Will FG/Labour make the bondholders pay?

RATM

FF aren't going to, this much is obvious. But I ain't voting for a party that doesn't include making the bondholders pay- in the media this is bandied about as 'sharing in the pain', i.e. as it stands the Irish public is taking all the pain and they have got off scot free, despite them being the ones who took the financial risk.

Even if Sinn Fein is the only party with this policy, I'll be voting for them. But where do FG/Labour stand on this, I haven't heard a thing about what they propose to do.

jprender

I'm not sure to be honest where FG/LAB stand on this.

But does the decision not to let the bondholders swivel mean the following ?

We borrow money to pay back the bondholders.
The bondholders then use that money and loan it back to us at an increased rate.
We then have to borrow money to pay back the bondholders again.
The bondholders then use that ......etc etc

Looks like Ireland was a free bet.

waffleman

arent we still relying on said bondholders for current and future handouts at extortionate lending rates?

seems as long as this is the situation we'll be getting bent over no matter what crowd of ditherers are in charge...

flutered

waffleman wrote: »

arent we still relying on said bondholders for current and future handouts at extortionate lending rates?

seems as long as this is the situation we'll be getting bent over no matter what crowd of ditherers are in charge...

i can not agree with you, there have been and always will be people prepared to take the risk with any thing under the sun, if they think they will make money on it, these bond holders are not the only game in town, they knew that there had to be a risk of some discription, others will say tough they got caught, i will have a go if the price is right, how badly off are iceland compared to us, anglo could cost another 5 billion, with no gurantee it will stop at that amount, our debt is 32% of what we have, one thing no one has taken account of is a rise in european interest rates, where are we going to be with a 1% raise, just imagne it at 2%, linehan is away with the faireys, how can he expect joe public to pay a morgage after a severe budget plus a raise in interest rates which are a certainty next year, people will not have money of any discription, i claimed sept 2008 that anglo should be allowed to implode, with our own banks ring fenced, please remebet that every euro put into anglo does nothing for our country.

Mr Benevolent

Having FG or Labour in control won't make the slightest difference to reality.

RATM

jprender wrote: »

I'm not sure to be honest where FG/LAB stand on this.

But does the decision not to let the bondholders swivel mean the following ?

We borrow money to pay back the bondholders.
The bondholders then use that money and loan it back to us at an increased rate.
We then have to borrow money to pay back the bondholders again.
The bondholders then use that ......etc etc

Looks like Ireland was a free bet.

Nah that's the spin that the bondholders want you to believe and it trickles down through the media as 'if Ireland default on their senior bondholders there'll be consequences to be paid'.
Investors will take a risk where ever they see an opportunity and would just see it as tough luck on those bondholders who got burnt before them. One of the golden rules of investing is to never get emotionally involved about previous bad deals, it will lose you even more money.

hinault

If FG/Labour did, they would benefit from huge public support.

Do we know the identity of the bondholders?
I know the ECB and Central Bank are bondholders but do we know the identity of the other bondholders?

johnnyskeleton

RATM wrote: »

Even if Sinn Fein is the only party with this policy, I'll be voting for them. But where do FG/Labour stand on this, I haven't heard a thing about what they propose to do.

Labour and SF are the only parties to have voted against NAMA and the bank guarantee.

They did it for a variety of reasons, lack of transparency, not to socialise private losses, builder bailout etc.

But people seem to ignore this as if they don't want to hear it, and think that they did so to be mindlessly obstructionist.

The more I think about it, the more it seems that Labour are the least worst option. Even if their policies are somewhat spoofy, at least they are not as corruptable or gullable as FF/FG.

johnnyskeleton

Confab wrote: »

Having FG or Labour in control won't make the slightest difference to reality.

Well that's all the more reason to vote them in to prevent FF making things even more "real" for us.

The_Thing

Labour and SF are the only parties to have voted against NAMA and the bank guarantee.

Did the Blueshirted b'stards vote for NAMA and the guarantee?

johnnyskeleton

The_Thing wrote: »

Did the Blueshirted b'stards vote for NAMA and the guarantee?

They voted against NAMA but for the guarantee i.e. when they saw what way popular opinion was going they changed their tack, but only then. Up to that point, they were happy to vote for the guarantee or whatever other madness would get them more votes.

Curiously, Inda didn't vote either way for NAMA because he was on a pairing agreement that day. It seems he only shows up for the votes of no confidence that he calls in Biffo. Pot calling the kettle black, really.

Coillte_Bhoy

johnnyskeleton wrote: »

Curiously, Inda didn't vote either way for NAMA because he was on a pairing agreement that day. .

Nothing curius about it. Thats a pointless thing to say. You obviously dont understand the pairing arrangements.

