Gurdgiev gives Ireland a 90% of defaulting on sovereign in the next 10 years

SugarHigh

http://trueeconomics.blogspot.com/2011/03/04032011-default-probabilities.html

Basically, there is a 90% chance of a default (20% haircut) within 10 years and 15% chance of such an event within the year.

The estimates are very much approximate as we use only yields.

Is there any point in delaying what seems to be the inevitable?

ednwireland

the eu obviously thinks so ! (i think our FF gov bent over and said there you go on this deal i dont think they made any of these decisions)

i agree with gurdgiev cant see how turning private debt to sovereign debt solves any prob apart from kicking the can down the road

gigino

"Gurdgiev gives Ireland a 90% of defaulting on sovereign in the next 10 years "

+1
I cannot see why the IMF/ EU continue to "lend" us vast amounts of money, when we squander it ( compared to social welfare / public spending etc in their own developed, industrialised economies ) and when we will probably almost certainly default...

Permabear

This post has been deleted.

ei.sdraob

Permabear wrote: »

This post had been deleted.

Seems like the Europeans are also playing the kick the can down the road and bury heads in sand

Today we have IMF telling us they will lower our rates, while the EU "friends" are not budging.

Scofflaw

ei.sdraob wrote: »

Seems like the Europeans are also playing the kick the can down the road and bury heads in sand

Today we have IMF telling us they will lower our rates, while the EU "friends" are not budging.

Yes, we upped out contribution to the IMF by half a billion, which entitles us to a few basis points less on debt.

Basically, there is a 90% chance of a default (20% haircut) within 10 years and 15% chance of such an event within the year.

The estimates are very much approximate as we use only yields.

It may be worth pointing out that Gurdgiev is only making a mathematical estimate of the market's current beliefs from the rates they're charging.

cordially,
Scofflaw

ei.sdraob

Scofflaw wrote: »

Yes, we upped out contribution to the IMF by half a billion, which entitles us to a few basis points less on debt.

What does keeping the finger in the dyke providing the european banking system some "stability" entitle (i love the word ) us to?

Scofflaw wrote: »

It may be worth pointing out that Gurdgiev is only making a mathematical estimate of the market's current beliefs from the rates they're charging.

cordially,
Scofflaw

Karl Wheelan had an article back in September calculating our default chance at 50% or so, things have certainly changed since then... for the worse

SkepticOne

What Gurdgiev is saying here presents a problem for defenders of the deal the outgoing Government made with the EU last September.

What they have now to answer is this:

a) If Gurdgiev is right, then should we proceed to draw down the 67 billion loan knowing that we will default on it? or;

b) If Gurdgiev is wrong, how is he wrong?

It seems to me that defenders of the deal want to be in a sort of limbo between these two positions. Unfortunately for them it has to be one or the other.

Scofflaw

ei.sdraob wrote: »

What does keeping the finger in the dyke providing the european banking system some "stability" entitle (i love the word ) us to?

If we were doing that, I suppose it might entitle us to something. As it is, we're thrashing around on the dyke screaming that we're going to blow it to hell if Mummy and Daddy don't give us what we want. That probably entitles us to a quick shove into the water, but luckily we won't get treated as we deserve.

I appreciate Michael Martin did claim that we had only accepted a bailout for the sake of Europe, but I didn't really think anyone believed him.

ei.sdraob wrote: »

Karl Wheelan had an article back in September calculating our default chance at 50% or so, things have certainly changed since then... for the worse

They have, but since Whelan used 50% recovery, you should likewise use Gurdgiev's 50% figure, which is 73% chance of default rather than 90%.

cordially,
Scofflaw

ei.sdraob

Scofflaw wrote: »

If we were doing that, I suppose it might entitle us to something. As it is, we're thrashing around on the dyke screaming that we're going to blow it to hell if Mummy and Daddy don't give us what we want. That probably entitles us to a quick shove into the water, but luckily we won't get treated as we deserve.

I appreciate Michael Martin did claim that we had only accepted a bailout for the sake of Europe, but I didn't really think anyone believed him.

