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“My bank account's got robbed by European Commission. Over 700k is lost.”

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Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#91

Post by lesterbuck »

bayesianhorse wrote: post #85
adventured wrote: post #82

Earlier quoted context omitted.

No, don't buy treasuries. Getting back inflation destroyed dollars is not risk free, in fact you're getting defrauded because you're not actually getting your money back at all. A quick check on what dollars will buy (the true judge of the value of a currency), spanning 10, 20, 30, 50, 100 years tells you everything you need to know about the destruction your capital will suffer while yielding almost nothing to offse…

That's plain wrong. You don't buy treasury bonds unless you know the interest rate. Even after all the bail outs, all the crisis and despite rising government debt there is no safer investment. It's just usually not used as the sole investment, but rather the safest position in portfolio...

And "usually" housing prices don't go down in tandem across the country....

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#92

Post by bayesianhorse »

nateabele wrote: post #18

One possible upshot of this is that maybe people will actually start paying attention to how their home banks are capitalized. What's their reserve ratio? What are their major investments? Have those investments been rated by independent agencies? Schemes like the FDIC (which, as mentioned in a previous comment, can change the rules at any time) only serve to dumb us down and encourage bad behavior; firstly by lullin…

People don't actually need to pay attention to that. Most banks in the European Union are already watched and have regulations up their collective funnels to avoid exactly these kinds of problems. The only mitigation strategy neccessary is to split your cash assets in multiple accounts...

And of course, if you partake in a well-functioning state, which protects your rights against all sorts of problems, educates your workforce, regulates your food and healthcare, you might consider the taxes a bargain.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#93

Post by trhtrsh »

fsniper wrote: post #58
mbreese wrote: post #51

So, the system worked and he gets to keep €100K? Because his bank is insolvent and that is the amount of money that was insured? I'm not saying this doesn't suck for him and his company, but €100K is better than €0.

Keeps €100K but can not withdraws or transfers €300 daily.

That's effectively a 1 year freeze.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#94

Post by JumpCrisscross »

NiekvdMaas wrote: post #64
jlarocco wrote: post #56

Earlier quoted context omitted.

I haven't been following this too closely, but the impression I've got from the news media is that the vast majority of accounts with >100k Euros are there for tax avoidance and other shady purposes like you mention. It sucks that this guy's business lost money, but I have a hard time feeling too bad for him, if he (probably) only had the account there for tax avoidance purposes. I'm curious what percentage of the ac…

It's true that the majority of these accounts are from foreign people, but that doesn't mean there is anything illegal with putting your money on a Cyprus bank account. Please note that Cyprus is part of the EU for a long time, and this way of tax avoiding (not evasion) is completely legal.

As of December 2012 62% of deposits in Cyprus were by domestic residents. Removing the €5,3 billion in non-Cypriot euro-deposits and we find about 31% of the mostly Russian and British deposits [1]. The political problem were the foreign deposits. The financial problem were 2011 foreign deposits at 82% of GDP, total deposits 2011 nearly 3x GDP, and bank assets 5-7x GDP.

[1] http://www.centralbank.gov.cy/media/xls/2nd_MFS_January_2013...

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#95

Post by Xylakant »

gurvinder wrote: post #38
brigade wrote: post #34

Earlier quoted context omitted.

€100,000 was insured. If you want to go along that line of thinking, then he currently has access to less than 4% of the uninsured money.

As far as I understood , no part of uninsured money will be left for him. Insurance is for Euro 100k, and he has a Dollar Account, that is why he will get only $128k based on the exchange rate.

The funds are currently marked as frozen. I presume that they're still figuring out the exact percentage for the haircut, so the only assets he can use is anything up to the insured amount.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#96

Post by adventured »

bayesianhorse wrote: post #85
adventured wrote: post #82

Earlier quoted context omitted.

No, don't buy treasuries. Getting back inflation destroyed dollars is not risk free, in fact you're getting defrauded because you're not actually getting your money back at all. A quick check on what dollars will buy (the true judge of the value of a currency), spanning 10, 20, 30, 50, 100 years tells you everything you need to know about the destruction your capital will suffer while yielding almost nothing to offse…

That's plain wrong. You don't buy treasury bonds unless you know the interest rate. Even after all the bail outs, all the crisis and despite rising government debt there is no safer investment. It's just usually not used as the sole investment, but rather the safest position in portfolio...

That's exactly my point. You can't even remotely earn enough interest on treasuries to offset the destruction in the dollar that is occurring as the Fed generates massive inflation (aka expands the money supply at a record pace). The M2 is expanding at 12%, and the M1 is expanding at 7.5%.

You don't have to take my word for it. The destruction has already occurred, and is getting worse. A 5 minute effort on calculating what your dollar will purchase today versus 10 or 15 years ago, proves that. Except now your treasury paper yields almost nada because the Fed is acting to destroy your 'return' by holding rates artificially low while devaluing the dollars you use every day to do so.

Treasury paper is as dangerous as holding your money in a Cyprus bank. The next decade is going to be a fiscal disaster for the US. The bill is coming due, and not only can the US not afford to repay its debts ever, but it can't afford any real interest on its debt (4% * $20 trillion = bankrupt US Government). This isn't going to happen in decades, it's happening now, which why the Fed can't raise interest rates, can't ever sell off its holdings, can't stop buying 85%+ of all the US Government debt being issued, and can't stop buying mortgages. Worse yet, they're going to increase their purchases again this year.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#97

Post by jcr »

In one sense, this submission really is politics and I feel bad about up-voting it, since politics are against the HN site guidelines.

In another sense, this is also about tech, specifically, bitcoin. The desperate people in Cypress may turn towards alternative currencies as a way to escape their situation.

I know there are a lot of folks around here who vocally support bitcoin or other alternative currencies. For me the idea is very interesting, but the reality makes me nervous. There are one of two possibilities; either (1) I know bitcoin well enough to never trust it, or (2) I don't know bitcoin well enough to make an informed decision.

I'm still betting on the latter. ;-)

None the less, there's a lot of negative bitcoin news that never makes the front page of HN, and I wonder why. The most recent was:

https://news.ycombinator.com/item?id=5459304

http://www.youtube.com/watch?v=7fvSYT7vhQY

The worst part of the above could the sensationalism, but in my opinion, it's my inability to verify the veracity of the claims. Are they just muckraking to (successfully) cause "Fear, Uncertainty, and Doubt" (FUD)? --Sadly, stuff like this makes us already skeptical and squeamish folks even more nervous about it.

Market manipulation is a very real problem in all markets, so even if the above is entirely true, it's merely one instance of graft against bitcoin, when there are countless instances of corruption in all the other markets.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#98

Post by auctiontheory »

fakeer wrote: post #50
Shenglong wrote: post #37

Background and summary (forgive me if some details need correcting): Cyprus is a tiny country with a GDP not much higher than Tim Hortons. Yet, it had something like 150 billion in private funds stored in two of its banks: the Bank of Cyprus and Lakie. Why? Because the majority of the funds (I am generalizing) belongs/belonged to Russians who took advantage of the people on the conversion out of communism (dirty mone…

So, if some country (and as you say Europe) where still primary mode of parking your earnings is banks what are other options to play safe in case such a seizure happens? Real estate is one I can see. What else? Gold, you will have to keep in a bank in the end. What about shares, aren't they somehow related to sth deposited in a bank? I mean, how do you safeguard your savings then?

> how do you safeguard your savings then?

If your savings are legal, and you don't mind paying taxes on them, you have many obvious choices.

If your savings are not legal, or if you want to escape paying taxes, then you have different choices and greater risk.

Finance is about one thing: risk versus reward, and in this case, the tradeoff was very clear. Any non-Cypriots who lost money in Cyprus are not as naïve as they would have us believe.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#99

Post by JumpCrisscross »

bitcartel wrote: post #89
JumpCrisscross wrote: post #35

When you deposit money in a bank you become a protected senior creditor, but creditor nonetheleas, to the bank. The government insures the first €100 000 or $250 000 against losses, but that guarantee is only as good as the government. Jeroen Dijsselbloem, president of the eurogroup, told the FT as the bailout was announced: “ If we want to have a healthy, sound financial sector, the only way is to say: ‘Look, where…

When push comes to shove, the deposit guarantee may not protect your money. "Back in December 2012 the FDIC and the BoE published a joint paper outlining their new approach for how to resolve any future collapse of one of the Too-Big-To-Fail banks... 'deposit guarantee schemes may be required to contribute to the recapitalization of the firm'[1][2] ...the new system raids the Deposit Protection scheme, gives it to th…

"deposit guarantee schemes may be required to contribute to the recapitalization of the firm"

Saying the deposit guarantee scheme may have to contribute means the bank may not have sufficient assets to cover insured deposits and so deposit insurance funds may have to make up the difference. When your house in Staten Island gets razed by Sandy, the insurance company pays up. Similarly, if an insured bank is unable to come up with enough cash to cover insured deposits, the FDIC has to pony up.

The worst case for FDIC insured deposits is you getting a cheque from the FDIC. If JPMorgan Chase goes under with worthless assets and busts the FDIC, you're still in luck since the federal government backstops your deposit insurance, and unlike Cyprus, the U.S. can print dollars.

Re: “My bank account's got robbed by European Commission. Over 700k is lost.”

#100

Post by bayesianhorse »

qdog wrote: post #74
fakeer wrote: post #50

Earlier quoted context omitted.

So, if some country (and as you say Europe) where still primary mode of parking your earnings is banks what are other options to play safe in case such a seizure happens? Real estate is one I can see. What else? Gold, you will have to keep in a bank in the end. What about shares, aren't they somehow related to sth deposited in a bank? I mean, how do you safeguard your savings then?

There seems to be some confusion as to what a bank is on this board. Every time you deposit say $1 with a bank, they lend out $.90 of it at interest for mortgages, payrolls, etc. It's these investments the bank makes that can (and do) wreck money. The government of the US and EU recognize this risk for most people is detrimental and offer insurance on the first 100,000 deposited. The phrase "seized account" does not…

Most of the talk I've heard on Bitcoin is BS. I'm enthusiastic on Bitcoins and their uses, but I don't see it replacing other investments on a large scale soon. I don't even want to see that.

From an investment point of you, all deposits are investments, so putting 700k into some undercapitalized bank is almost as stupid at converting it to BTC...

Only almost as stupid because these banks have historically had less risk than BTC, surprisingly...

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