We could be into the last 10 days of the Euro according to the Financial Times...

HellFireClub

Don't take my word for it, according to this article in the FT, the Euro as a currency has ten days to save itself or else face a violent break up of the currency and then whatever happens will happen...

http://businessetc.thejournal.ie/eurozone-has-ten-days-to-save-itself-or-collapse-analyst-290775-Nov2011/

MungBean

The EU’s sovereign bond market has “ceased to function” after the failure of a German auction last week – and the area now faces a ‘run’ whereby global investors withdraw their assets.The EU’s sovereign bond market has “ceased to function” after the failure of a German auction last week – and the area now faces a ‘run’ whereby global investors withdraw their assets.

I thought the reason the auction failed was because the projected inflation was 2% and the bonds were offered at 1.98%. Or something to that effect.

Surely there is little chance of a run because of that. Its not like other countries where the bonds have sky rocketed would it really make that much of a difference ?

beeftotheheels

MungBean wrote: »

I thought the reason the auction failed was because the projected inflation was 2% and the bonds were offered at 1.98%. Or something to that effect.

Surely there is little chance of a run because of that. Its not like other countries where the bonds have sky rocketed would it really make that much of a difference ?

If you look at German fundamentals they're not all that great. Their debt to GDP is higher than Frances. And they stand to lose the most from a euro break up in that the export led engine of their economy will struggle with a higher d'mark.

So yes, the German Government rationalization is the below inflation yields. But all explanations of movements in the financial markets are just that, rationalizations. The alternative rationalization being that the markets are pricing in a eurozone break-up.

shannon_tek

So basically were going to be back to 1990's if the euro breaks what will Ireland use. Will we develop a new currency.

I don't like this for the simple face its easier just to have euros in ur pocket when in Europe

irishh_bob

we,ve been hearing theese exact predictions for nearly a year now , i dont think we will be out of the woods in a year but i dont believe the euro will be gone either

beeftotheheels

irishh_bob wrote: »

we,ve been hearing theese exact predictions for nearly a year now , i dont think we will be out of the woods in a year but i dont believe the euro will be gone either

Nothing is ever certain until it happens, so the euro may yet survive. However, in relation to euro demise predictions one year ago you were hearing them from the fringes because there was very little evidence that we would end up where we are now.

The difference now is that you're not seeing the predictions in fringe newspapers, they're in the FT, and Bloomberg, and Reuters. Right now the serious academics who dismissed them a year ago are struggling to see how the demise of the eurozone can be avoided.

Italy is both too big to fail and too big to save, and unless they figure out a way to save Italy... The stakes went way up in the last month.

MungBean

I cant see the Eurozone collapsing, I think we are headed towards a new fiscal union and Eurobonds as Wolfgang reckons.

HellFireClub

beeftotheheels wrote: »

Nothing is ever certain until it happens, so the euro may yet survive. However, in relation to euro demise predictions one year ago you were hearing them from the fringes because there was very little evidence that we would end up where we are now.

The difference now is that you're not seeing the predictions in fringe newspapers, they're in the FT, and Bloomberg, and Reuters. Right now the serious academics who dismissed them a year ago are struggling to see how the demise of the eurozone can be avoided.

Italy is both too big to fail and too big to save, and unless they figure out a way to save Italy... The stakes went way up in the last month.

A year ago, this thread would likely have been locked and I'd probably have been handed a ban for stirring sh*t on the forum. Yet fast forward a year and there it is today in the FT, in the SBP yesterday, that the break up of the Euro is a probability at this stage, let alone a possibility.

And the same people who brought us to this place, reckon we should trust them to make the decisions for the future, the same people who are driving all this austerity that is literally killing people at this stage. You'd have to wonder...

beeftotheheels

HellFireClub wrote: »

A year ago, this thread would likely have been locked and I'd probably have been handed a ban for stirring sh*t on the forum. Yet fast forward a year and there it is today in the FT, in the SBP yesterday, that the break up of the Euro is a probability at this stage, let alone a possibility.

