Fiscal Treaty Referendum.....How will you vote?

Scofflaw

StealthRolex wrote: »

A bond is some thing that can be bought and sold. It is not a loan.

No, it's a loan. A mortgage is a loan, I think you'll agree, and a mortgage can also be bought and sold - indeed, whole loads of them just have been.

I'm afraid bondholders are creditors. It's really not possible to claim anything else!

cordially,
Scofflaw

dvpower

StealthRolex wrote: »

A bond is some thing that can be bought and sold. It is not a loan.

A loan can also be bought and sold. Whole loan books are often bought and sold. In Ireland, we have this organisation, I think its called NAMA ....

Scofflaw

antoobrien wrote: »

Senior bonds are (and have been for many years) legally ranked higher than deposits. The move to guarantee the senior bonds was required if they wanted to guarantee deposits.

So now it's an error to do something that is legally required?

I don't think that's what StealthRolex's argument is, though - he's arguing that when McWilliams said to guarantee "depositors and other creditors" he wasn't referring to bondholders, because StealthRolex doesn't consider them to be creditors.

cordially,
Scofflaw

antoobrien

Scofflaw wrote: »

I don't think that's what StealthRolex's argument is, though - he's arguing that when McWilliams said to guarantee "depositors and other creditors" he wasn't referring to bondholders, because StealthRolex doesn't consider them to be creditors.

cordially,
Scofflaw

Regardless of whether or not that's the point of the post, by stating that the there was an "error" in guaranteeing bondholders (which under McWilliams article should have been covered) StealthRolex is ignoring the legal position of (senior) bonds vs deposits.

An honest mistake is fine, but legal position has been discussed to death so ignorance of it is at this stage improbable, so arguments to the contrary look disingenuous.

StealthRolex

antoobrien wrote: »

Regardless of whether or not that's the point of the post, by stating that the there was an "error" in guaranteeing bondholders (which under McWilliams article should have been covered) StealthRolex is ignoring the legal position of (senior) bonds vs deposits.

An honest mistake is fine, but legal position has been discussed to death so ignorance of it is at this stage improbable, so arguments to the contrary look disingenuous.

The only answer to that is for McWilliams to state whether or not he meant the bondholders to be included. I have read his rebuttal as posted and I take him at his word.

A laymens reading, which is who is being address in a newspaper, would suggest the bondholders should not have been included. That is my take and my understanding as the term "bondholder" was not used. I may be wrong in that but so might you.

A reality of the situation is that the Government did not do due diligence before issuing the guarantee nor did the bondholders do due diligence to ensure their money was with reputable organisations or call them to book when it was realized what they were up to. Perhaps the bondholders didn't care and if that is the case they made bad bets and should expect to lose their money.

Anyway, the guarantee has a limited life. The government can, if it wishes, decide the guarantee is for depositors only at the next renewal.

As for disingenuity, I'm a visitor here and haven't trawled this for all arguments. My understanding is that a bondholder is a distinct legal entity from a depositor or a creditor. I take the latter terms to describe those involved in direct exchange of cash for cash in terms of deposit or loan as understood by the vast majority of the readership of mainstream media and not the nuances as understood by a select minority.

But again we are straying off the point. You may have no respect of so called "pop economists" and that's fine.

What I don't understand is why McWilliams is now the target. Was he in charge? Did he run a bank?

Or is it just another Yes campaign tactic to blacken the name of anyone on the No side?

PopeBuckfastXVI

Out of curiosity, who do you consider to be a Creditor, as a separate entity to depositors and bond holders?

Or were you saying that depositors are the only creditors?

Scofflaw

StealthRolex wrote: »

The only answer to that is for McWilliams to state whether or not he meant the bondholders to be included. I have read his rebuttal as posted and I take him at his word.

A laymens reading, which is who is being address in a newspaper, would suggest the bondholders should not have been included. That is my take and my understanding as the term "bondholder" was not used. I may be wrong in that but so might you.

A reality of the situation is that the Government did not do due diligence before issuing the guarantee nor did the bondholders do due diligence to ensure their money was with reputable organisations or call them to book when it was realized what they were up to. Perhaps the bondholders didn't care and if that is the case they made bad bets and should expect to lose their money.

Anyway, the guarantee has a limited life. The government can, if it wishes, decide the guarantee is for depositors only at the next renewal.

As for disingenuity, I'm a visitor here and haven't trawled this for all arguments. My understanding is that a bondholder is a distinct legal entity from a depositor or a creditor. I take the latter terms to describe those involved in direct exchange of cash for cash in terms of deposit or loan as understood by the vast majority of the readership of mainstream media and not the nuances as understood by a select minority.

If you owe the bank money because the bank has loaned you money, the bank is one of your creditors. I would have said that there is absolutely nobody who would dispute that or not know it.

I think you're trying to draw a very complex and unworkable distinction - bondholders give the bank money in exchange for a bond. Even using your distinctions, that makes them a "negative depositor" and thus a creditor.

StealthRolex wrote: »

But again we are straying off the point. You may have no respect of so called "pop economists" and that's fine.

What I don't understand is why McWilliams is now the target. Was he in charge? Did he run a bank?

Or is it just another Yes campaign tactic to blacken the name of anyone on the No side?

No, it came up because people were citing McWilliams as having the definitive answer to the question of how to vote on the Treaty - and his credibility in the matter is based on him being "the guy who pointed out the bubble", which is supposed to make his opinion on the Treaty valuable. Pointing out, in turn, that he was also someone who supported the bank guarantee - hailed it as a "masterstroke" the day after, even - is pointing out that his record for getting it right is not actually so rosy.

cordially,
Scofflaw

K-9

StealthRolex wrote: »

What I don't understand is why McWilliams is now the target. Was he in charge? Did he run a bank?

Or is it just another Yes campaign tactic to blacken the name of anyone on the No side?

I wouldn't hold him up as some God as some do, he gets things wrong too. I'd see him more as an opinion writer whose job is to be controversial and help sell papers and he does that very well.

StealthRolex

Scofflaw wrote: »

No, it came up because people were citing McWilliams as having the definitive answer to the question of how to vote on the Treaty - and his credibility in the matter is based on him being "the guy who pointed out the bubble", which is supposed to make his opinion on the Treaty valuable. Pointing out, in turn, that he was also someone who supported the bank guarantee - hailed it as a "masterstroke" the day after, even - is pointing out that his record for getting it right is not actually so rosy.

cordially,
Scofflaw

Well I didn't say he had a definitive answer I said his writing on the matter was compelling. It compelled me to reveiw other sources discussing the treaty and see if what he was saying made sense.

Nor is he the only one I am reading.

Still voting No primarily because I think the treaty is an EU solution to an EU problem and given the EU's track record it is probably not the right thing to sign in to law.

StealthRolex

K-9 wrote: »

I wouldn't hold him up as some God as some do, he gets things wrong too. I'd see him more as an opinion writer whose job is to be controversial and help sell papers and he does that very well.

I think you are confusing him with Vincent Browne

antoobrien

StealthRolex wrote: »

The only answer to that is for McWilliams to state whether or not he meant the bondholders to be included. I have read his rebuttal as posted and I take him at his word.

A laymens reading, which is who is being address in a newspaper, would suggest the bondholders should not have been included. That is my take and my understanding as the term "bondholder" was not used. I may be wrong in that but so might you.

Lets go back to what he said two days before the bank guarantee then

The only option is to guarantee 100 per cent of all depositors/creditors in the Irish banking system. This guarantee does not extend to shareholders who will have to live with the losses they have suffered. However, it applies to everyone else.

Can we agree that he is talking about not proving cover to shareholders and only shareholders?

Now a bond is not, repeat not, a share. So by singling out shareholders to the exclusion of all others, he is including bondholders under his proposal for a guarantee.

He does not give any more detail on the plan than that, so any later retractions/rebuttals smack of revisionism (i.e. he got some deserved criticism and is trying to weasel his way out, like any good journalist).

My understanding is that a bondholder is a distinct legal entity from a depositor or a creditor. I take the latter terms to describe those involved in direct exchange of cash for cash in terms of deposit or loan as understood by the vast majority of the readership of mainstream media and not the nuances as understood by a select minority.

Deposits are liabilities to banks - it's something they have to pay back, so depositors are creditors. As has been pointed out a bond is a loan to a bank, so bondholders are also creditors (i.e. the bank owes them money).

StealthRolex

PopeBuckfastXVI wrote: »

Out of curiosity, who do you consider to be a Creditor, as a separate entity to depositors and bond holders?

Or were you saying that depositors are the only creditors?

Well, a depositor is a creditor as I have already described.

Non-depositor creditors for me would be companies, businesses, contract staff etc. owed money from the bank for services rendered, and banks providing interbank loans.

The bondholders don't need a guarantee anyway. If a bank collapses they get paid first. Because of that there is a risk that depositors will not get a penny. This is why the guarantee should have covered depositors in the first interest and should have more carefully defined which creditors would have been paid after.

Perhaps bondholding should be banned and if something wants to invest in a bank by buying its bonds perhaps they would be better off opening a deposit interest account and putting their money there instead.

StealthRolex

antoobrien wrote: »

Lets go back to what he said two days before the bank guarantee then



Can we agree that he is talking about not proving cover to shareholders and only shareholders?

Now a bond is not, repeat not, a share. So by singling out shareholders to the exclusion of all others, he is including bondholders under his proposal for a guarantee.

He does not give any more detail on the plan than that, so any later retractions/rebuttals smack of revisionism (i.e. he got some deserved criticism and is trying to weasel his way out, like any good journalist).



Deposits are liabilities to banks - it's something they have to pay back, so depositors are creditors. As has been pointed out a bond is a loan to a bank, so bondholders are also creditors (i.e. the bank owes them money).

Let's not. I disagree and it's off topic and I'm still voting No because Merkel is an idiot and this is her idea anyway

meglome

StealthRolex wrote: »

Let's not. I disagree and it's off topic and I'm still voting No because Merkel is an idiot and this is her idea anyway

You should go pull her pigtails.

Godge

StealthRolex wrote: »

The only answer to that is for McWilliams to state whether or not he meant the bondholders to be included. I have read his rebuttal as posted and I take him at his word.

A laymens reading, which is who is being address in a newspaper, would suggest the bondholders should not have been included. That is my take and my understanding as the term "bondholder" was not used. I may be wrong in that but so might you.

A reality of the situation is that the Government did not do due diligence before issuing the guarantee nor did the bondholders do due diligence to ensure their money was with reputable organisations or call them to book when it was realized what they were up to. Perhaps the bondholders didn't care and if that is the case they made bad bets and should expect to lose their money.

Anyway, the guarantee has a limited life. The government can, if it wishes, decide the guarantee is for depositors only at the next renewal.

As for disingenuity, I'm a visitor here and haven't trawled this for all arguments. My understanding is that a bondholder is a distinct legal entity from a depositor or a creditor. I take the latter terms to describe those involved in direct exchange of cash for cash in terms of deposit or loan as understood by the vast majority of the readership of mainstream media and not the nuances as understood by a select minority.

But again we are straying off the point. You may have no respect of so called "pop economists" and that's fine.

What I don't understand is why McWilliams is now the target. Was he in charge? Did he run a bank?

Or is it just another Yes campaign tactic to blacken the name of anyone on the No side?

Of course McWilliams is saying it wasn't what he meant. It went spectacularly wrong, the biggest mistake ever, he is hardly going to admit it was exactly what he proposed. Unfortunately, his words in writing two days before the bank guarantee and the incidents outlined in his book, published before he changed his mind tell a different story to his.

McWilliams is not the target just now, his credibility has been a problem for a long time, many people have called him on this and other issues. Do you remember him and Constantin telling us our debt was heading for more than $250bn? Won't get anywhere near that and they were wrong on that as well.

Godge

StealthRolex wrote: »

Let's not. I disagree and it's off topic and I'm still voting No because Merkel is an idiot and this is her idea anyway

Any evidence that Merkel is an idiot or is that your professional opinion?

StealthRolex

Godge wrote: »

Of course McWilliams is saying it wasn't what he meant. It went spectacularly wrong, the biggest mistake ever, he is hardly going to admit it was exactly what he proposed. Unfortunately, his words in writing two days before the bank guarantee and the incidents outlined in his book, published before he changed his mind tell a different story to his.

