Baltic Dry Index. 933 Friday
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
“I’m
not saying that [the euro] will crumble tomorrow, but with the brains that they
have in Brussels, it is certain that it will not last in the long term, and the
best is to think about how to escape it.”
Cypriot
Archbishop Chrysostomos II, Greek
Orthodox Church.
Yesterday we found out the truth. Far from Cyprus
being a “one off,” unique special case, it’s going to become a “template” for
other bailouts in the insane asylum known as the European Monetary Union. It is
open season on European bank deposits. Jeroen
Dijsselbloem, head of the Euro finance ministers committee, let the cat out of
the bag yesterday, bragging of his success in the Cypriot slaughter. “The Cyprus solution will serve as a template for future EU bailouts,”
said Jeroen
Dijsselbloem, Dutch Finance Minister. Later he went on to deny that he said it. Stay long physical precious metals. We have entered an era where bank theft is
official policy, too big to fail banksters are too big to jail and above the
law. Everyone is now a serf to the state and crony banksterism.
This all ends in the breakup of the European Monetary
Union, of course, but not before much hard earned European wealth gets
destroyed in an ever more futile Canute attempt to order back the sea. Unlike
wise old King Canute who knew he couldn’t order back the sea, Europe’s
vainglorious Eurocrats and politicians actually think that they can order back
the sea that’s engulfing them. This never ending crisis, never ends.
Before a man speaks it is always safe to assume that he is a fool. After he speaks, it is seldom necessary to assume it.
H. L. Mencken.
Saving Cyprus Means Nobody Safe as Europe Breaks More Taboos
By Simon Kennedy - Mar 26, 2013 12:01 AM GMT
----The
island nation’s rescue sets precedents for the euro zone that may stick in the
memory of depositors and bondholders alike as investors debate who will next
fall victim to the debt crisis. Under the terms of the agreement struck
yesterday in Brussels, senior Cypriot bank bond holders will take losses and
uninsured depositors will be largely wiped out. The message that stakeholders of all stripes can be coerced into helping a cash-strapped nation may make investors more skittish they’ll be targeted if Slovenia, Italy, Spain or even Greece again is next in line to need help. The risk is that bank runs and bond market selloffs become more likely the moment a country applies for a new rescue, said economists and academics from Nicosia to New York.
“We now have a new type of rule and everyone within the euro zone has to sit down and see what that implies for their own finances,” Nobel laureate Christopher Pissarides, an adviser to the Cypriot government, told “The Pulse” on Bloomberg Television.
The Stoxx Europe 600 Index (SXXP) erased an earlier gain of as much as 1 percent after Jeroen Dijsselbloem, who chaired last night’s meeting of euro region finance ministers, indicated the model used for recapitalizing Cypriot banks could be replicated elsewhere. The euro slipped 0.8 percent to $1.2890.
Until now, euro region officials had left bank depositors and senior bondholders untouched as they tried to rescue the bloc’s struggling economies in a series of all-night summits over the past three years
More
Cyprus banks remain closed to avert run on deposits
NICOSIA |(Reuters) - The president of Cyprus assured his people a bailout deal he struck with the European Union was in their best interests, but banks will remain closed until Thursday - and even then subject to capital controls to prevent a run on deposits.
Returned from fraught negotiations in Brussels, President Nicos Anastasiades said late on Monday the 10-billion euro (8.5 billion pounds) rescue plan agreed there in the early hours of the morning was "painful" but essential to avoid economic meltdown.
----European leaders said a chaotic national
bankruptcy
that might have forced Cyprus from the euro and upset Europe's economy
was averted - though investors in other European banks
are alarmed by the precedent of losses for depositors in Cyprus.
----Many Cypriots say they felt anything but reassured by the bailout deal, however, and are expected to besiege banks as soon as they reopen after a shutdown that began over a week ago.
Reversing a previous decision to start reopening at least some banks on Tuesday, the central bank said late on Monday that they would all now stay shut until Thursday to ensure the "smooth functioning of the whole banking system".
Little is known about the restrictions on transactions that Anastasiades said the central bank would impose, but he told Cypriots: "I want to assure you that this will be a very temporary measure that will gradually be relaxed."
Capital controls, preventing people moving funds out of the country, are at odds with the European Union's ideals of a common market but the government may fear an ebb tide of panic that would cause even more disruption to the local economy.
More
Cyprus: It’s not over yet
By Felix Salmon March 25, 2013
This was not a good weekend for Russian billionaires. First, Boris
Berezovsky was found
dead at his English country estate. Now, all the uninsured depositors
(read: Russian plutocrats) at Cyprus’s two largest banks are going
to be hit much, much harder than they feared they might be when the Cyprus
crisis first erupted last week.Back then — a long, long week ago — Cypriot president Nicos Anastasiades stood firm: there was no way he would allow uninsured depositors to lose more than 10% of their money. What a difference a week makes: now, if your uninsured deposits are at the Bank of Cyprus, you’re probably going to lose about 40% And if they’re at Laiki, you’re going to lose everything.
