Wednesday, March 20

Cyprus Closes Banks Till Tuesday

Cyprus Banks Stay Closed Till Tuesday

[UPDATE : Well they decided to confiscate money 'only' from people with more than 100,000 euros (that means a lot of ordinary people in Cyprus, not just Russians). They have also said this could serve as a template for the rest of Europe! Wheras before they were insisting this was a special one-off situation blah blah blah etc... now they can use it for any country. If I had over 100,000 euros in any bank in the Eurozone I would seriously consider reducing my exposure and I suspect a lot of  people with such amounts will be doing just that!]

After the great attempted Cyprus bank heist, the Cypriot government refused to vote it and people around the world being heartily shocked by the attempt to confiscate people's money, the Cypriot government has tried to broker a deal with Russia, which so far has failed.

Why would Russia help? Well, they won't, unless there is a really good deal in it for them. They could get their hands on some gas deposits for example, or they could get a Mediterranean naval base in Cyprus. They might even get a bank or a bit of a bank. But they already loaned 2.5 billion dollars to Cyprus back in 2011, so they will take their time to reflect on what they really really want from this EU made mess.

The latest news is that Cyprus' banks are to remain closed until Tuesday, so clearly still lots of problems in the pipeline.

In the meantime the rest of the world is whistling in the wind and carrying on regardless. The DOW is at another all-time high - up 53 points at the moment. Crisis? What crisis?

Cyprus's Four Options to Avoid Banking Collapse - Bloomberg
Cyprus's Four Options to Avoid Banking CollapseBloombergPolicy makers will have to come up with a new plan, and they had better hope the European Central Bank buys them enough time to do so before Cyprus's financial system melts down.