1in4 chance of default in next 5 years

ei.sdraob

says the New York time

In the last few weeks, the perceived probability of default by Ireland (as traded in credit-default swap markets) has shot up, so that markets now price a 25 percent risk that Ireland will default within five years

...

Ireland, simply put, appears insolvent under plausible possibilities with current policies. The idea that Ireland, Greece or Portugal can cut spending and grow out of overvalued exchange rates with still large budget deficits, while servicing all their debts and building more debt, is proving — not surprisingly — wrong.

Its rather worrying to see a string of negative articles on Ireland in various global newspapers, the New York Times, FT and Bloomberg all have a series of articles in last week on our mess.

The_Thing

Look on the bright side - there's a 75% chance of not defaulting in the next 5 years.

MrDarcy

The funny thing about this type of negative news reporting, is that once a country comes starts showing up on the international economic radar like we now are, the markets seem to get a smell of blood and from therein, it's only a matter of time before the story fulfills itself. It's like watching the Discovery Channel, seeing lions targetting a family of wilderbeast, they don't just give up or wander off somewhere else, we are now the wilderbeast and we are not a fit, agile wilderbeast for that matter, we are the wilderbeat that is lucky if it can get onto it's feet and walk never mind run, basically I'd argue that we are going to move very quickly from here to a default.

And it's no bad thing either, because it will finally bring all this sh*t to a head and force us to get ourselves in order.

I've said on here before that half the economy has already defaulted, all those businesses that have closed, all those 500,000 now unemployed people who used to work for those businesses, the couple of hundred of people who have emmigrated, the toxic business as well as residential debt, all that is a direct result of default on debt.

I have to ask why at least 500,000 people allied to the private sector should experience the poverty that is associated with default, first hand, while we are still borrowing at what are now highly excessive interest rates to pay public sector workers an average salary of 54K a year.

The sooner we default the better, it will put us all onto the same page, and next time we sit down and try to redistribute "wealth", via a social partnership process, we should make sure that the PRIVATE sector worker is equally as represented within this process as the public sector worker, because it's my opinion that this is where we started to get things all wrong, one set of protectionist rules for those in the public sector, while private sector workers were completely outside the process.

Now look at what we have, one part of the economy has defaulted while the other half is being kept on a "default suspension machine", paid for by those who are lucky enough to still have a job.

We have a long way to fall yet in this country...

The_Thing

we should make sure that the PRIVATE sector worker is equally as represented within this process as the public sector worker

Would you want equal representation if it meant the private sector taking two pay cuts in one year in a similar fashion to the public sector?

Nah, didn't think you did.

The_Thing

The_Thing wrote: »

Would you want equal representation if it meant the private sector taking two pay cuts in one year in a similar fashion to the public sector?

Nah, didn't think you did.

your not including the 100% pay cuts for those on the dole.

Brussels Sprout

Anyone else surprised it was only 25%?

Permabear

This post has been deleted.

MrDarcy

The_Thing wrote: »

Would you want equal representation if it meant the private sector taking two pay cuts in one year in a similar fashion to the public sector?

Nah, didn't think you did.

Yeah I would actually. There is such a unfathomable chasm now between when has been given to public sector workers through the partnership process, not just in terms of pay but even more importantly in terms of job security and conditions, it is hard to stomach as a small private sector employer.

I used to work in a large multinational organisation in Ireland, when I had an issue with my employer, I could go to the LRC and my employer didn't even have to turn up! Then if I got a favourable recommendation, my employer doesn't even have to recognise it, the whole thing is based on a voluntary engagement basis, except of course when you work in the public sector, an LRC/Rights Commissioner recommendation is as good to you as a High Court injunction. The whole approach was, "if you are not happy, LEAVE!"... Forget about your shop steward (there was none, the company didn't recognise unions), or your union official making your case for you, you basically had to rights whatsoever or if you felt that you had rights, you had no means whatsoever of enforcing those rights.

Two pay cuts, how many of you have lost your job since the recession??? Not a single PS full time employee has had to face redundancy. The people in the public sector who have lost their jobs were actually private sector workers who were subcontracted into the public sector.

I'm fully for the rights of workers of this land but the reality in my experience is that only those working in the public sector have actual access to workers rights.

Outside of the protectionism of the partnership process is a very hard world for many people, a world of compulsory 3 day weeks, compulsory pay cuts, job termination on the spot, redundancy without funds to pay your minimum statutory entitlements, and you are lucky that you will never have to experience that.

The_Thing

Fair play to you, MrDarcy - you are the first private sector employer I know of that has said they fully support the idea of workers rights. The IBEC mob won't know what to make of you.

dan_d

The_Thing wrote: »

Would you want equal representation if it meant the private sector taking two pay cuts in one year in a similar fashion to the public sector?

