Shock in Cyprus as savers face bailout levy

[pilots]

Sounds like a good idea to me, the super conservative and the wealthy will be hit the hardest and that's how it should be, poor people living month to month don't have much in the bank so wont suffer much...a one off 10% tax, the pain will be short and it will be over quickly.

The wealthy would of benefited the most when the economy was riding high, so only right they pay the most.

R U 4 real????? bet you voted for the ALP, its the RICH and WEALTHY that employ people, we need the rich and wealthy.

 

[skyQuake]

I think its a pretty stupid way to tax people.

Most of the rich would have their money tied up in bonds or risk assets (note 0.75% cyprus benchmark rate). And a regular joes saving up for a house would be completely screwed. That could be years of savings wiped out!

 

[drsmith]

Sounds like a good idea to me, the super conservative and the wealthy will be hit the hardest and that's how it should be, poor people living month to month don't have much in the bank so wont suffer much...a one off 10% tax, the pain will be short and it will be over quickly.

The wealthy would of benefited the most when the economy was riding high, so only right they pay the most.

The logic of class warfare is questionable at the best of times, let alone to the point of mutual destruction.

 

[ASICK]

http://www.infowars.com/saxo-bank-c...cialism-and-i-still-cant-believe-it-happened/

 

[skc]

I'm off to Cyprus with a ship load of safes
And a concrete truck.

Holes in the ground will become very popular.

The tax component has already been frozen. The measure still has to pass parlimentary vote yet and I think there should be riots on the streets (if the Cyprians are anything like the Greeks).

Here are more views and analyses.

http://www.marketwatch.com/story/wh...prus-tax-shock-2013-03-17?mod=wsj_share_tweet

 

[YMI]

This seems like an harum-scarum action or idea and highly unfair to people who are saving small amounts of money for years. Not sure what they want to achieve but if it’s the further weakening of the Euro then it might just work. People all over Europe will lose trust in their banks.
I hope they considered possible consequences. :badass:

 

[notting]

Let's get them to invest their money and get Euro moving instead of sitting on it?

 

[Julia]

Sounds like a good idea to me, the super conservative and the wealthy will be hit the hardest and that's how it should be, poor people living month to month don't have much in the bank so wont suffer much...a one off 10% tax, the pain will be short and it will be over quickly.

The wealthy would of benefited the most when the economy was riding high, so only right they pay the most.

Your entrenched sense of envy toward anyone with more money or perhaps just more ability to save and/or generate money than yourself is so extreme that it renders you irrational.
It's not just the group that you would consider to be the idle rich who would be affected by this, (they will have taken measures to protect themselves from such legislation), but rather the ordinary folk doing their best to save to buy a modest home etc.

 

[Aussiejeff]

Let's get them to invest their money and get Euro moving instead of sitting on it?

Invest in what? Failed banks? Failed Businesses? Failed economy? With a guarantee of what? Failure of the investment?

 

[Aussiejeff]

This seems like an harum-scarum action or idea and highly unfair to people who are saving small amounts of money for years. Not sure what they want to achieve but if it’s the further weakening of the Euro then it might just work. People all over Europe will lose trust in their banks.
I hope they considered possible consequences. :badass:

Or worst case scenario if it all turns to $hite, people all over Europe will pack their bags and head for Oz on many trains, boats & planes. :1zhelp:

 

[notting]

Invest in what? Failed banks? Failed Businesses? Failed economy? With a guarantee of what? Failure of the investment?

I'm not saying it's a good thing!
It's just a comment on

I hope they considered possible consequences.

Showing how stimulitory that consequence could be.

Just taking money from the people is worthy of an immediate overthrow in my opinion.
I would feel worthy of revolt on the basis that I would not have voted for unafordable social services and government spending and so on.

 

[baby_swallow]

Other EU members that did not adopt the euro currency must be smiling behind the scene.
They can print their own money to their hearts content, while countries using the euro are being drip-fed by the ECB with all these crazy strings attached.

 

[skc]

OK... I am over it. Here's why.

There is a lot of outrage, much of it legitimate, about the radical decision to impose a one-off levy on depositors. But aside from those advocating default, it is not clear what could have been done to fix the problem.

