Irelands default risk.

ranger4

with the worsening global financial situation does ireland look likely to possibly default, there was a disscussion on bloomberg today and economist roubini sugested that small eu contries like ireland and greece has a strong possibilty of defaulting, He also suggested that germany and france could potentaly step in and avert a possible default, Roubini states there is a strong chance of default and possibly very soon, are we anywhere near default also could we expect the germans and french to avert such a drastic senario for ireland, wouldnt it be in every euro countrys best intrest to do everything possible to avert any eu member defaulting, Would a insurance scheme and possible bad bank for bad loans etc be enough to avert default risk.

ranger4

ranger4 wrote: »

with the worsening global financial situation does ireland look likely to possibly default, there was a disscussion on bloomberg today and economist roubini sugested that small eu contries like ireland and greece has a strong possibilty of defaulting, He also suggested that germany and france could potentaly step in and avert a possible default, Roubini states there is a strong chance of default and possibly very soon, are we anywhere near default also could we expect the germans and french to avert such a drastic senario for ireland, wouldnt it be in every euro countrys best intrest to do everything possible to avert any eu member defaulting, Would a insurance scheme and possible bad bank for bad loans etc be enough to avert default risk.

No one prepaired to share their views on this subject then.

P. Breathnach

ranger4 wrote: »

No one prepaired to share their views on this subject then.

Well observed.

Time Magazine

ranger4 wrote: »

No one prepaired to share their views on this subject then.

It might have something to do with the two or three other threads on the topic already.

daveirl

This post has been deleted.

ranger4

daveirl wrote: »

This post has been deleted.

Hello dave, I have a substantial amount invested in irish banks allong with a equal amount on the sidelines, I believe our main two banks will escape nationalisation and am in for the long haul, the question i posted was about irelands default risk and how any eu-german insurance-bad bank plan COULD help avoid such a default which would affect ALL stock not just banks bud.

fergalr

Hi guys,

On this topic, the Irish Examiner carried a story on 13Feb- and it's in other places too, think I saw the AP carrying it, which says
"Ireland given 25% chance of bankruptcy"

http://www.examiner.ie/business/ideymhqlgb/

This seems to be working out the probability based on the market value of Irish credit default swaps.

What I'm just wondering, is the numerical reasoning behind the article sound?
There's a few minor things in it that seem to be errors (eg: "the Irish five-year CDS hit a record 325,000 basis points" - presumably they mean 325 basis points) but are their figures in general correct?

Is the CDS swaps (roughly) implying a 25% chance of default over 5 years?

Darragh29

ranger4 wrote: »

Hello dave, I have a substantial amount invested in irish banks allong with a equal amount on the sidelines, I believe our main two banks will escape nationalisation and am in for the long haul, the question i posted was about irelands default risk and how any eu-german insurance-bad bank plan COULD help avoid such a default which would affect ALL stock not just banks bud.

Sorry for your loss OP. We probably need to default because we will not get our house in order until it is that serious. All the signs so far indicate that we are incapable of resolving this crisis or even letting a week go past where we have not made the crisis any worse, so I think ultimately someone else is going to arrive here imminently and sort the mess out for us.

20goto10

Darragh29 wrote: »

Sorry for your loss OP. We probably need to default because we will not get our house in order until it is that serious. All the signs so far indicate that we are incapable of resolving this crisis or even letting a week go past where we have not made the crisis any worse, so I think ultimately someone else is going to arrive here imminently and sort the mess out for us.

Enda Kenny and Eamonn Gilmore?

When will people learn to stop speculating. It will happen because the speculators say so. And the reason they say so is because they have a small fortune on it happening. Speculators are the scurge of the global economy. Irish people jumping on their band wagon and believing everything they say just because they are not Irish does nothing to help the situation. We could all fix this, any FTB holding off buying could go out and buy, people get moving, the problem gets sorted at the root of it all. but its never going to happen. We have a death wish. You want help by the same people we slapped in the face? Its bad enough we sent Dustin to the Eurovision but then we vote no to Lisbon (I don't care what people say it was blatantly anti-European) and now expect to be bailed out. They'll let us choke in our own vomit before they bail out an ungrateful ignorant nation such as Ireland.

Time Magazine

20goto10 wrote: »

Enda Kenny and Eamonn Gilmore?

When will people learn to stop speculating. It will happen because the speculators say so. And the reason they say so is because they have a small fortune on it happening. Speculators are the scurge of the global economy. Irish people jumping on their band wagon and believing everything they say just because they are not Irish does nothing to help the situation. We could all fix this, any FTB holding off buying could go out and buy, people get moving, the problem gets sorted at the root of it all. but its never going to happen. We have a death wish.