Nah, didn't think you did.

A friend from college told me yesterday that he is now earning the same from his full time job as he did when he did a student placement as part of our course in 3rd year of college.

Not even when he graduated, but when he was a student worker.

Most of us have already taken these paycuts and more.Much more.

So yes.

RichardAnd

dan_d wrote: »

A friend from college told me yesterday that he is now earning the same from his full time job as he did when he did a student placement as part of our course in 3rd year of college.

Not even when he graduated, but when he was a student worker.

Most of us have already taken these paycuts and more.Much more.

So yes.

I'm earning only slightly more as a software developer than I did when I was a admin pleb for the dept of justice 4 years back. Had I kept that job and not gone to college, I'd be earning about 5k more and doing half the work. This is also assuming that I wouldn't have been promoted in the CS which over 4 years is not unreasonable.

I'd say there are plenty of people in that position Dan.

MrDarcy

The_Thing wrote: »

Fair play to you, MrDarcy - you are the first private sector employer I know of that has said they fully support the idea of workers rights. The IBEC mob won't know what to make of you.

You need to understand that IBEC do not represent the majority of employers in this state. IBEC represent a tiny minority of employers in this country which are large multinational employers. Some of the largest companies operating in this country, which have huge influence within IBEC and therefore enjoy huge influence within the partnership process, funnily enough are the same companies that refuse to recognise unions within their workplaces.Even Funnier though, these same organisations have no problem whatsoever sitting down with unions at partnership level and dictating through organisations such as IBEC and AMCHAM (American Chamber of Commerce in Ireland), the whole flavour of industrial relations policy of the state that all state employs should be granted or as has been the case for the most recent years, what employment law should be denied to Irish workers.

Jack O' Connor and David Begg stood over this sham, where legislation that would have benefitted all Irish workers and would have provided for fairer workers rightswas blocked by the likes of IBEC. SIPTI and the ICTU allowed this to happen because in their eyes, their members didn't surrender any of their terms and conditions.

But who should we blame now when we find that one sector of workers in the state who are being completely hung out to dry, now dispise another sector of workers in the state who are perceived to be completely protected and isolated from this economic crisis???

We are very clearly not all on the same page, and the reason for that is because the same greedy, insufferable f*ckhounds who claim to be holy and blessed guardians of the legacy of Larkin and Connelly, sat back on their arses while IBEC and the lobby groups like AmCham told the whole nation what kind of industrial legislation would be tolerated and what type wouldn't be tolerated, the auld, "sure I'm grand Jack", mentality was what was at the controls.

The biggest disgrace that ever happened in this state was this situation where private sector workers have no real industrial relations rights, but for public sector workers, an LRC recommendation is as good as a high court injunction. Whatever approach we want to have for industrial relations matters in this country, for it to work and not ultimately cause social upheaval, every employee must be equally protected by it.

ei.sdraob

MrDarcy wrote: »

You need to understand that IBEC do not represent the majority of employers in this state. IBEC represent a tiny minority of employers in this country which are large multinational employers. Some of the largest companies operating in this country, which have huge influence within IBEC and therefore enjoy huge influence within the partnership process, funnily enough are the same companies that refuse to recognise unions within their workplaces.Even Funnier though, these same organisations have no problem whatsoever sitting down with unions at partnership level and dictating through organisations such as IBEC and AMCHAM (American Chamber of Commerce in Ireland), the whole flavour of industrial relations policy of the state that all state employs should be granted or as has been the case for the most recent years, what employment law should be denied to Irish workers.

Jack O' Connor and David Begg stood over this sham, where legislation that would have benefitted all Irish workers and would have provided for fairer workers rightswas blocked by the likes of IBEC. SIPTI and the ICTU allowed this to happen because in their eyes, their members didn't surrender any of their terms and conditions.

But who should we blame now when we find that one sector of workers in the state who are being completely hung out to dry, now dispise another sector of workers in the state who are perceived to be completely protected and isolated from this economic crisis???

We are very clearly not all on the same page, and the reason for that is because the same greedy, insufferable f*ckhounds who claim to be holy and blessed guardians of the legacy of Larkin and Connelly, sat back on their arses while IBEC and the lobby groups like AmCham told the whole nation what kind of industrial legislation would be tolerated and what type wouldn't be tolerated, the auld, "sure I'm grand Jack", mentality was what was at the controls.

The biggest disgrace that ever happened in this state was this situation where private sector workers have no real industrial relations rights, but for public sector workers, an LRC recommendation is as good as a high court injunction. Whatever approach we want to have for industrial relations matters in this country, for it to work and not ultimately cause social upheaval, every employee must be equally protected by it.

