Saturday, March 16, 2013

Cyprus Confiscates Money Deposited in Banks

I decided to do my own research and write-up on Cyprus, a small island country in the Mediterranean, the 3rd largest island in Mediterranean about 3500 Square Miles, and a bit of a money laundering and money protecting tax haven, that the Russians especially like.

 A very BOLD MOVE, the country decided to confiscate 6.75% of all Bank accounts under $130,000 US equivalent, and 9.9% of all larger accounts.   The gov is going to just take the money, they call it a "tax".  These are Cyprus Gov "insured" accounts like FDIC, so if there was a loss, it would be covered, if its a tax, Whallah!  problem solved.  

ADD--well not Pure Theft: Very unclear but a few articles indicate that after the "tax" is collected, that those who paid the tax will receive "equity" in the bank that used to hold their money.   No telling what that means, but most likely, they will receive "stock certificates" which will of course be highly diluted because of the sheer number of them being issued.  Also this is a strategic move....if those who had money confiscated remove all their money and cause a run on the bank, then whatever value they may had in the so called equity in the bank will also be destroyed. 
Of course this happens on not just a 3 days weekend for Cyrpus, but also on Saturday for the US.    So nobody except the big money with connections can make a move.

Besides this, I think some of the more important aspects of this "Bail In" are those that are barely stated anywhere--

1) Their corporate tax rate will increase 500%, from 2.5% to 12.5%.     That will be a shock.
2) The government will "accelerate" selling of assets, aka privatization.   This is better than classic economic hitman.   First "experts" recommend lots of infrastructure, like desalination plants, water systems, roads.   Then these experts from other countries finance the infrastructure, make large money on the buildout, and then manipulate/control the country through debt.   Now, once the debt is paid off...then they create another crisis, and take possession of all of the assets.   These are assets that people need in order to live on a daily basis, that is quite evil.    Now the evil will in charge of your water supply and your roads, directly.    And charge you up the ying yang for those services.  

Indeed Cyprus is a small country, and US main stream media is already doing the Big Brother Propaganda act in the low on the page headlines....."Cyprus tax payers to assist bailout through higher taxes..."   Huh, sound just like a "Patriotic" thing to do, why are those Cryprissians complaining.

The point is, a precedent has been set.    We (gov of all sort in collusion with Brokers/Bankers) will just take money from your bank account....the former method of stealing it through inflation just takes too long and also affects the big boys holding big assets too.   So there is the precedent.  

Cyprus is a bit of a tax haven, well it used to be until today!

Cyprus moved in the the Euro Currency on Jan 1, 2008.    Comparing the Euro/USD currency pair they haven't done bad on that move, only losing 6%, perhaps that shows the power of Ben's printing press.

Compared to Gold, you need twice as many Euros now than in 2008

 A lot of UK expats go to retire in Cyprus.   They are going to take a haircut of 10%.

The Cyprus bank system is small, around $70B Euros, of which 37% is foreign held and much by Russians (tax haven stuff).   6.75% to 9.9% of these bank accounts will be confiscated.

The GDP of Cyprus is around $18B to $24B Euros, depending on who you listen to, which is only .2% of the overall euro countries.   And with a million people, that is only around $20,000 per person GDP, that doesn't sound so good. 

The 2 largest Cyprus banks lost $4.5B Euros in 2012 because they were holding large amounts of Greek debt.

So roughly, the Banks will be made whole on their Greek Debt losses by confiscating depositor accounts.   Workers in Cyprus see it as they are being made to pay for bank mistakes.

The EU will pitch in $10B Euro (Bailout) to add to the Bank theft of around $6B euro, and maybe Russia will extend the duration on a $2.5B loan although with alot of the powerful rich Russians losing a boatload of money, I really don't see how that is going to play out.

It has long been this humble author's opinion that the Euro never made any sense.   The only reason it could have been created is to consolidate power, most likely into German and British hands (think Rothschilds) whilst the system blows up.

For now it appears that Cyprus and other EU countries have to "vote" on this bailout, but for sure bank accounts are now frozen, and no electronic transfers are allowed,  although rumor that some huge Russian investors were allowed to move money out, AFTER the decision.

So there is the background  

Going forward?    

