Luckily I had a bet on with William Hill that this would go ahead.
When is the Euro zone going to start to understand that once they have bailed out every country within, there will not be anything else left for them to do? Apparently there is going to be legislation in Cyprus and the parliament there is not going to get a vote on it. Democracy eh!
Now is this because they want to be lovey-dovey and keep the Euro zone together? Or is it because as we speak the Russians are preparing to move in? It is not as daft as it first sounds.
One of the mysteries of the Cyprus crisis has been the lack of response from Russia, despite the obvious strategic opportunities, not just to protect its offshore deposits, but also to exploit the island’s strategic location and its military and energy potential. A possible explanation is that Europe’s indecision also paralyzed Russia - until last night. As long as Europe’s policy on Cyprus kept shifting, it was impossible for Russia to intervene, since any help it offered could be rejected or outbid by the EU.
One of the biggest losers in this affair are the bond holders. Investors who have in the past helped out business, helped out governments and now must be considering their position. I believe it is going to become much harder for investments in the future to be available and there is going to be a considerable amount of currency movements over the next few days.