Getting back on topic now, enough of this socialist nonsense please, the trade unions are one of the parties responsible for this mess,

You do realize that if the private sector had the same "entitlements" and "safe" jobs craic as our public sector, that the chance of our defaulting (thread topic ahem ahem) would be much higher? Due to workforce being even more uncompetitive

Here in the real world there are realities which you seem to fail to comprehend and as employee and employer of a small Irish company I have to face every day:
Irish companies and people have to compete against another 6 billion people, 150+ countries and millions of companies. We are relatively rich because we took advantage of having an open economy. The word competition is foreign to public sector workers whom you seem to envy/admire, there is absolutely no incentive to be more productive and improve work practices as we all sadly know. The alternative to having an open economy is having a closed one, we tried that before in this country with so much "success" :rolleyes:

kevteljeur

On that original topic, the chance of defaulting is, I take it, one which can be influenced by various factors? Obviously, if the 'civil disobedience, let's all stop paying tax' crowd had their way, then we would default. On the other hand, EU-managed assistance coupled with very high taxes could avoid defaulting.

Am I right? Is it a manageable chance of default? Or is it a case pot luck? (I don't think that negative media reports directly influence the credit-ratings; I believe they influence our knowledge and perception of them)



k

Idbatterim

The funny thing about this type of negative news reporting, is that once a country comes starts showing up on the international economic radar like we now are, the markets seem to get a smell of blood and from therein, it's only a matter of time before the story fulfills itself. It's like watching the Discovery Channel, seeing lions targetting a family of wilderbeast, they don't just give up or wander off somewhere else, we are now the wilderbeast and we are not a fit, agile wilderbeast for that matter, we are the wilderbeat that is lucky if it can get onto it's feet and walk never mind run, basically I'd argue that we are going to move very quickly from here to a default.

And it's no bad thing either, because it will finally bring all this sh*t to a head and force us to get ourselves in order.

I've said on here before that half the economy has already defaulted, all those businesses that have closed, all those 500,000 now unemployed people who used to work for those businesses, the couple of hundred of people who have emmigrated, the toxic business as well as residential debt, all that is a direct result of default on debt.

I have to ask why at least 500,000 people allied to the private sector should experience the poverty that is associated with default, first hand, while we are still borrowing at what are now highly excessive interest rates to pay public sector workers an average salary of 54K a year.

The sooner we default the better, it will put us all onto the same page, and next time we sit down and try to redistribute "wealth", via a social partnership process, we should make sure that the PRIVATE sector worker is equally as represented within this process as the public sector worker, because it's my opinion that this is where we started to get things all wrong, one set of protectionist rules for those in the public sector, while private sector workers were completely outside the process.

Now look at what we have, one part of the economy has defaulted while the other half is being kept on a "default suspension machine", paid for by those who are lucky enough to still have a job.

We have a long way to fall yet in this country...

Nail on the head! I have posted similar before, realistically who is benefitting from keeping this sham on the road the most? PS workers, politicians and those on welfare ( not all by any means, but alot of them, please note I do not mean the recently unemployed or those genuinely looking for work, in my opinion their dole should be higher for the first maybe 6 months or so...). We dont need help with the Anglo bailout if more is cut from the budget, I reckon putting our own house in order under our conditions is alot better than being bailed out and having to end the low corporation tax etc as part of the deal! But what really gives me a kick, is this! those who are benefitting the most now, and who will shout the loudest at an more cuts to them, are nearly ensuring that if and when the bailout is required, that the negligible cuts that could have been implemented and rescued the situation, will be replaced with serious cuts! And it wont be the Irish government controlling them, it will be the EU and there wont be any recourse! If the PS workers and unions had any sense, they would be coming up with all possible ways to make the PS cheaper to run! it would be in their interest big time!

Cavehill Red

The state must cut itself loose from the bankrupt bogey banks as a matter of national urgency now.
Anglo is a lead weight round our collective neck. We're no longer waving but drowning, and this one corrupt bank is pulling us all under the waves.
Instead of going to Brussels to ask teacher can he keep ploughing money into Anglo for ten years, Lenihan should be removing the bank guarantee, watching the bank go to the wall and filing fraud charges against its entire former management.

Idbatterim

when you consider the effect the Anglo situation is having on us, it really is sickening, I would go after Fitzpatrick and the rest of them, and make the biggest example possible, take everything off them and then prosecute them and give them the max possible jail term and throw them in with the rest of the criminals in mount joy, dont segregate them!

Seth Brundle

Idbatterim wrote: »

I would go after Fitzpatrick and the rest of them, and make the biggest example possible, take everything off them and then prosecute them and give them the max possible jail term and throw them in with the rest of the criminals in mount joy, dont segregate them!

