Ratings Agencies make FF Pay for their failure to be upfront

ei.sdraob

@Sand, politicians are incapable of going against the popular grain (even if the average person is in cookoo land) and producing cuts, however badly needed

so by this stage bankruptcy and default are all but inevitable

the question is not if, but when me thinks


its not like were the first country to go down the path of runaway debt, i just hope people dont act surprised when the **** hits the fan, tho then again the recent developments were barely mentioned in the media so alot of people might be completely unaware about the latest corner we turned

unit 1

markiemark2005 wrote: »

I thought we have turned the corner?

It's a hairpen bend.:mad:

danbohan

ei.sdraob wrote: »

@Sand, politicians are incapable of going against the popular grain (even if the average person is in cookoo land) and producing cuts, however badly needed

so by this stage bankruptcy and default are all but inevitable

the question is not if, but when me thinks


its not like were the first country to go down the path of runaway debt, i just hope people dont act surprised when the **** hits the fan, tho then again the recent developments were barely mentioned in the media so alot of people might be completely unaware about the latest corner we turned

would this be the shssttt you had in mind ?

http://theautomaticearth.blogspot.com

1. Deflation is inevitable due to Ponzi dynamics (see From the Top of the Great Pyramid)
2. The collapse of credit will crash the money supply as credit is the vast majority of the effective money supply
3. Cash will be king for a long time
4. Printing one's way out of deflation is impossible as printing cannot keep pace with credit destruction (the net effect is contraction)
5. Debt will become a millstone around people's necks and bankruptcy will no longer be possible at some point
6. In the future the consequences of unpayable debt could include indentured servitude, debtor's prison or being drummed into the military
7. Early withdrawls from pension plans will be prevented and almost all pension plans will eventually default
8. We will see a systemic banking crisis that will result in bank runs and the loss of savings
9. Prices will fall across the board as purchasing power collapses
10. Real estate prices are likely to fall by at least 90% on average (with local variation)
11. The essentials will see relative price support as a much larger percentage of a much smaller money supply chases them
12. We are headed eventually for a bond market dislocation where nominal interest rates will shoot up into the double digits
13. Real interest rates will be even higher (the nominal rate minus negative inflation)
14. This will cause a tsunami of debt default which is highly deflationary
15. Government spending (all levels) will be slashed, with loss of entitlements and inability to maintain infrastructure
16. Finance rules will be changed at will and changes applied retroactively (eg short selling will be banned, loans will be called in at some point)
17. Centralized services (water, electricity, gas, education, garbage pick-up, snow-removal etc) will become unreliable and of much lower quality, or may be eliminated entirely
18. Suburbia is a trap due to its dependence on these services and cheap energy for transport
19. People with essentially no purchasing power will be living in a pay-as-you-go world
20. Modern healthcare will be largely unavailable and informal care will generally be very basic
21. Universities will go out of business as no one will be able to afford to attend
22. Cash hoarding will continue to reduce the velocity of money, amplifying the effect of deflation
23. The US dollar will continue to rise for quite a while on a flight to safety and as dollar-denominated debt deflates
24. Eventually the dollar will collapse, but that time is not now (and a falling dollar does not mean an expanding money supply, ie inflation)
25. Deflation and depression are mutually reinforcing in a positive feedback spiral, so both are likely to be protracted
26. There should be no lasting market bottom until at least the middle of the next decade, and even then the depression won't be over
27. Much capital will be revealed as having been converted to waste during the cheap energy/cheap credit years
28. Export markets will collapse with global trade and exporting countries will be hit very hard
29. Herding behaviour is the foundation of markets
30. The flip side of the manic optimism we saw in the bubble years will be persistent pessimism, risk aversion, anger, scapegoating, recrimination, violence and the election of dangerous populist extremists
31. A sense of common humanity will be lost as foreigners and those who are different are demonized
32. There will be war in the labour markets as unempoyment skyrockets and wages and benefits are slashed
33. We are headed for resource wars, which will result in much resource and infrastructure destruction
34. Energy prices are first affected by demand collapse, then supply collapse, so that prices first fall and then rise enormously
35. Ordinary people are unlikely to be able to afford oil products AT ALL within 5 years
36. Hard limits to capital and energy will greatly reduce socioeconomic complexity (see Tainter)
37. Political structures exist to concentrate wealth at the centre at the expense of the periphery, and this happens at all scales simultaneously
38. Taxation will rise substantially as the domestic population is squeezed in order for the elite to partially make up for the loss of the ability to pick the pockets of the whole world through globalization
39. Repressive political structures will arise, with much greater use of police state methods and a drastic reduction of freedom
40. The rule of law will replaced by the politics of the personal and an economy of favours (ie endemic corruption

SkepticOne

I see the optimists have arrived.

danbohan

SkepticOne wrote: »

I see the optimists have arrived.[/QUOTE

haha , yea , mind you we had them up until 2008 and they did real good job !

