In a dilemma with no real positive outcome

In a dilemma with no real positive outcome, it was the lesser of two evils that prevailed. The island nation of Cyprus was able to strike a deal, within hours of an EU imposed deadline, that will help the country avoid financial collapse and potential exit from the European Union. The deal comes less than a week after the initial plan, to tax all deposits up to 10%, was scrapped after widespread backlash to the notion of government takeover of private funds. However, not everyone is getting by unscathed as the new deal will restructure two of the country’s biggest banks, hitting depositors with more than €100,000 on account while shareholders and bondholders of those particular financial institutions will be “wiped out”. The restructuring is estimated to be worth €4.2 billion and will allow Cyprus access to €10 billion from the EU lead bailout fund. European markets were up more than 1% on the news of the deal and U.S. markets are poised to push even higher to start the week. Now that this debacle has been cleared up, it’s back to the political uncertainty in Italy and the budget deadlock in the U.S., which could undermine the euphoric atmosphere we’re seeing this Monday morning. Gold is down .5% after closing Friday’s session at $1606. The rest of the complex is leaning modestly higher. Palladium has managed to regain the $760 mark after falling sharply last week. There’s not much else on tap for the day, which could give those in/around the I-95 corridor some time to contemplate  joining a class action lawsuit against Punxsutawney Phil for his false advertisement of an early spring. Have a great day!