“As it turns out, these same oligrachs may have used the one week hiatus period of total chaos in the banking system to transfer the bulk of the cash they had deposited with one of the two main Cypriot banks, in the process making the whole punitive point of collapsing the Cyprus financial system entirely moot.
From Reuters:While ordinary Cypriots queued at ATM machines to withdraw a few hundred euros as credit card transactions stopped, other depositors used an array of techniques to access their money.
No one knows exactly how much money has left Cyprus’ banks, or where it has gone. The two banks at the centre of the crisis – Cyprus Popular Bank, also known as Laiki, and Bank of Cyprus – have units in London which remained open throughout the week and placed no limits on withdrawals. Bank of Cyprus also owns 80 percent of Russia’s Uniastrum Bank, which put no restrictions on withdrawals in Russia. Russians were among Cypriot banks’ largest depositors.
So while one could not withdraw from Bank of Cyprus or Laiki, one could withdraw without limitations from subsidiary and OpCo banks, and other affiliates?Just brilliant.
In every sense of the word.
(h/t Marc in Calgary)
So in other words…. could they have screwed it up any more had they tried?
Tax the rich but most of the rich got away with it (cuz they did not get rich by standing around ie multinational firm/gangster-mob) and some little guy, the honest hard working small business owner that played by the rules got gobsmacked in this. The guys that play a big role in that economy thingy.
The fallout will be epic….. worldwide epic. Trust in the monetary system and in government……… I guess the global warming scare did not send us back to the stone ages but this might.
Sigh
Considering the source of the funds, and the history of violence associated with Russian wealth over the last 20 years or so, perhaps this was the senior leadership at the Banks attempt at a “golden parachute”.
Not that they had anything to lose, as one bank is going to disappear, and the other will be reopening under new management.
A small crack for the money to slip through, and a few quick phone calls would give them a chance to placate the angry Russians, and maybe live out their natural life span.
Anyone care to place bets on a small “spike” in former bank officials mortality rates in Cyprus over the next decade?
Dominoes, anyone?
Karma? Cypriots created that system, voted for politicians, installed bureaucrats, winked and looked the other way while the money was laundered.
Bank runs have a way of spreading like a fever. A warning from an eminent Economics Professor to get out of the markets and the banks. http://www.youtube.com/watch?feature=player_embedded&v=DYsLixDNIKI#at=98
“Iceberg Cyprus Set To Sink Euroland Titanic” good insight into the EU crisis and the role of Cyprus. http://www.french-news-online.com/wordpress/?p=20878#axzz2OdwirqSf
Thank goodness for Cyprus’ strict gun control. Any sensible Cypriot would simply shoot their local elected official after learning this.
Quite simply, if this does NOT cause a war in Europe, we’re in for some real trouble.
And if it does cause a war in Europe, let’s sit this one out. Let them cull the herd, we would be all better off with fewer commies.
Savings accounts in Spain, Italy and other European countries will be raided if needed to preserve Europe’s single currency by propping up failing banks, a senior eurozone official has announced.
More here
The Bureaucrats always tip off the wealthy, whom they need to finance their political elections and re-elections, and will be the first to get the news, ensuring that the proper financial arrangements are made to ensure the wealthy remain that way.
The Bankstas will be tracking the money and looking for their next heist opportunities.
BITCOIN is another possible and dare I say, likely way that money was moved. Have a look at volume spikes here: http://www.bitcoinity.org/markets
More on BITCOIN: https://www.weusecoins.com/
Doncha just love the way the MSM refers to the Russian mob as “oligarchs”? Mein gott, these people are so reflexively predisposed to lying, even the blatantly obvious must be spun.
The Cyprus bank failures were an exact duplicate of the MF Global failure where rich connected depositors got their loot out through transfers before the collapse and restructuring. Same in Cyprus no mobster or politically connected investor got shorted. What, you thought there was a difference between the mob, the government and the banksters?
No one with any brains keeps anything in a bank they can’t afford to lose. I’m just waiting for this to start a run on other banks all over the globe. Anyone care to deride me as a “gold bug” now?
