Australian (ASX) Stock Market Forum

Shock in Cyprus as savers face bailout levy

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McLovin said:
What difference does it make? We're going around in circles.



OK. Not really sure what investment bankers have to do with retail deposit taking banks.:confused:
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Well in all fairness the failure of the Greek banking system was at some point, blamed on activities by G. Sachs and Co., yeah?:confused:

Cyprus banks have big liabilities from the Greek bond losses, right?

CanOz
 
CanOz said:
Well in all fairness the failure of the Greek banking system was at some point, blamed on activities by G. Sachs and Co., yeah?:confused:

Cyprus banks have big liabilities from the Greek bond losses, right?

CanOz
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Fair point:). In any event, the whole IB thing has been done to death and doesn't change a thing for those in Cyprus.
 
(CY) Cyprus Green Party spokesperson Xanthou: No matter what happens in the parliament we will have a run on the banks when they reopen- tv interview - Source TradeTheNews.com
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What an utterly useless thing to say...:banghead:

CanOz
 
I'd like to see Adam Bandt stand up now and praise cyprus for being a stunning example of the social benefits from making it hard for banks to profit.
 
skc said:
The market probably will be over it by the end of the week.
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McLovin said:
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.
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Our market will get over it, but there's ? Although the media is constantly using the term "savings accounts", what I believe they really mean is deposits, or basically any cash in the bank.

So yes, cash includes savings accounts, but it also covers day to day accounts for businesses, deposits paid to businesses, holding accounts for deceased estates, right down to the cash recently raised by fundraising.

I'm currently googling trying to trying to prove the above either way, so would be happy if anyone could clarify.

So although 9.9% would be a big hit to anyone, how would it affect an ongoing business ?
 
skc said:
Government has the power to take money from the public... either through taxes, reduced welfare, deliberate inflation or "direct debit" of bank accounts. The economic consequence is the same, and each of these methods will hurt some subset of the public.

Cast aside the notion that savers are for some reason more sacred than tax payers or welfare recipients,
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No, I cannot. Welfare recipients, many of whom have never made any attempt to look after their own outcomes and have a massive sense of entitlement that their fellow taxpayers will always prop them up, are absolutely not in the same category as savers. To suggest the two categories are alike is just not reasonable imo.

CanOz said:
You guys are making this sounds like its something new, its not. This is all related to the blatant fraudulant activities of the darn banker/wankers in the first place...now someone's got to pay.
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Certainly, someone should pay. But it should not be those people who have been diligent enough to save.

You, and others, seem to be suggesting it's all just fine that governments have grossly mismanaged their financial situations, yet those who are responsible get off with no consequent responsibility, this instead being sheeted home to small depositors. What sort of moral and practical precedent does that convey?

You might as well say that our government here should equally feel entitled to raid the accounts of depositors in order to shore up their rapidly worsening economic position.
 
FlyingFox said:
Can you please explain how it is the same? It may have the same economic impact but by no means is it the same.

I don't have a problem with your premise. Look at QLD flood levies which was charged on income. Fair on everyone as everyone earning paid the levy. The current arrangement equates to double taxation and only on those having savings.
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Why's a levy on income is fair, while a levy on saving is unfair?

Suppose you earn $100k a year and have $100k in the bank account. A meteorite destroyed Canberra and the Government said we need to raise a one-time Canberra rebuilding levy. They hold a referendum and offer you two methods of collection... 10% additional tax on income, or 10% levy on deposit. Which one would you vote on? Or can you start to see how it is the same?

Suppose again... same situation with the Canberra rebuilding levy, but instead you have $100k income but only $50k in the bank account. Which method of levy collection would you vote for in the referendum?
 
It wasn't a 10% levy for the flood relief. It was 1% if you were earning over $100K p.a.
A paltry $1000.

Very different from someone having gone without for decades to ensure security in old age with, say, $2M in deposit being slugged $200K.

I'm not going to argue back and forth about this. It's pointless.
You have one view. I have another.
 
FlyingFox said:
Do you really think the general populous will ever vote for what's right for their country?.
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If you don't vote for what’s best for the community you live in but rather your own selfish interest such as irresponsible welfare promises or unfair employer strangling policies that make it impossible or a nightmare to employ people or early retirement payouts. Then you have given a green light for you consequent government to raid your bank account when ever they need to as far as I am concerned because you voted for the situation.

People gotta stop blaming the governments and big bad bankers and other big bad institutions.

I'll bet that the vast majority of the people who riot in Greece and so on are the greatest leaches voting for pork barrels.
 
skc said:
Why's a levy on income is fair, while a levy on saving is unfair?

Suppose you earn $100k a year and have $100k in the bank account. A meteorite destroyed Canberra and the Government said we need to raise a one-time Canberra rebuilding levy. They hold a referendum and offer you two methods of collection... 10% additional tax on income, or 10% levy on deposit. Which one would you vote on? Or can you start to see how it is the same?

Suppose again... same situation with the Canberra rebuilding levy, but instead you have $100k income but only $50k in the bank account. Which method of levy collection would you vote for in the referendum?
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I would vote for income. Reason being the levy on income will affect everyone earning an income. This is much fairer than taxing only those who have savings.

Many more people are earning 100K than have 100K in bank deposits .....
 
notting said:
If you don't vote for what’s best for the community you live in but rather your own selfish interest such as irresponsible welfare promises or unfair employer strangling policies that make it impossible or a nightmare to employ people or early retirement payouts. Then you have given a green light for you consequent government to raid your bank account when ever they need to as far as I am concerned because you voted for the situation.

People gotta stop blaming the governments and big bad bankers and other big bad institutions.

I'll bet that the vast majority of the people who riot in Greece and so on are the greatest leaches voting for pork barrels.
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I agree . However, and this is the crux of it all, why are only savers targeted?

I do not believe in pork barrelling and I will not vote for a government that stands for it (that's why I abstain from voting). However I can't stop the rest of the smiths, jones or kumars from voting in idiots. They get their middle class welfare, baby bonuses and get to choke themselves on debt just so the economy keeps expanding.

Now if it all blows over, the government and banks can't fail so it's back to printing money or raiding bank accounts. The persons choking in debt gets a relief, house prices go up blah blah blah....we're saved. Now me, the diligent saver with money in the bank, it's worth much less or a portion of it has been taken away. Seems that it is wrong to save these days. No one else is doing it and by the responses received in this thread it almost sounds like it's a crime.
 
qldfrog said:
but sadly probably true.
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Yes, but it's also true that the majority of Club Med Euroland is, in reality, bankrupt.

Just isn't the most constructive thing to say on the megaphone from the leadership pulpit, unless you intend to make it worse.
 
skc said:
Why's a levy on income is fair, while a levy on saving is unfair?

Suppose you earn $100k a year and have $100k in the bank account. A meteorite destroyed Canberra and the Government said we need to raise a one-time Canberra rebuilding levy. They hold a referendum and offer you two methods of collection... 10% additional tax on income, or 10% levy on deposit. Which one would you vote on? Or can you start to see how it is the same?

Suppose again... same situation with the Canberra rebuilding levy, but instead you have $100k income but only $50k in the bank account. Which method of levy collection would you vote for in the referendum?
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You do realise that you have already paid all taxes on your savings right. People were up in arms about taxing super when taking money out of it etc not too long ago.

BTW have you ever been on the receiving end of anything like this? I am from Fiji and we had two 20% devaluations in the 2000's. Not a nice feeling.
 
FlyingFox said:
Now me, the diligent saver with money in the bank, it's worth much less or a portion of it has been taken away. Seems that it is wrong to save these days. No one else is doing it and by the responses received in this thread it almost sounds like it's a crime.
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Getting a bit creative here, but it's interesting -
If everyone put their money to work, it really does help things thrive so there is actually an argument for it.
The GFC was literally a freeze. That was what the crises was!
So you can kind of see why this sneaky (seemingly mad) little effort to beat the sheep to scare the flock may not be as bonkers as it first looks.
There is huge amounts of money not been put to work at present.
 
notting said:
Getting a bit creative here, but it's interesting -
If everyone put their money to work, it really does help things thrive so there is actually an argument for it.
The GFC was literally a freeze. That was what the crises was!
So you can kind of see why this sneaky (seemingly mad) little effort to beat the sheep to scare the flock may not be as bonkers as it first looks.
There is huge amounts of money not been put to work at present.
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Creative no, emotional perhaps, far from the truth? I don't think so. No all this does is drive the money underground and into precious metals etc. This sets a precedent for the bad old days when people did not trust banks.

I disagree with your comment. If it is in the banks, it is up to the banks and the people who borrow to put it to work. If I wanted to take the risk myself, I would have invested myself. If I put in the bank for a relatively low but safe return, I expect it to be there at the end of the day. This is a choice the saver makes with very well known opportunity costs.

BTW I would argue that we got to the GFC because "everyone put their money (and more that they borrowed) to work" leading to overheating/bubble in many fronts. When this stopped, and it was a break down in trust due to the sub prime debacle, the flow of money stopped.
 
CanOz said:
Same thing happened in the US, except it was the tax payers on the hook there through bailouts,

CanOz.
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Not to take the discussion off on a tangent, but that's the beauty of the USA. Ditching the gold standard but retaining world reserve currency status they've never really had to pay for anything. The tax payers there haven't paid for any of the bailout. The government increases its deficit, the fed prints the money. Someday the tax payer will have to pay but their day of reckoning hasn't arrived yet.

Go through the annals of history and find me a state that managed to wage a long war and cut taxes at the same time (there aren't any) except that's what the USA did during the 2000s while George W and his mates used the cover of war to raid the treasury. The USA has effectively been at war from since the 1940s in terms of military spending. (1990s after Gulf War I was probably the quietest period - just a few skirmishes here and there). Wars send countries broke. The USA won't be any exception.

But anyway, back to the pressing banking crisis of Cyprus...
 
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