How stupid can the Europeans be? They barely escaped the complete destruction of their economy, several times, over the past few years. Testing their fate, like a collection of idiots on a mantle, they bail out Cyprus–but add in the absurd condition that depositors are to take a hit. It’s cartoonishly funny.
This is the very definition of penny-wise, pound foolish that only a German could concoct. What did they think would happen, post Spaniard, Italian crises?
This is going to be walked-back, which is why futures are not down 300 right now. Cyprus may be meaningless, fodder for the Greeks and Turks. But it’s the precedent that matters here. As a member of the EU, the depositors must be afforded protection. This isn’t complicated.
Back in the Great Depression days people lost of their money because there wasn’t any depositor insurance. When the panic struck and everyone rushed to take their money out at once, the banks failed.
Why did the banks fail?
Answer: because the core business model of a bank is pyramid scheme. Why in the world would you perpetuate a bank run, just to save a few dollars on a small bailout? Are they trying to take a big, brave stand on moral hazard? Who are they kidding?
It’s a little late for that.
The pyramid scheme must continue and will. Both Italian and Spanish 10 yr bonds yields are little changed and Europe is barely down 1%. This is a non-event, because the suckers in Europe are going to walk-back this absurd 9.99% (No Herman Caine) levy.
In the event this isn’t walked back, just sell stocks and go on vacation for a few months–because it’s gonna cause a pan-european bank run.
http://www.youtube.com/watch?v=o4A_0fvWzHY
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Classic Coke, Netflix all in one pricing, JC Penny’s pod stores, and Now Cypress Banks -9.99% special dividend. Marketing at its finest.
9.99% does sound a lot better than 10
idiots
50 rupees says Germany will eventually take the fall
Even after watching them mock Herman, he still looks like the better option.
Frankly, there is no FDIC protection for the big banks because the FDIC doesn’t have trillions of dollars to do bailouts. If they go under the FED would be the only one who could bail them out. I bet they don’t do that and the depositors will lose their money, or most of their money.
spy puts doing well, bot some swn calls.
The thing is – I have predicted with mathematical precision …
Thanks for the time machine, I have parked it by the front door.. the tank is full too.
Mr.P
http://ibankcoin.com/partridge/2013/03/14/breaking-bad/
I’m afraid you are disillusioned, enamored by your reflection in the mirror.
See to your sins, Mr. Partridge.
You know I love you 🙂 no homo
So stocks can be bought lower..Smart
Perhaps the Europeans are not stupid. Perhaps their continent is just owned by their largest banks– the same as our continent is. But Cyprus-owned banks are not among their largest banks. So the owners of the continent don’t mind if those go bankrupt.
If Cyprus banks end up bankrupt, then the other European banks will claim that the problem is country-specific & that the money of the depositors in European banks outside of Cyprus is safe. Will people believe them? Who knows? I can’t imagine that trust in large banks is very high anywhere in the world right now. But then, people will want to believe them. And sometimes we humans believe what we want to believe.
http://www.viewfromtheblueridge.com/wp-content/uploads/2013/03/RIM-Jobs1.jpg
RIMM jobs
How old is that? Nobody reads print anymore.
When you take your $ to a bank they confiscate it anyways. They put you on the books as someone they owe $ to.
great title herr fly
History of the market shows that new record highs almost always indicate a top. My enthusiasm has certainly waned.
It was not the idea of the Germans. They wanted a 40% fee on the uninsured parts, i.e. Over 100000€. And leave the other accounts untouched. Only the Cypriot government wanted to change this and include the sub 100000 accounts to avoid the high fee on the large accounts.
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