Radical and unprecedented problems require the consideration and implementation of radical and unprecedented solutions. This is why the deposit levy may not be all bad.

What else could be done?

Of course there could be yet higher taxes on profits, income or spending. These are, more or less, much the same difference as the deposit levy and much slower to collect, with market distorting effects.

The Cypriot government could have implemented a range of even greater cuts to social welfare, public services and entitlements. Again, this would have hit the community in much the same way as the deposit tax and would have been slower to accrue.

It was a case of name your poison. What would you prefer? Someone had to pay and had to pay quickly.

The benefit of the deposit levy is that it yields a large amount of revenue, and a significant proportion of it is paid by non-residents who for years have been parking what might be termed dodgy money in Cyprus. It is also quick.

Clearly, the levy will have a sharp negative impact on the economy in the short term and there will be a flight of capital as non-locals take their money away for fear of another levy being imposed at some stage down the track.

Read more: http://www.businessspectator.com.au...two-options-misery-or-suffering#ixzz2NrxmDwpS

The market probably will be over it by the end of the week.

 

[CanOz]

OK... I am over it. Here's why.



The market probably will be over it by the end of the week.

I agree...i think the circumstances could be worse if they don't approve the plan.

CanOz

 

[McLovin]

OK... I am over it. Here's why.



The market probably will be over it by the end of the week.

I'm not sure why the market cares. AFAICS, the only issue is if this spread to other countries. But it doesn't seem to be.

 

[notting]

Probably a good idea to watch the Euro to see how universal the sentiment is regarding weather this is being considered as some kind of precedent.

 

[CanOz]

Probably a good idea to watch the Euro to see how universal the sentiment is regarding weather this is being considered as some kind of precedent.

Bond yields are the barometer for fear of contagion...

I posted the yields on the International Banter thread.

They're up, but the vote is not until 4PM Cyprus time...

 

[skc]

I'm not sure why the market cares. AFAICS, the only issue is if this spread to other countries. But it doesn't seem to be.

Of couse that is the only reason that the market cares. It appears to set a bad precedence that a multi-meta-national body can violate basic property rights that is taken for granted in a capitlist society.

What is easily forgotten, however, is that bank deposits are actually funds within the capital structure of a bank.

As the banks are being restructured essentially, various layers of the capital structure will be affected. Whether it is fair or legal, that's another matter.

Plus the fact that Cyprus is so tiny... that's why I don't expect the reaction to last too long.

 

[Caveman]

R U 4 real????? bet you voted for the ALP, its the RICH and WEALTHY that employ people, we need the rich and wealthy.

I think he`s just reacting to GG`s post.
But this bail out the banks thing is getting just a bit too convenient especially when the the go ahead is given from another country.

 

[So_Cynical]

Your entrenched sense of envy toward anyone with more money or perhaps just more ability to save and/or generate money than yourself is so extreme that it renders you irrational.

LOL .. The extreme irrationality of poverty. Cos only wealthy people are rational...hey

But seriously, Cyprus is Broke along with maybe a quarter of Europe, the people will pay one way or another, ask the Irish or Greeks if they are paying? suffering the consequences of being broke...i think the Cypriot Govt is being a lot more decisive and up front about it.

It's not just the group that you would consider to be the idle rich who would be affected by this.

And yet it is without any doubt the rich who will pay the most.

Yep it is the middle class that will be hit hardest. Or even those poor with a couple thousand int he back will still be slugged nearly 7%.

I dont see how you can think it is a good idea SC. What if someone had been saving for a medical expense (something like you are i beleive) and suddenly the gov takes 7% of that off you?

Meh...if it happened here im down 900 bucks (mostly cos i paid out the line of credit and CC's ) and im saving for a medical procedure that's going to happen in the Philippines at a third of the Aussie price, i give up on the the Aussie non emergency medical system, The doctors are all millionaires, the Nurses pull 6 figures and all the diagnostic places make a fortune...all at our expense.

My 7 x 11 mm Polyp isn't good/bad enough to even make the public waiting list, yet a professor told me he can take it straight out for 4K after Medicare, Its disgusting...the public surgeon says "why perform unnecessary surgery" :dunno: and yet the Professor who taught him has no issue with the unnecessariness of it.