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

[muppet]

A good day to reveal news like that.

So far:

* Anglo announces worse results in Irish corporate history
* Anglo announce CX gets nearly €1,000,000 in Bailout money as remuneration
* Irish Nationwide Basketcase Society will raise Variable Rate by .65%

Anything else out there that people are hoping we won't notice after 1630 today?

[muppet]

here we go

twitter:

Bank of Ireland needs €5.2bn. AIB needs €13.3bn. Irish Life needs €4bn. EBS needs €1.5bn. Total €24bn

[muppet]

twitter Colm Toibín:

They could announce any number/measurement at this stage. "300 Moons will have to be pumped into the banks." Grand so.

[armaghniac]

RTE reporting capital requirements for the four banks in today's exercise of €24 billion.

AIB 13.3
BOI 5.2
EBS 1.5
ILP 4

EBS & AIB to be merged. BOI to try and stay private.

from Irisheconomy.ie

The earth is 4.5 billion years old. That means that if from the beginning of time here itself, €5 had been put aside each and every long weary year from before life, through the time of the ancient single-celled creatures of the seas, the almost endless reign of the plants and insects, through the long, long reign of the dinosaurs, past their fall, the slow rise of the mammals and ourselves at last and our wandering development across the earth and city life of only six or seven thousand years, if €5 had been put away each and every year, we still would not have built up what the banks need today.

[seafoid]

It would be sort of funny if the FF opposition appeared on Prime time accusing the government of caving in to the ECB and
putting bondholders before taxpayers, the way Noonan did before he became a Minister. 

[bennydorano]

I've been dipping in and out of this discussion but did the bailout provide any additional funds to meet the unforseen? It was hardly a big secret amongst those in the know I'd imagine.  If not, defaulting now is a terrible option, get the additional funds at whatever percent to cover this shitpile and then default.

Does this running catastrophe not have an end in sight? It really is spectacular in a car crash sort of way.

[seafoid]

24bn was probably stagemanaged. If the Eurowallahs admitted the damage was north of 40bn the game would have been up.
So there were presentation considerations.

The most important thing is to keep within the limit of sustainable sov. debt . I can't see the markets buying it.

RTE are calling it "radical". Anything but. And nothing on bondholders.

[Bogball XV]

according to gay mitchell (FG's man in the know in Europe), senior bondholders cannot be burnt because they have the same legal standing as depositors, is that actually true?  I can see how it might be almost true, but the fact remains that depositors have the additional security blanket of a state guarantee of deposits up to 100K, hence unguaranteed bondholders could still be told that they're getting 25c in the euro and they'd not have much choice but to accept that.  Is there 26 Bn in unguaranteed senior bonds to be rolled over into sovereign debt this year?  We could easily turn that into 6.5BN, I suppose the question is, who are the bondholders?  Irish pension funds?  Irish credit unions?  I don't know.

[Ulick]

There was a list of bondholders published on p.ie a few months back and from what I remember they were mostly big German investors well able to take a hit. As for them having the same legal standing as depositors, the government could pass legislation to decouple that is the will was there.

[muppet]

There was a list of bondholders published on p.ie a few months back and from what I remember they were mostly big German investors well able to take a hit. As for them having the same legal standing as depositors, the government could pass legislation to decouple that is the will was there.

Any depositor with €105,000 would be fully covered only up to €100,000. What is the problem with saying to bondholders the same applies to you?

[Hardy]

Isn't it the case that most of the bondholders have already been sorted out and the opportunity to "burn" them is gone? I heard somebody say that all that's left of bondholder exposure to the Irish banks is 16Bn of the 170-odd Bn they've borrowed. A substantial proportion of those are Irish institutions, holding Irish taxpayers' money. Even if you gave them all a 50% haircut you'd only be saving, in current expenditure terms, a few hundred million in interest payments of the multi billions of interest per annum we're exposed to.

At this stage, burning the bondholders would cost us more in bad will than it would save in expenditure. The time to burn them was at the time of the guarantee in which they should not have been included.

[Bogball XV]

Isn't it the case that most of the bondholders have already been sorted out and the opportunity to "burn" them is gone? I heard somebody say that all that's left of bondholder exposure to the Irish banks is 16Bn of the 170-odd Bn they've borrowed. A substantial proportion of those are Irish institutions, holding Irish taxpayers' money. Even if you gave them all a 50% haircut you'd only be saving, in current expenditure terms, a few hundred million in interest payments of the multi billions of interest per annum we're exposed to.

At this stage, burning the bondholders would cost us more in bad will than it would save in expenditure. The time to burn them was at the time of the guarantee in which they should not have been included.

Just watched VB show, it seems that there's still 35bn unguaranteed, but the decision has been made that it would be counter-productive to burn them.  I see that point to an extent, but still, the reason these guys got a above the then sovereign rate was because of the additional risk of default, it's how capitalism is supposed to work.  If the lenders had done their homework properly, they'd not be in this situation.

[Declan]

Well I've heard nothing from him yet that indicates any different

Well there you go - same message different face. So our obligation to ECB Germany and France is more important than to the citizens. What part of unsustainable debt do these people not understand. Great little country alright. Listening to Honohan last night just confimed everything. Contagion, contagion is their big fear and we still cant understand that the whole system is fecked

[balladmaker]

Who is going to want to buy AIB ?
The bank has a huge portfolio of tracker mortgages that are loss making and that is even before talking about defaults.
As long as house prices keep falling nobody is going to want to buy the banks.

It is like trying to sell a herd of cattle when the marts are all closed due to an extended dose (coming on 3 years)  of Foot and Mouth  and nobody is buying.

Add the fact that most of the animals are sick and you the farmer owe your father in law 100K  that you borrowed to buy the stock
when prices were high and all the marts were open.

You could sell the herd for 2K in the current market via Facebook  but how are you going to repay the father in law? 
And who should bear the loss ?   

I think you missed the point slightly Seafoid.  McWilliams suggestion to 'try' to sell the banks was to illustrate that no one would ever touch them.  So if no other bank would buy them, why the hell should the Irish tax payer be expected to.  This is car crash viewing at it's worst with the ordinary Irish taxpayer stuck in the driving seat.  Those with vested interests in Germany and France must be quietly rubbing their hands.

[rrhf]

Can they bring the queens visit forward?