Which of our negotiators threatened to blow the dyke?

Lets not forget it was the ECB which pulled the clip out of the grenade.

Scofflaw

ei.sdraob wrote: »

Which of our negotiators threatened to blow the dyke?

Lets not forget it was the ECB which pulled the clip out of the grenade.

Are we on different timelines, perhaps? The one I'm on has the Irish media and swathes of the electorate demanding we default on bank debts. The one you're on has the ECB doing...what?

mystified,
Scofflaw

ei.sdraob

Scofflaw wrote: »

Are we on different timelines, perhaps? The one I'm on has the Irish media and swathes of the electorate demanding we default on bank debts. The one you're on has the ECB doing...what?

mystified,
Scofflaw

Which of our politicians or people negotiating the bailout have pointed (politely or otherwise) out to the EU that its in their own interest to help us out?

Look I have little sympathy left for the EU side since they started rocking the boat about corporation tax, about time we took a leaf out of Sarcozy's book and got a little cheekier. We are either in all of this together or not.

Laminations

Scofflaw wrote: »

Are we on different timelines, perhaps? The one I'm on has the Irish media and swathes of the electorate demanding we default on bank debts. The one you're on has the ECB doing...what?

mystified,
Scofflaw

read what you are saying - the electorate demanding we default on bank debts - oh the swines, not wanting to pay private debt.

How to make a buck from booms and busts:

1. Start outside with lots of money
2. Lend money into the boom, in the form of freebies to government (e.g. part-finance their national development plan), and in the form of bonds to banks. Do it at an appetising and irresponsible rate
3. Ensure you get enough people to bite, ensure the banks are well fed and well fat. Even at the point where bond yields are quadrupling and banks are growing at an unhealthy pace, keep feeding the beast. Make sure the economy relies on the banks
4. The bust will eventually come when people realise they are swimming in borrowed money.
5. Now the banks cannot pay you back. Threaten to turn off the taps to the state and reinforce the idea that the banks are systemic. Some simpleton believes this and actually ties the banks to the state
6. Panic ensues but you step in to soothe things.
7. Offer to pay the state money (at an unholy interest rate) if they pay a lot of it to the banks who will pay it back to you and yours. Now you have your initial bonds sorted plus the interets on them as well as a new state debt with a new exorbitant interest.
8. Sit back and enjoy your rape, and make sure to call any disgruntled dissenters (i.e. citizens) crazy and tap the sign that reminds them you'll pull the plug on state funding!

Laminations

Obviously this grand plan requires 3 things

1. Greed or naivety of a nation to achieve point 3
2. Simpletons in government for point 5
3. Cowtowing deferent cowards for point 8

Nowhere have I said we aren't to blame, but Europe is the co-respondant in this crime of bankrupting a country

Scofflaw

ei.sdraob wrote: »

Which of our politicians or people negotiating the bailout have pointed (politely or otherwise) out to the EU that its in their own interest to help us out?

How is that an answer to the question?

ei.sdraob wrote: »

Look I have little sympathy left for the EU side since they started rocking the boat about corporation tax, about time we took a leaf out of Sarcozy's book and got a little cheekier. We are either in all of this together or not.

There is no EU proposal to change our corporation tax rates. Yes, politicians (and others) in other countries have said that if we raised our tax we wouldn't need their money, but there is no proposal, and won't be. It's a straw man - our politicians pretend to defend it because they know it's not under attack.

What there will be is a CCCTB proposal, which will no doubt be painted as an attack on our rates by people who can't tell the difference between rates and bases - or between optional and mandatory, come to that.

cordially,
Scofflaw

Scofflaw

Laminations wrote: »

read what you are saying - the electorate demanding we default on bank debts - oh the swines, not wanting to pay private debt.

