Cyprus 60% haircut, about time too!

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30 Mar 2013 11:19 AM by rymski Star rating. 35 posts Send private message

 I'm surprised that people are surprised that uninsured investors in banks face monetary loss!

Just thinking if people had invested in stocks & shares, gold, commodities etc and had lost on their investment then no-one would bat an eyelid. Nobody would post about it, loss is somethging that happens in the real world.

Can't understand why investing in banks should be seen as always 100% successful, especially since govermnents have made it obvious that there is a risk by only guaranteeing the first 100,000 Euros - doesn't that send out a message??

Why would anybody invest more than 100K in any one bank?

If you have a fortune isn't it reasonable to spread your assetts. How many banks are there that you could allot you 100K slices to without taking the slightest risk providing the bank had a govt backed insurance agreement? Loads and loads. Or just take out a private insurance poicy to protect your bank assets!

Sorry but it is just greedy and foolish to put all your eggs in one basket, especially if the bank promises unrealistic high rewards - isn't this obvious since 2008?

Why should I bail out some fool and his easily parted money?

Something like this happening a bit more often and may be the banking sector will get its much needed sort out!

I haven't been daft with my money and am suffering badly with all the cuts, price rises etc etc. About time that that all this mess starts being sorted out.





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30 Mar 2013 12:50 PM by guslopez Star rating in Lorca, Murcia.. 745 posts Send private message

I don't 'invest' in banks & never have done. I loan it to them , without charge or interest  on the understanding that all & every penny is available on -demand & without notice. I do no t agree with unearned interest & never have. It is certainly not an investment just somewhere to leave it & I expect it back in full  there is no discussion on that whatsoever , as I have always explained to the bank managers in both the UK & here.



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30 Mar 2013 12:59 PM by baz1946 Star rating. 2266 posts Send private message

The reason you don't hear so much uproar when someone lose on gold, stocks etc is they are almost classed as single invested items, this Cyprus business is about a country that has screwed up it's people, forget all the politics involving the EU otherwise you could go on forever about it.

Why shouldn't people invest in banks? after all for the most part when was the last time you know of, or have been directly involved in something this big like this, with any country or it's banks up to now this type of thing has been almost unheard of, and it's no good sitting around telling yourself it might happen, just because the banks only guarantee 100'000, and the signs should have been read.  Banks are the best place for ordinary people to put money into, try living without them, and then see how far you get.

And don't forget when this started a week or so ago the taking of money was going to affect everyone, Cyrpus and abroad, right down to the small investor in the street with even 100€ in the bank, hence the massive rebellion. 

If you win the lottery, or have done well in life and lets say accumulated weatlh upwards of 30million of what ever currency, do you have any idea at all where to invest that amount so it's 100% safe, in your own country, could you find more then enough banks to invest only 100'000, in each, doubt it. And not everyone knows the stock market good enough to invest in shares to win.

If you feel that your bailing out fools feel free to let us know where else you can go to where the banks or the governments wont ever do such a thing again. 

The buying of stocks / shares is not 100% kosher either, because who ever owns shares in no way do they get as much in returns as the people running the company's you bought into. Same goes for many investments of any nature.





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30 Mar 2013 1:55 PM by rymski Star rating. 35 posts Send private message

Investing in banks I can completely understand and is a perfectly reasonable thing to do with your money, but if banks can only guarantee the first 100K, then why doesn't the better-off invester protect their investment with an insurance policy to cover potential risk? Basic prudence! Is it greed that makes one take such a foolish risk?

We live in a different world since 2008, isn't it just basic common sense to adapt to it?

Imagine you are a car driver and you are unfortunate enough to crash it into a lampost in a street.

Is it fair to expect street residents to pay for YOUR damage following your uninsured car crash - it's why you have insurance, isn't it?

I don't see any difference between a car crash with your uninsured car and your uninsured bank balance!

Would you reach deeply into your pocketr to put an uninsured driver back on the road?





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30 Mar 2013 2:10 PM by johnzx Star rating in Spain. 5255 posts Send private message

Rymski, 

                           what a strange argument.

If a lamp post collasped onto my car I would expect the council to pay.

 

That said, I have never heard of an insurance company with whom I could insure a bank investment,  and even if I could, what about when the insurance company crashes ?





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30 Mar 2013 3:17 PM by rymski Star rating. 35 posts Send private message

OK John

Let's run with your analogy then.

In the past a lampost falls on your parked car. Tough, stuff happens, the council pays and everything is sorted, no worries!

