cyprus and Marfin Popular, had to stomach when euro zone leaders agreed in late 2011 to write down the value of private-sector holdings of Greek government bonds.
In total, Cyprus requires 17 billion euros, nearly equivalent to its economy's annual output, to rescue its banks and deal with the government's own bills.
Relatively small in the context of the Greek and Irish EU-IMF bailouts, at 240 billion euros and 67.5 billion euros apiece, for an island of just 1 million people it is a huge burden and speaks volumes about how large and unwieldy its banking sector had become.
---- The banking sector is now roughly eight times the size of the economy compared to 10 times for Iceland and over four times for Ireland before their crises. Banks in both countries used cheap funding to gorge on speculative investments.
High interest rates, low taxes -- in particular a double taxation treaty with Russia -- and a shared Orthodox faith were all factors behind the influx of Russian money and people, which has seen the city of Limassol, the island's financial center, become known as "Lima grad".
It is estimated that of approximately 70 billion euros of deposits in Cyprus, a third are held by non-residents and most of those are believed to be Russian. Overall, deposits grew by nearly two thirds over a six year period to the end of 2012, according to data from the central bank in Cyprus.
---- In the past ten days, however, as rumors first surfaced about a hit on savers, an estimated 2 billion euros has been withdrawn by Russian depositors, according to Thomas Keane, co-founder of Cyprus-based law firm Keane Vgenopoulou & Associates LLC.
---- Iceland imposed capital controls to restrict the flow of crowns and other currencies in and out of the country in 2008 and there are concerns Cyprus will have to do likewise when its banks, currently closed, finally reopen.
"Even if a compromise solution can be found, confidence in the security of bank deposits in Cyprus may have been fatally undermined, especially among non-resident depositors who have more choice about where to keep their money," said Tristan Cooper, fixed income sovereign credit analyst at Fidelity Worldwide Investment.
"This will likely prompt capital flight once the banks reopen and may necessitate the sustained imposition of capital controls in order to stem an escalating banking crisis. The parallels with Iceland, which also had an outsized banking system are worrying."
More
http://www.reuters.com/article/2013/03/20/us-banking-cyprus-idUSBRE92J00K20130320
We end for the day on banking, with trouble on the other side of the Atlantic. Heart attack time for some. Cypriot depositors can only look on in envy.
Chase Customers See Bank Balance Reduced to Zero
Glitch
stokes panic on Twitter
Paul
Joseph Watson Infowars.com
March 19, 2013
Millions
of Chase Bank customers were affected by an unfortunately timed glitch which
resulted in their checking and savings accounts showing a zero balance for
several hours yesterday, prompting many to take to Twitter and express panic
that their money had been stolen.
Reaction
to the glitch was undoubtedly made more intense by the fact that the top global
news story yesterday was about how residents of Cyprus were facing a mandatory
“tax” that would see 10 per cent of their savings plundered for a banker
bailout.
After
Chase was hit by a denial of service attack last week, the bank blamed an
“internal” issue for the glitch which left shocked customers thinking their
online and mobile banking accounts had been emptied of deposits. The issue was
resolved by 7:30pm PST.
More
Later today we get the UK budget, though it’s hard to see much change coming there. We also have President Obama visiting Israel and Palestine. Again it’s hard to see much change occurring here, though he’s under pressure to comment on developments in next door Syria. And of course the Cyprus meltdown continues, although at a mere 17 billion euros, the Eurocrats have managed to turn a storm in a teapot into a question of the safety of the whole Eurozone banking system. There never was a problem that a eurocrat or a politician couldn’t make worse.
All
right, everybody line up alphabetically according to your height.
Herman
van Who’s-it, with apologies to Casey Stengel.
At the Comex silver depositories Tuesday final figures were: Registered 42.50
Moz, Eligible 120.94 Moz, Total 163.44 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, it’s the banksters again, forced to give back a part of their
unearned money. This time round its JP Morgan, giving back a little less than a
mediocre banksters annual bonus.
Banks are an almost irresistible attraction for that element of our society which seeks unearned money.
J. Edgar Hoover
JPMorgan, MF Global Inc trustee reach $546 million settlement
(Reuters) - JPMorgan Chase & Co (JPM.N) has reached a $546 million settlement with the trustee liquidating the failed broker-dealer unit of MF Global Holdings (MFGLQ.PK), a court filing showed, an amount that will help repay the brokerage's customers.
As part of a settlement reached with James Giddens, the trustee who is tasked with liquidating MF Global Inc, JPMorgan will pay $100 million that will be made available for distribution to former MF Global customers.
JPMorgan will also return more than $29 million of the brokerage's funds held by the bank, while releasing claims on $417 million that was previously returned to Giddens.
"The settlement agreement resolves claims by the trustee and customer representatives against JPMorgan that would otherwise result in years of costly litigation between the parties with an uncertain outcome," Giddens said in the filing.
JPMorgan was the lead on a $1.2 billion loan to MF Global, and was also one of its primary clearing banks before the broker-dealer went bankrupt. The bank had previously retained claims on some of the collateral posted by MF Global that led to the legal tussle.
Giddens will also request the bankruptcy court to authorize distribution of $250 million to former MF Global Inc customers who traded on U.S. exchanges and $50 million to customers who traded on foreign exchanges, according to the filing.
MF Global declared bankruptcy in 2011. Commodity traders with personal accounts lost millions of dollars when, according to Giddens, the firm improperly used client money to cover corporate transactions as the firm sank. MF Global customer accounts were frozen in the wake of the bankruptcy.
The case became a political firestorm when regulators discovered an estimated $1.6 billion hole in the trading accounts of the broker's trading customers.
It's good to trust others but, not to do so is much better
Jon Corzine, with apologies to Benito Mussolini
The monthly Coppock Indicators finished February:
DJIA: +111 Up. NASDAQ: +129 Up. SP500: +148 Up. All three indexes are giving the same signal since
January, up, but surprisingly February’s
move in all three was weak, suggesting that the indicators are topping
out. Will sequestration turn March into a
down month? So far so good.
No comments:
Post a Comment