Anyone shouting "burn the bond holders" should read this.....

SamSamSammy

More than half of Irish bank bonds held by investors in Republic

AN ACADEMIC evaluation of official data shows a little above half of Irish bank bonds are held within Ireland, casting new light on claims that senior bondholders should be burned in the bailout plan.

Séamus Coffey, a University College Cork economics lecturer, said his reading of Central Bank of Ireland data shows a significant disinvestment from Irish banks by bondholders elsewhere in the euro zone and in London.

“We are exposed ourselves,” he told The Irish Times . “It’s becoming more and more Irish through time,” he said of the investor base.

A senior European source said Mr Coffey’s findings stand as a “mirror image” of EU research.

Each of the Opposition parties – including Fine Gael, which expects to lead a government within weeks – have pledged that they would “burn” senior bondholders if they win the election.

However, Mr Coffey said in a blog posting* that any non-payment of the €33 billion owed to Irish-domiciled bond investors would be “far more significant” than the direct impact on euro zone banks or London-based investors.

The EU authorities have consistently ruled out senior bond “haircuts” and did so again this week when euro zone finance ministers met top European Central Bank (ECB) officials and economics commissioner Olli Rehn.

Mr Rehn said afterwards that Ireland’s European sponsors see no possibility of reneging such debt. Their stance is rooted in fear of contagion if the highest-ranked investors in other vulnerable European banks took fright at any move to impose bailout costs on senior Irish bondholders.

Mr Coffey suggests the high Irish exposure to such debt questions the merits of forcing bondholders to bear costs.

“Are we going to burn ourselves?”

The data he drew on does not distinguish between senior and subordinated debt and he has no information on whether Irish banks hold each other’s bonds.

He believes some of the debt is held by Irish pension funds and hedge funds.

He notes a sharp decline in the Irish bond holdings in the euro zone and the rest of the world -- mostly London-based investors, he believes – since the bank guarantee in 2008.

“Irish residents have seen their holdings of Irish bank bonds rise from €38 billion at the time of the guarantee to €45 billion in April 2010. Since then, these too have fallen and were down to €33 billion by December,” he said.

“The proportion of bonds held by Irish residents has been rising since the guarantee was introduced and now stands at just over 50 per cent.”

Rest of the world holdings fell €26 billion from the guarantee to some €20.5 billion at the end of 2010. Other euro zone investors cut their holdings of Irish bank bonds to €10 billion from €17 billion.

“As time progresses [and more bonds are repaid] the mantra of ‘burn the bondholders’ or equivalent becomes ever less relevant.

“It still has some scope to play a role but pretty soon it will be the country they are setting on fire. All the other fuel will be gone.”

Line up, line up, who is going to be first to say, that's not true it's all the money we owe to Europe.........

orourkeda

What difference does their nationality make?

Rawhead

I don't care if we burn Dermot Desmond or Roman Abromavich, they are both obscenely, disgustingly, astronomically wealthy individuals.

I'm no socialist but let these swines burn and burn badly.

SamSamSammy

The view is we're paying "ze germans" we're actually paying ourselves, 50% +.

We'd be burning ourselves.

Coriolanus

Fúck em all.

SamSamSammy

Rawhead wrote: »

I don't care if we burn Dermot Desmond or Roman Abromavich, they are both obscenely, disgustingly, astronomically wealthy individuals.

I'm no socialist but let these swines burn and burn badly.

Just because they have money? That's stupid.

listermint

I got burned once in Paddy Powers on Manchester United V Wolves,

Whats the difference ???????????

Seaneh

SamSamSammy wrote: »

The view is we're paying "ze germans" we're actually paying ourselves, 50% +.

We'd be burning ourselves.

Senior bond holders are actually a very small part of the banks debt.
The vast majority is owed to other European banks.

The only debt we, as a nation, should be paying back, at all, is the national debt, the money the government borrowed for the running of the country.

Tell the banks to get stuffed and sort their own mess out.

Dravokivich

SamSamSammy wrote: »

Just because they have money? That's stupid.

just think for once of the posibilty that they could be tastey...

someone pass over the bbq sauce!

:pac:

Seaneh

SamSamSammy wrote: »

Just because they have money? That's stupid.

they gambled, they lost, why the hell should they be paid anything?

stimpson

SamSamSammy wrote: »

Just because they have money? That's stupid.

