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Friday, March 22, 2013

INVESTORS' INSIGHTS - NEWS ALERT - "Russia Rebuffs Cyprus...



This is getting to be worse than the Wild,Wild West or the Lehman Bros. fiasco of 2008. Where was the EU and ECB oversight in the first place? Does the ECB, EU and IMF not have any regulatory metrics in place to detect or prevent such issues from ever reaching this stage?. Granted Cyprus is less than .2% of the EU's GDP, but still, could you imagine the US not bailing out Rhode Island? Or Canda PEI? The message would be clear: "there is no political union nor governing Central Bank". 

This is the absolute wrong message for the EU and ECB to be sending ,when they will be facing crisis after crisis in the months ahead. Bond markets should be shrivering, as these new frontiers are openiing unknown, unknowns with the potential to dominoe into the global system. Trigering the much feared rise in interest rates around the world.

Whatever bailout funds Cyprus had expected it needed, is now sure to be much larger as every depositor with a heart beat will be looking to withdraw their funds as soon as possible. Some sources say the Russians have as much as $65 billion on deposit, that they could be wanting to pull out the moment the bank doors open.on Tuesday. This could therefore get much uglier.

Is it the beginning of the end for the whole EU experiment? It does not look promising.



Investors' Insights

First Financial Insights

The Globe and Mail
Toronto, ON
March 22, 2013


Unknown, Unknowns