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    All this talk of appeasing the markets is complete horse-s**t !
    8% by the end of the week?

    Comment


      Last night on RTE1 they had a panel of economists on. Apparently nobody wants to buy AIB's junk assets in NI / GB so they need approx an additional 10.4 Billion. Seems its only a matter of time before we have to letAIB go to the wall.
      My computer thinks I'm gay
      What's the difference anyway
      When all the people do all day
      Is stare into a phone

      Comment




        Originally posted by sewa
        Last night on RTE1 they had a panel of economists on. Apparently nobody wants to buy AIB's junk assets in NI / GB so they need approx an additional 10.4 Billion. Seems its only a matter of time before we have to letAIB go to the wall.

        Can we put the government against that same wall?
        Excellence is hard to keep quite - Sherrie Coale

        Comment




          irishtimes.com - Last Updated: Thursday, November 4, 2010, 08:58


          Irish bond yields still rising
          IRISH TIMES REPORTERS


          The cost of Government borrowing continues to rise in trading this morning.


          The yield on Irish 10-year bonds increased to 757 (7.57per cent) by 8.59am, while the extra yield investors demand to hold the debt instead of the benchmark German bunds rose to a record 512 basic points after reaching a new high of 506 yesterday.


          The cost of insuring Irish sovereign debt against default rose to an all-time high yesterday as credit default swaps on AIB’s subordinated debt signalled a 63 per cent probability of default within five years.


          The higher cost of borrowing by the State reflects mounting concerns that Ireland will struggle to reduce its budget deficit.


          It also coincided with a push by Germany to make bondholders pay towards any future bailout of a euro zone state.


          The spread on Irish bonds has doubled in the past three months as the Government tries to cut the deficit in the face of a bank bailout cost that could reach €59 billion.


          The turmoil on bond markets spilled over into the Iseq index yesterday, where banking shares were once again brought down by the uncertainty surrounding the fiscal position of Ireland.


          Excellence is hard to keep quite - Sherrie Coale

          Comment


            http://blogs.telegraph.co.uk/finance...ans-pritchard/ 100008461/ireland-is-running-out-of-time/


            Ireland has been desperately unlucky.

            The bond crisis is snowballing out of control before the country has had enough time to let its medical, pharma, IT, and financial services industries (don’t laugh, some of it is doing well) come to the rescue.

            Yields on 10-year Irish bonds surged this morning to a post-EMU high of 7.41pc.

            Yes, Ireland is fully-funded until April – and has another €12bn in pension reserves that could be tapped in extremis – but that is less reassuring than it looks. The spreads over German Bunds are mimicking the action seen in Greece in the final hours before the dam broke.

            Once a confidence crisis takes root in this fashion it starts to contaminate everything, as we are seeing in punitive borrowing costs for Irish banks.

            The uber-strong euro does not help. Under the IMF’s rule of thumb, currencies should fall by 1.1pc to offset every 1pc of GDP in fiscal tightening, ceteris paribus. Given that Ireland is going through the most wrenching fiscal squeeze ever conducted in a modern economy – though Greece is catching up – it needs a devaluation to match. Instead, the euro has risen by 18pc against the dollar since June. (less in trade-weighted terms).

            UCD professor Karl Whelan, a former Fed economist, told me this morning that there is a “reasonably high probability” that Ireland will have to turn to the EU-IMF even though this will be resisted until the bitter end as a horrible humiliation.

            The Fianna Fail government has one last chance to avoid tutelage. He advises draconian cuts of €7bn when the 2011 budget is unveiled in coming days, rather than the €3bn previously agreed.

            “Yields on government bonds have priced in a high likelihood of default. If this continues, Ireland may not be able to continue borrowing on the sovereign bond market,” he said in an article posted on The Irish Economy website, a good source for anybody following this Gaelic tragedy.

            He rebuts the oft-repeated claim (including by me, I confess) that Ireland had shown admirable courage in getting a grip early. “They have taken far too long to admit the scale of the fiscal problem that we are facing”

            His UCD colleague Colm McCarthy said Dublin has until January or February at the latest to return to the bond markets after suspending all auctions when yields exploded. “The €1.5bn not borrowed in October plus the €1.5bn not borrowed in November represent borrowing postponed, not borrowing avoided,” he said in the Irish Independent.