How to make a buck from booms and busts:

1. Start outside with lots of money
2. Lend money into the boom, in the form of freebies to government (e.g. part-finance their national development plan), and in the form of bonds to banks. Do it at an appetising and irresponsible rate
3. Ensure you get enough people to bite, ensure the banks are well fed and well fat. Even at the point where bond yields are quadrupling and banks are growing at an unhealthy pace, keep feeding the beast. Make sure the economy relies on the banks
4. The bust will eventually come when people realise they are swimming in borrowed money.
5. Now the banks cannot pay you back. Threaten to turn off the taps to the state and reinforce the idea that the banks are systemic. Some simpleton believes this and actually ties the banks to the state
6. Panic ensues but you step in to soothe things.
7. Offer to pay the state money (at an unholy interest rate) if they pay a lot of it to the banks who will pay it back to you and yours. Now you have your initial bonds sorted plus the interets on them as well as a new state debt with a new exorbitant interest.
8. Sit back and enjoy your rape, and make sure to call any disgruntled dissenters (i.e. citizens) crazy and tap the sign that reminds them you'll pull the plug on state funding!

Very nice, but also a load of cobblers, because what actually happened was that the Irish government unilaterally decided to guarantee the banks, but didn't then restructure them, which resulted in the bank debt being converted to sovereign debt. So:

1. of the debt that was so converted (c. €70bn), only about €7bn was eurozone money - so the claim that this is some sort of money cycle for the eurozone fails on the first piece of evidence

2. the money earmarked for the banks in the IMF programme is exactly the same amount that was earmarked for the banks in the Fianna Fáil Programme for Recovery - so the claim someone else forced us to put the money into the banks also fails.

3. the requirement that we not burn the senior bondholders is an Irish government commitment that precedes the bailout agreement by a couple of months. The only reference to the protection of senior bondholders in the IMF programme is via that statement.

So, no eurozone flood of money, and a prior commitment by the Irish government to bailing out the banks and protecting the bondholders, nearly all of whom were either Irish or non-eurozone.

Why do people - other than Fianna Fáil - keep pretending a big boy made us do it? All the evidence is available to show it's not true.

puzzled again,
Scofflaw

Laminations

Scofflaw wrote: »

Why do people - other than Fianna Fáil - keep pretending a big boy made us do it? All the evidence is available to show it's not true.

puzzled again,
Scofflaw

No one made us do it. We did it to ourselves (or at least an elite few did it to the country) and we were stupid. The EU banks lent to stupid people, and they expect no downside to this? If a senior bond pays out interest then it recognises a risk, granted a tiny risk compared to subordinated bonds - when banks become insolvent that risk is realised. Their money, and any Irish money in Anglo should have gone puff. If other banks would have been damaged by this then the government should have stood in to bolster them. But for the EU to think they can help us by strangling us with an unaffordable interest rate is pointless.

And whether the money is owed to irish bondholders or european ones, the irish taxpayer shouldn't be on the hook for it, so they've every right to feel aggrieved

Scofflaw

Laminations wrote: »

No one made us do it. We did it to ourselves (or at least an elite few did it to the country) and we were stupid. The EU banks lent to stupid people, and they expect no downside to this? If a senior bond pays out interest then it recognises a risk, granted a tiny risk compared to subordinated bonds - when banks become insolvent that risk is realised. Their money, and any Irish money in Anglo should have gone puff. If other banks would have been damaged by this then the government should have stood in to bolster them. But for the EU to think they can help us by strangling us with an unaffordable interest rate is pointless.

And whether the money is owed to irish bondholders or european ones, the irish taxpayer shouldn't be on the hook for it, so they've every right to feel aggrieved

But no right to claim that people who lent us only a very small part of the money our banks borrowed should share the burden of it with us.

I'll say it again - it's not meaningfully the case that "the EU banks lent to stupid people". EU banks really didn't get involved in the Irish bubble - they were probably too cautious to do so.

I'll put it like this - between January 2003 and the peak of the boom somewhere in 2007, Irish domestic bank debt in the form of securities (bonds) grew by €116.6bn. That €116.6bn breaks down like this:

Ireland: €28.12bn (24.12%)
Eurozone: €15.71bn (13.47%)
Rest of World: €72.8bn (62.42%)

(Central Bank stats for Irish domestic credit institutions)

Currently, the Irish taxpayer is potentially on the hook for that debt. The only people with less involvement than ourselves are the eurozone countries. Whether we can get them to pick up some of the tab is one thing, but let's not pretend that it's any form of justice that they do so.