Reckless consumption is not the long-term solution to the economy's ills. Productivity is.

20goto10

The Economist wrote: »

Reckless consumption is not the long-term solution to the economy's ills. Productivity is.

It doesn't have to be wreckless. Produictivity is something that happens in a stable economy.

ranger4

20goto10 wrote: »

Enda Kenny and Eamonn Gilmore?

When will people learn to stop speculating. It will happen because the speculators say so. And the reason they say so is because they have a small fortune on it happening. Speculators are the scurge of the global economy. Irish people jumping on their band wagon and believing everything they say just because they are not Irish does nothing to help the situation. We could all fix this, any FTB holding off buying could go out and buy, people get moving, the problem gets sorted at the root of it all. but its never going to happen. We have a death wish. You want help by the same people we slapped in the face? Its bad enough we sent Dustin to the Eurovision but then we vote no to Lisbon (I don't care what people say it was blatantly anti-European) and now expect to be bailed out. They'll let us choke in our own vomit before they bail out an ungrateful ignorant nation such as Ireland.

I agree, the recent no vote was a slap in the face but i bet if a ref was called as soon as possible there would be a massive yes vote now, why cant our gov just go ahead and anounce that anglo is to be used to House any potential aib-boi bad loan debt which will be sold off at a future date? They had the balls in the past to announce a massive bank guarentee so wouldnt a brave move now be seen as possitive and bring back potential investors, as for gilmor and his socialist ****es they would dig an even deeper hole for all of us.

fergalr

fergalr wrote: »

Hi guys,

On this topic, the Irish Examiner carried a story on 13Feb- and it's in other places too, think I saw the AP carrying it, which says
"Ireland given 25% chance of bankruptcy"

http://www.examiner.ie/business/ideymhqlgb/

This seems to be working out the probability based on the market value of Irish credit default swaps.

What I'm just wondering, is the numerical reasoning behind the article sound?
There's a few minor things in it that seem to be errors (eg: "the Irish five-year CDS hit a record 325,000 basis points" - presumably they mean 325 basis points) but are their figures in general correct?

Is the CDS swaps (roughly) implying a 25% chance of default over 5 years?

Anything on this, guys? I know you understand this stuff a lot better than I do... Is there any chance they made a mistake and took the cumulative probability of a five year cds over each of it's five years, and so ended up with 25% as opposed to 3.5%? Or are their figures right?

ranger4

Are we anywhere nearer the possible bad bank idea (anglo) being used in ireland? The germans are concidering such a plan with commisbank and hypo,would such a plan help our exsisiting banks possible bad debt exposure going forward whilest gaining some cred with home & international investors for our ailing banks, doesnt seem to be any precise leadership or political will to act on problem anywhere in the euro zone, Are the eurozone countries capable of reaching agreement with some kind of bad bank or insurance plan before total financial meltdown occurs?

Économiste Monétaire

Ask on the investments and markets forum for a better answer on CDS spreads and implied probability of default. One of the fixed-income guys could probably give you a short answer.

betonit

i heard George Lee on the radio today, he was very confident that Ireland wouldnt default, why would he be so confident?

Time Magazine

betonit wrote: »

i heard George Lee on the radio today, he was very confident that Ireland wouldnt default, why would he be so confident?

Because our national debt as a percentage of our GDP is relatively low, a considerably lower than it was in the 80s. We have a couple of years before we get to 1980s levels. We have to make changes by then, or else we're f*cked.

George clearly thinks we're likely to cop on and stop striking/accept pay cuts etc by then.

daveirl

This post has been deleted.

cavedave

The Republic priced a 3-year €4bn deal Wednesday at 170bp over mid-swaps

So, Ireland marginally less risky than an acquisitive Swiss pharma group…

another slightly alarmist view on the cost of borrowing by Ireland

The Economist

The Economist wrote: »

Because our national debt as a percentage of our GDP is relatively low, a considerably lower than it was in the 80s. We have a couple of years before we get to 1980s levels. We have to make changes by then, or else we're f*cked.

George clearly thinks we're likely to cop on and stop striking/accept pay cuts etc by then.

Is it right or wrong to say that because we are guaranteeing the banks that our national debt is now linked to Irish private debt? i.e the individual defaulting puts increasing pressure on the state?

BlackWizard

Deleted User wrote: »

Is it right or wrong to say that because we are guaranteeing the banks that our national debt is now linked to Irish private debt? i.e the individual defaulting puts increasing pressure on the state?

I think it's wrong. Pure speculation and lots of maybe's and what if's. If that was the case then we'd have to account for a freak weather accident killing half the country.