Guilty by incrimination is all it takes these days to allow confiscation of assets, I guess? Clean all the bank accounts out! After all it is only ‘dirty’ Russian money. What excuse will they use in Canada?
Wealth has become such a dirty word in society that the conclusion is ordained that acquiring it was only thru exploitation. At what level will the definition of ‘dirty money’ fail? $1 million, $100,000 or $100 dollars? It appears that deferring consumption and simple investment have become exploitive as well.
Occam is right about buying gold!
I did read something about this today (I haven’t got a link), that did confirm what I believed to be true, and that is that the Cypriot banks are broke because they made loans to the Greek government.
So the governments business model is to borrow money from a bank and then rob the bank to pay them back.
To top it off, in some instances I have read about the banks have been forced to lend money to the government.
So or those people who like to blame the banks, remember that only governments can pass laws and have goons to enforce them. All other business transactions are voluntary.
It’s hard to think that the pointy heads in Brussels can’t see the result of this will be either a bank run, or slow steady draw down on bank assets all over Europe. This was all pointed out by the “Eurosceptics” a generation ago.
When Europe collapses, we will not be able to stay in our cocoon. We d a lot of trade with Europe and I imagine that our banks hold a lot of European government bonds or soon to be worthless Euro denominated assets.
None of this makes any sense to me. Here’s the story-line as I understand it:
– Cypriot banks need refinancing, on account of catastrophic exposure to non-performing loans (I guess).
– But there’s enough money in the bank to put a “progressive” tax on, essentially, all deposits of all depositors.
– That’s no good, so the new plan is to put a higher tax on big depositors only. But the banks have enough liquidity to pay out the big depositors before the tax gets imposed (remember the Pareto principle — 80/20 rule).
– So then we find out that this is actually akin to a criminal law-enforcement exercise (without due process) against Russian billionaires.
Who uses a deposit tax (on everyone) under the guise of bank refinancing that may or may not actually be necessarily to conduct extra-territorial anti-racketeering crime-fighting? Something is very, very wrong here — either it’s not being communicated correctly, or I’ve systematically underestimated the European madness (and I thought it was bad before).
The Bank of Cyprus has branches in Romania as well. On their website they made a point of reminding the public that the account freeze did not apply to Romanian branches of the Bank of Cyprus and please, please don’t come by demanding your cash. Their English language website said the following:
Dear customers,
The Eurozone finance ministers have announced that, against a background of measures agreed with the Cypriot authorities, financial assistance to Cyprus is warranted to secure the financial stability of Cyprus and the euro area.
Whilst the measures agreed include an up-front one-off stability levy on deposits in Cyprus, this does not apply to deposits (or current accounts) with Bank of Cyprus Romania, which are outside the scope of these measures.
I suspect even honest Romanians took that as their cue to empty their accounts. There are plenty of dishonest Romanians—Romania has more than its share of mobsters, ethnic Romanian and Gypsy alike—but stupid Romanians are as rare as hen’s teeth. Like stupid Russians, stupid Romanians tend to die young. Me I’ve never met one in my life. Even the Gypsies are crafty—a survival technique for them.
As for the Russian expats in Cyprus, all they had to do was make their brothers in Moscow or St. Petersburg joint account holders at the first sign of trouble, with the understanding the brothers were to empty the accounts if something like this happened. Lord knows banks have failed in Russia before. So I’m not actually sorry that those among the plain people of Romania and Russia who were smart enough to deserve to keep the money they’d put in Cypriot banks were able to do so.
What I am, to say the least, outraged about is that those of the plain people of Cyprus with no family abroad have had their life savings stolen and their country sold to the European banksters with—if the Reuters account can be believed—the full co-operation of the Russian government. Talk about burying the lede.
So the European banksters told the Russians: “Come on lads. What do you want that mouldy auld island for anyway? The oil? It’s not worth a war with Turkey over, and you have plenty of your own. Blood is thicker than water? Look—you know as well as we do most of the Russians actually living there only do so they can evade Russian taxes and plot against you without your overhearing. If they don’t like it they know where the airport is, and they can take the next flight to hell or Moscow. Don’t give Cyprus a penny—you’ll never see it again. Let us handle this. We’ll see to it that anybody you’d prefer to stay friends with will be repaid in full. Thank us later.”
