rbmrtn
Thinks s/he gets paid by the post
Must dependent on the bank, it worked at several I've had.
Hope there will not be bank runs in some European countries like Greece, Portugal, Spain and Italy.
Also found this interesting Market Map from WSJ (new to me, maybe not to you)The general feeling was that European leaders were using Cyprus to test whether confiscating deposits would work, before possibly applying it more widely. “They are trying to make an experiment with a small country,” said Stefan Kourbelis, a manager at the Centrum Hotel in Nicosia’s main square, echoing a widely held view. “If it works, the next one could be Spain, Italy and others. If things go badly, they can just say, who cares about Cyprus?”
The reason why there is not a bigger reaction (futures were off 90 points for DJIA prior to opening) is that everyone, including the Cypriot government, the EU and the Germans are now backing away from this ill thought out and incendiary idea.I expected a bigger reaction on Wall Street today and am wondering if the shoe just hasn't dropped yet. Read this in NYT:
Also found this interesting Market Map from WSJ (new to me, maybe not to you)
Must dependent on the bank, it worked at several I've had.
...everyone, including the Cypriot government, the EU and the Germans are now backing away from this ill thought out and incendiary idea.
"Eh, we are overdue for a correction and I have lots of cash to invest. Sell-off, ho!"
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.
As an Argentinian, I can relate to all of this. My parents lost a significant part of their life savings overnight, as did most middle-class folks down there. Severe currency devaluation, withdrawal limits and regulations, etc. I never saw a bank nor a government in the same light after 2001, and I was in my early 20's then. If you think your cash is safe in a bank, think again. Unfortunately, I have no magic alternatives to offer. But to this day I have a hard time believing those who keep telling me "that could NEVER happen in the US"...
As an Argentinian, I can relate to all of this. My parents lost a significant part of their life savings overnight, as did most middle-class folks down there. Severe currency devaluation, withdrawal limits and regulations, etc. I never saw a bank nor a government in the same light after 2001, and I was in my early 20's then. If you think your cash is safe in a bank, think again. Unfortunately, I have no magic alternatives to offer. But to this day I have a hard time believing those who keep telling me "that could NEVER happen in the US"...
It is the same in Oz. The article sparky linked to says that the definition of a dormant bank account has been shortened from 7 years to 3 years, and you can claim it back from the government just like before.
I'm not convinced a new (albeit insane!) precedent hasn't been set here. We'll see.
Even if bank deposits are not technically held in trust for the depositors, using their deposits to bail out the bondholders seems like terrible public policy to me. If anything, the current shareholders should be eliminated and the bondholders should be subjected to a forced debt-to-new equity conversion. Then and only then should depositors take a haircut.
I wonder what genius came up with this idea.
I must admit that it took me by surprise.
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At least the depositors with less than 100K Euros, which is the insured amount. The initial reports said the money would not be taxed, it would be replaced with additional equity. Technically, I have no idea what that really means.Even if bank deposits are not technically held in trust for the depositors, using their deposits to bail out the bondholders seems like terrible public policy to me. If anything, the current shareholders should be eliminated and the bondholders should be subjected to a forced debt-to-new equity conversion. Then and only then should depositors take a haircut.
I wonder what genius came up with this idea.
Apparently the germans, as they and the IMF and the ECB hold mucho bank debt in all these marginal countries.Even if bank deposits are not technically held in trust for the depositors, using their deposits to bail out the bondholders seems like terrible public policy to me. If anything, the current shareholders should be eliminated and the bondholders should be subjected to a forced debt-to-new equity conversion. Then and only then should depositors take a haircut.
I wonder what genius came up with this idea.
Taking people's money out of their account as a 'tax' is something that I have not heard happen before... and I wonder if they are only talking about bank accounts or does it include brokerage accounts IOW, Fidelity and Vanguard has a LOT of people's money... and if they took a % of that it would hurt big time...
Article I, Section 9, Clause 4:
No Capitation, or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken.
Oh sure.This won't happen in the United States without a constitutional amendment. The federal government is restricted by the constitution.
What's tragic is that we now have even larger To Big To Fail banks, a situation that may tempt our government to do something similar. The government can and does pick winners and losers in this kind of situation - remember the GM bond holders who were taken to the cleaners on the GM bailout. IMHO, the special interests are so powerful, I can see them pressuring the government to sacrifice the savings of the middle class for the good of reckless bankers. They have already done this partially by holding down rates to levels far below inflation. I hate to write this, but that is what I am feeling,
Now that would be something new, the Germans and Russians not getting along.There may be more politics to this. The germans and russians butting heads behind the scenes.
How Russia Could Take Revenge Over Cyprus Deal - Yahoo! Finance