Get Ready, Get Set, Go

Money, of course ! Money is getting ready to fly from Cyprus. Why?

Because I guess the people from Cyprus would like to keep the remaining capital.

ECB, Merkel or Schäuble may have a secret plan to capitalize the German banks. Flight to quality is happening, with german bonds hitting negative yields.

Now, the not so trivial question: if you were a cyprus citizien would you put your remaining cash in a german bank, the same banks that pressured for a deposit levy on your money. Would you help even more the enemy of your capital ?

The deposit levy, and the way it was conducted, it is a "no return" atomic bomb.

First, we already are seeing the "not me" show. Schäuble is saying that he is not responsible. Merkel says that she must explain to the voters why Germany has to save everybody, but now it is under fire internally and had to reassure that the german deposits are guaranteed.

Second, I really don't get the deposit levy rates. At current amounts Cyprus will not be able to repay the debt for a long, long time. The problem is that the reforms were not done. Taking money from people that have very few doesn't solve the problem. And the 20bn of Russian money will be a hot patato as Putin is already showing. Getting some money are providing the bailout only mean that in short time a second levy will be necessary.

What should be done is gaining control over the Cyprus financial system, ie, the banks. By controlling the banks, but guaranteeing the deposits, the respect of the depositors will happen. It is idiotic to make each small depositor a sharehold of the cyprus bank. A much more effective way would be to deliver those shares to Merkel ..... and from that point on, the Cyprus banks would be german banks, no bank runs, financial discipline, and more important, Germany would become committed to the solution.