why is the russian government so mad about the cyprus plan to tax accounts in cyprus? they are such money lauderers. many elizabeth warren threw out the rate of $22 an hour for minimum wage. i think she is nuts. first up, still licking their wounds from the november election, the republican national committee is out with a new report that outlines steps needed to reboot the party for 2016. among the proposed reforms, a streamlined process for earlier convention. improved outreach to women and young and minority voters. will the reforms be enough to give the gop brand a much-needed boost? joining us is mark stevens, ceo of msco and author of "your marketing sucks." with me the rest of the hour and i thought i introduced before, but i didn't, mark hanna and republican strategist chip saltsman. mark, what did this republican document do for the gop? >> it does nothing. it is a committee report adding to a pollution of noise that is going on in the republican party right now. the fact is as a marketing person, you cannot have a brand, talking about branding, you can't have

lot of russians do their banking in cyprus want to go to cyprus there are plenty of other places they could go to it's not the only offshore banking area is it well if you read the press i mean the press always says it's all tied to the money laundering and there is that there's definitely that element but the reality is that russians russia laws are recent they've been around for a little more than twenty years and it's very difficult to create a company and run a company under russian laws because it's very easy for somebody to illegally take over a country would they call raiding because somebody comes in with a gun or whatever into an office and they make people sign documents they forged documents take company stamps etc and if you have an offshore company you. prevent against doing that and of all the offshore drilling stiction with british type laws only cyprus allows russians to go to their country without a visa so it's easy and it's and it's all convenient yeah absolutely and also when you want to. change the shareholding of a company or if you want to attract investment you

cyprus, verge of collapse. finance ministers from 17 eurozone nations are holing a conference call tonight. talking about a bailout. what will the terms be. is this a one off or are the possible reverberations more global and severe than this? bob? >> i notice there are no lines in front of the atm machines or no bank runs. that wasn't my worry. i have two worries. this is going to strengthen the anti-us aausterity crowd. in italy, it will be tougher to form a political organization in europe or government in europe because the anti. austerity people will have their day. secondly, there's been talk about a banking union in europe. one of the aspects of a banking union is common deposit insurance team. how are going to do that? even if they say it's. >> do you agree with bob that this strengthens the hand of the anti-us a terrority people? they could say look what's going to happen here if you go with them? >> absolutely, deficitly, certainly. bob is right about that and totally strengthening them. i also want t

is giving cyprus has to be matched by the cyprus government coming up with about close to seven billion themselves the problem is they don't have the money and the only way they can get it out is out of their depositors now on the other side of the equation the germans will only agree to this bailout if the russians depositors which is a lot is about thirty billion dollars worth of russian money in those banks they don't get away scot free so there's a little bit of behind the scenes politics happening here in terms of who is getting hit i'm not sure that's michael but it's quite i mean a lot of russians are not have me about your head michel. they're not happy but if i don't it's because of deposits mean that the central bank says up to seventy billion in deposits in cypriot banks seven billion is held by russian nationals that may be not underestimate but certainly nothing more than double that out of seventy billion now it's quite true that russian entities have loaned money to the . cypriot banks but it's a different matter overwhelmingly the people who are getting burned by this ta

cyprus. this is simply stunned at the speed and man i wish the banking crisis in his country seems to be spiraling out of control he shows us his wallet no cash only lottery tickets a single parent unemployed and caring for a sick mother in raveling of cyprus's financial woes couldn't have come at a worse time by finishing the pension of my mom all of your life is coming up on you make of plans for the. people who are younger. than these. so. you standing with an empty hands. a sentiment echoed throughout the tiny island nation. scenes like these becoming a daily occurrence another day in nicosia cyprus another protest though this one in particular is a gathering of the police of the country's largest lender the bank of cyprus but they worry that the company is headed for collapse and they may eventually lose their jobs though many cypriots told me that they are well aware that this is just the beginning of a long hard road i believe that. europe. germany strolled because we're a small econom

but major investors in cyprus's biggest bank, the bank of cyprus, could lose up to 20% of their deposits. not surprisingly, it's an unpopular measure. >> nearly everyone's going to lose some money. of course, the amount will be greater for some than for others. and that's that. >> there is anger at the nation's creditors. >> the germans are only interested in themselves. they don't care about anyone else. >> cyprus's banks have been closed for a week. the european central bank has threatened to cut off the island's emergency funding should no deal be reached by monday. if that happens, cyprus's economy faces immediate collapse. in that cypriot's words, the negotiations are in a very delicate phase. the monday deadline is looming. whatever is agreed in brussels still needs to be adopted by the cypriot parliament. that is by no means certain. >> i'm following the story for us with our correspondent. bring us up-to-date. >> the euro groups finance ministers are in brussels here. they're waiting for the meeting to start. at meeting was originally scheduled for 6:00 local time. that would've

