Cypriot Bank Withdrawls: Why Is This a Surprise to Anyone?

I'm shocked, shocked!

Yesterday, we first reported on something very disturbing (at least to Cyprus' citizens): despite the closed banks (which will mostly reopen tomorrow, while the two biggest soon to be liquidated banks Laiki and BoC will be shuttered until Thursday) and the capital controls, the local financial system has been leaking cash. Lots and lots of cash.

Alas, we did not have much granularity or details on who or where these illegal transfers were conducted with. Today, courtesy of a follow up by Reuters, we do.

The result, at least for Europe, is quite scary because let's recall that the primary political purpose of destroying the Cyprus financial system was simply to punish and humiliate Russian billionaire oligarchs who held tens of billions in "unsecured" deposits with the island nation's two biggest banks.

As it turns out, these same oligrachs may have used the one week hiatus period of total chaos in the banking system to transfer the bulk of the cash they had deposited with one of the two main Cypriot banks, in the process making the whole punitive point of collapsing the Cyprus financial system entirely moot.

Why is there any surprise about this? Did the European banksters think that a bunch of guys who got rich by shady methods (including killing off those they found to be inconvenient) were just going to sit back and let the EU take tens of millions of Euros from them, because some wonks in Brussels thought it up?

If I were writing it, this is how it would have gone: Some of the more influential bankers would have received a portfolio of photographs. The photos would have been all candid shots, probably from a distance. The photos would show them, their wives, their children, and their grandchildren all going about their every day routine. If the photos were deliverd by hand, the delivery man would have uttered some vague threats, Chicago style of "nice family you have there, pity if anything would happen to them". Maybe in writing, it would look sort of like an insurance pitch. But the message would be clear and unmistakable. Then someone else would contact them, on behalf of some of the depositors, and ask for help on "doing the right thing" and allowing people to have access to their own money.

Or, the other option, the Russians got to them early on and the backdoor withdrawl system was not a bug, but a feature.

Everyone knows that the German were the drivers of the idea to steal from the Russian oligarchs. The Germans had better hope that next winter is not a cold one. Or they may find that there are some "technical problems" with the pipelines that send natural gas to Germany from Russia, for if anyone thinks that the Russians are not going to let this one go unanswered, they are fooling themselves.