On what specific charge(s)?
As much as I'd love to see them all hanging, I'm not sure if they have actually committed any crimes

kevteljeur

kbannon wrote: »

On what specific charge(s)?
As much as I'd love to see them all hanging, I'm not sure if they have actually committed any crimes

This was Ireland's big selling point as a good place to do your business, if you were a financial service; loose laws enforced by loose regulation. All good, as long as all was going well. But also without any serious legal consequence should anyone push their luck.

The biggest problem would really be the bank guarantee, since without that there probably would have been litigation against those individuals by shareholders for their losses. Instead, it's now the state's problem. Capitalism is great when you're winning (apologies for the cliché).

As 'tinfoil hat brigade' as this might sound, I'm not averse to the theory that for Anglo at least the state guarantee and nationalisation was cheaper for some in high places than letting that litigation expose some interesting truths, and having some 'friends of the family' get in the firing line. I guess it will be a long time before we find out.



k

RichardAnd

I have to be frank, how on earth was the statistic of 25% arrived at? I don't have a brilliant knowledge of economics but it seems that predicting a 25% chance of default is not unlike me predicting a 25% chance I'll have a cup of coffee tomorrow morning instead of my usual earl grey.

I'm not suggesting we're not in a bad place but something like this reeks of academics tossing out figures to make themselves seem more intelligent. Besides, statistics can be used to prove anything, 14% of all people know that

recedite

The idea that Ireland, Greece or Portugal can cut spending and grow out of overvalued exchange rates

The above quote betrays an anti-eurozone agenda.
The same article also provides both the solution and the reasons why that solution has not fully worked yet;

Mr. Trichet himself highlighted Ireland as an example that Greece and other financially stricken nations should follow. His message was simple: If only Greece or Portugal or Spain would cut public wages, reduce the budget deficit and make structural reforms as Ireland had done, then growth could occur and default could be prevented.
But it is now apparent that Ireland has not done enough to stem its march toward further crisis. The ultimate result of Ireland’s bank bailout exercise is obvious: one way or another, the government will have converted the liabilities of private banks into debts of the sovereign (that is, Irish taxpayers).

liammur

Cavehill Red wrote: »

The state must cut itself loose from the bankrupt bogey banks as a matter of national urgency now.
Anglo is a lead weight round our collective neck. We're no longer waving but drowning, and this one corrupt bank is pulling us all under the waves.
Instead of going to Brussels to ask teacher can he keep ploughing money into Anglo for ten years, Lenihan should be removing the bank guarantee, watching the bank go to the wall and filing fraud charges against its entire former management.

I agree, our politicians should be given the birch for this anglo fiasco.

ei.sdraob

RichardAnd wrote: »

I have to be frank, how on earth was the statistic of 25% arrived at? I don't have a brilliant knowledge of economics but it seems that predicting a 25% chance of default is not unlike me predicting a 25% chance I'll have a cup of coffee tomorrow morning instead of my usual earl grey.

I'm not suggesting we're not in a bad place but something like this reeks of academics tossing out figures to make themselves seem more intelligent. Besides, statistics can be used to prove anything, 14% of all people know that

How do bookies come up at ways of measuring odds on horse races

kevteljeur

RichardAnd wrote: »

I have to be frank, how on earth was the statistic of 25% arrived at? I don't have a brilliant knowledge of economics but it seems that predicting a 25% chance of default is not unlike me predicting a 25% chance I'll have a cup of coffee tomorrow morning instead of my usual earl grey.

I'm not suggesting we're not in a bad place but something like this reeks of academics tossing out figures to make themselves seem more intelligent. Besides, statistics can be used to prove anything, 14% of all people know that

I still haven't seen an answer to this from my question earlier in the thread. The reason is probably that the reality isn't very interesting; it strikes me as a less of a case of chance and more of an inevitable consequence, should a particular chain of events happen, or a set of actions followed. If in the next budget no cutbacks were made and the state allowed for an extra 15bn for Anglo, then yes, we will almost certainly default. But that won't actually happen.

It's probably safe to say that it's not a case of chance unless you take a guess at a point in time and know nothing about the actually mechanics of the situation. The so-called 'man on the street' needs percentages because it makes for a better soundbite than all of the available information on what would cause a default to happen.

Just my opinion; I'm no economist.



k

ei.sdraob

kevteljeur wrote: »

I still haven't seen an answer to this from my question earlier in the thread. The reason is probably that the reality isn't very interesting; it strikes me as a less of a case of chance and more of an inevitable consequence, should a particular chain of events happen, or a set of actions followed. If in the next budget no cutbacks were made and the state allowed for an extra 15bn for Anglo, then yes, we will almost certainly default. But that won't actually happen.

