would like to thank the Academy
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Cyprus Bailout Impacts Confidence in Eurozone Banks and Currency http://stks.co/fP59
I think more along the lines of me getting a good SLAP should I even broach the subject, so I will just be smart, keep quiet, and do whatever the heck she tells me.
*sigh* I MISSED that post last night. After dinner, got back to my room, got my computer together, and I said 'Let me just take a nap for a few minutes.....' Next thing I know I had to pee, and it was about midnight!
Looks like I missed the market fun. Catching up now, what a day.
Off to dinner folks. See ya at the open!
Number 11: Mila Kunis says she is LONG
I see the futures have yet again made a little rally here, almost at the gap level. Wondering if it holds at the open. PROBABLY! The BTFD crowd has been out in full force all damn year, don't see them taking a day off today. Plus, the POMO will hit at about 1030.
Vote tomorrow will be big. If they vote NO, and the banks actually do go down the toilet, the banks all over can be hit hard.
Either way, the cat is out of the bag, as the bureaucrats can no longer be trusted. They can rob you at anytime it seems, to pay off the bondholders.
Spot on Lex. Why right now the hot commodities are: GOLD, GUNS, AMMO!
Watch your pocket, the government is going to pick it, all in the name of FAIRNESS.
Oh yeah! Those Marines are an awesome bunch. OORAH!
The Bailout For Cyprus: A FAQ To The Latest European Financial Crisis via @Forbes $EURUSD $ECB $6E_F http://stks.co/dNgs
Man, reading about the weather you and EZ are going through makes me glad I am in the middle of a crappy ass desert. BEAUTIFUL weather out here recently, in the high 70's/low 80's, SUNNY.
Congrats to your Louisville Cards, kicking my Syracuse Orangemen's butts. Number 1! That is a LOT of pressure.
Good morning EZ. Looks like the futures have settled in at the negative 1% level. Should be an interesting open. They have delayed the vote on the Cyprus package AGAIN, so we will have a few days of insanity.
Stuff, just back from idiocy out here. Read your post. My best to you and the Bear. Prayers from me, hope all is well out there and whatever is the issue, a SPEEDY recovery will take place. Perhaps a few bowls of your famous soup?
FUTURES still BLOODY RED, but off the nasty lows from earlier. At one point, S&P Futures were down earlier about 1.5%, currently down about 1%. Dow was also way down, but has bounced back hard, and currently about half a percent down. The Russell has been steady at about 1.3% down, though it was also at about 1.5% down earlier, but not bouncing as hard as the Dow and S&P.
Cyprus Parliament to vote on the proposed deposit levy at 14:00 GMT. $EURUSD $SPX $DJIA causing huge up spike reversal in last 15 minutes
Gold Advances Above $1,600 for First Time in Two Weeks on Cyprus
By Glenys Sim and Phoebe Sedgman - Mar 18, 2013
Gold rose above $1,600 an ounce for the first time this month, widening its premium over platinum, as an unprecedented levy on Cyprus bank deposits reignited concern over Europe’s debt crisis and boosted haven demand.
Gold for immediate delivery jumped as much as 1.1 percent to $1,608.60 an ounce, the most expensive since Feb. 27, and traded at $1,605.35 at 3:42 p.m. in Singapore. One ounce of platinum bought as little as 0.9835 ounce of gold today, the least since Jan. 14, data compiled by Bloomberg show.
Cypriot President Nicos Anastasiades is seeking to persuade lawmakers to back a plan to raise 5.8 billion euros ($7.5 billion) by taking a piece of every bank account in the country as part of a bailout agreed by euro-area finance ministers. Gold, which fell 4.2 percent this year as an improving U.S. economy boosted the dollar, climbed for a third day even as the greenback rose 0.6 percent against a six-currency basket.
“Cyprus has put a little bit of a spin back towards safe- haven assets, purely as a result of a little bit of nervousness coming back into Europe,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney.
Gold last week had the first back-to-back weekly gain since January on concern about rising inflation. Data for February showed the U.S. consumer-price index rose more than projected, while inflation reached a 10-month high in China. Federal Reserve policy makers, meeting tomorrow, are divided on the pace of stimulus that helped gold to rally for the past 12 years.
