If we will default, When ?

Thespoofer

Hi

To the people of the opinion that we are heading for default ( I believe we are heading that way ) would any of ye care to put a timeline / estimate on when you believe this may happen according to your own studies on the subject.

To anybody else who believes it won't happen I respect your opinion on the subject and don't want to turn this into a will/won't debate, I'm just interested in the ' Will Default' camps estimates.

Thanks

PS. If already discussed please remove.

wiseguy

Thespoofer wrote: »

Hi

To the people of the opinion that we are heading for default ( I believe we are heading that way ) would any of ye care to put a timeline / estimate on when you believe this may happen according to your own studies on the subject.

To anybody else who believes it won't happen I respect your opinion on the subject and don't want to turn this into a will/won't debate, I'm just interested in the ' Will Default' camps estimates.

Thanks

PS. If already discussed please remove.

There will be 3 crunch points if the EU and ECB don't wake up and get a cop on


1. About 6 months after Greece defaults, which is hanging on the edge now, why? because we have so far trailed Greece step by step 6 months behind

2. If we somehow get over that then start of 2014 is the optimistic scenario, thats when we will run out of money altogether

On the 15th January 2014, €11,857 million of government bonds are due to mature. As things stand we will not have the money to repay these bonds.

3. After that things get worse and worse, assuming somehow the deficit is closed, the country will be faced with this:




Happy days ahead :pac:

later12

I think the term default is unhelpful, because some people confuse it to mean voluntary restructuring, or involuntary restructuring, or even a repudiation 9of debt, which are all different paths with various legal and credit-rating implications.

Research has shown that in terms of voluntary restructuring, countries who engage in it can sometimes be no worse off than those troubled economies who refused to engage with it. They may even be back in the markets sooner, as in the case of the IFI sponsored Brady Bonds, whereby the idea was to make debt relief more acceptable to commercial bank creditors than the original claim which was that payments simply could not be serviced, or else the blatant lie that nothing was wrong when clearly the evidence suggested otherwise.

Anyway, when Ireland does restructure its debt, I think it is more likely to be the IMF-EU-EA debt that will be restructured in the first round, and a second round of restructuring may follow sometime over the next few years, which may not be of a voluntary nature. It simply is too soon to be certain of the latter, and if anybody tells you they are certain of it, ask for hard factual evidence instead of rhetoric and emotion.

lasnoufle

wiseguy wrote: »

There will be 3 crunch points if the EU and ECB don't wake up and get a cop on

Ah sure, these EU guys, it's not like Ireland itself wasn't doing anything to cut its deficit.
Ireland plans to borrow more and more in the coming years and it's the borrower's fault if he's not ready to provide money?
I can't wait for a default, I'll be delighted to see people wake up to reality.

I've read somewhere (no sources sorry) that the country already has money to finance itself until the middle of next year so I suppose it won't happen until then.

Best case scenario would be that the tax on pension funds triggers a bank run but unfortunately it doesn't seem to happen.

Possible scenario would be that in December the income and expenditure don't match the government's prediction (very likely to happen but that's just my opinion), so nobody wants to buy the bonds issued next year and the default happens when the coffers are empty.

I'm afraid it'll never happen though, realistically none of the current Irish politicians has enough balls to plunge the country into instant chaos - not that I blame them for that, it's probably a tough decision to make.

Marguerite Tonery

We need leadership!

professore

lasnoufle wrote: »

I'm afraid it'll never happen though, realistically none of the current Irish politicians has enough balls to plunge the country into instant chaos - not that I blame them for that, it's probably a tough decision to make.

No they'll just sit there and pretend they are calling the shots when in fact the bailout conditions are being followed to the letter. Then the country will default messily when we run out of money.

bbam

Marguerite Tonery wrote: »

We need leadership!

People were tripping over themselves to get FG/Labour into Gvt...

