COLLECTIVE MADNESS


“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Monday, March 25, 2013

Russian bank depositors, with investments worth €20bn, are expected to be severely hit by the losses, described last week by Vladimir Putin, the Russian President, as "unprofessional and dangerous". "We did not speak to Putin tonight. We will have to speak to the Russians at some point," said Pierre Moscovici, the French finance minister.






Cyprus agrees €10bn bail-out deal with eurozone

Cyprus has agreed a last-ditch deal for a €10bn bail-out that will safeguard small savers, inflict heavy losses on uninsured depositors, including wealthy Russians, and keep the country in the eurozone.


By Bruno Waterfield, in Brussels TELEGRAPH
6:15AM GMT 25 Mar 2013

Popular Bank of Cyprus, also known as Laiki and the nation's second largest bank, will be shut as part of the deal, with the raid on uninsured Laiki depositors expected to raise €4.2bn.

The Bank of Cyprus, the island's largest lender, survives but investors not protected by the €100,000 deposit quarantee will suffer a major "haircut" – a forced loss on the value of their investment - over the coming weeks of up to 40pc.

Deposits above €100,000 in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki's debts and recapitalise Bank of Cyprus. The Bank of Cyprus must also assume over €9 bn in liabilities owed to the ECB by Laiki.

All deposits in Laiki Bank below €100,000 will be shifted to the Bank of Cyprus to create a "good bank". The rest will be placed in a "bad bank". The two banks account for around 50pc of deposits in the the banking system.

Officials said senior bondholders in Laiki would be wiped out and those in Bank of Cyprus would have to make a contribution.

The eurozone admitted early this morning that "no date is fixed" for banks to reopen in Cyprus and that they could remain closed after Tuesday, after a week of being closed.

Cyprus will today introduce unprecedented capital controls as the authorities scramble to prevent the collapse of the country's financial sector after the bailout deal.

President Nicos Anastasiades and heads of the European Union, the European Central Bank and the International Monetary Fund sealed the deal in the early hours of Monday and it was swiftly endorsed by eurozone finance ministers.

During emergency negotiations in Brussels last night, Mr Anastasiades threatened to pull his country out of the euro. He was warned that Cyprus faced disorderly default and exit from the EU single currency on Tuesday unless it bowed to the agreement - an agreement that will see almost half of the country's financial sector wiped out as part of the eurozone's strategy to restructure its economy by 2018.


Jeroen Dijsselbloem, head of the Eurogroup of finance ministers, of the Netherlands, said: "We've put an end to the uncertainty that affected Cyprus and the euro area over the last few days."

Even the best-protected senior bondholders investing in Laiki Bank would see their holdings "wiped out", Mr Dijsselbloem said.

"Laiki bank will have to be resolved so yes, senior bond holders, along with the others, will basically be wiped out there," he said.

He said the Bank of Cyprus, the island's largest bank, needs to be recapitalised. "The contribution to this recapitalisation must come, inevitably, from senior bondholders, junior bondholders, shareholders and, to some extent, we don't know to what extent yet, also from uninsured depositors," Mr Dijsselbloem said.

Christine Lagarde, head of the International Monetary Fund, said the deal provided "a comprehensive and credible plan to deal with the current economic challenges in the country".

Russian bank depositors, with investments worth €20bn, are expected to be severely hit by the losses, described last week by Vladimir Putin, the Russian President, as "unprofessional and dangerous".

"We did not speak to Putin tonight. We will have to speak to the Russians at some point," said Pierre Moscovici, the French finance minister.

The deal will not need the approval of the Cyprus parliament as the losses on large depositors will be achieved via a restructuring of Laiki and Bank of Cyprus and not a tax.

The Cypriot parliament has already voted through "generic" laws on bank resolution and capital controls, so no further vote will be needed to implement the new agreement.

Emergency legislation agreed at the weekend gives Cyprus the power to restrict all banking transactions, including cash withdrawals and the use of credit cards, alongside "any other measure necessary for reasons of public order and safety".

Last week a plan for a levy on all savings was rejected by the Cyprus parliament as "bank robbery" and provoked angry response from pensioners to Russian President Vladimir Putin.

The new deal, reached after a week of turmoil that threatened to plunge the eurozone back into crisis, was a "much better" outcome, Mr Dijsselbloem said.

The final bail-out will also involve a Cypriot government austerity programme, privatisations and tax changes at a time of deepening recession given job losses at banks and companies losing out on deposits.
European Union euro Commissioner Olli Rehn said new economic forecasts for Cyprus would need drawn up quickly to take account of the deal.

Mr Rehn said the Cypriot government would decide when to lift capital controls, which saw daily withdrawal limits at cash machines reduced to as little as €100 a day on Sunday.

The European Central Bank had threatened to halt life-support funding for Cyprus on Monday if there was no deal, but Mr Dijsselbloem said he expected that support now to continue.

This latest deal means Cyprus becomes the fifth eurozone country to win international aid for its banks, after Greece, Ireland, Portugal and Spain.
European shares rallied at the open on Monday, following Asian markets earlier. Germany Dax and France's CAC jumped 1pc and 1.4pc. In London the FTSE rose 0.6pc to 6431. Eurozone banks, which own a large part of the region's sovereign debt and depend on the wholesale funding market, gained.