Whereas the taxpayer picking up the tab for their mistakes is genius?

They took the risk. They should face the music.

martinn123

orourkeda wrote: »

What difference does their nationality make?

Well, if they are IRISH Pension Funds it will make a difference. Investment in our own economy is quite important, to aid our recovery.

Not all investors are Desmond or Abramovich types, some are Credit Unions, Banks, Pension Funds and Hedge Funds.

We need all the internal investors to help in the restoration of the Construction Industry, Metro North for Example to get our people off the Dole.

Burn the Bondholders is a great slogan, but not if they are Home Grown Bondholders

SamSamSammy

martinn123 wrote: »

Well, if they are IRISH Pension Funds it will make a difference. Investment in our own economy is quite important, to aid our recovery.

Not all investors are Desmond or Abramovich types, some are Credit Unions, Banks, Pension Funds and Hedge Funds.

We need all the internal investors to help in the restoration of the Construction Industry, Metro North for Example to get our people off the Dole.

Burn the Bondholders is a great slogan, but not if they are Home Grown Bondholders

At least that's one intelligent response!

Rawhead

SamSamSammy wrote: »

Just because they have money? That's stupid.

It has nothing to do with them having money that makes me want them to pay their debts, if my neighbour down the road gambled his meager savings on bonds then let him burn also.

I already said I am not a socialist, far from it, I am a right wing capitalist and more importantly I am a moralist.

They gambled, they lost, they fu*king pay.

Retail Hell

so what we burn irish Companys and and irish investers it means we the taxpayer have less to pay to the government, because they gaurenteed thebank debth.

Sanjuro

According to Constantin Gurdiev last night, the bonds may just be resident here, but the bondholders may still be foreign nationals. Until there is a list of who the bondholders actually are, it's still all speculation.

Regardless of where you're from, you gambled, you pay the price. Irish or otherwise.

CJhaughey

This information is from last year but it is still current.
http://golemxiv-credo.blogspot.com/2010/10/who-are-bond-holders-we-are-bailing-out.html

Amhran Nua

Seaneh wrote: »

Senior bond holders are actually a very small part of the banks debt.
The vast majority is owed to other European banks.

The only debt we, as a nation, should be paying back, at all, is the national debt, the money the government borrowed for the running of the country.

Tell the banks to get stuffed and sort their own mess out.

Sums up the cause of, and solution to, most of our problems rather neatly right there.

mikedragon32

"Your investment may go down as well as up" it used to say under all these pension products advertisements... In tiny print just above the HUGE print of how much the pension funds had grown in the last few years

If the bondholders ARE Irish pension funds, oh well. Don't forget they got their tax breaks for putting money into pensions too...

martinn123

Seaneh wrote: »

Senior bond holders are actually a very small part of the banks debt.
The vast majority is owed to other European banks.

The only debt we, as a nation, should be paying back, at all, is the national debt, the money the government borrowed for the running of the country.

Tell the banks to get stuffed and sort their own mess out.

Yes right, and when your wages are paid into your bank account next thursday, and you go to an ATM, it wont work and the bank will be closed, the banks will be stuffed, but so will we

Seaneh

martinn123 wrote: »

Yes right, and when your wages are paid into your bank account next thursday, and you go to an ATM, it wont work and the bank will be closed, the banks will be stuffed, but so will we

No, they won't, because you don't know what you are talking about.

Depostis and debts are entirely separate things.

Stop listening to Michael Martin's sound bites and taking them as fact.

Firefox11

Say goodbye to your pension then and maybe your savings too.

Rawhead

The value of your investments may fall as well as rise.

I seem to remember that annoying little sentence at the end of a lot of adverts over the years.

Ask all the people who got burned with Eircom shares about the help they received. A government minister advising people to invest in an inflated crock of sh1te. There was no bailout for the widows, pensioners and ordinary people.

It's like the off shore accounts, who really thinks that a farmer in Louth or a publicans wife in Finglas knew anything about investing offshore. They were told by the banks to put money offshore, the tax man found out, the banks washed their hands of it and the people were left with massive tax bills.

It's the big boys who look like getting burned now and all you hear is "they're to big to fail", "they are keeping the economy alive", "the sky will fall" we have to bail them out.