And the same people who brought us to this place, reckon we should trust them to make the decisions for the future, the same people who are driving all this austerity that is literally killing people at this stage. You'd have to wonder...

Hell, if you'd started this thread a year ago I'd probably have reported the post

And before the fringe who were shouting about it a year ago start claiming prescience, or before any one who dismissed them a year ago thinks they are now credible they should watch this clip from the west wing (which I cannot embed so if any mod feels like amending my post to do it properly...).

https://www.youtube.com/watch?v=

http://www.youtube.com/watch?v=HL_vHDjG5Wk

HellFireClub

At this stage the whole thing seems to be the ego pipe dream of a load of old farts over in Brussels. It doesn't work, one size clearly doesn't fit all, so why people won't face up to it and just accept that it isn't fit for purpose, it's completely beyond me.

beeftotheheels

HellFireClub wrote: »

At this stage the whole thing seems to be the ego pipe dream of a load of old farts over in Brussels. It doesn't work, one size clearly doesn't fit all, so why people won't face up to it and just accept that it isn't fit for purpose, it's completely beyond me.

Because it could have worked. Had the SGP been adhered to it could have worked. The fact it will probably fail does not mean it was doomed to failure, even up until this summer. The idea was both lofty, and incredibly successful, up until the point where it wasn't.

The idea that a Europe disintegrated is better than an integrated Europe is not borne out by the history of the EU, the longest period of peace and prosperity on most of the continent in its history.

And not only peace, but improvements in human rights, in environmental regulation, in employees rights... But without economic goals and integration none of these other improvements would have followed. The economic goals gave legitimacy to the rest.

HellFireClub

beeftotheheels wrote: »

Because it could have worked. Had the SGP been adhered to it could have worked. The fact it will probably fail does not mean it was doomed to failure, even up until this summer. The idea was both lofty, and incredibly successful, up until the point where it wasn't.

The idea that a Europe disintegrated is better than an integrated Europe is not borne out by the history of the EU, the longest period of peace and prosperity on most of the continent in its history.

And not only peace, but improvements in human rights, in environmental regulation, in employees rights... But without economic goals and integration none of these other improvements would have followed. The economic goals gave legitimacy to the rest.

I'm all for integration, but it seems to me that the EU project is now about everyone and everything being slowly assimilated into some kind of commonality, to the point where here we have something that clearly is not working, but yet the ideal of a common currency is still ruthlessly pursued, it's not unlike the kind of intransigence that is behind wars being continued for years, etc. Just like in wars, the people directing them and controlling them are never really out in the field doing the fighting, and the same is true for the austerity that is being pressed down on everyone, those who are directing this in the name of saving the Euro, they are not affected by the decisions that they are making...

djpbarry

HellFireClub wrote: »

Just like in wars, the people directing them and controlling them are never really out in the field doing the fighting, and the same is true for the austerity that is being pressed down on everyone...

You're comparing the "austere" existence of the current residents of Ireland with life in a war zone? Have people completely lost all sense of perspective?

HellFireClub

djpbarry wrote: »

You're comparing the "austere" existence of the current residents of Ireland with life in a war zone? Have people completely lost all sense of perspective?

No, what I'm saying is that this is an example of people up at the top making stupid, irrational and ideologically driven decisions, while living in a luxury that remains completely insulated from the decisions that they make that cause hardship on ordinary people. For some people trying to get through this austerity, there may as well be a war on, they experience what you could nearly call rationing but by a different means, being unable to put food on the table or struggling to exist.

This common currency is being held together because a handful of bullies are afraid to lose face.

beeftotheheels

HellFireClub wrote: »

No, what I'm saying is that this is an example of people up at the top making stupid, irrational and ideologically driven decisions, while living in a luxury that remains completely insulated from the decisions that they make that cause hardship on ordinary people. For some people trying to get through this austerity, there may as well be a war on, they experience what you could nearly call rationing but by a different means, being unable to put food on the table or struggling to exist.

