National Solidarity Bond - SSIA 2?

_Kaiser_

From Breaking News:

29/04/2010 - 07:19:59
Finance Minister Brian Lenihan is tonight set to announce details of a new National Solidarity Bond to allow members of the public help stimulate the economy and create jobs.

The bond will be available for subscription through local Post Offices from next week.

The stimulation package is expected to offer opportunities to invest in the bond for periods of five, seven or 10 years with interest being paid annually.

The Labour Party have welcomed the announcement saying it will provide us with the opportunity to make a positive contribution to recovery.

Just saw this this morning. Is it basically SSIA 2, or anyone know any more about it?

Amhran Nua

And another one of our policies gets lifted. Take a look at the rest Minister, its not that hard to do.

Riskymove

Kaiser2000 wrote: »

From Breaking News:



Just saw this this morning. Is it basically SSIA 2, or anyone know any more about it?

i doubt it will be as generous as the SSIA

ei.sdraob

Took them long enough

I was talking about this when discussing the scam that Anglo is few weeks back

Now the question that needs to be answered is what % this will be getting?

If it carries a higher % return than Anglo savings, then its a no brainer considering the risk is the same And hey your helping the country right :P?

ei.sdraob

I wonder if the timing has anything to do with this still freefalling

http://www.bloomberg.com/apps/cbuilder?ticker1=GIGB10YR:IND

MaceFace

Not only % it pays but the structure of it - will it require an upfront lump sum (a'la normal bonds), or will be allow people to save on a regular basis.

Unless it is giving 10% annually and is structured similar to the SSIA, it will probably struggle to get people to sign up.

On a 7 year term it should just mature right at the bottom of the property crash

Liam Byrne

Give Lenihan & Co even more of my money, and trust them with it ?

Not a hope in hell.

hobochris

Would this be a near certain thing like the original SSIA's were? I.e. are the state standing by the returns.

dvpower

Amhran Nua wrote: »

And another one of our policies gets lifted. Take a look at the rest Minister, its not that hard to do.

I thought it was an ICTU proposal?
http://www.ictu.ie/press/2009/01/16/congress-calls-for-national-recovery-bond-as-part-of-new-social-solidarity-pact/

dvpower

I think its a good idea. There are a lot of people who have been afraid to spend any money over the last couple of years, and would be prepared to put some of their savings into this even if the interest rate wasn't very competitive.

jmayo

As liam Byrne stated there is no way in hell I would give this incompetent government, and don't forget incompetent Dept of Finance, one cent.

What is this money going to be used for ?
Will it be put towards our public sector spending, will this be pi**** down the Anglo/INBS black hole, or will it be donated to wasteful fraudersters in Fás ?

If they want to get things going they should do something like expand the BES which helped small enterprises.
Giving the money to the government and the dept. finance is not going to do it.

IMHO the timing of this goes to show the writing is on the wall as regards our future borrowings.

One point that I have been thinking about recently is about how we were told by lendihand and all the other NAMA/bank guarantee/bank recapitalisation cheerleaders that we must repay the bond holders in the banks or else we would not be able to borrow on the bond markets.

Will our finance minister have the balls to tell the bank bondholders to go screw themselves when the bond markets start treating us like Greece and our bonds are rated as junk ?

skelliser

Ponzi scheme anyone?

18 months of fiddling and messing has lead to this point. The mask has slipped with the commission(germans) wanting Anglo wound up.
Its pretty clear now that we have been making it up as we went along. There is no leadership whatsoever.
We need a new Goverment.

Its the only way imo that foreign investers will have confidence in us again.

Highly Salami

skelliser wrote: »

......We need a new Goverment.......

could very well happen if the PS unions reject the Croker agreement (I think?).

Ogham

It doesn't look like it will be 10% - more like 2% with a 25% bonus after a certain number of years - according to this ...
Solidarity Bonds


If it is 25% after 5 years - that would be roughly 4.5% a year - plus the 2% - will be more like 6.5% overall ? Looks like it could be tax free if you keep it in long enough.

Nody

Inflation alone would kill a lot of the gains from year 3 to 5+ depending on how optimistic you are.

BlaasForRafa

Highly Salami wrote: »

could very well happen if the PS unions reject the Croker agreement (I think?).

The government should repudiate the proposals they made in that agreement anyway, more cuts need to be made in PS wages.

jmayo

Ogham wrote: »

It doesn't look like it will be 10% - more like 2% with a 25% bonus after a certain number of years - according to this ...
Solidarity Bonds


If it is 25% after 5 years - that would be roughly 4.5% a year - plus the 2% - will be more like 6.5% overall ? Looks like it could be tax free if you keep it in long enough.

Looking at the way things have panned out so far under ff's stewartship, if we do default down the road, which with the way things are going is looking more likely, then how much is anyone willing to bet that the foreign bondholders will be offered something where as the paddies who invested in these are left with shag all.

Remember the mantra that the foreign bondholders must be kept happy.

I don't trust anything uttered or proposed by this government.
ff (lenihan is a dyed in the wool ffer) have been shown to be incompetent and untrustworthy in all the shengagins that have gone on over the past 10 years.

If the government are interested in investment in enterprise in the economy then why not expand the BES and make it very attractive to invest in Irish industry/small enterprises.

IMHO giving money to this government and the current state institutions i.e. Dept of Finance, Dept of Trade and Enterprise (??? not sure what they call it these days) and Fás is pi**ing money down a drain.

