Okay, mixed references here.
There was initial euphoria in the markets that a deal was made to steal depositors’ money, but now the reality is sinking in, Rand flat as Cyprus euphoria wanes:
THE euphoria surrounding the Cyprus bail-out fizzled out in late trade on Monday, causing the rand to give back most of its earlier gains, with a softer euro also weighing on the local currency.
“We had a pretty range-bound day with the rand trading roughly between the R9.22-R9.30 level to the dollar for most of it. A lot of the euphoria on a bail-out plan for Cyprus led to risk-on sentiment, which initially benefited the rand, but this euphoria has waned and the rand went with it,” a local trader said.
‘No decision on reopening Cyprus banks’:
No decision has yet been taken on whether commercial banks in Cyprus will open as scheduled on Tuesday after a 10-day lockdown imposed on fears of a run on deposits, the Central Bank said.
Contacted by AFP, a Central Bank official said there had been “no decision yet” on whether banks would reopen, following a bailout agreement for the debt-hit island reached with the eurozone earlier Monday.
MARKET SNAPSHOT: U.S. Stocks Fall As Cyprus Deal Reassessed
U.S. stocks declined Monday, erasing gains that briefly put the S&P 500 Index less than 1 point from its record high, as investors considered the deal to keep Cyprus in the euro.
“We were having too much of a celebration over the near-term success of fixing the Cyprus problem, but the devil is in the details, and the details are still coming out,” said Art Hogan, market strategist at Lazard Capital Markets.
“The good news is disaster has been avoided; the bad news is the knock-on effect,” Hogan added.
The Bear must not be happy:
Russia was cut to marketweight at Bank of America Merrill Lynch, which called the nation a “net loser” from the Cyprus bailout plan.
“While the rest of the world welcomes the Cypriot bailout, the major haircuts and freezing of deposits over 100,000 euros is clearly worse for Russia than the originally proposed Cypriot bailout,” Bank of America strategists said in an e-mailed note today.
I doubt it’s over:
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.
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Russia to cut off nat gas supplies to Europe in 3, 2, 1 …
Does Putin seem like the kind of guy to get bent over a barrel and not react ? I don’t think so …
That’s one response, sure. I doubt that will be his first play.
The first play? have the Russian depositors remove all of their funds in Cypriot banks and move them somewhere sturdier, like the Caymans.
Yes, that’ll collapse the Cypriot banks in short order, but I doubt Puti-put-put will give a hoot. The resulting turmoil will be the equivalent of a swift kick in the ECB.
Popcorn. This is going to get interesting now.
We’ve been doing essentially the same thing here for years.
And LESS openly and “honestly”…or at least MORE surreptitiously…
Exactly! See, our Fed is much more sophisticated than those oafish EuroClods. The fed steals 5-10% of everybody’s bank account every year and the rubes never even notice.
Control freaks and power grabbers came up with a plan to cover earlier thefts with a “legal” way to confiscate property. What a great way to govern!
hmm…..Does Cypress really expect the Russians to sit this one out? What makes them think that Russians won’t do a bank run and force a bank failure, even among ‘strong’ banks?
They said they may collect 6 billion euros, maybe half from the Russians. Something tells me the influence of the crime syndicates has not gone unnoticed, and this measure is somehow coordinated.
iirc, back in the late 90’s we bailed out the Russian currency?, or their markets? Anyway, the rumor was the Russkies took the money and ran, to buy expensive villas on the Mediterranean. The war of the oligarchs and central planners perhaps, on how to best scam the general public. Too bad the CIA doesn’t blog with updates. 🙂
My question is… Will the fall of the Cyprus economy be the thread that brings down the European Union?
It’s time to consolidate our holdings abroad..
It’s a pretty easy grab, the Russian oligarchs (for some reason, we have to call Russian gangsters “oligarchs”) have stashed their laundered money in Cyprus.
But undermining the confidence in the banks generally is a foolish step when on the brink of crisis in at least half a dozen other countries. Of course, if EU had any idea how to manage things soundly, they would have already. They do not.
This won’t be pretty.
It’s done for the same reason we called Chavez a “president”. It’s proper etiquette in polite company. It’s a well understood rule when they have power to effect redistributive or retributive change.
I cannot see the Russians taking this lying down. Are we about to see a repeat of Hitlers’s retreat from Russia?
It’s not just in Cyprus where Russian interests are being challenged. It’s also in the Middle East and Africa. Is Russia the target of all these provocative acts? If so, then why?
[…] Cyprus needed a bailout and it got it. May God have mercy on the lot of them, because one of the prices they paid for their money was […]
I doubt there are the funds in large accounts that Cyprus claims. Cyprus has been on high rate short term loans for several months.
I think it’s primary function is access to Euros & Haaretz has it that Cyprus is a Forex currency trading centre & gambling hub . Foreign players would not just be Russian.
There also may be legit funds deposited to secure /guarantee gas negotiations..
Cyprus is pretty much finished.
The hell of it for Cypriots is that if their gov doesn’t take a chunk of their money, maybe the banks collapse and they lose all of their money. Of course, both could happen.
Time to rename California Cypriornia.
shoulda read maybe their government collapses…..