Ping
This article is old news. Need info for 24 Mar 2013 onward. Sunday EST is Monday in EU. We will have an inkling what will happen in EU by Sunday night which will impact stock opening in New York on Monday EST.
Cyprus has reportedly agreed to a new scheme to tax deposits in order to raise the money to bail out its banks.
According to Reuters, a 20 percent tax on deposits over 100,000 euros at the Bank of Cyprus would be levied. That would be coupled with a 4 percent tax across the board elsewhere.
Zero Hedge has some good articles & links (language warning on comments).
#Cyprus has good updates. This is really, really, really not good- worse than TARP (direct theft), if that’s possible.
Now they are talking 20% - 25% instead of 100%.
That will not happen.
Depositors will likely lose closer to 100%.
Why?
Tuesday, banks will ‘open’.
When Cyprus banks open, there will be a run on the banks by all depositors who are not brain dead, to remove every cent.
Deposits will be limited, capital controls... in an attempt to stop a bank run. So what if you have a piece of paper that says you have $1million in the bank if you cannot withdraw it at all.
When will they remove the capital controls?
That is the day the banks fail completely - they are insolvent.
If you cannot withdraw your money, you don’t have it.
Now they are talking 20% - 25% instead of 100%.
The way it will play out - the government will steal 20%-25%, the subsequent run on the banks will bankrupt them and depositors will lose every penny of the rest.
Every penny.
Not only did they kill the banks but they killed Cyprus’ biggest industry outside tourism.
Cyprus as a tax haven is dead.
Cyprus as a company location is dead.
There are thousands of lawyers who made a living setting up companies, investment funds, trusts, etc. in Cyprus.
They are all finished.
The Soviet mob bosses will help them recover....right?
The euro was a dumb idea. Wailing over the consequences of a dumb idea is stupid.
I suspect that the Europhiles will blink on this one, and cough up the bailout, because they would rather destroy their own countries than see other nations leave the EU, as that would “destroy the dream” of a unified European nation, that they are obsessed with.