Deposits, by the way, are similar. They grew by €279.3bn over the same period, which breaks down like this:

Ireland: €145.81bn (52.21%)
Eurozone: €26.5bn (9.49%)
Rest of World: €106.95bn (38.3%)

(Central Bank stats for Irish domestic credit institutions)

The eurozone wasn't involved in our bubble except very peripherally. There was no flood of eurozone money. Financially, we're very much closer to Boston (and London) than Berlin.

cordially,
Scofflaw

later12

Anyone have *any* idea why Gurdgiev is estimating this on bond yields and spread yields (on one specific date) as opposed to a collection of CDS?

There is a good reason why there are people whose only real job is to examine CDS data. Why does he disregard this information?

jamesbrond

Gurdgiev gave a talk at my company in 2007.
He said that investors should get out of property.
Then he went on to say that the safe way to invest to diversify.
All good so far. Then he said to invest in Europe, banks, US stocks and that gold was all played out. And to get out of Indian, chinese, and all emerging markets.

Watch Eddie the economic genius Hobbs on his TV show from before the bust. All those people he got to remortgage must be sick. Yet people still hang on every word he spews out.

Like all economists (and the rest of us who are all experienced economists now ). They get some right, they get some wrong.


Just sayin

Laminations

Can you provide a breakdown of Anglo pleaase without the other banks bonds blurring the players?

And regardless of who lent into the bubble, they did so to make money, we lost and they lost. The 62% (rest of world) and 13% (EU) bonds means we have 75% foreign bondholders, I can't see why they shouldn't be given a haircut.

Who'd lend to a debt ridden country? debt ridden because they crwled down a hole without looking and took on other peoples debt. The answer is clear by the market rates for borrowing, no one wants to lend to a debt ridden country. So lets shed our debt....well because it is not our debt.

hinault

Scofflaw wrote: »

But no right to claim that people who lent us only a very small part of the money our banks borrowed should share the burden of it with us.

I'll say it again - it's not meaningfully the case that "the EU banks lent to stupid people". EU banks really didn't get involved in the Irish bubble - they were probably too cautious to do so.

I'll put it like this - between January 2003 and the peak of the boom somewhere in 2007, Irish domestic bank debt in the form of securities (bonds) grew by €116.6bn. That €116.6bn breaks down like this:

Ireland: €28.12bn (24.12%)
Eurozone: €15.71bn (13.47%)
Rest of World: €72.8bn (62.42%)

(Central Bank stats for Irish domestic credit institutions)

Currently, the Irish taxpayer is potentially on the hook for that debt. The only people with less involvement than ourselves are the eurozone countries. Whether we can get them to pick up some of the tab is one thing, but let's not pretend that it's any form of justice that they do so.

Deposits, by the way, are similar. They grew by €279.3bn over the same period, which breaks down like this:

Ireland: €145.81bn (52.21%)
Eurozone: €26.5bn (9.49%)
Rest of World: €106.95bn (38.3%)

(Central Bank stats for Irish domestic credit institutions)

The eurozone wasn't involved in our bubble except very peripherally. There was no flood of eurozone money. Financially, we're very much closer to Boston (and London) than Berlin.

cordially,
Scofflaw

ROW figure €72b is an eye opener.

I (lazily) assumed that the majority of bond (loans) were provided from Europe.

Thanks for posting this.

dan_d

Who or what is Gurdgiev?Economist, statistician, analyst...what?
(I'm on a mobile that doesn't like opening links, sorry)

Permabear

This post has been deleted.

Scofflaw

Laminations wrote: »

Can you provide a breakdown of Anglo pleaase without the other banks bonds blurring the players?