This does explain why the Russian paratroopers never arrived in Nicosia. I suppose the plain people of Cyprus are expected to be grateful. I suspect plenty of them are.
David: The mobsters were never the target of the European banksters. THe article makes clear that they got their money back in full. They had no choice, unless the Europeans wanted their gas cut off, their cars to blow up the moment they tried to turn the engine over, or both.
The penalty for the crimes of the Cypriot banksters, who handed over their people’s life savings to Greek kleptocrats so their wives could squander it at Harrod’s, will be paid by the plain people of Cyprus, which is what their masters in Brussels and Frankfurt wanted in the first place.
Great Hayek Road to Serfdom quote (from ZH): The extent of the control over all life that economic control confers is nowhere better illustrated than in the field of foreign exchanges. Nothing would at first seem to affect private life less than a state control of the dealings in foreign exchange, and most people will regard its introduction with complete indifference. Yet the experience of most Continental countries has taught thoughtful people to regard this step as the decisive advance on the path to totalitarianism and the suppression of individual liberty. It is, in fact, the complete delivery of the individual to the tyranny of the state, the final suppression of all means of escape—not merely for the rich but for everybody.
Occam, they will confiscate that too unless you have it in your physical possession and not locked in a bank vault. Remember, there’s a lot more gold floating around the world than actually exists as bullion.
No one seems to connect the dots that lead directly to socialism. Most all of the government debt in the world is the result of socialism or socialist programs that countries and millions of people willingly accepted in election after election. It is the same in Canada today. This is the same in the USA. People need to quit blaming just the banks and start laying the blame were it belongs, on the shysters in government that made the promises and the dupes who voted for the heroin/socialist poison. We are all TAX SLAVES managed by TAX FARMERS who operate the TAXFARMS. Total Sovereign Debt in Canada 3-4T Canada’s GDP annually 1.2T Ontarios Total Debt approx. 300B Quebec’s Total Sovereign Debt 400T plus another 700B plus for QPP Canada has 16M taxpayers. Taxes on the Canadian TAXFARM now consume more of the average Canadian Families Budget than Food, Clothing and Housing combined. The majority of citizens live hand to mouth each week. And still the people demand more bread and circus’s. None of this will end very well for anybody. http://sopebocks.blogspot.ca/2008/10/sub-prime-crisis-was-created-by.html
David, try this.
Remember that raiding bank deposits was only part of the package. Cyprus also has to raise its oorporate income tax from 4 to 12%. And it’s going to be retaining capital flow controls for some time to come.
Add these things into the picture and it becomes a bit more clear. Cyprus is finished as a banking haven. Its banks can’t afford the highly attractive deposite interest rates they could before. Its banks can’t dispense funds to offshore depositors with the freedom they used to. So if the objective was to put Cyprus out of the international banking business, it succeeded.
Just like Iceland, its business model is broken permanently.
Coming soon to the USSA. The Chimp in Chief and his handlers know they can get away with it due to the high number of LIV’s and gubermint dependents.
We all need to understand that any money we have at a bank is in reality an unsecured loan with no collateral, deposit insurance notwithstanding. Cypriots found this out the hard way – the banksters played with deposits and got burnt, then socialized their losses.
The banks got burnt buy lending money to governments who are broke and can’t pay back their debts. The lesson here is don’t lend money to socialist governments that are going broke because people who want free stuff keep voting for bankrupt governments.
The only reason that Cyprus is in this situation is because they can’t print money to pay their debts. Countries that control their own central bank steal your money by inflating it out of existance, countries that can’t, steal it directly from your account.
Yes the banks share some blame but this is 99 percent a government caused problem.
we git the government we VOTE for?????
the LIIV’s are as much to blame as anyone
LIIV = low informed, intelligent voters
NNM666 you are correct in saying “we get the government we vote for” but I am tired of voting for the best of the worst !
I believe all of our parties and politicians are pressured by Bankers and that none of them dare to effectively lead any democratic nation on earth.