            “What if the re-entry to the bond market doesn’t work? The amount required is not offered or the rate of interest demanded is just too high to be affordable. In either case early resort to a bailout would be unavoidable.”

            “We cannot do `fiscal stimulus’, nor can we devalue our exchange rate, since we do not have one. It is perfectly reasonable to ask how we got into this mess, to allocate blame and to demand retribution. But no amount of ranting can expand the limited range of choices available to the Government.”

            (If I may interject: Ireland got into the mess because real interest rates set by the ECB for German needs were minus 2pc for much of the last decade, with utterly predicitable and calamitous results. Could any Irish government have adopted policies – financial repression, fiscal tightening, etc – to offset such idiotic interest rates? Perhaps, at a stretch. But the unbearable truth is that EMU itself caused this crisis).

            Back to Prof McCarthy:

            “The only factor the Government can do anything about at this stage is the budget deficit. If they do too little to convince the markets, the game is up and the Irish Government will be unable to finance itself, which means an IMF/European bailout and economic policy dictated from outside the country. How bad
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            Comment


              Originally posted by Bitter As A Lemon


              All this talk of appeasing the markets is complete horse-s**t !
              8% by the end of the week?


              could well be worse is the opposition decides to descent louadly on the budget announcement later...or explode if any of their own party dont toe the line.


              Ireland is the laughing stock of the world right now, some idiots have almost talked us into a bailout that our underlying figures dont suggest we need. But if there is zero confidence in us, which there is in large parts of the markts currently, we are goosed. Its really snow balled shockingly this week.


              A day is a long time in this game, but much more of this and we are goosed. Standing on the edge of the abyss now......
              Seas suas agus troid!

              Comment


                Can you let us know when we finally Jump the Shark? I am heading straight for the boozer when we do [img]smileys/sad.gif[/img]
                My computer thinks I'm gay
                What's the difference anyway
                When all the people do all day
                Is stare into a phone

                Comment


                  Surely there is zero confidence for a reason i.e the markets are forward looking (supposedly!) and see that Ireland can't cut by that much and have any chance of growth?
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                  Comment




                    Originally posted by fitzy73
                    Surely there is zero confidence for a reason i.e the markets are forward looking (supposedly!) and see that Ireland can't cut by that much and have any chance of growth?

                    Its illogical,based on my own in-depth analysis, of all the worst case figures thou and Id be 99% confident that my analaysis is both correct, and far more in-depth than the loons who put their populist views in public.


                    Key to growth,like during the boom, uness we want another bubble of sorts, has nothign to do with us. Our recovery will be dependant on the international recovery, given how we are this open market economy.


                    Domestic growth can be a % of it alright, but a very mute part. Competitiveness, and living within our means are keys domestically. I cant even think of too many valauable stimulus our Govt could undertake currently in anycase until we fix the issues that are clouding everything we do- ie,the banks, and the public sector wage bill. Its madness that 2 years on we still have not injected equity into some of our banks, while over the the US, and in the UK,to name but a few countires,they have or are talking out repaying the cash
                    Seas suas agus troid!

                    Comment


                      Originally posted by sewa
                      Can you let us know when we finally Jump
                      the Shark? I am heading straight for the boozer when we do
                      [img]smileys/sad.gif[/img]
                      See you in Bowles' later on?

                      It is useless to attempt to reason a man out of a thing he was never reasoned into.

                      Every plan I have is the best plan in the room. Everybody get quiet and listen to it, and everybody will win

                      Comment



                        Originally posted by LLCOOLJ14

                        Originally posted by fitzy73
                        Surely there is zero confidence for a reason i.e the markets are forward looking (supposedly!) and see that Ireland can't cut by that much and have any chance of growth?

                        Its illogical,based on my own in-depth analysis, of all the worst case figures thou and Id be 99% confident that my analaysis is both correct, and far more in-depth than the loons who put their populist views in public.
                        But then why aren't some canny bond investors putting their money where your mouth is?
                        Because if they've been basing investment decisions solely on the advice of the Irish media then they'd all own duplexes in Leitrim.
                        Dublin Northeast FF free since Feb 27th 2011

                        Comment



                          Originally posted by LLCOOLJ14

                          Originally posted by fitzy73
                          Surely there is zero confidence for a reason i.e the markets are forward looking (supposedly!) and see that Ireland can't cut by that much and have any chance of growth?

