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We came across this story on the Lew Rockwell's Blog this morning. It's an example of how a picture paints a thousand words.
This is what an 85% haircut actually looks like:
Writes the owner:
"Most circulating assets on our business Current Account are blocked. Over 700k of expropriated money will be used to repay country's debt. Probably we will get back about 20% of this amount in 6-7 years.
I'm not Russian oligarch, but just European medium size IT business. Thousands of other companies around Cyprus have the same situation.
The business is definitely ruined, all Cypriot workers to be fired. We are moving to small Caribbean country where authorities have more respect to people's assets."
Ouch.
Now you know why Martin Hutchinson says "the Cyprus bailout could set banking back 300 years".
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As Cyprus Struggles, Now Is the Time to Buy Gold - Money Morning:
The Cyprus Bailout Sets a "Very, Very Dangerous Precedent" - Money Morning:
Cyprus Bailout Deal Sets Stage For a Bigger Eurozone Blowup
It's a sad story telling truth about the fate of many businesses located in Cyprus.
Over 10,000 of commercial and savings accounts in Laiki Bank and Bank Of Cyprus with balance over 100k EUR are affected.
And "Coming Soon to a Theatre Near YOU", as they used to say
That's not a haircut,,thats a beheading.