can we lat the banks default?

bd2012

howdy, perhaps naive in the extreme but still think its a valid question, can we let the banks default?

Leiva

hupdehup wrote: »

howdy, perhaps naive in the extreme but still think its a valid question, can we let the banks default?

Yes we can let the banks default and let the Bond holders pick up the Tab (IMO is gonna happen soon/eventually as we cant sustain the payments)

We cannot default on the sovereign Debt ...Big Mistake .

EDIT : Neither option is ideal but its time to call a spade a spade ...a country that only has around 2.2 million workers (and falling) cannot repay the billions been confirmed today .

tommy57

I don't think we can because the state and bank debts are now the one. think thats it anyway though if anyone knows be free to correct me.

shannonpowerlab

tommy57 wrote: »

I don't think we can because the state and bank debts are now the one. think thats it anyway though if anyone knows be free to correct me.

Sounds like it now though doesn't it...I am under the same impression...Does that mean we are getting paid virtually by virtual employer with virtual money and we live virtual live in this virtual country...?

SuperInfinity

We can let the banks default... absolutely we can.

That's what Iceland are doing, and I think Greece. Portugal, Spain are all starting to do the same.

What we need to do is like how Fidel Castro says to Monty Burns in The Simpsons.....: "what trillion dollar bill?".

These loans and bailouts have been fradulently induced in the first place, all of the bankers who engaged in this should be in jail.

We should let the banks default, but I would be wary about pissing off the rest of europe too much, holding our economy as a kind of kamikaze threat to the whole of europe and the euro. Pissing them off is ok, pissing them off by financial/eurozone terrorist type threats = not ok.

bd2012

how about the argument forwarded on vincent brown last night that we can use the threat of default in order to negotiate a better, and more feasible rate of interest?
http://www.tv3.ie/shows.php?request=tonightwithvincentbrowne&tv3_preview=&video=29656

Bob_Latchford

The rate of interest and the total borrowed are crucial unfortunately these have not been released as apparently talks are ongoing.

By the time they are released I imagine it would already be signed and sealed.

karlth

mixednuts wrote: »

We cannot default on the sovereign Debt ...Big Mistake .

Agree. A sovereign default is a very serious matter, especially when you can't print your own currency.

The solution must be focused on the banks, the debt holders should be forced to share the burden or take them over.

Bob_Latchford

Karlth, you mentioned before that Iceland issued in effect IOUs to the banks (i think)

where they some legal jiggery pokery to get over the legal issues of senior bond holders? Where they ever traded openly?

Alpha99

Irish banks should never have been bailed out in the first place. Failed businesses fail because they are unviable. Competition knocks them out and only viable businesses survive. If all the Irish banks failed, others would simply have come in and started trading.

Perhaps it would have been more prudent for the gov. to establish a NAMA type agency who would lend directly to the public and let all of these zombie banks die.

Donal Og O Baelach

If the govt. defaults on bank debts you can be certain a lot of householders will look again at their own debts and say "well if it was ok for Ireland Inc to...."

karlth

Bob_Latchford wrote: »

Karlth, you mentioned before that Iceland issued in effect IOUs to the banks (i think)

where they some legal jiggery pokery to get over the legal issues of senior bond holders? Where they ever traded openly?

The senior bonds are being actively traded, at a fraction of their original value, just like Lehman's bonds are. They are just betting on how large the returns will be.

When the new banks were created they incorporated the domestic assets and the deposits (debts) into them. To ensure funding and liquidity the government also injected IOUs into the banks.

Now when the new banks had calculated the difference between their assets and their debts they wrote an IOU for that amount and handed it to the old bank's receivership, i.e the senior bond holders.

The bond holders(both icelandic and foreign) were shafted though of course because the deposit holders were essentially covered in full while other debt holders had to fight for the scraps.

This was considered necessary purely because in the event of financial calamity deposits are more important than any other debts because otherwise the society might sink into chaos.

astra2000

Donal Og O Baelach wrote: »

If the govt. defaults on bank debts you can be certain a lot of householders will look again at their own debts and say "well if it was ok for Ireland Inc to...."

The difference is we there would be repercussions for the normal person on the street to default, they would lose their home/ be pursued through the court for it .No such thing for the bankers though, one rule for us another for them:mad:.

Laminations

Donal Og O Baelach wrote: »

If the govt. defaults on bank debts you can be certain a lot of householders will look again at their own debts and say "well if it was ok for Ireland Inc to...."

Not the same at all. Note the difference between the words in bold. Its like me looking at your car loan and saying 'Thats not my ****ing debt to pay'

It is perfectly ok for Ireland Inc. not to pay the debts of Anglo Inc. or BOI Inc. or Deutsche Bank Inc. It was not our debt.

Alpha99

Yes, this is on point. I think another analogy is if I set up a restaurant and as I trade, I can't pay my staff and I can't afford the rent or pay my creditors, my business will fail. Nobody should feel obliged to "bail" my failed business out to save my creditors.

It's the same with the banks. The risk of banks failing was not originally on the tax payer... They should have let the banks fail. They were badly run business and if nature is to take it's course, then these failed banks should die in our capitalistic society.

Laminations wrote: »

Not the same at all. Note the difference between the words in bold. Its like me looking at your car loan and saying 'Thats not my ****ing debt to pay'

It is perfectly ok for Ireland Inc. not to pay the debts of Anglo Inc. or BOI Inc. or Deutsche Bank Inc. It was not our debt.

Sticky_Fingers

Bob_Latchford wrote: »

The rate of interest and the total borrowed are crucial unfortunately these have not been released as apparently talks are ongoing.

By the time they are released I imagine it would already be signed and sealed.

+1
Its NAMA all over again, we are going to be railroaded into suffering for the shoddy deals our government sign us up to without being told whats in the small print until the ink is dry. The carry on of this crowd is a national scandal and should not be tolerated by the electorate. We have been shafted by the bank bailouts and now they are asking us to accept money from the loansharks in order to protect those very same people. Sweet Jesus its enough to drive you to drink...