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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: JohnM who wrote (220202)	3/22/2013 11:29:07 AM
From: Steve Lokness	Read Replies (1) \| Respond to of 542224

<<<<< That represents such a misreading of that short Krugman piece that I'm tempted to post it again >>>>> John, perhaps my argument was poorly worded. I made one small point about Krugman's piece and that had to do with your misperception that Krugman had argued that Iceland and Cyprus were similar. You said that, Krugman didn't! The only lumping that Krugman did was for his suggested solution (sorry - part of his suggested solution)- devalue the currency. Most of Krugmans piece was about what to do with the Cyprus banks - I made no comment on any of that. Bentways posted piece this morning mentions how unique Cyprus is. I vehemently stand behind the fact that Cyprus has little similarities with Iceland - other than that they are tiny island nations. The Cyprus problem is indeed very unique because of the role Russia plays in the country - whereby Russians are laundering their huge fortunes through Cypriot banks. NOW, you may have mixed up Iceland and Ireland (which was also mentioned in the article), but that was my point!!!! Krugman argues about the rest of Europe and then out of the blue in the last sentence throws out Iceland. If you believe the answer to the problems in Cyprus is to devalue their currency - then support that position of Krugmans. But if you criticize my point, you should at least do so with evidence instead of the old argument that I don't like Krugman. The Cyprus problems are waaaaay different than Icelands because of the Russian involvement there. krugman.blogs.nytimes.com

To: JohnM who wrote (220202)	3/22/2013 2:46:45 PM
From: Steve Lokness	Read Replies (1) \| Respond to of 542224

John, I think Krugman made his blog post just for you this morning - but before you get too giddy, I'm going to comment first.; Cyprus Update Well, it looks as if the Icelandization of Cyprus — at least in the sense of making offshore depositors take a big hit — is happening faster and more decisively than I feared. Great summary by Paul Murphy at FT Alphaville, ending thusly: Big depositors in Cypriot banks stand to lose circa 40 per cent of their money here, which has drawn plenty of fury and veiled threats from Russia. But what exactly can the Russians do about this? Sell euros? Tear up double taxation agreements? Murder Cypriot bankers? Medvedev and co could not have played a worse hand during this crisis — and it’s not immediately clear why. Cyprus now has a binary choice: become a gimp state for Russian gangsta finance, or turn fully towards Europe, close down much of its shady banking sector and rebuild its economy on something more sustainable. The choice is obvious. Still, if I were a Cypriot official I might seek a bit of extra security for my family …