Taiwan’s Alishan cherry blossom season expected to draw huge crowds

Taiwan’s Alishan cherry blossom season expected to draw huge crowds

CNA 

  • 2013-03-17

Alishan

Alishan cherry blossoms and the famous forest railway. (Photo/CNA)

The Alishan National Scenic Area Administration on Friday launched the area’s cherry blossom annual celebrations, and said that the popular tourist destination in southern Taiwan could draw thousands of visitors per day during the flower season.

The celebration, which will run until April 15, marks the last of a series of cherry blossom festivals that have won huge popularity in Taiwan over recent years.

Priding itself on the approximately 5,000 cherry trees it has, Alishan might attract 14,000 tourists per day during the festival, said administration head Tseng Han-chou. Read more of this post

Moody’s Investor Services said China’s local-government financing vehicles face greater risk of default, as regulators warn 20 percent of their loans are risky.

Moody’s Sees Defaults as PBOC Warns on Local Risks

Moody’s Investor Services said China’s local-government financing vehicles face greater risk of default, as regulators warn 20 percent of their loans are risky.

A rally in LGFV bonds may reverse, particularly should delinqencies emerge, Christine Kuo, a Moody’s analyst, wrote in an e-mailed response to questions on March 8. The average yield may rise to 7 percent by June from 6 percent now, according to Shenyin & Wanguo Securities Co., the first brokerage incorporated in China and ranked the nation’s most influential research provider by New Fortune magazine in 2010.

“I see increased risk of LGFV defaults because the financial profiles of many remain weak and heavy refinancing is needed,” Hong Kong-based Kuo said. “Regulators have asked banks to control their LGFV exposures. Some of the projects could default unless other sources of funds are found.”

People’s Bank of China Governor Zhou Xiaochuan said in a March 13 press briefing that about one-fifth of loans to the financing arms of local governments are risky. Net debt issuance by these entities surged 179 percent in 2012 to 1.132 trillion yuan ($182 billion), accounting for 50 percent of corporate bond sales, according to Bank of America Corp. data. Read more of this post

Where ‘Channel-Stuffed’ German Cars Go To Die

Where ‘Channel-Stuffed’ German Cars Go To Die

Tyler Durden on 03/17/2013 21:57 -0400

With the collapse of Europe’s auto market, and the channel-stuffing that is rife in every car manufacturer in the world, it is no surprise that at the end of their brief lease periods, European cars (Audi in this case) are being led to this ‘graveyard’ in Germany (70 miles north of Munich). This car park of chaos is full of nearly-new cars meant for destruction so as never to enter the car market as a cheap alternative and to maintain a high-priced spare parts market. It seems the Keynesian profligacy or digging a hole to fill it in has progressed in the 21st century to building a car and crushing that car as the engine of growth for our economies. The site can be found here…

20130317_audi_0

Forecast: What Physics, Meteorology, and the Natural Sciences Can Teach Us About Economics

Forecast: What Physics, Meteorology, and the Natural Sciences Can Teach Us About Economics [Hardcover]

Mark Buchanan (Author)

Release date: March 26, 2013 | ISBN-10: 1608198510 | ISBN-13: 978-1608198511 | Edition: 1

Picture an early scene from The Wizard of Oz: Dorothy hurries home as a tornado gathers in what was once a clear Kansas sky. Hurriedly, she seeks shelter in the storm cellar under the house, but, finding it locked, takes cover in her bedroom. We all know how that works out for her.

Many investors these days are a bit like Dorothy, putting their faith in something as solid and trustworthy as a house (or, say, real estate). But market disruptions–storms–seem to arrive without warning, leaving us little time to react. Why are we so often blindsided by these things, left outdoors with nothing but our little dogs? More to the point: how did Kansas go from blue skies to tornadoes in such a short time?

In this deeply researched and piercingly intelligent book, physicist Mark Buchanan shows how a simple feedback loop can lead to major consequences, the kind predictable by mathematical models but hard for most people to anticipate. From his unique perspective, Buchanan argues that our basic assumptions about economic markets–that they are for the most part stable, with occasional interruptions–are simply wrong. Markets really act more like the weather: a brief heat wave can become a massive storm in a matter of a few days, or even hours.

The Physics of Finance reimagines the basics of how economics, with consequences that affect everyone. Read more of this post

The Insupportable Equilibrium of Economic Thought; In one form or another, positive feedback lies behind almost everything that makes our world rich and surprising, changeable and dynamic, lively and unpredictable

The Insupportable Equilibrium of Economic Thought

Conjure an image in your mind: a pencil resting on a small table, perhaps next to a notebook. In what position did you imagine the pencil? Lying on its side, right? Why not upright, with either the eraser or the graphite tip touching the table and the rest pointing into the air?

In terms of strict physical forces, it’s possible to position a pencil this way. We never see it happen because even the tiniest vibration, from the rumble of someone tapping the table to a slight shift in air currents, will knock it over.

The upright pencil is in what’s called unstable equilibrium, a state of being that can exist if unperturbed, but that will change rapidly if given the tiniest shock from the physical world. By contrast, a pencil lying on its side is in stable equilibrium. Blow on it, even slam your fist on the table, and the pencil will stay in that position or bounce around momentarily and then go back to it.

Stable equilibria are generally more important than unstable, because things in such states stay there. Whether we’re thinking of forces affecting a pencil or the Dow Jones Industrial Average, we can expect something to remain near a stable equilibrium but to wander away from an unstable one. So whenever we consider a state of equilibrium, we’ve got to ask whether it’s stable. Read more of this post

Cereal With 70% Sugar Hooks Kids on Junk-Food Bliss Point

Cereal With 70% Sugar Hooks Kids on Junk-Food Bliss Point

After E. coli from a burger paralyzed 22-year-old Stephanie Smith, Michael Moss’s newspaper story tracing the meat’s origins helped win him a Pulitzer Prize in 2010.

The titular villains of Moss’s new book, “Salt Sugar Fat: How the Food Giants Hooked Us,” aren’t much less malign. The three substances are tied to rising obesity, diabetes, hypertension and heart disease. They’re also the pillars on which the $1 trillion food-manufacturing industry is built.

Moss, a New York Times reporter, digs into the history, science, commerce and politics behind processed foods and Americans’ addiction to them. It’s a craving he tracks from lab bench and corporate memo to working moms and the mantra of convenience, from Wall Street’s relentless pressure for profit and the feckless regulators in Washington.

Moss makes the digestion of hard facts easier with a keen sense of the telling anecdote and detail. When he interviews the legendary Al Clausi in 2010, 64 years after he started as a food chemist for General Foods (MO), Moss observes a copy of the patent for Jell-O instant pudding hanging in the retiree’s office and on a shelf “a toy replica of the trucks that delivered Tang, another one of his iconic inventions.” Read more of this post

Chinese Kids Who Ignore Confucius Face State Backlash

Chinese Kids Who Ignore Confucius Face State Backlash

By Bloomberg News  Mar 17, 2013

In 10 years as head of an elder- care center in Confucius’s hometown of Qufu, Yang Youling has seen the Chinese philosopher’s exhortation of filial piety turned on its head.

Many children never visit their aged parents in the 50-bed home in eastern China’s Shandong province to avoid being criticized for not taking care of them at home, said Yang, 47. “The children are ashamed of being seen,” she said.

They may soon have no choice. From July 1, parents in China can sue their kids who don’t visit often enough, under a broadened law mandating children take better care of the aged. With China’s elderly population forecast to more than double to 487 million in the next 40 years, the government needs to try and limit the cost of caring for seniors.

“China’s aging problem is at a scale and speed not comparable with anywhere else in the world,” said Yuan Xin, director of Nankai University’s Aging Development Strategy Research Center in Tianjin, and a member of an advisory committee on the new rule. “My concern is how we can have sustainable economic development” while maintaining Confucian values such as respect and care for one’s parents, he said.

Traditionally, children lived with their parents and looked after them in accordance with Confucian beliefs. The ancient Chinese philosopher emphasized filial piety as the foundation of all values and placed great importance on harmony and a proper order of social relationships especially within families. Read more of this post

Test culture makes love of learning a waste

Test culture makes love of learning a waste

Created: 2013-3-18

Author:Wan Linxin

20130318_526209_01

RECENTLY while taking a stroll along nearby Weihai Road near Yan’an Road, I found a number of fashionable shops were closed and being remodeled. These shops come and go, and I would never have noticed them if they were not disappearing. But surprisingly, the opposite Jing’an Book Club remained open. It always puzzles me how any entity today can pretend not to care about turning a good profit. If it were not for the shelves of books, the club might well pass for an exclusive lobby, complete with beige lounges, fancy stools, long ivory-colored tables, all tastefully arranged in an ornate setting. No book reader can help being a bit flattered to be admitted – freely – into such a cultured milieu, at a time when brick-and-mortar bookstores are retreating or vanishing. The flagship Jifeng Bookstore in Shanxi Road S. metro station announced early this month it would close and move to another location after 15 years of operation, even though the rentals for the bookstore were only 10 percent the normal rates, for the bookstore had been seen somewhat as part of Shanghai’s cultural scene. Often have I strolled into this classy book club, and rarely did I find many readers. On the door was a notice to the effect that students can be admitted after 3pm by showing a pass issued by the club.

Of course, no one expects students to be readers. They are there doing their homework. I usually gave my third grader son a pat on the shoulder if he successfully prevents his homework from invading his sleep hours. One colleague of mine said that homework typically keeps his daughter busy until 10pm. My son has shown early promise of being an avid reader, but he has little time for reading, being perennially busy cracking problems meant to, among other things, assess his Chinese vocabulary, comprehension, and analytical skills. These ingeniously designed test items – cloze, multiple choice, summary – reduce to an ordeal a process that should be inspiring, exhilarating, and enchanting. Read more of this post

China is engineering genius babies; NYU Geoff Miller: BGI Shenzhen the biggest genetic research center in China, and I think the biggest in the world, by a considerable margin

CHINA IS ENGINEERING GENIUS BABIES

By Aleks Eror

It’s not exactly news that China is setting itself up as a new global superpower, is it? While Western civilization chokes on its own gluttony like a latter-day Marlon Brando, China continues to buy up American debt and lock away the world’s natural resources. But now, not content to simply laugh and make jerk-off signs as they pass us on the geopolitical highway, they’ve also developed a state-endorsed genetic-engineering project.

At BGI Shenzhen, scientists have collected DNA samples from 2,000 of the world’s smartest people and are sequencing their entire genomes in an attempt to identify the alleles which determine human intelligence. Apparently they’re not far from finding them, and when they do, embryo screening will allow parents to pick their brightest zygote and potentially bump up every generation’s intelligence by five to 15 IQ points. Within a couple of generations, competing with the Chinese on an intellectual level will be like challenging Lena Dunham to a getting-naked-on-TV contest.

Geoffrey Miller, an evolutionary psychologist and lecturer at NYU, is one of the 2,000 braniacs who contributed their DNA. I spoke to him about what this creepy-ass program might mean for the future of Chinese kids.

VICE: Hey, Geoffrey. Does China have a history of eugenics?
Geoffrey Miller: As soon as Deng Xiaoping took power in the late 70s, he took the whole focus of the Chinese government from trying to manage the economy, to trying to manage the quality and quantity of people. In the 90s, they started to do widespread prenatal testing for birth defects with ultrasound, and more recently, they’ve spent a lot of money researching human genetics to figure out which genes make people smarter.

What do you know about BGI Shenzhen?
It’s the biggest genetic research center in China, and I think the biggest in the world, by a considerable margin. They’re not just doing human genetics; BGI is also doing lots of plant genetics, animal genetics, anything that’s economically relevant or scientifically interesting. Read more of this post

Lagoon In Rio De Janeiro Is So Polluted That Thousands Of Fish Just Floated Up Dead [PHOTO]

Lagoon In Rio De Janeiro Is So Polluted That Thousands Of Fish Just Floated Up Dead [PHOTO]

Henry Blodget | Mar. 17, 2013, 10:43 AM | 3,591 | 11

Here’s the scene in Rio de Janeiro… This lagoon, called Rodrigo de Freitas, is where the Olympic rowing competitions will be held in 2016.  The fish died after oxygen levels in the water dropped because of pollution, local media said.

rtr3ey19

Twitter Just Crushed Wall Street After The Cyprus Bailout

Twitter Just Crushed Wall Street After The Cyprus Bailout

Joe Weisenthal | Mar. 17, 2013, 3:32 PM | 20,602 | 24

twitter-8

This process has been happening for a long time, but for those in finance, the value of Twitter is increasingly equaling or surpassing the value of traditional sell-side research from Wall Street analysts.

