Why Ireland Can't Afford To Punish Reckless Lenders To Its Banks

[_w_]

Thanks to R+R for the link.

Look at how much the UK taxpayer is in hock for. 244billion lent by UK banks.

http://www.bbc.co.uk...ord_to_pun.html

Thanks for that. No matter how much I think I know about the situation there I am shocked every time I read about it.

This tidbit reminds me of Argentina. I can't believe Irish pensions are being raided so openly:

Except for one thing. The huge losses incurred by the banks on the NAMA transfers deplete banks' capital - which then has to be topped up by (you guessed it) Irish taxpayers and the National Pension Reserve Fund, a state pension fund created for the long term benefit of Irish citizens.

[headrow]

After reading Pestons article can anybody make a case for holding British bank shares?

It's made me very nervous about where my money is held.

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

http://uk.reuters.com/article/idUKTRE68Q27D20100927

Moody's downgrades Anglo Irish again. GULP!

[Uriah Heap]

A couple of points. FIrst off, before the financial crisis Osbourne was criticising Brown for not being more like Ireland. Brown haters on here who are welcoming the Tories as sound money men might like to ponder that one.

Second, does it really make sense to impose onerous terms on the Irish to repay this money? It looks like it is possible that Ireland will be reduced to beggary by repaying these loans. Would it not make more sense to restructure them over say a century? I am not Irish and I have no particular positive or negative feelings about them as a people. I have always found the ones I meet to be pretty much standard human beings. But they are not going to be a lot of use to themselves or anyone else if we push them back to emigration and subsistence farming.

[Traktion]

A couple of points. FIrst off, before the financial crisis Osbourne was criticising Brown for not being more like Ireland. Brown haters on here who are welcoming the Tories as sound money men might like to ponder that one.

Second, does it really make sense to impose onerous terms on the Irish to repay this money? It looks like it is possible that Ireland will be reduced to beggary by repaying these loans. Would it not make more sense to restructure them over say a century? I am not Irish and I have no particular positive or negative feelings about them as a people. I have always found the ones I meet to be pretty much standard human beings. But they are not going to be a lot of use to themselves or anyone else if we push them back to emigration and subsistence farming.

If it's British banks owed the money, if the Irish don't pay it, then it will be British savers who take the hit (either by hair cut or inflation). Maybe savers would gladly take a loss, to free the Irish from too much toil, but I doubt it.

EDIT: If they can (agree to) restructure over a longer period, it will effect the liquidity of those banks owed too. Either way, do the great grand children of this generation really deserve to be paying for our generation's profligacy?

Edited September 27, 2010 by Traktion

[_w_]

A couple of points. FIrst off, before the financial crisis Osbourne was criticising Brown for not being more like Ireland. Brown haters on here who are welcoming the Tories as sound money men might like to ponder that one.

Second, does it really make sense to impose onerous terms on the Irish to repay this money? It looks like it is possible that Ireland will be reduced to beggary by repaying these loans. Would it not make more sense to restructure them over say a century? I am not Irish and I have no particular positive or negative feelings about them as a people. I have always found the ones I meet to be pretty much standard human beings. But they are not going to be a lot of use to themselves or anyone else if we push them back to emigration and subsistence farming.

Default with partial haircuts would have been another answer, something like Iceland light.

Better than inflating it away (screwing bondholders just as much in the process) and sending fake signals of (housing or other) recovery to the economy in the process IMO.

[Meg32]

Look at how much the UK taxpayer is in hock for. 244billion lent by UK banks.

Scarey stuff - and the rest - Spain and the like. How long they can keep on bailing this lot out? I doubt the Euro as we know it is going to be around for long.

[leicestersq]

Look at how much the UK taxpayer is in hock for. 244billion lent by UK banks.

Scarey stuff - and the rest - Spain and the like. How long they can keep on bailing this lot out? I doubt the Euro as we know it is going to be around for long.

