9.9%? 30%? 60%? 80%? Nope - according to the latest from Reuters, the cash-on-cash return to all uninsured depositors in the healthy, i.e., only remaining big Cyprus bank, will be a big, fat doughnut.
9.9%? 30%? 60%? 80%? Nope - according to the latest from Reuters, the cash-on-cash return to all uninsured depositors in the healthy, i.e., only remaining big Cyprus bank, will be a big, fat doughnut.

In what appears to be drastically worse than many had hoped (and expected), uninsured depositors in Cyprus' largest bank stand to get no actual cash back from their initial deposit as the plan (expected to be announced tomorrow) is:

•22.5% of the previous cash deposit gone forever (pure haircut)
•40% of the previous cash deposit will receive interest (but will never be repaid),
•and the remaining 37.5% of the previous cash deposit will be swapped into equity into the bank (a completely worthless bank that is of course.)
So, theoretically this is 62.5% haircut but once everyone decides to 'sell' their shares to reconstitute some cash then we would imagine it will be far greater. Furthermore, at what valuation will the 37.5% equity be allocated (we suspect a rather aggressive mark-up to 'market' clearing levels).

wake_up_bomb wrote:

''Very bad, very, very bad,'' says 65-year-old John Demetriou, rubbing tears from his lined face with thick fingers. ''I lost all my money.''
John now lives in the picturesque fishing village of Liopetri on Cyprus' south coast. But for 35 years he lived at Bondi Junction and worked days, nights and weekends in Sydney markets selling jewellery and imitation jewellery.
He had left Cyprus in the early 1970s at the height of its war with Turkey, taking his wife and young children to safety in Australia. He built a life from nothing and, gradually, a substantial nest egg. He retired to Cyprus in 2007 with about $1 million, his life savings.
He planned to spend it on his grandchildren - some of whom live in Cyprus - putting them through university and setting them up. There would be medical bills; he has a heart condition. The interest was paying for a comfortable retirement, and trips back to Australia. He also toyed with the idea of buying a boat.
He wanted to leave any big purchases a few years, to be sure this was where he would spend his retirement. There was no hurry. But now it is all gone.
''If I made the decision to stay, I was going to build a house,'' John says. ''Unfortunately I didn't make the decision yet.

''I went to sleep Friday as a rich man. I woke up a poor man.''

His money was all in the Laiki ''Popular'' Bank which was the main casualty of Cyprus' bailout package set by the European Union. Laiki is to be dismantled. Savings of less than €100,000 are to move to the Bank of Cyprus. Anything more than that will almost certainly be wiped out as the bank is wound down, its remaining assets taken by the bank's creditors.
Last week he heard a rumour that the bank was in trouble and went into Aiya Napa to ask his bank manager - a friend - if he should move his life savings.
''There's no problem, nothing to worry about,'' he was told.
Not so. ''I go to bed and I can't sleep. I walk around, I have a coffee. I am thinking about my family.''
John's tears flow. As he chokes up, his son George, who moved to Cyprus in 1990, explains.

''The whole family, we used to work at the markets. I would work at the markets on the weekend to help my parents while my mates were off having fun. Honest work in honest jobs. Now all that hard work is paying the debts of other people and the government. It's disgusting, to be honest.''
George says he can start again - if things get worse he and his family might move back to Australia.
''But not my dad. He can't go back to Australia. He is not allowed to fly because of his heart, and anyway where would he live? He has no house. He will have €100,000 left to live off. Soon he's not going to have a cent to his name.''
John has a thin hope. His money was sitting in the bank in Australian dollars instead of euros, so he wonders if it would be exempt from the bank's collapse. But the bank's doors are closed, so he doesn't even know to whom he should put that argument.
''For the moment I am 'sitting on charcoal', as they say,'' waiting to see if he gets burnt.

''It's not Russian money, it's not black money. It's my money.''

There are almost 5000 Cypriot-Australians on the island. Most are - or were - self-sufficient veterans of the 1950s engineering boom or the 1974 war who came back to retire or to be with family (John is looking after his 90-year-old mother).
This week Britain stopped paying pensions into Cypriot accounts, advising expatriates to open a British bank account instead.
Australia's high commission in Nicosia has already fielded inquiries from dual nationals seeking advice on their pensions. They were told to set up different payment arrangements, a spokeswoman for the Department of Foreign Affairs and Trade said.

''We expect the main impact will be for Australians who have invested large sums in Laiki Bank or the Bank of Cyprus,'' she said. ''There is no need for special measures at this stage.''

A few days ago, when news hit that Cyprus has begun investigating who the people were who had managed to pull cash out of nation's insolvent banks, both during the capital control "blackout" period and previously, we asked "how much longer will the rule of law remain in Cyprus once full blown class warfare is unleashed, and the 99% are generously handed the list of the 1% who were "informed" enough to pull their money from the flaming sovereign equivalent of Bernie Madoff, while every other uninsured depositor is facing losses of up to 80%, and soon 100%?" We may get the answer much sooner than expected, as the first iteration of this list: one naming the beneficiaries of millions of loans written off by the now insolvent Cyprus banks and therefore indirectly responsible for the "impairment" of the banks' depositors, was released yesterday by Greece's daily Ethnos newspaper. But what virtually assures substantial political fallout is that among the people listed is Cyprus' former president, George Vassiliou.

Kathimerini summarized the situation as follows:

A list of Cypriot companies and politicians that allegedly had millions of euros in loans written off by the three Cypriot lenders at a center of an unprecedented banking crisis on the Mediterranean island has been forward to Cyprus's parliamentary ethics committee after its publication in Greece's daily Ethnos newspaper.
According to the revelations, Bank of Cyprus, Cyprus Popular Bank (Laiki) and Hellenic Bank -- which were earlier this week acquired by Greece's Piraeus Bank -- has forgiven companies, MPs and local authority officials millions of euros in loans over the past five years. The list reportedly features the names of politicians from all Cypriot parties except Social Democracy (EDEK) and the Social Ecology Movement (KKO).

Why are we not surprised?

More here....
www.zerohedge.com/news/2013-03-30/politi...e-offs-leading-banki


Jane

Here's one for you Nov...
www.zerohedge.com/news/2013-03-29/i-went...rich-man-i-woke-poor

Jane

I doubt he has more than 100k.
I sure as fuck don't and theres no way I could make that much working on a market

andyh wrote:
I disagree, i know someone who works in the sydney market and makes plenty of money there, infact ive sold him product and he resells it there for way more than i ever have a hope of hell in selling it bulk without having a retail outlet. It is getting more difficult though as big chain stores/corporations get stronger, but it wasnt always the case.

There would have been other things he did also, plus there was money to be made back in the day, i see many like him. Have you seen property prices in Sydney for example, many have built up substantial wealth especially those who got in early in property. Add to that the Australian dollar getting stronger which adds to that. When the sydney olympics were on in 2000 one australian dollar bought only 50 something US cents, now it has doubled vs US dollar and is actually worth more. That alone has doubled peoples money that they held since 2000 when its converted to US dollars.

the interest rates payed in australia were also historically very high, up to 17 percent at one time, people were making money on savings, more than many other places. Thats over now, the most you can get is around 4 right now, and they will probably drop to 2 percent, as will property prices, i predict they will drop substantially also.

So as the years pass, the money builds up. Tough break tho, of all the places he could have put the money.

And the stories coming out about people in the loop pulling out their cash, well tbh if that didnt happen it wouldve suprised me more.

You can't make 100k+ in clear savings by selling apple and oranges mate.
Cocaine maybe

andyh wrote:
I still disagree, you need to look at things on a case by case basis imo and not make assumptions, how many years have passed for example, he is 65. Im sure he probably owned property also at some stage, it appreciated, and probably sold it off to bank the money because he thought it would be easier to sit on his butt and get interest.

The guy i know was making a shitload of money a few years back, i knew what his margin was. As i said its all slowed down though due to corporations, but it wasnt always like that.

And im not naive to the other kind of sales either mate, ive been around and i actually worked at a dealership that sold new ferraris and maseratis for a few years. Theres save all your pennies money, then theres money money, i know the difference.

You can get lucky and sell a house for a profit but 100k clear profit after all expenses in life?
Thats another ball game.
You either get it given with a silver spoon or you break the law, simple as.
No-one makes that much dosh clear of expenses unless you have no expenses.

The list reportedly features the names of politicians from all Cypriot parties except Social Democracy (EDEK) and the Social Ecology Movement (KKO).

the reality is tho ofc if you sell a house for 600, it still only buys the same house that 10-20 k bought in the 70's, so have you really made anything you have in terms of numbers on a screen but the buying power is still the same... you know about all of that side of things though ofc.

@ Novum and Andy....
I am going to jump in here and say it is VERY possible Andy. My best gf sold shoes at markets here in the UK. Over a short period of years she has made well over 100k.....she lent more than that to help her brother out with his business...which has since gone down the swanny.
She came out of the markets and set up 2 shops....shoe shop and fruit and veg shop as it happened. She closed the veg shop when a big supermarket chain came to town, and moved her shoe shop to what used to be my old business premisses as she could open a shoe shop and cafe. There was a massive downturn in the rural economy...she's now bankrupt. BUT...she's a tenacious old cow is my mate and has left Anglesey and gone back to her roots in Tod and is starting all over again.
So yes, it can be done...even here in the UK.

Jane

angelchemuel wrote:
She didn't make 100k clear did she?
I know a guy who has but he didn't do it legally lol :p

The important point I'm trying to make is "100k CLEAR"
I've already made way more than 100k but I've had to spend it just like everyone else.

andyh wrote:
She lent the bolded bit in cash...and she still had over a 100k. But your quite right about spending it...like she says she should have made different business decisions in 2008 and not try and keep going like she was.

Jane

List Released With 132 Names Who Pulled Cyprus Deposits Ahead Of "Confiscation Day"
Submitted by Tyler Durden on 04/01/2013 12:51 -0400

With every passing day, it becomes clearer and clearer the Cyprus deposit confiscation "news" was the most unsurprising outcome for the nation's financial system and was known by virtually everyone on the ground days and weeks in advance: first it was disclosed that Russians had been pulling their money, then it was suggested the president himself had made sure some €21 million of his family's money was parked safely in London, then we showed a massive surge in Cyprus deposit outflows in February, and now the latest news is that a list of 132 companies and individuals has emerged who withdrew their €-denominated deposits in the two weeks from March 1 to March 15, among which the previously noted company Loutsios & Sons which is alleged to have ties with the current Cypriot president Anastasiadis.