The euro also enjoyed a bounce in Asian trading, as investors bought on the back of a deal they hope will draw a line under the crisis

36 comments:

  1. Russia and China say not so fast on Syria




    MOSCOW | Mon Mar 25, 2013 5:45am EDT
    (Reuters) - Moscow will insist that Russian and Chinese representatives join a United Nations investigation into allegations that chemical weapons were used in Syria last week, a senior Russian diplomat said on Monday.

    U.N. Secretary General Ban Ki-moon announced the inquiry on Thursday and made clear it would focus on a rocket attack that killed 26 people near Aleppo. Syria's government and opponents accused each other of firing a missile laden with chemicals.

    Russian Deputy Foreign Minister Gennady Gatilov said the investigation could only be objective if it is conducted by a "balanced group of international experts".

    The group "must without fail include representatives of the five permanent U.N. Security Council members, including Russian and Chinese chemical specialists", he said on Twitter.

    Ban's announcement followed a dispute between Russia and Western council members over the scope of the investigation.

    After France and Britain wrote to Ban to draw his attention to a second alleged attack near Damascus and one in Homs in December, both of which rebels blame on the government, Russia accused them of trying to delay the inquiry.

    U.S. and European officials say there is no evidence of a chemical weapons attack. If one is confirmed, it would be the first use of such weapons in the two-year-old Syrian conflict, which the United Nations says has cost 70,000 lives.

    ReplyDelete
  2. Russia Cuts China Into Arctic Oil Rush as Energy Giants Embrace
    By Rakteem Katakey & Will Kennedy - Mar 25, 2013 4:33 AM ET


    Russia’s decision to give China a share of prized Arctic exploration licenses as part of a “breakthrough” deal signals how the world’s largest oil and gas producer and the biggest energy consumer are redrawing the global energy map.

    Under agreements signed during President Xi Jinping’s first state trip abroad, China may double oil imports from state-run OAO Rosneft (ROSN) to more than 620,000 barrels a day, challenging Germany as the biggest buyer of Russian crude. The two also plan to sign an agreement this year to build a pipeline to ship Russian gas to China.
    In return, China National Petroleum Corp. will join with Rosneft in exploring three offshore Arctic areas for oil, the first such deal Russia’s signed with an Asian company. The ocean north of Russia is considered one of the world’s largest unexplored oil provinces, and Exxon Mobil Corp. (XOM), Italy’s Eni SpA (ENI) and Norway’s Statoil ASA (STL) have already agreed to help finance drilling.

    “China is emerging as the most important buyer of Russian oil and gas, helping Russian companies diverge from European exports,” Tony Regan, an energy consultant with Tri-Zen International Inc. in Singapore, which counts Royal Dutch Shell Plc and OAO Lukoil as clients. “It’s also a huge catalyst for Russian companies to develop their oil and gas fields.”

    ReplyDelete
  3. Maybe the Euros think the Oligarchs can't raise too much cain in that they're "dodging taxes" to start with.

    ReplyDelete
  4. Rand Paul is as Out to Lunch as his Father:

    . . . dialogue that shows that the GOP sees all immigrants as assets

    A police state for citizens, free lunch for illegals. ...forever.

    Rand Paul's presence-and-jobs amnesty -- WITHOUT E-Verify

    Whether or not you admire the bold individualistic leadership of Rand Paul (R-Ky.) on other issues, I know you will be disappointed and maybe even shocked by the immigration platform he outlined this morning before the Hispanic Chamber of Commerce.

    KEY POINTS OF THE RAND PAUL AMNESTY

    •The 11-19 million illegal aliens would get to live permanently in the United States.
    •One year after passing the amnesty, illegal aliens can start getting work permits to compete directly in the legal job market with Americans.
    •New illegal aliens who are enticed by the amnesty will continue to have a relatively open access to U.S. jobs because Sen. Paul opposes mandatory E-Verify and other means to keep employers from hiring illegal aliens.
    •Sen. Paul will force American workers to compete with far more new legal immigrant workers in the future.

    Nowhere in his long speech did Sen. Paul indicate any concern for the 20 million Americans who can't find a full-time job or for the taxpayers who have to support them in myriad ways while 26 million legal and illegal foreign-born workers hold U.S. jobs.

    Instead, Sen. Paul emphasized the need for even more foreign workers as if there can never be a downside of too much immigration. He called for a:

    . . . dialogue that shows that the GOP sees all immigrants as assets
    . . . . The Republican Party must embrace more legal immigration.

    ReplyDelete
    Replies
    1. My brief abnormal love affair with Rand Paul is over.

      bob

      Delete
    2. Kentucky, do they not process chickens there?

      Paul's constituents need the low cost labor that illegal laborers provide, so they can have higher profits.
      Why would anyone here think that Federal Socialists cared about US workers?
      Where is the history of US legislation that protects them from foreign competition?

