By Alexander Apostolides on July 24, 2012

They can not be serious! 13 Bn. is crazy;

They can not be serious! 13Bn is crazy It seems that the amount of the Cyprus bailout is nearing a final amount of 13 bn. That is crazy, comming out 16,185.3 per man, woman and child in Cyprus. We can never pay that - if our needs are that high ( i doubt it) we need to default now and learn from Greece- at least renegotiate. With debt to GDP of 160% we need not to wait and realise it unpayable latter, increasing uncertainty. A haircut is not an option either-pensions would be blasted. can we borrow less for stupid banks

By Alexander Apostolides on July 20, 2012

No. 7 reason why Laiki bailout as it happened was a bad idea...

A quick thought occured:
Thought of the day: 1.8bn given to Laiki divided by aprox. 300 thousand households: average household cost (or to be correct forced investment) is 6,000 Euros!

I would want direct ownership for so much of my family's investment thank you very much...
For 6,000 euros I want and need full ownership thank you very much - and heads rolling in all positions, perhaps even a cull of the whole risk assessment division of the bank as it is clearly a joke.
If the banks took such risks by acting as helpers to startups then i would be more willing to support them. They lost so much money by refusing to believe WHAT EVERYONE WAS SAYING - that Greece was in a mess and a haircut was the only way forward.
I found the a few slogan:
Risk Assessment division of Marfin- Doing more damage than Mari!
Risk Assessment division of Marfin- Watering hot containers in the sun for you.
Risk Assessment division of Marfin- We help the environment by buying all the Greek toxies

By Alexander Apostolides on July 19, 2012

Things that are cheaper than the Laiki Bailout: No.6 Manchester United

From Kyriakos (@Chuparos) with thanks:
I am not sure if the Glazers are selling the club but I really would have preferred the state spend 1.8 billion Euros to purchase Manchester United, currently valued at 1.81 bn euros (I am sure we will get a small discount so that is cheaper than the Marfin Laiki bailout).

I am getting angrier and angrier when I do this. At least if we bought Manchester United we would have had full ownership rights, something we do not have in Laiki. Why the hell did we ever agree to this?

By Alexander Apostolides on July 18, 2012

Ο Στέφανος Στεφάνου αληθινά νομίζει ότι κυβερνά κούφα χρυσόψαρα

Στέφανος Στεφάνου "Είπε επίσης ότι πρέπει να λαμβάνεται υπόψη και το γεγονός ότι οι στόχοι που τέθηκαν για την κυπριακή οικονομία είναι πάρα πολύ φιλόδοξοι, δηλαδή το έλλειμμα να είναι κάτω από το 3% ως το τέλος του 2012, περίπου στο 0,5% για το 2013 και από το 2014 και μετά να υπάρχει ένας εντελώς ισορροπημένος προϋπολογισμό."

Τώρα σας φαίνονται δύσκολα; Όταν δεχτήκατε στόχο ελλείμματος από την κομμισίον 2.5% δεν είπατε κιχ. Νιώθω ότι αύτη η κυβέρνηση νομίζει ότι κυβερνά κούφα χρυσόψαρα. Τόσο καιρό φωνάζαμε για διορθωτικά μέτρα και δεν άκουγαν ούτε τους δικούς τους, λέγοντας ότι όλα ήταν υπό έλεγχο και τώρα θεωρούν ότι έχουμε την μνήμη των χρυσόψαρων, και δεν θυμόμαστε ούτε τις υπεραισιόδοξες μπούρδες ούτε τις υποσχέσεις τους προς εμάς και τους Ευρωπαϊκούς εταίρους.

Περί ιδιωτικών πανεπιστήμιων και αυξήσεων διδάκτρων – γιατί η κυβέρνηση δεν είναι η λύση;

Μια μικρή σκέψη. Η κυβέρνηση φωνάζει για την αύξηση διδάκτρων στα ιδιωτικά πανεπιστήμια της Κύπρου. Η αύξηση ήταν λιγότερη από την αύξηση του ρεύματος που η ιδία σύστησε εναντία των συμφερόντων των καταναλωτών. Στο τέλος τέλος θα μπορούσε να βοηθήσει τα ιδιωτικά πανεπιστήμια να μειώσουν τις αυξήσεις τους με να μειώσουν την κρατική γραφειοκρατία της εποπτείας. Γιατί πτυχία πρέπει δια νόμου να είναι 4 χρονιά όταν είναι 3 στην Αγγλία; Το κόστος του φοιτητή θα έπεφτε κατά 25%.