The agreement between the Cypriot government and the Troika of the EU, IMF, and ECB is a bold and brutal geopolitical power-play. There might be language in the official communiqué about how “The Eurogroup looks forward to an agreement between Cyprus and the Russian Federation on a financial contribution”, but given the billions of euros that Russians are being forced to contribute unwillingly, the chances that they’ll happily throw a bit more money into the pot have to be tiny.
In the Europe vs Russia poker game, the Europeans have played the most aggressive move they can, essentially forcing Russian depositors to contribute maximally to the bailout against their will. If this is how the game ends, it’s an unambiguous loss for Russia, and a win for the EU.
---- Of course, the game does not end here. It’s unlikely that Russia will appear bearing a better deal at some point in the next 24 hours, but the hit to Cyprus’s GDP is going to be so enormous that staying in the euro over the long term, absent another round or two of massive debt relief, is going to be extremely difficult. The deal as constructed is, in Pawelmorski’s wonderful phrase, “Iceland without the fish”: Cyprus, as Iceland did before it, is letting its banks fail, since they’re too big for the government to bail out. But Iceland has other industries besides banking — and, more importantly, has a floating currency as well, which by weakening can make those industries more competitive.
In order to truly become Iceland, then, Cyprus is going to need to devalue and default. If it doesn’t, then it will live unhappily under the yoke of Europe-imposed austerity until such a time as the parliament revolts, the austerity measures are revoked, and the island drops out of the euro, and probably out of the EU as well.
More
Move over, Cyprus. Slovenia is the new tiny country you should worry about.
The Cyprus crisis, it appears, is soooo last week. The new country that’s provoking concern is Slovenia. The small former Yugoslav—wedged between Italy, Austria, Hungary and Croatia and best known for its exceptional skiers and Slavoj Žižek—had a pretty bad week, with long-term bond yields spiking to 5.4 percent Friday morning amid fears that the country would need a bailout. That’s not crisis-level — Cyprus’ yields are around 7 percent, for comparison — but it’s certainly in the “Danger Zone.”How did Slovenia get here, and why?
At the Comex silver depositories Monday final figures were: Registered 43.12
Moz, Eligible 121.52 Moz, Total 164.64 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, Japan’s new
currency war is kicking off. The race to the bottom in competitive devaluation starts
in earnest right after Easter. In keeping with tongue in cheek G-20 pious
proclamations, it’s not a competitive devaluation of course, that’s merely an
unintended consequence of an otherwise sound policy.
'When I
use a word,' Haruhiko
Kuroda
said, in rather a scornful tone, 'it means just what I choose it to mean —
neither more nor less.'
'The question is,' said Bernocchio, 'whether you can make words mean so many different
things.'
With
apologies to Lewis Carroll.
BOJ's Kuroda signals targeting longer-dated bonds
TOKYO |(Reuters) - Bank of Japan Governor Haruhiko Kuroda said the central bank will seek to push down market interest rates by purchasing longer-dated government bonds, underscoring its resolve to expand its balance sheet more aggressively to beat deflation.
Kuroda said among future policy options for the BOJ would be to extend the maturity of the government bonds it buys under its asset-buying programme, its key monetary easing tool, to five years from the current three years.
He also said there may be room to boost purchases of riskier assets, although the BOJ's nine-member board will make the final decision at next week's policy-setting meeting.
"We will scrutinise what would be the most effective step, aiming to make full use of the BOJ's capacities," Kuroda told parliament on Tuesday in semi-annual testimony on the BOJ's monetary policy and assessment of the economy.
His remarks pushed the 10-year government bond yield to a near-decade low of 0.525 percent on expectations the BOJ will buy bonds more aggressively.
Sources familiar with central bank thinking say the BOJ is expected to ease its already ultra-loose policy and debate an overhaul of its policy framework at its next scheduled meeting on April 3-4.
More
Ford CEO Mulally Says He’s Concerned About Japanese Yen
By Siddharth Philip - Mar 26, 2013 3:03 AM GMT
Ford Motor
Co. (F) Chief Executive Officer Alan Mulally
said he’s concerned about the depreciation of the yen that’s bolstering the
competitiveness of Japanese carmakers. “The most important thing that most countries around the world believe in is letting the markets determine the currency,” Mulally said today from Bangkok in reference to the Japanese currency, during an interview on Bloomberg TV’s First Up with Susan Li. “That’s just so important to all of us in the international trading system.”
On Europe, Mulally said the company
is scaling back production to meet “real demand” amid economic contraction in
the region.
More
There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.
J. K. Galbraith
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