flutered

i was on a little r & r in the sunny south east recently, i met up with a canadian guy, during our conversation the world economy came up, i was interested on what an outsiders view of ireland would be, he said that we would have trouble with serviceing our debt, that we would have to pay higher interest rates, after much chat he came up with the following, you have a prime minister who is an obese overweight beer swilling nicotine addict, his deputy is an obese person who one gets the impression that likes the sauce, your tresuary minister is unfortunatly a cancer victim, he said in my country they would not be allowed to run a little league. dont shoot me i am only recounting a conversation.

ei.sdraob

SkepticOne wrote: »

I see the optimists have arrived.

ei.sdraob

This is the brutal disaster waiting to unfold, which the banks are actively ignoring but which will necessitate, in some cases, writedowns of 90pc or more. Unfortunately, there isn't much hope that Mr Honohan's estimate of a 50pc writedown will materialise across the Nama portfolio -- the truth will be far worse.

Even with the cuts to capital expenditure and the difficult budgets since the crisis began, the Government has made no progress in reducing the structural deficit, once the increased cost of servicing the rising national debt is factored in, as well as the cost of bank bailouts

Short of a miracle, there is not enough capacity in the Irish economy to pay for things to which people have become accustomed. Public-sector pay, retirement benefits, universal heath care, free education, social security and welfare benefit are all at levels that are completely unsustainable. Our model is bust.

For government debts to be stabilised at manageable levels, taxes, entitlements, public-sector pay and all government services will have to be reformed in quite dramatic ways, involving a combination of more taxes and reduced entitlements.

Quality of life, as we have known it, must change as disposable income collapses. As in Greece, the mathematics won't allow us to maintain the status quo, but changing the behaviour of vested interests is always problematic. So this is the end of the beginning -- not the beginning of the end -- as the severity of change will prove wrenching.

The next time a public-sector union wishes to defend its pay, perhaps it might tell us where to make the cuts instead -- old-folks' pensions, social welfare or health care? Make up your mind.

http://www.independent.ie/opinion/analysis/end-of-the-beginning-as-wrenching-changes-kick-in-2315957.html

is the media finally coping on to the budget math not working out?

Thanks to the enormous loss of tax revenue caused by the recession, the spending commitments of the Government during the boom have become unsustainable.

I disagree with above somewhat, the bubble would have burst sooner or later, having it coincide with a global recession didnt help things of course but as IMF have put it "the country has permanently lost some of its income", income that was based on once off property boom receipts, and against which the public sector and welfare got benchmarked up

Lorenzo Bini Smaghi (ECB Executive Board member) wrote:

“I have the impression that many people, whether in the business sector, the financial markets, or in academic and political circles, think that the post-crisis world will be quite similar to the pre-crisis one in 2006-2007. In other words, they expect the economic recovery to bring us back to where we were before the crisis,”

“My feeling is that those who think like that are deluding themselves”

Nody

Article from ei.sdraob wrote:

The next time a public-sector union wishes to defend its pay, perhaps it might tell us where to make the cuts instead -- old-folks' pensions, social welfare or health care? Make up your mind.

All I expect to hear is that:

a) It is not their fault
b) It should be taken from the rich people
c) The bankers/banks should pay

johnnyskeleton

Laminations wrote: »

It's total c0ck,

We apparently bailed out the banks (especially Anglo) so as to save our sovereign credit rating- still not sure how private bank mismanagement and excessive risk could have reflected badly on sovereign borrowing, in fact I'm sure bond holders invested in the excessively risky Anglo to get excessively large returns- but now our sovereign credit rating is being dragged down by the bailout that was intended to protect it.

Not quite. The official belief was that the Irish credit rating was immovable and that we could simply let the Irish banks coast along with our cheap as German chips interest rates for as long as they needed to sort out a few minor blips.

The minority and much despised view at the time was that the scale of the problems in the banking sector were so vast that the choice was to save the banking sector or save the country because we could not do both. Our government opted to save the banking sector.

So bailing out the banks wasn't intended to protect the sovereign credit rating but was instead intended to bolster the individual credit ratings of the Irish banks.

johnnyskeleton

Scarab80 wrote: »

Irish banks have been buying up soverign debt?? I think you are confusing direct government injections of capital with participation in bond auctions.

The plan was that the government gives them money which the banks lend back to the government. The rate charged by the government lent money was reasonable, but only had to be paid if the bank made a profit. So until the banks returned to profitability, the government lent them money created by borrowing money from the banks who borrowed it from the government in the first place and paid interest to the banks for the pleasure. The snake eating its own tail.

This three card trick would have been perfect, but for the pesky ECB saying that if the banks don't pay interest to the government, then the government takes more ownership of the banks. Now the government is being forced to buy up more and more of the banks and borrow more and more money to do so, which they in turn rely on the banks to pay to them but the banks are starting to run a bit dry.

The_Thing

The next time a public-sector union wishes to defend its pay, perhaps it might tell us where to make the cuts instead -- old-folks' pensions, social welfare or health care? Make up your mind.

As a government employee I would suggest the cuts be made in social welfare - I don't care a damn what happens to all those unmarried mothers and the children they've had by God only knows how many fathers.