McWilliams is not the target just now, his credibility has been a problem for a long time, many people have called him on this and other issues. Do you remember him and Constantin telling us our debt was heading for more than $250bn? Won't get anywhere near that and they were wrong on that as well.

I'm not sure if this page is correct but it suggests our external debt was 2,378,000,000,000 dollars as of Nov 2011

That is trillion, isn't it? I can't recall if we call 1,000,000,000 a billion or 1,000,000,000,000 a billion

either way it looks to be a little bit more than 250bn.

Granted it is nowhere near 250bn so they were essentially wrong but were you thinking they were underestimating it?

My reading is that anything more than 250bn is a vindication.

StealthRolex

Godge wrote: »

Any evidence that Merkel is an idiot or is that your professional opinion?

Her leadership of Europe and her handling of the Euro crisis speak for themselves.

dvpower

StealthRolex wrote: »

Her leadership of Europe and her handling of the Euro crisis speak for themselves.

Her leadership of Germany on the other hand...

K-9

StealthRolex wrote: »

I'm not sure if this page is correct but it suggests our external debt was 2,378,000,000,000 dollars as of Nov 2011

That is trillion, isn't it? I can't recall if we call 1,000,000,000 a billion or 1,000,000,000,000 a billion

either way it looks to be a little bit more than 250bn.

Granted it is nowhere near 250bn so they were essentially wrong but were you thinking they were underestimating it?

My reading is that anything more than 250bn is a vindication.

That seems a bit like the debt graph that was going around a couple of years ago, that would include IFSC debt and debt of banks like Ulster Bank not covered by the guarantee. One of the banks in the IFSC failed a couple of years ago and the German taxpayer picked up the tab, not us.

StealthRolex

Godge wrote: »

Of course McWilliams is saying it wasn't what he meant. It went spectacularly wrong, the biggest mistake ever, he is hardly going to admit it was exactly what he proposed. Unfortunately, his words in writing two days before the bank guarantee and the incidents outlined in his book, published before he changed his mind tell a different story to his.

I believe the salient point is that he was asked for an opinion and he gave one. I haven't read his book

Unless you can show a contract for advisory services rendered indicating that he was an official advisor to the minister at the time there is no point trying to blaming him. The reality is that the minister made the decision and the buck stops with the Taoiseach.

Perhaps you would be happier if he had gone to Bono for advice instead?

StealthRolex

K-9 wrote: »

That seems a bit like the debt graph that was going around a couple of years ago, that would include IFSC debt and debt of banks like Ulster Bank not covered by the guarantee. One of the banks in the IFSC failed a couple of years ago and the German taxpayer picked up the tab, not us.

of course - silly me. Boards is a couple of time zones out and November 2011 was a few years ago.

If the debt has been reduced significantly from this 2.odd trillion what is it now?

StealthRolex

dvpower wrote: »

Her leadership of Germany on the other hand...

... will be answered next year by German citizens.

Anyway, you know what Germans are like.

K-9

StealthRolex wrote: »

of course - silly me. Boards is a couple of time zones out and November 2011 was a few years ago.

If the debt has been reduced significantly from this 2.odd trillion what is it now?

Not sure. Why is IFSC debt and non Government guaranteed debt important?

StealthRolex

K-9 wrote: »

Not sure. Why is IFSC debt and non Government guaranteed debt important?

Don't know what you are talking about. the link I put up details external debt

the total public and private debt (i.e. gross general government debt including both intragovernmental and sub-national public entities debts) owed to nonresidents repayable in internationally accepted currencies, goods, or services,[1] where the public debt is the money or credit owed by any level of government, from central to local, and the private debt the money or credit owed by private households or private corporations

The real debt account of the country is important because austerity budgets increase the likelihood of default.

Regardless of whether or not this treaty is passed unless we get some intelligence into the Dail and the civil service we are in for more austerity and more austerity means less money with means less growth.
And I didn't get that from any pop economist either. That's just plain ordinary common sense.

If income tax and vat are cut there will be more money to spend. If more money is spent more people will be employed. If more people are employed more money will be spent and we will have a thing called growth.
Of course that might lead to a growth bubble and if that happens the government can increase income tax and vat to control it.

But we all know that is not going to happen any time soon which means that more individual defaults will happen and continue to happen.