I-Shot-Jr

This almost makes me want to write to some of my local TDs and ask them personally about their stance on bondholders. It would certainly allow me to ascertain who I could give my vote to. I've a good mind to ask my economics lecturer what she thinks and have her break it all down for me. I'm not content to sit around and take in all these figures without understanding their real life implications and repercussions. As I am of the voting age I feel its time I got more involved.

Bullseye1

I would suggest that most of the TDs know little or nothing about international money markets and bond shareholders. So asking them about their stance won't give you the proper feedback you are looking for. They rely on high level civil servants for their information. Some of these high level civil servants are as culpable as the financial regulator and the bank chairmen.

Stabshauptmann

hinault wrote: »

If FG/Labour did, they would benefit from huge public support.

Do we know the identity of the bondholders?
I know the ECB and Central Bank are bondholders but do we know the identity of the other bondholders?

its not the CB or ECB, and Im too tired to explain it properly.

The investors are large institutional investors. You have a portfolio manager who wants x% return or y% risk so he mixes and matches bonds, shares, and other assets until he gets the right mix.

Who's money hes investing might be someone who needs to make a pool of money grow: a pension fund, an insurance company's etc or someone with surplus cash - rich Saudi, cash rich company.

What you are getting confused with is the ECB repo market. This is where banks can get cash off the ECB who holds onto bonds as collateral for the length of the contract.

johnnyskeleton

Coillte_Bhoy wrote: »

Nothing curius about it. Thats a pointless thing to say. You obviously dont understand the pairing arrangements.

It is curious because the leader of the main opposition party obviously didn't think it was as important as meeting a few boyos down Mayo way to get a few extra votes. Shows a complete disregard for the national interest in my opinion, as if I had even a sniff of a vote on that one I'd overcome any obstacle to make sure my vote was registered.

Again, it's not pointless because it shows very poor judgement by a person who is putting himself forward as a potential leader. If Kenny was Taoiseach and there was an emergency would he, George-Bush-like, keep doing whatever parish pump jaunt he was on, or would he rush to the cabinet to deal with it. Methinks the latter.

But purely on a political level, it is important in that Kenny doesn't even seem to get that voters notice these things. Although perhaps the recent cancellation of the pairing system was his ham fisted way of trying to reach city slicker voters.

Coillte_Bhoy wrote: »

You obviously dont understand the pairing arrangements

Can you explain to me why it is obvious that I don't understand it? It's not difficult to understand - TDs agree to pair off to do other stuff during the less important votes. The fact that Kenny thinks that asking Coughlan a few questions about education is more important than attending for the NAMA vote shows how hopelessly out of touch he is with everyone outside of Mayo.

Stabshauptmann

I-Shot-Jr wrote: »

This almost makes me want to write to some of my local TDs and ask them personally about their stance on bondholders. It would certainly allow me to ascertain who I could give my vote to. I've a good mind to ask my economics lecturer what she thinks and have her break it all down for me. I'm not content to sit around and take in all these figures without understanding their real life implications and repercussions. As I am of the voting age I feel its time I got more involved.

A soundbite isnt going to help. I work in FS and I havent made up my mind. TBH, the media does a very poor job of explaining FS - but I wouldnt expect to understand the latest medical science journal so I suppose I dont expect joe soap to understand the inner workings of the FS sector

I-Shot-Jr

Stabshauptmann wrote: »

A soundbite isnt going to help. I work in FS and I havent made up my mind. TBH, the media does a very poor job of explaining FS - but I wouldnt expect to understand the latest medical science journal so I suppose I dont expect joe soap to understand the inner workings of the FS sector

I know only too well how the media does a poor job, thats why I have bought a few books in an effort to educate myself! I think maybe I expressed myself poorly beforehand, I am trying to form my own opinion of the current situation. Once I have managed this (hopefully I'll be able to get my head around what is happening!) I will then use what information I can gather from politicians to choose how I will vote in order to be sure that my vote counted towards something I agree with. Although perhaps this is just naive? I have only just began to take an interest in economics as it is a part of my course in college and the one I enjoy most.

I really just want to find out the relative advantages/disadvantages of making the bondholders pay and which political entities will do so should they gain power. Excuse me if I'm bringing the level or complexity of the conversation down I'm just rather curious and would like to have the opinions of others better versed and more knowledgeable in this domain!

Stabshauptmann

Why they should be made pay:
They took a risk, it didnt work out. thats life.

Why they shouldnt:
The arguement is that all of Ierland would be tarred with the same brush. One defualt could bring this whole, very delicate, house of cards down.

I think there might also be an insolvencies legal point, but I'm not sure. If there is a scenario that could lead to a firesale of bank assets the losses for the Irish tax payer would be astromomical.