Cost of Irish debt falls

Scofflaw · 05-10-2009 07:08PM #1

Initial economic fallout from the Yes vote:

LONDON, Oct 5 (Reuters) - The Irish 10-year government bond yield spread over euro zone benchmark German Bunds tightened by 6 basis points on Monday, while the cost of protecting Irish debt against default dropped.

Meanwhile, the 10-year Greek government bond yield spread over Bunds also narrowed by 6 basis points.

These moves followed Irish voters endorsement of the European Union's Lisbon Treaty and a widely-expected change of government following Greek elections at the weekend.

Five-year credit default swaps (CDS) on Irish government debt contracted to 130.5 basis points from 138.5 bps on Friday, according to credit monitor from CMA DataVision.

It means the cost falls to 130,500 euros to protect 10 million euros-worth of Irish government bonds.

The 10-year Irish/Bund spread was last seen at 159 bps, retaining their position as the euro zone's highest-yielding sovereign debt, according to Reuters data.

Source

This was widely regarded as predictable - part of the effects of a Yes vote confirming Ireland's long-term intentions.

cordially,
Scofflaw

Sam Vimes · 05-10-2009 07:13PM

But but but, there wasn't an article in the treaty to say that would happen, I thought Ireland's acceptance of the treaty had nothing to do with the economy

marco_polo · 05-10-2009 07:14PM

Scofflaw wrote: »

Initial economic fallout from the Yes vote:

Source

This was widely regarded as predictable - part of the effects of a Yes vote confirming Ireland's long-term intentions.

cordially,
Scofflaw

As was indeed predicted by a number of our leading economists, but sure what would they know about it?

Robbo · 05-10-2009 07:15PM

Scofflaw wrote: »

This was widely regarded as predictable - part of the effects of a Yes vote confirming Ireland's long-term intentions.

You mean Declan Ganley misled us when he said that the bond spread wouldn't change?

Next you'll be telling me that's not a real Tuam accent he has...

BlitzKrieg · 05-10-2009 08:05PM

when will we know if it will continue to narrow?

wylo · 05-10-2009 08:05PM

I hope this kinda stuff makes bigger news, there seems to be a post lisbon no campaign spreading across the internet, mainly stemming from Lenihans comments about the treaty not being a job creation program. He really shouldn't have put it like that.
I was labeled as a "sheep" for "buying into the lies" today in work by a few no voters.

Wheely · 05-10-2009 08:27PM

But where are the ACTUAL jobs........?

MikeC101 · 05-10-2009 08:34PM

The problem is, that those now convinced that everyone who voted yes did so in the belief that suddenly we'd hit full employment are utterly sure it could only have been meant in that context.

They are absolutely not going to accept anything as evidence of a yes vote to Lisbon contributing to a better economic climate, which I thought it was fairly obvious the "Yes to Jobs" posters meant. I will point out I didn't like those posters, nor did I vote yes for the "jobs" reason.

When you see stuff posted like "Yes voters - where are all the jobs?", you know there is absolutely no point in trying to get across the idea of improved investor confidence, or scary notions like "bond yield spreads", which is quite possibly voodoo of some sort.

meglome · 05-10-2009 08:59PM

MikeC101 wrote: »

The problem is, that those now convinced that everyone who voted yes did so in the belief that suddenly we'd hit full employment are utterly sure it could only have been meant in that context.

They are absolutely not going to accept anything as evidence of a yes vote to Lisbon contributing to a better economic climate, which I thought it was fairly obvious the "Yes to Jobs" posters meant. I will point out I didn't like those posters, nor did I vote yes for the "jobs" reason.

When you see stuff posted like "Yes voters - where are all the jobs?", you know there is absolutely no point in trying to get across the idea of improved investor confidence, or scary notions like "bond yield spreads", which is quite possibly voodoo of some sort.

The annoying thing is in the run-up to the vote many of us spelt out several times that 'Yes for jobs' did not mean immediate jobs, nor was it a promise of jobs. The same with 'yes for the economy. etc. To have to repeat the same things again and again after the vote was even worse. I wouldn't mind but many of the people doing the whining about it were involved in the earlier discussions. They're either being purposefully obtuse or they have very bad memories.