It's probably safe to say that it's not a case of chance unless you take a guess at a point in time and know nothing about the actually mechanics of the situation. The so-called 'man on the street' needs percentages because it makes for a better soundbite than all of the available information on what would cause a default to happen.

Just my opinion; I'm no economist.



k

@kevteljeur

our banks have to find and borrow many many billions of euro this month in order to rollover existing debts (yes borrowing to pay off borrowing)

If they don't manage, then that could be one of the events which triggers a collapse since they would then come cap in hand to us...


It could also be the case that the worst possible scenario with NAMA is being considered since the instrument is so secretive and impossible to value

And finally (if you like conspiracy theories) someone outthere could be trying hard to engineer a collapse in order to make money, like I said before we are next in line after Greece

or maybe a mixture of all :P

the_dark_side

Hi all... here are a couple of links to an eye-opening statistic regarding how we have reached this point. Im going to start a new thread on this subject in a while.... anyways, heres the info

September 2009: Ireland's external debt: $2.287 trillion ($2,287 billion)

compared to

1998: Ireland's external debt: $11 billion

So in 11 years, our external debt has risen by $2,276 billion

The source for these figures is the CIA Factbook (you have to scroll down to near the bottom of the page to get the External Debt stats)

1998 figures http://www.faqs.org/docs/factbook/geos/ei.html

2009 figures https://www.cia.gov/library/publications/the-world-factbook/geos/ei.html

Cavehill Red

kbannon wrote: »

On what specific charge(s)?
As much as I'd love to see them all hanging, I'm not sure if they have actually committed any crimes

Obtaining funds by deception.
Fraud.
Treason.

MrDarcy

ei.sdraob wrote: »

Getting back on topic now, enough of this socialist nonsense please, the trade unions are one of the parties responsible for this mess,

You do realize that if the private sector had the same "entitlements" and "safe" jobs craic as our public sector, that the chance of our defaulting (thread topic ahem ahem) would be much higher? Due to workforce being even more uncompetitive

Here in the real world there are realities which you seem to fail to comprehend and as employee and employer of a small Irish company I have to face every day:
Irish companies and people have to compete against another 6 billion people, 150+ countries and millions of companies. We are relatively rich because we took advantage of having an open economy. The word competition is foreign to public sector workers whom you seem to envy/admire, there is absolutely no incentive to be more productive and improve work practices as we all sadly know. The alternative to having an open economy is having a closed one, we tried that before in this country with so much "success" :rolleyes:

It's not such a simple matter of bumping everyone in the private sector up to the same terms, conditions and entitlements as everyone in the public sector. There is a huge gap here in relation to entitlements, a gap that should not have been allowed to develop and you obviously fail to understand the correlation between the gap that exists and the cost of maintaining that gap, a cost that we cannot afford.

Where did you get the notion that I envy or admire public sector workers???

The reason we are going to default in this country is because the cost of running the public sector is too high and there isn't enough money coming in through tax revenue from the private sector. There are reasons why we are paying too much to run the public sector and why we have a private sector that has already defaulted, and for the avoidance of doubt, these reasons are very much "on topic" in relation to the thread title! :rolleyes:

ei.sdraob

anyways

were up to 27.27% now

right above Iraq and Dubai

jmayo

MrDarcy wrote: »

You need to understand that IBEC do not represent the majority of employers in this state. IBEC represent a tiny minority of employers in this country which are large multinational employers. Some of the largest companies operating in this country, which have huge influence within IBEC and therefore enjoy huge influence within the partnership process, funnily enough are the same companies that refuse to recognise unions within their workplaces.Even Funnier though, these same organisations have no problem whatsoever sitting down with unions at partnership level and dictating through organisations such as IBEC and AMCHAM (American Chamber of Commerce in Ireland), the whole flavour of industrial relations policy of the state that all state employs should be granted or as has been the case for the most recent years, what employment law should be denied to Irish workers.

You do know that the greatest contributors to the IBEC coffers were the banks.
IBEC never represented the small manufacturer, small businesses, etc.

kevteljeur wrote: »

On that original topic, the chance of defaulting is, I take it, one which can be influenced by various factors? Obviously, if the 'civil disobedience, let's all stop paying tax' crowd had their way, then we would default. On the other hand, EU-managed assistance coupled with very high taxes could avoid defaulting.

Ah lets tax our way out of this mentality. :rolleyes:
firstly you cannot tax your way out of a recession since increased taxes causes people to stop spending and businesses to close or go elsewhere.