Ah - if people haven't seen this, the Central Bank issued a once-off breakdown of debt by institution - the figures Lenihan wouldn't provide:

Institution|Senior Bonds Guaranteed |Senior Bonds Unguaranteed Secured |Senior Bonds Unguaranteed Unsecured |Subordinated Bonds
AIB |6063|2765|5872|2601
BOI |6178|12284|5164|2751
EBS |1025|1050|472|65
ILP |4704|2999|1156|1203
Anglo |2963|0|3147|145
INBS |0|0|601|175
Total|20933|19098|16412|6940


Those are €millions. A brief explanation when it comes to burning them goes something like this:

Senior Bonds Guaranteed - burning these involves sovereign default

Senior Bonds Unguaranteed Secured - burning these involves seizure by the bondholders of the collateral they're secured on

Senior Bonds Unguaranteed Unsecured - can be burned, have legal standing equal to depositors

Subordinated Bonds - good to go, and many already have been

So it's worth bearing in mind that what's burnable there is the €22.902bn in the last two columns.

Laminations wrote: »

And regardless of who lent into the bubble, they did so to make money, we lost and they lost. The 62% (rest of world) and 13% (EU) bonds means we have 75% foreign bondholders, I can't see why they shouldn't be given a haircut.

Discrimination against foreign bondholders is legally dubious - and I'm afraid we don't have 75% foreign bondholders. Those percentages were the contribution of different investor bases to our banking bubble.

The current (end-January) position in bonds is:

Ireland: €50.304bn (62.79%)
Eurozone: €10bn (12.48%)
Rest of World: €19.812bn (24.73%)

Discussed on another thread is the fact that €17bn of the Irish holdings are known to be sovereign-guaranteed cross-holdings by the banks in the banks. They spent January issuing each other government-backed debt.

Laminations wrote: »

Who'd lend to a debt ridden country? debt ridden because they crwled down a hole without looking and took on other peoples debt. The answer is clear by the market rates for borrowing, no one wants to lend to a debt ridden country. So lets shed our debt....well because it is not our debt.

It's private bank debt, it should be handled by the private companies who contracted the debt, but they can't handle it. That it's not our taxpayers' debt doesn't make it someone else's taxpayers' debt either - two wrongs still don't make a right. If we can offload some of it onto Europe, let's by all means do so - but let's not pretend to ourselves that it's morally right to do so.

cordially,
Scofflaw

dazberry

Scofflaw wrote: »

I'll say it again - it's not meaningfully the case that "the EU banks lent to stupid people". EU banks really didn't get involved in the Irish bubble - they were probably too cautious to do so.

Does this include BOSI and RBS?

D.

KylieWyley

Permabear wrote: »

This post had been deleted.

economists really are the rock and roll stars of our day, aren't they? :cool:

hinault

Scofflaw wrote: »

But no right to claim that people who lent us only a very small part of the money our banks borrowed should share the burden of it with us.

I'll say it again - it's not meaningfully the case that "the EU banks lent to stupid people". EU banks really didn't get involved in the Irish bubble - they were probably too cautious to do so.

I'll put it like this - between January 2003 and the peak of the boom somewhere in 2007, Irish domestic bank debt in the form of securities (bonds) grew by €116.6bn. That €116.6bn breaks down like this:

Ireland: €28.12bn (24.12%)
Eurozone: €15.71bn (13.47%)
Rest of World: €72.8bn (62.42%)

(Central Bank stats for Irish domestic credit institutions)

Currently, the Irish taxpayer is potentially on the hook for that debt. The only people with less involvement than ourselves are the eurozone countries. Whether we can get them to pick up some of the tab is one thing, but let's not pretend that it's any form of justice that they do so.

Deposits, by the way, are similar. They grew by €279.3bn over the same period, which breaks down like this:

Ireland: €145.81bn (52.21%)
Eurozone: €26.5bn (9.49%)
Rest of World: €106.95bn (38.3%)

(Central Bank stats for Irish domestic credit institutions)

The eurozone wasn't involved in our bubble except very peripherally. There was no flood of eurozone money. Financially, we're very much closer to Boston (and London) than Berlin.

cordially,
Scofflaw

Scofflaw : do you have a link to this information that you posted?
I've quickly looked through the central bank site but I cannot locate the statistics that you quoted above.