not as much and you know like the math you just said that cyprus is a special case but cyprus is is now in real trouble when the banks open on thursday . so i do think that we will have problems as we go down the line this is just the beginning. cyprus yes absolutely there's no question that when the banks open you're going to see an exodus of money even because people are scared no one's taking a chance what's going to happen the week after because we saw how the greek crisis unfolded from one day to the next you didn't know what was going on and so anyone who can will probably take all their money out especially foreign depositors and this is of course going to hurt the cyprus economy and the small depositor in multitude of ways so michael is it fear now more than anything else where you're sure i mean we've focused a little bit on small savers but they're not the only savers just on them you know if you were a bar owner or a taxi driver or something are you going to take a check from someone you going to take a. credit card payment i doubt it now but actually know what going to get i

does so sylvia are nicosia cyprus the president of cyprus is defending the controversial rescue package admitting it is painful but saying it's in the best interest of cypriots meanwhile the troika hailed the plan saying it places the country on a sustainable path to recovery but the deposit levy has raised fears the same thing could be done in other struggling banks across the continent here's what the head of the euro group is saying if there is a risk in a bank our first question should be ok what's the bank going to do about that this prompted fears across the euro zone as cyprus deal as the cyprus deal has now created a new template for resulting future banking problems as professor of international finance charizard raman explained to my colleague bill dodd the bailout hasn't only scared small savers but may trigger big investors to start pulling their money out of other banks. it's good we tied him on to the greek social economic debacle that we are seeing. going to go into a deep recession and this is going to be another decade lost for this country clearly the europeans and the

cyprus could be the catalyst. the fundamentals i don't think had anything to do with whether we go down or not. the catalyst, you can see there's a lot of people looking every time we get a little bit of panic, we sell hard. and i think that's the direction, that's what the market is looking for is the reason to sell hard and take some profit here. there's been a lot of money made. the big money and the managers are looking to take some profit here. >> people generally are taking positions off for the weekend or do you have a sense kind of of how positioning generally is shaping up? >> i think that you're going to see probably some more profit taking into the weekend here. i think people are going to be taking up the position. i think you'll see a lot more of the money going to some of the safer asset classes. we are more in a risk off classes right now. >> it's not necessarily the kind of acute risk off greek-like european drama situation that we saw 18 months ago. this seems to be a little bit of a different kin

on cyprus coming through with a bailout plan or cyprus having to leave the eurozone? >> nobody in brussels can really imagine that cyprus would want to take the risk of leaving the eurozone, so the message we are getting is people are still convinced that cyprus will come up with a plan. remember, european partners stand ready to help, but cyprus has to contribute its share, and the eu does was up to tackle its core problem so the situation does not get repeated. that means also reducing the very massive banking sector that the country has, but the feeling here in brussels is that so far, cyprus has not really understood that the system that they have been running with so well over the last few years is not working anymore. they hope that it is dawning on them now. >> what if it does not dawn on them? are there contingency plans for a cyprus collapse? >> well, of course, they are not communicated publicly if they exist, but what you do get is a feeling that patience is running very thin. we have been hearing from officials in brussels, who are simply astonished, if no

that was confirmed by cyprus. things are already happening. we know the central bank has named an administrator for the lockheed bank. we have just got notice that lockheed and think of cyprus will remain closed for two days and remain open on thursday. that gives them two days to try to get ready for whatever happens next. we note with lockheed that will be the end of their business. >> ok. at the end of their business. her banking sector is effectively dismantled. facing years of austerity. what has been the public reaction? >> the public are just getting used to the idea, now, i think. as the situation is being explained to them, there is extreme anger about the banks and the state of the banks and the fact that lots of people did not know how bad it was. they passed the stress test, believe it or not in 2011. the european central bank gave them the green light. so, people are stunned by the fact that there is such an unhealthy state. >> a lot of questions to be answered. thank you very much. >> cyprus has been saved from bankruptcy, but ul

that was confirmed by cyprus. things are already happening. we know the central bank has named an administrator for the lockheed bank. we have just got notice that lockheed and think of cyprus will remain closed for two days and remain open on thursday. that gives them two days to try to get ready for whatever happens next. we note with lockheed that will be the end of their business. >> ok. at the end of their business. her banking sector is effectively dismantled. facing years of austerity. what has been the public reaction? >> the public are just getting used to the idea, now, i think. as the situation is being explained to them, there is extreme anger about the banks and the state of the banks and the fact that lots of people did not know how bad it was. they passed the stress test, believe it or not in 2011. the european central bank gave them the green light. so, people are stunned by the fact that there is such an unhealthy state. >> a lot of questions to be answered. thank you very much. >> cyprus has been saved from bankruptcy, but ul

