If I was Cypriot politician I’d be taking a flight overseas for a while, quick smart

Cyprus has decided to raid the piggy banks of depositors. In order to fund the excesses of wayward borrowers and a spendthrift government they have decided to scalp up to 10% from saved funds in their banks. Stealing the wealth of those who have done it right…as Cactus Kate rightly says Cypriots riot for much less.

There is going to be bloodshed and politicians will cop it.

Imagine over your weekend your government announced they are going to steal 6.75-9.9 per cent of your total savings to pay for those who ran up all the debt?

Well it is happening in Cyprus. 

I hope the tanks are ready because Cypriots do not take well to bad news.

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Not to mention the wealthy Russians with money in Cyprus.  They will pay the levy if they have to then yank their money out and put it somewhere else friendlier.  Given an estimated half of the money in the banking system is from such persons the effect of that is pretty obvious.

 


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  • Pita

    The rapacious demands of the EU kleptocracy know no bounds…THEFT I call it!

    • Bunswalla

      Well, to be fair it’s the rapacious demands of the Cypriot government trying to pass on the costs of the bailout that the “EU kleptocracy” have generously offered them. I suppose the EU could have left them swinging in the wind and collapsed the entire economy, possibly triggering a domino effect, leading the PIGS to slaughter.

      Stupidity, I would call that.

  • tarkwin

    Isn’t that what Russel Norman wants to do here?

    • blazer

      no

    • Mr_Blobby

      YES

  • blazer

    in a roundabout way the yanks have done the same thing.Instead of shareholders and bondholders doing their dough, in steps the Fed with Govt compliance to save the investments of the rich.Who pays….the legacy of debt is the poison chalice handed to the next generations.

  • maninblack

    Isn’t Russell’s printing money and devaluing our currency effectively doing
    the same thing as this?

    • blazer

      no completely different

      • blokeintakapuna

        Same end result though… Inconvenient, unintended consequences…

    • Mr_Blobby

      YES it is right again.

  • is it called “Lange-nomics”?

    • blazer

      more like IMF ‘medecine’ for minnows!

  • Gazzaw

    With the Brit peoples’ current negative attitudes towards the EU it will be interesting to see their reaction to the thousands of Brit expat retirees losing 10% of their savings that they have deposited in Cypriot banks. Worse still those accounts held by Brit armed forces personnel based in Cyprus and their families.

  • LabTested

    So European (read German) tax payers should bail out broke Cypriot banks so those banks can pay back Russian depositors (not to mention all the Greeks who hid their money in Cyprus to avoid paying tax)

    Cyprus banks should be left to fail. Why complain that the crooks only lose 10% of their hidden money.

    When finance companies in NZ failed should we have bailed out all the investors? (I know we did, but should we have)

    British government has already said it will pay back its soldiers & civil servants in Cyprus who get hit by this. Let the Russian government look after the Russian depositors

    • BJ

      Maybe it reads ‘all depositors’ but will target offshore account holders – Russians, Brits etc because if those groups that have used Cyprian banks for particular gain and will now withdraw their savings, why not ‘tax’ them on their way out.
      And no, NZ shouldn’t have bailed out investors of finance companies – how many people take financial risk everyday investing in their business or a startup – why should passive investors get to be so comfortable.

      • unsol

        “And no, NZ shouldn’t have bailed out investors of finance companies”

        I agree. Good returns such as those always promised with finance companies are almost synonymous with a higher risk. So if you take the risk & have egg on your face then how is it our fault?

        I never do – hubby would love to do the shares thing, but we’re a reasonably young family (as in not quite 40!) with big financial goals (freehold by 50 etc) & have things we want to save for so any would-be share money would have to be money we would be prepared to lose. And being a bean counter I am not prepared to lose $1.

        And yes, interesting that the Cyprian banks having taxed these people as they have withdrawn their money. So wrong that those who are suffering the most are those who cant even access their money. You’d think that the IMF or an organisation like that would be able to do something.

    • JimboBug

      No – the banks should go bust and not be bailed out.
      However, every person who deposits their money with a bank in the EU is guaranteed that, in the event of a collapse, the first 100,000 euro of deposits will be repaid. For this guarantee banks pay an insurance premium to the governments, and then on-charge this premium to their customers through lower interest. So if the banks are broke then they should go bust; but depositors should receive what they have paid for; and if their deposits are higher than the 100,000 then that is a risk that they took.

  • Phar Lap

    Seems the last time Lie-bour got the treasury benches they upped the top tax rate to 39 cents.Also artificially pumped up power prices from 2001 to 2007 as they gouged the consumers,for billions and called the extra money a surplus.That to me is a lot worse than the Cyprus savings scam.At least the money is there,Lie- bour in NZ just stole from the consumers future notional income.

    • unsol

      Hear hear, so completely true. I personally think that Clark & Cullen et al should be charged with fraud. They lied & stole – isn’t that what fraud is?

  • peterwn

    Taking a 10% haircut on bank deposits seems preferable to having the national economy and banks implode. Similar happened in the 1980’s when ‘Belgium dentists’ who invested in NZ for high interest rates took a bath. IMO the bank guarantee scheme here should have had provision for a 10% haircut.

  • Mr_Blobby

    It could very well happen here and worse. A greedy incompetent Government desperately trying to keep a lid on the mess they themselves created.

    What do you think will happen, when we can no longer afford to TAX or borrow enough to fund the entitlement mentality that is taking over here.

    • blazer

      the entitlement mentality in the west can be defined by ‘banks that are too big to fail’.Destabilisation of the global financial system has been caused by this Friedman/Chicago nonsense of so called deregulated free markets.

      • Mostly_Harmless

        You have a curious view of free-market economics. Friedman never argued that the government should bail out failing banks – nor, as far as I’m aware, did any other member of the Chicago School.

        • blazer

          will anyone put their hand up for it then?

          • Gazzaw

            You’re telling the story blazer.

          • blazer

            indeed I am…’the Chicago School’ believed that markets are always efficient…’plenty of evidence available Gaz.

          • Mostly_Harmless

            Yes, the Chicago School did believe that markets were always efficient – no one is disputing that. But you were trying to link the Chicago School to bank bailouts.

          • blazer

            in fact you are, but anecdotal evidence confirms that markets are NOT efficient.

          • Mostly_Harmless

            Not efficient compared to what? Governments?

          • blazer

            the reality is that regulation (by govts)is required.The IMF is a joke,primarily designed to assist western creditors to recover loans and interest payments,not really to provide real help to countries that need it.That champion of capitalism Pinochet introduced completely unregulated banking in Chile,with disastrous results that took 25years to address.

          • They are efficient so long as you don’t let politicians fuck them up. A case in point is the banking system.

            The market excludes poor people…because they are a bad risk…so the government says that’s ok, we will underwrite that and you go and make a couple of banks and lend to drop kicks it’ll be ok.

            Fannie Mae and Freddie Mac then fall over…and there it all starts, meddling by politicians to help people the market didn’t want.

          • blazer

            thats the excuse the bankers try to peddle.The reality is the exponential increase in synthetic derivatives and their huge fees and bonus rewards was the catalyst for disaster..Mortgage securities based on liars loans,teaser rates and backed by AAA ratings were a wonderful product to unleash on gullible world markets.If you examine the Credit Sails fiasco promoted by Forsyth Barr and Co. as safer than a term deposit with Westpac it gives an idea of just how widespread these toxic products were.

        • blazer

          well Joseph Stiglitz supports that notion,but hey maybe hes just got a ‘curious’ view!

          • Mostly_Harmless

            And he’s a member of the Chicago School, is he?

          • blazer

            no hes not…hes an acclaimed economist who worked at the World Bank for years,is a Nobel Prize winner and who has written a number of books,in a clear,measured analysis of global economic cause and effect.

          • Mostly_Harmless

            Well good for him! But that has nothing to do with what we were discussing.

          • blazer

            if you reread and comprehend the posts you will see you have twisted the discussion from defining entitlement and the cause of the GFC.

          • Mostly_Harmless

            Perhaps I did misunderstand your position. No twisting was intended.

          • unsol

            From what I can see, no one was even attempting to say entitlement attitude here is the same as the GFC that has impacted Cyprus. But they did say the way things are going thanks to everyone always putting their hand out, we could very well be facing the same issue as the people of Cyprus with a govt that has run out of options so has decided to stick it’s snout into our savings…..and by our I mean those who are nett taxpayers, who don’t bludge & actually have savings!!!

          • Hazards001

            Tell me something. Are your employees nett taxpayers? Or are they a blot on society, a burden?

          • unsol

            We’re self-employed & nett taxpayers. Comment above references who nz govt would most likely target in the same circumstances.

          • Hazards001

            If you are self employed there is no way you personally have paid anywhere near the amount of tax I have or will ever
            come close to it but you call yourself a nett (lmfao at the stupidity of
            the whole concept) taxpayer! The whole nett taxpayer myth is a tool employed by the entitled.
            See if you can garner from this post my feelings about people that claim to be nett taxpayers. A dodgy and supercilious claim to fame if ever there was one!

          • unsol

            I was being generous & referring to a more generic school of thought the masses fund palatable. The reality is anyone earning less than $120 of taxable income cannot possibly be a nett taxpayer & if you take into account ACC & GST that employers & the self-employed pay then nett taxpayer almost certainly precludes all employees in terms if volume of taxes the former pay – primarily for the benefit of the masses.

            In other words, 13% of taxpayers pay more than 75% of taxes collected & benefits paid.

            IRD has all this info – very easy to find.

            DF also posted on this issue a year or so ago re question time about nett taxpayers in parliament. Just google kiwi blog & taxpayers & it should come up.

          • In Vino Veritas

            Still waiting for that “my bad” from last week blazer. On Stiglitz, having a Nobel Prize doesnt say much, Al Gore got one for preaching on research that has been proven to be completely wrong.
            And the opposite of free market is government controlled. You know, the market where businesses manufacture or produce goods that no body wants. Most countries that have had long term socialist governments have tried this, and they have failed utterly miserably. Free market on the other hand has never failed. So its a choice between failure and success blazer, and you choose failure. A socialist trait.

          • blazer

            agree about Nobels,hand them out like knighthoods these days.You have committed hari kari re the rest of your post however.There has NEVER been a free market.Your facile definition ignores the dynamics of global trade supply and demand and restrictions,forex controls and a whole lot more.

          • In Vino Veritas

            Hardly hari kari blazer since free market has therefore never failed. Nothing facile about that.
            Still not heard “my bad” blazer.

          • blazer

            how can something that never existed be a success then einstein?.If you are in fact rich as you say,it can only be through property inflation.

      • Mr_Blobby

        Blazer you are truly a stupid Muppet. You are on the right track, but missing the point.

        • blazer

          do tell.

          • Mr_Blobby

            I think you are right, just running around in ever decreasing circles.

  • thor42

    Definitely THEFT.
    If I found out that the bank had ripped off 7% of my money overnight, I’d be down at the bloody barricades in the streets.
    Europe is now seeing the fruits of leftist economic “policy”. Throwing other people’s money around.

    • Hazards001

      And if anyone in Zimbabwe had any money they would. Bet Mugabe is kicking himself for not thinking of it sooner!

  • ConwayCaptain

    The British Govt has said that they will recompense civil servants and servicepeople based in Cyprus.
    Have you seen the headline in todays NZH Business section where they spell Cyprus as CYPRESS

    • Gazzaw

      Nothing surprises me anymore regarding illiteracy at the Herald. The subbies should be sent on a primary school reading recovery programme.

    • Mr_Blobby

      I think it was just a play on words.

  • cows4me

    I guess if you can get away with it the first time then it just gets easier. Politicians the world over will be watching this closely. If none of the Cypriot politicians get drawn and quarter it will only encourage the bastards to give it a go. I hope the politicians are filling their pants.

  • Pita

    If it works in Cyprus it will soon be introduced in Greece, Italy, Spain and Portugal…simple really, can’t understand why they hadn’t thought of it before…

    • Mr_Blobby

      It is that simple they have.

      Some one calculated that if the EU had an asset TAX. 100% TAX on all assets over a relatively small amount, say 150,000 Euro you could pay off the EU debt.

  • Lion_ess

    Isn’t one of Winston’s grand plans to use Kiwisaver funds to buy back assets? I don’t recall any fine print stating the Government could borrow from Kiwisaver – I guess that’s why it’s not government guaranteed.

    • Mr_Blobby

      Kiwisaver is just a big Ponzi scheme to help prop up the financial markets. At some stage financial markets, lobbying for compulsory savings, will get the go ahead.

      What is Guaranteed is that some suckers, locked in until a predefined age, will be just about to retire and see there funds drop fast in the latest financial crisis. And either retire on less or wait 10+ years for it to recover, maybe.

      It has happened in Australia.

      Look at recent history, think Muldoon, have we had a bankrupt Government that has seen a big stack of retirement pre funding to good to turn down.

      Remember National Super is not pre funded, it is paid for by the TAX payer of the day, when it does eventually become unaffordable, think Ponzie. 25% of your TAX dollar goes to welfare, that most people will be excluded from because they did the right(wrong) thing.

      • unsol

        Some suckers – you mean a shitload of NZers!

        “Kiwisaver is just a big Ponzi scheme to help prop up the financial markets”

        I often wonder that.

        But I decided to take the risk & put one of us into the scheme – me, the one with zero earning power without hubby (well unless I had to go & work) so that way we have an out (I can’t afford it – it’s not a joint scheme so just like student loans etc he can’t be held liable)……or at least I hope!

        “NZ super….when it does eventually become unaffordable”

        it already is now. This is the main reason why I decided to join KS as I think NZ will end up going down the path of the UK & have a national contributions scheme (which of course still means propping up the losers & wastrels….sigh).

  • Dave

    Sounds just like a Labour policy to me.

  • AnonWgtn

    Cyprus has been used as an easy banking facility for many years for considerable amounts of Greek money, to say nothing of huge amounts of Russian black money, and UK dodgy funds from both Greek and Turkish UK immigrants.
    Considerable drug money is marketed though Cyprus, both the Greek side, and the Turkish side from Afghanistan drugs.
    Very useful as customs on both sides can be bought very cheaply.
    BUT I suspect that the moment it was leaked about the rake off of people’s savings the big money left within hours.
    Only the ordinary person left will get stuffed.

    • Mr_Blobby

      Yes, of course. Joe/Jane (sucker) will always pick up the Tab. If you are sitting around a Poker table and you can’t see who the mark is……..

      • 4077th

        Dead bodies, the mark and suckers? I wonder, do you work for yourself by yourself MB? Have you checked the back of your neck for a barcode?

        • Mr_Blobby

          HTFU 4077, Now have to got to lunch, back at 3pm to 3.30pm

          • 4077th

            Not insulting you MB…just curious about your job given some of the references you made to the afore mentioned my attempt at some cryptic humor.

          • Mr_Blobby

            Sorry just got back from lunch. What was your point again.

  • rangitoto

    Surely this will cause a run on their banks. Massive failure

    • Mr_Blobby

      probably withdrawal limits and currency controls.The smart money left town the day before.

      • JimboBug

        Currency controls illegal under EU laws, same with transfer limits. Oh, and making depositors with under 100,000 euro take a haircut. So yes, probably transfer limits and currency controls!

  • Anonymouse Coward

    When Heezbolah, Hamas, the PLA, the Russian Mafia and Cactus Kate(on behalf of clients) are all in the same queue, to get the same money out of the same bank, things could get exiting.

    • Mr_Blobby

      If they were not invited the day before. The bodies would be piling up.

  • Anonymouse Coward

    Kiwis should pay attention to this. What is being tried in Cyprus is similar to the NZ Reserve Banks Open Bank Resolution scheme where depositors take a haircut to save the banks.

    Reserve Bank governor Graeme Wheeler should be on his way to Cyprus right now to study how this shakes down.

    Graeme should leave his suit behind and take only shorts and jandals. Being recognized on the streets of Cyprus as a banker may be hazardous to your health.

    Anyone hear the rumour todays cabinet meeting is starting late. Story is the Prime Currency Trader is too busy having fun shorting the Euro and going long Swiss Francs.

    • Mr_Blobby

      yes, it did slip through with little fanfare didn’t it. The suckers (Public) have no idea that the mechanism is already in place here in NZ.Google open bank resolution.Look past the official propaganda.

      • Anonymouse Coward

        Its the rich wot get the covered bonds, its the poor wot get the haircut, ain’t it all a bleedin shame.

        • BJ

          I thought poor people didn’t have any savings – isn’t that why we have welfare payments.

    • JimboBug

      Which is why my parents’ money has left the country for a nice little jaunt overseas where these rules aren’t in place. And the profits from the French property, which were building up in a French bank account, are on their way to London as we speak as France is an absolute basket case so it is only a matter of time before they try the same.

  • jesterx

    this is just a play run for the same thing they will be doing in the US soon. They want to ween people onto the idea.

    The guy from http://sentiment-trader.blogspot.com who has amazing and accurate market calls is saying this will be the next catalyst for a market sell off. It will be interesting to see what happens the next few weeks.

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