Seriously... they taxed pensions for their Jobs budget Strategy
100,000 jobs over 5 years..
20,000 jobs a year when there are near 500,000 on the scratcher.

People were easily bought...
"no new taxes" that didn't last long either..

Where is leadership going to come from in this country..

Greens, imploded because they wanted to stay in power no matter what principals they has to sacrifice.
FF, Were in bed with anybody who was throwing money around and when the sh1t hit the fan their leader was like a fox in headlights, not knowing what to do..
FG/Labour...
Have cleanish histories just because they weren't in power anytime recently, lied to the public to get into power, will probably continue to do so...
SF.. more worried with who shook hands with the queen..

To top it all after two exceptional Presidents we're on track to have one who will be of little value unless we have a sudden Joycian crisis to be resolved as this seems to be his only qualification or specialty..:rolleyes:

There is no leadership in this country...

RichardAnd

lasnoufle wrote: »

Possible scenario would be that in December the income and expenditure don't match the government's prediction (very likely to happen but that's just my opinion), so nobody wants to buy the bonds issued next year and the default happens when the coffers are empty.

Well the thing is, we don't (in theory) need to borrow from bond markets as we were given money by the EU in the form of the bailout. If all goes to plan, we will have enough money to last the course of the deficit cutback at which point we should (again, in theory) be breaking even and not need to borrow.

Of course, I for one do not believe this process will be smooth and the fact that it is based upon rather optimistic growth predictions for the future makes me even more dubious.

i did a thesis on it back in 2010 with most of research done on figures from 2009 (as up to date as I could be) and could only give a time frame of between 2012 and 2015.

Since then all figures have gotten worse with GDP reducing and growth forecasts being reduced so I would imagine it will be sooner. Possibly even beginning to see signs late this year (Q3) the writing is on the wall at the moment but not everyone will see it until then. I expect the **** to hit the fan towards the end of next year anyway. But this prediction is an educated guess while my previous work was based on proper sums.

who_ru

there will be a 2nd bailout, Varadkaar got a bollocking for telling the truth.

the ECB will want much more control over the financial affairs of bailout recipients.

how can there not be a 2nd bailout on the cards?

we were being quoted 10% + on the bond markets for funding before this bailout. the international lenders knew well we couldn't pay back all we owed as it was.

now with an extra 85bn euro tacked on to that overall debt, who seriously expects that situation to change?

Bailout 2 is going to happen here. just like in Greece.

more and more and more taxes are on the way. all to pay back bank debts that have nothing to do with us. but we must pay up because that is what FF negotiated with the IMF/ECB.

this Govt is a puppet, nothing more, nothing less.

Tora Bora

When it happens, it will probably be announced on the Sunday evening, of a bank holiday week end, when the banks are closed:eek:
Leo Varadker, will probably tell some journalist, that we have just defaulted. Enda Kenny will come on the nine o clock news, to say there has been no decision about a default. He will say, the cabinet will discuss the matter, and come to a conclusion on it some time in the next few days.
Meanwhile down at the local bank, angry mobs .................. :eek:

careca11

Thespoofer wrote: »

Hi

To the people of the opinion that we are heading for default ( I believe we are heading that way ) would any of ye care to put a timeline / estimate on when you believe this may happen according to your own studies on the subject.

To anybody else who believes it won't happen I respect your opinion on the subject and don't want to turn this into a will/won't debate, I'm just interested in the ' Will Default' camps estimates.

Thanks

PS. If already discussed please remove.