Thanks in advance.

Permabear

This post has been deleted.

Scofflaw

hinault wrote: »

Scofflaw : do you have a link to this information that you posted?
I've quickly looked through the central bank site but I cannot locate the statistics that you quoted above.

Thanks in advance.

The data is available from here:

http://www.centralbank.ie/frame_main.asp?pg=sta_late_data.asp&nv=sta_nav.asp

Table A.4.1 Domestic Market Credit Institutions: Aggregate Balance Sheet (140 KB XLS)

cordially,
Scofflaw

Scofflaw

dazberry wrote: »

I'll say it again - it's not meaningfully the case that "the EU banks lent to stupid people". EU banks really didn't get involved in the Irish bubble - they were probably too cautious to do so.

Does this include BOSI and RBS?

D.

No, BoSI and RBS/Halifax lent directly into the Irish market, rather than to our banks, so they don't appear in those statistics. Nor are we bailing them out - the UK taxpayer is.

Also, I should have more clearly stated "eurozone" rather than "EU" there - I didn't, because I was replying to someone who I presumed from the rest of their posts was using "EU" as shorthand for Germany and France.

cordially,
Scofflaw

hinault

Scofflaw wrote: »

The data is available from here:

http://www.centralbank.ie/frame_main.asp?pg=sta_late_data.asp&nv=sta_nav.asp

Table A.4.1 Domestic Market Credit Institutions: Aggregate Balance Sheet (140 KB XLS)

cordially,
Scofflaw

Thank you very much

Scofflaw

hinault wrote: »

Thank you very much

"Taxi Drivers" has just pointed out that there is now (as in today, I think) a Table 4.2 which actually aggregates just the "covered institutions" - so there's no need to do estimates from Table 4.1.

So exciting!

wheee,
Scofflaw

hinault

I've access those tables and for the life of me I cannot reconcile where the ROW figure (below) is derived from :

Ireland: €28.12bn (24.12%)
Eurozone: €15.71bn (13.47%)
Rest of World: €72.8bn (62.42%)

Table 4 Spreadsheet Liabilities Column L rows 12 to 108 = ROW € 24.325 billion


In respect of the deposits listed below : I can't seem to source where these figures are coming from either!

Ireland: €145.81bn (52.21%)
Eurozone: €26.5bn (9.49%)
Rest of World: €106.95bn (38.3%)

I'll try again tomorrow.

Scofflaw

hinault wrote: »

I've access those tables and for the life of me I cannot reconcile where the ROW figure (below) is derived from :

Ireland: €28.12bn (24.12%)
Eurozone: €15.71bn (13.47%)
Rest of World: €72.8bn (62.42%)

Table 4 Spreadsheet Liabilities Column L rows 12 to 108 = ROW € 24.325 billion


In respect of the deposits listed below : I can't seem to source where these figures are coming from either!

Ireland: €145.81bn (52.21%)
Eurozone: €26.5bn (9.49%)
Rest of World: €106.95bn (38.3%)

I'll try again tomorrow.

OK - those figures are the result of looking at how much the debt of the banks grew between January 2003 and some time in 2007. That is, they're trough-to-peak debt growth. Where you pick the peak is a a little arbitrary - I originally had October 2007, so in that case the figures for debt and deposit growth are essentially (Row 69 - Row 12). Update to use Table 4.2 rather than 4.1 for Securities Issued, the figures should be:

Ireland: €27.068bn (24.45%) - H69-H12
Eurozone: €13.723bn (12.39%) - I69-I12
Rest of World: €69.931bn (63.16%) - J69-J12

They're as a percentage of the total growth in debt securities, obviously. The reason for not using (Row 108 - Row 12) is because you're then getting a figure that represents the difference between the start of the bubble (or as close as the figures allow) and the current position - which tells us nothing about the bubble growth, because the bubble has now burst.

cordially,
Scofflaw

Dannyboy83

Scofflaw wrote: »

So exciting!

wheee,
Scofflaw

LMAO:D

ixtlan

Just to suggest something...

