Bailout megathread.

ei.sdraob

Scofflaw wrote: »

...the rumour that the Irish government is currently in bailout talks isn't confirmed by that. Assuming, that is, that we're operating to some higher standard than that of the Spanish Inquisition.

Why else would they be talking with "germans" if its not to get money one way or another

Scofflaw

ei.sdraob wrote: »

Why else would they be talking with "germans" if its not to get money one way or another

Why confused? Ireland is currently on the front line of euro area instability, and the markets are producing a rumour a day that the IMF have landed, the EU have landed, that we're in immediate need of a bailout, that we're not in need but are being asked to get one, that the state has only a week's money, has only 60 days money, has plenty of money but lost it down the couch in the Dáil bar...what's not to talk about?

As I've said, if the Irish government isn't talking to the other Member States about the upcoming budget, the possibility of the government falling, the current situation of our state-guaranteed banks and the question of our current reserves, they'd be being seriously derelict. What we still don't have, despite the swirling rumours, is some sort of substantiation of the idea that we are actually in there getting a bailout, and (for example of a further rumour taken as gospel) that the price of the bailout is that we commit seppuku by raising our CT rates.

Given the cast of players is currently politicians, "financial analysts", and journalists, I'm inclined to believe none of them any more than the rest of them, if you see what I mean. It's entirely possible that what is said to be happening is happening, but I don't regard yet more people repeating it as some sort of proof.

cordially,
Scofflaw

ninty9er

dan_d wrote: »

Excuse my ignorance, but can you explain what this has to go with anything?

Oops, forgot to add the commentary

Ireland is a nation of cognitive dissonance. IMF at the door but also this truth

ei.sdraob

Scofflaw wrote: »

Why confused? Ireland is currently on the front line of euro area instability, and the markets are producing a rumour a day that the IMF have landed, the EU have landed, that we're in immediate need of a bailout, that we're not in need but are being asked to get one, that the state has only a week's money, has only 60 days money, has plenty of money but lost it down the couch in the Dáil bar...what's not to talk about?

cordially,
Scofflaw

I don't think its the "markets" producing these rumours but someone in our govt/DOF
Since these "rumours" surfaced then % have fallen. Just what Brian's needed.


This whole thing is now following in Greek footsteps

ATHENS - Bloomberg

'We are not expecting anyone to come to our rescue,' says Greek Finance Minister George Papaconstantinou.

Thursday, January 21, 2010

Scofflaw

ei.sdraob wrote: »

I don't think its the "markets" producing these rumours but someone in our govt/DOF
Since these "rumours" surfaced then % have fallen. Just what Brian's needed.

Which would make them rumours with a different purpose than if they had been started by the markets, but still rumours - and even that idea of yours is a further supposition on top of the rumour...

ei.sdraob wrote: »

This whole thing is now following in Greek footsteps

Thursday, January 21, 2010

Which would give us a timescale of roughly February at this point, if the rumours are correct. The problem with making that sort of deduction, though, is that it ignores the case of rumours that aren't the case:

Spain has called on the European Commission to publish results of stress tests on the main European banks to dispel rumours that it needs a Greek-style bailout, it was reported today.

That was back in May, when the rumour that Spain would need a bailout was doing the rounds. One can't simply point to the Greeks wrongly denying rumours of their bailout without accepting that the Spanish had to do the same, but were right.

I have to say it again - rumours are rumours. If one believes them, one is welcome to act on them, but one is not entitled to accord them the status of objective truth on the basis of that preference. What we have so far is no more than rumour - it could be true, like the rumours about the Greek bailout, or it could be false, like the rumours about the Spanish one.

cordially,
Scofflaw

jank

http://www.politics.ie/economy/142685-bbc-irish-gov-confirm-ongoing-contacts-light-current-market-conditions-5.html#post3168424

Daily Telegraph also reporting this.

What the **** are RTE doing? Seriously!! Where is the inside reporting of the real story. Charlie Bird my ass! Seems the foreign media know more of whats going on than anyone in D4 or that they have been slipped a note to say "Shut the **** up" Heads should roll over this debacle that has been going on the last 3 years. Disgraceful stuff. All they seem to do is wait for government official to give them the "official" line.

Mister men

jank wrote: »

http://www.politics.ie/economy/142685-bbc-irish-gov-confirm-ongoing-contacts-light-current-market-conditions-5.html#post3168424

Daily Telegraph also reporting this.

What the **** are RTE doing? Seriously!! Where is the inside reporting of the real story. Charlie Bird my ass! Seems the foreign media know more of whats going on than anyone in D4 or that they have been slipped a note to say "Shut the **** up" Heads should roll over this debacle that has been going on the last 3 years. Disgraceful stuff. All they seem to do is wait for government official to give them the "official" line.

Orders from above.

Scofflaw

Mister men wrote: »

Orders from above.

Could well be - I'm sure RTE could have been prevailed upon 'not to spread damaging rumours in the national interest'. Mind you, they could have decided that themselves - and it's not a restraint that would operate on any foreign media. Are other Irish media carrying it, though?

Makes the idea that the rumours were started by the DOF all the more unlikely, mind you.

cordially,
Scofflaw

Cavehill Red

Game over.

We should run for the IMF now. But we won't. Instead the Brian Bunch will hand over our sovereignty to Brussels tonight.

LookingFor

jank wrote: »

http://www.politics.ie/economy/142685-bbc-irish-gov-confirm-ongoing-contacts-light-current-market-conditions-5.html#post3168424

Daily Telegraph also reporting this.

Said article has been posted to their site now:

http://www.telegraph.co.uk/news/worldnews/europe/ireland/8133074/Ireland-fights-to-stave-off-77-billion-bail-out.html

Ireland was fighting for its political and economic independence last night as secret negotiations began in Brussels over an international bailout of up to £77billion.

Talks went on into the night as Irish ministers insisted that they could manage their stricken finances but other Governments expressed concerns that an emergency bail-out may be required as early as today.

...

Sources confirmed that Irish and other eurozone governments were holding “frantic” talks with officials from the European Central Bank and the EU throughout the weekend. “Things are moving quickly,” said an Irish official as EU officials worked late into the night.

The key period, said officials, would be the reaction of the international market today to Irish and other eurozone bonds, especially Portuguese and Spanish government debt. Any sign of panic will lead to fears of so-called market contagion spreading from Ireland to Portugal, Spain and the wider eurozone. This is likely to lead to Ireland coming under pressure to sign up to the bail-out.

A related article from Friday:

Ireland has been betrayed by its EU 'friends’

Paints a picture of a country that's done everything that could be expected of it, voluntarily and in advance, yet that has been 'betrayed' by loud mouths in Europe who've sewn uncertainty in the market (i.e. Merkel and Sarkozy re. bondholders taking some pain on bad debt post-2013).

Scofflaw

Paints a picture of a country that's done everything that could be expected of it, voluntarily and in advance, yet that has been 'betrayed' by loud mouths in Europe who've sewn uncertainty in the market (i.e. Merkel and Sarkozy re. bondholders taking some pain on bad debt post-2013).

Given that the Telegraph happily repeated such rumours, and that the damage done by Merkel's comments was based on misinterpreting them in the first place, that's pretty funny.

cordially,
Scofflaw

LookingFor

I saw this also linked on politics.ie. A fairly good overview of where things are at the moment from the New York Times.

http://www.nytimes.com/2010/11/15/business/global/15ireland.html?pagewanted=1&_r=2

Preliminary talks have already taken place on whether Ireland needs to tap outside funding, and on the size of any possible rescue package. Discussions involving E.U. ministers and senior officials continued Sunday, said one official involved in the issue. But by early Sunday evening, diplomats said, there were still no plans for any formal teleconference between the euro-zone finance ministers.

The “extreme tension that has been prevailing in the financial markets, especially concerning the ability of Ireland to achieve a sustainable fiscal path by going it alone” meant that recourse to E.U. loans “would, in our view, represent a sensible outturn,” Julian Callow and Antonio Garcia Pascual of Barclays Capital wrote in a research note Friday evening.