Cyprus Vote
Bullion for April delivery rose as much as 0.9 percent to $1,607.60 on the Comex in New York, also the highest price since Feb. 27, before trading at $1,603.70. The Cyprus turmoil “must be very good for gold,” Lars Seier Christensen, CEO of Denmark- based Saxo Bank A/S, wrote on his blog.
Anastasiades will defend his decision to accept a 10 billion-euro rescue that includes the euro area’s first move to penalize depositors after the country in June became the fifth euro-area nation to request a bailout. Cypriot lawmakers vote on the legislation today, a day after originally planned.
Spot platinum fell as much as 1.1 percent to $1,572.75 an ounce, before trading at $1,579, dropping for a fifth day in the longest losing streak this year.
Cash silver rose 0.5 percent to $28.90 an ounce, after earlier climbing as much as 1.3 percent, snapping a three-day loss. Palladium sank 2 percent to $760.45 an ounce.
To contact the reporters for this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
Monday's economic calendar: 10:00 NAHB Housing Market Index
Notable earnings before Monday’s open: $AMRC, $KIOR, $TA
Here Is The Best FX Position To Trade The Cyprus Bailout Deal - UBS http://stks.co/cNgb
Jim Rogers: Won't Buy Gold Now; Will Wait Until It Hits This Level http://stks.co/q5jm
Syracuse fell asleep at the wheel during that game, so I STILL hold them as the winner when all is said and done.
(Now watch, they lose in the first round!)
<mish>Put a German Flag in Cyprus; Poker or Chicken? Cyprus Archbishop Says "Leave the Eurozone and Readopt the Cyprus Pound"
EU officials are now swarming over Cyprus threatening to cut off funds to Laiki , Cyprus' second largest bank if the deal does not go through. Nonetheless, Cyprian politicians are balking because they know what will happen to those who go along with EU blackmail threats.
Making matters difficult for President Nicos Anastasiades, the Cyprian government controls only 28 of 56 seats in the chamber and needs support and backing from two deputies of a small pro-European party.
Today's vote was postponed for one obvious reason. The votes are not there.
As one would expect Cypriot authorities in revised deal talks.
Cyprus’ embattled president was on Sunday in talks with Brussels and political rivals to ease the terms of a planned levy on smaller deposit holders as he tried to scrape together a parliamentary majority for a €10bn bailout for the debt-laden island.
A revised deal being discussed in Nicosia, with the blessing of the European Commission, would shift more of the burden on to deposits larger than €100,000, according to officials involved in the talks.
“The ECB officials were very blunt,” said one Cypriot official familiar with the discussions. “There are serious fears of contagion regarding Italy and Spain if this legislation doesn’t go through.”
Cypriot officials insisted no levy on smaller depositors was impossible. One senior Cypriot official involved in the talks said that because about 35 per cent of all deposits are below the threshold, exempting them would mean a rate so high for the rest that it would no longer be viewed as a tax.
Archbishop Chrysostomos, the island’s influential spiritual leader, called for Cyprus to leave deposits intact, leave the eurozone and readopt its former currency, the Cyprus pound.
Lie of the Day
Cyprus President Nicos Anastasiades now states "depositors would be offered bank shares covering the full amount of their losses, while those who left their savings in banks for another two years would be rewarded with bonds backed by future income from exploiting Cyprus’s natural gas deposits."
The Mish response is "Please be serious". Bank shares are worthless, and if they are not, they should be and soon will be. As for leaving money in the bank for two more years, subject to still more confiscation at the whims of the EU, I also say "please be serious".
"Bailout Math"
The Financial Times stated "The depositor levy was demanded by a German-led group of creditor countries to bring down the bailout’s price tag from €17bn."
I went through the Cyprus Bailout Math addressing the question "can depositors be left whole?" The answer is yes, up to €17.7 billion (and depositors were only hit with €5.8 billion).
Poker or Chicken?
Some have likened events in Cyprus to the world's largest game of poker. A game of "chicken" where one side has an unfair advantage is more like it.
