CYPRUS TO
TAX BANK ACCOUNTS (CNBC)
“... the new proposal would see savers with less than 100,000 euros in
their accounts pay a one-time tax of 3 percent (the initial figure was 6.75
percent). Those with deposits from 100,000 to 500,000 euros would pay 10
percent and anyone with over 500,000 euros in their accounts would pay 15
percent.
With an estimated 37 percent of the $68 billion of deposits in Cypriot
banks belonging to foreigners, many of whom Russian investors and businesses
according to experts, Cypriots are not the only savers that could lose money
under the deal.
Vladimir Putin's spokesman quoted the Russian President as saying on
Monday morning that a deposit levy would be ‘unfair, unprofessional and dangerous’,
Reuters reported.” Full story at…
http://www.cnbc.com/id/100562036
My comment: When a diplomat (and I use the word loosely) says
“dangerous”, it is clearly a threat. As
Dennis Gartman said on CNBC, “You don’t mess with the Russian Mafia.” Cyprus is surprisingly tied to Russia; they
owe Russian banks a lot of money and they have billions from Russian
depositors.
This “wealth tax” consists of raiding private bank accounts and taxing
(stealing) the money to give to the Government.
Bank-runs began the minute this became public draining ATMs of
cash. Banks are not expected to reopen
until Thursday.
FUSE IS LIT – El-Erian (CNBC)
"Europe lit the fuse of two sticks of dynamite on Saturday. One is
very clear," El-Erian said in a “Squawk Box” interview. "By including
small depositors they are risking social unrest, political disorder, and an
exit from the euro zone." He added that small depositors should be exempt
and that's exactly what Cypriot ministers are trying to do ahead of a Tuesday
parliamentary vote.
...The other stick of dynamite that's been lit is much more complicated
and more uncertain," El-Erian added. "That is a question mark about
the sanctity of bank deposits in Europe. And a reminder that Europe has too
many objectives and too few instruments." He said he thinks the political
system there is "failing Europe."
... As for whether he'd take money out of European banks, he said no...
"I think it's a different threat this time. It's less of a liquidity
problem and much more that citizens in Europe are losing confidence in the
established political order and the political parties." Full story at…
http://www.cnbc.com/id/100563044\
The markets were surprisingly sanguine – down about one-half percent at
the close. The Government was back
tracking all day and that is probably one reason why. Another point is that Cyprus is so small, it is hard to get too worked up.
MARKET RECAP
Monday, the S&P 500 finished down 0.5% to 1552 (rounded). VIX exploded up 18% to 13.36 on the Cyprus news.
Monday, the S&P 500 finished down 0.5% to 1552 (rounded). VIX exploded up 18% to 13.36 on the Cyprus news.
NTSM
Monday, the NTSM analysis remained HOLD at the close.
MY INVESTED POSITION
With long-term funds, I remain about 20% invested in stocks as of 5
March, due to my risk tolerance rather than the numerical NTSM analysis. To put it bluntly, I currently have no
tolerance for risk. (If I were strictly
following the NTSM numbers, I'd still be heavily invested in stocks.) My
reasoning may be found at…http://navigatethestockmarket.blogspot.com/2013/03/why-i-got-mostly-out-of-stock-market.html