This common currency is being held together because a handful of bullies are afraid to lose face.

As and when the euro fails our currency will fall. People will be unable to put fuel in their cars, to heat their houses if their heating is oil. Unless we can get the Corrib gas onshore the price of electricity will go through the roof.

Food prices will initially rise as the export demand will be there. This the Government can control because we at least produce enough food to feed ourselves. People can be shipped back out to the bogs to cut turf if you want a proper war time analogy.

This, right now, is not as bad as it gets, it is going to get a whole lot worse before it gets worse. That's not something to celebrate. The euro was and is well worth saving. It's just a shame that the politicians didn't realise how easily they could destroy it in the name of "strengthening" it.

HellFireClub

beeftotheheels wrote: »

As and when the euro fails our currency will fall. People will be unable to put fuel in their cars, to heat their houses if their heating is oil. Unless we can get the Corrib gas onshore the price of electricity will go through the roof.

Food prices will initially rise as the export demand will be there. This the Government can control because we at least produce enough food to feed ourselves. People can be shipped back out to the bogs to cut turf if you want a proper war time analogy.

This, right now, is not as bad as it gets, it is going to get a whole lot worse before it gets worse. That's not something to celebrate. The euro was and is well worth saving. It's just a shame that the politicians didn't realise how easily they could destroy it in the name of "strengthening" it.

It seems to me that the whole financial system now is completely and utterly constipated with massive almost unimaginable debts that cannot be paid, yet the idealogical mantra is there again, "this debt must all be repaid, more austerity, we have to follow the program, good little Ireland"...

Meanwhile more people lose jobs, as people spend less, because the economy contracts, is this really what we signed up to when we said we wanted to be at the heart of the EU?!? I don't think so...

Scofflaw

HellFireClub wrote: »

I'm all for integration, but it seems to me that the EU project is now about everyone and everything being slowly assimilated into some kind of commonality, to the point where here we have something that clearly is not working, but yet the ideal of a common currency is still ruthlessly pursued, it's not unlike the kind of intransigence that is behind wars being continued for years, etc. Just like in wars, the people directing them and controlling them are never really out in the field doing the fighting, and the same is true for the austerity that is being pressed down on everyone, those who are directing this in the name of saving the Euro, they are not affected by the decisions that they are making...

The reason the Member States want to keep the euro is the same reason they liked it during the last decade - for the economically weaker states it provided much lower borrowing costs, because the markets treated it as implicitly backed by the economically stronger states, while for the economically stronger states the inclusion of the economically weaker states kept the strength of the currency from growing too great without them having to actually take responsibility for their debts. For both it allowed the growth of the internal market. For the markets it meant you could invest in high-return weak economies with the risk profile of low-return strong economies.

The problem is that everyone wants to keep the euro that they "had" for the last ten years - which didn't exist, because the stronger states were not actually promising to stand behind the debts of the weaker states - and what's happening currently can be boiled down to a fight between the markets and the strong economies as to whose version of the euro gets kept, the one the markets like with the strong economies really backing it, or the one the stronger economies like where they don't.

So the strong euro economies are trying to fight off the euro crisis without losing and giving the markets what they want, but if the euro implodes as a result of the fight, everybody loses.

cordially,
Scofflaw

Permabear

This post has been deleted.

djpbarry

Permabear wrote: »

This post had been deleted.

I'm still waiting for the Euro to collapse against Sterling so my Euro debts will be wiped out. I dare say I'll be waiting a while longer.

carveone

Nail biting stuff! The market action today shows the level of of oversold into fundamentals - ie: if you believe that Barclay's is worth $15 (which I do) then either it's a great buy at $10 (was at $9.25 two days ago) or you might as well build a bunker.

On Friday I found it a positive sign that Finland and the Netherlands were advocating greater ECB intervention. Their attitudes generally tend to be similar to the Germans so I find that significant.

Anyway. We have a set of imperfect solutions on offer:

- We head towards 7% borrowing rates for all countries as the reality of unsustainable debt loads bites. Global debt goes from $60 trillion to $120 trillion within a decade.

That assumes you can find some suckers to lend to. Ha! As the German bond auction showed it's already reaching end game on that front - everyone is tapped out. You are competing for money that someone else needs to borrow. All the bond interest rate rises in the world isn't going to help if you end up bankrupt.

Result: Crawl into bomb shelter.

Or:

- Plan B.

Realise that Plan A is just stupid and go print some damn money! The essential premise is that noone will let the World end and by printing money we hopefully kick start the economies.

Result: Buy some stocks. Crawl out of shelter.

Side effect: hyper inflation. Well, life is hard. It means debts get paid, the people get happy because they get raises and bonuses (which they better spend fast!). Velocity of money increases...

The US did this before in the 1970s. It's isn't a new concept. It isn't wonderful for those who have savings but at this point, we just can't pay down the debt....

GSF

The end of the euro wont mean the end of austerity. The same fundamental problems in the european economies remain. Too many unfunded entitlements in short.

bmaxi

I never really understood the world of high finance, as far as I could gather, this was all "virtual" money, i.e. no actual physical collateral.
What intrigues me is; who are the lenders, are they pension funds, merchant banks etc? They are hardly individuals. Do the lenders not also rely on the borrowers to borrow, if the money wasn't borrowed surely they couldn't profit from it, so is it not in their long term interest to keep the bond market functioning? If the Euro was to collapse, how would the value of Ireland's currency be decided, would it immediately go back to € 1.27 and be devalued next day? I can see those in the know making a killing if that were the case.

carveone

Well Japan is a major buyer of EU bonds but I'd imagine there are a lot of individual investors, pension and hedge funds who buy as well. Plus the ECB of course! 7% beats the hell out of buying US treasuries and its supposed to be risk free.

Italy is quite interesting because most of its debt is owned domestically.

I'd like to know where the 80 billion euro in Irish pension funds is invested.

murphaph

I don't think people appreciate the fuss that German voters will make about any printing press induced inflation.

Germans were saving while the Irish et al were spending. Merkel may not be able to convince them that it is indeed the best worst option for them and their jobs.

I think people will end up getting scared enough of the unknown that a new level of fiscal union will be accepted by them to prevent the perceived Armageddon from happening.

I also believe the Euro was a decent Idea badly managed by politicians like Bertie Ahern, who instead of harnessing the unprecedented low interest rates to build up our infrastructure, used it instead to buy elections and further his own interests in the process. The same happened in Greece and elsewhere.

If the Euro goes bang (and even if it doesn't) I expect greater fiscal union in at least a core of the more fiscally responsible nations.

gizmo555

murphaph wrote: »

Germans were saving while the Irish et al were spending.

This kind of misses the points that

(a) The Irish et al were spending a significant amount on German goods, without which the Germans wouldn't have been able to do all that saving. The eurozone is by far the biggest German export market.

and

(b) The German banks where the German savers deposited their savings lent recklessly into, among others, the Irish property bubble.

murphaph

gizmo555 wrote: »

This kind of misses the points that

(a) The Irish et al were spending a significant amount on German goods, without which the Germans wouldn't have been able to do all that saving. The eurozone is by far the biggest German export market.

and

(b) The German banks where the German savers deposited their savings lent recklessly into, among others, the Irish property bubble.

I don't think I missed the point-I just didn't directly make it but do you think the average German voter/saver is thinking like that?

Merkel will have a very hard sell in Germany if she tries to sell the "inflation is the best option" line.

I have more debts than savings and my debts are in Ireland and my savings are in Germany so I am not overly concerned about inflation but I will understand the legitimate anger of savers in Ireland and Germany, should the printing presses be cranked up to reduce the effective debts of less responsible folks.

Don't be surprised if German voters do opt for a nuclear option: reintroduction of the D-Mark and hope for the best. I really can't call it and I don't think even Angie knows how things will pan out.

Scofflaw

gizmo555 wrote: »

This kind of misses the points that

(a) The Irish et al were spending a significant amount on German goods, without which the Germans wouldn't have been able to do all that saving. The eurozone is by far the biggest German export market.

And also one of ours.

gizmo555 wrote: »

and

(b) The German banks where the German savers deposited their savings lent recklessly into, among others, the Irish property bubble.

Everybody says it, but nobody proves it. Have you any proof?

cordially,
Scofflaw

jimmycrackcorm

murphaph wrote: »

Don't be surprised if German voters do opt for a nuclear option: reintroduction of the D-Mark and hope for the best. I really can't call it and I don't think even Angie knows how things will pan out.

Until they realize that no-one will be able to afford their BMWs and Mercs with a strong DMark and their own economy declines.

gizmo555

Scofflaw wrote: »

Everybody says it, but nobody proves it. Have you any proof?

cordially,
Scofflaw

In March of last year, German banks' exposure to Ireland was $206bn, including $46bn lent to Irish banks, according to the Bank of International Settlements, reported in the WSJ. As you can see below, this was only exceeded by the UK's banks.

Mr.Micro

The Germans will ask themselves how much they got out of being in the Euro?
It appears that the smaller countries benefited the most with Germany being thrifty and wise but all for nothing as it still foots the bill. I cannot call what will happen to the Euro, I am not optimistic that it will survive. Even if we get through this patch I fear the big Euro experiment is over....at least in the format we are in now ie single tier.

Scofflaw

gizmo555 wrote: »

In March of last year, German banks' exposure to Ireland was $206bn, including $46bn lent to Irish banks, according to the Bank of International Settlements, reported in the WSJ. As you can see below, this was only exceeded by the UK's banks.

Uh-huh. See the bit at the bottom of the graph where it says "Bank of International Settlements"? That means the data includes the entire IFSC, which is roughly the same size as the Irish banking sector at its most bloated, and contains wall-to-wall eurozone money. In the Irish domestic banks, the ones lending into the Irish property bubble, and the ones we bailed out, on the other hand, there was next to sod-all.

Journalists pick the first set of data that makes a pretty picture - they're not about accuracy and correct use of applicable statistics.

cordially,
Scofflaw

RandolphEsq

beeftotheheels wrote: »

As and when the euro fails our currency will fall. People will be unable to put fuel in their cars, to heat their houses if their heating is oil. Unless we can get the Corrib gas onshore take a mature view of nuclear power the price of electricity will go through the roof.

Food prices will initially rise as the export demand will be there. This the Government can control because we at least produce enough food to feed ourselves. People can be shipped back out to the bogs to cut turf if you want a proper war time analogy.

This, right now, is not as bad as it gets, it is going to get a whole lot worse before it gets worse. That's not something to celebrate. The euro was and is well worth saving. It's just a shame that the politicians didn't realise how easily they could destroy it in the name of "strengthening" it.

I edited your post because I feel that nuclear power is more sustainable than Corrib gas

beeftotheheels

RandolphEsq wrote: »

I edited your post because I feel that nuclear power is more sustainable than Corrib gas

Oh good lord I'm not quite, but almost, clinging to the hope that the Irish people, threatened with EU expulsions might just be capable of passing an referendum on the treaties if that referendum makes the changes required and involves some sort of quid pro quo from the Germans. I doubt it, but it is the straw I am clutching to.

And then you have to go and bring up things like Nuclear power....

Because it is a fact, universally acknowledged (especially in France) that Nuclear Power KILLS BABIES AND PEOPLE, all of the time. Poverty, cold and hunger never did any one a bit of harm, part of our heritage that is.

