Whats going to happen when ireland defaults

ilovesleep

From what I have read I really dont see this IMF/EU bailout loan helping Ireland. Nobody knows just how big the banking dept is with them not even taking mortgage defaults into consideration. It looks as if with each passing day we are going to be lumped with this imf/eu loan for good. We're just throwing money away into failing banks.

I want to know whats going to happen when Ireland defaults.

Are we going to be completely on our own to run the country having exhausted all the money loaned to us and leaving the countries that has given us a loan as part of this bailout package up in a heap.

melekalikimaka

i will eat my hat if we default

its not going to happen at this point. too many people have too much invested at this point

MrMatisse

Id go and get some ketchup for that hat.....

melekalikimaka

MrMatisse wrote: »

Id go and get some ketchup for that hat.....

what makes people think that we are going to default?

blinding

To correctly justify the default we are going to have to bring the Fraudsters that brought us to this situation to justice.

Hopefully this will not be have to be done with the gun but it may have to come to that.

JENNYWREN19

ilovesleep wrote: »

From what I have read I really dont see this IMF/EU bailout loan helping Ireland. Nobody knows just how big the banking dept is with them not even taking mortgage defaults into consideration. It looks as if with each passing day we are going to be lumped with this imf/eu loan for good. We're just throwing money away into failing banks.

I want to know whats going to happen when Ireland defaults.

Are we going to be completely on our own to run the country having exhausted all the money loaned to us and leaving the countries that has given us a loan as part of this bailout package up in a heap.

we'll be repossessed

ei.sdraob

melekalikimaka wrote: »

what makes people think that we are going to default?

Mountains of debt at every level: personal, company and state

and being in a currency union with low target inflation

since inflation is ruled out that only leaves default of one form or the other on some or all of the debt, there is no other way out of this situation

johnnyskeleton

melekalikimaka wrote: »

what makes people think that we are going to default?

The EU are advising (nay insisting) on us at least partially defaulting on Anglo's debts. As Anglo is now nationalised, that is an act of soverign default:

http://www.bloomberg.com/news/2010-12-21/allied-irish-anglo-irish-secure-european-union-approval-for-state-support.html

dissed doc

melekalikimaka wrote: »

i will eat my hat if we default

its not going to happen at this point. too many people have too much invested at this point

LOL!

We have already defaulted. We have already passed the point with which the country can pay it's debts. We are borrowing from the ECB - EuroArea lender of last resort.

previous user

I just hope it does not have the indirect effect of ending the euro and devaluing everybodies savings.

melekalikimaka

dissed doc wrote: »

LOL!

We have already defaulted. We have already passed the point with which the country can pay it's debts. We are borrowing from the ECB - EuroArea lender of last resort.

we have not defaulted, our loan interest would be markably higher if we had

Anonymous1987

johnnyskeleton wrote: »

The EU are advising (nay insisting) on us at least partially defaulting on Anglo's debts. As Anglo is now nationalised, that is an act of soverign default:

http://www.bloomberg.com/news/2010-12-21/allied-irish-anglo-irish-secure-european-union-approval-for-state-support.html

Restructuring of the banks junior debt does not mean government default.

The government is a shareholder of Anglo and AIB but note that the government and the banks are separate entities legally and as a shareholder the greatest lost the government can make is on the investments it made to recapitalise the banks. The bank restructuring is a default for the banks not the government. Shareholders can only lose their investments.

Unfortunately the government has also guaranteed senior bondholders as well as deposits up to €100,000 so if the banks cannot meet either of these the government must cover the loss to the depositors and senior bondholders. This would put pressure on the government to meet its own obligations. Its important to note junior bondholders are not included in the government guarantee so a bank default on junior bondholders does not impact on the government.

Anonymous1987

ilovesleep wrote: »

I want to know whats going to happen when Ireland defaults.

Its not like a default is a cure, it would involve renegotiating our debt with our creditors through the IMF and reaching an agreement on what we can afford to repay.

