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

[bcarrier]

The english telegraph has a lot to say about ireland these days ..here is the latest


http://www.telegraph.co.uk/news/worldnews/europe/ireland/8039759/Irelands-austerity-programme-was-bogus.html

[Main Street]

That Telegraph article is a load of neoliberal pish.
It is mixing up bank guarantees. The Irish Gov guarantee of Bank deposits did not commit it to wholesale guaranteeing of toxic assets. That was a separate independent decision taken to protect a financial elite, under the guise of protecting an economy.
The Gov guaranteeing bank deposits was essential and about the only sound decision the Gov made during the crash.

[muppet]

Apparently the Government Broadcaster RTE will see a few changes between now and the Election.

Here is what the News is going to look like: http://www.youtube.com/watch?v=fY19S4_zFXU

[Zapatista]

That's what puzzles me.  All this eye watery amount of money was borrowed and poured into the state of 4 million people.  Where did the money go?  All of these developers are claiming they have nothing now.  Is there nothing that can be recovered from anyone in the state?  There must be a large number of millionaires and even some billionaires given the amount of money sloshing around the system.

BTW BoI in N.Ireland is now divorced from BoI RoI and is now part of BoI UK.

T.U.P the money never existed to start with. This is what is buggin me. The banks were lending credit that they never had, but yet people are been forced to pay back real money in place of it The bad loans that nama is supposed to be takin care off could be wiped tomorrow because its not real money, its credit that never exisited. If that makes any sense.

The money did exist (although the wealth didn't) but it has disappeared with the fall in asset value. We borrowed real money and spent it on real product but we paid over the odds of the value. When the market turned and the real value of the assets were realised we had still borrowed the real money but were left in it's place with something of much less value. Now to repay the debts and make up the difference in the asset value and the money borrowed we must borrow futher. As it's not possible for individuals to borrow and pay the debts the state have taken on all the debt. Meaning profit for the lender is guaranteed while loss for the borrower has been nationalised.

[seafoid]

Been thinking about the NTMA not issuing bonds for the next couple of months. After Thursday it is probably now too expensive for us.

Cowen's spin is that we are funded up to the middle of next year. The problem is that we are broke after that. The assumption must be that they think things will be better by then and borrowing will be dramatically cheaper. If they are wrong we will be borrowing at higher rates and with money running out. They would most likely be strung by the markets never mind the citizens.

The only likely way that rates will fall back well under 5% is if a ferocious budget gets through. That is by no means certain either.

That leaves only one other possibility. Cowen will pull the plug and have an election before they borrow again.

The government had no choice but to suspend the auctions. The market doesn't believe the government and the rates being paid reflected that. At 6.5% debt is simply too expensive. The finance sector globally is currently in "risk off " mode and stock markets are all down on 3 months ago and nobody is very optimistic about the prognosis for the immediate future. If the mood changes and it's "risk on" again and money flows back into assets like bonds and share then maybe the 2 Brians will get lucky. It all depends now on outside factors.    The government has very few choices. 

[Zapatista]

The government has very few choices.

It has to be one of two things that has made the price of borrowing very high. Either they are hinging something or they don't know what they are doing. Two years of revising the cost of the bail out from the cheapest in the world to the most expencive in the world has left everyone asking themselves "will this freefall ever end?".

The Government could choose to be honest and tell us where this is going (too late for that maybe as they have cried wolf). If they have been telling us lies they should bite the bullet and call an election as they are not fit for office. If they are being honest and just got it badly wrong then they are clearly not able for the job and should call an election. If there is an election it will keep the Irish public from taking to the streets. If there isn't the pot will eventually boil over and we will take to the streets in angry numbers and force an election which will have a bad effect on our status. It would be worth it though as it would only be short term and we'd be rid of these FF blood suckers.

[MCMLX]

I cant see the Irish public ever taking to the streets. They seem to be content to complain from the comfort of their own homes and allow their government to destroy the country and whats left of the economy. I would love to be wrong on this one but cant see it.