                          Its illogical,based on my own in-depth analysis, of all the worst case figures thou and Id be 99% confident that my analaysis is both correct, and far more in-depth than the loons who put their populist views in public.


                          Key to growth,like during the boom, uness we want another bubble of sorts, has nothign to do with us. Our recovery will be dependant on the international recovery, given how we are this open market economy.


                          Domestic growth can be a % of it alright, but a very mute part. Competitiveness, and living within our means are keys domestically. I cant even think of too many valauable stimulus our Govt could undertake currently in anycase until we fix the issues that are clouding everything we do- ie,the banks, and the public sector wage bill. Its madness that 2 years on we still have not injected equity into some of our banks, while over the the US, and in the UK,to name but a few countires,they have or are talking out repaying the cash
                          But it's not the loons who are pricing? It's the market.

                          Unless you are saying that the market has not done it's own analysis, but rather is listening to those "populist views"?
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                          Comment


                            Originally posted by My2Cents
                            Originally posted by LLCOOLJ14


                            Originally posted by fitzy73
                            Surely there is zero confidence for a reason i.e the markets are forward looking (supposedly!) and see that Ireland can't cut by that much and have any chance of growth?

                            Its illogical,based on my own in-depth analysis, of all the worst case figures thou and Id be 99% confident that my analaysis is both correct, and far more in-depth than the loons who put their populist views in public.

                            But then why aren't some canny bond investors putting their money where your mouth is?
                            Because if they've been basing investment decisions solely on the advice of the Irish media then they'd all own duplexes in Leitrim.

                            Some are, the problem is more arnt (the good old fashioned more sellers than buyers)

                            Comment


                              Originally posted by fitzy73
                              Originally posted by LLCOOLJ14


                              Originally posted by fitzy73
                              Surely there is zero confidence for a reason i.e the markets are forward looking (supposedly!) and see that Ireland can't cut by that much and have any chance of growth?

                              Its illogical,based on my own in-depth analysis, of all the worst case figures thou and Id be 99% confident that my analaysis is both correct, and far more in-depth than the loons who put their populist views in public.


                              Key to growth,like during the boom, uness we want another bubble of sorts, has nothign to do with us. Our recovery will be dependant on the international recovery, given how we are this open market economy.


                              Domestic growth can be a % of it alright, but a very mute part. Competitiveness, and living within our means are keys domestically. I cant even think of too many valauable stimulus our Govt could undertake currently in anycase until we fix the issues that are clouding everything we do- ie,the banks, and the public sector wage bill. Its madness that 2 years on we still have not injected equity into some of our banks, while over the the US, and in the UK,to name but a few countires,they have or are talking out repaying the cash

                              But it's not the loons who are pricing? It's the market.

                              Unless you are saying that the market has not done it's own analysis, but rather is listening to those "populist views"?

                              From what I can see, this weeks sell off is predominately down to the idiotic comments from our German friend.

                              Comment


                                Originally posted by LLCOOLJ14
                                Originally posted by Bitter As A Lemon


                                All this talk of appeasing the markets is complete horse-s**t !
                                8% by the end of the week?


                                could well be worse is the opposition decides to descent louadly on the budget announcement later...or explode if any of their own party dont toe the line.


                                Ireland is the laughing stock of the world right now, some idiots have almost talked us into a bailout that our underlying figures dont suggest we need. But if there is zero confidence in us, which there is in large parts of the markts currently, we are goosed. Its really snow balled shockingly this week.


                                A day is a long time in this game, but much more of this and we are goosed. Standing on the edge of the abyss now......


                                I would agree with you we do not and should not need a bailout. The current defict is very bad but our overall level of debt is still very manageable.


                                We cut the deficit by cutting spending a bit, increasing taxes a bit and do not spend any of the extra revenues that will be generated by growth over the next few years. As you say we are largely dependant on outside factors to generate growth but there are things we can do ourselves. Profits in the big Corporate sector are up but apart from increased CT receipts they do not appear to be providing any other economic benefits. I believe uncertainty is the reason why.


                                Our big problem now is down to the politicians in general and more specifically our Government. If they want to be of service to the country they would resign and call an election. Even if the won an election we would be in a far better place as the Government would have a mandate and we would have an end to the political uncertainty.


                                As things stand the budget and the 4 year plan will not remove the uncertainty basically because no one knows whether the Government will last days weeks or months and the new boys when they arrive might have a different gameplan.

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