bubblesort
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March 26, 2013, 12:37:09 PM |
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Conclusion: What I did is just a precaution. The bank does not pay me anything for keeping my money. I lose nothing if I take it out. I will spend it in my business in approx. 3-4 weeks even if nothing happens. If everyone did the same, there would be same hell here as in Cyprus.
Are you saying that banks don't pay interest in Finland or that the interest is at or below the rate of inflation so the interest doesn't stop the real value of your savings from decreasing?
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Ekaros
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March 26, 2013, 12:40:05 PM |
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Conclusion: What I did is just a precaution. The bank does not pay me anything for keeping my money. I lose nothing if I take it out. I will spend it in my business in approx. 3-4 weeks even if nothing happens. If everyone did the same, there would be same hell here as in Cyprus.
Are you saying that banks don't pay interest in Finland or that the interest is at or below the rate of inflation so the interest doesn't stop the real value of your savings from decreasing? I think for regular people it's around 0.250% for spending accounts. Of course you have saving accounts with better interest, but then also can't use at any time. EDIT: For my bank if minimum balance is over 5k, the interest is bank's prime - 3%... So 0.250% really...
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rpietila
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March 26, 2013, 12:52:12 PM |
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Conclusion: What I did is just a precaution. The bank does not pay me anything for keeping my money. I lose nothing if I take it out. I will spend it in my business in approx. 3-4 weeks even if nothing happens. If everyone did the same, there would be same hell here as in Cyprus.
Are you saying that banks don't pay interest in Finland or that the interest is at or below the rate of inflation so the interest doesn't stop the real value of your savings from decreasing? I think for regular people it's around 0.250% for spending accounts. That is under 2k I think. Not sure how much under euribor it is probably around 0.750% for larger savings on regular accounts. Of course you have saving accounts with better interest, but then also can't use at any time. The euribor is ranging from .12% to .55% depending on the maturity. I could theoretically borrow money at about 1% interest for house, but the banks are not so keen on having me as a customer (how come?) Ppl get 0.25% for spending/saving acct. Businesses get 0% + fees. The way to increase the marketed yield is to demand a multi-year contract with 50% of the money invested in the bank's mutual fund. They can siphon off enough to be able to offer about 1.55% for the account part this way. The reason why I believe the risk for crash has increased, is that insurance against it costs nothing, AND if people go for it, it is causing the very crash they are trying to insure themselves from. Price inflation is approx. 3.5%-5.5% measured over 10 years (food and energy, that is, the things they usually exclude ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif) )
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caveden
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March 26, 2013, 01:38:16 PM |
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You people think the depositors deserve it? ROFLMAO, that's insane!
Sigh... Have you read the text I linked to above? Here, I link it again: http://www.economicpolicyjournal.com/2013/03/peter-schiff-on-cyprus.htmlAlso, read this: http://detlevschlichter.com/2013/03/cyprus-and-the-reality-of-banking-deposit-haircuts-are-both-inevitable-and-the-right-thing-to-do/And then, read my previous posts on this thread. And stop saying BS, please. These banks are going down, some people are going to lose money. Better it be those who invested in said banks than tax-victims who had nothing to do with the problem. Even worse would be forcing all EUR holders to pay. Of course, for the 100th time, the bank shareholders should lose all, they should not be saved at the expense of their clients. And ideally those who made riskier investments should be cut before those who simply held checking accounts. And every creditor or client of the bank that loses something should receive a proportional share of the bank's assets in return.
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rpietila
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March 26, 2013, 01:43:08 PM |
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justusranvier
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March 26, 2013, 01:55:47 PM |
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And stop saying BS, please. These banks are going down, some people are going to lose money. Better it be those who invested in said banks than tax-victims who had nothing to do with the problem. Even worse would be forcing all EUR holders to pay. Of course, for the 100th time, the bank shareholders should lose all, they should not be saved at the expense of their clients. And ideally those who made riskier investments should be cut before those who simply held checking accounts. And every creditor or client of the bank that loses something should receive a proportional share of the bank's assets in return. There used to be this story called a "capital structure". According to this story every stakeholder in a company was assigned a certain preference so that if a bankruptcy was to occur the losses would be felt by the different classes of stakeholders in a pre-defined order. People who believed this story used it to calculate risk. Some people decided to accept a lower return in exchange for a safer position in the capital structure, other people decided to take a less senior position in exchange for a higher return. Everybody made their decisions based on the idea these rules would remain objective and unchanged. Then 2008 happened and reality decided to tear down this pretty little fantasy. Much to the dismay of the investors stupid enough to believe in the "rule of law", the way it actually works is when a bank becomes insolvent the losses are eaten by the group of stakeholders who have the least ability to bribe the regulatory and lawmaking apparatus. Your actual position in the capital structure depends on your political clout at the time of bankruptcy. Congratulations, you just learned an expensive lesson in what it means to live in a centrally-planned command economy. Welcome to fascism.
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rpietila
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March 26, 2013, 01:56:46 PM |
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Meanwhile in Finland:
My local bank refuses to give out more than EUR 10,000 in cash to me. The stated reason is Easter. Then I ask, "okay, 10,000 more next week?". Answer: "Nope."
They advice me to go to other branches in the same city, so that I could take out the 20k I wanted. <- Note, it was not even big sum I was asking for.
I regularly visit them and take out several 100,000s a year in cash, so it is not that there is any "suspicious activity" rule that they are enforcing.
I had a meeting and then walked to another bank. Because my risk assessment had changed because of the above incident, I wanted to have an additional EUR 20k. After about 15 minutes of paperwork, none of which was anything special or suspicious to me, I was given the cash I wanted. Conclusion: What I did is just a precaution. The bank does not pay me anything for keeping my money. I lose nothing if I take it out. I will spend it in my business in approx. 3-4 weeks even if nothing happens. If everyone did the same, there would be same hell here as in Cyprus. ![](https://ip.bitcointalk.org/?u=http%3A%2F%2Fhopea.fi%2Fwp-content%2Fuploads%2F2013%2F03%2FN%25E4ytt%25F6kuva-2013-03-26-kohteessa-15.49.44.png&t=665&c=wnqMw7BfaorEzg) Ahh... feels safer this way.
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rpietila
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March 26, 2013, 01:58:48 PM |
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And stop saying BS, please. These banks are going down, some people are going to lose money. Better it be those who invested in said banks than tax-victims who had nothing to do with the problem. Even worse would be forcing all EUR holders to pay. Of course, for the 100th time, the bank shareholders should lose all, they should not be saved at the expense of their clients. And ideally those who made riskier investments should be cut before those who simply held checking accounts. And every creditor or client of the bank that loses something should receive a proportional share of the bank's assets in return. There used to be this story called a "capital structure". According to this story every stakeholder in a company was assigned a certain preference so that if a bankruptcy was to occur the losses would be felt by the different classes of stakeholders in a pre-defined order. People who believed this story used it to calculate risk. Some people decided to accept a lower return in exchange for a safer position in the capital structure, other people decided to take a less senior position in exchange for a higher return. Everybody made their decisions based on the idea these rules would remain objective and unchanged. Then 2008 happened and reality decided to tear down this pretty little fantasy. Much to the dismay of the investors stupid enough to believe in the "rule of law", the way it actually works is when a bank becomes insolvent the losses are eaten by the group of stakeholders who have the least ability to bribe the regulatory and lawmaking apparatus. Your actual position in the capital structure depends on your political clout at the time of bankruptcy. Congratulations, you just learned an expensive lesson in what it means to live in a centrally-planned command economy. Welcome to fascism. PM me your tip jar, I will show my appreciation.
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creativex
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March 26, 2013, 02:11:40 PM |
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And stop saying BS, please. These banks are going down, some people are going to lose money. Better it be those who invested in said banks than tax-victims who had nothing to do with the problem. Even worse would be forcing all EUR holders to pay. Of course, for the 100th time, the bank shareholders should lose all, they should not be saved at the expense of their clients. And ideally those who made riskier investments should be cut before those who simply held checking accounts. And every creditor or client of the bank that loses something should receive a proportional share of the bank's assets in return. There used to be this story called a "capital structure". According to this story every stakeholder in a company was assigned a certain preference so that if a bankruptcy was to occur the losses would be felt by the different classes of stakeholders in a pre-defined order. People who believed this story used it to calculate risk. Some people decided to accept a lower return in exchange for a safer position in the capital structure, other people decided to take a less senior position in exchange for a higher return. Everybody made their decisions based on the idea these rules would remain objective and unchanged. Then 2008 happened and reality decided to tear down this pretty little fantasy. Much to the dismay of the investors stupid enough to believe in the "rule of law", the way it actually works is when a bank becomes insolvent the losses are eaten by the group of stakeholders who have the least ability to bribe the regulatory and lawmaking apparatus. Your actual position in the capital structure depends on your political clout at the time of bankruptcy. Congratulations, you just learned an expensive lesson in what it means to live in a centrally-planned command economy. Welcome to fascism. +1 Please see USSA bailout of General Motors for reference.
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bubblesort
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March 26, 2013, 02:38:23 PM |
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I really shouldn't feed the trolls, but I just can't resist. You are so stupid I simply can't ignore you. Check out the following definitions: Share HolderDepositorYou seem to be confusing these two terms. If the EU didn't want to bail out banks then they should allow them to fail, but they still need to pay what they owe to the people whose deposits they insured (there is some kind of deposit insurance in Europe, isn't there?). If you want to bail out banks then you need to bail them out and forget your idiotic, suicidal nationalism. In the US wealthy states like New Hampshire have been picking up the tab for poor states like Mississippi since forever. Yeah, they have cultural differences. Yeah, the people in New Hampshire and Mississippi might not like each other. That doesn't matter because we have one financial system. We aren't going to allow one state to fall because another state doesn't want to pay because they aren't from New Hampshire. Nobody would ever hold it against Mississippi that they are poor so they need more handouts from the Federal government. We understand contagion and externalities. Europe doesn't. The argument I see Germans making is that Germans shouldn't have to bail out other people who work with the same monetary system as them because Germans aren't responsible for anybody but Germany. That is socialist nationalism. If the Cypriots were German then yeah, they would bail them out, but they are from Cyprus so the Germans won't bail them out. It is socialist, but only applying to people within Germany, which makes it nationalist as well. If Europe can't act like a single financial system and if they want to keep holding these bailouts against countries who do not flourish under the management (or mismanagement) of the EU, and retaliating against each other by destroying each other's economies with austerity then fuck it, you all deserve the recession that is coming. I'm all for the EU working out and Europe prospering, but if it's not going to work then dissolve the EU and be done with it. Stretching it out by stealing people's pensions isn't going to help anybody.
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awkorama
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March 26, 2013, 02:42:40 PM |
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Are you planning to put some new wallpaper in your trading room? Purple/violet + orange go nice together.
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Akka
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March 26, 2013, 02:52:22 PM |
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The argument I see Germans making is that Germans shouldn't have to bail out other people who work with the same monetary system as them because Germans aren't responsible for anybody but Germany. That is socialist nationalism. If the Cypriots were German then yeah, they would bail them out, but they are from Cyprus so the Germans won't bail them out. It is socialist, but only applying to people within Germany, which makes it nationalist as well.
No the argument is that Germans should not have to pay the profits people made by putting their money into (indirectly) into high risk investments. You understand the words high and risk, do you? Cyprus Banks paid outrages interest rates compared to other European banks. Due to their high risk investments and all depositors provided from this. Why should German Taxpayers pay this? Wow and the nazi club, did you came up with this all by yourself? Cause this is brilliant, seems to always work against Germans. And gain: Nobody here in Germany says Cyprus should not be bailed out, everyone here knows that this is necessary and important. But Germany can't just bailout everyone. You are aware that Germany doesn't have this money. We have to lend it ourself and pay interests on it. It has to hurt the people who provided from this mess, too.
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bubblesort
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March 26, 2013, 02:59:05 PM |
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The argument I see Germans making is that Germans shouldn't have to bail out other people who work with the same monetary system as them because Germans aren't responsible for anybody but Germany. That is socialist nationalism. If the Cypriots were German then yeah, they would bail them out, but they are from Cyprus so the Germans won't bail them out. It is socialist, but only applying to people within Germany, which makes it nationalist as well.
No the argument is that Germans should not have to pay the profits people made by putting their money into (indirectly) into high risk investments. You understand the words high and risk, do you? Cyprus Banks paid outrages interest rates compared to other European banks. Due to their high risk investments and all depositors provided from this. Why should German Taxpayers pay this? Wow and the nazi club, did you came up with this all by yourself? Cause this is brilliant, seems to always work against Germans. Come on, I never called you a Nazi. That's ridiculous. As far as why you should pay, I'll reiterate: You formed a union with your neighbors to work within a single financial system and a single currency. You are all mismanaging it together so you should all pay together. Not only because you all caused the problem together (so you deserve to share the loss), but because if any of you go down you all go down. You don't have to like each other, you just have to keep each other afloat when things get bad. If you didn't want to pay for things like this then you should not have set up such an insane arrangement in the first place.
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Akka
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March 26, 2013, 03:03:15 PM |
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The argument I see Germans making is that Germans shouldn't have to bail out other people who work with the same monetary system as them because Germans aren't responsible for anybody but Germany. That is socialist nationalism. If the Cypriots were German then yeah, they would bail them out, but they are from Cyprus so the Germans won't bail them out. It is socialist, but only applying to people within Germany, which makes it nationalist as well.
No the argument is that Germans should not have to pay the profits people made by putting their money into (indirectly) into high risk investments. You understand the words high and risk, do you? Cyprus Banks paid outrages interest rates compared to other European banks. Due to their high risk investments and all depositors provided from this. Why should German Taxpayers pay this? Wow and the nazi club, did you came up with this all by yourself? Cause this is brilliant, seems to always work against Germans. Come on, I never called you a Nazi. That's ridiculous. As far as why you should pay, I'll reiterate: You formed a union with your neighbors to work within a single financial system and a single currency. You are all mismanaging it together so you should all pay together. Not only because you all caused the problem together (so you deserve to share the loss), but because if any of you go down you all go down. You don't have to like each other, you just have to keep each other afloat when things get bad. If you didn't want to pay for things like this then you should not have set up such an insane arrangement in the first place. Quoted me before I was finished: And gain: Nobody here in Germany says Cyprus should not be bailed out, everyone here knows that this is necessary and important. But Germany can't just bailout everyone. You are aware that Germany doesn't have this money. We have to lend it ourself and pay interests on it. It has to hurt the people who profited from this mess, too.
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rpietila
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March 26, 2013, 03:05:51 PM |
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You formed a union with your neighbors to work within a single financial system and a single currency. You are all mismanaging it together so you should all pay together. Not only because you all caused the problem together (so you deserve to share the loss), but because if any of you go down you all go down. You don't have to like each other, you just have to keep each other afloat when things get bad. If you didn't want to pay for things like this then you should not have set up such an insane arrangement in the first place.
This is called moral hazard, and the fact that this shit is going to blow up on all of the Finns' and Germans' face, is the very reason why I took my last EUR 30,000 out of the bank today (see pic). Now they can try to "tax" me bruahaha.
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Vladimir
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March 26, 2013, 03:07:43 PM |
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Nobody here in Germany says Cyprus should not be bailed out, everyone here knows that this is necessary and important.
But Germany can't just bailout everyone. You are aware that Germany doesn't have this money. We have to lend it ourself and pay interests on it.
It has to hurt the people who profited from this mess, too.
Why not just hang central banksters on the nearest lampost and start issuing money yourself then? No need to pay any interest and can easily abolish income tax while you at it. ![Wink](https://bitcointalk.org/Smileys/default/wink.gif)
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March 26, 2013, 03:15:02 PM |
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If the EU didn't want to bail out banks then they should allow them to fail, but they still need to pay what they owe to the people whose deposits they insured (there is some kind of deposit insurance in Europe, isn't there?).
Some kind, yes; deposits are guaranteed up to 100K euro; and thats what is being honored. Above that you are on your own. Thats not unique to cyprus; that applies pretty much across europe. In the US I believe its up to $250K. As for the rest of your post; shareholders were indeed wiped out completely (as they should be) but obviously thats not enough otherwise those banks wouldnt be bankrupt in the first place. The rest of the gap will be filled by bond holders and deposit holders with >100K. Also that seems completely logical to me, if any company goes bankrupt its creditors shouldnt expect to be paid in full, otherwise there would be no bankruptcy. Both bond and deposit holders really are nothing else than creditors to the bank. I dont see why taxpayers should cough up that money for a bank and not any other bankruptcy.
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