Organising a protest to demand we default?

pog it

Please anyone with suggestions share them!

Is there any way we can rally people and get a protest organised to call for a default?

How can one do this without the help of unions? Can it be done?

later12

I noticed Argentina were seeing 40% bid yields on bonds to mature in 7 years according to the Markets index today.

Sorry OP what were you saying...?

Edit: to add something useful: write downs on senior debt don't necessarily have to happen in light of the bond swap procedures currently being pushed about with regards to an overhaul of the EFSF. It suits everybody to pursue this course.

pog it

later10 wrote: »

I noticed Argentina were paying a 40% yield on ten year paper in the Markets index today.

Sorry OP what were you saying...?

Sorry I must have been too busy looking at Iceland's recovery.

later12

pog it wrote: »

Sorry I must have been too busy looking at Iceland's recovery.

Recovery in Iceland? I failed to catch that on the news... when did that happen?

http://news.xinhuanet.com/english2010/world/2011-01/11/c_13686056.htm

Upon the conclusion of the review, the Icelandic government sent the IMF a new Letter of Intent, describing Iceland's economic policy.

The Letter states that an economic recovery is gradually taking hold, apparently by the continued stability of the krona, a declining debt path and falling inflation.

Trade surpluses have allowed authorities to begin purchases of foreign currency to bolster reserves. Recent indicators suggest that demand is slowly picking up, and growth is expected to turn positive in 2011.

Definitely on the road to recovery

later12

Papa Smut wrote: »

http://news.xinhuanet.com/english2010/world/2011-01/11/c_13686056.htm




Definitely on the road to recovery

According to their Government, in that link. We could all be on the road to recovery. After all, that link mentions trade surplus, and we have a very impressive surplus and are ourselves the most impressive exporters in Europe after Germany.

Iceland have their own currency and they are sitting on big chunks of forex reserves. But we cannot control our own currency, so for that reason and others, we don't have the luxury of defaulting on senior or sovereign debt right now.

pog it

later10 wrote: »

According to their Government, in that link. We could all be on the road to recovery. After all, that link mentions trade surplus, and we have a very impressive surplus and are ourselves the most impressive exporters in Europe after Germany.

Iceland have their own currency and they are sitting on big chunks of forex reserves. But we cannot control our own currency, so for that reason and others, we don't have the luxury of defaulting on senior or sovereign debt right now.

How feasible is it to leave the euro?

later12

pog it wrote: »

How feasible is it to leave the euro?

Not feasible for the moment.

It could be feasible to leave the euro after 2013 if we worked out a restructured debt programme with the European Commission and the Eurozone itself whereby they helped us realise our corporate and sovereign debt repayments over an extended period of time. That is the only remotely acceptable way that we could leave the euro and potentially still do well economically.

The 'alternative' leaving process is to default on debt and leave, which would both destroy our trade and our new currency all at once.

pog it

later10 wrote: »

The 'alternative' leaving process is to default on debt and leave, which would both destroy our trade and our new currency all at once.

How would that destroy our trade? Could we not control our own new currency?

macannrb

pog it wrote: »

How would that destroy our trade? Could we not control our own new currency?

As we rely on exports, who in the UK, EU US etc etc wants to buy our goods in the an Punt Nua/Lenny pennies as it would be like buying goods in Zimbabwe in their currency. Not attractive. Also 1/3 of corp tax revenue comes from the IFSC which would go to about zero as people in the FS sector want stability

later12

pog it wrote: »

How would that destroy our trade? Could we not control our own new currency?

No we would not be able to control our new currency to any realistic degree in the long term, but in trade terms alone that is a good thing since the currency would only depreciate and it would make life cheaper for employers and foreign industries in Ireland.
But, there is a but. Firstly, the inevitable flight of money from punt denominated accounts to Euro, Dollar and Swiss Franc accounts in the lead up to any such change would be catastrophic to Irish business. I wouldn't even leave my (pathetically small) current account intact before the switch to the punt, would you?

The solution to that would be to impose rules on the amount of money allowed to leave the country, and any such transactional prohibitions would result in foreign companies with real or nominal bases in Ireland quite simply packing up and leaving. They aren't in Ireland for the sunshine, they're often in Ireland for the income they can generate and repackage to foreign destinations at low tax.

The alternative would be no ban on capital flight, but an inevitable drying up of real money - this is called a suspension of convertibility and basically means you go to your ATM and it doesn't allow you access to money in your account. This has gone on in Argentina and Uruguay among other countries who have defaulted on debt, and they are still living with the consequences (and the law suits).

Ireland will undoubtedly restructure some of its debt, but that will have to take place in a calm and orderly way and if possible, with senior bondholders being part of the negotiations in doing so. This happened with some of the more successful Latin American countries during their major debt crisis, and it is that example, and not the Argentine example, that we ought to follow.

Ash.J.Williams

pog it wrote: »

Please anyone with suggestions share them!

Is there any way we can rally people and get a protest organised to call for a default?

How can one do this without the help of unions? Can it be done?

Outline the repercussions of defaulting first please?

pog it

Ash.J.Williams wrote: »

Outline the repercussions of defaulting first please?

What repercussions?

Ash.J.Williams

pog it wrote: »

What repercussions?

We just default and that's it? Back to normal?

pog it

Ash.J.Williams wrote: »

We just default and that's it? Back to normal?

Who said anything about going "back to normal"?

The FT and many international economic commentators are telling us we are mad accepting this bailout as is and say we would be better off defaulting.

It's hard to believe FF when you have the FT and other greats saying to do the opposite.

later12

pog it wrote: »

The FT and many international economic commentators are telling us we are mad accepting this bailout as is and say we would be better off defaulting.

Who in the FT said that?

whippet

pog it wrote: »

Please anyone with suggestions share them!

Is there any way we can rally people and get a protest organised to call for a default?

How can one do this without the help of unions? Can it be done?

organise a Facebook campaign :rolleyes: it would probably be as good as any other form of protest.

Or just elect Sinn Fein and the Socialist Party into government, they don't want to pay a penny back ... actually they don't even want to borrow any, they will just demand that everyone go in to their attic, dig out the old Monopoly Boxes and use the money in that to buy things and shore up our budget deficit.

I have yet to see a convincing argument in favour of a default?

pog it

later10 wrote: »

Who in the FT said that?

It was in the editorial yesterday but is resounded again and again in the paper.

pog it

whippet wrote: »

I have yet to see a convincing argument in favour of a default?

That's a valid point Whippet, I'm educating myself on this but what I can say is that what I'm hearing and reading from a lot of good sources is that we need to default. I'll have to pull up the sources together and assess what they're saying but I trust these sources a lot more than the EU and FF band. A lot of these people saying we should default are genuinely independent voices.

later12

pog it wrote: »

It was in the editorial yesterday but is resounded again and again in the paper.

You are grossly mistaken. I am looking at yesterday's editorial in the paper copy of the FT right now, it is solely about Fianna Fáil and what the paper quite rightly refers to as its 'factional antics' and 'electoral annihilation'.

That editorial does not even mention the word default, let alone suggest we ought to undertake a default. Nor has a single article I have ever read in that, or any creditable paper, mentioned Ireland's 'need to default' as you suggest.

You say that you are educating yourself and while that is a commendable endeavour, and we should all seek to further educate ourselves as the crisis emerges no matter how much we think we know, it is no good suggesting that the 'need to default' argument is coming from the mainstream economic viewpoint. Arguably, the tentative vision is emerging of a possible (I would say probable) need to restructure senior debt by way of Common Action Clauses in the future and an overhaul of the EFSF, but nobody is realistically and credibly suggesting a default on debt currently payable.

pog it

I reread the article and still to me, my reading of it is they are saying we got a disastrous deal. Yes "default" was not used outright but they didn't specify how we could get out of the bailout, just that we should. I can't access the article now as I'm a subscriber to the website and not using my laptop at the moment (password buried deep in my mailbox somewhere).

David McWilliams is another proponent of a default and also a couple of guest financial journalists have written in the Irish Independent of the need for same recently.

Do you read the financial site Zerohedge.com? I trust that site and not just the authors of the articles but also the posters on the site and they are constantly saying we should have had the cop on to default.

A question for you later10... It is ridiculous that we and future taxpayers in Ireland are effectively bailing out these european banks. But how else do we **** them back but default tell me?

later12

pog it wrote: »

I reread the article and still to me, my reading of it is they are saying we got a disastrous deal. Yes "default" was not used outright but they didn't specify how we could get out of the bailout, just that we should. I can't access the article now as I'm a subscriber to the website and not using my laptop at the moment (password buried deep in my mailbox somewhere).

I'm still looking at the article and i can assure you that the only thing the editorial says about the bailout is that the issue of whether or not the public ought to be shouldering the debt of financial institutions will be the dominant theme of the campaign. It says elsewhere in the piece that voters' anger is justified, but that does not amount to a suggestion that Ireland ought to default on anything at all. Honestly, this is not something that I have ever read in any reputable financial or trading publication and I don't think you are being misleading but i do think that the suggestion about default is off the mark.

Do you read the financial site Zerohedge.com? I trust that site and not just the authors of the articles but also the posters on the site and they are constantly saying we should have had the cop on to default.