The Financial Times reports "The message, delivered by the ECB’s chief negotiator, Jörg Asmussen, meant that if no deal was reached, Laiki would collapse, probably bringing the island’s largest bank down with it, and saddling Nicosia with a €30bn bill to reimburse accounts covered by the country’s deposit guarantee scheme. It was money Nicosia did not have. All of the island’s account holders would be wiped out."
Apparently this is another one of those "offers you cannot refuse". The ECB is willing to inflict €30 billion in damages on Cyprus to collect €5.8 billion from Cyprian citizens.
Put a German Flag in Cyprus
Here is an interesting quote courtesy of Google Translate: Put a German Flag in Cyprus
Russian President Vladimir Putin placed an angry call to Cyprus president Nikos Anastasiadis Sunday morning.
The Putin reportedly said verbatim "Better to put the German flag at the Presidential Palace. Don't you understand this decision will destroy your country?" Who will trust banks on Tuesday?
Not sure if that story is validated but the quote seems reasonable enough.
Contagion-Begging Actions
What is someone in Greece, Spain, or Italy supposed to think?
Consider Spain. By a 526 to 86 vote, the nannycrats in Brussels just passed a regulation that will require a country to accept a bailout if offered. (Please see An Offer You Cannot Refuse; EU Passes Law Forcing Countries to Take Bailout; Is Spain the First Target?)
Also note that EU Court Strikes Down Spain’s Eviction Law.
Think about the parlay of EU contagion-begging actions for a second.
1.Spanish banks will not be able to evict homeowners, who in turn will be give reason to default. Losses will soar at Spanish banks and they are insolvent already.
2. The "Offer You Cannot Refuse" action by the EU is sure to arouse suspicion of a forced bailout in Spain.
3.Cyprus actions will heighten fears of bank takeovers, capital controls, and theft of deposits via confiscation.
Reader Scott had this pertinent comment:
"This has simply got to be ruinous for legitimate business in Cyprus. Right off the bat every business in Cyprus is having part of its capital confiscated. Governments may not understand this but a lot of people and businesses are on a razors edge. That $1000 rent payment may not withstand a $67.50 haircut. A monthly payroll of $100,000 might not be made if 10% of the businesses cash is seized."
My friend Bernd who lives in Germany had these comments. "Judging by the German forums on Focus, Der Spiegel, SZ, FAZ and Die Zeit, there is hardly any support for this action. The name calling and swearing is rather blunt. These guys did not study their Machiavelli. He said roughly if you hurt people, you must never hurt all of them at once."
The closest Machiavelli quote I can find is "If you need to injure someone, do it in such a way that you do not have to fear their vengeance."
"F" the EU
It will not stop here. There will be more demands and more haircuts. Staying in the eurozone cannot be worth the price.
It is high time something be crammed straight down the throats of the EU and for that matter, straight down the throats of anyone in Cyprus parliament who votes for the imposed terms.
I encourage 100% of Cyprus citizens to take every penny out of their banks the second the "bank holiday" ends.
Justifiable vengeance is coming, in spades.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Read more at http://globaleconomicanalysis.blogspot.com/2013/03/poker-or-chicken-cyprus-archbishop-says.html#7qrDqjm8ykfxt44o.99
Analysis: Europe's social shock-absorbers show crisis strain
2:59am EDT
By Paul Taylor
PARIS (Reuters) - Grigoris Lemonis, a 73-year-old Athens pensioner, uses his 580 euro ($760) monthly state pension to support his wife and the family of his son, an unemployed cook with two small children and a wife who works occasionally as a cleaner.
Three-generation families surviving on a single income are increasingly common across southern Europe as mass unemployment tears at the fabric of closely knit societies.
The continent's social shock-absorbers are creaking under the strain of a prolonged economic crisis that began in 2008 and engulfed the euro zone in a sovereign debt crisis from 2010.
The welfare state that Europeans built after World War Two, and which many view as a defining achievement of their civilization, is one reason why the Great Recession has not triggered a revolution or severe social unrest so far.
"Daily life has become pure misery," said Lemonis, a former painter in the construction industry who owns his own house.