not as much and you know like the math you just said that that cyprus is a special case but cyprus is is now in real trouble when the banks open on thursday . so i do think that we will have problems as we go down the line this is just the beginning cyprus yes absolutely there's no question that when the banks open you're going to see an exodus of money even because people are scared no one's taking a chance what's going to happen the week after because we still have the greek crisis unfolded from one day to the next you didn't know what was going on and so anyone who can will probably take all their money out especially foreign depositors and this is of course going to hurt the cyprus economy and the small depositor in multitude of ways so michael is it fear no more than anything else. well yes sure i mean we focus a little bit on small savers but they're not the only savers just on them you know if you were a bar owner or a taxi driver or something are you going to take a check from someone you going to take a. credit card payment i doubt it. but actually know what going to get is t

the situation between russia and cyprus is partly rich russians using cyprus. that's one thing to say. the second thing is the way russian companies are structured is the legacy of the fact that 10 or 15 years ago russians wanted to do business with the world but their own structures were so underdeveloped because they were so young because they had to use russia and they had to use cyprus. it isn't sustainable in the medium term. more and more of the market is coming back offshore. a major initiative to make moscow an international financial center. apart from that, you have to look at the diplomacy of this. it looks as if the deposit grab is being deliberately designed in order to tax russian companies and relatively wealthy russians. about a third of the deposits in cyprus we know are foreign. a large chunk of them are russian. russia didn't get the eurozone into this mess. russia has been there to help. >> cyprus knows having turned to russia for help, it's policy makers who are opposed to higher tax on higher earnings in those banks and it is to some exten

her or her opposition have identified cyprus as a wedge issue. her uncompromising stance which backed a raid on privately held posits in cyprus forced a surprise to come to moscow looking for help at the weekend for the subsidy of e.u. limit to how much money cyprus going to borrow it from outside the u n e way no well i think at that stage the cypriots are pretty much ready to talk to anybody but the the russian cyprus connections are well known but it's not like the russians are the only one but i've been talking about this for a year how come this is just come such a head. now when they have failed it at this eleventh hour will again this this comes back to the change of government in cyprus last year that there was a possible for the for them to make a deal while that political transition was going on right now the russians are looking at the situation and basically sent the cypriot ministers packing with the by example for two were reasons one specifically is that it's a eurozone problem of russians who are going to get involved in what is t

turkey has a standing military cyprus doesn't turkey has more geo political power versus cyprus ok it's a good chance as our president and strong standing there going to play with response to that this is soon that. cyprus does somehow outmuscle turkey these are gas mines that are not developed there are no standing pipelines to turkey or to create to get to rest for you know if it has to be built up it has to be built by a country that's being built out that is actually stealing from its own deposits the fun. and a bailout from the c.p.p. so. basically you know what you're doing is you're pledging something you don't own that you can't afford to build out to justify taking money from people who trusted the banking system what they've done is they've destroyed outright destroyed trust in a broken system it's confidence that allows a better system run because no bank standing in the world has the liquid assets to pay for the positive that wants which is the definition of a bank so this is very interesting once the conference destroyed in cyprus where does the go next i would have much co

societe generale has subsidiary in cyprus. biggest banks in cyprus are local banks. david: boy, do you see this spreading, erin? we've got to go. do you see i had spreading beyond spain and italy and possibly even over here? >> i think that is not likely. it might even take a while to spread to spain and italy. that may only happen if we start it see worsening trends in credit walt. david: erin davis from "morningstar". good to have you on. thanks so much for explaining it. appreciate it. >> thank you. david: thank you very much. sandy, over to you. >> david, people might have a little less to spend this spring but that doesn't mean they won't be buying new clothes. you never sacrifice fashion. up next we've got a top analyst ready to share her fashion stock picks for your portfolio. >>> samsung's newest phone putting a lot of pressure on apple. find out how the tech giant is responding to the competition. log on to facebook.co facebook.com/afterthebell, click on the "like" button. tell us what you think is the best smartphone on the market right now. ♪ . today is

that cyprus is a unique situation. and i'ming looking at what you're looking at. >> haven as an offshore. >> a lot of money. >> about getting back at the russians. >> yeah. >> there it is right there. contagion risks are overrated. >> it's just not the origin. it's the size, the size of the banking system there is huge. >> three times gdp. >> no, no, no, eight times gdp. the average in europe is three times the gdp. here in the u.s. it's only one times gdp. they did that on purpose. >> some monday my is from russian. >> foreign money. >> we don't though that it's criminal money. it's packed opt plimized at a minimum is the way they describe it. they sought that money for sure. >> they are known for having lax money laundering laws. >> no comparison in the you r eurozone. >> excellent. >> switzerland was in this situation. >> going back to the initial point, greece was a very small country as well. 2% of the gdp of the eurozone and created a big problem which started that and spent the rest of the region. >> the size of

