Mish's Global Economic Trend Analysis |
- Cyprus Conservative Opposition Parliamentary Member Says "If No Solution Soon, Print Cyprus Pounds and Abandon the Euro"
- Flash and Fantasy; Miami Condo Boom is Back, Fueled by Foreign Buying
- "Not Me!"; Capital Controls Placed, Banks Closed Until Tuesday; What's the Best That Can Happen?
- EU Blinks Already? Staged Vote? Cyprus Finance Minister Proposes Deal with Russia; Will That Fly?
- Cypriot Lawmakers Overwhelmingly Reject EU Demands; What's Next?
- Straight from the Rumor Mill
- Laughable Hypocrisy from the Thick Book of EU Lies and Hypocritical Statements
- From Smoldering Ashes Comes Good News of Reality
| Posted: 19 Mar 2013 09:28 PM PDT Marios Mavrides, a conservative opposition member of the Cyprus parliament just chimed in with his viewpoint "If No Solution Soon, Print Cyprus Pound and Abandon the Euro". The conservative opposition parliamentarian of Cyprus, Marios Mavrides, said Wednesday that if his country can not find a solution shortly, it "will begin to print Cyprus pounds and abandon the euro."Joke of the Day Here's the joke of the day from Eurogroup finance chairman Jeroen Dijsselbloem: "I confirm that the Eurogroup stands ready to assist Cyprus in its reform efforts." Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Flash and Fantasy; Miami Condo Boom is Back, Fueled by Foreign Buying Posted: 19 Mar 2013 06:31 PM PDT Diana Olick has an interesting article called Defying Gravity: Miami Condos Soar Again During the height of the housing boom, some likened the feverish flipping game in Miami's condominium market to a circus. The circus is back, and more high-flying than ever.Flash and Fantasy Even with that 25% rise from a year ago, prices are still way under where they were in 2005. That said, my reaction is still the same: Here we go again! "Echo" is a nice name (as in echo bubble). Click on the link and watch the video. It's quite entertaining. Clearly the Fed has sponsored yet another bubble as people are once again buying sight unseen. This time, it's primarily foreign buyers. Will it end any better this time? Probably for the banks simply because they are not deeply involved in funding. How about the buyers? I think you know the answer to that, but don't expect the Fed to care. Rather, expect them to cheerlead this artificial boom every step of the way. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Wine Country Conference I am hosting an economic conference on April 5 in Sonoma, California. Proceeds go to the Les Turner ALS Foundation (Lou Gehrig's Disease). Please see My Wife Joanne Has Passed Away; Stop and Smell the Lilacs for my association with the disease. To learn about the economic conference with world-class speakers including John Hussman, Michael Pettis, Jim Chanos, John Mauldin, Mike "Mish" Shedlock, Chris Martenson with guest moderator Lauren Lyster and other Special Guests, please visit Wine Country Conference April 5, 2013 |
| "Not Me!"; Capital Controls Placed, Banks Closed Until Tuesday; What's the Best That Can Happen? Posted: 19 Mar 2013 03:56 PM PDT Banks Closed Until Tuesday I will gladly pay you Tuesday for a hamburger today seems to be the message from this tweet from DJ FX Trader "Cyprus Banks Could Stay Closed Until Tuesday March 26". Capital Controls Bloomberg confirms in a story EU Said to Discuss Cyprus Capital Controls, Longer Bank Holiday European policy makers are in Cyprus discussing further capital controls and the extension of a bank holiday through to the end of the week, said a European official familiar with the talks. No decisions have been made yet, said the person, who spoke on condition of anonymity because the discussions are confidential."Not Me!" In the meantime, the Cyprus Bailout Blame Game is well underway. No one wants to be the object of "The Big Point".