Ultimately the national debt is immaterial.

K-9

StealthRolex wrote: »

Don't know what you are talking about. the link I put up details external debt

the total public and private debt (i.e. gross general government debt including both intragovernmental and sub-national public entities debts) owed to nonresidents repayable in internationally accepted currencies, goods, or services,[1] where the public debt is the money or credit owed by any level of government, from central to local, and the private debt the money or credit owed by private households or private corporations

That would include IFSC and non guaranteed bank debt, we aren't liable if that ever became repayable. An American bank in the IFSC could owe money to a USA bank at home, Intel cold owe money to its parent company back home, Google the same etc. etc.

You brought up the figure, do you see the above as significant as regards Irish debt? It's a pretty easy question to answer, not going through semantics like with McWilliams on this thread.

The real debt account of the country is important because austerity budgets increase the likelihood of default.

How does austerity effect Google, Intel or the IFSC?

Regardless of whether or not this treaty is passed unless we get some intelligence into the Dail and the civil service we are in for more austerity and more austerity means less money with means less growth.
And I didn't get that from any pop economist either. That's just plain ordinary common sense.

If income tax and vat are cut there will be more money to spend. If more money is spent more people will be employed. If more people are employed more money will be spent and we will have a thing called growth.
Of course that might lead to a growth bubble and if that happens the government can increase income tax and vat to control it.

But we all know that is not going to happen any time soon which means that more individual defaults will happen and continue to happen.

Ultimately the national debt is immaterial.

We'd need growth far in excess of the celtic tiger and bubble years to avoid cuts in welfare and PS pay. It requires a 2 pronged approach, people need to get away from the idea of unsustainable growth, have real growth not fueled by tax cuts and government intervention and have prudent expenditure for the future.

StealthRolex

K-9 wrote: »

That would include IFSC and non guaranteed bank debt, we aren't liable if that ever became repayable. An American bank in the IFSC could owe money to a USA bank at home, Intel cold owe money to its parent company back home, Google the same etc. etc.

You brought up the figure, do you see the above as significant as regards Irish debt? It's a pretty easy question to answer, not going through semantics like with McWilliams on this thread.

Yes

K-9 wrote: »

How does austerity effect Google, Intel or the IFSC?

If these are growth companies they will need employees of a particular calibre. If they have all the employees they will ever need now that is not a major worry, and less of a one once they have figured out how to stop employees taking pensions, leaving or dying.

The reality is that if they continue to grow they will need more employees. Ireland is an ageing nation. If they can't find the employees here they will go elsewhere.
There are factors reducing available staff apart from death and taxes. Those who do not find employment with them now will go elsewhere. Those with children who are likely to be their next generation of employees are emigrating. Of those already employed many are foreign nationals who may return home or go elsewhere as austerity bites.
Another effect of austerity is that increased income taxes will lead to increased employment costs.
As there is no law that forces the company or their foreign nationals to commit to Ireland they will relocate to better pastures.

Apologies if this is not the consummate answer you are looking for but in all honesty I do not see any ordinary person in Ireland immune from austerity other that the wealthy and the politicans.

K-9 wrote: »

We'd need growth far in excess of the celtic tiger and bubble years to avoid cuts in welfare and PS pay. It requires a 2 pronged approach, people need to get away from the idea of unsustainable growth, have real growth not fueled by tax cuts and government intervention and have prudent expenditure for the future.

Agreed, however we need stimulus. If we cannot inject vast quantities of money in to the economy - not the banks, they're awash with money but are too scared to use it besides no one trusts them any more - the ball will not get rolling. Drop the taxes now and bring them up slowly as the economy recovers to a sustainable level.

As for getting people away from the concept of unsustainable growth - that requires education. I saw the crash coming in 2005, long before I had ever heard of David McWilliams or the Russian or anyone else. I did a simple calculation on average wage against average house cost and it was obviously unsustainable. Once I heard there were sub-prime mortages available it became blindingly obvious. I heard Bertie gave himself a pay rise and was apoplectic with rage. I heard him tell people to commit suicide and I very nearly put in an application to have my Irish citizenship revoked. I'm still considering it.