Secondly what grates with most of us is that our existing taxes, nevermind increaed ones, are being wasted on fruitless things like trying to save defunct insolvent financial institutions (Anglo & INBS) that were in all but name fraudently and corruptly run for the benefit of connected influential people.
In most other western democracies the people that ran these banks into the ground would be facing charges of negligence and fraud.

kevteljeur wrote: »

Am I right? Is it a manageable chance of default? Or is it a case pot luck? (I don't think that negative media reports directly influence the credit-ratings; I believe they influence our knowledge and perception of them)

k

IMHO some of it is luck.
It is like how sometimes something that comes out of left field can finish a government.
The Euro is on a knife edge where each country owes so much to each other and most countries just don't have it.
Spain, Portugal, Greece, Italy and Ireland are all shaky.

Germany (and all the other countries including broke Ireland) are giving money to Greece, hoping Greece can pay back some of the money it owes other countries.

IMHO it is like giving a gambler more money to gamble hoping he turns things around and can pay back his debts.

An interesting one will be what happens when AIB needs it's next cash injection and it surely will.
Than watch what happens to our credit rating.

When NAMA eventually starts to chase their loans, they will have to take control of the dodgy assets, then there will be push to start offloading some property.
They will start with foreign property, but once they try and offload the steaming pile of crud some of the Irish stuff is, we will discover we have lost more billions.
Again our credit rating can take a hammering.

Externally all it takes are things like a double dip in the states which could be on the cards despite the stimulus package announced by Obama or oil prices to increase dramitcally if things turn even more shaky in Middle East with say Israel bombing Iran.
Then our borrowings go up and we can't cope anymore.

kbannon wrote: »

On what specific charge(s)?
As much as I'd love to see them all hanging, I'm not sure if they have actually committed any crimes

AFAIK fitzpatrick was in breach of company law (now there may be dispensation for banks ??) by concealing director loans.
Secondly there could be argument for nailing fingelton for facilitating this concealment.
fingelton actually was in breach of society guidelines for lending and could possibly be nailed somehow on that.

Then the next thing is the awarding of loans by Anglo to some of it's customers to buy shares, CDFs, options in the bank and thus prop up the share price.
And the loans were secured on the shares.
I bet if that happened in the states the SEC would be all over it and mr fitzpatrick would be in cell next to bernie madoff.

Then we have the issue of second time misleading the shareholders by misrepresenting a 7 billion interbank loan as a deposit.

Of course you can rightly say the CB and IFSRA were aware of these things in which I would counter the responsible people in these institutions should be charged with criminal negligence in carrying out their duties on behalf of the state and it's people.

Perhaps if we had class actions in this country shareholders would have some come back against these actions.

Seth Brundle

Cavehill Red wrote: »

Obtaining funds by deception.
Fraud.
Treason.

Have you proof of these allegations? If so then head down to your local garda station with it!

ei.sdraob

kbannon wrote: »

Have you proof of these allegations? If so then head down to your local garda station with it!

As was already mentioned moving millions around in the manner that was done would go against company law, there's plenty of regulation around directors loans. I am sure the Gardai are investigating this avenue among others but i do hope they have the expertise onboard to help

kevteljeur

jmayo wrote: »

Ah lets tax our way out of this mentality. :rolleyes:
firstly you cannot tax your way out of a recession since increased taxes causes people to stop spending and businesses to close or go elsewhere.

Secondly what grates with most of us is that our existing taxes, nevermind increaed ones, are being wasted on fruitless things like trying to save defunct insolvent financial institutions (Anglo & INBS) that were in all but name fraudently and corruptly run for the benefit of connected influential people.
In most other western democracies the people that ran these banks into the ground would be facing charges of negligence and fraud.

Well, my point was that if we collectively decide that we're not going to deal with it, whatever our solution is, then we'll default by definition. That can only end badly (how will the state pay for itself?). It's not an endorsement of one or other strategies, only that if the state works hard to avoid default (whether through tax, or by nationalising the huge offshore oilfields* and world-class butter industry*) then it's probably not going to happen, and be less of an issue of chance.

jmayo wrote: »

IMHO some of it is luck.
It is like how sometimes something that comes out of left field can finish a government.
The Euro is on a knife edge where each country owes so much to each other and most countries just don't have it.
Spain, Portugal, Greece, Italy and Ireland are all shaky.

Germany (and all the other countries including broke Ireland) are giving money to Greece, hoping Greece can pay back some of the money it owes other countries.

IMHO it is like giving a gambler more money to gamble hoping he turns things around and can pay back his debts.

An interesting one will be what happens when AIB needs it's next cash injection and it surely will.
Than watch what happens to our credit rating.

When NAMA eventually starts to chase their loans, they will have to take control of the dodgy assets, then there will be push to start offloading some property.
They will start with foreign property, but once they try and offload the steaming pile of crud some of the Irish stuff is, we will discover we have lost more billions.
Again our credit rating can take a hammering.