The consequences would be that the markets would think twice before lending to us, charging a higher interest rate on future borrowing. Worst case scenario; no-one will lend to us. Of course it is very difficult to say exactly how the markets would react.

Thankfully we haven't reached the point where our debt is unsustainable yet only because of the IMF/EU bailout although the bank guarantee increases our risk substantially.

Anonymous1987

melekalikimaka wrote: »

i will eat my hat if we default

its not going to happen at this point. too many people have too much invested at this point

If we cannot pay our debts then it doesn't matter who or how much is invested, the initial contract can not been honoured.

melekalikimaka

Anonymous1987 wrote: »

If we cannot pay our debts then it doesn't matter who or how much is invested, the initial contract can not been honoured.

we will end up getting more pumped in i think... but tbh i think theres enough leftover as there is with the bailout as it stands to cover some extra unseen debt

Anonymous1987

melekalikimaka wrote: »

we will end up getting more pumped in i think... but tbh i think theres enough leftover as there is with the bailout as it stands to cover some extra unseen debt

True, the bailout does have a substantial contingency fund set aside for the banks, it really depends on how the economy performs and the ability of people and business to meet repayments of loans. There is also the issue of short term liquidity to banks with the Irish banks being heavily dependent on the ECB, the markets are still not lending to the banks for liquidity.

johnnyskeleton

Anonymous1987 wrote: »

Restructuring of the banks junior debt does not mean government default.

The government is a shareholder of Anglo and AIB but note that the government and the banks are separate entities legally and as a shareholder the greatest lost the government can make is on the investments it made to recapitalise the banks. The bank restructuring is a default for the banks not the government. Shareholders can only lose their investments.

Unfortunately the government has also guaranteed senior bondholders as well as deposits up to €100,000 so if the banks cannot meet either of these the government must cover the loss to the depositors and senior bondholders. This would put pressure on the government to meet its own obligations. Its important to note junior bondholders are not included in the government guarantee so a bank default on junior bondholders does not impact on the government.

I don't think such a technical distinction is anything other than a way to call it something other than what it is.

Anglo has been nationalised. It is a separate company, but so are semi state companies. I mean, we could make everything into a private company - tax collecting, social welfare, NAMA, NPRF, the gardai etc. Then, if we default on any or all of these companies we can simply say "whoops, private company, sorry about that lenders, but our soverign credit rating should be kept intact". I think you should give the markets some credit - a limited company in public ownership is a state body in all but name.

If Anglo defaults on its bondholders, it is not in substance any different to if the social welfare fund defaults on paying recipients.

blinding

Eventually the "penny" will drop with the Irish people that they have been defrauded (at present a slow realization)

That many people do not end up owing so much money without Fraud on a grand scale being commited.

The people will not pay for this fraud.

melekalikimaka

blinding wrote: »

The people will not pay for this fraud.

its no longer the problem of individuals, its national problem

sollar

Is it worse to pay a higher interest rate on future borrowings or to pay back fifty to a hundred odd billion of debts built up by reckless private bankers.

We should default on as much as we can and then concentrate on balancing budgets in the future so our borrowings can be lower.

The markets are not exactly impressed with our prospects by carrying all that debt anyway.

blinding

melekalikimaka wrote: »

its no longer the problem of individuals, its national problem

The Irish people have been defrauded by politicians and bankers.

If somebody defrauded your local post office/credit union and then went down the bookies and blew the lot would you go down the bookies and settle their account. If you would then you must have "mug" on your forehead !

We were continuously lied to. We are under no moral or in my view legal obligation to honour "deals" made by fraudsters.

later12

We will not default exactly.

We will most likely restructure our debts through progressive write downs on piggy back (banking) debentures from 2013 onwards, once European lending institutions have a chance to build up capital cushions and offload Irish debts to the global market thereby minimising their exposures.