I have voted in every election, municipal , provincial and federal since coming of age, and I will not vote again until after the upcoming financial and civil revolution.
Good luck to us all !
How great was the leakage this past week? Is 3 billion an accurate figure?
“When we reported yesterday that over the past week, the Russian depositors in Cypriot banks had managed to find loopholes through which to pull out billions…”
…
…”moments ago Welt reported precisely what we had been expecting to read all morning: the Cyprus Central Bank is about to demand even more cash from the ECB to plug the holes left from the stealthy Russian outflows.”
http://www.zerohedge.com/news/2013-03-26/russian-withdrawals-quantified-cyprus-central-bank-set-expand-emergency-credit-€3-bi
The youth in Cyprus:
http://www.zerohedge.com/news/2013-03-26/cypriot-youth-rise-pictures-they-just-got-rid-all-our-dreams
It’s one thing to tell the 60 / 70 years olds that they’re going to have to eat thin soup for the remainder of their days, quite another to tell the 20 / 30 year crowd that… It’s why the 50% unemployment rate of those under 30 years in Spain matters.
The murder rate in Cyprus is quite low, about 10 – 20 individuals each year? At that rate, any increase will be seen as a giant spike…
I can’t tell you how many socialist bastards I work with who see no problem at all with the theft of Cyprus savings.
I’ve heard “good! take those rick bastards money” and so on.
It is quite amazing that these idiots can’t see that it’s theirs, and/or their parent’s money next. It’s the same bloody retards that were crying “foul” on Jan 14/13 when their paychecks took a trim. Today, they are oblivious to how the plight of others will eventually become their own plight, because of the decisions they make today.
Quite frankly… I’m falling into the Captain’s camp and choose to “Enjoy the Decline”. Perhaps it time to ‘borrow and spend’ and let the suckers pick-up the bill.
Is this not what Obama did ? Furlough the Fed Workers so he can continue to take vacations.
Agreed.
Nowhere will you read that option 1A should have been: CUT SPENDING!
Cut the 5.8 billion out of spending and you don’t have to steal people’s money. Now, one can argue that 5.8B is too much to cut in one go; but, this has been brewing for some time. I can only conclude that this “template” of theft has been loooonnnnngggggg thought-out, and is now being executed.
I have very little faith that the socialist sheeple of the world will ever realize that it is they who is being stolen from. Not in the name of the poor(Robin Hood); but in the name of maintaining the lifestyles of the “rich” elites they so despise.
Who spent that money, Indiana? It wasn’t the Cypriots. That was their life savings. The Cypriot government was running a surplus. Cyprus was paying its way.
The trouble began when the mainland Greek government “borrowed” the money from their pals the Cypriot banksters, with no intention of ever repaying it. I’m all for cutting the spending of the Russian mistresses of the Greek kleptocrats who stole that money, and returning the money to the plain people of Cyprus and of Greece. If you can think you have an easy way to get that money back, good luck to you.
Oh, by the way, that 5.8 billion is several months worth of Cyprus’s national income. Explain again what Cyprus was supposed to cut out of its government budget to find the money. The Cypriots did everything they could think of to find another way to beg or borrow the money from their people honestly. The European banksters just laughed at them.
Laugh if you want, I can’t stop you. You’d be better off praying for Cyprus, and that Canada is spared the same fate. Enjoy the decline? Unless your father owns the Toronto-Dominion bank, don’t talk bollocks. Only a few thousand banksters will have the luxury of enjoying the spectacle of the destruction of Christian civilization. Everyone else should pray for Christ to return, or failing that to take them from this world before they see what replaces it.
This is a financial Taranto. Someone is watching what happens.
Your right unfortunately. How many 20 to 30 year old’s today aren’t spoiled and misinformed about what life owes them? I worry about people like my parents that just retired, and hard working kids if things get snowballing. I still think the high employment rate of young workers has more to do with a poor work ethic and being above certain types of work than lack of jobs.
Re: Bitcoin via drudge
“The online alternative currency, previously little more than a curiosity in financial markets since its 2009 inception, has zoomed in trading value since the Cyprus banking crisis erupted two weeks ago.”
http://www.cnbc.com/id/100597242