MrDarcy

There is a pattern starting to emerge here, I don't know if anyone else can see it, but this is what I see happening...

2004, 2005, 2006, 2007:

Irish people are saying: "This housing boom is not sustainable, we don't want to be a part of this madness, most of us can't afford to buy a house now, please listen to us and slow this sh*t down, it isn't sustainable, we are losing and big business interests like banks, developers and builders are winning, this is not what we elected you to deliver to us, it simply is not fair"...

Government replies back: "No, you have it wrong, this time is different, we have everything under control, either get behind us on this and you and your spouse work harder to be able to afford a house or else F*CK off talking the place down, go off and commit suicide"...

Outcome: We have been proven entirely right in relation to what we thought at the time, now we are going to end up with a bill of around 80 billion Euro to remind us of just how accurate and right we were on the property market.

2008, 2009, 2010:

Irish people are saying: "We can't afford to keep forklifting pallets of cash into Anglo and the other monetary skips that are are the Irish banks, we don't have 80 Billion Euro to give these failed businesses and even if we did, why should we hand it over??? Please stop forklifting our hard earned money into these institutions, we have to borrow it all and we, WE the taxpayers have to pay it all back, our great grandchildren who are not even born yet are going to end up saddled with this sh*t..."

Government replies back: "Paddy you're talking through your arse again. Trust us, yeah maybe we should have listened to you on the property market, but this time, IT REALLY IS DIFFERENT, you just can't see it but from where we are standing, we can see that it's different, so just trust us and get back to work, we need you to work harder for us now, leave the managing up to us, just get back on the threadmill.

Outcome: So much money has now been borrowed and continues to be borrowed to plough into 4 failed businesses, that the cost of debt for the whole nation is starting to spiral out of control and it's looking like access to financial markets will soon be closed to the state.

Freiheit

Matt Cooper wrote what is probably an accurate but sadly very depressing article on the Irish economy in the Sunday Times today. Figures that a Greek like bailout is necessary and that Ireland is probably already bankrupt. Says words to the effect that 'the Irish government done all it could but it couldn't do much', imlying that outsides forces are going to have to do it for them. Sad but this nation is going to be on prozac for a generation.

Idbatterim

S & P should have downgraded our credit rating to "Junk" status the minute the government came out and announced that they had agreed to not further cut or interfere with public sector pay rates as part of the next budgetary process.

SPOT ON! I agree that cuts should start at the top, but IMHO, half of workers paying no tax, is nearly as big a joke as any of the other current issues! As far as im concerned for the vast majority if us, i.e if your a private sector worker or unemployed and want to get back to work, the EU or IMF bailing us out, will be a blessing! as I private sector worker, im not prepared to work my balls off to keep a large amount of people in this country living to a standard that is a few leagues north of where they should be!

jonsnow

The_Thing wrote: »

As a government employee I would suggest the cuts be made in social welfare - I don't care a damn what happens to all those unmarried mothers and the children they've had by God only knows how many fathers.

Charming.Well as a private sector worker ie one of the people who pays the bills.I,d much rather my taxes go towards paying the dole for the unemployed (single moms included) the vast vast majority who were once private sector workers who paid for your benchmarking increases,perks and goldplated pension.I might be joining their ranks some day soon.You however obviously have no such concerns.

danbohan

jonsnow wrote: »

Charming.Well as a private sector worker ie one of the people who pays the bills.I,d much rather my taxes go towards paying the dole for the unemployed (single moms included) the vast vast majority who were once private sector workers who paid for your benchmarking increases,perks and goldplated pension.I might be joining their ranks some day soon.You however obviously have no such concerns.

You however obviously have no such concerns


he might just need to have when the IMF/EU are caling the shots not cowen and co in very near future

The_Thing

jonsnow wrote: »

Charming.Well as a private sector worker ie one of the people who pays the bills.I,d much rather my taxes go towards paying the dole for the unemployed (single moms included) the vast vast majority who were once private sector workers who paid for your benchmarking increases,perks and goldplated pension.I might be joining their ranks some day soon.You however obviously have no such concerns.

I think you've deliberately missed the point I was trying to make in that No One - be they private sector or public sector - should pay a cent for somebody else's children and most especially when those children are the result of a drunken fling.

he might just need to have when the IMF/EU are caling the shots not cowen and co in very near future

I honestly have no fear of the IMF - I am entirely debt free
I own my own house and land. I have my own well which means I'll not have to pay Gormley's water tax. The most I ever borrowed from a bank (TSB) was £4,000 to buy my first car. Since then the most I owed - €1,500 - was on my credit card when I got some building materials for my house. The last holiday abroad I had was about 4 years ago when I went to Australia.

If all else goes belly up I'll just go back to farming full time.

thebman

hobochris wrote: »

The stench from Anglo is only getting stronger.

I wonder when we will find out the full story behind why FF are so intent on not letting this bank go to the wall like it should.

One need only look at who invests in our political parties through political donations and also where our politicians choose to invest their own pay and ill claimed expenses to piece together that puzzle.