"We are up to here with bills and once all that is paid there's nothing left to live a decent life," he said, adding that the family can only afford meat once or twice a month.
With more than 26 million unemployed in the 27-nation European Union, including nearly 6 million young people, the system is struggling, and in some places failing, to cope. Many of the jobless have exhausted their benefit entitlements.
"In many countries, the poor are getting poorer," says Laszlo Andor, the EU's Commissioner for Employment and Social Affairs, pointing to a growing North-South divergence. "Europe's social fabric is clearly under pressure and a stronger response at EU and national level is needed."
Social spending rose across the continent in the first phase of the crisis but states like Greece, Portugal, Ireland, Spain and Italy that were hardest hit have now had to cut outlays on pensions, healthcare, education and unemployment benefits.
Countries that target social spending towards providing services such as childcare, vocational training, job-search assistance and accessible healthcare have better results than those that spend most in cash payments to pensioners and the unemployed, Andor told Reuters in an interview.
While Austria and Spain both spent about 15 percent of GDP on social welfare other than pensions, Austria achieved a 55 percent poverty reduction while Spain managed only 28 percent.
Countries like Italy and Poland that spend a higher share of their social budget on pensions tend to be less effective in alleviating poverty because the working-age population most severely hit by the crisis is less well covered, Andor said.
But welfare systems breed their own interest groups and are fiendishly hard to transform.
AFFORDABILITY
Political leaders are fretting about the affordability of the European social model in an era of high public debt, low growth and ageing populations.
"If Europe today accounts for just over 7 per cent of the world's population, produces around 25 per cent of global GDP and has to finance 50 per cent of global social spending, then it's obvious that it will have to work very hard to maintain its prosperity and way of life," German Chancellor Angela Merkel said in an interview with the Financial Times last December.
Social spending as a proportion of output is now at least 6 percent higher than in 2007 on average in the 34 countries of the Organisation for Economic Cooperation and Development, a club of industrialized democracies of which 21 are EU members.
Moreover, ageing populations are set to drive up the costs of pensions and healthcare in coming years, the OECD said.
The majority of EU governments have used the crisis as a reason to raise the retirement age, bringing it more into line with increasing life expectancy, said Willem Adema, an OECD expert on employment, labor and social affairs.
Social scientists distinguish three broad welfare models: Nordic, continental European and Anglo-Saxon.
Nordic countries offer a high level of "cradle to grave" welfare with an emphasis on pre-school childcare and education, designed to keep women and older people in the labor market.
The continental European model features contributory social insurance systems that offer strong protection to "insiders" with protected jobs, while continuing to regulate employment and the labor market.
The Anglo-Saxon model tends to make welfare payments smaller and more selective and encourages private provision of healthcare, education and pensions for the better-off.
The Nordic model seems to have proven the most effective at reducing poverty without discouraging people from work, although it comes with the highest taxes.
Britain and Ireland pay cash allowances to stay-at-home single mothers, contrary to the OECD and EU view that such money is better spent on providing public childcare. In Germany, Merkel's government plans to introduce such a benefit this year.
"It makes more sense to get people into work than to focus on paying benefit to stay home," the OECD's Adema said. "Yet amazingly, some countries are cutting pre-school childcare."
European governments have found it easier to trim welfare systems at the edges than to reform them radically.
In particular, spending more on young children and school-leavers to promote employment and skills and less on the elderly is politically difficult. Older people vote more than the young.
"In many countries, it is the middle class who are the direct beneficiaries of social security entitlements," policy analysts Patrick Diamond and Guy Lodge wrote in a paper for the Policy Network think-tank. "This makes pensions and welfare payments to older cohorts practically untouchable."
The Netherlands, where retirees enjoy the highest purchasing power in Europe, provides an example. Its recently created 50PLUS party that campaigns on behalf of pensioners won two seats in the 150-member parliament for the first time last year.
Since the new coalition of centre-right Liberals and the centre-left Labor party agreed to raise the retirement age to 67 from 2021, support for the grey movement has soared. A poll this month showed 50PLUS would win 18 seats if the election were held now, making it the third biggest party.
