Monday, March 25, 2013

Cyprus: Day Eight (Monday)

The deal is done, and it's all downhill from this point on.

If you were a regular citizen on Cyprus, with a bank account of 100k Euro or survive with no taxation on your account.  Otherwise?  You are screwed.  You guys with the bigger accounts won't be able to reach in and close out your accounts immediately (as you would expect), and your taxation might be as high as forty percent (it's not clear about how the taxes will work on the bigger accounts).

The EU deal was agreed upon at the last minute, and there's to be a minimum of 10 billion Euro dropped to Cyprus to cover the operations.

As for Monday?  Well, there is some bad news in that ATM machines are now limiting folks to roughly 100 Euro per day.  Some might go as high as 120 Euro.  It's a one-day limitation, at least on appearance. One would expect Tuesday's operations to start back to a more normal state....maybe back to 260 Euro. Perhaps by Thursday....back to a norm.

Based on commentary in several news sources....the state came to an agreement....there's to be a temporary restriction to cash withdrawals, with no specified date to end this.  There's a ban on bank transfers put into effect, again with no specified date to end it.  There's a general limit put on credit cards and debit cards.  And there appears to be a new rule to stop sudden interruption of CD-type bank accounts.

The losers in all of this?  The Russian billionaires.  I suspect that they will be fairly displeased over the answer, and lock their sights onto the politicians, bankers and EU aristocrats who engineered this rescue.  I'd personally suggest they look over at the Russian government who said they didn't have a desire to get into this Cyprus mess or help rescue them.    It'll be weeks....if not months....before the billionaires will be allowed to touch and move their money.   They won't be happy about this.

As for Monday?  No bank openings....just a moment for the dust to settle, and for everyone to eye Tuesday carefully.  Food and gas appear to be the number one issues on everyone's mind.  Had this gone on for another five to seven days....the isle would have been in utter chaos.  The European markets ought to be one to two percent higher today by closure.

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