Monday, March 25, 2013

A Bad Week for Russians (and many average Cypriots)

The Cat Fish has a pretty good take on Cyprus, in the first part of a recent column, but the second half is nothing but thinking from a macro bankster one world view. There is one caveat even in the first part, he focuses only on the damages done to Russians, and they will lose big, but as I have already discussed, the deposit grab, at 100,000 plus,  will also hit many middle class Cypriots. Here'
s the Fish.

Here's the good part:
 This was not a good weekend for Russian billionaires. First, Boris Berezovsky was found dead at his English country estate. Now, all the uninsured depositors (read: Russian plutocrats) at Cyprus’s two largest banks are going to be hit much, much harder than they feared they might be when the Cyprus crisis first erupted last week.

Back then — a long, long week ago — Cypriot president Nicos Anastasiades stood firm: there was no way he would allow uninsured depositors to lose more than 10% of their money. What a difference a week makes: now, if your uninsured deposits are at the Bank of Cyprus, you’re probably going to lose about 40% And if they’re at Laiki, you’re going to lose everything.

The agreement between the Cypriot government and the Troika of the EU, IMF, and ECB is a bold and brutal geopolitical power-play. There might be language in the official communiqué about how “The Eurogroup looks forward to an agreement between Cyprus and the Russian Federation on a financial contribution”, but given the billions of euros that Russians are being forced to contribute unwillingly, the chances that they’ll happily throw a bit more money into the pot have to be tiny.

In the Europe vs Russia poker game, the Europeans have played the most aggressive move they can, essentially forcing Russian depositors to contribute maximally to the bailout against their will.



  2. Wrong Robert,

    I guess you missed these: