Monday, March 28, 2011

More from the Banana Republic of Ireland

Irish banks need another bailout

Fresh bank stress tests in Ireland are expected to show another black hole of between €18bn and €23bn and lead to the fifth bailout in two and half years. The losses reflect the worsening state of the banks' commercial and residential mortgage loan books with a worse-case scenario of a 60% fall in house prices from peak to trough. If the figures are confirmed, it will mean virtually all the EU-IMF contingency fund is now consumed

Posted by little professor @ 11:18 AM (1401 views)
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3 thoughts on “More from the Banana Republic of Ireland

  • Like I have been saying, more QE to come.

    “Once you start, you can’t stop.” It’s also nice to see some numbers, as fictitious as they will become.

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  • Is it wishful thinking, or is there a groundswell of anti-euro/anti EC sentiment rising across the continent?

    First the Greeks were bailed out, after fiddling their books; yet a consensus of economists believes they will still default on their sovereign debt; while the language from Athens towards the rest of the eurozone is less than grateful..

    Then the Irish were bailed out, and for their efforts, the government promptly suffered one of the worst electoral defeats in recent european history..

    Then there is the stalemate in Belgium, which has been totally unable to form a government since June last year. It seems that no-one wants to take responsibility for putting the Belgian economy back on track, fearing the electoral consequences of doing so..

    Portugal has now reached an impasse – prime minister Socrates resigned because not enough MPs would back an austerity plan. They will now have an election, probably at the end of May; which is unlikely to give a clear mandate to any one party. Within days of that election, Portuguese sovereign debt will go critical – the chances of a coalition being formed in time to solve the crisis look tiny, and it also has to be remembered that EU or IMF bailouts can only occur if the country concerned asks for one. Portugal may well default – by default..

    Now Germany’s Merkel has suffered a massive defeat in regional elections. Yes, some blame the nuclear issue, others controversial projects like Stuttgart 21; but it seems unlikely that they were the core issues that turned her most loyal voters against her..

    Politicians are ultimately cowards; so will they now recognise that lip service to the european dream is now a recipe for political suicide..?

    ..I watch with interest!

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  • @Uncle Tom: “It seems that no-one wants to take responsibility for putting the Belgian economy back on track, fearing the electoral consequences of doing so..”

    Indeed. They may have watched all the flack the ConDems are getting for attempting to put the UK economy back on track.

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