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

[seafoid]

I was watching Baz Andrews on that pat kenny programme on the RTE player and i can state with confidence that he will be the last generation of that family to stand for political office in Ireland. Philippe Legrain of LSE wiped the floor with him.   
Putting the taxpayer first my arse. Even the FT, no friend usually of the poor or the oppressed is calling the Government's bluff. The taxpayer is being shafted.  Holders of sov bonds are next.   

http://www.vexnews.com/news/11669/useless-gobshites-irish-daily-star-lets-irish-pm-brian-cowen-have-it/

Surely there is a majority in the Dáil to bring down the government in the national interest. 

[mayogodhelpus@gmail.com]

I was watching Baz Andrews on that pat kenny programme on the RTE player and i can state with confidence that he will be the last generation of that family to stand for political office in Ireland. Philippe Legrain of LSE wiped the floor with him.   
Putting the taxpayer first my arse. Even the FT, no friend usually of the poor or the oppressed is calling the Government's bluff. The taxpayer is being shafted.  Holders of sov bonds are next.   

http://www.vexnews.com/news/11669/useless-gobshites-irish-daily-star-lets-irish-pm-brian-cowen-have-it/

Surely there is a majority in the Dáil to bring down the government in the national interest.

Saw him on the Front Line too, very bad reaction to him at the end from the crowd. I thought Brian Hayes and Philippe Legrain! where good enough on the show. Have to say I found the Left Wing Alliance and National Forum (I think they where called) quite interesting. A left wing and a centre-right group. As I understand the LWA will be running 9 candidates while the Forum will act as a think tank for the time being but may run in the upcoming elections. Was a bit more impressed by the centre-right argument, but then again that sits closer to my political views. I am a strong believer in the 12.5% Corpo tax rate.

[ludermor]

http://www.rte.ie/news/2010/1130/eu_economy.html

The back lash starts, it will be some craic if/when the likes of Intel/Hewlett Packard pull out of Ireland.

[seafoid]

http://www.irisheconomy.ie/index.php/2010/12/01/barry-eichengreen-on-the-irish-bailout/#more-8831

Ireland's Reparations Burden

Barry Eichengreen
The Irish "rescue package" finalized over the weekend is a disaster. You can say one thing for the European Commission, the ECB and the German government: they never miss an opportunity to make things worse.
It pains me to say this. I'm probably the most pro-euro economist on my side of the Atlantic. Not because I think the euro area is the perfect monetary union, but because I have always thought that a Europe of scores of national currencies would be even less stable. I'm also a believer in the larger European project. But given this abject failure of European and German leadership, I am going to have to rethink my position.
The Irish "program" solves exactly nothing – it simply kicks the can down the road. A public debt that will now top out at around 130 per cent of GDP has not been reduced by a single cent. The interest payments that the Irish sovereign will have to make have not been reduced by a single cent, given the rate of 5.8% on the international loan. After a couple of years, not just interest but also principal is supposed to begin to be repaid. Ireland will be transferring nearly 10 per cent of its national income as reparations to the bondholders, year after painful year.

This is not politically sustainable, as anyone who remembers Germany's own experience with World War I reparations should know. A populist backlash is inevitable. The Commission, the ECB and the German Government have set the stage for a situation where Ireland's new government, once formed early next year, rejects the budget negotiated by its predecessor. Do Mr. Trichet and Mrs. Merkel have a contingency plan for this?

Nor is the situation economically sustainable. Ireland is told to reduce wages and costs. It must engage in "internal devaluation" because the traditional option of external devaluation is not available to a country that lacks its own national currency. But the more successful it is at reducing wages and costs, the heavier its inherited debt load becomes. Public spending then has to be cut even deeper. Taxes have to rise even higher to service the debt of the government and of wards of the state like the banks.
This in turn implies the need for yet more internal devaluation, which further heightens the burden of the debt in a vicious spiral.

This is the phenomenon of "debt deflation" about which the Yale economist Irving Fisher wrote in a famous article at the nadir of the Great Depression.

