Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 03-17-2013, 10:10 AM   #21
Recycles dryer sheets
ratto's Avatar
 
Join Date: Mar 2011
Posts: 225
Based on the report I read, about 1/3 bank deposit in Cyprus belongs to foreign holders. There is also accusation that Cyprus banking system has allowed tax invasion and black money for too long. So asking whoever has over 100k euros in deposit for one-time 9.99% tax is not too far-stretched from some other EU members. It would be unfair to ask Germans to foot bills every time. There have already been bank runs in Cyprus now, even including a man threatened to get his deposit out of his bank by using a bulldozer. Not sure if online banking will make any difference in this case. I guess it probably would be even easier for government to put restriction on asset transfer initiated online if deemed necessary. We can potentially inflate our debt obligation away, but the price must be paid, sooner or later, by someone.
__________________

__________________
ratto is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-17-2013, 10:18 AM   #22
Full time employment: Posting here.
 
Join Date: Jan 2008
Posts: 882
Quote:
Originally Posted by MichaelB View Post
I've lived through worse than that. Twice, in fact (Venezuela). Nothing to do with the US, not even sure it has any impact on us.
On the business side I was pretty heavily into the situation in Argentina when they un-pegged. In some ways this was the equivalent of seizing about 75% of the bank deposits in local currencies. Those were interesting times. The locals who didn't have USD accounts offshore were not happy campers.

Our dealings in Venezuela were almost exclusively with PDVSA so we dealt strictly in USD and all transactions occurred through a bank outside of VEN.
__________________

__________________
jebmke is offline   Reply With Quote
Old 03-17-2013, 11:15 AM   #23
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 572
While the article said a lot of accounts in Cypress were set up by money from Russia, by history, proximity and linkage, there must be a lot of money from Greece as well.
__________________
bondi688 is offline   Reply With Quote
Old 03-17-2013, 03:21 PM   #24
Thinks s/he gets paid by the post
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 3,242
Truly, the law of unintended consequences will kick in in Cyprus. It will be a cold day in Paradise before most folks put any more money into their accounts there. Fool me once., etc.... YMMV
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is online now   Reply With Quote
Old 03-17-2013, 03:31 PM   #25
Full time employment: Posting here.
 
Join Date: Mar 2011
Posts: 534
Excellent piece on the subject by Felix Salmon

The Cyprus precedent | Felix Salmon
__________________
jon-nyc is offline   Reply With Quote
Old 03-17-2013, 03:37 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,880
One can not help to wonder if it is at all possible for Cypriot politicians that were in the know on Friday (you know that there were some. Had to be) took advantage of the situation and made arrangements to transfer all/most of their loot.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Old 03-17-2013, 03:39 PM   #27
Thinks s/he gets paid by the post
redduck's Avatar
 
Join Date: Mar 2005
Location: yonder
Posts: 2,053
Quote:
Originally Posted by soupcxan View Post
To me this sounds like hypothetical fear mongering on AM talk radio, but in fact is happening today in Cyprus (account limits are EUR not USD). Am I the only one scared by the precedent this sets?

http://www.nytimes.com/2013/03/17/bu...banks.html?hpw
Well, to answer your question, you seem to be the only one scared so far.
__________________
redduck is offline   Reply With Quote
Old 03-17-2013, 03:48 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,616
Thanks for link to the Salmon piece.

Is there anything actionable in all this for US investors? Will US Treasuries get a small pop? Will int'l funds drop by 1% since the Euro is off by 1%? Anything else?
__________________
LOL! is offline   Reply With Quote
Old 03-17-2013, 03:56 PM   #29
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,424
Quote:
Originally Posted by jebmke View Post
On the business side I was pretty heavily into the situation in Argentina when they un-pegged. In some ways this was the equivalent of seizing about 75% of the bank deposits in local currencies. Those were interesting times. The locals who didn't have USD accounts offshore were not happy campers.

Our dealings in Venezuela were almost exclusively with PDVSA so we dealt strictly in USD and all transactions occurred through a bank outside of VEN.
I was a local hire and paid in Bs. Some rough moments and sleepless nights. I remember friends and coworkers in Brazil, Argentina, Mexico and Peru who also went through tough currency and banking situations. I imagine lots of folks in Cyprus are worried right now. Those that can afford it the least will be hurt.

Nothing about the US financial situation even remotely compares, especially the fear factor.
__________________
MichaelB is offline   Reply With Quote
Old 03-17-2013, 04:18 PM   #30
Recycles dryer sheets
 
Join Date: May 2011
Posts: 134
This from the BBC:

"Depositors will be compensated with the equivalent amount in shares in their banks."