FU*K EM ALL AND MAKE THEM PAY

reilig

A lot of Credit Unions across the country invested their excess deposits in bonds in Irish Banks. If the bond holders are burned then the Credit Unions will be the first to go belly-up and a lot of savings of the middle and lower class will go with them. My local Credit Union in its AGM statement showed that they have over €3m in bonds in 2 Irish Banks. Their total deposits are only €4.5m. They have less than 300 members. I assume that these investments were made based on advice which would have been given to other credit unions across the country too???

sollar

We had plenty of people on here saying they aren't willing to pay extra tax to bail out the "NE generation" so surely the same applies to private investors of all hues.

martinn123

Seaneh wrote: »

No, they won't, because you don't know what you are talking about.

Depostis and debts are entirely separate things.

Stop listening to Michael Martin's sound bites and taking them as fact.

Thanks for the observation,
1, I have a good idea what I am talking about
2, Deposits and debt are in fact very similar, both sources of funds are used by the Banks on a daily basis to balance the books, fund loans, mortgages etc, where do you think the money came from.
3, Michael Who?

squod

Does it mention who it is? I'd imagine a large portion of those people are speculators, gamblers and developers. Does it suggest sorting through those debts to find the ones we should pay or part pay? Credit Unions, pension schemes etc.....

For the past three years there's been no clarity given by any of the political parties in all of this.

martinn123

Rawhead wrote: »

The value of your investments may fall as well as rise.

I seem to remember that annoying little sentence at the end of a lot of adverts over the years.

Ita actually misquoted

Correct quotation.....The value of your investments can fall as well as plummet.......

stimpson

The Danes seem to be happy to do it:

http://www.irishtimes.com/newspaper/finance/2011/0217/1224290024769.html

Monty Burnz

Rawhead wrote: »

I don't care if we burn Dermot Desmond or Roman Abromavich, they are both obscenely, disgustingly, astronomically wealthy individuals.

I'm no socialist but let these swines burn and burn badly.

In reality, most of these bonds would be held by pension companies to provide an income to old folk who didn't want to be a burden on the state. Funny how people accept the cartoon version SF peddle with the evil speculators laughing at us inside their golden houses.

Monty Burnz

Seaneh wrote: »

No, they won't, because you don't know what you are talking about.

Depostis and debts are entirely separate things.

Ironic post of the day. The banks are already insolvent, we are all just pretending they are not. Without government/ECB support, they will fold like a house of cards.

And by the way, deposits are a debt on the banks books. But you know that because you clearly know what you are talking about :rolleyes:

Irish Slaves for Europe

martinn123 wrote: »

Thanks for the observation,
1, I have a good idea what I am talking about
2, Deposits and debt are in fact very similar, both sources of funds are used by the Banks on a daily basis to balance the books, fund loans, mortgages etc, where do you think the money came from.
3, Michael Who?

No you really don't know what you are talking about. If Europe stopped funding our banks it would collapse the euro, they are not going to let that happen, despite all the bluster coming from the likes of Rehn and Sarkozy. Its nothing but a scare tactic put about to get the best deal for Europe, and its working so far, considering how badly Ireland's negotiating team got raped in the bailout talks. If Ireland was let go the floodgates would really open then, Portugals bond rates would skyrocket, they would need a bailout, then Spain would be next. Saving Ireland is in Europe's interest, they know it, they're just hoping we don't know it.

martinn123

Monty Burnz wrote: »

In reality, most of these bonds would be held by pension companies to provide an income to old folk who didn't want to be a burden on the state. Funny how people accept the cartoon version SF peddle with the evil speculators laughing at us inside their golden houses.

Slight correction Their Spouses Golden Houses.

PeakOutput

i used to be all about not burning the bond holders i just didnt think it would be beneficial

i am kinda 50-50 now but i just had a thought

people are saying they gambled they lost etc etc

if i understand it correctly, bond holders aren't investors they dont buy a share in a company. they basically are lending their money to the bank so the bank can use it to do its work. they are lending with the expectation of getting the money back plus interest of some sort

so my question is do you view it as the bank gambling when they give you a mortgage? or an overdraft or whatever? if you decide you cant pay those back is that just tough on the bank as they took the gamble and lost? or, should you be compelled in any legal way to pay back the bank or if you can't pay the full amount back you should be compelled to pay something back?

if my understanding of bondholders is wrong fair enough but i dont think it is

i have noticed that most of the people saying burn the bond holders would be the same people to say boo hoo to someone who took a mortgage out at the peak and is now in negative equity or worse, cant pay it back. how is it not hypocritical to say to the individual 'you gotta pay back your loans or lose your home or be sent to prison' but say to the bondholders 'well tough we arent paying our loans back'

now im not saying dont burn them but i am saying its not as simple as they gambled and lost

Monty Burnz

squod wrote: »

Does it mention who it is? I'd imagine a large portion of those people are speculators, gamblers and developers. Does it suggest sorting through those debts to find the ones we should pay or part pay? Credit Unions, pension schemes etc......