But I presume many of them don't really live here or possibly not even in the euro area. When i was 18 and still discovering how to work a calculator I thought Argentina were great altogether for having kicked out the IMF, but I was a pretty dumb kid and history and age have proven me quite incorrect. We have to be calm and rational about the bailout and about defaulting on senior debt or renegotiation of emerging debt based on our current market position.

It is ridiculous that we and future taxpayers in Ireland are effectively bailing out these european banks. But how else do we **** them back but default tell me?

Well there is no silver bullet, but the closest thing to a silver bullet is a situation whereby we continue to meet our commitments in the short term, and we try to bring about a situation whereby a European fund, supported by Germany and the core economies, buys back our corporate debt from bondholders on secondary markets (at reduced values) and they swap them in dublin for new bonds which we remunerate over a longer period. this is the basic principle of the Brady Bond model that you may have heard about.

That way Ireland could enjoy lower sovereign bond yields because we would have banking debt off our backs to aid our recovery and we don't have to resort to facing up to senior bond holders pulling empty pockets.

pog it

Are they seriously considering this brady bond model or is it just a theoretical construct for now? Also, the cynic in me wonders why they are willing to consider this brady bond model now having already agreed bailout terms?

Have they discovered that Ireland need even more bailout funds?

pog it

What do you make of this article?

http://www.zerohedge.com/article/guest-post-ireland-please-do-world-favor-and-default

later12

pog it wrote: »

Are they considering this brady bond model or is it just a theoretical construct for now?

This is very much speculation, but it has been pretty much rampant speculation since about last September, or whenever the Collective action clauses arose, which allow for write downs on senior debt in the future. Brady Bonds, similar in principle to what I just mentioned, were issued in latin America during their major debt crisis, and they have wide approval.

If you have yesterday's copy of the FT somewhere, Wolfgang Munchau has an interesting opinion on it, and Citi's Chief economist Willem Buiter has an 84 page document on it if you are feeling particularly bored today. It's not a very complicated principle though and it just might work - again.

The EU summit in march will bring a lot more clarity. There's the chance that more information might be forthcoming before that time in the not unlikely event of a Portuguese bailout.

Edit\
it should be noted that the author of zerohedge has, as far as i know, a firm grudge against the likes of ML, Goldman Sachs and other major financial institutions. That's ok. But while the Irish debt crisis is significant, I think he overestimates the amount of damage that a default would do not only to these banks but even to their smaller associates, simply hoping that our default would bring about their downfall. That's not really accurate in my opinion.

Fratton Fred

pog it wrote: »

A question for you later10... It is ridiculous that we and future taxpayers in Ireland are effectively bailing out these european banks. But how else do we **** them back but default tell me?

So who should pay it back then?

pog it

Fratton Fred wrote: »

So who should pay it back then?

Nobody. It's a free market. If bondholders and other parties made bad investments then let them be wiped out altogether. That's what happened to shareholders in Anglo, AIB and BOI. The whole idea of a default is that we don't pay it back for them. We are looking at a grim decade ahead if you go this route.Though who knows maybe this restructuring of debt that Later10 has talked about will ease the pain somewhat and make it less painful. Still going to be a horridly slow recovery.

Fratton Fred

pog it wrote: »

Nobody. It's a free market. If bondholders and other parties made bad investments then let them be wiped out altogether. That's what happened to shareholders in Anglo, AIB and BOI. The whole idea of a default is that we don't pay it back for them. We are looking at a grim decade ahead if you go this route.Though who knows maybe this restructuring of debt that Later10 has talked about will ease the pain somewhat and make it less painful. Still going to be a horridly slow recovery.

So what you are saying is **** everybody who lent Ireland money? Including the ecb, because well, things might be a bit tough if we take the offer in the table.

So, when Ireland us thrown out of the euro and has become a complete pariah in the bond markets, who are you going to ask for help then?

People don't seem to get it. Ireland has reached It's overdraft limit and has to borrow in order to pay It's bills. Currently it is borrowing off the bond markets, who have become nervous and are therefore demanding a high interest rate. To help, the imf and ecb have said that if the interest rate gets too high there is a pot of money Ireland can borrow.

What you are talking about is ****ing the bond markets in the bollox, which means they won't touch Ireland, let alone charge decent interest rates and also turning around to the imf/ecb and telling them to piss off.

If the imf/ecb have to step in a second time, it will be a lot more punitive than it is right now.

pog it

Fratton Fred wrote: »

If the imf/ecb have to step in a second time, it will be a lot more punitive than it is right now.

