Greece Imploding

Greece is continuing on its downward spiral to financial implosion.

To add to the woes of the good people of Greece, on top of last week's truly shocking youth unemployment statistics (close to 65%), Reuters reports that Greece's economy shrank at annual pace of 4.6% in the second quarter, contributing to a slump of more than 20% in real terms since 2008.

Ironically, in the delusional world of economists, these figures were slightly better than the 5% contraction forecast.

Delusions aside, Der Spiegel has blown the whole charade of bailing out the Greek economy wide open. It quoted an internal document prepared by the Bundesbank as saying that Europe "will certainly agree a new aid programme for Greece" by early next year at the latest.

The Bundesbank also described the risks associated with the existing aid package for Greece as "extremely high", and said the approval last month of a 5.8 billion euro aid instalment to Athens had been "politically motivated".

As I have noted many times before, in order to survive as a democracy and civilised society Greece needs to exit the Eurozone now; others such as Cyprus need also to consider their positions. 

Greece's Day of The Jackal Looms

Reuters reports that Greece has been given three days to reassure Europe and the International Monetary Fund it can deliver on conditions attached to its international bailout in order to receive the next tranche of aid.

Europe and the IMF are unhappy with the progress that Greece has made towards reforming its public sector and improving its tax collection.

In the event that Greece misses the deadline or its promises fail to assuage its "bankers", then as sure as eggs are eggs the "solution" that was foisted upon Cyprus (ie a raid on bank accounts) will be foisted upon Greece.

Those with money in Greek bank accounts would be advised to withdraw it now, before the jackals pounce. 

Cyprus NOT Seeking Renegotiation of Bailout

Q: When is a renegotiation not a renegotiation?

A: When it is a "tweaking".

Brexit - Good or Bad For Britain?

Britain's "love affair" with the EU, much like the seasons, turns hot and cold on a regular basis. More often than not the feelings towards the EU are frigid, to say the least.

In response to the never ending wrangling with the Tory party over Britain's role within (or without) the EU, Britain's leading businessmen have penned a letter to the Independentwarning that a Brexit would severely damage Britain's economy and standing within the world:

"The benefits of membership overwhelmingly outweigh the costs, and to suggest otherwise is putting politics before economics."

The economic costs/benefits of leaving the EU are not clear cut. However, the political consequences of remaining in the EU are clear; Britain's independence will continue to be eroded.

Does this erosion of independence matter?

Ask the good people of Greece or Cyprus!

Like it or not politics does play a role in this, because if politics fails we lose our democracy and there will be either dictatorship or anarchy. Businesses may well do well under certain forms of dictatorship, but the people of Britain won't.

Cyprus Parliament Votes

Today the Cyprus parliament will be finally given an opportunity to vote on the bailout plan imposed on it by the IMF/EU.

Pundits expect that the bill will pass.

However, if it doesn't, the EU/IMF will simply delay the bailout until the parliament votes in favour of it.

"Democracy" in action, the EU way!

Cyprus To Maintain Capital Controls

In a remarkably unsurprising development, Cyprus has decided to maintain capital controls during the summer.

The Eurozone finance ministers and ECB will of course be delighted, as this will enable them to continue to crow that there there has been no bank run in Cyprus.

My sympathies to the people of Cyprus, it will be a long hot summer!

Wheels Fall Off Cyprus Bailout Agreement

It seems that the wheels are falling off the Cyprus bailout deal.

The cost of the rescue has risen from Euro17.5BN to Euro23BN, but Germany remains adamant that the size of the bailout will not increase. 

Meanwhile the BBC reports that Cyprus president Nicos Anastasiades has said that he will appeal for extra assistance from the European Union, even though he claims he does not want more money.

What does he want?

Help from EU to reduce the burden of the conditions to make the bailout possible.

In other words Cyprus is trying to renegotiate the terms of the bailout, ie the wheels have fallen off the agreement!

Who Ate All The Pies? - Cyprus Cashflows Pre "Bailout"

RT reports the following:

"A company owned by in-laws of Cypriot President Nicos Anastasiades wired €21 million from Laiki Bank to London days before the Eurogroup’s crisis-triggering levy proposal, claims a Cypriot newspaper. The president demands an investigation.

