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

[seafoid]

"Living in Athenry, Lorraine  contested the 2009 Galway County Council elections where she secured over 800 first preferences on her first time out. She is the Labour Party's General election candidate in Galway East in 2011.
Lorraine is a qualified barrister and Membership Officer with Junior Chamber Ireland, Galway. Her vision of Galway East is of an area where people have more opportunities, more facilities, more choice, more power over their lives and an area that is safer."

Yesterday the government paid Anglo bondholders 750m. Ireland is headed for a sovereign default unless the banks are resolved. When Ireland defaults the budget deficit will have to be cut immediately. Who is going to pay the salaries of the people in Portiuncula hospital in Ballinasloe or the teachers in Tuam ? What is Labour going to do to avoid sovereign default?     

[muppet]

"Living in Athenry, Lorraine  contested the 2009 Galway County Council elections where she secured over 800 first preferences on her first time out. She is the Labour Party's General election candidate in Galway East in 2011.
Lorraine is a qualified barrister and Membership Officer with Junior Chamber Ireland, Galway. Her vision of Galway East is of an area where people have more opportunities, more facilities, more choice, more power over their lives and an area that is safer."

Yesterday the government paid Anglo bondholders 750m. Ireland is headed for a sovereign default unless the banks are resolved. When Ireland defaults the budget deficit will have to be cut immediately. Who is going to pay the salaries of the people in Portiuncula hospital in Ballinasloe or the teachers in Tuam ? What is Labour going to do to avoid sovereign default?     

As posted above this was unsecured debt not covered by the Guarantee. In other words the Government owned Anglo just gave away €750 Million of taxpayers' money voluntarily.

[Bogball XV]

Yesterday the government paid Anglo bondholders 750m. Ireland is headed for a sovereign default unless the banks are resolved. When Ireland defaults the budget deficit will have to be cut immediately. Who is going to pay the salaries of the people in Portiuncula hospital in Ballinasloe or the teachers in Tuam ? What is Labour going to do to avoid sovereign default?     

As posted above this was unsecured debt not covered by the Guarantee. In other words the Government owned Anglo just gave away €750 Million of taxpayers' money voluntarily.
[/quote]
If they hadn't done so would that not have precipitated insolvency proceedings instigated by the holders of those bonds?  And since Anglo is state owned what would have happened, I haven't thought much about the consequences of any of this, am I right and if so what would have happened?
In any case the EU bailout is contingent on repaying the bondholders, all of them that is.  Does anyone know how far back the guarantee runs?  Was it only for loans advanced from the date of the guarantee, I had been under the impression that it related to loans already in existence?

[muppet]

Yesterday the government paid Anglo bondholders 750m. Ireland is headed for a sovereign default unless the banks are resolved. When Ireland defaults the budget deficit will have to be cut immediately. Who is going to pay the salaries of the people in Portiuncula hospital in Ballinasloe or the teachers in Tuam ? What is Labour going to do to avoid sovereign default?     

As posted above this was unsecured debt not covered by the Guarantee. In other words the Government owned Anglo just gave away €750 Million of taxpayers' money voluntarily.

If they hadn't done so would that not have precipitated insolvency proceedings instigated by the holders of those bonds?  And since Anglo is state owned what would have happened, I haven't thought much about the consequences of any of this, am I right and if so what would have happened?
In any case the EU bailout is contingent on repaying the bondholders, all of them that is.  Does anyone know how far back the guarantee runs?  Was it only for loans advanced from the date of the guarantee, I had been under the impression that it related to loans already in existence?
[/quote]

Anglo is only solvent thanks to the taxpayer. This only confirms what you said at the start of the Guarantee that they should have let it go. The above bond was issued in 2006 but wasn't covered by the Guarantee according to the SBP (don't ask me why).

If the EU bailout terms are the cause of this then: the EU are saying we must pay these people and the EU will fine you (punitive interest rate for bailout) for owing them.

[Bogball XV]

If the EU bailout terms are the cause of this then: the EU are saying we must pay these people and the EU will fine you (punitive interest rate for bailout) for owing them.

that's pretty much my understanding of it.  Not that we don't deserve it btw, they advanced us money, it wasn't their fault that we decided to blow it. 

[muppet]

If the EU bailout terms are the cause of this then: the EU are saying we must pay these people and the EU will fine you (punitive interest rate for bailout) for owing them.

that's pretty much my understanding of it.  Not that we don't deserve it btw, they advanced us money, it wasn't their fault that we decided to blow it.

This is the nub of the issue though.

