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Ireland Sovereign Debt Down Graded By S&p

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BY 2011, one euro in every 10 raised in taxes in Ireland will go on servicing the national debt, according to Moody’s Investor Services, the credit rating agency. Among the 16 euro-zone countries, the ratio is expected to be higher only in Greece and Italy.(The Irish Times)

According to the official UK Budget forecast, that's pretty much the fate that awaits the UK in 2015/16.

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£ & $ to collaspe, last chance to lash out at the Euro, "sadly" (singger) China got Germanys back...The Euro will NOT be allowed to collaspe, the $ will.

Mike

It is strange that these European down grades always seem to come out on days when the news about the US economy is particularly dire,

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This is what happens when you try austerity and follow the plans of the bondholders and IMF. Otoh when you print recklessly and treat the bondholders like dirt.. they will love you for it. Think the UK, Japan and the USA where bondholders are in love with these nations, always outbidding each other for lower yields.

PS.. the same is also true of women.

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http://www.bloomberg.com/news/2010-08-24/ireland-s-long-term-sovereign-debt-rating-cut-by-standard-poor-s-to-aa-.html

Ireland's Credit Rating Cut by S&P on Costs of Bank Aid
By Ben "Benjamin" Livesey and Robert "Bob" Burgess - Aug 24, 2010 10:17 PM GMT+0100
Aug. 24 (Bloomberg) -- Bloomberg's Matt Miller, Dominic Chu and Julie Hyman discuss today's decision by Standard and Poor's to cut Ireland's long-term sovereign credit rating to AA- from AA. Nobel Prize-winning economist Joseph Stiglitz told Dublin-based RTE Radio in an interview broadcast today that the European economy is at risk of sliding back into a recession as governments cut spending to reduce their budget deficits. They talk on Bloomberg Television's "Street Smart." (Source: Bloomberg)
“The negative outlook reflects our view that a further downgrade is possible if the fiscal cost of supporting the banking sector rises further, or if other adverse economic developments weaken the government’s ability to meet its medium- term fiscal objectives,” S&P said today in a statement.

I can imagine the Irish are cursing their luck these days and wish HPI never happened.

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Ere we go, ere we go, ere we go---o

http://www.bloomberg.com/news/2010-08-25/corporate-bond-risk-increases-in-europe-credit-default-swap-prices-show.html

Irish Bank Credit-Default Swaps Near One-Year High on Ratings Cut Concerns
By Abigail Moses and Caroline Hyde - Aug 25, 2010 12:29 PM GMT+0100
The cost of insuring against default on Irish bank bonds approached the highest in a year on concern their credit rankings will be cut after Standard & Poor’s downgraded the government.

It didn't take the vultures long then. :o

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Ere we go, ere we go, ere we go---o

http://www.bloomberg.com/news/2010-08-25/corporate-bond-risk-increases-in-europe-credit-default-swap-prices-show.html

Irish Bank Credit-Default Swaps Near One-Year High on Ratings Cut Concerns
By Abigail Moses and Caroline Hyde - Aug 25, 2010 12:29 PM GMT+0100
The cost of insuring against default on Irish bank bonds approached the highest in a year on concern their credit rankings will be cut after Standard & Poor’s downgraded the government.

It didn't take the vultures long then. :o

But I thought that the Irish were the poster-boys for the benefits of austerity measures ? Now it all looks like a great big scam whereby the less well off all take a huge pay cut and all of the proceeds end up with the banks.. shocker.

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Irish credit rating is downgraded

The Irish Republic has had its credit rating downgraded by a leading ratings agency, Standard and Poor's (S&P).

Link to article

So Irish Government borrowing rise? Its Stock market to fall? Its Government ministers to panic and point at "fundamental" the countries strengths. I wonder how long before the UK's credit worthiness is to be reviewed.

EDIT

Boo, duplicate thread. I did search, guess not hard enough. :-)

Edited by Redback911

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So the policy of massive loans to the banks and slashing public spending did not work? Maybe they should have just printed all the new money they needed.

If they had the ability to print they would have and done it on a Zimbabwean scale.

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This is just great. The Irish suffer swingeing cuts and a nasty austerity package. And for what? All the savings will be paid out in increased interest on the national debt. A higher rate of interest will be charged due to the rating downgrade.

This blog picked up on this money making scheme - http://gregpytel.blogspot.com/2010/08/irish-lesson.html

Social unrest is looking more and more likely.

It is important that you understand this -

Ireland is being downgraded because they have guaranteed all the banks and bondholders.

They are not being downgraded because they have introduced austerity measures, they are downgraded because they foolishly tried to prop up the whole banking system at once. If anything the downgrade alludes to the fact that they have not cut back enough.

The austerity measures are miniscule in comparison to the savings that need to be made.

The party in power (Fianna Fail - centre Left - new labour-style) promised everything to everyone, and reduced taxes during a boom.

Above all things, they let the Irish housing market get way, way, way out of control.

So much so, that in a country with a population of ~4 million there are 300k empty houses.

Ireland is getting everything it deserves.

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So the policy of massive loans to the banks and slashing public spending did not work? Maybe they should have just printed all the new money they needed.

That is what they should have done. Labour did exactly that.. a nd I remember 1.5 years ago bond investors were saying how this would

1) definately lead to hyperinflation

2) How the UK's credit rating would be wrecked, have to pay a much higher rate for future debt

We see inflation running at a 'dangerous' 3.1%, about the historic average for the last 100 years. And the amount the UK government pays for 10 year notes is substantially less than before the crisis started.

Seeing the great success of that program, the Tories are thinking of copying the Irish model of austerity. Although I believe the Tories will back down from the cuts and not actually go ahead with them.

Edited by aa3

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  • 195 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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