Why is the "common wisdom" that if the debt is unsustainable it's better to default now rather than down the line? And "kicking the can down the road" is a bad idea?

It seems to be this attitude comes from a position of moral superiority, in regard to a/ getting revenge on the bondholders, and b/ proving that we really really cannot pay, rather than a sober accessment of the best course of action.

Surely, the more sensible view is to go along with the bailout, and even if the the worst comes to the worst we will have several years to reduce our deficit to a point where borrowing on the normal bond markets will not be necessary. If our EU/IMF lenders are willing to take the risk on us then so be it.

This "face up to all the problems right now this year" position seems rather ridiculous to me, even if it does turn out to be correct that the debt must be re-structured. We would be in a much stronger position for re-structuring if the deficit was greatly reduced, and the bailout is going to allow that to be done much more gently than any alternative.

ix.

hinault

Scofflaw wrote: »

OK - those figures are the result of looking at how much the debt of the banks grew between January 2003 and some time in 2007. That is, they're trough-to-peak debt growth. Where you pick the peak is a a little arbitrary - I originally had October 2007, so in that case the figures for debt and deposit growth are essentially (Row 69 - Row 12).

That time line seems entirely reasonable to me.

Scofflaw wrote: »

Update to use Table 4.2 rather than 4.1 for Securities Issued, the figures should be:

Ireland: €27.068bn (24.45%) - H69-H12
Eurozone: €13.723bn (12.39%) - I69-I12
Rest of World: €69.931bn (63.16%) - J69-J12

After downloading Table 4.2 (Liabilities tab), the sum totals for H12-H69, I12-I69 and J12-J69 are displaying different totals to €27.06, €13.72 and €69.93
billions that you've posted above.

It's not that I doubt your figures, I just want to see them for myself.
(It's late and it's been a long day - I'll try this tomorrow. Thanks again for the help!).

Scofflaw

ixtlan wrote: »

Just to suggest something...

Why is the "common wisdom" that if the debt is unsustainable it's better to default now rather than down the line? And "kicking the can down the road" is a bad idea?

It seems to be this attitude comes from a position of moral superiority, in regard to a/ getting revenge on the bondholders, and b/ proving that we really really cannot pay, rather than a sober accessment of the best course of action.

Surely, the more sensible view is to go along with the bailout, and even if the the worst comes to the worst we will have several years to reduce our deficit to a point where borrowing on the normal bond markets will not be necessary. If our EU/IMF lenders are willing to take the risk on us then so be it.

This "face up to all the problems right now this year" position seems rather ridiculous to me, even if it does turn out to be correct that the debt must be re-structured. We would be in a much stronger position for re-structuring if the deficit was greatly reduced, and the bailout is going to allow that to be done much more gently than any alternative.

ix.

I'm sure that's somehow outrageously unreasonable, for reasons that can't be articulated particularly clearly.

Actually, of course, that is the plan - that we restructure the banks over the next 3-4 years, so that they can access the markets again, take back on the debt that's rightfully theirs, return the state-injected capital that isn't, and be sold by the state back into the private sector. And we do so without worrying too much about the market rates for Irish sovereign debt, because we're no longer directly exposed. And yes, the IMF/EU plan does have a default rate of 10% on domestic mortgages built in - it may not be enough, but n that case the plan can be revisited, because the underlying assumptions will have changed.

But, of course, we must do something, so we must also do it now, because...well, because because. Because now is when we're panicky, and so we want action now. It doesn't really matter what gets done, as long as our politicians are seen to be doing something right now.

Also, to be fair, most people are quite rightly suspicious of 'solutions' that have the last government's fingerprints on them.

cordially,
Scofflaw

Scofflaw

hinault wrote: »

That time line seems entirely reasonable to me.




After downloading Table 4.2 (Liabilities tab), the sum totals for H12-H69, I12-I69 and J12-J69 are displaying different totals to €27.06, €13.72 and €69.93
billions that you've posted above.

It's not that I doubt your figures, I just want to see them for myself.
(It's late and it's been a long day - I'll try this tomorrow. Thanks again for the help!).

Time to do the envelope thing...I'm guessing those totals are:

690000.02
391013.8
2518829.91

telepathically,
Scofflaw

hinault

Scofflaw wrote: »

Time to do the envelope thing...I'm guessing those totals are:

690000.02
391013.8
2518829.91

telepathically,
Scofflaw

I doff my cap to your powers of telepathy!:D
Spot on.

What am I doin' wrong??

Scofflaw

hinault wrote: »

I doff my cap to your powers of telepathy!:D
Spot on.

What am I doin' wrong??

Adding - the figures are for outstanding debt securities at month-end, not securities issued in that month. They're therefore a snapshot of the debt position at that moment - the current balance. Hence when the covered institutions issue €17bn of debt in January, the figure goes from €33bn to €50bn rather than saying €17bn, because it's recording how much debt is currently outstanding.

Same with deposits - the figure is the month-end balance, not the amount of inflow. That's why there's no negative figures, despite the fact we know deposits have been flowing out.

Sorry - it probably looked like H69-H12 meant the sum of those rows, but the "-" is actually a minus sign!

I had the same problem initially, because the column header says "Debt Securities Issued", which suggests exactly that interpretation - then realised it was securities outstanding, not securities issued. Checked it with an economist, though, to be sure.

cordially,
Scofflaw

Permabear

This post has been deleted.

hinault

Scofflaw wrote: »

Adding - the figures are for outstanding debt securities at month-end, not securities issued in that month. They're therefore a snapshot of the debt position at that moment - the current balance. Hence when the covered institutions issue €17bn of debt in January, the figure goes from €33bn to €50bn rather than saying €17bn, because it's recording how much debt is currently outstanding.

Same with deposits - the figure is the month-end balance, not the amount of inflow. That's why there's no negative figures, despite the fact we know deposits have been flowing out.

Sorry - it probably looked like H69-H12 meant the sum of those rows, but the "-" is actually a minus sign!

I had the same problem initially, because the column header says "Debt Securities Issued", which suggests exactly that interpretation - then realised it was securities outstanding, not securities issued. Checked it with an economist, though, to be sure.

cordially,
Scofflaw

I understand now.

H69-H12 (28,578 less 1,510 = 27,068).
I69-I12 (13,357 less 490 = 12,867)
J69-J12 (83,256 less 13,325 = 69,931)

Thanks again for taking the time to explain this both telepathically and in writing!

Scofflaw

hinault wrote: »

I understand now.

H69-H12 (28,578 less 1,510 = 27,068).
I69-I12 (13,357 less 490 = 12,867)
J69-J12 (83,256 less 13,325 = 69,931)

Thanks again for taking the time to explain this both telepathically and in writing!

A pleasure - many eyeballs make bugs shallow, as they say.

cordially,
Scofflaw

Scofflaw

Permabear wrote:

This post had been deleted.

The problem I have here is that all of that makes absolute sense, right up to the moment that you factor in people.

cordially,
Scofflaw

WalterMitty

How much of the outstanding bonds were only issued after guarantee? How much has matured since guaranteed?

Permabear

This post has been deleted.

sollar

Permabear wrote: »

This post had been deleted.

Alot of our construction workers are leaving the country now. We are not going to be a construction free zone forever. There is a level of sustainable construction jobs in any country we will get back there in time. Of course we don't need to ever go back to the maddness of the last 10 years.

Permabear wrote: »

This post had been deleted.

Numbers are falling in the PS and there won't be any resistance to FG's plans for a 30,000 reduction. Currently 17% of workers in this country are public servants. If that is true then that is not high by european standards. Maybe we just need to put them to better use.

hinault

Permabear wrote: »

This post had been deleted.

Very good point, Perma.
By having a firesale the reality for a lot of people will bite hard.

As you stated in an earlier post, the government has tried to derive artificial solutions to what is a perfect financial/banking/debt storm.

Permabear

This post has been deleted.