I would expect a bank run on Cyprus banks, although they have a 3 day weekend to establish controls, and probably prevent people from  moving their money in a panic.

And a general distrust of banks throughout Europe, which may spread to USA

There may be a flight to USD, and to Yen, and Yen has gotten super weak in the last 5 months, so you can get alot of Yen per Euro at this time.

I wouldn't be surprised if we also see a big rush into Precious Metals.

Direct theft from bank accounts is a HUGE DEAL.    Expect anything going forward.   It is difficult to make and protect assets, but that doesn't mean the attempt shouldn't be made.    And protecting what one has may take precedence over making more at this time.

 Last week I was mentioning a short trade on EUR/JPY currency pair in Forex.    It was a double top backtest of a Bernoulli channel pattern, and just happened to be a 78Fib retrace also.

It dropped like a rock, funny how the charts seem to telegraph some of these big events.    Like the Invisible Hand knows......

Original Call to Short EUR / JPY

The results

Pictures from Cyprus

Wednesday, March 13, 2013

EUR JPY Short still in play

Now, could be a breakdown, or a double bottom teaser.

Great Fractal topping Pattern from BPT

Matt at BPT is very technically ept, and I don't just mean in reading charts.

He sometimes makes quick videos and even posts them in real time on the member blog.   

Its $40 per month for all the newsletters and the blog.    A troll free blog too, think how nice that would be, LOL!

Anyhow click this link and get the video..

Tuesday, March 12, 2013

Short on Eur/JPY

Took a short, JPY is very oversold, at some point it must strengthen, this having a real effect on international trade at this time.    Anyway, the chart justifies that this could be a good turn point, for say a 10% move the other way.

To Da Moon Alice! and Fukushima rant

I started following the moon for trading in 2006.

Oftentimes the moon, full or no moon, will correlate to tops or bottoms, and maybe a day or two after the moon, rarely three. And it will be very accurate for months, and then it will just decorrelate for a while until you stop watching it, LOL, and then BOOM back in lock step with the moon

March 11, was a new moon, and anniversary of the Japan Earthquake / Fukushima

BTW Fukushima is still "going off". The melted cores from three reactors are partly in the reactor remnants and partly underground, they cool them with water, and then pump up some of the water into tanks. The whole surrounding area of the nuclear plant is now one massive water tank farm. TEPCO just announced that they just can't keep storing water, and they are going to resort to dumping directly into the ocean.

 Much of the core cooling water (picture a few large swimming pools full a day)goes into the ground water anyway, and then into the ocean. Cesium levels in the ocean are not dropping at all.

AND by the way, the Japanese ALL know that their government cannot be trusted and that the government is allowing Fukushima to poison them, but they have no good options. They also know that the US nuclear cartel (military/industrial war machine) did push Japan into nuclear in the 1950's and is now pushing Japan to resume nuclear power production.

On that cheery note, here is the moon chart. Matt from Breakpoint Trades keeps this chart updated, and posts it on the members only blog when the moon approacheth so you don't have the moon sneak up on you! Thanks Matt!

Sign up for Breakpoint Trades using the link on the right, it is well worth it, and they will greatly improve your trading.    If you trade the markets, if you put money at risk, it is silly to not purchase the great information that Matt and Steve put out, these guys work like 60 to 70 hours a week and for like $1.33 a day you can buy all that work.   And its tax deductible.

So sign up, today.

Monday, March 11, 2013

Jobs creation, a mini rant, sorry! LOL

You don't create jobs through legislation at least not directly.

You create jobs by enforcing the rule of law, by creating a situation in which effort and creativity have  good chance of being rewarded without the rewards being stolen.   You create jobs by reducing regulation and red tape and government interference.   You create jobs by allowing a level of trust in government in which a business plan is not going to be deep 6'd so some half witted government edict or politically motivated change that is done with less than utilitarian intent.

And then after you have done those things, you get the hell out of the way.

Sunday, March 10, 2013

Maui Fun

A blogger asked me about what to do in Maui so I wrote this up.   You will have smile on your face if you do these things.

The nightlife is fairly limited on Maui believe it or not

Lahaina has some good bars and restaurants right on the ocean, will be touristy.

I always like the Greek Bistro in Kihei for moderate local nightlife and good enough food.  
There are some other restaurant bars in that same shopping center which are also good.