This weekend’s surprise bailout of Cyprus (surprise, because of the fact that depositors in Cypriot banks are seeing a ‘one-off’ tax) is a major moment in the evolution of financial information.

Because the news was so surprising, and because there’s so little time between when the bailout was announced early Saturday morning, and when trading begins Sunday evening, there’s been an aggressive thirst for information and analysis on what it all means.

But the sell-side has been fairly slow, and the Twittersphere has come to the rescue. Read more of this post

Burmese startups have both foreign competitors and local cronies to contend with

Burmese startups have both foreign competitors and local cronies to contend with

By Sam Petulla — 7 hours ago

facebook-shop-myanmar

Doesn’t matter what it sells—just call it Facebook.Sam Petulla

YANGON— To hear him talk, Thiha Aye Kyaw sounds pretty much like an ambitious young entrepreneur anywhere on the planet. The 20-year-old computer science student has already built an app that makes him about as much money as a full-time software engineer. Businesses seek him out, and he no plans to join a large IT company after he graduates. He and his friends “don’t want to get the salary and work under other people.”

Except that Thiha lives in Myanmar, which makes realizing his entrepreneurial dreams a little more complicated.

With Google’s chairman, Eric Schmidt, visiting Myanmar this week, there’s a lot of attention on the country’s untapped potential for investment, especially in technology and communications. Myanmar is implementing a new foreign investment law and plans to dramatically increase internet and mobile connectivity from its current levels of less than 10%. In January it hosted Barcamp Yangon, the country’s largest tech conference, attended by an estimated 6,000 people, where Thiha rubbed shoulders with entrepreneurs and digital activists from all over the planet; there were also a few of Schmidt’s colleagues from Google.

But Burmese startups have to contend both with foreign companies that are much better financed and more experienced, and with powerful local businessmen with ties to the regime. Read more of this post

There are fresh allegations that some of the money that went missing from a Chinese company once listed on the Nasdaq may have been laundered through slot machines in Las Vegas casinos

More on the Chinese missing millions that may have been laundered through Las Vegas

By Naomi Rovnick — 2 hours ago

There are fresh allegations that some of the money that went missing from a Chinese company once listed on the Nasdaq may have been laundered through slot machines in Las Vegas casinos.

As we reported in December, medical equipment maker China Medical Technologies was listed on the Nasdaq from 2005 until February last year, and had the bluest of blue-chip advisers, underwriters, investors and creditors. It was wound up last July after missing interest payments. According to court filings since our last report, the company’s liquidators now claim that $670 million of cash the company raised in its 2005 IPO and subsequent equity and bond sales cannot be located, upping their estimate from a previous $400 million. Read more of this post

Life Discovered in the Deepest Ocean; “Nobody realized there is so much biodiversity”

March 17, 2013, 7:33 p.m. ET

Life Discovered in the Deepest Ocean

By JONATHAN D. ROCKOFF

Researchers probing the deepest ocean have found a surprisingly high concentration of microbes, the latest evidence of organisms thriving in inhospitable environments that is reshaping scientists’ understanding of the conditions necessary for life.

The bacteria were found nearly 6.8 miles below sea level, on the floor of the Pacific Ocean’s Mariana Trench, according to the researchers, whose findings were published online Sunday by the journal Nature Geoscience. No light reaches that part of the ocean, where the temperature is an estimated 36 degrees Fahrenheit.

Extremophiles

Extremophiles are organisms that can thrive in harsh conditions, such as high pressure or freezing temperatures. Researchers have found life in a number of unlikely environments: Read more of this post

‘Wash Trades’ Scrutinized; U.S. regulators are investigating whether high-frequency traders are routinely distorting stock and futures markets by illegally acting as buyer and seller in the same transactions

Updated March 17, 2013, 9:42 p.m. ET

‘Wash Trades’ Scrutinized

Issue Is Whether High-Speed Firms Illegally Buy, Sell Futures in Same Deals

By SCOTT PATTERSONJENNY STRASBURG and JAMILA TRINDLE

MI-BU744B_WASHT_G_20130317201803

U.S. regulators are investigating whether high-frequency traders are routinely distorting stock and futures markets by illegally acting as buyer and seller in the same transactions, according to people familiar with the probes.

Such transactions, known as wash trades, are banned by U.S. law because they can feed false information into the market and be used to manipulate prices. Intentionally taking both sides of a trade can minimize financial risk for the trading firm while potentially creating a false impression of higher volume in the market.

The Commodity Futures Trading Commission is focused on suspected wash trades by high-speed firms in futures contracts tied to the value of crude oil, precious metals, agricultural commodities and the Standard & Poor’s 500-stock index, among other underlying instruments, the people said.

The agency is looking at potential wash trades by multiple high-speed firms, although it isn’t known which ones investigators are scrutinizing. Firms found guilty of intentionally distorting the market through wash trades could face hefty fines. Read more of this post

Philippines Bets Big on Casinos; Manila Wants to Be as Big as Vegas

Updated March 17, 2013, 6:27 p.m. ET

Philippines Bets Big on Casinos

New $1.2 Billion Solaire Resort Opens, Raising Asian Pressure on U.S. Gambling Industry

By KATE O’KEEFFE

MANILA—The Philippines this weekend launched its bid to become Asia’s third gambling hub with the opening of a $1.2 billion casino, as the region battles the U.S. for supremacy in the global gambling market.

In China, Macau’s $38 billion gambling industry already generates six times the revenue of the Las Vegas Strip. In Southeast Asia, Singapore’s gambling revenue matched that of the U.S. casino capital within a year of the island opening its first resorts in 2010. Now Manila is gunning for Vegas, too. Read more of this post

Fashion chain’s Johnnie Boden turned his neurosis into a strength; The 2012 Sunday Times Rich List puts Boden at number 255 of the UK’s richest estates, valued at £320m. Boden is cursed by self-doubt, but gifted with personableness and entrepreneurial skill. That’s why people love the brand – because it bears the name and spirit and set of values of a truly likeable character.

Johnnie Boden’s fashion brand is the love of his life

In an exclusive extract from their forthcoming book on the new breed of entrepreneurs who made their names by making names into brands, David Hopper and Charles Vallance meet British success story Johnnie Boden

cut_Johnnie-Boden__2511986b

Johnnie Boden set up the fashion brand that bears his name. Photo: Rex Features

David Hopper and Charles Vallance

8:00PM GMT 17 Mar 2013

The Boden headquarters do not conform to any known middle-class stereotype. The architectural cues of the concrete-rich buildings in North Acton feel more North Korean than Etonian. The sign on the rectangular column outside says, “Ugly building. Nice clothes”.

Johnnie Boden’s office is an ill-defined composite of artistic creativity and box-files. His welcome is warm and open. He is a well built, tallish man, so he cuts a presence in a room, helped by a head of tawny-auburn hair.

For a person who makes everyone else feel so good about themselves, Boden is an anxious individual — wanting to be helpful whilst hoping not to disappoint. He would probably say “Sorry” spontaneously to someone who elbowed him in the ribs. He is permanently self-critical.

“My father was quite old at 45 when I was born; a strong, successful soldier, old-fashioned, but a complicated man and he was very hard on me,” Boden explains. “He had such high expectations, so I always felt I was never good enough. My parents were not big on praise. So I always wanted to do better. If I got 7 out of 10, I was just cross with myself. A lot of people are very comfortable in their own skin. I wasn’t.”

Boden speaks a lot about the slim margin between success and failure. Indeed, he puts a figure on it: “51pc is successful, but 49pc is awful”. Read more of this post

Canberra Wasn’t Built in a Day; Australia’s capital city celebrated its 100th anniversary this week

Canberra Wasn’t Built in a Day
Catriona Richards | March 17, 2013

20130317110418156

A couple admires the National Library of Australia, lit with colorful light projections as part of the Enlighten festival to celebrate Canberra\’s 100th anniversary. (JG Photo/Catriona Richards)

On the site of a former sheep station not so far from here, Australia’s capital city celebrated its 100th anniversary this week.

Canberra, the seat of Australia’s parliament and home to more than 370,000 people, is one of a handful of cities around the world that was built with the express purpose of serving as a nation’s administrative capital.

Before there was Naypyidaw in Myanmar or Putrajaya in Malaysia, the newly federated nation of Australia began to lay foundations for the city it believed would not only house its parliament, but also express the character of its people.

One hundred years on and deriding the sparsely populated, bureaucratic city has become a national sport — so much so that the phrase “Canberra bashing” entered Oxford’s Australian National Dictionary just weeks ahead of the city’s centenary celebrations.

Indonesia has long toyed with the idea of relocating its administrative capital away from the crowds and infrastructure problems of Jakarta.

The issue most recently came to the fore when floodwaters inundated the central business district in January, killing dozens of people and spilling embarrassingly into the grounds of the presidential palace.

But the experience of Indonesia’s neighbor to the south shows that building a capital city from scratch and finding acceptance from the people it seeks to represent is no easy feat.  Read more of this post

Thailand: The government’s rice pledging scheme appears to have created a new worry for consumers. Many people now wonder if is it safe to eat rice that has been kept in warehouses for years; Doctor warns against eating mouldy grains

How safe is our rice?

Doctor warns against eating mouldy grains

The government’s rice pledging scheme appears to have created a new worry for consumers.

Besides concerns over whether the government can manage its huge rice stockpile to prevent any severe impact on the country’s budget, many people now wonder if is it safe to eat rice that has been kept in warehouses for years.

Their worries will likely increase after Dr Banchob Junhasavasdikul questioned the quality of rice and whether it had become rotten and mouldy.

In an interview with Isranews, the founder of the Balavi Natural Medicine Center said he believes many consumers are eating fungal or mouldy rice that can be poisonous and increase the risk of cancer.

The pledging scheme has reduced the competitiveness of Thai rice exports, so the government is selling the grain locally at cheap prices, he said. Read more of this post

Pension and Investment Research Consultants, global independent research provider, disclosed that the British sizable banks have undisclosed losses of up to 31.8 bn pounds; HSBC tops list with 10.4 bn pounds in undisclosed losses

(5) HSBC:
Pension and Investment Research Consultants, global independent research provider, disclosed that the British sizable banks have undisclosed losses of up to 31.8 bn pounds. In particular, HSBC HOLDINGS (00005.HK) accounted for 10.4 bn pounds, topping the list
(5 HK) @ HK$130.9: market cap. US$200,315.1m, daily liquidity US$526.8m. Broker forecasts: 12 buys, 13 holds, 8 sells, 95.8x current year P/E, 0.7% yield.

British banks may have £30bn hidden losses

British banks may be harbouring a black hole of as much as £50bn in undeclared losses that do not show up in their accounts but hamper their efforts to lend, a shareholder group has warned.

By Louise Armitstead, Chief Business Correspondent

6:20AM GMT 12 Mar 2013

PIRC has calculated the amount of bad debts the banks may have to write off in coming years but have yet to subtract from profits, together with other items such as deferred bonuses not booked.

HSBC, which is the biggest bank by assets, was shown to have £10.4bn of hidden losses, the Royal Bank of Scotland has £9.4bn, and Barclays has £7.3bn. Lloyds Banking Group has £2.5bn and Standard Chartered £2.2bn. Together the undeclared losses total £31.8bn.

The research shows the distorting impact the accounting rules, which allow bad loans to remain hidden, have on bank results. PIRC applied old-style UK GAAP accounting rules, which applied for 100 years until 2005, to the figures released in the 2012 banks’ accounts. Read more of this post

‘Nightmare’ superbug alarm; Patients fall ill with ”nightmare bacteria” that caused the deaths of many people worldwide.

‘Nightmare’ superbug alarm

Date

March 18, 2013

Julia Medew

A widely feared superbug has contaminated hand-washing sinks in Dandenong Hospital’s intensive care unit, causing 10 patients to fall ill with the ”nightmare bacteria” that have killed many people worldwide.

A report published in the Medical Journal of Australia on Monday says the 440-bed hospital in Melbourne’s south-east has been struggling to contain the multi-drug-resistant bacteria since 2009. Ten patients have been infected since then, but none died from the infection.

An infectious disease physician at the hospital, Rhonda Stuart, said doctors had been concerned about a string of cases in the intensive care unit between 2009 and last year, but only acquired the technology last August to test surfaces for the bacteria known as CRE. Associate Professor Stuart said the tests revealed the bacteria were in the sinks where healthcare workers washed their hands. While it could not be proved, she said, this might have spread the infection to patients because the sinks’ poor design caused water to splash back off the drain. Read more of this post

Could The “Cyprus Fiasco” Occur In The United States? The bottom line is that the Rubicon has been crossed and deposits have now been forcefully confiscated

Could The “Cyprus Fiasco” Occur In The United States?

Tyler Durden on 03/17/2013 12:37 -0400

global write offs_0US Deposits_0

As has been assiduously explained by members of the European statist oligarchy, the reason for the deposit tax levy, in addition to the broader unsecured debt “bail-in” bailout of Cyprus, was due to the unique funding structure of Cypriot banks, in which the bulk of funding was in the form of deposits (whether Russian or domestic), leaving a tiny €2 billion in the form of junior bonds. Since the bailout would require realigning the balance sheet to a new, sustainable “fresh start” in which assets were remarked to a realistic value, it would mean impairing liabilities all the way down the capital structure. Naturally, politics played a big part in the decision to impair what Germany primarily saw as a Russian money-laundering haven, while local depositors were merely “collateral damage.”

Politics aside, the bottom line is that the Rubicon has been crossed, and deposits have now been forcefully confiscated in what Europe promises to be a standalone case. What is certain, is that nobody will wait to find out how long it takes before Europe’s class of increasingly more desperate and ill-meaning despots is found to be have lied once more (as it has about everything else since the start of the European crisis). And while the mainstream media will be focused primarily on Europe in the coming days, as BCG and we have warned, the topic of “wealth taxation” is now front and center, and it stars not only Europe, but the US as well. Read more of this post

Europe Braces for Renewed Turmoil as Cyprus Deposit Levy at Risk; “Cyprus will turn into Libya”; The levy is “a worrying precedent with potentially systemic consequences if depositors in other periphery countries fear a similar treatment in the future”

Europe Braces for Renewed Turmoil as Cyprus Deposit Levy at Risk

Europe braced for renewed turmoil as outrage in Cyprus over an unprecedented levy on bank deposits threatened to derail the nation’s bailout and spark a new round in the debt crisis.

Cypriot President Nicos Anastasiades, who bowed to demands by euro-area finance ministers to raise 5.8 billion euros ($7.6 billion) by taking a piece of every bank account in Cyprus, delayed a parliamentary vote to pass the measure by a day. The European Central Bank pushed for a vote today, according to two people with knowledge of the discussions. Anastasiades plans to address the nation later today.

The levy is “a worrying precedent with potentially systemic consequences if depositors in other periphery countries fear a similar treatment in the future,” Joachim Fels, chief economist at Morgan Stanley in London, wrote in a note to clients.

Scenes of Cypriots lining up at cash machines raised the specter of capital flight elsewhere and threatened to disrupt a market calm that settled over the 17-member bloc since the ECB’s pledge in September to backstop troubled nations’ debt. With no government in Italy, Spain in the throes of a political scandal and Greece struggling to meet the terms of its own bailout, more turmoil could hamper efforts to end the crisis.

Anticipating gains in haven markets, Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co. in Newport Beach, California, said on Twitter that the concern in Cyprus “moves risk-on trade to backseat.”

“Sell euro as well,” he wrote. Read more of this post

<span>%d</span> bloggers like this: