"banks in Cyprus may never re-open if a bailout is not agreed."

[dixiegrrrrl]

"German Finance Minister Wolfgang Schaeuble warned Cyprus that its banks might never be able to reopen if it rejected the bailout."
and
"Some businesses are now refusing credit card payments, our correspondent reports."
and

Options for Cyprus
Declaration of insolvency
Revised bailout but still with bank levy
Bigger EU bailout
Increased Russian funding

http://www.bbc.co.uk/news/world-europe-21855163

[TheMadMonk]

1. So? "Pay protection or lose the lot." Does that about sum it up? /nt

[dixiegrrrrl]

6. Reminds me of the Nigerian scam.

"We will give you enough money to pay all your debts, you just have to pay us a handling fee of 8 billion"

[neverforget]

2. Give us your money or the country gets it.

[dipsydoodle]

3. That's associated with the current liquidity of their banks.

They are liquid at present only while ECB support , which was originally due to expire tomorrow, continues. In its absence they would immediately be declared insolvent and it would become illegal for them to open / trade at all.

Part of the reason the cap was set at €10 billion was that this is German taxpayer money and the Bundesbank wouldn't allow more in the knowledge that is regarded as being the sustainable maximum for Cyprus. That is the background to them needing to raise over €5 billion themselves, they'd already got €2.5 from Russia and the total they need is €17.5 billion or so.

[Ruby the Liberal]

4. My take

Russia is going to step in and fund them wholly in return for (i) partial ownership/control of the banks (ii) ownership of the gas rights that Cyprus is sitting on (a buttload) and (iii) ownership of a new Russian naval base/port on the Island. Cyprus will return to the Cypriot Pound and leave the EU once 'safely' esconsed as a Russian "subsidiary". This may be a Sovereign deal or combined Sovereign/Private (Gazprom).

Bookmark this one.

[pampango]

12. Since a lot of the savings belong to rich Russians, I would not be surprised if Russia did this.

I wonder if Obama would come to the rescue of rich Americans savers, if one of their tax havens (say, the Cayman Islands), were on the verge of going bankrupt, what the position of liberals would be on that possibility. I know I would be against it even if the Cayman Islands offered us off-shore oil drilling rights and a naval base there.

The idea that the rescuer (Russia in Cyprus, the US hypothetically in the Cayman Islands) would want gas rights and a naval base in the weaker country in exchange for a bailout would seem not seem to be a liberal-supported solution to a financial crisis, regardless of who caused the crisis in the first place.

I bookmarked your post. I think you have a good chance of being right.

[Ruby the Liberal]

13. Oops!

How much you bet this was never supposed to get out...

In comments released early Thursday, Medvedev warned that Russia would take a "firm" stand on Cyprus because the accounts of governmment structures had been blocked on the island.

"A large number of our open public structures work through Cyprus. They now have money blocked for reasons that are unclear, because the source of that money is obvious. This money is declared everywhere. These include government structures," Medvedev said in an interview published early Thursday on the Russian government website.

http://www.globalpost.com/dispatch/news/afp/130321/russia-complains-government-accounts-blocked-cyprus

Just how corrupt is your government if THEIR official accounts are housed in offshore tax havens??

[reformist2]

14. Like pampango, I also think you're right. It could even end up as a bidding war!

[Ruby the Liberal]

5. And check this out...

Someone put a 100k (!!) put on April financials XLF to $16 - they are at $17 and change right now. That is a MONSTER bet on that ETF. Makes me think of the shorts (or were they also puts?) on the airline industry stocks for Sept 2001 delivery that were never claimed.

http://online.barrons.com/article/SB50001424052748704372504578287852685209978.html

[dixiegrrrrl]

7. You find the darndest stuff....

Make sense that someone would know to make a buck on the situation, tho.

[Ruby the Liberal]

8. This Cyprus thing has my undivided attention

First time ever that a Sovereign body has decided to renege on deposit insurance. The implications of what that will do to overall confidence in the system as a whole is staggering.

Not getting much play here on DU though, so greatly appreciate the update tonight!

[dixiegrrrrl]

10. The thing is, deposit insurance would not cover the losses.

Because the state is calling the stealing a ...tax..a tithe.So the bank is not declaring a loss.

Which is ironic, since obviously the banks and the country are bankrupt other wise they would not need to steal the money to get a loan to float the loss....*head spinning*

And now New Zealand is talking about doing this.
I am really interested in how many bank runs happened since yesterday, all over the globe..
Now that this idea has been floated, one would be foolish not to expect their government to do the same thing, at some point.
Looking at Italy, Spain and Ireland, at the moment.

[Ruby the Liberal]

9. Just did a quick Google which shows BI was on this ~6 weeks ago

Totally missed it.

http://www.businessinsider.com/art-cashin-on-big-vix-bet-2013-2

[reformist2]

11. "If you close your doors before 6 pm, you will never reopen!" - Mr. Potter, It's A Wonderful Life