The economists also said they “would not expect heavy conditionality similar to the structural reforms in Greece.”

The German Finance Ministry on Sunday denied that it was pressing Ireland to accept a bailout, and it clarified that only Ireland could initiate the process of tapping E.U. rescue funds

The European Central Bank declined to comment on Sunday.

The two pools of funding were set up in May after the bailout of Greece. But the official stressed that Ireland was a very different case.

Whereas Greece needed to be rescued this year, after years of concealing the true state of its finances, Ireland had a much stronger track record in economic management. That meant it was still possible that Ireland could steady the markets by imposing tougher austerity measures.

Scofflaw

Interestingly enough, that almost sounds like there's a large camp in the financial world who would rather see a bailout than austerity, and who are doing everything they can to make that happen.

Wasn't it Goldman Sachs who said they'd like to see an IMF intervention?

cordially,
Scofflaw

th3 s1aught3r

Scofflaw wrote: »

Interestingly enough, that almost sounds like there's a large camp in the financial world who would rather see a bailout than austerity, and who are doing everything they can to make that happen.

Wasn't it Goldman Sachs who said they'd like to see an IMF intervention?

cordially,
Scofflaw

Why is the consenus that the IMF is preferable to an EU bailout ?

WIZE

what will the bailout be used for?
do we get 80 billion in one go to pay off all the debts including anglo or is it used for running the countfy etc public sector and all

rumour

I wouldn't get to excited about the sensationalist headlines.

We earn 30bn in taxes and intend to spend 50bn-6bn next year, so 14bn has to come from somewhere???

Given the markets are nearly closed to us the ecb (stabilisation fund) looks like the only option. This borrowing can always be construed as a bailout but currently thats what the government are proposing and seemingly what everyone in Ireland wants unless they are prepared to accept 20bn in cuts next year. No one is proposing we cut 20bn so why so excited.

The only thing of interest is if we are going to the ecb is cowen and co giving away our CT as we speak?

Cavehill Red

th3 s1aught3r wrote: »

Why is the consenus that the IMF is preferable to an EU bailout ?

Dunno that it's the consensus, but the IMF won't assume de facto control of our economic policies for starters. The EU will claim they won't either, but you can bet that our corporation tax and a few other things will be the next items on the agenda after cutting the cheque.

Scofflaw

WIZE wrote: »

what will the bailout be used for?
do we get 80 billion in one go to pay off all the debts including anglo or is it used for running the countfy etc public sector and all

In the case of a bailout, that would depend on what conditions were attached. If we're genuinely negotiating one now, or being pressured to take one, in advance of needing it, my concern is that the conditions attached will be insufficiently stringent not to prevent the government doing something stupid with it.

cordially,
Scofflaw

LookingFor

Scofflaw wrote: »

Interestingly enough, that almost sounds like there's a large camp in the financial world who would rather see a bailout than austerity, and who are doing everything they can to make that happen.

Wasn't it Goldman Sachs who said they'd like to see an IMF intervention?

cordially,
Scofflaw

Yeah, it seems like for the sake of certainty if not necessity, some analysts would like to see a bailout of one kind or another.

To me, I don't care as long as there aren't policy-related conditions attached. In that case it's just another loan.

However, if this government was to sacrifice any kind of sovereignty in advance of it being absolutely necessary for us (whatever about the EU, Spain, Portugal), I would be at the Dail in a heartbeat, hopefully with many others. And I've never marched for anything before.

Cavehill Red

Scofflaw wrote: »

In the case of a bailout, that would depend on what conditions were attached. If we're genuinely negotiating one now, or being pressured to take one, in advance of needing it, my concern is that the conditions attached will be insufficiently stringent not to prevent the government doing something stupid with it.

cordially,
Scofflaw

Like ploughing more money into the banks, for example?

Scofflaw

rumour wrote: »

I wouldn't get to excited about the sensationalist headlines.

We earn 30bn in taxes and intend to spend 50bn-6bn next year, so 14bn has to come from somewhere???

Given the markets are nearly closed to us the ecb looks like the only option. This borrowing can always be construed as a bailout but currently thats what the government are proposing and seemingly what everyone in Ireland wants unless they are prepared to accept 20bn in cuts next year. No one is proposing we cut 20bn so why so excited.

The only thing of interest is if we are going to the ecb is cowen and co giving away our CT as we speak?

If we're being pressured to take one - that's the latest rumour, perhaps because otherwise a bailout right now doesn't make sense - then, given that Ireland has to request one, CT could hardly be part of the deal. Accepting a bailout when we don't want one is one thing, but accepting a bailout we don't want on condition that we do things we don't want to do to get it seems to have a small logical flaw.

I appreciate the current demand for logic is minimal.

cordially,
Scofflaw

Scofflaw

Cavehill Red wrote: »

Like ploughing more money into the banks, for example?

I was thinking more of propping up the PS wage bill, myself. The absence of a sufficiently strong requirement to bring public spending into line as part of the conditions of the loan would provide the country with an opportunity to not make some necessary savings, whether under Fianna Fáil or a new Labour-heavy coalition.

cordially,
Scofflaw

Cavehill Red

Scofflaw wrote: »

I was thinking more of propping up the PS wage bill, myself. The absence of a sufficiently strong requirement to bring public spending into line as part of the conditions of the loan would provide the country with an opportunity to not make some necessary savings, whether under Fianna Fáil or a new Labour-heavy coalition.

cordially,
Scofflaw

On that issue, I think a restoration of benchmarking (which would bring PS wages DOWN not up this time) would do the trick and adhere to concepts of parity of pain.

My concern is that we're being pressured by Europe to take the bailout so as to plug more holes in the banking finances. Which is money we'll be on the hook for which we'll never see again. And the reason why the EU are doing this is to ensure that German and British bondholders get paid.

th3 s1aught3r

I think the Germans are panicking that all the Irish Bonds the ECB has bought recently might be worth nothing very soon, this could potentially bring down the Euro if it spreads to Spain ?

oppenheimer1

I have a feeling that the announcement thats going to be made in the next few days is not that Ireland is being bailed out per-se but that the EU fund is going to be "made available" should it be required. This will be similar to the IMF bail-out of the UK in '76, where the ability to access the funds was enough to calm the markets and the UK didn't need to dip into the fund at all.

I've a feeling this is the best that can be hoped for at this stage.

Cavehill Red

oppenheimer1 wrote: »

I have a feeling that the announcement thats going to be made in the next few days is not that Ireland is being bailed out per-se but that the EU fund is going to be "made available" should it be required. This will be similar to the IMF bail-out of the UK in '76, where the ability to access the funds was enough to calm the markets and the UK didn't need to dip into the fund at all.

I've a feeling this is the best that can be hoped for at this stage.

That would buy us some time. But that time is only useful is we use it to renege on the bank guarantee. Sunday Times reported today that BoI's loan to deposit ratio now stands at 160%, same as AIB. The banks are taking us under.

ninty9er

Since when did the Skeptograph and Pie become legitimate news sources. None of our own newspapers are legitimate news sources, and I think you'll find most Brits would have the same view of theirs, and the BBC.

NOBODY KNOWS.

If there's a EFSF loan, there will be an EFSF loan, taking up a couple of hundred MB cyberspace isn't going to change it or make anyone any more prepared if it does transpire.

Sponge Bob

RTE News just said that "High Level Contacts" went on over the weekend with EU ECB IMF according to an EU Commission source.

ArtSmart

Scofflaw wrote: »

Interestingly enough, that almost sounds like there's a large camp in the financial world who would rather see a bailout than austerity, and who are doing everything they can to make that happen.