[Zapatista]

I cant see the Irish public ever taking to the streets. They seem to be content to complain from the comfort of their own homes and allow their government to destroy the country and whats left of the economy. I would love to be wrong on this one but cant see it.

I think the main thing that keeps us at home and off the streets is our high personal debt. We are shackled by debt. We are almost afraid to upset anyone and want to keep our heads down and live in hope that what is being said and done is the right thing. Many of us are slave to the debt. We will never be able to act freely again as we will always be thinking about the money we owe and our ability to repay it. It's easy to get angry and upset about the State bailouts but it's not so easy when it's personal debt.

[MCMLX]

I have no personal debt, but if I did I would be expecting a dig out from the government. If the can bail the banks out to the tune of billions then why cant the bail the average Joe out, what is the difference?
A friend of ours bought a house in 2007 with the help of a 100% mortgage, despite us pleading with him to hold tight. He has a €1500 a month mortgage and is about to lose his job because of government cutbacks. His partner is a school teacher who has been hit by some sort of government levy. The house is worth at least 100k less than he paid for it and although he now realises he was foolish to say the least, there is simply no help out there for him and thousands of others like him who were sold a dream that has become a bit of a nightmare that has no end in sight. His health is suffering because of the stress, which is unsurprising.
I told him to move back north, take the woman with him and rent a house. Renting would save him roughly €800 a month and the cost of living is considerably cheaper. She wont hear of it. Either way they have no financial future.

[balladmaker]

What is the real life impact of a country defaulting on its debt?

[Rossie11]

McWilliams latest piece
http://www.davidmcwilliams.ie/2010/10/04/no-hope-for-blind-optimism

Countdown to Paddys day 2011

[armaghniac]

I have no personal debt, but if I did I would be expecting a dig out from the government. If the can bail the banks out to the tune of billions then why cant the bail the average Joe out, what is the difference?
A friend of ours bought a house in 2007 with the help of a 100% mortgage, despite us pleading with him to hold tight

The "government" doesn't help out indebted people, it all comes from other taxpayers. Other taxpayers will be pressed hard enough with their own wage cuts and higher taxes without having to bail out the person next door who bought a house "despite us pleading with him to hold tight".

[seafoid]

What is the real life impact of a country defaulting on its debt?

Lenders are less likely to lend it money in future. Ireland is currently borrowing €19bn a year just to pay the day to day bills.  The banks are on top of that.

If the government defaulted on its own debt then there would be no more borrowing for a few years and you would need to cut spending by €19 bn or around 30% of total spending. so social welfare would fall by 30% t 140 a week and gardai and teachers would get 30%pay cuts and 30%of hospitals would close as would 30% f schools. 

[MCMLX]

Would it not be sensible to implement 30% cuts to everything in Ireland. End the likes of the medical card scheme, rent allowance, etc. if they could do this then the day to day living costs would have to follow suit. Or am I being a bit idealistic/simplistic?

[Bogball XV]

I have no personal debt, but if I did I would be expecting a dig out from the government. If the can bail the banks out to the tune of billions then why cant the bail the average Joe out, what is the difference?
A friend of ours bought a house in 2007 with the help of a 100% mortgage, despite us pleading with him to hold tight. He has a €1500 a month mortgage and is about to lose his job because of government cutbacks. His partner is a school teacher who has been hit by some sort of government levy. The house is worth at least 100k less than he paid for it and although he now realises he was foolish to say the least, there is simply no help out there for him and thousands of others like him who were sold a dream that has become a bit of a nightmare that has no end in sight. His health is suffering because of the stress, which is unsurprising.
I told him to move back north, take the woman with him and rent a house. Renting would save him roughly €800 a month and the cost of living is considerably cheaper. She wont hear of it. Either way they have no financial future.

They're not in that bad a position.  She probably makes about 53K, probably takes in 1150 per fortnight after tax, he will get unemployment benefit of €205 a week (don't think unemployment has been cut yet). 
They go north what happens?  She has no job, he has no job, dole is 60 odd quid a week, rent is £700 odd (400-500 quid will be paid for them?).  They become bankrupt in the south and judgments are obtained by their bank to pursue them into the north.....

Better off where they are I think.