I reckon default will happen by end of 2012,
gove spending needs to be cut , right!
but are gov are not doing anything to cut the 3 most expensive area's of the revenue spent in this country ,
Public sector Pay, expenses, bouns's pensions (their afraid of the unions, plus Labour are the union really) , what we need is a serious of large cuts
earning between 50--75k = 10% cut
75k to 110k =20%
110k or higher 30% cut , overtime banned, all expenses banned PERIOD,
CROKE PARK DEAL IS AN ABSOLUTE FARCE

HSE.................Grossly over mismanaged billions over budget mass duplication of work , yet when you ring a hospital looking for some helps , they don't know their arse from their elbow) SAME LEVEL OF CUTS AS ABOVE ,
Social welfare .........Long term unemployed(5 years or more) should be cut year on year .
non-eu citizens sent home (sorry but we simply cannot afford them )especially the one's who came over and never bothered to day a days work.
Thorough investigations into the who single mother more than 1 kid sh1te

THOSE ARE THE TOUGH DECISONS THIS GOV NEED TO TAKE, BUT ULTIMATELY DON'T HAVE BALLS TO DO IT

instead of the above they are taxing us jo soaps to the hilt , wages going down via cuts in pay or hours ,
increases in mortgages, all insurances especially health , food getting dearer,Fuel going through the roof , Gas and electricity prices will be going up by at least 10% if not more by October , now we have property tax (call it what you like but thats what it is ) (I FOR ONE WILL REFUSE TO PAY THIS AND I HOPE EVERY PERSON IN THE STATE WILL ALSO , EVEN IF ITS ONLY €5)
water charges coming down the line
tax on breathing and wanching I'm sure is not far off

the more the gov take of us , the less and less we have to spend , so we will make necessary cuts ....................more businesses will go be the wayside , unemployment on the up

YEP DEFAULT IS GETTING NEARER

wiseguy

lasnoufle wrote: »

Ah sure, these EU guys, it's not like Ireland itself wasn't doing anything to cut its deficit.

I guess you missed the bit in my post which said "if we get deficit in control" :rolleyes:

GSF

http://blogs.telegraph.co.uk/finance/andrewlilico/100010332/what-happens-when-greece-defaults/


The Telegraph reckons that when Greece goes, Ireland goes too.

What happens when Greece defaults. Here are a few things:
- Every bank in Greece will instantly go insolvent.
- The Greek government will nationalise every bank in Greece.
- The Greek government will forbid withdrawals from Greek banks.
- To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law.
- Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting)
- The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting 0n 50 per cent or more of all Greek euro-denominated debts.
- The Irish will, within a few days, walk away from the debts of its banking system.

clear thinking

I wouldn't be relying on the telegraph for proof that we will default.

Blind Justice, could you post a link to your thesis as it sounds interesting.

My understanding is that Debt will peak at 110% of GDP, which in my opinion is manageable. But that is based on full IMF/EU drawdown.

I can see about €5-10bn coming back from Anglo as it is fully written down & also has tier one capital.

I also cant see the full drawdown of the banking contingency element for Bank & AIB.

So i reckon we'll peak at about 90% which is manageble.

Owldshtok

So,a former deputy director of the IMF has said in an interview with Gavin Jennings on RTE Radio One on the 'this week' programme this lunchtime that Ireland should default sooner rather than later in order to avoid 2 years of limping along with austerity,and anxiety for the general population.His view was very clear and without reservation - that Greece will inevitably default and Ireland will follow.Of course the minister for employment came on the same show straight after and completely disagreed with him.I think most people agree that the Government won't default sooner,so to follow what this guy has said in todays interview,and what some poster has already said in this forum it seems there will be a messy default in around 2 years.

Sorry I don't have the link to the podcast,I've checked and it's not yet uploaded onto RTE radio's website.It might be by the time some of you read this.It's definitely worth listening to.

Taxi Drivers

And here is the view of another former Deputy-Director of the IMF.

Irish bailout actions display credibility the Greeks lack

The fiscal programme is so far on-track and is fully funded from official non-market sources until the end of next year. Moreover, some margin of manoeuvrability has been gained as there is likely to be at least €10 billion in savings relative to the amount provided for under the bailout package to recapitalise the banks.

The Irish authorities should, therefore, continuously and consistently emphasise to the markets and the public at large their key message: the Irish programme is on track, the Government intends to keep it on track, and the funding mechanisms and amounts are firmly in place to be able to manage any risks of collateral damage resulting from events associated with the Greek crisis.

Owldshtok

Here's the link to the podcast of todays interview with Desmond Lackman,former IMF DD.
Scroll forward on the player to 40:00.It's only around 10mins long.
http://www.rte.ie/news/player.html?thisweek#programme=This Week

Taxi Drivers link and this link goes to show that even former deputy directors of the IMF have opposing views. At this point you've just got to make up your own mind which one is the more convincing.

Dannyboy83

Taxi Drivers wrote: »

The Irish authorities should, therefore, continuously and consistently emphasise to the markets and the public at large their key message: the Irish programme is on track, the Government intends to keep it on track, and the funding mechanisms and amounts are firmly in place to be able to manage any risks of collateral damage resulting from events associated with the Greek crisis.
[/INDENT]

If the Irish won't fall for it anymore, why should anyone else?

The Americans are terrified at the prospect of hyperinflation.
Inflation is running at 5% in the UK and they are going to soft default.

Good or Bad, nobody gives a damn about Ireland or our government's propaganda at the moment.

Jubo

Was listening to the Dunphy show yesterday. One of the guests, Margaret E Ward said her belief is that the governments purpose at the moment is just 'to keep the Irish people calm' ahead of a structured default. My guess, for what it's worth, is a late 2013 default.

sic

Jubo wrote: »

Was listening to the Dunphy show yesterday. One of the guests, Margaret E Ward said her belief is that the governments purpose at the moment is just 'to keep the Irish people calm' ahead of a structured default. My guess, for what it's worth, is a late 2013 default.

On that note, if there was a restructure in 2013, does anyone know or have an opinion on whether certain maturities would be treated differently than others e.g. long dated take more severe haircuts than shorter dated as these investors took on greater risk? Would haircuts be applied uniformly accross the board or strategically based on what suits the government at the time? If the latter, how might this play out?

sic

Nobody?

later12

sic wrote: »

On that note, if there was a restructure in 2013, does anyone know or have an opinion on whether certain maturities would be treated differently than others e.g. long dated take more severe haircuts than shorter dated as these investors took on greater risk?

I think one of the more attractive possibilities is that only the shorter-medium term debt (I mean debt maturing in the coming three years) to be exchanged for longer debt issues. These might be guaranteed by the ECB, might offer higher coupon payments, or might otherwise bring with them a preferred creditor status.

I do not particularly see a necessity to deal with debt that is about to mature in 2020, although this may arise in any restructuring part 2 (the occasional sequel to voluntary reprofiling)

So to summarise, I do not think there is any question at all of imposed losses this time around. The Greeks will do what they can to make the reprofiling attractive to creditors, and it may only apply to creditors with maturities extending into 3 years from now. It does not really make sense to deal with the 2015 - 20 creditors *so long as* a credit event is not declared by a ratings agency.

beeftotheheels

later10 wrote: »

It does not really make sense to deal with the 2015 - 20 creditors *so long as* a credit event is not declared by a ratings agency.

For some reason this is striking me as unlikely today...

http://uk.reuters.com/article/2011/06/08/uk-eurozone-idUKTRE75720020110608

later12

That does not sound very encouraging. I think the difficulty lies in the voluntary aspect. In order not to declare a credit event, a ratings agency has to be convinced that the creditor is not partaking in the restructuring of debt out of fear of the repercussions should they refuse to partake and prhaps suffer a direct loss.

So that is going to be an awfully tall bar to clear if such a voluntary programme were to go ahead.

FreudianSlippers

I think defaulting is a bad idea in general. However, what I will say is that it's looking more likely that the US may default in the future. If we can hold out to such a point as the US defaults then we may come out looking better.
Remember, a huge issue is our rating on the markets... there's no point in defaulting now and then another pitfall in the international economy requires us to be bailed out again.