If they did so be it! We have the most outrageously inefficient public service in Europe (and the world ?) and which is costing us massively. We have no special job creation initiatives, we are paying too high of rates to social welfare recipients and not just the minority of that group who are long term spongers who won't work but also in general it is still too high. Also they are doing nothing about helping mortgage holders move to fixed rate from their variable rates and when interest rates go up, what then for the Irish economy?

Ireland won't deal with these issues themselves. If ECB/IMF came back in these things might be changed. Ironically then we'd start seeing a better country.

beeno67

pog it wrote: »

David McWilliams is another proponent of a default ?

Now. Originally he was one of the first people proposing the bank guarantee scheme in the first place. In other words he was the original person saying bank debt should become state debt. He even advised Brian Lenihan that this was the right course of action. Basically he is in favour of doing something different to what is actually been done. That way he can always maintain he would have been right.

beeno67

pog it wrote: »

If they did so be it! We have the most outrageously inefficient public service in Europe (and the world ?) and which is costing us massively. We have no special job creation initiatives, we are paying too high of rates to social welfare recipients and not just the minority of that group who are long term spongers who won't work but also in general it is still too high. Also they are doing nothing about helping mortgage holders move to fixed rate from their variable rates and when interest rates go up, what then for the Irish economy?

Ireland won't deal with these issues themselves. If ECB/IMF came back in these things might be changed. Ironically then we'd start seeing a better country.

We also have a massively undertaxed section of the community. Those in Ireland earning less than 40K a year are the most under taxed in Europe. Conversly those earning over 100K are the most over taxed in Europe. (and that was before the current budget).

Donal Og O Baelach

beeno67 wrote: »

Now. Originally he was one of the first people proposing the bank guarantee scheme in the first place. In other words he was the original person saying bank debt should become state debt. He even advised Brian Lenihan that this was the right course of action. Basically he is in favour of doing something different to what is actually been done. That way he can always maintain he would have been right.

Thats how I remembered his initial response to the bailout too, but then I thought I must have been wrong, since no one seemed to challenge him on it when the system collapsed.
I think the days of the celebrity economists are coming to a close - partly because people are educating themselves on the economy more now.
I'm not sure if Paul Summerville can carry on without buying in to the hype.

beeno67

Donal Og O Baelach wrote: »

Thats how I remembered his initial response to the bailout too, but then I thought I must have been wrong, since no one seemed to challenge him on it when the system collapsed.
I think the days of the celebrity economists are coming to a close - partly because people are educating themselves on the economy more now.
I'm not sure if Paul Summerville can carry on without buying in to the hype.

In his book, where he describes his famous "garlic eating" incident with Lenihan, McWilliams claims he convinced Lenihan to go for the guarantee. He has since tried to back down on this saying he meant a blanket guarantee but it would have been somehow different.

So we to-ed and fro-ed with what had been done before. I had worked for UBS (Union Bank of Switzerland) in Zurich in the years after Switzerland experienced a banking crisis in the early 1990s. The Swiss government guaranteed all liabilities of the banking system even though the banks' balance sheets were a number of times bigger than the country's GDP. A guarantee had worked there.
I'd also worked in Sweden where I'd seen the Swedes guarantee all their deposits in the face of a banking crisis. I told the minister it seemed to me that Sweden's reaction was an interesting place to start.
Above all, we needed to protect the ordinary savers, not bond or equity holders. They were playing a different game. They were in the business of gambling. But the savers, the ordinary people who had bank accounts, needed protection.
The crux of the issue was that the problem had gone way beyond normal remedies. The minister was aware of that.
The officials in the Department were (by then) also advocating a guarantee of people's deposits but only to a certain level. However, I argued because the Irish banks' funding had become so unstable, if we didn't guarantee the funding as well as the deposits, the banks would come crashing down and you would have had to come up with the money immediately for people's deposits. The whole point of a guarantee is that you want to avoid paying out right away.

hmmm

Argentina defaulted 10 years ago and still cannot borrow normally. If we do default, can anyone explain how we pay for teachers, guards, hospitals, pensions, social welfare etc.? There is too much simplistic "burn the bondholders" nonsense.

Anyway, if you were going to default, the last thing you want to do is tell anyone you were planning it.

steve9859

hmmm wrote: »

Argentina defaulted 10 years ago and still cannot borrow normally. If we do default, can anyone explain how we pay for teachers, guards, hospitals, pensions, social welfare etc.? There is too much simplistic "burn the bondholders" nonsense.

Anyway, if you were going to default, the last thing you want to do is tell anyone you were planning it.

SF have yet to answer that question. Every time they are asked how we pay for stuff after we default they just ignore it. Makes me mad - it is so bloody reckless to spout that nonsense as people start believing that default will be painless and won't result in cuts in services and welfare that will dwarf what we are seeing now!