The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[Rossfan]

What utter gobshites we have to suffer in this country. f**king arseholes and arselickers and as someone already said not a ball among the lot of them.

Take a deep breath and count to 10 Seanie. All that anger and indignation isn't good for you.

Just remember the Rep of Ireland is just a pimple on the arse of the EU - 4.4m pop out of something like 500m so the head buck cats in the ECB etc look on Kenny/Gilmore etc as naughty kids who overspent their pocket money.
Of course they also remember the arrogant cnuts like McCreevy and Harney roaring and shouting during the artificial property boom about "being nearer Boston than Berlin" and "we're not taking any guff from that oul EU - look at us the richest Country in Europe" etc etc.
Not much help coming from Boston these days. What a pity Berlin wouldn't stop Harney and McCreevy's fat pensions 

[armaghniac]

There is a big element of kicking the can down the road here. But it is clear that default now, while there is a substantial deficit, is dangerous. Kicking the can down the road means you can default/restructure in the future if needs be or if the time is more opportune. These bonds are in Irish Central Bank for the moment. If the Euro was to break up or the like, then they could simply be shredded.

[seafoid]

The damage was done when FF guaranteed the banks. They were clueless. They didn't even know what the total exposure was. It was all going to be grand. It was, in fact, worse than spread betting.

Everything followed on from that.

Correct and let no one forget that  when they come knocking or spout more shite on TV or radio

But is it right to blame someone for what their predecessors did?

I think the Magdalene women deserve an apology.
I think the people deserve an apology from FF and the PDs.
I think they deserve some "never again" assurances.

I think Leaving Cert students should study what happened and why .

The worst thing that could happen would be that nobody learns anything and it happens again in 2 generations' time 

[Asal Mor]

The damage was done when FF guaranteed the banks. They were clueless. They didn't even know what the total exposure was. It was all going to be grand. It was, in fact, worse than spread betting.

Everything followed on from that.

Correct and let no one forget that  when they come knocking or spout more shite on TV or radio

This is not a great victory or a game changing goal, but it is a point scored against a tenacious opposition.

Nice analogy but continuing that them it's like Kilkenny allowing Tyrone hurlers to score a point in the first 10 minutes of the game whilst promptly sticking the boot back in and battering the shite out of them for the next 60 mins and every time they meet in the future.

  Very good Declan and this is a great thread. Excellent posting all round.

[Croí na hÉireann]

http://www.davidmcwilliams.ie/2013/02/08/lets-get-something-very-clear

Good synopsis by McWilliams.

[Billys Boots]

But is the unreliability of the promissory note not the very reason that the ECB wouldn't lower our interest rate on the bailout deal?  Or is that completely unrelated?

[Declan]

http://thechatteringmagpie14.blogspot.ie/2013/02/ballyhea-charleville-bank-bailout.html
Gwan de rebels

[camanchero]

I hope they start up a bolshevik party , I'll vote for them - esp if they say they are going to tell the bondholders to feck off

Nothing like waiting for "Someone else" eh?
Anyway SF in the 26 Cos. fit the bill already 

Anyway the deal done today/last night was the inevitable one - pay back over a longer period so it costs less each year but the overall total is much more .
There will be a lot more of this over the next few years both at Governmantal and private/personal levels.

im too much of a capitalist fat cat.

sf are almost as central policy wise now as ff , fg etc - so they are not the leaders of the revolution !

we still are ending up paying more and we should have followed Icelands example and at least reduced the debt by some magnitude.

we are just going to go further into hock to loan sharks.

IF the public sector was tackled then that would make inroads on the 15bn a year - but turkeys dont vote for christmas and we have wasted too many years maintaining the status quo on this already.

[Denn Forever]

What if we become super competative again?

Can we pay off the bank debt with our surplus (we can dream)?

[muppet]

What if we become super competative again?

Can we pay off the bank debt with our surplus (we can dream)?

It is worth imagining what will happen if we get into surplus in say 8 years:

FG: likely to want to use the surplus to undo recent taxes;
Labour: Likely remove pension levy on Public service and undo any Croke Park 2 cuts;
Sinn Féin: likely want 'to protect the most vulnerable in society';
FF: likely to put it into Qango and tax havens for their buddies;

No one: will have the cop on to reduce the debt at the first opportunity.

[armaghniac]

No one: will have the cop on to reduce the debt at the first opportunity.

Th impact of debt was reduced from its early 90s highs, although it was only paid back in the odd year, because the economy grew and so the burden became a lot less. What we need coming out of this is a realistic economic model of where exactly we stand, so that good public finances based on borrowing is recognised for what it is. With a realistic model, taxes can be set up to deliver stability over the cycle.

[muppet]

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9906230/Brave-Ireland-is-the-poster-child-of-EMU-cruelty-and-folly.html

[Billys Boots]

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9906230/Brave-Ireland-is-the-poster-child-of-EMU-cruelty-and-folly.html

Very interesting, thanks for that Elmo!

[Hardy]

Probably been posted before, but anyway ...


Mary is the proprietor of a bar in Dublin . She realises that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronise her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

Word gets around about Mary's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Mary's bar. Soon she has the largest sales volume for any bar in Dublin .

By providing her customers freedom from immediate payment demands, Mary gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Mary's gross sales volume increases massively. A young and dynamic vice-president at the local bank recognises that these customer debts constitute valuable future assets and increases Mary's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then bundled and traded on international security markets. Naive investors don't really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics.

Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Mary's bar. He so informs Mary.

Mary then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts.

Since, Mary cannot fulfil her loan obligations she is forced into bankruptcy. The bar closes and the eleven employees lose their jobs.

Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%.

The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.

The suppliers of Mary's bar had granted her generous payment extensions and had invested their firms' pension funds in the various BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations. Her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion euro no-strings attached cash infusion from their cronies in Government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Mary's bar.

Now do you understand the bank bailout?

[Declan]

Always good to be reminded Hardy