Wheely · 05-10-2009 09:01PM

MikeC101 wrote: »

The problem is, that those now convinced that everyone who voted yes did so in the belief that suddenly we'd hit full employment are utterly sure it could only have been meant in that context.

They are absolutely not going to accept anything as evidence of a yes vote to Lisbon contributing to a better economic climate, which I thought it was fairly obvious the "Yes to Jobs" posters meant. I will point out I didn't like those posters, nor did I vote yes for the "jobs" reason.

When you see stuff posted like "Yes voters - where are all the jobs?", you know there is absolutely no point in trying to get across the idea of improved investor confidence, or scary notions like "bond yield spreads", which is quite possibly voodoo of some sort.

Sorry Mike......maybe it wasn't clear. I was being sarcastic. My bad. I was not surprised to wake up this morning and hear that 400,000 ACTUAL LISBON jobs had, in fact, not been created.

MikeC101 · 05-10-2009 09:06PM

Wheely wrote: »

Sorry Mike......maybe it wasn't clear. I was being sarcastic. My bad. I was not surprised to wake up this morning and hear that 400,000 ACTUAL LISBON jobs had, in fact, not been created.

Not directed at you Wheely, I had the post typed out before you even posted yours!

Moreso at the staggering amount of people (I assume No voters) who seem convinced the only reason anyone voted Yes was based on the "Yes to Jobs" poster.

Dob74 · 05-10-2009 09:10PM

Sam Vimes wrote: »

But but but, there wasn't an article in the treaty to say that would happen, I thought Ireland's acceptance of the treaty had nothing to do with the economy

Lets check out the state of the country in a few years. Markets move daily, but in a few years we will still be in it up to our necks with no way out.
Looking forward to all the b;tching when the ecb rises interest rates. What do u think 1,2,3 months time?

meglome · 05-10-2009 09:17PM

Dob74 wrote: »

Lets check out the state of the country in a few years. Markets move daily, but in a few years we will still be in it up to our necks with no way out.
Looking forward to all the b;tching when the ecb rises interest rates. What do u think 1,2,3 months time?

The ultimate reason for getting out of this mess will be our government which hopefully isn't the current one. Although I don't care who gets us out of this mess as long as it's done. But the Yes vote to Lisbon will help.

Martin 2 · 05-10-2009 09:53PM

Very good news, in fact most of the forecasts weren't so much that a Yes would lower bond yield spreads but that a No could raise them by up to 100bp, link

Let's hope it continues to fall.

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rumour · 05-10-2009 09:54PM

Scofflaw wrote: »

Initial economic fallout from the Yes vote:

Source

This was widely regarded as predictable - part of the effects of a Yes vote confirming Ireland's long-term intentions.

cordially,
Scofflaw

Any good news has to be welcomed, lets hope it continues. I'm not in a glass half full mood at the moment though.

the flananator · 05-10-2009 09:59PM

Scofflaw wrote: »

Initial economic fallout from the Yes vote:

Source

This was widely regarded as predictable - part of the effects of a Yes vote confirming Ireland's long-term intentions.

cordially,
Scofflaw

For plebs like myself, could someone explain to me what this actually means?

Thanks.

rumour · 05-10-2009 09:59PM

Dob74 wrote: »

Lets check out the state of the country in a few years. Markets move daily, but in a few years we will still be in it up to our necks with no way out.
Looking forward to all the b;tching when the ecb rises interest rates. What do u think 1,2,3 months time?

for your info I suspect we have a bit longer to wait before we're out of the woods.http://news.xinhuanet.com/english/2009-10/02/content_12172204.htm

ei.sdraob · 05-10-2009 10:01PM

the flananator wrote: »

For plebs like myself, could someone explain to me what this actually means?

Thanks.

currently the government is borrowing 400million+ a week to keep the show going

now they have to pay less interest on any new debts they take on

less interest means less money being wasted, money that would have to be collected via taxation at some point

hope thats clear? and yes do imagine what interest on 400mill a week looks like

A NO would have created uncertainty, uncertainty => more risk, more risk => higher interests, higher interests => more raping of taxpayers

Plotician · 05-10-2009 11:09PM

forget the interest, I'm trying to imagine the 400 million!

Does anyone know how long it's anticipated we'll be borrowing at this level?