For internal devaluation to work, therefore, the value of debts, expressed in euros, has to be reduced. This would have been particularly easy in the Irish case. A bright red line could have been drawn between the third of the government debt that guarantees the obligations of the banks, on the one hand, and the rest of the government's debt, on the other. The third representing the debts of the Irish banking system could have been restructured. Bondholders could have been offered 20 cents on the euro, assuming that the Irish banks still have some residual economic value. If those banks are insolvent, the bondholders could – and should – have been wiped out.

Irish public debt would then have topped out at maybe 100% of GDP. And the Irish program would have had a hope of working. As it is, the program will have to be revisited, perhaps as soon as next year. Investors know this, which is why Irish spreads have barely budged.

In fact, this is exactly what the IMF, which at least knows how to add, has been pushing for over the last week. But the Fund was unable to overcome the objections of the Commission, the ECB and the German government.

One can interpret the intransigence of the German government and its EU allies in two ways. First, they understand neither economics nor politics. As Tallyrand said of the Bourbons, "They have learned nothing, and they have forgotten nothing."

Alternatively, policy makers in Germany – and in France and Britain – are scared to death over what Ireland restructuring its bank debt would do to their own banking systems. If so, the appropriate response is not to lend to Ireland – to pile yet more debt on the country's existing debt – but to properly capitalize their own banking systems so that the latter can withstand the inevitable Irish restructuring.

But European officials are scared to death not just by their banks but by their publics, who don't want to hear that public money is required for bank recapitalization. It's safer, in their view, to kick the can down the road in the hope that something good will turn up – to rely on "the luck of the Irish."

As John Maynard Keynes – who knew about matters like reparations – once said, leadership involves "ruthless truth telling." In Europe today, recent events make clear, leadership is in short supply.
Barry Eichengreen is George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, Berkeley.

[seafoid]

I was watching Baz Andrews on that pat kenny programme on the RTE player and i can state with confidence that he will be the last generation of that family to stand for political office in Ireland. Philippe Legrain of LSE wiped the floor with him.   
Putting the taxpayer first my arse. Even the FT, no friend usually of the poor or the oppressed is calling the Government's bluff. The taxpayer is being shafted.  Holders of sov bonds are next.   

http://www.vexnews.com/news/11669/useless-gobshites-irish-daily-star-lets-irish-pm-brian-cowen-have-it/

Surely there is a majority in the Dáil to bring down the government in the national interest.

Saw him on the Front Line too, very bad reaction to him at the end from the crowd.

I read an interview in the Sunday Tribune with his older brother a few years ago. 2 of the brothers are FF ministers but the other brother was dyslexic I think and said going around clinic with his Dad wasn't his cup of tea so he went off and did something completely different.   He actually said it sickened his h**e but he came across as a very principled character. Seeing this Andrews squirming on the set while Legrain looked as calm as you like was very interesting. He obviously doesn't believe the spin but he doesn't have the balls to say it.  Fianna Fáil are digging their own grave live on TV every night. 

[mayogodhelpus@gmail.com]

http://www.rte.ie/news/2010/1130/eu_economy.html

The back lash starts, it will be some craic if/when the likes of Intel/Hewlett Packard pull out of Ireland.

Thats not good, its about time we burned the bondholders, let Germany, France and the U.K. bail out their banks not Ireland. We should keep our 12.5% corpo tax, Ireland should not be for turning.

[Hardy]

The next bastard who says "kicking the can down the road" is liable to get his arse kicked down the road. I'll save the detail until the time comes. Because, yes - "the devil is in the detail".

Sometimes I think we're being commentated at by parrots.

[Hardy]

http://www.rte.ie/news/2010/1130/eu_economy.html

The back lash starts, it will be some craic if/when the likes of Intel/Hewlett Packard pull out of Ireland.

Thats not good, its about time we burned the bondholders, let Germany, France and the U.K. bail out their banks not Ireland. We should keep our 12.5% corpo tax, Ireland should not be for turning.