Older voters may fight their political corner, but they also should grasp the need to leave resources for social spending for the young. Just ask Lemonis - the Athens pensioner supporting two younger generations on his dwindling monthly allowance.
"At least we pensioners are old and we've lived our lives," he said. "I'm worried about our children. What will they do when we can no longer help them?"
($1 = 0.7680 euros)
(Additional reporting by Karolina Tagaris in Athens and Sara Webb in Amsterdam; Writing by Paul Taylor; Editing by Peter Graff)
Markets drop amid Cyprus bailout worries
By Charles Riley @CNNMoneyInvestMarch 18, 2013: 3:12 AM ET
Fears of contagion in Europe returned with a vengeance Monday as a proposed bailout of Cyprus weakened the Euro, strengthened the yen and sparked a sell-off in stocks.
The terms of the EU bank bailout are controversial, and include a tax on any bank deposits still held in the tiny nation -- the first time such a strategy has been employed during the continent's debt crisis.
Lawmakers must still approve the agreement, but Cypriots reacted over the weekend by rushing to withdraw their savings from bank ATMs. Depositors in other financially weak nations were left to consider the possibility that a new precedent had been set for future EU bailouts.
In response, the euro weakened Monday to $1.29, its lowest mark this year against the U.S. dollar. The safe-haven Japanese yen strengthened.
Equity markets in Asia also took a dive. Japan's Nikkei plunged 2.7%, the Hang Seng in Hong Kong declined 2.2% and the Shanghai Composite lost 1.3%. Stock futures suggested markets in Europe and the United States would follow Asia's lead.
Under the proposed Cyprus deal, a 9.9% tax will be levied on deposits of more than €100,000, while a 6.75% rate will be paid on smaller accounts.
It is the first time that the EU has insisted on such terms for bank depositors as part of a bailout. The EU's bailouts other nations in the last three years, such as Greece and Portugal, have usually been accompanied with strict budget restrictions and led to big losses for bond holders.
"Officials have been at pains to stress the uniqueness of Cyprus and how such a bail-in will not happen elsewhere," said Steven Englander, a foreign exchange strategist at Citi. "The question is whether the depositors elsewhere in the euro zone see things the same way."
MORE - http://money.cnn.com/2013/03/18/investing/cyprus-bailout-reaction/index.html?section=money_markets&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_markets+%28Markets%29
Asian stocks, commodities in broad selloff on jitters over Cyprus deal
1:46am EDT
By Chikako Mogi
TOKYO (Reuters) - Stocks and commodities fell sharply in Asia on Monday as investors were rattled by a radical bailout plan for Cyprus and piled into safer assets including the U.S. dollar, gold and sovereign debt.
European markets are also expected to fall, with financial spreadbetters predicting London's FTSE 100 .FTSE, Paris's CAC-40 .FCHI and Frankfurt's DAX .GDAXI to open down as much as 2 percent. A 1.4 percent slide in U.S. stock futures suggested a lower Wall Street start as well. .L.EU .N
Cyprus and international lenders agreed at the weekend that savers in the island's outsized banking system would take a hit in return for the offer of 10 billion euros ($13.07 billion) in aid, breaking with previous European Union practice that depositors' savings are sacrosanct and raising fears that it could set a precedent for future euro zone bailouts.
The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slumped 1.8 percent to its lowest level since January 2. It was the steepest one-day fall since late July.
The materials sector .MIAPJMT00POUS led the decline with a 2.2 percent slide as London copper shed 1.8 percent to $7,610 a metric ton. Resources-reliant Australian shares plunged 2 percent.
"What happened ... is best described as a precautionary sell-off by the markets, some profit taking and some lighting positions, in case this situation escalates," said Ric Spooner, chief market analyst at CMC Markets in Sydney.
"But it's too early to make that call, we have to see what happens from here. First step will be to see what Cyprus' parliament does. If they reject these measures, then markets may at the least see some increased uncertainty in the period of negotiations," he said.