Corrib Gas STOLEN FROM US BY EVIL MULTINATIONALS WHO WILL NEVER PAY US A CENT IN TAX AND NOW WISH TO USE IT TO KILL OUR BABIES AND PEOPLE is equally evil.

So I'm really not sure you fixed my post since I cannot decide which of the two evils is worse.

Liam Byrne

Scofflaw wrote: »

Everybody says it, but nobody proves it. Have you any proof?

cordially,
Scofflaw

Strange how you ask for proof about that and none for the generalised claim that "the Irish were spending".

If even some German banks lent recklessly then we are surely allowed the same generalisations, no ?

Personally I'd prefer cold hard facts re both, with no ridiculous generalisations or inaccurate collectivity allowed, but that's just me.

Coillte_Bhoy

shannon_tek wrote: »

So basically were going to be back to 1990's if the euro breaks what will Ireland use. Will we develop a new currency.

I don't like this for the simple face its easier just to have euros in ur pocket when in Europe

No disrespect but if you think the the worst thing about collapse of the euro will be inconveniencing you on your holidays abroad, then god help you

FreudianSlippers

GSF wrote: »

The end of the euro wont mean the end of austerity. The same fundamental problems in the european economies remain. Too many unfunded entitlements in short.

On the contrary, the end of the Euro for us will mean years of crippling economic depression, drastic reductions in social welfare payments and other severe austerity measures simply to "keep the lights on".

Crazy Horse 6

FreudianSlippers wrote: »

On the contrary, the end of the Euro for us will mean years of crippling economic depression, drastic reductions in social welfare payments and other severe austerity measures simply to "keep the lights on".

All good things imo. We need to get back to basics and start over. We have been living beyond our means for more than 20 years now.

FreudianSlippers

Crazy Horse 6 wrote: »

All good things imo. We need to get back to basics and start over. We have been living beyond our means for more than 20 years now.

Get off your fancy computer so.

Benny_Cake

Crazy Horse 6 wrote: »

FreudianSlippers wrote: »

On the contrary, the end of the Euro for us will mean years of crippling economic depression, drastic reductions in social welfare payments and other severe austerity measures simply to "keep the lights on".

All good things imo. We need to get back to basics and start over. We have been living beyond our means for more than 20 years now.

Really,how far back to basics should we go?The 1950s?The Bronze Age?The masochism of some people boggles the mind..

Scofflaw

Liam Byrne wrote: »

Strange how you ask for proof about that and none for the generalised claim that "the Irish were spending".

If even some German banks lent recklessly then we are surely allowed the same generalisations, no ?

Personally I'd prefer cold hard facts re both, with no ridiculous generalisations or inaccurate collectivity allowed, but that's just me.

I'm aware, and you're aware, that not all the Irish spent. I'm also aware that any time anyone says it, you're going to get snippy about it, but like everyone else, I find it hard to reach 100% compliance with your particular bugbears.

slightly forgetful regards,
Scofflaw

djpbarry

Liam Byrne wrote: »

Strange how you ask for proof about that and none for the generalised claim that "the Irish were spending".

If even some German banks lent recklessly then we are surely allowed the same generalisations, no ?

Personally I'd prefer cold hard facts re both, with no ridiculous generalisations or inaccurate collectivity allowed, but that's just me.

In 2007, private debt in Ireland totalled €148 billion:
http://www.cso.ie/en/newsandevents/pressreleases/2008pressreleases/statisticalyearbookofireland2008

gizmo555

Scofflaw wrote: »

Uh-huh. See the bit at the bottom of the graph where it says "Bank of International Settlements"? That means the data includes the entire IFSC, which is roughly the same size as the Irish banking sector at its most bloated, and contains wall-to-wall eurozone money. In the Irish domestic banks, the ones lending into the Irish property bubble, and the ones we bailed out, on the other hand, there was next to sod-all.