Don't worry lads. Our leaders promised us at the time of the Lisbon referendum and the other Lisbon referendum that this wouldn't happen. And we trust our leaders, so sleep well.

[Kerry Mike]

I read an interview in the Sunday Tribune with his older brother a few years ago. 2 of the brothers are FF ministers but the other brother was dyslexic I think and said going around clinic with his Dad wasn't his cup of tea so he went off and did something completely different.   He actually said it sickened his h**e but he came across as a very principled character. Seeing this Andrews squirming on the set while Legrain looked as calm as you like was very interesting. He obviously doesn't believe the spin but he doesn't have the balls to say it.  Fianna Fáil are digging their own grave live on TV every night. 

Is it this brother...
David McSavage (born David Andrews Jr.) is an Irish comedian. He is the son of an Irish politician, David Andrews and brother of Fianna Fáil politician Barry Andrews.

[Fear ón Srath Bán]

Regardless of what you may think of the man, this has merit, and an oul signature wouldn't go amiss:

Fintan O'Toole's petition

[seafoid]

The next b**tard who says "kicking the can down the road" is liable to get his arse kicked down the road. I'll save the detail until the time comes. Because, yes - "the devil is in the detail".

Sometimes I think we're being commentated at by parrots.

At least the can would be kicked, Hardy. Not like that Meath ball in the Leinster final, eh?

[seafoid]

I read an interview in the Sunday Tribune with his older brother a few years ago. 2 of the brothers are FF ministers but the other brother was dyslexic I think and said going around clinic with his Dad wasn't his cup of tea so he went off and did something completely different.   He actually said it sickened his h**e but he came across as a very principled character. Seeing this Andrews squirming on the set while Legrain looked as calm as you like was very interesting. He obviously doesn't believe the spin but he doesn't have the balls to say it.  Fianna Fáil are digging their own grave live on TV every night. 

Is it this brother...
David McSavage (born David Andrews Jr.) is an Irish comedian. He is the son of an Irish politician, David Andrews and brother of Fianna Fáil politician Barry Andrews.

That's him. More integrity than the brothers.

[Denn Forever]

The next b**tard who says "kicking the can down the road" is liable to get his arse kicked down the road. I'll save the detail until the time comes. Because, yes - "the devil is in the detail".

Sometimes I think we're being commentated at by parrots.

At least the can would be kicked, Hardy. Not like that Meath ball in the Leinster final, eh?

Its good to see we haven't lost our sense of humour and the more important things in life;P

[seafoid]

Regardless of what you may think of the man, this has merit, and an oul signature wouldn't go amiss:

Fintan O'Toole's petition

Thanks for the link a fhear

[seafoid]

1.   http://www.guardian.co.uk/business/2010/nov/30/eurozone-crisis-what-the-experts-say
Willem Buiter, chief economist at Citigroup

in our view, the consolidated Irish sovereign and Irish domestic financial system is de facto insolvent.

Jim Reid, head of global strategy at Deutsche Bank

In speaking to clients and traders yesterday, it's clear that there is extremely low appetite to take fresh peripheral or financial (especially sub) exposure. There are an increasing number of investors who will not touch these assets at any price for now given all the uncertainty

Gary Jenkins, head of fixed income research at Evolution Securities

If bond yields keep rising like this then we may see a much faster move towards a de facto fiscal union with a central debt management office and a single European government bond, possibly under the auspices of the EFSF initially. A muddle-through option could involve the ECB [European central bank] announcing a "shock and awe" amount of QE [quantitative easing] to hoover up a significant part of government issuance. With the ECB expected to scale back extraordinary measures at this week's meeting, such an option would require the sharpest of U-turns, but might well be the most flexible and easy to implement in the short run.

David Buik at BGC Partners

The really visceral treatment has been meted out in the futures market. The bond cash market trading has been somewhat sedentary. If dealers wanted to shift a large amount it would not be possible to accommodate any size.