It would be illegal to discriminate between them - they all get repaid in proportion.

squod wrote: »

For the past three years there's been no clarity given by any of the political parties in all of this.

I've seen a list of bondholders published somewhere, I'll see if I can find it. Not sure what type of bonds they are though.

Ah, found it - it's a list of Anglo Bondholders. These guys should all have been toasted. The 'speculators' are nearly all savings banks, pension funds and so forth.
http://www.irishcentral.com/news/List-of-bondholders-in-Anglo-Irish-Bank-leaked-110903209.html

thebigbiffo

it's an interesting enough point to make - but i'm still of the opinion that the bondholders sort out their own mess, not us.

fair enough - banks that you and i get paid into, have out mortages and savings with etc should be capitalised to keep the country running but the likes of Anglo...pffft, tough titty if that's where your pension fund decided to invest.

Phill Ewinn

squod wrote: »

Does it mention who it is? I'd imagine a large portion of those people are speculators, gamblers and developers. Does it suggest sorting through those debts to find the ones we should pay or part pay? Credit Unions, pension schemes etc.....

For the past three years there's been no clarity given by any of the political parties in all of this.

Politicians willing to tell the voters the truth? That'll never happen!

Irish Slaves for Europe

Monty Burnz wrote: »

In reality, most of these bonds would be held by pension companies to provide an income to old folk who didn't want to be a burden on the state. Funny how people accept the cartoon version SF peddle with the evil speculators laughing at us inside their golden houses.

Thats complete rubbish, pension funds do not invest all their eggs in one basket, there are regulations preventing them from doing this. Any loses from Irish bonds would not have a big impact on someones pension. And as mentioned several times already, it is complete speculation as to who the bondholders are exactly.

squod

Irish Slaves for Europe wrote: »

. And as mentioned several times already, it is complete speculation as to who the bondholders are exactly.

That's very true. We're asked to have faith in the government who made these decisions to bail their mates out. A party with a long history of corruption and crony-ism. FG in lending their support are no better IMO.

Nevermind_

I'd wonder how many of these bondholders classed as "irish resident" are just irish domiciled companies / SPV's based in the IFSC with ultimately foreign ownership?
many of them may look irish owned but ultimately theyre not.

Monty Burnz

Irish Slaves for Europe wrote: »

Thats complete rubbish, pension funds do not invest all their eggs in one basket, there are regulations preventing them from doing this.

I'm sorry, but what you are saying is complete rubbish. Can you please quote where I said that pension funds invest all their eggs in one basket?

Monty Burnz

Nevermind_ wrote: »

I'd wonder how many of these bondholders classed as "irish resident" are just irish domiciled companies / SPV's based in the IFSC with ultimately foreign ownership?
many of them may look irish owned but ultimately theyre not.

I would suspect most of them, unless this was already allowed for when gathering the information.

Marcusm

Rawhead wrote: »

I don't care if we burn Dermot Desmond or Roman Abromavich, they are both obscenely, disgustingly, astronomically wealthy individuals.

I'm no socialist but let these swines burn and burn badly.

It would be surprising if the bonds were not held by insurance companies, pension funds, credit unions etc. Would be surprised for vanilla senior bank debt to be held y others - more likely to have bought sub debt for yield. In fact, I think Abramovich's fund was suing re Anglo sub debt.

Losses of insurance companies, pension funds etc will be borne by ordinary decent folk.

That being said, I fully expect a restructuring if sovereign as well as bank debt in due course, either because the current EU approach works and the contagion is contained or because it cntinues spreading!

