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

[magickingdom]

Looks like we're fucked. I'd say there is some craic in the White House this evening! Looks like they're gonna have to try again. Looks like the only way the Republicans will be appeased if heads roll in the banks and ideally some people get locked up!

Maybe one of yea could clarify this. If inflation is increasing (ie the price of everything) then why do banks / states increase the interest rates on mortgages etc when they know it's more difficult for people to pay? Personnaly I'd rather be receiving some money from mortage repayments than have to take their home and try to sell it in a market which isn't buying. Is it not simply a case that those, like major share holders etc, still want their big fat 15 or 20% profit no matter what damage it does to the country (there are no countries only economies) or the joe bloggs on the street?

if inflation is increasing the central banks raise interest rates in order to make money more expensive, this slows down demand which takes the presure off prices and reduces/gets rid off the rate of inflation

[muppet]

Just back from the beer I mentioned earlier.

Shouldn't have gone.

From what I hear Irish banking will not be the same by lunchtime today. Better stay in bed.

[stephenite]

Do tell?

[J70]

Would this $700 billion (and whatever New Labia are spending on B&B) not be better spent on Joe Public who are going to be hit hardest in this credit crunch? Surely this bail out is only going to help the people who created this crisis and who have been on huge salaries and bonuses for selling mortgagaes and loans to people who couldnt afford them.

That appears to be the interpretation that the US public have put on it, which is why the politicians facing tough reelection battles are afraid to vote for the bill. However, its not like Wall St exists on a different planet to regular people. If Wall St is fucked, everyone is, which is the point that Paulson and the Bush administration have been trying to make. Its not like the general public can tell the banks and traders to go to hell and it won't affect them. Mortgages, car loans, student loans, the whole bloody shebang will be affected.

[Lecale2]

Just heard that the Irish Government is guaranteeing all bank deposits in order to avoid a run on the banks. Stock markets falling after big falls in Asia and USA over night.

What's the story on Irish Banks?

[Lecale2]

It's on RTE now.

http://www.rte.ie/news/2008/0930/economy.html

[Zapatista]

Does it not basically boil down to the fact that with the current capitalist system in the US (and by extention Ireland) allows money to filter to the top?

A small percentage of people have all the money. The rest of the money is rising towards them. The poor distribution of cash has left the large percentage with little or no cash. In order for the large percentage to have a home/car etc. they must use credit as the cash is simple not available to them. The were willingly given the credit and believed all was well but the cash through repayments and elsewhere has continued to filter to the top. This is your basic pyramid scheme (which is illegal here ). Now that the banks and creditors have drained all the capital available from the larger percentage the shit has hit the fan.

Would a more equal distribution of wealth have prevented this? Would it prevent it now? Would any 700 billion injection under the current system not eventually head in the same direction?

[bcarrier]

Brian Lenihan saves the world 

[orangeman]

Just back from the beer I mentioned earlier.

Shouldn't have gone.

From what I hear Irish banking will not be the same by lunchtime today. Better stay in bed.

Beer on a Monday night is never a good thing unless you've just won the AI - In that instance, it's almost compulsory ! 

Good news for Irish banking ?

Will UK and other governments follow suit ?

[Bogball XV]

Just back from the beer I mentioned earlier.

Shouldn't have gone.

From what I hear Irish banking will not be the same by lunchtime today. Better stay in bed.

Beer on a Monday night is never a good thing unless you've just won the AI - In that instance, it's almost compulsory ! 

Good news for Irish banking ?

Will UK and other governments follow suit ?

I don't know the ins and outs of it yet, but it seems to be a massive piece of bluffing by lenno - if he were ever asked to pay up, he couldn't, i suppose it depends on how long it will be before the markets either test his promise or just decide to disbelieve him.  If he has to come up with the goods, it'll be a disaster for the taxpayer.  We're currently talking about the budget from hell coming up because tax revenues are short by 7bn on estimates (you have to wonder what idiot came up with the estimates), yet the minister finds it okay to guarantee over €400Bn of loans made by banks?  If 10% go bad (probably not an unreasonable assumption) that's €40 Bn, almost our total annual budget.
It would have been a better idea to force some mergers between the banks who appeared in serious bother yesterday and the ones who just appeared in bother.

[Down Gael]

Which of the banks are in serious difficulty and more importantly how safe is the Ulster Bank in the north and the Permanent TSB in the south?

[Bogball XV]

Thinking about it more, I can just see the situation in NY at present, John Paulson and the other hedge fund lads have been woken up early, they've been told about the latest developments in Ireland, now Ireland doesn't normally warrant waing up early for, sure they've a few quid in short bets against irish banks, but now, they've an opportunity to make serious cash, and they will.  Probably before the day is out, these guys will have figured out just how they can make a guaranteed profit from this move.  The trouble with coming up schemes like this on the run is that you can't possibly cover all the eventualities and I'll be shocked if they haven't left a few gaps wide open to exploitation.

http://www.reuters.com/article/hedgeFundsNews/idUSLNE48S0AG20080930

[Bogball XV]

Which of the banks are in serious difficulty and more importantly how safe is the Ulster Bank in the north and the Permanent TSB in the south?

safe as houses

Sorry couldn't resist, ulster are owned by RBS - the UK govt. have thusfar protected everything and I can't see that changing.
IL&P have all the advantages that the irish govt has just awarded them as outlined above.

[muppet]

Just back from the beer I mentioned earlier.

Shouldn't have gone.

From what I hear Irish banking will not be the same by lunchtime today. Better stay in bed.

Beer on a Monday night is never a good thing unless you've just won the AI - In that instance, it's almost compulsory ! 

Good news for Irish banking ?

Will UK and other governments follow suit ?

I don't know the ins and outs of it yet, but it seems to be a massive piece of bluffing by lenno - if he were ever asked to pay up, he couldn't, i suppose it depends on how long it will be before the markets either test his promise or just decide to disbelieve him.  If he has to come up with the goods, it'll be a disaster for the taxpayer.  We're currently talking about the budget from hell coming up because tax revenues are short by 7bn on estimates (you have to wonder what idiot came up with the estimates), yet the minister finds it okay to guarantee over €400Bn of loans made by banks?  If 10% go bad (probably not an unreasonable assumption) that's €40 Bn, almost our total annual budget.
It would have been a better idea to force some mergers between the banks who appeared in serious bother yesterday and the ones who just appeared in bother.

Agreed. So far it is the greatest and probably the most stupid gamble in the history of the state. They should have nationalised one bank (or 2 if they could afford it) and let the others go. Now all it takes is another day or two in the markets like yesterday and we will have taxes like we have never seen before.

[muppet]

Thinking about it more our Government have just underwritten €500 Billion. Presumably believing that they will never have to pay up.

To put that in context (assuming there are 5 million of us to pay it back, which there isn't considering that all retirees should be excluded) that gives us:

€500 Billion/ 5 million people = we all have a bet of €100,000 each that this works out.

Thanks Brian.