During two days, 12 and 13 of March, the company A.Loutsios & Sons Ltd., co-owned by Loutsios John, the husband of Nikos Anastasiadis’ daughter, Elsa, took five promissory notes worth €21 million from Laiki Bank. The money was then transferred to London, reported Cypriot newspaper Haravgi, affiliated to the communist-rooted AKEL party.

The withdrawal was fulfilled just three days before the Eurogroup meeting when euro finance ministers agreed a 10 billion euro ($13 billion) bailout for Cyprus.

The company, however, has firmly denied the reports.

The newspaper recalls that Cyprus Finance Minister, Michalis Sarris, publicly admitted that the government was aware in advance about the Eurogroup’s intentions to impose a “haircut” on bank deposits of more than 100,000 euros.

Spokesman of AKEL, Stavros Evagorou, has called on the investigation committee to check the information regarding money withdrawal by Anastasiades’ family members as well as other reports about money transfer from the country on the eve of the Eurogroups’ levy decision.

Responding to the allegations, President Anastasiades called the publication an “attempt to defame companies or people linked to my family”.

“[This] is nothing but an attempt to distract people from the liability of those who led the country to a state of bankruptcy,” Anastasiades said.

The president stressed that no one, including himself, will walk free from the on-going investigations looking into responsibility for the crisis that has engulfed the Cypriot economy.

Moreover, Anastasiades assured that when the investigative committee assembled on Tuesday, he would request that its members look into this particular case."

In related news, Cyprus News reports that "700millions fled the country between 1-15 march 2013".

Protothema.gr reports the following:

"Four pages with the names of some 132 companies and individuals who withdrew the bulk of their deposits in euros, dollars and rubles kept in local banks reveals protothema.gr.

Transfers of money totaling causes vertigo made within 15 days, namely the period from 1st until March 15, 2013. On Friday, March 15 at the Eurogroup meeting which decided formally levy, as has been called the "haircut", on deposits of companies and individuals in all banks in Cyprus. These 132 companies and individuals seem to have "inside" information about impending single taxation of deposits in Cypriot banks so it proved as the elements contained in lists, in most cases, they withdrew all their deposits in Euro, dollars and rubles, which moved to other banks outside Cyprus, which apparently considered a "safe harbor."

The disclosure of the list, which shows that the outflow of deposits from local banks other financial institutions outside Cyprus became massively creates reasonable suspicion that some had inside information about the decisions taken by the other 16 eurozone countries in exchange for funding deficits of the economy.

Apart from the huge moral issue raised, the government of Nikos Anastasiadis is heavily exposed, since in some cases, those who took huge funds from abroad are relatives of the President of the Republic, as the company Loutsios & Sons ltd owned by father of groom Nikos Anastasiadis, who three days before the decision to "haircut" deposits transferred to a British bank 21 million euros!

Read the lists with the names of all companies and individuals who withdrew their deposits from Cyprus during the period from 1st until March 15.

The first column are names of companies and individuals in the second record of the amounts withdrawn in the third column refers to the account balance of the People, the currency in the fourth and the fifth and last column refers to the date of transfer."

Banks In Cyprus Reopen

The banks in Cyprus reopened this morning at 10:00GMT.

There has been no panic or a shambolic dash by people to withdraw all their cash.

For why?

The capital controls limiting daily manual withdrawals (to what you can take from cash machines), the banning of cheques etc are ensuring that there cannot be a mass withdrawal of cash by those who were not tipped off before the crisis occurred.

However, the litmus test will be when/if the capital controls are removed in seven days time.

The 80% Cyprus Haircut

As capital controls are about to be put in place, and Cyprus is ring fenced from the rest of the world, it now emerges that the 40% haircut will in fact be around 80%.

This will end badly!

Two Questions For The Good People of Cyprus

1 What will happen to the rule of law in Cyprus when the list of people who removed their money from the country before, and during, the ongoing crisis is made public?