is giving cyprus has to be matched by the cyprus government coming up with close to seven billion themselves the problem is they don't have the money and the only way they can get it out is out of their depositors now on the other side of the equation the germans will only agree to this bailout if the russians depositors which is a lot is about thirty billion dollars worth of russian money in those banks they don't get away scot free so there's a little bit of behind the scenes politics happening here in terms of who is getting hit i'm not sure that's michael but it's quite i mean a lot of russians are not had me about you know said michael. they're not happy but if i don't it's because of deposits mean the central bank says of the seventy billion in deposits in cypriot banks seven billion is held by russian nationals that may be not underestimate certainly nothing more than double that seventy billion now it's quite true that russian entities have loaned money to the. cypriot banks but it's a different matter overwhelmingly the people who are getting burned by this tax on depositors are cyp

>> pretty grim prospects in cyprus. and in a speech to the cypriot people tonight, the president called the deal painful but he said it was the best he could get. for more on the reaction there, i spoke to the bb's tim wilcox. we have now some clarity on the deal that cyprus has struck with europe. does it look like the island's actually going to be worse off because of this? >> it's instinct because i've just been talking to one of the m.p.'s who voted against the proposals last week, which was going to have a 10% levy or hair cut on deposits over 100,000 euros and 6.7% for those under, and she admitted today for the first time, because she hasn't on previous occasions, that probably people would be worse off and that is because of the fundamental damage that this -- the bailout deal is going to do to the cypriot economy. leading economists here, nobel prize winning economists here are talking about this economy being in recession. perhaps really quite deep recession for as long as five years. and that is because a sma

see the same situation as cyprus? >> absolutely. we have banks that are literally telling us because we know from our controls that they are trying even to regenerate it. they are trying to get people to borrow more money again. we're not changing the way -- wage structure of america, which these people required to go into debt to supplement their wages. the irony is, we are trying to kickstart our economy, to get it going again. but the problem is, our economy was a train headed into a stone wall in the first years of this century. if we get our economy going again without fundamental changes, what we're doing is putting the same train back on the track headed toward the same wall. cyprus shows us what is happening. we don't have to take a small countries. take great britain, are classic ally. their economy is in the second or even in some people's minds, the third recession within the crisis since 2007. they are falling in austerity problem or process exactly like that supported by mr. boehner and the economic downturn in great br

is giving cyprus has to be matched by the cyprus government coming up with about close to seven billion themselves the problem is they don't have the money and the only way they can get it out is out of their depositors now on the other side of the equation the germans will only agree to this bailout if the russians depositors which is a lot is about thirty billion dollars worth of russian money in those banks they don't get away scot free so there's a little bit of behind the scenes politics happening here in terms of who is getting hit i'm not sure that's michael but it's quite i mean a lot of russians are not have me about you know said michael. they're not happy but if i don't it's because of deposits in the central bank says of the seventy billion in deposits in cypriot banks seven billion is held by russian nationals that may be not underestimate certainly nothing more than double that out of seventy billion now it's quite true that russian entities have loaned money to the . cypriot banks but a different matter overwhelmingly the people who are getting burned by this tax on depos

merkel, the ball is now in cyprus' court. she says they must submit a fair counterproposal first in what she expects to be tough counter negotiations. >> onto wednesday's market action now. european stocks snapped a three- day losing streak and locked in some pretty healthy gains as the region's policy makers weighed the future of cyprus in the euro area. we have a summary of the day's trading at the frankfurt stock exchange. >> the failure of the bank levy in cyprus had no impact at the markets. traders remained calm. no rescue package went through at the first attempt, they said. they are still optimistic that politicians will find a solution, but not everyone is so trustful. the world's largest bond dealer, a u.s. company pimco, reduced its euro investment, but its warnings have been ignored. the dax was on the upside thanks to gains in the banking sector. >> we stay in frankfurt for a closer look at wednesday's market numbers. the dax finished the session up by nearly 0.7%. good to see that. the euro stoxx finishing up. t

ok cyprus. is going to take a levy basically take money from deposit holders and exchange or give them bonds backed by the revenue output of their gas my gas my ownership is not a seventy there is because turkey is disputing ownership of it ok turkey versus cyprus turkey has a standing military cyprus doesn't turkey has more geo political power versus cyprus ok it's a good chance as our president and strong standing there going to put through these bonds to that this is soon that cyprus does someone. outmuscle turkey these are gas mines that are not developed there are no standing pipelines to turkey or to create to get to rest has to be built up it has to be built by a country that's being built out that is actually stealing from its own the positives to fund. and a bailout from the c.p.p. so basically you know what you're doing is you're pledging something you don't own that you can't afford to build out to justify taking money from people who trust the banking system what they've done is they