3 beaches in Kihei which are awesome too

The outdoor stuff is the real winner stuff for Maui

Upcountry / Haleakala
Visit a Lavender farm in upcountry Maui, have a lavender scone and by some other products.

Also visit Kula lodge in upcountry, same day, have a lunch/dinner drinks there.  Very cool.  Old style hobbit type outdoor seating area.

Go to top of Haleakala for sunrise 10,000, don’t miscalculate the timing, its a crap shoot if there are clouds, hike the crater, but be prepared for cold and don’t caught in there after dark

Worth it to spend the money for a whale boat its the best season right now, but April it starts winding down.  $50 to $80 per person out of Maalaea or Lahaina....but even better there is a Catamaran that sails from  Makena Beach and Golf Resort called the Kai Kanani run by Captain Bill and it leaves right from the beach in front of hotel….maybe go to small island called Molokini for snorkeling and see whales along the way.

Or from same hotel, if SCUBA certified so a guided underwater scooter dive to WW2 wrecks right off the beach within scooter range, world class fun.

Wailuku and Kahului are fairly useless except to stock up necessities at Costco at start of trip,  Only a few decent beaches on that side of the island too, 90% of the good beaches are on the South/West side 

Further east Kahului, I guess you would call it the north shore is Hookipa world class wind surfing beach, bring good binoculars, maybe whales too.    And out that direction is Twin Falls a 1.4 mile hike to some wicked good falls and swimming holes.    ALL of the swimming holes in Hawaii are now being fencing off by 12’ tall razor wire fences as the owner of the land have been repeatedly sued by people doing stupid stuff and hurting themselves and ambulance chasing lawyers ruining it for everyone.    This one is fairly docile and still open as far as I know, don’t miss it!!!! In 10 years all the good spots will be shut down.   

Hana side-- Hike the bamboo forests up to 200' waterfalls in the national park upstream of the seven sacred pools in Hana, which entails driving the road to Hana which is an adventure all itself, start real early in the AM like on the road by 7AM to enjoy the day properly and have some red bull for the trip home.

On Sunday PM 5 to 9 go to Little Beach (next to Big Beach), it’s a clothing optional beach and they do drum circles and seriously good fire dancing (also clothing optional), really a blast.   This is also the best body surfing in Maui, bar none.    If you want to see how the locals really do it!

 West Side
Drive around the west side just for the adventure, the road is much better now than it used to be, but still amazing.   There are only a few spots to drop down to the water, don't miss any of them.

There are also some horse riding tours which take you through nice woods, great views, and maybe even have a lunch by a waterfall.   $100 and up.

Safety and Security
Be aware that the ocean kills an average of 1 person per week in Hawaii, and half of those are tourists, although tourists are only 10% of the population.

Also petty theft (break your car window) is RAMPANT in Hawaii.   The locals think it is “income” and the cops come to fill out a report and then do nothing, they also think of it as extra income for the local bruddahs.   DO NOT put you valuable stuff into the trunk after arriving at a site, especially a beach or hiking site…”they” look for that and will break in.   But they will break in anyway, so carrying valuables in the car should be curtailed without getting too crazy about that idea.    If hiking or boating, definitely don’t leave your wallet or camera in the car, or any fancy looking bag or even backpack.   

Sorry, that is the reality of a corrupt and low education island chain, disgusting but true. 

Free Precious Metals!

For sure, you could still win, but you are kind of late to the game for this free Platinum, you can enter up to March 23, and closest to spot price on March 29 wins the Platinum coin.

But ONLY the first correct guess wins.  Thats why I say late to the game.


When they release April's contest, I am pretty much the first to know and will post it up.

Done Ranting, Trade Idea

Although we are "overbought", it still makes sense to take the best individual setups, even to the long side.     Big Gov added $230B to Gov debt just in February, just saying.

Here is one Trade Idea from Breakpoint Trades, I bought long, half size position, around $20k for what that is worth.

TOS (thinkorswim) has come up with some new stuff, real basic actually in my book, like 2 Y axis charts for comparison.   However, the scaling is a joke, I was trying to compare US dollar index to Gold, and it is, a joke.    Ever since the evil empire took them over (Ameritrade) they have really gone downhill, but still way better charting than most, and excellent options analysis.