by Calculated Risk on 3/22/2013 11:20:00 AM

It is after 5 PM in Cyprus and Parliament is expected to vote soon ... on something.

From the Telegraph: Cyprus bail-out: live

[H]ere's what we think that proposal might look like, based on reports and rumours from journalists on the ground.

Laiki Bank - the island's second largest lender - is wound down. Depositors' first €100,000 are hived into the Bank of Cyprus. Everything else is put into a bad bank, and sold off, likely at a 20pc to 40pc discount. ... According to information on the spread of deposits, a 9.46pc levy - lower than the 9.9pc proposed in the Eurogroup's original plan - on deposits over €100,000 would do the trick.

Under such an arrangement, the biggest losers would be those with deposits over €100,000 in Laiki Bank, who could be charged a 9.46pc levy and have any deposit over €100,000 swallowed into the 'bad bank' and sold off at a discount, losing as much as 40pc of its value. ...

Does this mean the Bank of Cyprus is safe? For now, yes. But as we have seen from the draft banking bill, the government wants to give the Cypriot central bank powers to restructure any bank as it sees necessary- the ominous "any other measure" clause that blogger Yiannis Mouzakis helpfully translated from the Greek.

Not to mention the draconian capital controls included in the draft bill, among which are compulsory renewal of all time savings deposits upon maturity, conversion of current accounts to time deposits, ban or restrictions on non cash transactions.

And from the CyprusMail: Cyprus Crisis Update, Friday March 22nd

A solution to Cyprus’ bailout crisis within the framework set down by the European Union may be possible within "the next few hours", the ruling DISY deputy leader Averof Neophytou said.

"There is cautious optimism that in the next few hours we may be able to reach an agreed platform so parliament can approve these specific measures which will be consistent with the approach, the framework and the targets agreed at the last Eurogroup," Neophytou told reporters.

by Calculated Risk on 3/22/2013 09:28:00 AM

Another update on hotels from HotelNewsNow.com: STR: US results for week ending 16 March

In year-over-year comparisons, occupancy was up 1.4 percent to 66.6 percent, average daily rate rose 4.5 percent to US$112.05 and revenue per available room increased 5.9 percent to US$74.66.

The 4-week average of the occupancy rate is close to normal levels.

Note: ADR: Average Daily Rate, RevPAR: Revenue per Available Room.

The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Click on graph for larger image.

The red line is for 2013, yellow is for 2012, blue is "normal" and black is for 2009 - the worst year since the Great Depression for hotels.

The occupancy rate will increase seasonal over the next few weeks and then move sideways until summer vacation travel starts. This occupancy rate has improved from the same period last year - and is close to pre-recession levels.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

by Calculated Risk on 3/21/2013 10:15:00 PM

Two more articles:

From the NY Times: Mood Darkens in Cyprus as Deadline Is Set for Bailout

President Nicos Anastasiades presented Parliament on Thursday with a plan that scrapped a controversial tax on bank deposits.
...
The central bank said the new package included “consolidation measures” to enable Cyprus Popular Bank, also known as Laiki Bank, to continue operating.

As the country’s most troubled lender, it would be reorganized by placing underperforming loans and questionable assets into a so-called bad bank and transferring healthy assets to the Bank of Cyprus, the nation’s largest financial institution. ...

But the central bank warned that if Parliament failed to pass the measure, “Laiki will default immediately, causing major consequences to its employees and its clients.”

Lawmakers will also vote on restrictions on taking cash out of banks and out of the country, known as capital controls, when the banks reopen. ...

The central bank said on Thursday that Cyprus had until Monday to reach an agreement ... the group of 17 finance ministers whose countries use the euro issued a statement declaring themselves “conditionally satisfied” with most of the new proposal, which the so-called troika of lenders ... is to assess on Friday after the Parliament vote.
emphasis added

From the WSJ: Clock Ticks on Cyprus

Cyprus ... readied a plan that would restructure its second-largest lender and enforce unprecedented restrictions on financial transactions.

The proposals, if they take effect, would allow authorities to restrict noncash transactions, curtail check cashing, limit withdrawals and even convert checking accounts into fixed-term deposits when banks reopen. ...

Parliament is set to debate the measures on Friday. If Cyprus can't pass them, it could find itself with little choice but to leave the euro zone ...

by Calculated Risk on 3/21/2013 06:13:00 PM

From the WSJ: Amid Housing Recovery, Humble Plywood Shines Anew

Growing demand and tight supplies have pushed up plywood prices by 45% in the past year, and U.S. producers are scrambling to get back up to speed after slashing output of the basic construction material during the housing bust.

Georgia-Pacific, the largest U.S. producer of plywood, will announce Friday it plans to invest about $400 million over the next three years to boost softwood plywood and lumber capacity by 20%.
...
With demand rising, the composite price for structural panels, which includes plywood and other wood products, jumped to $511 per thousand square feet on March 15 this year, up 45% from $351 in mid-March a year ago, according to Random Lengths, a Eugene, Ore., wood-products market reporting service.

Click on graph for larger image in graph gallery.

This graph shows two measures of lumber prices (not plywood): 1) Framing Lumber from Random Lengths through last week (via NAHB), and 2) CME framing futures.

Lumber prices are now at 2004 and 2005 levels.  Demand is far below the levels during the housing bubble, but supply has fallen sharply too.

by Calculated Risk on 3/21/2013 04:06:00 PM

A few articles on Cyprus:

First, the deadline from the ECB: Governing Council decision on Emergency Liquidity Assistance requested by the Central Bank of Cyprus

The Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance (ELA) until Monday, 25 March 2013.

Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks.

From the Financial Times: Cyprus targets big depositors in bank plan

Cyprus announced plans on Thursday to overhaul the island’s banking industry, including forcing big depositors to accept losses on their accounts ... “The banking system needs restructuring otherwise it will go bankrupt and it needs to be done immediately,” said Panicos Demetriades, governor of the Central Bank of Cyprus. Deposits up to €100,000 would be guaranteed and bank jobs would be safeguarded, he added.
Excerpt with permission

From Alphaville: Taxi for Laiki

And live updates from the Telegraph: Cyprus bail-out: live