Oh, and re the promise of jobs, FG were the main culprits on that one, starting with Enda himself! (and the odd ffer who probably were'nt referring to the hymm sheet)

ei.sdraob · 05-10-2009 11:20PM

Plotician wrote: »

forget the interest, I'm trying to imagine the 400 million!

Does anyone know how long it's anticipated we'll be borrowing at this level?

Oh, and re the promise of jobs, FG were the main culprits on that one, starting with Enda himself! (and the odd ffer who probably were'nt referring to the hymm sheet)

if you cut all of welfare (20billion+) and some public sector cuts (lets say 5 billion somehow is cut)

we would still need to borrow! the deficit this year is approaching 30billion

the interest we pay is very important

alot of people stuck with mortgages now on negative equity would relate to low interest rates being a silver lining

this is the same except on MUCH LARGER SCALE

a YES vote made a bad situation slightly better, which is much better than the alternative

Sir Oxman · 05-10-2009 11:30PM

Dob74 wrote: »

Lets check out the state of the country in a few years. Markets move daily, but in a few years we will still be in it up to our necks with no way out.
Looking forward to all the b;tching when the ecb rises interest rates. What do u think 1,2,3 months time?

I hope the OP's post was intentioned as part of a realistic, longterm outlook for our lovely, Banana Republic. (due to the YES vote, of course)

Sir Oxman · 05-10-2009 11:31PM

ei.sdraob wrote: »

if you cut all of welfare (20billion+) and some public sector cuts (lets say 5 billion somehow is cut)

we would still need to borrow! the deficit this year is approaching 30billion

the interest we pay is very important

alot of people stuck with mortgages now on negative equity would relate to low interest rates being a silver lining

this is the same except on MUCH LARGER SCALE

a YES vote made a bad situation slightly better, which is much better than the alternative

Which was what, exactly?

ei.sdraob · 05-10-2009 11:37PM

gambiaman wrote: »

Which was what, exactly?

more uncertainty hence higher interest on our new loans

someone had a link earlier

a NO vote would have been another economic nail in a deep coffin

P. Breathnach · 05-10-2009 11:39PM

gambiaman wrote: »

Which was what, exactly?

Getting worse.

K-9 · 05-10-2009 11:40PM

gambiaman wrote: »

Which was what, exactly?

The opposite to the OP.

Sir Oxman · 06-10-2009 12:06AM

P. Breathnach wrote: »

Getting worse.

I suggest you contribute (however badly) rather than be a mealy-mouthed sycophant jabbering a sloppey aside.

more uncertainty hence higher interest on our new loans

someone had a link earlier

a NO vote would have been another economic nail in a deep coffin

You are surmising.
It is only Monday after all.

Sir Oxman · 06-10-2009 12:07AM

K-9 wrote: »

The opposite to the OP.

And you know this how?

Oh boy, wait till the big **** hits the fan.

K-9 · 06-10-2009 12:22AM

gambiaman wrote: »

And you know this how?

Oh boy, wait till the big **** hits the fan.

And a No vote would have changed this how?

yep, I Know a No vote would cost us money.

P. Breathnach · 06-10-2009 12:37AM

gambiaman wrote: »

I suggest you contribute (however badly) rather than be a mealy-mouthed sycophant jabbering a sloppey aside...

Don't mistake me for mealy-mouthed simply because I don't have much regard for nonsense.

Plotician · 06-10-2009 12:40AM

I think there's a risk any spin-off economic benefit from the yes result could be short-lived. Unless we start to show strong strategic policies that steer a clear path towards economic improvement any lift in international confidence could be quickly undermined.

The government is banking on NAMA and a severe budget, the public sector is lining up to do battle - its a tightrope act to say the least.

The inference during the referendum was 'yes for jobs' 'yes for the economy', doesn't matter how anyone defines that here we all know how the guy in the street interpreted it.

Problem is Lisbon in the short term could all prove fairly irrelevant unless we provide our own advantages for attracting foreign investment.

I suspect we're all going to feel a little lonely here in Ireland for a while.

Thomas_S_Hunterson · 06-10-2009 12:54AM

the flananator wrote: »

For plebs like myself, could someone explain to me what this actually means?

Thanks.

You can now get a price of 74 to 1 if you think Ireland's going to go busto, as opposed to 70 to 1 before the spread narrowed :pac::P

Cost of Irish debt falls

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