Ogham

More details announced - rate is just 1% with bonuses of upto 40% over 10 years. Max possible return (net) is 47.5% over 10 years. Bonuses are tax free. The An Post Certificates give a better return.
The above article has been amended.
http://www.moneyguideireland.com/national-solidarity-bond.html

pathway33

With An Post for €1,000 after 5.5 years I get €1,210. So assuming the rate stays the same, after 11 years I get €1,464.10 (reinvesting my €1,210)

With the National Solidarity Bond for €1,000 investment I get €1,475 after 10 years.

So I get €10.90 more per €1,000 and have to wait a year less for my money with the solidarity bond.

But anyone know the return on the bond after 5 or 7 years?

Amhran Nua

dvpower wrote: »

I thought it was an ICTU proposal?
http://www.ictu.ie/press/2009/01/16/congress-calls-for-national-recovery-bond-as-part-of-new-social-solidarity-pact/

We got the idea from the "war bonds" set up by the US to fund its government during WWII as it turns out. Perhaps the ICTU drew from the same inspiration? I can only imagine a fairly lukewarm takeup from investors with this government regardless.

Welease

Amhran Nua wrote: »

We got the idea from the "war bonds" set up by the US to fund its government during WWII as it turns out. Perhaps the ICTU drew from the same inspiration? I can only imagine a fairly lukewarm takeup from investors with this government regardless.

As far as I know, they are currently available in other countries (the US have ARRA). So the government are hardly stealing your ideas.. given you admit you got the idea elsewhere, and other countries implemented these ideas previously

Amhran Nua

Welease wrote: »

As far as I know, they are currently available in other countries (the US have ARRA). So the government are hardly stealing your ideas.. given you admit you got the idea elsewhere, and other countries implemented these ideas previously

Its not the first one, I'm afraid. They got some of their ideas on pension reform from us as well, a few others which escape my memory at the moment. We are going to have to set up a page on the site containing all of the ideas put forward which have been incorporated into policy.

Speaking of which, the FG health policy bears more than a passing resemblance to our own, since both got the idea from the Dutch; international best practise is a reasonable source for national policies. A good idea is a good idea. Who proposed its introduction first into Ireland would be the main issue, looks like the ICTU got the jump on us by a month or so, but I wasn't aware of that, and fair play to them. Two groups arriving at the same idea independently can only be a good thing.

Welease

Amhran Nua wrote: »

Its not the first one, I'm afraid. They got some of their ideas on pension reform from us as well, a few others which escape my memory at the moment. We are going to have to set up a page on the site containing all of the ideas put forward which have been incorporated into policy.

Speaking of which, the FG health policy bears more than a passing resemblance to our own, since both got the idea from the Dutch; international best practise is a reasonable source for national policies. A good idea is a good idea. Who proposed its introduction first into Ireland would be the main issue, looks like the ICTU got the jump on us by a month or so, but I wasn't aware of that, and fair play to them. Two groups arriving at the same idea independently can only be a good thing.

I typed a bunch of replies but they all sound rude and arguementative which is not my intent.. So let me just state the blunt truth (imho) and apologise if it comes across more agressively than it is meant

Claiming they are lifting your policies is giving yourself far to much credit. The US have a recovery bond scheme, the Dutch health care system is well known.. These policies didnt come from you guys, and I doubt you are even on the radar of the government or the opposition. You cannnot take other people ideas, form a party then claim when someone else does something similar that they are lifting "your" ideas.

Amhran Nua

Welease wrote: »

Claiming they are lifting your policies is giving yourself far to much credit. The US have a recovery bond scheme, the Dutch health care system is well known.. These policies didnt come from you guys, and I doubt you are even on the radar of the government or the opposition. You cannnot take other people ideas, form a party then claim when someone else does something similar that they are lifting "your" ideas.

There are quite a few original ideas in there as well, not to worry. Look at the ICIM and educational policies for example. If FG was promoting the Dutch method of healthcare first, and the government used that idea, then indeed FG does deserve credit for putting it forward - I would have no difficulty doing that. That you would prefer to ignore this fact raises an eyebrow to be honest.

We've been in contact with a variety of TDs and senators from the main parties, not to mention national radio interviews and several articles in national newspapers, and countless local and regional newspaper articles, so everyone is quite aware of our existence, thanks all the same. New groups don't spring whole from the ether to the thunderous applause of legions, these things take time.

Wudyaquit

pathway33 wrote: »

With An Post for €1,000 after 5.5 years I get €1,210. So assuming the rate stays the same, after 11 years I get €1,464.10 (reinvesting my €1,210)

With the National Solidarity Bond for €1,000 investment I get €1,475 after 10 years.

So I get €10.90 more per €1,000 and have to wait a year less for my money with the solidarity bond.

But anyone know the return on the bond after 5 or 7 years?

The yield on this is pretty crap for anyone thinking it's some way like the SSIA. Compounding, it's the equivalent of 4.15% per year.

Over 10 years, it's likely interest rates will rise and you'll be able to get a better rate - there's a chance you'll do marginally better with this bond, but it won't be by much and certainly not enough to warrant locking your money away for 10 years.

After 7 years you'll have gotten seven 1% payments plus 22% lump sum.
After 5 years you'll have gotten five 1% payments plus 10% lump sum. (less than 3% pa compounded).