I'm not sure shares in a failing bank is any consulation.

BBC News - Cyprus bailout: Parliament postpones debate
__________________
theOAP is offline   Reply With Quote
Old 03-17-2013, 04:23 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 5,880
Quote:
Originally Posted by theOAP View Post
This from the BBC:

"Depositors will be compensated with the equivalent amount in shares in their banks."

I'm not sure shares in a failing bank is any consulation.

BBC News - Cyprus bailout: Parliament postpones debate
Wow can't believe that the Cyprus government has that much power. Forcing banks to issue sahres of their stock and getting zero in return.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Old 03-17-2013, 05:47 PM   #32
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,904
Monday might be an interesting day in some European countries... Good thing there is no chance of a reenactment of the impact of certain events in Sarajevo almost exactly a century ago.
__________________
ejman is offline   Reply With Quote
Old 03-17-2013, 06:34 PM   #33
Thinks s/he gets paid by the post
 
Join Date: Feb 2011
Posts: 1,629
Quote:
Originally Posted by MichaelB View Post
I've lived through worse than that. Twice, in fact (Venezuela). Nothing to do with the US, not even sure it has any impact on us.
I would like to agree, but things like this have a way of spiraling beyond expectations. If this situation in Cyrpus is viewed by enough Eurozone citizens as a precedent it could start a major run on bank deposits across the Eurozone, and possible precipitate another financial crisis before the world economy has fully recovered from the last one.

Why today’s Cyprus bailout could be the start of the next financial crisis
__________________
ERhoosier is offline   Reply With Quote
Old 03-17-2013, 07:04 PM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Eh, we are overdue for a correction and I have lots of cash to invest. Sell-off, ho!
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 03-17-2013, 07:53 PM   #35
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,382
Quote:
Originally Posted by brewer12345 View Post
Eh, we are overdue for a correction and I have lots of cash to invest. Sell-off, ho!
Yes, and to make it better I just bought some SPY puts. Here's hoping for some filthy lucre, my second favorite thing.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 03-17-2013, 07:56 PM   #36
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
Quote:
Originally Posted by brewer12345 View Post
Eh, we are overdue for a correction and I have lots of cash to invest. Sell-off, ho!
You may get your wish as market futures are heading down.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 03-17-2013, 07:57 PM   #37
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,037
It could be argued, I think, that in the US we are also paying a tax on our deposits when real interest rates are kept negative.
__________________
FIREd is offline   Reply With Quote
Old 03-17-2013, 10:24 PM   #38
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Cyprus is a pimple on the ass of Europe, so realistically this should be nothing.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 03-17-2013, 10:44 PM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,263
Quote:
Originally Posted by Koolau View Post
Truly, the law of unintended consequences will kick in in Cyprus. It will be a cold day in Paradise before most folks put any more money into their accounts there. Fool me once., etc.... YMMV

This is what I was thinking...

Also, if some of that money is Russian mob.... I bet they will not take less than what they put in.... or else...
__________________
Texas Proud is offline   Reply With Quote
Old 03-17-2013, 11:00 PM   #40
Thinks s/he gets paid by the post
imoldernu's Avatar
 
Join Date: Jul 2012
Location: Peru
Posts: 4,616
If the results of the Monday decision cause EU instability or the beginnings of worry in the US markets, you may want to revisit this link (previously posted on this thread). "Collateral Damage - Back to Mesopotamia"
http://www.bcg.com/documents/file87307.pdf

Not only does it cover the kind of resolution proposed by Cyprus government, but it shows the inter dependability of world wide banks, and offers some unpleasant solutions, as well looking forward in the event solutions are not begun.
Interesting, if only as a framework to view events as they unfold, and possibly to help in developing a personal plan of action, in the event that things do go downhill... ie, where to keep assets safe.
On of the parts of a proposed solution was to tax corporations on non producing liquid assets, to encourage R & D.
The charts that cover the relative financial strength of the US and EU countries is quite revealing, covering Household Debt, Corporate Debt and National Debt... as well as the relative differences in personal wealth between the countries.
The article is from September 2011, but as far as I can see, very true to today's circumstances, albeit the debt was substantially less then.
__________________

__________________
Today is the oldest you've ever been, and the youngest you'll ever be again. - Eleanor Roosevelt
imoldernu is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 05:33 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.