      Not in NAFTA. Nor in the authorizing legislation for the WTO, or World Bank.
      Not in the US tax code that allows for incomes to be anchored, untaxed, "off shore".



      Delete
  5. Even child molesters and drunk-driving murderers are assets!
    ...and they can and do drive insurance free.

    ReplyDelete
    Replies
    1. Most everyone that drives without a drivers license does so uninsured, doug

      You opposed allowing the undocumented becoming documented, so of course they do not have, are not allowed to have, US drivers licenses.

      The real outcome of "No Amnesty" is an under class of folks that are not permitted to comply with the law, even if they desired to. Then are not arrested or charged when found to be out of compliance by local police. A tangled web, indeed.

      Delete
  6. Ex major IMF fairy on Bloomberg just now, said Putin and boyz not really all that upset. Making a little noise for the cheap seats.

    10-1 the "Putin Gang" got a heads-up in plenty of time.

    ReplyDelete
    Replies
    1. No World War Three over Cyprus?

      Who would have guessed.

      I didn't know there was so much money parked there though.

      My bank accounts in Cyprus are zero, no loss here.

      Parked in the inter mountain zone.

      bob

      Delete
  7. Nothing like a little insider trading to grease the skids.

    ReplyDelete
    Replies
    1. You gotta figure he's got your phone bugged, anyway; might as well tell him, and stay on his good side, right? :)

      Delete
    2. Here is another point of view, if I can still quote a poet ---

      I think I could turn and live with animals, they are so placid and
      self-contain'd,
      I stand and look at them long and long.

      They do not sweat and whine about their condition,
      They do not lie awake in the dark and weep for their sins,
      They do not make me sick discussing their duty to God,
      Not one is dissatisfied, not one is demented with the mania of owning things,
      Not one kneels to another, nor to his kind that lived thousands of years ago,
      Not one is respectable or unhappy over the whole earth.


      ~ Walt Whitman ~


      http://www.panhala.net/Archive/Song_of_Myself_32.html


      Wonderful picture!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

      animal yawn

      bob

      Delete
    3. Worse than off topic, the droppings are boring. Even the animals yawn.

      Delete
  8. Putin and Company are just another group of killers.

    Nothing new.

    Demented.

    Leo is sound asleep, at my feet.

    bob

    ReplyDelete
    Replies
    1. not one is demented with the mania of owning things

      bob

      Delete
    2. The wicked will not be saved, as St Mark says they mustn't, only those who have turned to love.....


      perferrser bob

      Delete
    3. boring and off topic

      Delete
    4. Neitzsche ... was opposed to what he saw as the bourgeoisie's focus on accumulating money.
      Such people, he believed, had no sense of honor. They lacked good style or a taste for that which made life worth living.

      Delete


    5. They lacked good style or a taste for that which made life worth living. Which you obviously don't have, .. since you have attacked Whitman.

      Worse than off topic, the droppings are boring. Even the animals yawn.

      My daughter knows better.

      bob

      Delete
    6. This comment has been removed by the author.

      Delete
    7. Your daughter, by your owning telling, is not a good citizen nor someone we should look to for moral or sociological guidance.
      She did not know to call the police to report a violent crime, in an effort to protect her community and the other innocent women residing there.

      You should not bring her and her Standards to the conversation, as you have objected to discussing her judgement as a citizen and her standing within the community in the past.

      Delete
    8. Should death threats made over the internet be reported to the FBI?

      Delete
  9. Walt Whitman, our national poet, now mostly forgotten, a few schools named after him, who would not want to deface Mt. Rushmore with images, in whose poem 'Song of Myself' I first began to find myself, my true friend.

    bob

    ReplyDelete
    Replies
    1. boring and off topic

      Delete
    2. Religions, believed Nietzsche, taught a slave mentality.
      He saw a connection between Christianity and the rising belief in democracy and socialism among Europeans.


      Delete
    3. heh

      believed Nietzsche

      That is funny.

      That old Lutheran fart.

      Nietzsche believed

      That is funny.

      When the real question is getting a sense, not of believing, but knowing.

      bob

      Delete
  10. He asked once, when we look at the mountains, or the plains, or the rivers, why do we feel beauty?

    Is it out there, or in here?

    bob

    ReplyDelete
  11. Here is something not off topic, and only boring to the bored -

    The Killers - Ernest Hemingway

    As Simone Weil said of the Illiad, one can see the spirit of Christ hovering over Hemingway as well.

    Nietzsche is strong brew for young minds.

    bob

    ReplyDelete
    Replies


    1. The only spirit hovering over Hemingway was Ron Rico rum

      Delete
    2. This is truly disgusting. and not worth comment

      bob

      Delete
  12. What is interesting about Nietzsche is his understanding of metaphor. What he thought, if I understand him correctly, which I may not, is that all language was made up of comparisons. This seems a deep thought, until one realizes that there may be some human experiences that are beyond comparison, truly ineffable. Sometimes there may be no comparisons, and then what language do we use?

    bob

    ReplyDelete
    Replies
    1. As in where Whitman tries, but can can only say, light, rare, untellable.

      bob

      Delete
    2. The myths struggle to tell the untellable.

      bob

      Delete