BUT this is no longer the scenario, let me move it on a bit....

Due to imminent earthquakes, hurricanes or any impending disaster you care to name, the council warns you loudly and clearly  that collapsing lampost  dangers are considerably increased. In future any  car owners will face greatly reduced payouts if they leave their cars parked under lamposts.

Stuff happens and lamposts takes a tumble..... Now what happens is that the guy with the Ford Fiesta gets a total like-for-like replacement, but the chap with a Ferrari only gets a Merc. You were warned.

Isn't this nearer to what is happening now - it's not as if there is NO compensation, it's just that even after years of knowing there's a risk of loss, people are surprised that loss happens!

I just can't believe that it is impossible to protect your bank investments, can't cost more than 60% of your investment can it?

Spread your assetts, surely!

Fortunately in financial terms I'm only a cyclist, may be why I'm not over sympathetic.

 





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30 Mar 2013 4:24 PM by baz1946 Star rating. 2266 posts Send private message

Money in a UK bank is insured up to £85'000, joint account double that......But, and this is the catch, if you place £85'000 in several different bank accounts and your chosen bank has other subsidiaries and you are using some of these, and the bank has just the one insurance plan you stand to lose all but £85'000.

It's foolish to think that a insurance company, any insurance company...If such a one exists to insure your money separately....Wont ever go bust, if you trust them to insure your money and honour it if the bank went bust then fine....But don't bank on them doing that.

Of course people are surprised they have lost,  you don't put money into a bank thinking it might go bust. Millions of Russians got this wrong as well.

Of course it's possible to protect your investments, but in what? shares, i know many who have lost thousands on the wrong shares, i know many who have bought the weirdest items in the hope they went up in value only to have to chuck them away in the dump, gold and silver are safe...ish investments, but try to tell the ordinary working people "Don't save, buy gold or silver" bricks and mortar are a safe bet, but like a lot of these investments, such as bank account interest, and cash in the bank, you cant get at it as and when you might need it quickly.

Do you know anyone that knew only about £35'000 of your money was safe in a UK bank some years ago, everyone i have spoken to thought that every penny of their money was safe....Because it was in the bank.

It's quite obvious now that many will start to use some form of different investing or putting money elsewhere other then a bank, thanks to the the EU and Cyprus, but in this day and age if anyone knows where a "Safe" place is.... Then keep it to yourself.

 





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30 Mar 2013 4:26 PM by Mungry Star rating. 329 posts Send private message

i just invest my money in beer so its not a problem

keep your assests liquid



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30 Mar 2013 4:30 PM by baz1946 Star rating. 2266 posts Send private message

i just invest my money in beer so its not a problem

keep your assests liquid

 

Good advice....On my way home tonight i will buy a can.





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30 Mar 2013 5:24 PM by newworld Star rating. 940 posts Send private message

I've just sold  a property in Spain, and I got over 100k in a bank paying 3% for the first  3 months,next but next week its all coming back to the UK. The Spanish gov  say you money would be protected , I don't believe they would have the money to help people, Cyprus could not help there bad banks, I will take my chances with the in the UK banks any day.





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30 Mar 2013 6:27 PM by bobaol Star rating. 2255 posts Send private message

bobaol´s avatar
By newworld - I will take my chances with the UK banks any day

Really? Is your memory that short? Northern Rock, RBS, HBOS, Lloyds etc which all teetered on the brink. Only massive printing of extra money by the BOE, which has effectively bailed out UK by more than all the other European countries combined less Greece. And that on top of the 37 billion quid given by the government in 2008. The banks in Spain, like UK, were bailed out by the government. I can't see any differences. Money put into any bank will not even get enough to keep up with inflation. Get a big mattress and stuff it all in there. Swiss francs would probably be best or Kruger rands but that may make the mattress a bit uncomfortable. Failing that, get a job as a banker. That way your bonus will be safe no matter how much of other people's money you lose. Might even get a knighthood out of it.



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30 Mar 2013 7:36 PM by Roberto Star rating in Torremolinos. 4552 posts Send private message

Roberto´s avatar
If I want to "invest" in bank without actually buying or starting my own, I would buy shares in one. If I want to save my money, I would put it in a bank account, because that's supposed to be safer than stuffing it my mattress. I don't see this as "investing".
My understanding of the situation in Cyprus is that deposits under 100k are being exempted from the haircut, due to the public outcry. But this is not the same as being protected under the savings compensation scheme. If that was the case, the thread title would say100% ( of deposits over 100k), not just 60%, because if the compensation scheme was kicking in it would be because the bank had folded. Now it still isn't entirely clear whether joint accounts with 200k are exempted, or even if the haircut % applies to the total held in an account with over 100k, or just to the amount above 100k. If it's the latter, imagine how you'd feel if you'd taken the reckless risk of leaving 100,001€ in an account.
Yes, in this day and age it is foolhardy to "save" more than 100k in any one bank, but that still doesn't make this disgrace OK.

