Was Cyprus the black swan event that everyone was waiting for late in 2012? I don't know, but it has all the hallmark of a geopolitical disaster. First, it puts in play the whole idea that deposits for less than $100k are guaranteed. Even if this agreement between Cyprus' new government and the IMF/EU fails, the gate has been opened to employ this solution elsewhere. Europe's technocrats have decided that your money is really theirs to play with, and dispose as they see fit. Watch out Greece -- your government will not play ball, we will get our cash out of your savings accounts...
"the Russians are coming! the Russians are coming!" would be the best statement I could make on the events of the past 72 hours. It is more than likely that Europe has just sold Cyprus to the Russians (giving them the ability to build a massive base on the island) next door to the middle east for $20 billion. Not only is Europe now sucking on the teat of Russian Gas to an unprecedented level, they've just given away Cyprus -- giving Russia a say in the Mediterranean. Because that's cheap for Russia -- $20 billion to get a foothold in the region is much better than what Bush/Cheney achieved in Iraq/Afganistan -- which is $1.5 trillion for absolutely nothing!
If I were Putin I would get this thing lock up quickly before the Americans figure out the geopolitical impact this will create. America which is in full bellybutton mode may wake up in a few weeks with a done deal.
One thing for sure, despite the reassurance from every serious commentator, the door has been opened to seize depositors cash (BTW ahead of equity holders and bond holders) to make up the numbers.
A worrying precedent!