2 What was the Central Bank of Cyprus doing during this period?

Bank of Cyprus Head Yiannis Kypri Fired

Yiannis Kypri, head of Bank of Cyprus, has been fired by central bank governor Panicos Demetriades who, apparently, is acting under orders form his Eurozone overlords.

Diesel-Boom's Master Plan

As the markets ready themselves for the mother of all bank runs, as and when the banks re-open in Cyprus (I cannot see that they will open before Easter), the apparatchiks of the Eurozone have also been making plans.

The Slog reports that Diesel-Boom has a plan all ready to go live, that will impose capital controls within the Eurozone that will prevent people moving money out of the Eurozone:

"A plan is ready to go, and has been since January.

But the FinMins have yet to discuss it – not that this will make much difference. Now he’s in the Eurogroup driving seat, Dijsselbloem has become a prime mover in all this”.

As the Slog notes, Diesel-Boom has no clue as to the way markets work. He studied agriculture at University, took a masters in it at UCD, and then became a local councillor before moving onto the national political scene in the Netherlands.

Cyprus is the Eurozone's Czechoslovakia (betrayed by the Munich Agreement in 1938).

Question For The Bank of Cyprus

If the Bank of Cyprus is meant to be the good bank, and the one that is meant to survive, why has the Chairman of the Bank of Cyprus (Andreas Artemis) resigned?

The Hand of Diesel-Boom Detected In The Market

Jeroen Dijsselbloem has been busy again, today saying that there were no signs of a bank run in periphery countries or deposits moved from periphery to core.

That's nice.

Except that the banks in Cyprus are closed, and are likely to remain closed until after Easter.

Once they re open there will most certainly be bank runs and deposit moves.

Meanwhile maybe someone should tell Dijsselbloem that the banks are shut and, more pertinently, that he should shut his mouth!

German Banks After Russian Money

It seems that, having more or less destroyed the Cypriot banking sector, Germany (in the spirit of Eurozone "fraternity") is seeking to get its hands on all the Russian money that will take flight from Cyprus.

Faisal Islam has tweeted:

"German banks in Cyprus are offering bonuses to accountants with Russian clients to divert savings to Germany, a Cypriot businessman tells me."

So much for the Eurozone being a "band of brothers" who support each other when times are hard!

Question Re Cyprus

Question: When does a one off event (the theft of depositors' accounts in Cyprus) become a template for future bailouts?

Answer: Ask Dutch Finance Minister Jeroen Dijsselbloem
 

Happy Greek Independence Day - Cyprus "Fixed"!

On this bank holiday in Cyprus, to celebrate Greek Independence Day, doubtless the good people of Cyprus are also "celebrating" the fact that the banking crisis has been "fixed" and that they will receive Euro10BN in bailout money.

The Eurozone finance ministers have agreed that Laiki (Popular) Bank will be wound down and depositors with more than Euros100K will face losses of 40% or more (Schauble's original plan). Those who have deposits of less than this amount will, theoretically, incur no immediate losses.

However, unlike the last "deal", the Cyprus parliament will not be voting on this.

It seems that, once again, the Eurozone sacrifices democracy in order to pursue its Messianic mission!

The chairman of the Cypriot parliament's finance committee, Nicholas Papadopolous, told the BBC said the agreement made "no economic sense":

"We are heading for a deep recession, high unemployment. They wanted to send a message that the Cypriot economy ought to be destroyed, and they've succeeded in a large part - they've destroyed our banking sector." 

Needless to say the banks, as it a bank holiday, remain closed. As and when they re open will be the litmus test as to whether people believe that this is "fixed".

Clearly anyone with half a brain will empty their bank account immediately, Cyprus has signed its own death warrant and is finished unless it leaves the Eurozone.

Happy Greek Independence Day!

Troika Demands More From Cyprus

Much like a loan shark adding more to the bill of his hapless borrower, the Troika now claim that conditions have worsened and as such have increased the amount of money they want from Cyprus from Euro5.8BN to Euro6.7BN.

Meanwhile in Cyprus, it seems that the despised and rejected bank levy is now back on the table!

Haircut For Depositors In Other European Countries

As per The Slog:

"We cannot exclude a haircut for depositors in other European countries."

You have been warned!

We are all Bulldozer Man now!