We will probably voluntarily leave the Euro, as things appear in 2010, by that time.

ilovesleep

blinding wrote: »

The Irish people have been defrauded by politicians and bankers.

If somebody defrauded your local post office/credit union and then went down the bookies and blew the lot would you go down the bookies and settle their account. If you would then you must have "mug" on your forehead !

We were continuously lied to. We are under no moral or in my view legal obligation to honour "deals" made by fraudsters.

exactly! our government has to get the best deal possible and do the right thing - whatever the hell that is right now - or we will probably be like russia in time. Its very hard to get russians to work. I could see a lot of irish picking a house, moving in, becoming squatters, stealing hens and living happily ever after on eggs and beer.

Anonymous1987

johnnyskeleton wrote: »

I don't think such a technical distinction is anything other than a way to call it something other than what it is.

Anglo has been nationalised. It is a separate company, but so are semi state companies. I mean, we could make everything into a private company - tax collecting, social welfare, NAMA, NPRF, the gardai etc. Then, if we default on any or all of these companies we can simply say "whoops, private company, sorry about that lenders, but our soverign credit rating should be kept intact". I think you should give the markets some credit - a limited company in public ownership is a state body in all but name.

If Anglo defaults on its bondholders, it is not in substance any different to if the social welfare fund defaults on paying recipients.

Explain to me how the government as a shareholder is any different from an individual as a shareholder, the government has an obligation to meet social welfare payments because it has a legal obligation to do so.

A limited liability company is a specific legal structure which by definition limits the liability of the shareholder. In the case of Anglo the government has limited liability for the junior bondholders. The senior bondholders on the other hand are covered by the government guarantee and hence the government is obliged to cover the losses of the senior bondholders.

The legal structure of firms cannot be dismissed as technicalities, they define who faces the losses in the event of a failure to pay.

blinding

ilovesleep wrote: »

exactly! our government has to get the best deal possible and do the right thing - whatever the hell that is right now - or we will probably be like russia in time. Its very hard to get russians to work. I could see a lot of irish picking a house, moving in, becoming squatters, stealing hens and living happily ever after on eggs and beer.

The present goverment have no moral authority to make "a deal"

They must step down and engage legal representatives to defend themselves against the Fraud charges that will surely be brought against them.

later12

blinding wrote: »

They must step down and engage legal representatives to defend themselves against the Fraud charges that will surely be brought against them.

They are guilty of severe mismanagement and negligence, but fraud? How do you make that one out?

blinding

later10 wrote: »

They are guilty of severe mismanagement and negligence, but fraud? How do you make that one out?

They knowingly underplayed the debts of the banks. They sold this pig in a poke to the Irish people. The pig was dead and but a skeleton of a pig.

They knowingly mislead the Irish people to the debts of the banks. They commited fraud and should be brought to justice for their mis-selling.

later12

blinding wrote: »

They knowingly underplayed the debts of the banks. They sold this pig in a poke to the Irish people. The pig was dead and but a skeleton of a pig.

Well that would seem to go against every other understanding of the situation that I have ever come across. It seems widely accepted that it was the banking industry which misrepresented their liabilities, but you are saying it was the Government? Hmmm.

I think people are very angry, justifiably so, but lets at least be reasonable in our criticisms. Exaggerating Government culpability and talk of an active fraud actually only serves to bring the justified criticism into disrepute and portrays the critics as being irrational.

Anonymous1987

Just a note on the banks auditors. The New York Attorney General is taking Lehman Brothers auditors Ernst and Young to court for giving the bank a clean bill of health before its collapse. Ernst and Young were also the auditors of Anglo Irish. I think the Irish Attorney General should take similar proceedings against E&Y.

ilovesleep

later10 wrote: »

Well that would seem to go against every other understanding of the situation that I have ever come across. It seems widely accepted that it was the banking industry which misrepresented their liabilities, but you are saying it was the Government? Hmmm.

the banking guarantee should have been annulled but our government is still continueing with that

Anonymous1987

ilovesleep wrote: »

the banking guarantee should have been annulled but our government is still continueing with that

Note that the bank guarantee consists of two guarantees.

Firstly there is the guarantee on deposits in banks. Guaranteed deposits consist of money held in savings and current accounts up to the value of €100,000. Note that this includes everyone who has an account with a domestic Irish bank.

The second guarantee is a guarantee to cover the senior bondholders in the event they face losses. You have to consider whether the banks can survive without guaranteeing senior bondholders when they are already struggling to obtain funding at present.

If the banks fail then and we still have deposits guaranteed then the government faces enormous debts to cover the deposits.

If we remove the deposit guarantee then the banks will inevitably face a bank run as depositors grow nervous and shift their money to banks located in Ireland but guaranteed by another country. In this case those depositors who cannot get their money in time will lose.

Its also important to note that a collapse of domestic Irish banks will result in a hole in the financial system whereby lending will fall dramatically. This would have dramatic negative consequences for firms and individuals operating in Ireland and the economy in general.

blinding

later10 wrote: »

Well that would seem to go against every other understanding of the situation that I have ever come across. It seems widely accepted that it was the banking industry which misrepresented their liabilities, but you are saying it was the Government? Hmmm.

I think people are very angry, justifiably so, but lets at least be reasonable in our criticisms. Exaggerating Government culpability and talk of an active fraud actually only serves to bring the justified criticism into disrepute and portrays the critics as being irrational.

How handy for the banks that they were dealing with fools and knaves or was it willing accomplices to defraud the Irish people.

The Irish "goverment" could have guaranteed the debts of the banks to certrain limits but this was not done. We were mislead and mis-sold the debt levels.

How deliciously naive of you and others to "believe" the word of poiliticians that are in cahoots with the bankers.

Who but Fraudsters would give open ended guarantees to bankers that cannot be trusted,

melekalikimaka

blinding wrote: »

Who but Fraudsters would give open ended guarantees to bankers that cannot be trusted,

you throw alot of buzz words without really understanding what they mean.

P. Breathnach

blinding wrote: »

...
Hopefully this will not be have to be done with the gun but it may have to come to that.

No, no, no! That sort of suggestion is seriously bad.

blinding

melekalikimaka wrote: »

you throw alot of buzz words without really understanding what they mean.

I understand that I have been de-frauded when I am being forced to pay other peoples debt without being told the amount of that debt and when I am given a "fait accompli" to pay up.

If it quacks like a duck and walks like a duck then its a duck.

This is Fraud on a grand scale. Its a classic of the big lie.

People that did not bring themselves to this situation and yet have to pay are being de-frauded.

Essexboy

Careful, or Senator MacSharry will be on your case!

http://sligotoday.ie/details.php?id=12502&PHPSESSID=ebdc77b161a7423ce259b2690c7f37c8

hmmm

Interestingly, the downsides of defaulting is rarely mentioned. In my paranoid delusions I think this is a deliberate tactic by SF and the extreme left who see profit from creating a chaotic and desperate situation, or alternatively perhaps it's simply because some posters see default as an easy option with no downsides?

Let's not forget that for us to default Ireland would have to renege on a promise made by a sovereign government. The implications of that alone are potentially staggering for any future investment, of any type, by anyone in this country.

Amhran Nua

melekalikimaka wrote: »

what makes people think that we are going to default?

You might ask Professors Barry Eichengreen, Kevin O'Rourke, and Wolfgang Munchau for starters, among many other high profile international economic commentators, none of whom are notably eurosceptic. Colm McCarthy of An Bord Snip Nua fame thinks a default is unavoidable unless bondholders share the pain.

ilovesleep wrote: »

I could see a lot of irish picking a house, moving in, becoming squatters, stealing hens and living happily ever after on eggs and beer.