Same result

Nevermind_

Monty Burnz wrote: »

I would suspect most of them, unless this was already allowed for when gathering the information.

i'd doubt this was allowed for, could you imagine the workload of trying to identify the real owner of bonds working through a convoluted myriad of shelf companies and holding companies based in other countries.

if someone wants to hide their ownership of bonds it can be done pretty easily

Phill Ewinn

Could as easily be bonds intended for foreign schemes. Either way we can't afford to pay for all of these bond holders, banking debts and sovereign budget deficits

Irish Slaves for Europe

Monty Burnz wrote: »

I'm sorry, but what you are saying is complete rubbish. Can you please quote where I said that pension funds invest all their eggs in one basket?

You said:

Monty Burnz wrote: »

In reality, most of these bonds would be held by pension companies to provide an income to old folk who didn't want to be a burden on the state. Funny how people accept the cartoon version SF peddle with the evil speculators laughing at us inside their golden houses.

You're peddling a soppy tale about how "old folk" who didn't want to be a burden on the state (I'm still laughing at that by the way), are going to be burned because their pension fund invested in bonds which are now worthless. I'm saying the value of these bonds will only have made up a small portion of the total pension funds portfolio, therefore losses to peoples pension will be minimal. What part of that is difficult exactly?

martinn123

Monty Burnz wrote: »

Ah, found it - it's a list of Anglo Bondholders. These guys should all have been toasted. The 'speculators' are nearly all savings banks, pension funds and so forth.
http://www.irishcentral.com/news/List-of-bondholders-in-Anglo-Irish-Bank-leaked-110903209.html

I think you may find that these are also the pension funds etc. who have been lending our Govt. funds to pay for everyday services.

While we are now borrowing from Europe, the BOND, they issued recently to fund our loans was oversubscribed 4 times, and by who, chect the list above.
Where do you think that money comes from.
Biting off nose to spite face.

extra-ordinary_

martinn123 wrote: »

..We need all the internal investors to help in the restoration of the Construction Industry, Metro North for Example to get our people off the Dole...

Yeh, let's restore our construction industry to where it was - on an unsustainable path fuelling a bubble wihich has us in this mess :rolleyes:

martinn123

extra-ordinary_ wrote: »

Yeh, let's restore our construction industry to where it was - on an unsustainable path fuelling a bubble wihich has us in this mess :rolleyes:

Or building Metro North, Hospitals, Schools, Roads, Factories, and perhaps taking a hundred thousand or so off the Dole.

Not all construction is fuelling a bubble.I am not recommending a return to unsustainable house building.

Marcusm

Sanjuro wrote: »

According to Constantin Gurdiev last night, the bonds may just be resident here, but the bondholders may still be foreign nationals. Until there is a list of who the bondholders actually are, it's still all speculation.

Regardless of where you're from, you gambled, you pay the price. Irish or otherwise.

With all due respect to the guy, he's an academic not a financial markets professional and he does not demonstrate a sophisticated understanding of bond Market dynamics. All this debt is in "dematerialised" form meaning that it's a computer entry at one f two clearing systems - Euroclear or Clearstream. The bonds are held by a member of the clearing system either on their own account or on behalf of clients. If the bonds are registered to an Irish custodian it is a lost certain on behalf of anunderlyin Irish client as non national investors would not use an Irish bank as a custodian/sub custodian. Even IfSC registered funds with a nominal Irish custodian would more likely have a more internationally focused house as actual custodian (JPM, State Street, Deutsche, BoNY or HSBC).

I saw the sales data Irish FIG bonds for quite a period andi recall that they were substantially placed with UK/Ireland "real money accounts" meaning long term holders like pension funds. There is very little trading in such bonds and they will likely still be there. Not so much the green jersey agenda as easier to analyse the bank you see every day.

Seaneh

Monty Burnz wrote: »

Ironic post of the day. The banks are already insolvent, we are all just pretending they are not. Without government/ECB support, they will fold like a house of cards.

And by the way, deposits are a debt on the banks books. But you know that because you clearly know what you are talking about :rolleyes:

They are listed as a debt, but they are entirely separate from the debt banks owe other banks.
Deposits are not treated the same as other debts, depositors are protected before every other debtor on the banks books, so if a bank goes balls up, depositors get they money back first and foremost and then the rest of the banks reserves and assist go to their other various debtors.

But of course, you either knew this and were being a pedant for the sake of being a pedant or you were, in fact, the one making the most ironic post of the day.