Wasn't it Goldman Sachs who said they'd like to see an IMF intervention?

cordially,
Scofflaw

'it aint personal. it's business'

- Mafia.inc (AKA the mkts)

jank

Scofflaw wrote: »

Interestingly enough, that almost sounds like there's a large camp in the financial world who would rather see a bailout than austerity, and who are doing everything they can to make that happen.

Wasn't it Goldman Sachs who said they'd like to see an IMF intervention?

cordially,
Scofflaw

hmmm you sound as if this is a conspiracy brought about by foreigners? I personally blame the Greens and FF.

The_Thing

Cavehill Red wrote: »

On that issue, I think a restoration of benchmarking (which would bring PS wages DOWN not up this time) would do the trick and adhere to concepts of parity of pain.

Sure no problem, I'll just go back to doing things the way I did them pre-benchmarking then.

ArtSmart

Scofflaw wrote: »

In the case of a bailout, that would depend on what conditions were attached. If we're genuinely negotiating one now, or being pressured to take one, in advance of needing it, my concern is that the conditions attached will be insufficiently stringent not to prevent the government doing something stupid with it.

cordially,
Scofflaw

wow.

you serious?

or being satirical?

blogga

Sponge Bob wrote: »

RTE News just said that "High Level Contacts" went on over the weekend with EU ECB IMF according to an EU Commission source.

In keeping with the gravity of the moment, "the lights are going out all over Ireland, we shall not see them lit again in our lifetime."

rumour

Scofflaw wrote: »

If we're being pressured to take one - that's the latest rumour, perhaps because otherwise a bailout right now doesn't make sense - then, given that Ireland has to request one, CT could hardly be part of the deal. Accepting a bailout when we don't want one is one thing, but accepting a bailout we don't want on condition that we do things we don't want to do to get it seems to have a small logical flaw.

I appreciate the current demand for logic is minimal.

cordially,
Scofflaw

It's becoming farcical,reason is out the window. I wish people would just look at the basic figures.

1 we plan to spend 44bn. By July we'll have spent about half, 22bn.

2 we will earn approx 30bn plus some in tax if all goes well.

3 we have enough to July, on an even spread thats 25bn or 22bn depending on the plan adopted(this is borrowed money)

4 By July we'll probably have taken half the tax say 16bn

That means in July we will be 4bn short to see out the year and remember this is all predicated on the economy growing (no way to plan out of a crisis IMO). If no one agrees to lend to us that is the status and means we're insolvent at the end of the year at best.

To be in this position is even more irresponsible than where we are now. So the Government have to talk to someone about money. Who is there to talk to. Do people really have any idea what it takes to source billions, it doesn't happen overnight it takes months if not years.
The media are obviously taking great joy in scandalising this issue. Any conversation now to source funding can be construed as a 'bailout'.

Also why is anyone surprised. Either we impose some swift hard discipline on ourselves or be prepared to accept the terms that follow. Add to this that if this plan of 6bn in cuts fails there is an election. What then is the budgetary plan (it is quite forseeable that no cuts will be imposed until a new budget is passed meaning July may not be July it could easily be June or even May) When will we know our borrowing needs? unless this is clarified PDFQ there will not be enough money.

jank

ninty9er wrote: »

Since when did the Skeptograph and Pie become legitimate news sources. None of our own newspapers are legitimate news sources, and I think you'll find most Brits would have the same view of theirs, and the BBC.

NOBODY KNOWS.

If there's a EFSF loan, there will be an EFSF loan, taking up a couple of hundred MB cyberspace isn't going to change it or make anyone any more prepared if it does transpire.

Then why did you post a twitter link to Mark Little of all people. If the country is going to be bailed out and rumors are flying around about talks to this effect, yet these talks are denied by RTE and the DOF and those two idiots in FF only then to be contradicted by the FT, NYT, Telegraph, BBC, Reuters etc.. then you want us to just ignore it. Jesus Christ, wake up. Your party is preparing the ground work to sell our last bit of economic sovernity. Sounds all too desperate to me.