Scary stuff indeed. I have a theory, that it is only the ECB now who is buying the debt of these troubled nations, who else but Mad McMadd, the mad buyer of worthless bonds would want these bonds?

Of course if the ECB just prints the money, no one need default, and Germany gets a devaluing currency to keep it competitive against all comers.

Please shoot my theory down in flames if you can. Can anyone confirm if it is the ECB buying all this stuff? How would we know, or is it all 'secret'?

[leicestersq]

Scary stuff indeed. I have a theory, that it is only the ECB now who is buying the debt of these troubled nations, who else but Mad McMadd, the mad buyer of worthless bonds would want these bonds?

Of course if the ECB just prints the money, no one need default, and Germany gets a devaluing currency to keep it competitive against all comers.

Please shoot my theory down in flames if you can. Can anyone confirm if it is the ECB buying all this stuff? How would we know, or is it all 'secret'?

Even scarier, zero hedge seem to have answered my question.

http://www.zerohedge.com/article/ecb-purchased-%E2%82%AC134-million-sovereign-bonds-week-ended-sept-24-compared-%E2%82%AC323-million-previous

So the ECB are just buying up these bonds. I bet they are the only buyer in town.

Lord Preserve us, something very bad is about to happen very soon.

[Traktion]

Even scarier, zero hedge seem to have answered my question.

http://www.zerohedge.com/article/ecb-purchased-%E2%82%AC134-million-sovereign-bonds-week-ended-sept-24-compared-%E2%82%AC323-million-previous

So the ECB are just buying up these bonds. I bet they are the only buyer in town.

Lord Preserve us, something very bad is about to happen very soon.

I note that they are pushing for austerity measures at the same time too. It sounds like they're trying to get the need to borrow down ASAP, while trying to fool/sooth the market in the mean time.

TBH, I can't see why they would stop*. While ever they think it is the only option and can get away with it, they're going to print and print.

(* Not that it's particularly wise to print your troubles away, it's just that I think it's the only politically acceptable option... right up until hyperinflation)

[leicestersq]

I note that they are pushing for austerity measures at the same time too. It sounds like they're trying to get the need to borrow down ASAP, while trying to fool/sooth the market in the mean time.

TBH, I can't see why they would stop*. While ever they think it is the only option and can get away with it, they're going to print and print.

(* Not that it's particularly wise to print your troubles away, it's just that I think it's the only politically acceptable option... right up until hyperinflation)

Well if Ireland gets into trouble, then no need to repay, borrow some more from the ECB, so that they can pay back the first loan to the ECB, plus interest. No need for this to end ever. Well at least until the Euro goes up in smoke, then no need to repay ever.

This is really bad. If the market ever gets wind of the fact that there is an open ended promise by the ECB to print money like this, then the Euro becomes worthless. And even worse is the thought that if the ECB can print money like this for bust nations like Greece, then what is there to stop corrupt officials printing a bit for themselves? Given the corrupt nature of the EU, I wouldnt put that notion entirely out of the question.

The UK has to leave the EU, at least on a temporary basis, until the auditors can sign off the books of the EU Budget. A look at the ECB wouldnt go amiss either.

[Democorruptcy]

It's all contained.

Didn't RBS stick billions of Irish debts in the Asset Protection Scheme? The chap who runs it is "certain" they are going to make a profit.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7905434/UK-taxpayer-in-line-for-5bn-profit-from-insuring-banks-toxic-assets.html

He wouldn't say that just so he could get his bonus then do a runner would he?

[Meg32]

Even scarier, zero hedge seem to have answered my question.

http://www.zerohedge...illion-previous

So the ECB are just buying up these bonds. I bet they are the only buyer in town.

Lord Preserve us, something very bad is about to happen very soon.

I fear that's the case - something awful is about to happen soon. I just can't see how all the European massively serious debt mess is going to get sorted out - ECB buying up bonds is a short term holding strategy.