I'm fortunate enough to have a job but I would love to get out of Ireland again but permanently this time.

ps - we need cuts in PS salaries, welfare and CS pay along with cuts in politicians pay. Anyone who suggests that cuts in PS\CS pay and welfare is to be avoided is not worth talking to.

K-9

StealthRolex wrote: »

Yes

Grand.

If these are growth companies they will need employees of a particular calibre. If they have all the employees they will ever need now that is not a major worry, and less of a one once they have figured out how to stop employees taking pensions, leaving or dying.

But anyway.

The reality is that if they continue to grow they will need more employees. Ireland is an ageing nation. If they can't find the employees here they will go elsewhere.

Ireland is not an aging nation like many other European countries, we had quite the baby boom recently. Plus Google or Intel acquire immigrants if they can't get the people here, you might have missed Intel's recent announcement as well.

There are factors reducing available staff apart from death and taxes. Those who do not find employment with them now will go elsewhere. Those with children who are likely to be their next generation of employees are emigrating. Of those already employed many are foreign nationals who may return home or go elsewhere as austerity bites.

So what happened in the late 80's and early 90's here when we had huge emigration? Where did the employees come from for Intel when we had far higher taxes than we have now? Foreign nationals are in demand for companies like Intel and Google.

Another effect of austerity is that increased income taxes will lead to increased employment costs.

Increased income taxes do not affect employment costs. Increased ER PRSI does.

As there is no law that forces the company or their foreign nationals to commit to Ireland they will relocate to better pastures.

Not if wages remain competitive.

Apologies if this is not the consummate answer you are looking for but in all honesty I do not see any ordinary person in Ireland immune from austerity other that the wealthy and the politicans.

But none of that addresses my point that Intel's debt to its American company is irrelevant to Ireland. You seem to think it is because it's included in that external debt figure you quoted.

Agreed, however we need stimulus. If we cannot inject vast quantities of money in to the economy - not the banks, they're awash with money but are too scared to use it besides no one trusts them any more - the ball will not get rolling. Drop the taxes now and bring them up slowly as the economy recovers to a sustainable level.

We need stimulus on growth areas and that is what is lacking. Giving tax cuts for people to spend in shops etc. is a waste, it's just repeating the same mistakes as the bubble.. Government will see tax revenues rise like they did during the bubble and think everything is fine and they wont increase them.

StealthRolex

K-9 wrote: »

Grand.



But anyway.



Ireland is not an aging nation like many other European countries, we had quite the baby boom recently. Plus Google or Intel acquire immigrants if they can't get the people here, you might have missed Intel's recent announcement as well.



So what happened in the late 80's and early 90's here when we had huge emigration? Where did the employees come from for Intel when we had far higher taxes than we have now? Foreign nationals are in demand for companies like Intel and Google.



Increased income taxes do not affect employment costs. Increased ER PRSI does.



Not if wages remain competitive.



But none of that addresses my point that Intel's debt to its American company is irrelevant to Ireland. You seem to think it is because it's included in that external debt figure you quoted.




We need stimulus on growth areas and that is what is lacking. Giving tax cuts for people to spend in shops etc. is a waste, it's just repeating the same mistakes as the bubble.. Government will see tax revenues rise like they did during the bubble and think everything is fine and they wont increase them.

Hey, I'm just talking - don't take it so seriously

Still voting No and getting out of this kip as soon as I can.

Scofflaw

StealthRolex wrote: »

McWilliams is not the target just now, his credibility has been a problem for a long time, many people have called him on this and other issues. Do you remember him and Constantin telling us our debt was heading for more than $250bn? Won't get anywhere near that and they were wrong on that as well.

I'm not sure if this page is correct but it suggests our external debt was 2,378,000,000,000 dollars as of Nov 2011

That is trillion, isn't it? I can't recall if we call 1,000,000,000 a billion or 1,000,000,000,000 a billion

either way it looks to be a little bit more than 250bn.

Granted it is nowhere near 250bn so they were essentially wrong but were you thinking they were underestimating it?

My reading is that anything more than 250bn is a vindication.

But you're reading a number that has nothing to do with what Gurdgiev and McWilliams was talking about. They were talking about "public debt", not the total of all public and private debt, which is what you're reading there.

And public debt is nowhere near their figure.

cordially,
Scofflaw