, use the cyprus banks, keep money in cyprus. cyprus is essentially a part of russia, not really a part of europe. as such there's one other very important feature which is there's a lot of crime that goes on in russia. a lot of money laundering that goes on in russia. it is a place for russian criminals. that's why there is all this distaste about a proper bailout in cyprus where there wasn't in other countries, because nobody wants to bail out a bunch of criminals. >> unless you're vladimir putin. what does he do? vladimir putin is not renowned as being the king who'sphilanth outside of russia. does he he spring the cypriots along? if you're looking for incentives, the russians can pick up a lot of assets much cheaper if cyprus is smashed at the beginning of next week sglp let's look at this very objectively. cyprus has 1 million people. it is a small little island. what -- let's say russia ponied up all the money, the $17 billion. what's russia get for the $17 billion? it's not clear there's anything all that worth while to ge

cyprus really was on the hook for all of the trouble caused by bank of cyprus and my. now it's certainly a e.u. taxpayers have long resented having to bail out banks here but is it possible that making a deposit is pay them off to fill in the void is the next best solution some lawmakers have certainly and. this is this is what suffer debate i think a lot of germany and the netherlands among others would like to see really the banks pay the tab for their own troubles so a shareholder if if necessary shareholders wiped out junior bond holders right then senior bondholders and then if necessary uninsured depositors and the line would really only be drawn at people who have guaranteed deposits under one hundred thousand euros or whatever the the amount that is insured in each national government a lot of other people say look you're playing with fire when you when you try and impose this kind of solution in a crisis you're really going to have to guarantee a significant portion of bank liabilities that includes depositors that includes even some bondholders and that was t

consequence for cyprus because the amount of money that the russian government has provided to cyprus has been in the order of what two and a half billion dollars. damage of this measure to the cyprus banking system is not going to be two and a half minutes going to be twenty five and fifty billion dollars because the russian government is going to have to find a way to guarantee the banking system of cyprus and if russia is going to do. that too in order to sustain side press then cyprus has got to provide a political for russia and so that's why i think at the moment the cyprus government says that they gonna stay in russia it's not just a question of two and a half billion dollars it's going to be much much more was hacked it will now have on the relationship between russia and europe this is an ideal opportunity for russia to take the moral high ground all it needs to do is to say this is a very badly thought out decision. this has an effect on the russian economy that was never considered them was never consulted with the russian government. the regular appearances have already m

to cyprus live. all these pictures let me just ask these pictures from cyprus of these pictures from these are live pictures from cyprus tonight protesters are urging their government not to bend the repression they're busy news night brussels wants the cypriot parliament to push through a highly unpopular tax that could wipe out ten percent of people's savings the a proposal ready to be rejected once but there's growing concern that cyprus will be forced to accept it the country's banks have been paralyzed for almost a week now and it's tests are still reports people are bracing themselves for the worst. all of this panic this negativity started of course on the announcement over the weekend from brussels that in order to get a ten billion euro bailout package cyprus will have to cough up about five point eight billion in the suggestion was to impose a tax on back holders deposits now ninety one percent of cypriots according to a poll have been against. back tax and there we've seen protests on the

as cyprus's cash dispenses run dry. he says the conditions of his country bailout were unavoidable because cyprus expecting bankruptcy. , the great up alleged cover-up. the guilty verdict that shocked the u.s.. 4 million liters of waste and counting. the first sunday on the job. the berlin wall. find out what has protesters angry in january. the decision was difficult, but necessary. the last few minutes, cyprus's president has addressed his country to say why he agreed to controversy all conditions attached to the eu bailout trad. facing his country was bankruptcy and he yet to go to for a long term -- he had to go for a long-term solution. >> whatever the contribution, it will be made one time so the survival of the people will be guaranteed and future generations will be exempt from our mistakes. first, this report. >> attending to drain their savings before the government takes the cut. these anxious investors were a day late. i saw people with drawing money on saturday and said, let's do it later. and then there wa

not not as much and you know like the math you just said that that cyprus is a special case but cyprus is is now in real trouble when the banks open on thursday shares i do think that we will have problems as we go down the line this is just the beginning cyprus yes absolutely there's no question that when the banks open you're going to see an exodus of money even because people are scared no one's taking a chance what's going to happen the week after because we still have the greek crisis unfolded from one day to the next you didn't know what was going on and so anyone who can will probably take all their money out especially foreign depositors and this is of course going to hurt the cyprus economy and the small depositor in multitude of ways so michael is it fear no more than anything else. well yes sure i mean we focus a little bit on small savers but they're not the only savers just on them you know if you were a bar owner or a taxi driver or something are you going to take a check from someone you going to take a. credit card payment i doubt it. but i actually know what going to g

not as much and you know like the math you just said that cyprus is a special case but cyprus is is now in real trouble when the banks open on thursday . so i do think that they will have problems as we go down the line this is just the beginning. cyprus yes absolutely there's no question that when the banks open you're going to see an exodus of money even because people are scared no one's taking a chance what's going to happen the week after because we saw how the greek crisis unfolded from one day to the next you didn't know what was going on and so anyone who can will probably take all their money out especially foreign depositors and this is of course going to hurt the cyprus economy and the small depositor in multitude of ways so michael is it fear now more than anything else we're sure i mean we've focused a little bit on small savers but they're not the only savers just on them you know if you were a bar owner or a taxi driver or something are you going to take a check from someone you going to take a. credit card payment i doubt it now but actually know what going to get is the

i have greece over cyprus in the second round and mallorca. >> how about gonzaga over cyprus. i don't want to make too much light of it, it's just that when you come in after a weekend where you just believe that the futures will be down 28 because a lot of people tell you they'll be down 28 you don't want to be lulled into thinking this isn't as bad as i thought because then that will bring out sellers who take a look at stocks leak the insurers which were up so much. kimberly downgraded today. i think kimberly is a sell. i've been saying to consumer stocks. they're 19 times earnings and they grow very small amounts. >> is toilet paper worth that sort of valuation? >> no, i don't think so. maybe two-ply. >> if you're out there. >> possibly! >> if you're out in america and you went with your husband and wife to view a home and you're ready to make a bid to buy a home, finally after sitting on your hands for a few years, did you weake up today and say hone, we're not going put a bid on the house because the cypress bank tax has been levied. >> they don't know it's russian mafia

and berlin in particular are being so heavy handed with cyprus. but don't forget that we are heading for elections in germany rescue packages that we have gone through in the past have been totally unpopular with determine how taxpayer and going ahead now with a simple solution to what we've had in the past and you just cannot sell it to the german taxpayer i guess that's an issue as well also you don't you shouldn't forget that those negotiations go she asians with a cyprus are very complicated every party has to keep up its bargaining power and so we it's like a mystery you know and you have to be on guard you have to bluff and god knows what will happen and us germans we're not saying that we shouldn't cult cyprus but the germans told that at the end of the dying day the money the loans the guarantees whatever you want to call it does not support the people in cyprus it's supporting the banks that supporting the bank owners it supporting wall street of supporting them when people and that's the whole issue here catching of the chinese wind and

summit last year when the euro krotz told russia that cyprus would be their problem to solve cyprus had been racked by the greek economic collapse the russians didn't take kindly to that said it's a euro zone problem and it's not like russians are the only ones availing of time cypriot tax loopholes however russia did stop at two and a half billion to help trying to keep the island afloat a change in the cypriot government last year delayed any chance of a resolution most notably out of russia e.u. summit last december but it crucially brought the timing of any deal into the german election cycle and this is why merkel is playing hardball merkel's in search of votes she's under pressure at home and explains the euro group's decision to back a raid on privately held posits in cyprus germany's taking a very very hard line on this issue merkel's uncompromising stance backed euro group's decision to raid privately held super deposits weekend. and sent the cypriots to moscow looking for help the russians look at the cyprus approach and say no we're not going to get involved for two reasons.

like many in cyprus. this is simply stunned at the speed and man who will finish the banking crisis that his country seems to be spiraling out of control he shows us his wallet no cash a little lottery tickets a single parent unemployed and caring for his sick mother in raveling of cyprus's financial woes couldn't have come at a worse time and i feel shame that i live with the pension of my mom all of your life is coming up so i don't you make a plan for the future of the people in the younger. you care. the economy of your country or in the park system these. corrupt so. you standing with an empty hands. a sentiment echoed throughout the tiny island nation. scenes like these becoming a daily occurrence another day in nicosia cyprus another protest now this one in particular is a gathering of black appointees of the country's largest lender the bank of cyprus but they are worried that the company is headed for collapse and they may eventually lose their jobs so many cypriots told me that they are well awa

how can cyprus restore its banking image after all of this now. ok it seems like we've lost some a c. even a wolf who is the financial a service spokesman for the united kingdom independence party they speaking to us live from london now the european central bank has set and ultimatum for cyprus either a strike of bailout to deal by monday or be cut off from the emergency funds that would be a devastating blow for where banks are remain shut to prevent a massacre drolls tessa cilia has more on what's happening in the capital. the message is so widespread now across the capital that when you walk down the street wherever there's a television it's on the news channel and. that liquidity flow to cyprus will end on monday if there was no new or i.m.f. program in place and that really poses a problem as far as cashflow was concerned we've already gone to some a.t.m. machines are people winding up they're trying to get some cash and some people tell me limit the amount of money they can get from from one withdraw all has lessened some for four hundred f

does so sylvia are nicosia cyprus the president of cyprus is defending the controversial rescue package saying it's painful but in the best interest of the country meanwhile the troika held the plan saying it places the country on a sustainable path to recovery but the deposit levy has raised fears that the same thing could be done in other struggling banks across europe here's what the head of the euro group is saying quote if there's a risk in a bank our first question should be ok what's the bank going to do about that is printed fears across the euro zone as the cyprus deal is now created a new template for resolving future banking problems as professor of international finance charizard raman explained to my colleague bill died earlier the bell it's not only scared small savers but may trigger big investors to start pulling their cash out of other e.u. banks. it's going to be tied to the greek social economic debacle that we are seeing. going to go into a deep recession and this is going to be another decade lost for this country clearly the europeans and the i.m.f. they have broke

, cyprus, cyprus. up next, rick santelli will take a look at the country through the prism of time after the eak.k. >>> now let's get to the cme group and rick santelli and the exchange. >> this wild ride for cyprus is eye-opening not that it's necessarily market-moving in a way that's catastrophic, but it's absolutely very important. so let's read something that was put in "the boston globe" over the weekend. a restaurant owner in cyprus and let's read some of the comments that he made. i find this so fascinating. so let's put it on the screen and restaurant said it's been cash only here for three days. the banks have been closed. we don't really know if they will reopen and all of our suppliers are demanding cash, even the beer companies. all right, in their own words let's do cyprus back to the future. let's start out with the following quote, and this, of course, is from the previous head of the european commission. the head of the ecb and here's what jean claude said. i can find it. i have quite a

nicosia cyprus the president of cyprus is defending the controversial rescue package admitting it's painful but in the best interest of the country meanwhile the troika held the plan saying it places the country on a sustainable path to recovery but the deposit levy has raised fears the same thing could be done in other struggling banks across the continent here's what the head of the euro group is saying quote if there's a risk in a bank our first question should be ok what's the bank going to do about that is prompted fears across the euro zone as the cyprus deal is now created a new template for resolving future banking problems as professor of international finance charizard raman explained to my colleague bill daughter earlier the bailout hasn't only scared small savers but may trigger big investors to start pulling their money out of other e.u. banks. it's going to tie him onto the greek social economic debacle that we are seeing. going to go into a deep recession and this is going to be another decade lost for this country clearly the europeans and the i.m.f. they have broken one of

cyprus. as anger grew in nicosia this week of the supriya capital was rocked by a series of protests. thanks. on tuesday iran those three thousand students left classes and took to the streets in protest against the painful bailout deal while angry banker work has a stage their own rally outside the central bank headquarters and feel things in bad job thursday so more crowds a march through nicosia this time led by the opposition communist party activist chrysostom assad does or says cypriots i think brussels has destroyed the economy with what it calls a rescue package i don't think that it's correct to speak for a bailout because this is not the bailout the country best described as an overnight assassination because with the decisions that have taken in you know group they have pretty much destroyed forty percent of the economy and now they will also add on top of the debt problem that we have another low and you can obviously understand that the matter not work we're facing a new padding

turkey has a standing military cyprus doesn't turkey has more geo political power versus cyprus ok it's a good chance as strong standing yet they're going to play with response to that let's assume that. cyprus does somehow outmuscle turkey these are gas mines that are not developed there are no standing pipelines to turkey or to create to get to rest has to be built up has to be built by a country that's being built out that is actually stealing from its own the positives to fund. and a bailout from the c.p.p. so basically you know what you're doing is you're pledging something you don't own that you can't afford to build out to justify taking money from people who trust the banking system what they've done is they've destroyed outright destroyed trust integrated system it's confidence that allows the banking system run because no bank standing in the world has the liquid assets to pay for the positive thought it wants which is the definition of a bank. so this is very interesting what's a conference destroyed in cyprus rid of the go next i would have much confidence in much of the cor

all about cyprus. cyprus, they'll out approved. >> the economy is likely to get worse. >> continuation of stealing what has already been stolen. they will not be happy. >> they are devastated. that is not what cyprus is or ever was. >> europe does not have the mechanisms in place that the united states has to manage a currency or a banking system. >> watch the euro. that affects all of us. stuart: italian banks have been halted in trading. charles: yes. stuart: why? charles: they are worried. these stocks are plummeting. stuart: the dutch finance minister said the cyprus situation is a good template for other european countries. they have reached into private bank accounts, taken the money out and used it to finance the bailout. that is what everybody wanted to avoid and now the dow is down 43 points. >> that italian banks are frozen because now the fear is they will have their money taken out. stuart: the dutch minister is now staying this could prompt a euro zone bank restructuring. that is why the d

just look at cyprus like any. any person or corporate corporate asking for a loan any financial institution would wonder if if the debtor will be measured to repay or not as it stands in cyprus cyprus is the economy relying quite significantly on its tax haven status. it is quite consistent from the european union not to not to rely on on cyprus is you know favorite tax regime to to repay whatever the. when when you talk about cyprus i was i was sort of jump in here jeff i mean cyprus has been a legal haven it's a safety zone for those who want to invest that money there it's a legally that you know the money should be safe in that degree when it comes to the frustration of the people there on cyprus we're hearing some describing the e.u. bailout and the grabbing of funds from the two leading banks as basically legalized theft. believe it's true to a certain extent and that's where i again i come back to the idea of the political message there is a economical situation with a country that is nearly closed to bankr

the deal centers on the bank of cyprus and the popular bank of cyprus. those are the top two biggest banks in cyprus. the focus has been particularly on a so-called of uninsured depositors, those with deposits above the key benchmark level of 100,000 heroes or $130,000. that would in effect mean that people with balances above that level will have their money frozen completely, until the assets and liabilities of the two banks have been worked out. the liabilities paid off, and whatever remains, that will come directly out of the bank accounts of those uninsured depositors. it is entirely feasible they will take an immense hit, anything from a 30%-40%, even more. in the meantime, they will not have any money at all. that is an extraordinary account -- a consequence, if consider the bank of cyprus holds one- third of all bank deposits in this country, some $35 billion held in the bank of cyprus alone. it employs 11,000 people, many who lose their jobs over a period of time. holdspular bank also billions in deposits. some in the bank accounts of foreign in

it was good to have a contribution of the savers in cyprus itself eg if the cyprus does go along with this tax are we going to see other easy countries implementing the same measures of the same tax relief. no i don't think so because this was a very acute crisis and i think it was the only way to save cyprus and other countries will have a different sort of problems but remember in spain savers already have contributed those people who had an interest in the spanish bank bank here lost money some people in other banks have lost money and generally european savers are losing money because we have a policy of cheap money low interest rates that means they're saving money if you put money in the bank it costs you money and this is happening to a lot of citizen in europe already so it would be wrong to i or to to suggest that this is the first thing the first time in happens actually already happened because because savers in europe are not well off at all i was actually going to ask you because there's a lot of our foreign investment and capital in cyprus there which is likely to flee t

concerns about laundered money in cyprus bags but why weren't these concerns addressed back when cyprus joined the e.u. why did they keep silent on that. can you please repeat it again there's been a lot of talk about laundered money within cyprus so why are they only talking about it now why wasn't that addressed within the e.u. . prior to this it's very correct that you said that first of all i don't think that this is something that is happening really happening there waits its present its. money laundry can be anywhere in the in the same level as perhaps he. happens. percentage actually which is within the i mean with the normal the normal . scale the thing is that the bring up a lot of things so the cunt pushed in a show in a state under pressure and it was a way to put us under pressure even if they have the. council of europe money which they did and and the i.m.f. which they did investigate the money laundering and the reports are a very very very very good. thing and. maybe that in the few countries will get over that we have the less problem but still they brought it up he pla

to pay back in terms of russia and in terms of cyprus and in terms of russia too to actually help cyprus along i mean there is a huge amount of russian interest in cyprus and i think it's only natural that these two parties meet but i don't think the relation seen nice relationship or strain in any shape or form to be honest russia has expressed a certain dismay at the way the whole scenario was played out the fact that they want for a welcome in terms of supporting cyprus but then do you think that russia can really complain considering that they didn't offer the vost amounts of financial support that site press desire at one point last week in terms of rush or helping out the cyprus i don't think it is pretty it isn't the first port of call in terms of helping out cyprus is part of the european union as such the financial help should first and foremost come from the european union i think russia is right to point out that the the modus operandi in terms of helping out cyprus was not exactly smooth it wasn't. smadi in any sense and this afternoon's development where actually we've seen