This Crazy Cyprus Deal Could Screw Up A Lot More Than Cyprus…

Bank run

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Bank run in New York in 1933.

You can be forgiven for thinking that you don’t need to give a hoot about what’s going on in Cyprus this weekend.

After all, it’s just a little island somewhere in the Mediterranean.

But what’s going on in Cyprus could actually matter — not just to the rest of Europe, but to the rest of the world.

Here’s the short version of what’s happening:

Cyprus’s banks, like many banks in Europe, are bankrupt.

Cyprus went to the Eurozone to get a bailout, the same way Ireland, Greece, and other European countries have.

The Eurozone powers-that-be gave Cyprus a bailout — but with a startling condition that has never before been imposed on any major banking system since the start of the global financial crisis in 2008.

The Eurozone powers-that-be (mainly, Germany) insisted that the depositors in Cyprus’s banks pay part of the tab.

Not the bondholders.

The depositors. The folks who had their money in the banks for safe-keeping.

When Cyprus’s banks reopen on Tuesday morning, every depositor will have some of his or her money seized. Accounts under 100,000 euros will have 6.75% of the funds seized. Accounts over 100,000 euros will have 9.9% seized. And then the Eurozone’s emergency lending facility and the International Monetary Fund will inject 10 billion euros into the banks to allow them to keep operating.

Cyprus’s government tried to explain this deal by observing that it was better than the alternative: Immediate bankruptcy and closure of the major banks. In that scenario, depositors would lose a lot more of their money. Businesses would go bankrupt. And tens of thousands of people would be instantly thrown out of work.

But, still, not surprisingly, news that deposits in Cyprus’s banks would be seized triggered an immediate run on the banks.

Depositors rushed to ATMs and tried to withdraw their money before it could be seized.

But the ATMs weren’t working. And the government has now made it impossible to transfer money out of the country.

So, assuming Cyprus’s government approves the deal (still pending), depositors will have some of their money seized on Tuesday morning.

Now, half of these depositors are said to be Russian oligarchs and other non-residents. And unless you happen to have the misfortune of having an account in a Cyprus bank, you may not care much whether these depositors have their money seized.

After all, that was the risk they took for storing their money in bankrupt banks, right?

Well, yes, that was the risk they took.

But ever since the Great Depression wiped out a big percentage of the world’s banks, vaporizing the bank depositors’ savings in the process, banking system regulators have tried to do everything they can to protect bank depositors.

And they are smart to do so.

Because the moment depositors think that there is risk to their savings, they rush to banks to yank their money out.

That’s called a run on the bank.

And since no bank anywhere has enough cash on hand to pay off all its depositors at once, runs on the bank cause banks to go bust.

That’s what happened to hundreds of banks in the Great Depression.

And it’s what happened to Bear Stearns, Lehman Brothers, and other huge banks during the financial crisis (though, with Bear and Lehman, the folks who yanked their money out weren’t mom and pop depositors but other big financial institutions). It’s what threatened to bring the entire U.S. financial system to its knees. And it’s why the U.S. and European governments have been frantically bailing out banks ever since.

But now, thanks to Eurozone’s bizarre decision in Cyprus, the illusion that depositors don’t need to yank their money out of threatened banks because they’ll be protected has been shattered.

Depositors in Cyprus banks will lose some of their deposits.

They will be furious about this.

And they will, rightly, feel that it is grossly unfair — because depositors in the bailed-out banks in Ireland, Greece, etc. didn’t lose their money.

And they will feel like fools for not having taken their money out.

And … here’s the important part …

Other depositors at weak banks all over Europe, in places like Spain, Italy, and Greece, will rightly wonder whether this is the beginning of a new era of bank bailouts, an era in which bank depositors are going lose some of their money.

What do you think those other depositors in Spain, Italy, Greece, etc., are going to feel like doing when they realize that, if their banks ever need a bailout, they might have their deposits seized?

That’s right.

They’re going to feel like yanking their money out of their banks.

And if some of them yank their money out of their banks, well — then the financial condition of those banks will go from weak to insolvent.

And the banks will go rushing to their governments and the Eurozone for help.

And if, god forbid, the Eurozone decides to seize the deposits of more bank depositors …

Well, then, a good portion of Europe is going to suddenly experience a good old-fashioned bank run.

That, to put it mildly, could be a disaster.

It could bring the European financial crisis, which has lurched from one flare-up to another for most of the past five years, to a rather sudden head.

How much would it cost for the powers-that-be to bail out all of Europe’s weak banks at once?

A lot.

More than the Eurozone has in its emergency lending facilities, certainly. And more than the International Monetary Fund has on hand.

So the U.S. would probably have to get involved.

And, regardless of whether the U.S. needed to get involved, the European economy would likely suffer the equivalent of a heart attack.

That wouldn’t be good for the U.S. economy.

Or the Chinese economy.

Or any other economy that sells things to Europe.

So, you can see, this little decision to seize a little money from bank depositors in the little island of Cyprus could be a much bigger deal than you think.

It could conceivably precipitate a run on weak European banks.

