Cypriot banks and the EU

[lakechampainer]

From Der Spiegel: Bomb from Brussels: Cyprus Model May Guide Future Bank Bailouts

http://www.spiegel.de/international/...-a-891849.html

excerpt
Including the Creditors
In the case of Cyprus, European leaders have demonstrated for the first time that the burdens can be distributed differently. Laiki Bank, the country's second-largest financial institution, will be dismantled, and the remaining private shareholders of the already largely nationalized bank and its creditors will shoulder its losses. But the plan also calls for bank customers with large deposits to share in the pain for the first time: Deposits above €100,000 will be drawn on to help cover the bank's losses.
"The plan is good because creditors and major depositors will be included," says Daniel Gros, director of the Brussels-based Centre for European Policy Studies. He also believes that the Cyprus solution could become a blueprint for dealing with banks in other EU countries in crisis. In recent years, Gros continues, banks and their creditors have been bailed out because people have kept in mind the dramatic market turbulences that followed in the collapse of Lehman Brothers. But he thinks people will now say: "Look at Cyprus. The market reacted positively to the plan to close down a major bank and have its creditors bear the costs."
Forcing private creditors to participate in bailing out faltering banks has, to be sure, triggered worries about the possible flight of capital from ailing countries. Bank customers and creditors could "relocate (their money) from the weak to the strongest institutions," says Uwe Burkert, head of credit analysis at the Landesbank Baden-Württemberg, a publicly owned regional bank based in the southwestern German state.

[Johan Banér]

Originally Posted by lakechampainer

It was great knowin' ya!

We're still here.

What is it exactly you expect to happen?

[Johan Banér]

Originally Posted by lakechampainer

From CNBC: Emerging Markets Dump Euro Reserves

http://www.cnbc.com/id/100604785

So? It might as well be construed as excellent news for the Eurozone export industry, and tourism, neither of which is served by a strong Euro.

All it potentially means is that the Eurozone is not about to gain the superpower of being able to print oodles of Euros, with no worries about inflation, like the US has been able to do for an age. But since the Eurozone can't do it anyway, it's not as if it's perceptibly worse off than before.

The CNBC seems not a little hysterical. Then again, it's US media, so who's surprised?

[Selous]

If the Eurozone failed, would other currencies become more valuable?

[copenhagen]

Originally Posted by Selous

If the Eurozone failed, would other currencies become more valuable?

Yes there would be a flight to safety. The dollar and yen would appreciate quite markedly I would imagine....

[Selous]

More importantly Cope; howabout the Pound?

[copenhagen]

Originally Posted by Selous

More importantly Cope; howabout the Pound?

Wel we're local so i think people might transfer to here in terms of currency and personally. They're already doing that. Lot of French money is doing that now. However a Euro collapse would cause massive economic problems in the Eurozone and we would just get caught up in that as we're so closely linked.

[lakechampainer]

Originally Posted by Johan Banér

We're still here.

What is it exactly you expect to happen?

"Humpty Dumpty sat on a wall,"


By Mother Goose
Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall;
All the king's horses and all the king's men
Couldn't put Humpty together again.

[Johan Banér]

Originally Posted by lakechampainer

"Humpty Dumpty sat on a wall,"


By Mother Goose
Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall;
All the king's horses and all the king's men
Couldn't put Humpty together again.

And the mermaid got her legs, and the king is naked, etc...

Essentially you predict disaster, because you predict disaster?

Could be. It's how markets react out of fear. The bloody annoying thing is that by now they seem to be reacting out of fear of their own fear of everything. It could still kill us all in the end.

[lakechampainer]

Originally Posted by Johan Banér

And the mermaid got her legs, and the king is naked, etc...

Essentially you predict disaster, because you predict disaster?

Could be. It's how markets react out of fear. The bloody annoying thing is that by now they seem to be reacting out of fear of their own fear of everything. It could still kill us all in the end.

I predict disaster because the Euro is an artificial creation created by elites for their nefarious purposes - like NAFTA, GATT, WTO, IMF, etc. etc. It is unstable (like an egg on a wall). It is unstable because after all people naturally group themselves into clans, tribes, duchies, kingdoms, countries, etc. Such differentiation between peoples certainly naturally includes people who speak different languages, have different economic resources, different education levels, different climates, etc. etc.

So here I guess I am saying the Euro has fallen apart, as we will have different Euros/but one Euro, something almost mystic I guess. I guess it will be like Humpty Dumpty has been put back together, as an omelet.