Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

* News * World News * Ireland Ireland Sells €1.5Bn Of Bonds Amid Warnings Of Greek-Style Crisis

Recommended Posts

http://www.guardian.co.uk/world/2010/sep/21/ireland-bond-selloff-fears-greece-crisis

Ireland was today forced to pay big premiums as it sold €1.5bn (£1.3bn) of bonds, amid continued fears that the country's finances are spiralling out of control.

Dublin managed to reach the maximum target for the auction, but analysts warned it might struggle to cope with the high interest rates as the government imposes harsh spending cuts in an effort to get the economy back on a steady footing. The rates were more than 6% on eight-year bonds and just under 5% on four-year bonds.

Ireland has been thrust back into the spotlight as its borrowing costs have reached record levels amid dire warnings about the former Celtic Tiger's hobbled economy. The head of Ireland's central bank, Patrick Honohan, called on Monday for tougher budget cuts, arguing that three austerity budgets in two years is no longer enough.

"The message from the markets to the European Central Bank is: come in and do something to help the situation, increase your purchase of Irish government bonds to bring yields down," said Ashok Shah, Chief investment officer at London & Capital. "Ireland can't afford to pay these kind of rates when the economy is contracting. The cost of capital is too high for an economy that's barely growing. If there are more spending cuts, the economy will be going into recession again, because there won't be any demand."

Irish bonds suffered a big sell-off on Friday after Barclays Capital said in a research report that the country might need a European Union and International Monetary Fund bailout if its economy or its banking system worsened, plunging it into a Greek-style crisis. The IMF and the government denied they were planning any rescue.

Where will the dam burst.

Who will collapse first and trigger a potential European monetary crisis?

Share this post


Link to post
Share on other sites

http://www.guardian.co.uk/world/2010/sep/21/ireland-bond-selloff-fears-greece-crisis

Where will the dam burst.

Who will collapse first and trigger a potential European monetary crisis?

:rolleyes:

I read that this auction was more than 3 times oversubscribed.

Start a thread when a bond auction fails... this is clearly not good for Ireland, but it is not the eve of some apocalypse.

Share this post


Link to post
Share on other sites

:rolleyes:

I read that this auction was more than 3 times oversubscribed.

Start a thread when a bond auction fails... this is clearly not good for Ireland, but it is not the eve of some apocalypse.

Oversubscribed? I can believe it. Ireland is no more likely to fail than Germany, the rates been offered equates to money for old rope. The bond spreads between the two countries are polar opposites. No country in the single currency will be permitted to fail.

Share this post


Link to post
Share on other sites

Oversubscribed? I can believe it. Ireland is no more likely to fail than Germany, the rates been offered equates to money for old rope. The bond spreads between the two countries are polar opposites. No country in the single currency will be permitted to fail.

What happens if a political prty is formed in ireland whos number on policy is default on all debts, start again. If the voters voted them in (and the Irish are angry) would thre be a default then or would the EU send the Stormtroopers in?

Share this post


Link to post
Share on other sites

What happens if a political prty is formed in ireland whos number on policy is default on all debts, start again. If the voters voted them in (and the Irish are angry) would thre be a default then or would the EU send the Stormtroopers in?

It'd never get off the ground and if it did the leaders of such a movement would go under a bus asap.

Not that they can actually make this turd fly, you understand but they'll have to completely and utterly fail first before anyone else gets a crack at it.

Share this post


Link to post
Share on other sites

What happens if a political prty is formed in ireland whos number on policy is default on all debts, start again. If the voters voted them in (and the Irish are angry) would thre be a default then or would the EU send the Stormtroopers in?

There is a party tending that way - Sinn Fein, aka the literary wing of the IRA.

They're a bit vague on the EU, but basically hostile from the nationalist end of the spectrum. And here's their manifesto on the economy, which includes a mortgage possession moratorium and a demand to make the banks come clean:

http://www.sinnfein.ie/economy

Starts out kind of HPC, but I suspect it would trail off into old style socialism: all your dollar are belong to us.

Share this post


Link to post
Share on other sites

Start a thread when a bond auction fails... this is clearly not good for Ireland, but it is not the eve of some apocalypse.

If you were on a ship crossing the Atlantic, would you want to be woken up when the iceberg was spotted or when the ship actually hit it?

6%+ interest rates on government debt are highly meaningful. They mean that absent a big rise in tax revenues or a big drop in bond yields in the future, insolvency is on the horizon. Solvency is no longer the default option for Ireland.

Share this post


Link to post
Share on other sites

Start a thread when a bond auction fails...

I don't think this will happen.

From Trichet's magic cooking book of euros:

- Talk to the banks

- Banks buy bonds at auction

- After auction, ECB buys traded government bonds with gusto

- Bond prices rise

- Banks sell on the market at a profit

- Rinse and repeat with more banks joining each time as it is such a nice little earner

As an added twist, add a zest of BS from virtually every euro region banks suddenly telling their clients, in concert, that euro bonds are great buys!

Not only will no bond auction fail, under this system euro bonds probably ARE a great buy!!!

Share this post


Link to post
Share on other sites
If there are more spending cuts, the economy will be going into recession again, because there won't be any demand.

So it turns out that much of the 'wealth' held by the 'rich' is little more than a bunch of IOU's predicated on the sheeple going shopping? :lol:

For some reason I find that oddly satisfying.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 261 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.