It is no longer a question of whether Ireland will go bust, but when.

Slippers 2

Morgan Kelly in the IT

jimmycrackcorm

Almost as entertaining as David mcWilliams

Slippers 2

You don't think he might be on to something?

baaaa

I believe he's quite respected,in a different league to McWilliams.

Slippers 2

Richard Douthwaite in the same 'not if, when' vein: www.boards.ie/vbulletin/showthread.php?p=65709054#post65709054

noodler

It must be remembered that when these bonds were issued they had no government guarantee, and the institutions that bought them did so in full knowledge that they could default, and charged an appropriate rate of interest to compensate themselves for this risk.

This is the crux of the issue. I have talked to 2 or 3 economists over the past 3 months (Irish ones I grant you) and there is universal agreement over this.


The point that Irish banks are going to have borrowing troubles in the very near future whether or not we 'burn' the bondholders is also a good point.

However, I wonder if we have passed a point of no return here: I mean they bonds were never taxholder liabilities and the argument is that the markets would have shown us little long-term ill-effects if we had not gaurenteed them in 2008. However, does gaurenteeing them for two years and then backing out have the same effect?

I really hope the Government takes some action against the bondholders when revising the gaurentee.

Chipboard

jimmycrackcorm wrote: »

Almost as entertaining as David mcWilliams

You and the Dept of Finance are the only parties who seem to disagree with Morgan Kelly and the Dept's arguments are based on nothing more than quoting Messrs Holohan and Elderfield.

I'd be interested to hear your argument.

willietherock

could someone explain what the debt to equity swap he proposes would involve?

Flamed Diving

http://en.wikipedia.org/wiki/Debt_restructuring#Debt-for-Equity_Swaps

willietherock

So basically the banks and bondholders agree a deal where by the banks issues a load of shares equal to agreed % of bond value thereby
1, removing bonds
2. destroying value of original shareholders value.

What are the negatives from the government's and banks' prospective?

noodler

Almost purely international reputation.

Would investors blame the country for the fact they are being burnt on the bonds etc

betonit

if "when" happens what happens to deposits in banks, post office savings certs/bonds, prize bonds etc? Were deposits in Greece affected?

Slippers 2

Greece hasn't defaulted yet.