Externally all it takes are things like a double dip in the states which could be on the cards despite the stimulus package announced by Obama or oil prices to increase dramitcally if things turn even more shaky in Middle East with say Israel bombing Iran.
Then our borrowings go up and we can't cope anymore.

This is what I was looking for; a good argument in favour of chance as a factor. Some of these are indeed unknown external factors which can cause an otherwise stable situation to become unmanageable.


k



* I'm not endorsing those as a strategy; but see here:
http://www.boards.ie/vbulletin/showthread.php?t=2055313530
http://www.boards.ie/vbulletin/showthread.php?t=2055316887
Has to be seen to be believed.

maninasia

Well put. For instance who could have predicted the Icelandic volcano would go off when it did? Anything could come in from leftfield, as the edifice is so weak at this point they are going to need lady luck to see it through. I'm fairly doubtful myself, the numbers are too big. The EU is supporting the whole thing at the moment..see how long the Germans are willing to support the Euro by proxy.

jmayo

maninasia wrote: »

Well put. For instance who could have predicted the Icelandic volcano would go off when it did? Anything could come in from leftfield, as the edifice is so weak at this point they are going to need lady luck to see it through. I'm fairly doubtful myself, the numbers are too big. The EU is supporting the whole thing at the moment..see how long the Germans are willing to support the Euro by proxy.

I firmly believe the Euro will not work long term unless there is more cohesion across it's members.
For the Euro to work Euro members need to become like US states.

You cannot have some countries with good successful economies, with fiscal conservativism and fiscal responsible policies tied to the same currency that other very fiscally unresponsible states have.
Greece and Ireland in particular have shown up the Eurozone as being flawed.

The Germans, the Dutch, the French can't be happy that their currency, and thus their economic wellbeing, is tied to and at the mercy of the vagaries of some of their more irresponsible fellow Eurozone members.

Cavehill Red

kbannon wrote: »

Have you proof of these allegations? If so then head down to your local garda station with it!

Plenty of people have made submissions to the Gardai on this matter, including myself. The position of your local plod is they ain't touching it with a bargepole, never mind investigating or bringing a file to the DPP.
There is, allegedly, an investigation into Anglo which has seen sweet FA achieved in over a year. It is my opinion that this functions as a smokescreen and mudguard, a protection against the allegation that nothing is being done. In reality, nothing IS being done.
In the meantime, assets have been transferred overseas and into wives names, and in some cases they have transferred themselves permanently overseas too.
The reality of the matter is that the culpable parties in the banking fiasco are so well got with the powers-that-be that they will never face charges in this country.

ei.sdraob

bumpy bumpy were up to 1in3 now :eek: despite all the positive spin from FF about being "mugged" at the last bond auction


http://www.cmavision.com/market-data/#riskiest
33% chance of default in next 5 years according to above


or just over 50% in next 10 years according to Karl Wheelan over at irisheconomy.ie


are there any bookies taking bets, for that matters which bookies will be still around after a default

hinault

kbannon wrote: »

On what specific charge(s)?
As much as I'd love to see them all hanging, I'm not sure if they have actually committed any crimes

Artificially rigging the Anglo Irish share price, through share support buying scheme is illegal (see Guinness trial).

Artificially inflating the reserves of your bank at year end is also illegal.

failure to disclose loans made to directors in the yearend statutory reports.

some examples.

ei.sdraob

hinault wrote: »

Artificially rigging the Anglo Irish share price, through share support buying scheme is illegal (see Guinness trial).

Artificially inflating the reserves of your bank at year end is also illegal.

failure to disclose loans made to directors in the yearend statutory reports.

some examples.

I seriously hope Revenue launch an audit into his wife as well

http://www.independent.ie/national-news/courts/fitzpatrick-owes-euro40000-to-his-wife-2347710.html

hinault

The only Irish banker who did jail time that I know of is Patrick Gallagher.

And even then Gallagher only did time because the Northern Ireland police force and British DPP took action in the Merchant Banking scandal.

He was never charged in this country.



Which begs the question................................

Colonel Sanders

Implied Default Rates curtosy of the Irish Economy blog:

Today’s bond auction has attracted a lot of media attention. However, quite a lot of the comment has been a bit confused. Let me set out the usual framework that economists use to think about bond yields. Our more financially sophisticated readers know this stuff anyway but it’s still worth briefly spelling out.

Consider an investor who has two options for their investment.

Option A is to purchase a risk-free bond which carries an interest rate of RF.

Option B is to purchase a bond with potential default risk. This bond delivers two possible outcomes. The first outcome occurs with probability p and in this case, the bond is defaulted on and the investor only recovers a percentage c of their original investment. The second outcome B occurs with probability 1-p and in this case the bond delivers the promised interest rate of RR and also repays the principal.

