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sailingaway
03-16-2013, 10:15 PM
Authored by Lars Seier Christensen, CEO Saxo Bank; originally posted at his blog at TradingFloor.com,

It is difficult to describe the weekend bailout package to Cyprus in any other way. The confiscation of 6.75 percent of small depositors' money and 9.9 percent of big depositors' funds is without precedence that I can think of in a supposedly civilised and democratic society. But maybe the European Union (EU) is no longer a civilised democracy?

I heard rumours about this when I visited Limassol last week, but dismissed them as completely outlandish. And yet, here we are. The consequences are unpredictable, but we are clearly looking at a significant paradigm shift.

This is a breach of fundamental property rights, dictated to a small country by foreign powers and it must make every bank depositor in Europe shiver. Although the representatives at the bailout press conference tried to present this as a one-off, they were not willing to rule out similar measures elsewhere - not that it would have mattered much as the trust is gone anyway. It is now difficult to expect any kind of limitation to what measures the Troika and EU might take when the crisis really starts to bite.

If you can do this once, you can do it again. if you can confiscate 10 percent of a bank customer's money, you can confiscate 25, 50 or even 100 percent. I now believe we will see worse as the panic increases, with politicians desperately trying to keep the EUR alive.

Depositors in other prospective bailout countries must be running scared - is it safe to keep money in an Italian, Spanish or Greek bank any more? I dont know, must be the answer. Is it prudent to take the risk? You decide. I fear this will lead to massive capital outflows from weak Eurozone countries, just about the last thing they need right now. Even from the EU as a whole, I suspect, as the banking union is in place in most countries already.

Another open question is what will happen to the huge number of brokerages based in Cyprus? There is about 100 or more FX and other brokers currently operating under the relatively light Cypriot regulation. How will this impact the trustworthiness of these many small institutions? What IS the exact impact on the client deposits they might be holding in Cyprus? Will anyone dare to do business with them going forward?

This is a major, MAJOR game changer and the fallout will be with us for a long time to come. I believe it could be the beginning of the end for the Eurozone as this is an unbelievable blow to the already challenged trust that might be left among investors. Talk about a possible own goal.

Market reaction? it must be very good for gold - and for safe-haven countries like Switzerland, Singapore and economically more healthy non-Euro countries in, for example, Scandinavia. I would think the EUR and associated markets will be undermined by increasing lack of confidence when the full implications become clear for investors.

This is full-blown socialism and I still cannot believe this really happened.

Be careful out there...

http://www.zerohedge.com/news/2013-03-16/saxo-bank-ceo-full-blown-socialism-and-i-still-cant-believe-it-happened

itshappening
03-16-2013, 10:34 PM
Thanks for posting.

itshappening
03-16-2013, 10:34 PM
The moral of the story is : don't leave tens of thousands in bank accounts.

Anti Federalist
03-17-2013, 12:30 AM
But maybe the European Union (EU) is no longer a civilised democracy?

Why is this CEO having such a hard time with this?

Sure it is...a "Civilised Democracy" that is.

51% of civilised people just "civilly" approved the confiscation of some wealth of the other 49% percent of civilised people.

Democracy.

What are you bitching about?

Anti Federalist
03-17-2013, 12:31 AM
The moral of the story is : don't leave tens of thousands in bank accounts.

This is not approved, comrade.

bolil
03-17-2013, 12:32 AM
Do you believe I would take such a thing with me, and give it to a police man? I woudln't do that.


Give it to me
one time
two times
three times
four times


WOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO okay im done.

Carson
03-17-2013, 12:48 AM
And I'll bet they have the same form of stealth back-door socialism we have here with the counterfeiters on top of their new upfront assault.

Kind of a gang rape. ?

BAllen
03-17-2013, 08:16 AM
OPM.
Other people's money. Wealthy don't gamble with their own money. They use other peoples' money, so if it's lost, it won't be their money that's lost.

KingRobbStark
03-17-2013, 08:27 AM
What America is doing is much much worse.

Lucille
03-17-2013, 09:17 AM
Germany and the IMF originally wanted them to take 40% (http://www.zerohedge.com/news/2013-03-16/germany-and-imfs-initial-deposit-haircut-demand-40-total)!


Those who were confident in the security of their 401ks (http://voxday.blogspot.com/2013/03/a-major-major-game-changer.html) should probably reconsider their opinions in light of these mandatory depository "contributions" to the cause of debt restructuring. As Karl Denninger puts it: "$100 bills in your hand have just been declared to be worth somewhere between 7-10% more than those "deposited" and "stored" in a bank."

Petar
03-17-2013, 09:23 AM
Germany and the IMF originally wanted them to take 40% (http://www.zerohedge.com/news/2013-03-16/germany-and-imfs-initial-deposit-haircut-demand-40-total)!

Holy shit, the EU is turning into the 4th Reich..

seapilot
03-17-2013, 12:02 PM
The EU was an experiment and its starting to go badly.

AuH20
03-17-2013, 12:04 PM
No guns in Europe?????? What a coincidence?

Lucille
03-17-2013, 12:18 PM
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/03/20130317_cyprus.png


No guns in Europe?????? What a coincidence?

Why do you hate The Children®?

They'll have to settle for heavy equipment (http://www.zerohedge.com/news/2013-03-16/excavator-parks-outside-cyprus-bank-full-video).

Could The "Cyprus Fiasco" Occur In The United States?
http://www.zerohedge.com/news/2013-03-17/could-cyprus-fiasco-occur-united-states


The question then becomes: what does the funding structure of the US private depository institutions look like, and is there any possibility of Cyprus "wealth tax" recurring on the other side of the Atlantic. To answer this question, we present the summary layout of the consolidated US depository system, which according to the Fed's December 31, 2012 Flow of Funds report had a grand total of $15 trillion in assets, and a matched number of liabilities, of which 72%, or a total of $10.9 trillion was in the form of deposits (checkable, small and large time, and savings).
[...]
So, if the US was to go the Cyprus route, and begin impairing balance sheet liabilities to remark assets, there would be precious little space (with just $4.3 trillion in total other funding liabilities), before one would need to start eating into the deposit base, should Congress decide to implement a very "fair and just" financial asset tax in the US next.

Will Congress do this? Obviously, nobody can answer that question now. However, it was "absolutely certain" as recently as 48 hours ago that Cyprus too would see no depositor "bail in" either. Then things changed rapidly. What is known, is that according to the same BCG chart we showed last night, the necessary debt-reduction needed in the US to reach a sustainable debt level, was over $8.2 trillion using debt numbers as of 2009...
[...]
Which means that if, indeed, the US proceeds with its own wealth tax, then deposits may well be one "wealth class" that gets impaired. Of course, since in the US other financial assets, namely the stock market, account for a far greater proportion of household net worth, it is quite possible that instead of impairing deposits at US banks, which already subsist solely due to the Fed's $2 trillion in excess reserves, the government may instead choose to generously tax simple 30% of all of your stock holdings, and achieve the same "wealth transfer" result.

Another coincidence:

Russian Navy to send permanent fleet to Mediterranean
http://rt.com/news/fleet-mediterranean-russia-ships-390/

oyarde
03-17-2013, 05:54 PM
I may need a chip in to get my own fleet .

cheapseats
03-17-2013, 07:26 PM
Authored by Lars Seier Christensen, CEO Saxo Bank; originally posted at his blog at TradingFloor.com,

It is difficult to describe the weekend bailout package to Cyprus in any other way. The confiscation of 6.75 percent of small depositors' money and 9.9 percent of big depositors' funds is without precedence that I can think of in a supposedly civilised and democratic society. But maybe the European Union (EU) is no longer a civilised democracy?

...If you can do this once, you can do it again. if you can confiscate 10 percent of a bank customer's money, you can confiscate 25, 50 or even 100 percent. I now believe we will see worse as the panic increases, with politicians desperately trying to keep the EUR alive.

Depositors in other prospective bailout countries must be running scared - is it safe to keep money in an Italian, Spanish or Greek bank any more? I dont know, must be the answer...

This is a major, MAJOR game changer and the fallout will be with us for a long time to come...

This is full-blown socialism and I still cannot believe this really happened.

Be careful out there...


It is difficult to describe the TARP bailout of financial institutions in any other way. The confiscation and redirection of $890 BILLION dollars of American Taxpayers' money was without precedent that I can think of in a supposedly civilised and democratic society. But maybe the revolving door between Washington DC and Wall Street marks the start of civilized Corporatism?

...If you can do this once, you can do it again. if you can confiscate 10 percent of people's money, you can confiscate 25, 50 or even 100 percent. I now believe we will see worse as the panic increases, with politicians desperately trying to keep their governments running.

Depositors/Investors/Taxpayers/Customers/Clients/Citizens in other prospective bailout countries must be running scared - is it safe to keep money anywhere on earth? I DON'T KNOW must be the answer...

It was a major, MAJOR game changer and the fallout will be with us for a long time to come...

It was tough-shit-you-can't-touch-us CORPORATISM, and I am still really pissed that it happened.

Be careful out there . . . CAVEAT EMPTOR.

cindy25
03-17-2013, 08:37 PM
I never thought any govt would do this in such a direct way; I figured they would just print and print, and it it worthless

Athan
03-17-2013, 08:51 PM
This is good! They are calling a flat out bank-robbery "full-blown socialism"!

cindy25
03-17-2013, 09:52 PM
this is full blown stupidity. People in Greece, Italy and even Germany will start taking out their Euros (much as people did in the thirties) banks pay no interest so the only reason people store it in banks is safety. if that safety factor ends (either because of bank failure or govt theft) people will naturally store euros at home.

the next step will be a flight to gold. I just can't believe the morons in charge didn't think of it.

MRK
03-17-2013, 09:56 PM
This is good! They are calling a flat out bank-robbery "full-blown socialism"!

This is more or less what I said on my facebook during the day of the announcement of the TARP bank bailouts of 2008. No one outside of a few RPers on my facebook gave any comment out of my 700-some facebook friends. Perhaps if they had seen it unfold for longer or had the age or wisdom to understand what it meant there would have been more comments that day. While this was certainly not the fault of facebook, it was rather indicative of the kind of people it attracts, and I deleted my account soon after.