Journalists pick the first set of data that makes a pretty picture - they're not about accuracy and correct use of applicable statistics.

cordially,
Scofflaw

Have you a source for any of these assertions, in particular the one that German banks lent Irish ones "next to sod-all"?

According to this article by Laura Noonan in the Indo, as of March this year, the Bundesbank reported that German banks had exposure of €21.3bn to Irish banks. "Next to sod all"? Feel free to refute these figures if you can, but this time you might include some references.

HellFireClub

FreudianSlippers wrote: »

On the contrary, the end of the Euro for us will mean years of crippling economic depression, drastic reductions in social welfare payments and other severe austerity measures simply to "keep the lights on".

In fairness, it seems to me that the problem with this country is that the large majority of people in Ireland today, (people in non-high earning private sector employments & people who are currently unemployed, are already in territory where they are experiencing poverty (this is certainly true for people on the dole), but folks in private sector jobs where they are not earning more than 40K, are being bled dry financially.

Then we have a load of people in the public sector, (like Gardai, teachers, etc, still on yearly automatic pay increments, something that is unheard of in the private sector in the sense that it is automatic, you have to fight for it and provide a basis for an annual pay increase and you still won't get a pay increase in the current climate).

The whole thing is upside down, inside out and back to front. You have these huge inefficiencies being held in place by vested interests like Siptu, IBEC, ASTI, UNITE, etc, and you have the vast majority of the workforce being bled dry to pay for it all. Then you have nearly 500,000 unemployed people on long term state support, that there is no plan at all to deal with.

In this context, I don't believe that it is wrong to say, "right, hit the nuclear/reset button and bring it all back to where it really ought to be.

Whether we do or we don't, until we have a credible government that has an actual plan for job creation, as opposed to the absolutely rediculous ramblings, false hopes and deluded talk of a school teacher Taoiseach, we are not going to get anywhere in this country.

whatstherush

gizmo555 wrote: »

Have you a source for any of these assertions, in particular the one that German banks lent Irish ones "next to sod-all"?

According to this article by Laura Noonan in the Indo, as of March this year, the Bundesbank reported that German banks had exposure of €21.3bn to Irish banks. "Next to sod all"? Feel free to refute these figures if you can, but this time you might include some references.

€21.3 bn might not be "Next to sod all", but its hardly lending recklessly either as you put it.

Scofflaw

gizmo555 wrote: »

Have you a source for any of these assertions, in particular the one that German banks lent Irish ones "next to sod-all"?

According to this article by Laura Noonan in the Indo, as of March this year, the Bundesbank reported that German banks had exposure of €21.3bn to Irish banks. "Next to sod all"? Feel free to refute these figures if you can, but this time you might include some references.

Sure: http://www.centralbank.ie/polstats/stats/cmab/Pages/Money%20and%20Banking.aspx

You want this one in particular: http://www.centralbank.ie/polstats/stats/cmab/Documents/ie_table_a.4.2_covered_institutions_-_aggregate_balance_sheet.xls

That's the aggregate balance sheets of the banks we bailed out, from 2003 to present.

You can compare that one to this one: http://www.centralbank.ie/polstats/stats/cmab/Documents/ie_table_a.4_credit_institutions_-_aggregate_balance_sheet.xls

That's the aggregate balance sheets for all the banks in Ireland, including the banks in the IFSC.

Take September 2008 - for all banks in Ireland, the figure for bonds held by eurozone entities is about €38bn, and for deposits €206bn. But for the bailed out banks, the figures are €14bn and €25bn.

If we take March 2011, which is the date of the article you're referencing, the figures are: for all banks in Ireland, eurozone entities held €21bn bonds and €145bn deposits. But for the domestic banks, it's €9.75bn bonds and €16.4bn deposits.

What does all that mean? It means that the big figures usually cited by journalists include the IFSC. And the IFSC has nothing to do with the Irish domestic economy - exposure to something in the IFSC doesn't mean a thing when it comes to working out "exposure to Ireland".