Did you see it on Eastenders and Hollyoaks?

blinding wrote: »

Hopefully this will not be have to be done with the gun but it may have to come to that.

Hopefully not but unfortunately quite possible.

hmmm

Amhran Nua wrote: »

Hopefully not but unfortunately quite possible.

Err what? Are you suggesting that shooting opposition politicians may "hopefully" not happen but is also "quite possible"?

Amhran Nua

hmmm wrote: »

Err what? Are you suggesting that shooting opposition politicians may "hopefully" not happen but is also "quite possible"?

What did you think was going to happen when you stand on people's necks, lie and lie, and try to convince them that somehow its all their fault? What has always happened?

They turn around and wipe the bloody smirk off your face, that's what.

I don't condone it, but its possible, in my opinion. Also I'm not sure what you mean by opposition politicians, the comment in question was referring to those responsible for this shambles.

hmmm

Amhran Nua wrote: »

What did you think was going to happen when you stand on people's necks, lie and lie, and try to convince them that somehow its all their fault? What has always happened?

In a democracy, what happens is the previous government, which had been freely elected by the people, is removed and replaced. The new government will either draft new laws or enforce previous laws if appropriate. That's how grown up countries deal with their problems.

What democracies don't do is support juvenile fantasies about allowing thugs to murder an arbitrary list people. You're condoning these fantasists by throwing your hands up in the air and saying it is perhaps inevitable.

I don't condone it, but its possible, in my opinion. Also I'm not sure what you mean by opposition politicians, the comment in question was referring to those responsible for this shambles.

Well who else do you see as being "responsible" if not politicians in the current government? Aren't they in opposition to you? Who else do you see being on the list of those to be murdered?

Amhran Nua

hmmm wrote: »

You're condoning these fantasists by throwing your hands up in the air and saying it is perhaps inevitable.

The only one using the word inevitable here is you. Why do you condone violence by using the word "inevitable"? Yeah, that makes as much sense as your argument.

I can see a situation in the near future where extremist elements decide to take the law into their own hands. It is possible. I would be opposed to that.

Clear?

hmmm

Amhran Nua wrote: »

I can see a situation in the near future where extremist elements decide to take the law into their own hands. It is possible. I would be opposed to that.

Clear?

Oh it is very clear.

Amhran Nua

hmmm wrote: »

Oh it is very clear.

That's great.

zig

hmmm wrote: »

Oh it is very clear.

troll, to be fair,youve spent the last few posts putting words into his mouth

hmmm

zig wrote: »

troll, to be fair,youve spent the last few posts putting words into his mouth

To be fair whoever you are, he hasn't answered my question. I don't know much about your new party but I thought it was meant to be mainstream party to attract broad support. The language and views expressed here is more reminiscent of the extreme left and SF.

I'd like to note that AN has not answered my question.

Originally Posted by Amhran Nua View Post
What did you think was going to happen when you stand on people's necks, lie and lie, and try to convince them that somehow its all their fault? What has always happened?

Why are you justifying your suggestion that there may be murders of those you feel are "responsible", which will necessarily include politicians opposed to you? I don't see any other mainstream party or politician or commentator using language like this. Do you think that sympathising with extreme thought is acceptable?

Amhran Nua

hmmm wrote: »

To be fair whoever you are, he hasn't answered my question. I don't know much about your new party but I thought it was meant to be mainstream party to attract broad support. The language and views expressed here is more reminiscent of the extreme left and SF.

I'd like to note that AN has not answered my question.

Why are you justifying your suggestion that there may be murders of those you feel are "responsible", which will necessarily include politicians opposed to you? I don't see any other mainstream party or politician or commentator using language like this. Do you think that sympathising with extreme thought is acceptable?

Get thee to After Hours, and your handbaggery along with you. Politics is an adult forum.

hmmm

Amhran Nua wrote: »

Get thee to After Hours, and your handbaggery along with you. Politics is an adult forum.

That's very weak. I'll leave it there.