Who's to Blame? Every damn one of them actually. The eurozone was fatally flawed from the beginning. The ECB's interest rate policy of "One Size Fits Germany" fueled the crisis. There should not have been any deposit insurance, and the ECB should not have insisted Greece would never default (and it was Cypriot banks that were left holding the bag when Greece did default). Best That Can Happen The best thing for all involved would be for this to blow up in the EU's face, for Cyprus to exit the eurozone, and for Russia to quickly pick up the pieces so that everyone can see a eurozone exit is not the end of the world, for anyone. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| EU Blinks Already? Staged Vote? Cyprus Finance Minister Proposes Deal with Russia; Will That Fly? Posted: 19 Mar 2013 12:55 PM PDT Staged Vote? In spite of the 1-Not Present, 36-No, 19-abstentions vote in the Cypriot parliament, one really has to wonder if this was a staged vote to show solidarity with Cypriot citizens, with some sort of face-saving deal already approved for tomorrow (in which the Cypriot parliament votes yes by a slim majority in return for minor concessions from the ECB and Germany). In short, it is unclear if we really know what is happening in the Cypriot parliament. Note: I originally posted that as 1-Yes vote but the "1" was actually a member of parliament who was not present. EU Blinks Already? While pondering that thought, please consider the Bloomberg Tweet "The ECB reaffirms its commitment to provide liquidity as needed within the existing rules" What precisely does that ECB statement mean? Did the ECB just blink, or was that a meaningless statement counting on "existing rules" to lay the hammer on Cyprus once things calm down a bit? What About Russia? In other conflicting news, a CNBC headline reads Gazprom Is or Is Not Offering Cyprus a Bailout. The latest news: Russian energy giant Gazprom either has or has not offered to bail out the country in exchange for exploration rights.Well, that sure clears things up, doesn't it? And adding to the confusion, there were rumors today that Cyprus Finance Minister Resigns, President Refuses To Accept Resignation, complete with official denials. Is there a Gazprom Offer On the Table? World News Australia reports Cyprus finance minister heads to Russia amid an explosion of anger over a bank levy that could cost investors billions of euros. Cyprus Finance Minister Michalis Sarris is heading to Moscow amid an explosion of anger over an EU bailout deal that could cost Russian investors billions of euros.Cyprus Finance Minister Proposes Deal with Russia The Wall Street Journal reports Cyprus Finance Minister to Offer New Plan in Bid for Russian Support Cyprus's finance minister is set to present a plan to his Russian counterpart in Moscow Wednesday aimed at saving the country's financial sector, a government official said Tuesday.What's Really Happening? "The situation is very difficult--unprecedented--and we don't understand what's happening." That line is a succinct summation of the situation regarding staged votes, the possibility of the ECB blinking, and Gazprom offers. One thing is for sure, if the ECB did blink, one of the reasons would be fear of driving Cyprus further into the hands of Russia. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Cypriot Lawmakers Overwhelmingly Reject EU Demands; What's Next? Posted: 19 Mar 2013 11:45 AM PDT From the library of genuine news, Reuters reports Cyprus parliament rejects deposit tax for bailout. Cypriot lawmakers overwhelmingly rejected a deeply unpopular tax on bank deposits on Tuesday, throwing into doubt an international bailout for the troubled euro zone member needed to avert default and a banking collapse.What's Next? First, I commend the Cypriot lawmakers. Of course, they will likely vote on this again and again, until they "get it right". Second, please note the rumor mill was wrong as I expected. The Telegraph Live Blog reports "Michalis Sarris, Cyprus's finance minister, is definitely staying put. He's just sent Bloomberg a text message to say just that, the newswire reports." Third, expect pressure on Cypus from the ECB, EU, Russia, the IMF, US, and UK. Finally, expect banks and the stock market to remain closed until parliament approves some face-saving deal, or Cyprus abandons the euro and returns to the Cypriot pound. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Posted: 19 Mar 2013 11:12 AM PDT Speculation on Cyprus is rampant. It is difficult to separate fact from fantasy as reports as to what is happening vary widely. For example Ekathimerini reports "Cypriot Finance Minister Michalis Sarris is about to be replaced upon his return from his current trip to Moscow, Kathimerini understands, as he no longer enjoys the support of President Nicos Anastasiades following his handling of the crisis." The ZeroHedge version of the story is Cyprus Finance Minister Resigns, President Refuses To Accept Resignation. There is quite a bit of difference between being forced out and resigning. Neither site provided links to their stories. The Telegraph live blog just chimed in with "17.39 Cyprus's finance minister has told Reuters that there is "not truth" to reports of his resignation." Of course, no link was provided to Reuters. The sad state of affairs in blogging is many sites do not link to anything but themselves, and when you search for a story, you often cannot find it. Here are more unreferenced reports from the above linked-to live blog. 16.29 More from AFP, which now says that although the Cypriot parliament has opened a session to vote, it is unclear whether any voting will take place as all parties - including the ruling party of President Anastasiades - have threatened to abstain.Seriously guys, I understand that if there is no link, you cannot provide one, but otherwise, how hard would it be for the Telegraph to have made "AFP" a link. Straight From the Book of Official Denials Straight from the book official denials (typically lies) , comes this set of official statements courtesy of the Reuters Cyprus aims to let small savers off bank tax; veto still likely
Clearly, rumors are flowing as are lies and official denials. Meanwhile, Cyprus ATMs are drained of cash, the stock exchange is suspended, and votes have already been postponed numerous times. I am hoping the Cypriot parliament rejects the deal outright, and on that score we will see soon enough unless they postpone the vote again. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Laughable Hypocrisy from the Thick Book of EU Lies and Hypocritical Statements Posted: 19 Mar 2013 10:03 AM PDT Here's one for the thick book of EU lies and hypocritical statements "Deposit guarantees only protect against bankruptcy, not levies" Guarantees on deposits in the European Union are only there if a bank completely collapses, and does not protect from fiscal steps decided by parliaments, the European Commission said on Tuesday, defending a decision to impose a levy in Cyprus. Excuse Me! What are the Cyprus banks, if not shutdown, collapsed, and bankrupt? Furthermore, any move by the ECB to withholding liquidity (and that is the threat), would immediately make them bankrupt, were they not bankrupt already. By extension, if the EC was telling the truth, all Cyprus need do is not pass the "tax", thereby forcing the banks into bankruptcy the moment the ECB withheld funds, thereby triggering the guarantee. These idiots obviously have no idea how ridiculous they sound. To top it off, such statements are likely to fuel further speculation about forced depositor bail-ins in Spain, Portugal, and Italy. In essence, it proves there really is no deposit guarantee at all. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| From Smoldering Ashes Comes Good News of Reality Posted: 19 Mar 2013 12:03 AM PDT It's easy enough to focus on the smoldering ashes of the politically and economically insane move in Cyprus by the heavy-handed bureaucrats in Brussels and Germany. Instead, I suggest we focus on the bright side, and there is plenty to be found.