As shakerpeare said. "The lady doth protest too much"

ArtSmart

WIZE wrote: »

what will the bailout be used for?
do we get 80 billion in one go to pay off all the debts including anglo or is it used for running the countfy etc public sector and all

for the banks.

an upfront bank buy out (or rather bank rental), disguised as something else.

the mkt and some media seem to be declaring the state and the banks as one - which in a way they have become.

but as long as there's a money injection that's all that the mkts what to see.

jank

ninty9er wrote: »

Since when did the Skeptograph and Pie become legitimate news sources. None of our own newspapers are legitimate news sources, and I think you'll find most Brits would have the same view of theirs, and the BBC.

NOBODY KNOWS.

If there's a EFSF loan, there will be an EFSF loan, taking up a couple of hundred MB cyberspace isn't going to change it or make anyone any more prepared if it does transpire.

Oh and people are posting link to Pie as they have links to said articles like the FT. You know, its how the internet works...

Cavehill Red

The_Thing wrote: »

Sure no problem, I'll just go back to doing things the way I did them pre-benchmarking then.

Fine by me, depending on what you were doing. If you were working as a public servant, then I'd expect you to put in a proper week for your reduced wages. If you're not, obviously benchmarking doesn't affect you.

th3 s1aught3r

What time do the bond markets open at ?

Cavehill Red

Gold just shot up against the euro. I suspect something's been agreed.

ArtSmart

Scofflaw wrote: »

I was thinking more of propping up the PS wage bill, myself. The absence of a sufficiently strong requirement to bring public spending into line as part of the conditions of the loan would provide the country with an opportunity to not make some necessary savings, whether under Fianna Fáil or a new Labour-heavy coalition.

cordially,
Scofflaw

oh, i see.

naw, the monies (if they come) will be targeted to the specific bank situation -very much so.

as i said before it wont effect the 15 billion cut proposals, initially at least, as this target was reached before sovereign bonds went to craziville.

Euro_Kraut

One of Germany's leading financial papers 'Handlesblatt' has a slight different take on things. They say that the German Government does not expect that a decision will be taken before Tuesday. They say that the Bondmarkets reactions over the coming days may be the deciding factor.

Also they quote a German Govt official as saying 'We are not going to pressure the Irish into making a decision'

The article is here (in German unfortunately): http://www.handelsblatt.com/politik/international/schuldenkrise-irland-will-sich-selber-helfen;2692486

oppenheimer1

Cavehill Red wrote: »

Gold just shot up against the euro. I suspect something's been agreed.

Any chance of a link to the market data?

Cavehill Red

oppenheimer1 wrote: »

Any chance of a link to the market data?

Kitco.

But I'm accessing it via bullionvault.

ArtSmart

Cavehill Red wrote: »

Gold just shot up against the euro. I suspect something's been agreed.

em, wouldnt that suggest the exact opposite?
if gold is trading high against the euro, which means the mkts are selling the euro,then the euro is perceived as weakened.
which menas a deal has not been dome between ireland and europe.
all this of course may mean that Ireland may have to do a deal.

Ficheall

What happens if we don't ask for/accept the bailout?

ninty9er

Ficheall wrote: »

What happens if we don't ask for/accept the bailout?

Nothing.

Cavehill Red

ArtSmart wrote: »

em, wouldnt that suggest the exact opposite?
if gold is trading high against the euro, which means the mkts are selling the euro,then the euro is perceived as weakened.
which menas a deal has not been dome between ireland and europe.
all this of course may mean that Ireland may have to do a deal.

If Ireland has to take a bailout, it will inevitably weaken the euro, not strengthen it. But that also benefits those on the continent who wish to see us bailed out to ensure that their banks don't take a hit on Irish ones and simultaneously allows the euro to slide, benefitting German exporters.

jank

Ficheall wrote: »

What happens if we don't ask for/accept the bailout?

Then come sometime next year the ATM will run dry and the Dole/PS cheques will bounce. We run out of money.... basicly. Can we run an economy on cheese?

th3 s1aught3r

So we will be forced to take a bailout to stop us from bringing down a few more countries with us ? If I am reading it correctly its no longer about us, its about contagen ?