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"Get your facts first, then you can distort them as you please"

Mark Twain

 

 

 




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30 Mar 2013 7:37 PM by newworld Star rating. 940 posts Send private message

No my memory is not  that short,  The fact is this the UK has a better credit rating  with the agencies, than most countries, so when/ if  things go tits up people will lend to the UK, unlike poor old Cyprus. No savers lost out in the UK unlike Cyprus. I had money with Northern Rock at the time, and I cant  remember losing  40%, CAN YOU.





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30 Mar 2013 7:56 PM by bobaol Star rating. 2255 posts Send private message

bobaol´s avatar
As far as I know, we are not in Cyprus so I can't see where that comes into it. The only reason you didn't lose money was because the government poured billions into it. Much the same as the Spanish government poured money into the failing cajas so people didn't lose money here either. My point is not that the Spanish banks are safe but that the UK banks are not either. UK has the highest level of actual debt in Europe and the 4th highest against GDP after Ireland, Portugal, Italy and Greece, one of the reasons the UK credit rating was recently cut. Just don't stick all that over 100k in one bank. Split it over two banks (but not subsidiaries of each other like RBS Natwest) just to make sure it's protected. Hopefully the latest trade figures for UK will be on the up as that's where my money is as well. But do I trust them? Not on your nelly! And that goes for virtually every country's bank. It's a totally different world now than it was in 2008.



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30 Mar 2013 8:27 PM by newworld Star rating. 940 posts Send private message

bobaol wrote
As far as I know, we are not in Cyprus so I can't see where that comes into it, ===== Well   the reason I was talking about Cyprus the clue is in the heading of this topic    (Cyprus 60% haircut, about time too)   and the other point about keeping under over  100k in a bank a/c and its safe,well at one point last week it  did not matter how much you had in the account  they wanted some of your money. so my money is going on a buy to let in the UK..





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30 Mar 2013 8:47 PM by Roberto Star rating in Torremolinos. 4552 posts Send private message

Roberto´s avatar
Exactly, and although we're talking about Cyprus, the point is it could have happened (and therefore could happen anywhere) and if it had, I suspect the OP would not have made such a smug post.

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31 Mar 2013 11:35 AM by davidjrowe Star rating. 37 posts Send private message

Cyprus has been used by people for year as a way of hiding money and avoiding tax in their home countries. Well now the chickens have come to roost.





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31 Mar 2013 1:06 PM by rymski Star rating. 35 posts Send private message

Roberto, don't mean to sound smug! I'm just very, very angry that bad banking practices still seem to be going on.

Internet is rife with Cyprus tax evasion, money laundering and general malpractice. I'm genuinly sorry for the hardship it will cause to innocent Cypriots as the haircut will have a knock on effect.

BUT this is exactly what has happened to all of us, as myself and family are badly affected by the crisis, having lost more than a 100K in lost deposits  with having to abondon our purchase of a retirement  home in Spain.

Bad banking has been going on since 2008, the only way for it  stop is if better off investors (speculators?) are directly affected. If losses are spread to all and sundry why should bad banking stop?

My point is that sad though it is, Cyprus hopefully is the warning shot that starts to bring banking into the real world. Continued reward of bad practice will mean that bad practice will just continue. There is no reason for it to stop, is there!





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31 Mar 2013 1:28 PM by baz1946 Star rating. 2266 posts Send private message

BUT this is exactly what has happened to all of us, as myself and family are badly affected by the crisis, having lost more than a 100K in lost deposits with having to abondon our purchase of a retirement home in Spain.

 

In your first post that started this of you said "I haven't been daft with my money"....Now you say you have lost more then 100k in lost deposits....Not deposit...But more then one.





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31 Mar 2013 1:38 PM by Poppyseed Star rating. 898 posts Send private message

Bad banking has been going on since 2008

Rymski, I think you'll find bad banking was going on  l-o-n-g  before 2008, but it was in 2008 that the s*h*t hit the fan.....If I had lost money in Cyprus I think I would probably now be in jail for attempted murder at least.



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