Crude oil and Brent both tumbled 1.1 percent to $92.46 a barrel and to $108.62 respectively. <O/R>
Assets perceived as safe-haven were bolstered by the sharp risk aversion, pushing spot gold as much as 1 percent higher to a three-week high of $1,608.30 an ounce earlier. Bullion was last trading up 0.4 percent at $1,597.81. <GOL/>
"It's a Cyprus shock. The euro fell, and crude followed that lower," said Ken Hasegawa, a commodity sales manager at Newedge in Tokyo. "We don't know what's going to happen, and it's becoming an uncertain factor."
Cyprus was working on a last-minute proposal to soften the impact of a bank deposit levy on smaller savers ahead of a parliamentary vote on Monday on the measure central to the bailout.
FLIGHT-TO-QUALITY
The dollar strengthened 0.7 percent to 82.824 against a basket of major currencies .DXY, inching closer to a seven-month high of 83.166 hit last Thursday. The euro touched a three-week low of $1.2888.
Investors flocking for safety drove yields down for benchmark government bonds in Asia. The 10-year Japanese government bond yield fell to 0.590 percent, just above a 10-year low of 0.585 percent hit on March 4.
Australia's three-year cash yields shed 15 basis points to 2.96 percent, the biggest daily drop since May last year. Ten-year U.S. Treasury yield plunged 8 bps to 1.91 percent in Asia.
Asian credit markets faltered along with the significant retreat in broad risk assets, widening the spread on the iTraxx Asia ex-Japan investment-grade index by eight bps.
Risk markets have seen similarly big one-day moves over the past few months, and despite today's moves, markets have so far remained within the trading range of the past several months.
But since much of the market rally so far this year has been based on an assumption that short-term risks were significantly reduced, some of buying momentum could be wound down if such a view were to change.
FEARS OVERBLOWN
The yen rose broadly early in the session, briefly touching 93.45 yen against the dollar and 121.585 yen against the euro, as well as gaining nearly two full yen against the risk-sensitive Australian dollar. The yen stabilized later to stand at 94.61 yen against the dollar and 98.04 against the Aussie.
The yen's rebound weighed on Japanese shares, with the Nikkei stock average .N225 slipping 1.9 percent. .T
While uncertainty over how the broader euro zone markets react to Cyprus' news later on Monday weighed on sentiment in Asia, some say fears of contagion risk are overdone.
"There will certainly be confusion in Cyprus and investors looking just at headlines may fret about its case becoming a model," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.
"I doubt that the case in Cyprus will trigger contagion risks across the euro zone, as the size of the country is too small and its industrial structure is very different from other euro zone members, in that Cyprus is dependent on just tourism and the financials sector," Saito said.
($1 = 0.7654 euros)
(Additional reporting by Osamu Tsukimori in Tokyo; Editing by Sanjeev Miglani)
LOTS going on while you guys are sleeping. The Cyprus situation is really driving things. Need to get a haircut, back with LOTS of posts afterwards for your morning reading pleasure.
You know, it is nice to see people starting to come around on this crap, like the doctors and the unions, but WHERE THE HECK WERE THEY A FEW YEARS AGO!!?? What is happening now is what was SAID will happen if that stupid law was passed. They stayed silent, or at some times complicit, and now they complain.
LOL, thanks, I will PASS on that insanity, TOO OLD! I just do the standard MON-WED-FRI of weights (LOTS of abs on those days) and TUE-THU-SAT a 3 mile run. On Thursday, I do intense intervals when I run, and DAMN but it makes me want to just up and die.
I will want to keep this up when I get home if possible, I LOOK REAL GOOD! I am expecting my wife to take full advantage of this new body, and hopefully include her friends!
But then Louisville KICKED THEIR BUTT.
Dinner time! Had a blast with you people this morning. Should be back before the open to watch the market continue its quest to go to the moon before May.
LATER PEEPS!!
Morning Ske. Any plans for the weekend? I got my SUnday all planned out: 3 hours with Turbo Tax
*snicker* You got THAT right.
Got to love those ANALysts.
LOL - Credit Suisse Upgrades ULTA Salon ($ULTA) to Outperform
Thanks, GOOD IDEA! That should get me some points.
Will be interesting to see if this up move actually sticks. Seems like a lot of selling lately in the rips. Big money flowing out into other things, like GOOG?