Things that are cheaper than the Marfin Laiki bailout no.3, 4 & 5: Research, Football and Oil deals

I an still finding the amount the government has given to Marfin Laiki without taking full control of the company staggeringly high. Although this is a crude way, I want to show how big was the bailout by comparing it with other aspects of out lives and understand that this help is unprecedented and it should come with direct nationalisation and control.

What can you buy for 1.8 billion euros?

No. 3. All the nanotechnology funding by Europe.
Cyprus is notoriously not spending enough for research and development and this has an impact on the type of industries it generates. Such a large injection (1.8bn euro) into research and technology, provided it was targeted to worthwhile projects, could provide a tremendous boost to the productive capacity of Cyprus since the Cypriot government by its own admission only provides 25 million euro for research.
Nanotechnology is just the sort of sector where Cypriot disadvantages such as location and lack of resources are not applicable, and were the high skill base of the labour force could allow for successful implementation and creation of a new globally competitive industry.

No.4. All the losses of the top flight football clubs for 2010

We look at the amount of money that Abramomvitch and Sheik Mansour seem to waste on their football teams, yet the total loss of all top flight European football was smaller that the Marfin Laiki Bailout. These fat cats at least are getting something out of all this spending - a chance to be entertained like Roman Emperors of old. I doubt if we will see Marfin Laiki staff scoring wonder goals in the champions league for the amount of money we have spent.

No.5 - the foundations of a high tech oil and gas industry

We hear all these wonderful announcements about the imminent extraction of gas from the sea, but such industries need a frightful large amount of investment. Even countries with exisitng oil industries are having to spend amounts comperable to the Laiki bailout to overhaul the industry they have. If such amounts could be spent by the government on the gas industry then the deals it could strike with any strategic investor would be more more profitable and credible.

Now we hear other banks and the state needing a external bailout of 15.5 bn. When the number is finalised we will begin a new series to show just how staggeringly large that number is for an economy such as ours. That number could overwhelm us into an economic crisis that could be the most severe ever faced in our short history, despite facing insurrections, civil strife, terrorism and war.

By Alexander Apostolides on July 06, 2012

Things that are cheaper than the Laiki Bailout: No.1 & 2

I do believe increasingly in the ideas that markets should really work on the principle of "let the buyer beware" and hence I am not the most keen supporter of the Cypriot government sponsored bailout of Cypriot banks.

These bailouts have disquieted me even more with the way they have been made: I would prefer a share deal that is straightforward and a more outright nationalization. That would allow the government to collect information on possible regulation violations, kick out all executives who actively brought the banks in this mess, and perhaps prosecute those who might be liable, either through civil courts or the the security and exchange commission.

My views might sound as they lack consistency but they do not: what I am saying is that I am against bailouts due to the creation of moral hazard problems (allowing bank managers to use high risk strategies, knowing the state will cover any losses). But if a bail out has to happen then it should take place in such a way as for government has full control and it can punish those who let the bank down severely.
The latest move by the government of Cyprus to purchase 1.79 billion worth of Laiki shares based on a law that was unnecessarily rushed through parliament was a huge deal for the small Cypriot state, as the amount is just over 10% the county's GDP.

But what can 1.79bn buy you in the world? Well you are just shy of building the shard in London with that amount of money and since real estate in Cyrpus is cheap8er than in London, I am guessing you could build 1/2 little buildings on the side.

[Corrected 06/06/2012] Alternatively you can build a pipeline for gas from the Cypriot gas find to Cyprus as underwater pipelines are very expensive to build and maintain.

I wonder if the people that find the bailout of Cypriot banks so appealing can convince me that buying Laiki will provide more returns that these two suggestions...

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