Courtesy of Bruce Krasting.
What an interesting week. Monday brought a wave of righteous indignation over the thought of a haircut for Cypriot depositors, on Friday everyone is cheering the idea that deposits over E100k are going to gets ‘faced’ for 40%. The Cyprus story is far from over, but there are some lessons so far:
– European leaders have shown their hand. They are more than willing to stiff depositors when pushed to the wall.
– The deposit level of +/- E100k has been reinforced at the benchmark for haircuts.
– All Deposits < E100k in European banks are safe.
– All Deposits > E100k are unsafe.
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