Quote:
Originally Posted by M_Six
The average Cypriot saver with under 100k EUR will be fine. The Russians and wealthier Cypriots are going to take a huge hit if they haven't spread their wealth around.
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That mirrors the US depositor protection under FDIC and I really think it's fair. Uninsured depositors should always be aware that they're sharing risk with the bank. In 2008, 401(k) investors took huge losses on equities and large investor/depositors in Lehman and some others took huge losses. The inequity here was that Lehman was allowed to fail while Countrywide, Wachovia, Washington Mutual, IndyMac, etc. were saved, along with AIG and even some moneymarket funds. It wasn't an evenhanded bailout. The shotgun marriages that BofA, Chase, Wells and others were forced into, transfer burden from the depositors at the colapsing banks to the stockholders of the surviving banks. If we have it to do again, simply let the failing banks fail and insure the insured depositors and liquidate the remaining assets at market rates.
You have to maintain confidence in the banking system and a big part of that is protecting some reasonable amount of insured deposits for the "small guys." The big guys have to take care of themselves by diversifying, hedging and other measures.
BTW, don't be long the Chinese economy, unless you have stop losses or hedges. The GDP has been manipulated for the last several years such that it appears to be double its real natural level, if not worse. The government is encouraging the building of whole cities of unoccupied apartments and they've even built huge unoccupied shopping malls. Strange as it seems, this may keep up for another year or two, but it has to come crashing down eventually. It'll make the US in 2008 and even the Greece debacle seem like tiny blips on the screen. What's sad is that the Chinese middle class is pumping almost all of its savings into properties that will ultimately be worthless. It's going to be a huge and sickening fail.
Dave