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

[muppet]

The original is behind a paywall at businesspost.ie but here is a follow up: http://www.irishmirror.ie/news/irish-news/irish-economy-wrecked-50-tycoons-5341159

This should have been the story 5 - 10 years ago and should definitely have been the story when FF/PD brought the Bank Guarantee legislation to the Dáil. Here is the link to the article on the PWC report Cowan used to justify the Guarantee. The report warned of relying on the information given by the banks. For example, here is a quote form the article: A tiny loan with a provision of just €100,000 (owed by a businessman with no property exposure) was laughably enough to make it into Anglo's top 20 impaired loans list.

http://www.businesspost.ie/#!story/Home/News+Focus/The+PwC+files+revealed/id/ef1f839e-27f3-41ba-89c5-066406772b25

A second article on the sbp lists the top 22. I won't bother with the full article which is long and subject to copyright/paywall etc. But here is the link:
http://www.businesspost.ie/#!story/Home/News+Focus/The+gang+of+22/id/0bcf803b-908a-43f2-9019-72168a5b3c7a

The following 22 men ended up owing Irish Banks €26n cumulatively:

1 Sean Quinn Total borrowings: €2.85 billion
2 Joe O'Reilly Castlethorn / Crossridge Total borrowings: €2.3 billion
3 Sean Mulryan Total borrowings: €2.4 billion
4 Derek Quinlan Total borrowings: €1.84 billion
5 Michael O'Flynn and linked companies Total borrowings: €1.8 billion
6 Bernard McNamara Total borrowings: €1.67 billion
7 Treasury Holdings Total borrowings: €1.613 billion
8 Gerry Gannon Total borrowings: €1.237 billion
9 Cosgrave Group Total borrowings: €1.086 billion
10 Denis O'Brien Total borrowings: €1 billion
11 Achilleas Kallakis Total borrowings: €888 million
12 Liam Carroll Total borrowings: €1 billion
13 Gerry Barrett Total borrowings: €705.2 million
14 John J Fleming/Fleming Group Total borrowings: €658 million
15 Pat Doherty/Harcourt Developments Total borrowings: €650 million
16 PCO 199 (Vendart) Total borrowings: €646.7 million
17 Glenn Maud Total borrowings: €605.5 million
18 David Daly Total borrowings: €588 million
19 McAleer & Rushe Total borrowings: €545 million
20 Fitzwilliam Finance Corp (Noel Smyth) Total borrowings: €543 million
21 Bovale Developments Total borrowings: €529 million
22 The Grehan brothers Total borrowings: €570 million

[seafoid]

Ireland, fastest growing economy in the Eurozone
http://www.rte.ie/news/business/2015/0312/686549-cso-gdp-growth/

https://www.irishtimes.com/news/politics/rise-of-sinn-f%C3%A9in-represents-main-threat-to-growth-says-economist-1.2143204
"The Irish economy has the capacity to continue to grow rapidly without overheating, according to the senior European economist with Goldman Sachs.
London-based Kevin Daly said political factors were now the main risk to Ireland's economic future, citing the increased popularity of Sinn Féin, with policies similar to those of Syriza in Greece and Podemos in Spain.
"In his view an important explanation for "mainstream" parties losing popularity when the economy was doing so well was due to the fact that job and income levels remained weaker than before the crisis."

Weak wage growth is cancerous

[foxcommander]

"The Irish economy has the capacity to continue to grow rapidly without overheating, according to the senior European economist with Goldman Sachs.

Have we heard this one before?

[armaghniac]

"The Irish economy has the capacity to continue to grow rapidly without overheating, according to the senior European economist with Goldman Sachs.

Have we heard this one before?

Yes. We heard this 20 years ago and it was absolutely true for 7 years. Of course, the economy will eventually overheat in 2023, if we haven't learned anything, but there should be good progress in the meantime.

[seafoid]

"The Irish economy has the capacity to continue to grow rapidly without overheating, according to the senior European economist with Goldman Sachs.

Have we heard this one before?

Yes. We heard this 20 years ago and it was absolutely true for 7 years. Of course, the economy will eventually overheat in 2023, if we haven't learned anything, but there should be good progress in the meantime.

Only if the US economy takes off. I don't think it can.

[Mike Sheehy]

"The Irish economy has the capacity to continue to grow rapidly without overheating, according to the senior European economist with Goldman Sachs.

Have we heard this one before?

Yes. We heard this 20 years ago and it was absolutely true for 7 years. Of course, the economy will eventually overheat in 2023, if we haven't learned anything, but there should be good progress in the meantime.

Only if the US economy takes off. I don't think it can.

What is your definition of "takes off" ?

[muppet]

And on it goes......

http://www.irishtimes.com/business/economy/greece-ready-to-default-if-deal-not-made-say-officials-1.2174510

......The warning of an imminent default could be a negotiating tactic, reflecting the government's wish to extract the best possible conditions from Greece's creditors, but it underlined the reality that state coffers are emptying fast.

Unprofessional tactics
Default is a prospect for which other European governments, irritated at what they see as the unprofessional tactics and rhetoric of the Greek government, have also begun to make contingency plans.....

[muppet]

http://www.rte.ie/news/business/2015/0415/694275-ecb-meeting/

Draghi attacked by protestor throwing 'paper and glitter'. It isn't clear whether either were printed by the ECB.

[seafoid]

"The Irish economy has the capacity to continue to grow rapidly without overheating, according to the senior European economist with Goldman Sachs.

Have we heard this one before?

Yes. We heard this 20 years ago and it was absolutely true for 7 years. Of course, the economy will eventually overheat in 2023, if we haven't learned anything, but there should be good progress in the meantime.

Only if the US economy takes off. I don't think it can.

What is your definition of "takes off" ?

Wage inflation of 3%+ for more than a year.
Just not possible under the current trickle up system.

[muppet]

http://www.independent.ie/business/irish/exclusive-chopra-says-ecbs-threats-to-ireland-were-outrageous-31152447.html

THE European Central Bank acted in an "outrageous" manner and went beyond its remit when it pressured Ireland to commit to years of austerity, according to Ajai Chopra.


Just as well Chopra stood up to the dastardly ECB and refused to become part of the Troika, which imposed everything from Pension raids to Water charges on us.


...Mr Chopra reiterated that it was unfair for Irish taxpayers to suffer the cost of bailing out the banks when senior bondholders got their money back.

"The IMF staff right from the beginning was very much in favour of imposing losses on senior bondholders. The EU partners were dead against it, especially the ECB," he said.

"The reason given by the Europeans was exaggerated. Yes, there would have been spill-overs. It would not have been so much of a disaster, but the Europeans were just terrified about the implications for bank funding markets."....

[seafoid]

http://www.independent.ie/business/irish/exclusive-chopra-says-ecbs-threats-to-ireland-were-outrageous-31152447.html

THE European Central Bank acted in an "outrageous" manner and went beyond its remit when it pressured Ireland to commit to years of austerity, according to Ajai Chopra.


Just as well Chopra stood up to the dastardly ECB and refused to become part of the Troika, which imposed everything from Pension raids to Water charges on us.


...Mr Chopra reiterated that it was unfair for Irish taxpayers to suffer the cost of bailing out the banks when senior bondholders got their money back.

"The IMF staff right from the beginning was very much in favour of imposing losses on senior bondholders. The EU partners were dead against it, especially the ECB," he said.

"The reason given by the Europeans was exaggerated. Yes, there would have been spill-overs. It would not have been so much of a disaster, but the Europeans were just terrified about the implications for bank funding markets."....

Trichet didn't have the balls to stand up to the markets. One of the reasons is because the Euro was so poorly designed. It was assumed there would never be any defaults and there are no rules on how to wind up dud banks. So when the shit hit the fan Trichet  pandered to markets and loaded sovereigns like Ireland with bank losses. Now over 2 trillion euro in bonds have a negative yield which means people buying them will get less out than they put in.

And the mess is pan Europe now.

[muppet]

http://www.independent.ie/business/irish/exclusive-chopra-says-ecbs-threats-to-ireland-were-outrageous-31152447.html

THE European Central Bank acted in an "outrageous" manner and went beyond its remit when it pressured Ireland to commit to years of austerity, according to Ajai Chopra.


Just as well Chopra stood up to the dastardly ECB and refused to become part of the Troika, which imposed everything from Pension raids to Water charges on us.


...Mr Chopra reiterated that it was unfair for Irish taxpayers to suffer the cost of bailing out the banks when senior bondholders got their money back.

"The IMF staff right from the beginning was very much in favour of imposing losses on senior bondholders. The EU partners were dead against it, especially the ECB," he said.

"The reason given by the Europeans was exaggerated. Yes, there would have been spill-overs. It would not have been so much of a disaster, but the Europeans were just terrified about the implications for bank funding markets."....

Trichet didn't have the balls to stand up to the markets. One of the reasons is because the Euro was so poorly designed. It was assumed there would never be any defaults and there are no rules on how to wind up dud banks. So when the shit hit the fan Trichet  pandered to markets and loaded sovereigns like Ireland with bank losses. Now over 2 trillion euro in bonds have a negative yield which means people buying them will get less out than they put in.

And the mess is pan Europe now.

German yields now around zero. Irish private pensions, which have already been raided by the levy, and the the cap, are totally screwed now.

[seafoid]

http://www.independent.ie/business/irish/exclusive-chopra-says-ecbs-threats-to-ireland-were-outrageous-31152447.html

THE European Central Bank acted in an "outrageous" manner and went beyond its remit when it pressured Ireland to commit to years of austerity, according to Ajai Chopra.


Just as well Chopra stood up to the dastardly ECB and refused to become part of the Troika, which imposed everything from Pension raids to Water charges on us.


...Mr Chopra reiterated that it was unfair for Irish taxpayers to suffer the cost of bailing out the banks when senior bondholders got their money back.

"The IMF staff right from the beginning was very much in favour of imposing losses on senior bondholders. The EU partners were dead against it, especially the ECB," he said.

"The reason given by the Europeans was exaggerated. Yes, there would have been spill-overs. It would not have been so much of a disaster, but the Europeans were just terrified about the implications for bank funding markets."....

Trichet didn't have the balls to stand up to the markets. One of the reasons is because the Euro was so poorly designed. It was assumed there would never be any defaults and there are no rules on how to wind up dud banks. So when the shit hit the fan Trichet  pandered to markets and loaded sovereigns like Ireland with bank losses. Now over 2 trillion euro in bonds have a negative yield which means people buying them will get less out than they put in.

And the mess is pan Europe now.

German yields now around zero. Irish private pensions, which have already been raided by the levy, and the the cap, are totally screwed now.

There is just too much debt in the system, Muppet. Yields are at all time lows because of this.
And new debt is added every day.

[muppet]

I think they are running out of road for that much kicked can........

http://www.bloomberg.com/news/articles/2015-04-18/ecb-s-draghi-says-urgent-that-greece-strikes-deal-with-creditors

European Central Bank President Mario Draghi urged Greece to work quickly toward an agreement with its creditors to curb a deepening financial crisis and quash doubts over its membership of the euro.

Even as he warned investors against dumping the single currency, Draghi said Prime Minister Alexis Tsipras's government must do "much more work" to show it can satisfy the terms of its 240 billion-euro ($259 billion) bailout program.

"It's urgent," Draghi told reporters in Washington on Saturday during meetings of the International Monetary Fund. "We all want Greece to succeed. The answer is in the hands of the Greek government."

Draghi made his call for action after Greek government bonds suffered their worst week since Tsipras's January election. The government's anti-austerity rhetoric is clashing with demands from its European peers to take more steps to revamp its debt-laden economy before they will release another tranche of aid.

At stake is Greece's ability to avoid defaulting on its debts and stay in the 19-nation euro area. The brinkmanship overshadowed the Washington talks of global finance chiefs as delegates from outside of the euro area urged a speedy resolution.

"We have been clear in our conversations with all parties there is an urgent need to come together around a comprehensive approach," U.S. Treasury Secretary Jacob J. Lew said Friday. "Time is of the essence" and "Greece has to take the lead."

Euro-area finance ministers are next due to discuss progress on Greece at their meeting on April 24 in the Latvian capital of Riga. A deal is unlikely to be ready by then, Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem told reporters in Washington on Friday.

For all the strains, Draghi cautioned investors not to bet against the 16-year-old single currency. "It's pointless to go short on the euro," he said. "Do it."

He also said that Greek banks continue to meet the requirements for Emergency Liquidity Assistance, a financial lifeline the ECB decides on each week. The funding has so far helped avoid a financial meltdown as the wrangling over aid has gone on.
"ELA will continue to be given to the banks if they're judged to be solvent and if they have adequate collateral which is the case now," Draghi said.

In an interview in Washington, ECB Governing Council member Vitas Vasiliauskas said the central bank shouldn't extend its assistance beyond the summer.

"The situation in Greece means that we should have a limit until summer for ELA," Vasiliauskas said on Saturday. "Everyone understands what ELA means, it's a temporary measure to give the banks liquidity."

Draghi said any package of Greek policies should focus on "growth, fairness, fiscal sustainability and financial stability."

While Europe is better equipped to deal with any fallout in financial markets if Greek negotiations fail than it was when it first fell into crisis, he said the region is still in "uncharted waters."

[armaghniac]

There is just too much debt in the system, Muppet. Yields are at all time lows because of this.

Yields are low because the ECB are printing money because there is too much debt in the system. A surplus of debt would tend increase interest rates.

I think they are running out of road for that much kicked can........

I suppose they would justify themselves that if Greece goes down now, the knock on effect on Ireland or Spain would be very limited and indeed Greece itself would probably do OK as they now have a surplus.