Do journalists regularly cite the wrong figures? Absolutely. There's a piece by Fintan O'Toole in today's IT, for example, where he says:

And now a second mercenary question. How much are we paying back to the EU to support the euro and rescue euro zone banks? At the time of the so-called “bailout” by the troika this time last year, euro zone banks held €214 billion in Irish debt.

That's utter, utter, bollox. At the time of the bailout eurozone banks held €22.8bn in bonds and €178bn in deposits in banks in Ireland, sure - but what happens if we strip away the IFSC and just leave the covered banks? We get, instead, a figure of €10.1bn in bonds and €8.2bn in deposits - and that's for the whole eurozone, not just Germany, and more importantly, not just the banks. Those deposit figures will include any eurozone resident brave enough to hold money in an Irish bank account, right down, as far as I can tell, to an Irish emigrant in France with €50 still in his AIB student account.

Journalists want to know the answer to "how much does country x owe country y?" or "how much do Irish banks owe German banks?". The only set of figures that provides a nice easy set of tables showing the "answers" to those questions are the BIS figures on 'locational banking statistics'. Unfortunately, as is often the case with a nice easy set of statistics, they don't actually answer the question. Instead, they answer another question - how much do legal banking entities in Ireland owe legal banking entities outside Ireland - with the extremely important proviso that "legal banking entities in Ireland" covers the 6 bailed out banks (Anglo, AIB, BOI etc), the 6 domestic banks that weren't bailed out (Rabo, KBC etc), and 71 other banks that have nothing whatsoever to do with the Irish taxpayer or the Irish domestic economy.

Journalists ignore the last part, and it means their figures don't relate to the question they're "answering" with them.

Anyway, sorry - pet peeve! It annoys me that so much of the discussion about the crisis is bedevilled by lazy journalists who completely fail to check the relevance of the figures they drag into the debate.

cordially,
Scofflaw

irishh_bob

FreudianSlippers wrote: »

On the contrary, the end of the Euro for us will mean years of crippling economic depression, drastic reductions in social welfare payments and other severe austerity measures simply to "keep the lights on".

i think you could be usefull in fronting the vote YES campaign in whatever referendum we are asked to vote on in the near future

meglome

irishh_bob wrote: »

i think you could be usefull in fronting the vote YES campaign in whatever referendum we are asked to vote on in the near future

Do you think he's incorrect? Because from my reading of it he's on the money (so to speak).

Crazy Horse 6

irishh_bob wrote: »

i think you could be usefull in fronting the vote YES campaign in whatever referendum we are asked to vote on in the near future

It's incredible is'nt it yet people keep buying the BS. Fear is the elites best weapon aginst the sheeple.

[MOD]Please save the conspiracy theory terms for the appropriate forum.[/MOD]

djpbarry

HellFireClub wrote: »

...the large majority of people in Ireland today ... are already in territory where they are experiencing poverty...

No, no they are not.

HellFireClub wrote: »

Then you have nearly 500,000 unemployed people on long term state support...

You're overstating the number unemployed by about 200,000.

HellFireClub wrote: »

In this context, I don't believe that it is wrong to say, "right, hit the nuclear/reset button and bring it all back to where it really ought to be.

And where would that be?

HellFireClub wrote: »

Whether we do or we don't, until we have a credible government that has an actual plan for job creation....

A big chunk of the unemployed were formerly employed in the construction sector. The only way to get them back into employment, unless they retrain (lots of demand for software developers, for example), is to kick off another construction bubble. Personally, I don't think that's a great idea. What's needed is a massive retraining strategy, not a "job creation plan".

Permabear

This post has been deleted.

irishh_bob

meglome wrote: »

Do you think he's incorrect? Because from my reading of it he's on the money (so to speak).

i wont even try to argue with you on matters european , you make angela merkel look like nigel farrage