If one bank lends to another bank and the second bank blows the money, it is fair enough that the owners of the second bank get stung. But why should people who live near the second bank have to pay back the first bank?

More particularly why would a central authority rule that citizens in one part of its jurisdiction should pay back a bank they never dealt with in another jurisdiction. Either the EU is in charge, in which case it is responsible or it isn't, in which case it had no business ordering us to repay the bondholders. That was our decision.

[Declan]

http://www.vanityfair.com/online/daily/2011/02/michael-lewis-on-how-merrill-lynch-and-brian-lenihan-stuck-the-people-of-ireland-with-a-debt-of-106-billion.html

Lendahand's Lies

[muppet]

http://www.vanityfair.com/online/daily/2011/02/michael-lewis-on-how-merrill-lynch-and-brian-lenihan-stuck-the-people-of-ireland-with-a-debt-of-106-billion.html

Lendahand's Lies

Good article.

There is something poetic about his lies being exposed in something called Vanity Fair. The former reflects his ego, the latter his intelligence.

[muppet]

"We have turned the corner" - Brian Lenihan Budget Day 2009

Today - http://www.rte.ie/news/2011/0202/rating-business.html

Standard & Poor's cuts Ireland's credit rating

'We consider the decline in creditworthiness of the Irish banking system over the past three years, and the related collapse in investor confidence, to be one of the most severe that we have observed in a major developed economy for many years,' S&P said.

Cowen in 2006:

http://www.finance.gov.ie/viewdoc.asp?DocID=3870

"There is currently a consensus amongst experts and analysts (domestic, IMF and OECD) that the most likely outcome for the housing market is a "soft landing".  This is a reasonable assessment that a "cooling-off" period will guide the market to a soft landing.  However, we cannot be complacent by assuming this is inevitable.

For its part, the Government continues to run a prudent, stability-oriented budgetary policy which gives us room for manoeuvre in the event of an economic downturn, whatever the cause. "

"Against the background of the strong growth of credit and the associated increase in indebtedness, it is hardly a surprise to anyone that the Central Bank and the Financial Regulator have put increasing emphasis on the need for prudence in lending by the financial institutions.

The Financial Regulator clearly has an important role in view of its statutory mandate both to safeguard the interests of consumers and for the prudential supervision of financial institutions.  The continued vigilance of the Financial Regulator is demonstrated by the recent announcement of increased capital provisioning by lending institutions in respect of high loan to value (LTV) mortgage lending."

[Declan]

The State's largest home-loan lender is preparing to raise its mortgage rate by a full 1pc in a move that is set to shock homeowners.

Other lenders are now expected to follow Permanent TSB with a similar-sized hike, in a move that could push thousands of homeowners into arrears.

The rise in standard variable rates from 4.19pc to 5.19pc will add €60 to the monthly repayments for every €100,000 borrowed.

Don't you just love those wonderful financial institutions

[muppet]

The State's largest home-loan lender is preparing to raise its mortgage rate by a full 1pc in a move that is set to shock homeowners.

Other lenders are now expected to follow Permanent TSB with a similar-sized hike, in a move that could push thousands of homeowners into arrears.

The rise in standard variable rates from 4.19pc to 5.19pc will add €60 to the monthly repayments for every €100,000 borrowed.

Don't you just love those wonderful financial institutions

Variable Russian Roulette?

[Declan]

http://av.r.ftdata.co.uk/files/2011/02/Michael-Lewis-on-ireland.pdf

The full Vanity Fair article - long but a good read

[Declan]

The Supreme Court has ruled in favour of Paddy McKillen in his action aimed at preventing the National Assets Management Agency (Nama) acquiring some €2.1 billion loans of his companies.

The seven-judge court found that the decision by the Nama board to acquire his loans was not legally binding. The decision had been made by an interim board of the State's bad bank before the agency had been established through legislation.

More good news

[muppet]

The Supreme Court has ruled in favour of Paddy McKillen in his action aimed at preventing the National Assets Management Agency (Nama) acquiring some €2.1 billion loans of his companies.

The seven-judge court found that the decision by the Nama board to acquire his loans was not legally binding. The decision had been made by an interim board of the State's bad bank before the agency had been established through legislation.

More good news

Bbbbbbbbbbbbut Lenny is a Barrister. He know's law and stuff (not finance obviously).

Part of me hopes they get re-elected.

Then we might see a million people on the streets.

[An Gaeilgoir]

Paddy mc killen has won part of his case today. It just gets worse and worse for NAMA. This could change everything.