Cyprus linkfarm I

The Cyprus/bank/bailout story is big. Really big . Too much for me to handle in my own voice just now. So I'll just provide a few links, following chronological order, in this post and the next.

The above photo is Cyprus' finance minister, Michael Sarris.

By February 28, Cyprus was clearly 'next up,' the new center of the ever-shifting limelight in Europe's traveling crisis over banks and sovereign debts. The new president of Cyprus, Nicos Anastasiades, said that day that though Cyprus would have to negotiate terms of a bail-out, "no reference to a haircut on public debt or deposits will be tolerated."

A big EU meeting in Brussels began on March 3d, and involved a good deal of discussion of the matters that Anastasiades had tried to wish off the table.

Skipping ahead a bit ... by March 14th, EU officials, as well as those from the IMF, were in round-the-clock talks on a bail-out of Cyprus that would include a depositor sacrifice, known politely as a bail-in.

On Saturday, March 16th, Adam Levitin, of the estimable blog Credit Slips, summarized the ways in which Cyprus had gotten itself into a mess.

The weekend of March 16-18, 2013, will retain a certain infamy in the history of the Eurozone and its banks. Representatives of the government of Cyprus seemed on that Saturday to have reached agreement with the EU and IMF -- an agreement including a "one-off tax" on bank accounts, including small depositors whose deposits are below the supposedly sacrosanct insured level.

It was a long weekend. Monday, the 18th, was a bank holiday on Cyprus. One might think that had provided the government with some breathing room. Not enough, though. Seeing early reaction on Sunday, the government shut down the ATMs and ordered banks to stay closed until Thursday!

Meanwhile, some were trying to frame this all as a nasty-Russian-oligarch story.

When Parliament did get a chance to consider the matter, the members voted with their constituents and against the EU. Bravo!, I have to say.

By Wednesday, Reuters was calling this the worst crisis to hit Cyprus since the Turkish invasion of 1974.

So: what's Plan B? Mr. President?

By Wednesday, the banks had been told to stay closed "for as long as we need to conclude an agreement."

On Thursday, the European Central Bank announced an ultimatum: unless Cyprus finds a way to raise the necessary monies (what the Troika of the ECB, the EU, and the IMF decide should be domestically generated), they'll lose access to emergency funds. That, in turn, could precipitate a Cypriot exit from the Eurozone.

So, caught between the Troika and its own Parliament, the Cypriot govt and central bank were furiously looking for a way to raise 5.8 billion euros without administering a haircut to insured depositors.

On Friday morning the wire services were reporting that Germany was taking a tough line. "I still believe we will get a settlement, but Cyprus is playing with fire," said Volker Kauder, leader of the country's Christian Democrats.

We will break off our tale here and resume tomorrow.

A Story About Coleridge

This is a quote from a memoir by Dorothy Wordsworth, reflecting on a trip she took with two famous poets, her brother, William Wordsworth, and their similarly gifted companion, Samuel Taylor Coleridge. We sat upon a bench, placed for the sake of one of these views, whence we looked down upon the waterfall, and over the open country ... A lady and gentleman, more expeditious tourists than ourselves, came to the spot; they left us at the seat, and we found them again at another station above the Falls. Coleridge, who is always good-natured enough to enter into conversation with anybody whom he meets in his way, began to talk with the gentleman, who observed that it was a majestic waterfall. Coleridge was delighted with the accuracy of the epithet, particularly as he had been settling in his own mind the precise meaning of the words grand, majestic, sublime, etc., and had discussed the subject with William at some length the day before. “Yes, sir,” says Coleridge, “it is a maj...

Searle: The Chinese Room

John Searle has become the object of accusations of improper conduct. These accusations even have some people in the world of academic philosophy saying that instructors in that world should try to avoid teaching Searle's views. That is an odd contention, and has given rise to heated exchanges in certain corners of the blogosphere. At Leiter Reports, I encountered a comment from someone describing himself as "grad student drop out." GSDO said: " This is a side question (and not at all an attempt to answer the question BL posed): How important is John Searle's work? Are people still working on speech act theory or is that just another dead end in the history of 20th century philosophy? My impression is that his reputation is somewhat inflated from all of his speaking engagements and NYRoB reviews. The Chinese room argument is a classic, but is there much more to his work than that?" I took it upon myself to answer that on LR. But here I'll tak...

Recent Controversies Involving Nassim Taleb, Part I

I've written about Nassim Taleb on earlier occasions in this blog. I'll let you do the search yourself, dear reader, for the full background. The short answer to the question "who is Taleb?" is this: he is a 57 year old man born in Lebanon, educated in France, who has been both a hedge fund manager and a derivatives trader. He retired from active participation from the financial world sometime between 2004 and 2006, and has been a full-time writer and provocateur ever since. Taleb's writings for the general public began where one might expect -- in the field where he had made his money -- and he explained certain financial issues to a broad audiences in a very dramatic non-technical way. Since then, he has widened has fields of study, writing about just about everything, applying the intellectual tools he honed in that earlier work. As you might have gather from the above, I respect Taleb, though I have sometimes been critical of him when my own writing ab...

Jamesian Philosophy Refreshed

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