And a run on weak European banks could hammer the European economy and then the economy of Europe’s trading partners. And it could cause global markets to crash.

So keep an eye on what’s going on over there in Cyprus.

It’s potentially much more important than it seems.

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the5krunner

You train at different intensities and duration to vary the stresses your training has on your body. Assuming that you allow proper recovery then these stresses are turned into a better, fitter and faster you. You adapt to cope. You improve.

So what is the Long Slow Run (LSR)? Otherwise called Long Steady Run or Long Slow Distance. & Why should I do one?

I’ll answer the “Why?” first of all.

1. Your cardiovascular function will improve.

2. Your ability of your body to regulate heat will improve

3. You will get better at burning fat to fuel your running (rather than muscle/carbs)

4. Your muscles will get better and producing energy; and

5. Mitochondria produce energy better.

So your energy and oxygen pathways are basically all improved at various levels.

With slower running you can train more frequently and/or more further and you can certainly also better…

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How did we survived?

People over 35 should be dead. Here’s why. According to today’s regulators and bureaucrats, those of us who were kids in the 40’s, 50’s, 60’s, or even maybe the early 70’s probably shouldn’t have survived.

Our baby cribs were covered with bright colored lead-based paint. We had no childproof lids on medicine bottles, doors or cabinets, and when we rode our bikes, we had no helmets. (Not to mention the risks we took hitchhiking.)

As children, we would ride in cars with no seat belts or air bags. Riding in the back of a pickup truck on a warm day was always a special treat!

We drank water from the garden hose and not from a bottle. Horrors! We ate cupcakes, bread and butter, and drank soda pop with sugar in it, but we were never overweight because we were always outside playing. We shared one soft drink with four friends, from one bottle, and no one actually died from this.

We would spend hours building our go-carts out of scraps and then rode down the hill, only to find out we forgot the brakes. After running into the bushes a few times, we learned to solve the problem.

We would leave home in the morning and play all day, as long as we were back when the street lights came on.

No one was able to reach us all day. NO CELL PHONES!!!!! Unthinkable!

We did not have Play-stations, Nintendo 64, X-Boxes, no video games at all, no 99 channels on cable, video tape movies, surround sound, personal cell phones, personal computers, or Internet chat rooms.

We had friends! We went outside and found them. We played dodge ball, and sometimes, the ball would really hurt.

We fell out of trees, got cut and broke bones and teeth, and there were no lawsuits from these accidents. They were accidents. No one was to blame but us. Remember accidents?

We had fights and punched each other and got black and blue and learned to get over it.

We made up games with sticks and tennis balls and ate worms, and although we were told it would happen, we did not put out very many eyes, nor did the worms live inside us forever.

We rode bikes or walked to a friend’s home and knocked on the door, or rang the bell or just walked in and talked to them!

Little League had tryouts and not everyone made the team. Those who didn’t had to learn to deal with disappointment.
Some students weren’t as smart as others, so they failed a grade and were held back to repeat the same grade.

Horrors! Tests were not adjusted for any reason.

Our actions were our own. Consequences were expected. The idea of a parent bailing us out if we broke a law was unheard of. They actually sided with the law. Imagine that!

This generation has produced some of the best risk-takers and problem solvers and inventors, ever. The past 50 years have been an explosion of innovation and new ideas. We had freedom, failure, success and responsibility, and we learned how to deal with it all.

And you’re one of them!

Congratulations!

Scary free dive

Bradley Wiggins Olympic bike

The Great Britain men’s road race team will line up on the Mall this Saturday not on the Pinarellos and Cervelos they’ve been riding all season, but on plain black UK Sports Institute bikes. From Cycling weekly

The five-man team that consists of Mark Cavendish, Bradley Wiggins, Chris Froome, David Millar and Ian Stannard will ride road-going versions of the GB track bikes, designed with aerodynamics in mind.

Built by carbon expert and former sprinter Dimitris Katsanis, a version of these bikes was first used on the track back in 2002. They have been developed ever since, especially in the build up to the Beijing Olympics when Chris Boardman spent hundreds of man-hours in a wind tunnel in Southampton testing everything that could be tested.

The bike is stiff enough to harness the power of Sir Chris Hoy, yet aerodynamic with a low profile (see the low top tube) and minimal frontal area (see the narrow head tube and minimalistic forks).

The British team is going in to the race with the sole aim of delivering Mark Cavendish for the sprint and will also wear aero gear. They will ride the filled-in helmets that we’ve seen all season and likely some version of a skinsuit, rather than shorts and jersey.

The men’s road race starts at 10am on The Mall on Saturday morning and will finish around 4pm.

 

A DRAMATIC SURPRISE ON A QUIET SQUARE

Bad behavor from Iker Casillias to a small child, during APOEL – Real Madrid

Usually elite football players like European and World Champion Iker Casillas sign autographs to young children. Look what he did to a small kid, during his visit to our country Cyprus, for Uefa Champions League match Apoel – Real Madrid. I used to like Casillas,  but definetly not any more, as no one else from Cyprus is