That is one heck of a lot of good things for the bargain basement price of a mere €5.8 billion. If Europe could not come together to scrape up a mere €5.8 billion to rescue tiny Cyprus, what exactly can they come up with? The answer of course is nothing. Philosophically speaking, Northern and Southern Europe could not possibly be wider apart. No Union, Only Dreams There is no union, only foolish dreams of one. There is no solidarity, only talk. Yet the talk has changed. I was wondering exactly what it would take to light a fire in Telegraph columnist Ambrose-Evans Pritchard and we now have the answer. Pritchard says Daylight robbery in Cyprus will come to haunt EMU. But so have two-dozen others. What struck me was these paragraphs. They [EU creditor States] have demonstrated that the rhetoric of EMU solidarity is just hot air, that they will not force their own taxpayers to share a single cent of clean-up costs for the great joint venture of monetary union.America and China must crush Germany into submission Please compare the above paragraphs with an article Pritchard wrote on November 9, 2011: America and China must crush Germany into submission As we watch Italy's 10-year bond yields near 7.5pc and threaten to detonate the explosive charge on €1.9 trillion of debt, it is time for the world to reimpose order.Two days later, on November 11, 2011, I wrote a rebuttal: We Must Crush Ambrose Evans-Pritchard, Nouriel Roubini, Martin Wolf, the Army of Krugmanites into Submission; Reflections on "Dangerous and Insane" Reflections on "Dangerous and Insane"In my rebuttal, I also wrote "Widespread debt restructuring and partial break-up of the eurozone is where we are headed, and the debate ought to be how to do that correctly instead of how to achieve the impossible." As you can see, Pritchard finally has it correct. Given that he was one of the original eurosceptics, I knew he would eventually come around. It's one thing for eurosceptics to finally get back on the right track, but it's another thing indeed for dyed in the wool euro supporters to begin questioning the euro itself. Wolfgang Münchau, founder of Eurointelligence and columnist on the Financial Times is one such euro supporter. The Failure of the Euro-Politicians Please consider Münchau's recent column on Der Spiegel Expropriation in Cyprus: The Failure of the Euro-politicians. The euro finance ministers will partially expropriate bank customers in Cyprus. This decision is the worst accident in the monetary union. Anyone now trusting his savings to a southern-European bank must be pretty naive.When Tanks Are Needed Reader Bernd translated the final two paragraphs as follows ... "Readers of my column know, that I have always defended the Euro, including the instruments (tools) needed to make it a success. However, there comes a point when it is no longer morally acceptable to uphold a currency if Governments and Parliaments do not have the will and the insight to manage it properly.And so here we are, at long last, with ardent supporters finally questioning whether this experiment can work. The answer should now be obvious to all: it can't. So we finally need to do what I suggested long ago, start frank discussions on how to break up the eurozone in the least disruptive manner. Wine Country Conference I am hosting an economic conference on April 5 in Sonoma, California. Proceeds go to the Les Turner ALS Foundation (Lou Gehrig's Disease). Please see My Wife Joanne Has Passed Away; Stop and Smell the Lilacs for my association with the disease. To learn about the economic conference with world-class speakers including John Hussman, Michael Pettis, Jim Chanos, John Mauldin, Mike "Mish" Shedlock, Chris Martenson with guest moderator Lauren Lyster and other Special Guests, please visit Wine Country Conference April 5, 2013 |
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