(Weighted) averaging over these two outcomes, the expected return from option B is

p(c-1) + (1-p) RR

Now assume that investors are risk-neutral, meaning they will pick the bond with the highest average return (and won’t shy away from option B just because it carries some uncertainty).

In this case, for investors to be willing to purchase both bonds, they must have the same average expected return. Setting the above return for option B equal to RF and re-arranging, this determines the interest rate on the risky bond as

RR = RF / (1-p) + p (1-c)

If one knows what the “recovery rate” parameter c is, then one can also back out the implied probability of default as

p = (RR – RF ) / (1 –c + RR)

Now to our current situation. As of this evening, the FT is reporting yields on ten-year Irish bond at annualised rates were 6.3% while the comparable German bond was yielding 2.46%. Let’s use 0.5 as the implied recovery rate should Ireland default. Now plug in RR = .063, RF = .0246, C = 0.5

p = (0.0630 – 0.0246) / .563 = .0682

Implies a default probability of 29.8% over 5 years

johnnyskeleton

Colonel Sanders wrote: »

Implied Default Rates curtosy of the Irish Economy blog:



Implies a default probability of 29.8% over 5 years

Germany is not entirely risk free and has an estimated CPD of c. 3%. Hence the 33% risk of default for Ireland I suppose.

ei.sdraob

somewhat related

Ireland Debt Swaps at Record High as Allied Signals 62% Chance of Default

The cost of insuring Irish sovereign debt surged to a record as credit-default swaps on Allied Irish Banks Plc subordinated debt signaled a 62 percent probability of default within five years.

Contracts insuring 10 million euros ($14 million) of Allied Irish’s junior bonds cost about 3.25 million euros upfront and 500,000 euros annually, according to data provider CMA. That’s up from 400,000 euros a year in April. Swaps on the government’s debt jumped 27 basis points to 545.

http://www.bloomberg.com/news/2010-11-03/ireland-swaps-rise-to-record-as-allied-irish-signals-60-chance-of-default.html

sollar

MrDarcy wrote: »

The reason we are going to default in this country is because the cost of running the public sector is too high and there isn't enough money coming in through tax revenue from the private sector. There are reasons why we are paying too much to run the public sector and why we have a private sector that has already defaulted, and for the avoidance of doubt, these reasons are very much "on topic" in relation to the thread title! :rolleyes:

Does the 50 billion bank bailout or 21 billion social welfare costs not figure in your calculations.

Yes private sector tax intake has collapsed and is one major reason we are near default. The cost of our public services are a little to high but it is far from the reason we may default. It would be fairly affordable if we were near full employment again and tax take was at normal levels for an economy at full employment.

ei.sdraob

sollar wrote: »

Does the 50 billion bank bailout or 21 billion social welfare costs not figure in your calculations.

Yes private sector tax intake has collapsed and is one major reason we are near default. The cost of our public services are a little to high but it is far from the reason we may default. It would be fairly affordable if we were near full employment again and tax take was at normal levels for an economy at full employment.

Right so lads, lets build more houses and start selling/flipping them to each other. It worked great before

sollar

ei.sdraob wrote: »

Right so lads, lets build more houses and start selling/flipping them to each other. It worked great before

Who mentioned building more houses and flipping them? Is that what the mention of full employment stirs in the irish imagination.

sollar

Does anyone know if the figure quoted last night by the economists on primetime was the gross public sector pay or net. They quoted 17.3 billion i think.

ei.sdraob

sollar wrote: »

Who mentioned building more houses and flipping them? Is that what the mention of full employment stirs in the irish imagination.

And how do you propose we get to full employment again?


Anyways your thesis in previous post is wrong, it wasnt the tax take from income taxes that made the income during the bubble, but once off stamp duty and capital gains.


Go check the breakdown of taxation during the bubble, theres a graphs threads here some where which illustrates it nicely


edit: here

sollar

ei.sdraob wrote: »

And how do you propose we get to full employment again?

Anyways your thesis in previous post is wrong, it wasnt the tax take from income taxes that made the income during the bubble, but once off stamp duty and capital gains.

I agree that we were way off line with our method of generating revenues and taxes.

We'll need all areas of the private sector growing to get near full employment and part of that will be a healthy/normal level of building activity. Unfortunately we are a long long way off that.

Interesting graph there too. VAT is down a good bit too.

ei.sdraob

woot, were up to 40% now (Greece is at 50%)
how have things deteriorated since this thread started

Nody

ei.sdraob wrote: »

woot, were up to 40% now (Greece is at 50%)
how have things deteriorated since this thread started

Don't worry, the lads in government knows what they are doing :pac: