Irish bond prices

My name is URL · 20-09-2010 06:19PM

Really-Stressed wrote: »

Our future is in our hands. as it was when people were borrowing 300k for a gaf in a floodplain in westmeath, which of course was the banks fault.

Stupid bloody recklessness got us here by a huge portion of the Irish populace and we can get ourselves out but bloody moaning and worrying wont do it.

I dunno, much of it has already been taken out of our hands. You're right of course about it being mostly our own fault that we're in this position in the first place, though. There's not many people today living so recklessly, and talk of the utter collapse of the country being spouted by speculators isn't going to make things any easier

squod · 20-09-2010 06:26PM

(Reuters) - Ireland is due to auction bonds worth up to 1.5 billion euros (1.3 billion pounds) on Tuesday, a day after Moody's cut its credit rating citing mounting bank rescue costs and weak growth prospects.

Am I hearing this correctly. Wasn't I told that the ''banks'' (Anglo) had to be bailed out due to the fall out effect that would happen if bond holders were given the two fingers. If were selling bonds worth a piddling €1.5bn, what are we giving €50bn to Anglo for?

Micky Dolenz · 20-09-2010 06:28PM

Really-Stressed wrote: »

Bloody scaremongering already posted in politics.

We come to afterhours to get away from this **** , scaremongering by armchair experts.

To be fair, there is little to no scaremongering in this thread. Very informative and positive i would say.

up for anything · 20-09-2010 06:38PM

Could someone provide an idiot's guide to bonds for me please? I have a sort of idea but really don't have a clue.

Wertz · 20-09-2010 06:49PM

skyhighflyer wrote: »

The same Barclays note points out that Irish domestic banks own just €8.5bn of the debt, compared with balance sheets of about €700bn. A default on Irish debt won’t be borne by Irish banks, or by many Irish institutions at all.

Balance sheets of about €700,000,000,000.
What comprises a balance sheet: future mortgage/loan repayments and current assets (cash on deposit/property/bonds/gold) or just current assets?
If Irish institutions hold this much in assets then why the need for recapitalisation?
If it includes property(s), then how can a balance sheet be accurate when no-one seems ot know how much a lot of that property is worth?

Budget's going to be some fun this year...

skyhighflyer · 20-09-2010 06:57PM

up for anything wrote: »

Could someone provide an idiot's guide to bonds for me please? I have a sort of idea but really don't have a clue.

Bonds are IOUs, plain and simple. They are a means by which governments and corporations can borrow money on the international financial markets.

Bonds are normally issued for a fixed time period (also known as the 'tenor' of the bond) and pay a rate of interest. This rate can be fixed (e.g. 5%) or floating (e.g LIBOR plus 2%). The rate of interest is also known as the 'coupon' because in the old days bonds were physical paper and had a number of coupons which you detached on each interest payment date and presented to the issuer (or their agent) and got paid your interest.

So if traders talk about "Ireland's 5% 2030's" we mean Ireland has issued bonds paying a fixed rate of interest at 5% redeemable in 2030. So if you buy a €100,000 bond you'll get €5000 interest a year from the Irish government plus your €100,000 back in 2030.

The bonds are usually bought by investment funds, financial institutions, pension funds and other big players in the international financial markets. The problem at the moment is that worries about Anglo and how much it's going to cost us to fix are causing these institutional investors to get nervous and demand higher interest rates from Ireland for the perceived increased risk in buying and holding its debt.

MrMatisse · 20-09-2010 07:00PM

up for anything wrote: »

Could someone provide an idiot's guide to bonds for me please? I have a sort of idea but really don't have a clue.

In order to get money the government borrows money from international investors. This loan agreement is called a bond. The interest rate we have to pay on the bond depends on whether or nor the international investors think we will pay the money back. At the moment we are paying 6.5% and Germany is paying about 2%, we are seen as very high risk.

Tomorrow morning the governemnt is going to try to borrow money and sign up to more loan agreements or bonds. People are unsure whether people will lend to us.

My name is URL · 20-09-2010 07:01PM

up for anything wrote: »

Could someone provide an idiot's guide to bonds for me please? I have a sort of idea but really don't have a clue.

It's pretty much just the sale of debt.. bonds are like an IOU issued by the seller in exchange for money. The people buying them profit from the interest on the debt.. the higher the interest, the bigger the risk and vice versa.. and if it keeps rising the whole idea of Irish bonds will be worthless, which is why the IMF may need to step in and stop things spiraling out of control

Sticky_Fingers · 20-09-2010 07:02PM

skyhighflyer wrote: »

Ireland isn't the centre of the world like many of us think it is and isn't likely to bring down the Eurozone on its own. However, it's enough to galvanise the EU into giving us a dig out with cheap German money if we need it

We'll be bailed out sharpish because they definitely don't want to see a repeat of the what happened with Greece but Ze Germans are not going to just hand over the readies, there will be strings attached though then again if we don't like the deal we could tell them to stuff it. We'd be fooked but it would probably bring down the Euro so we have a few outs if we need to deal with them.

Really-Stressed wrote: »

What a load of bllox!

.....

Bloody scaremongering already posted in politics.

We come to afterhours to get away from this **** , scaremongering by armchair experts.

This thread wasn't posted to scare people but to let them know something was up. It was posted in AH to inform boardsie's who don't usually go into the politics forum about the situation. No one here can do anything about the situation, its in the hands of the markets. The price of borrowing has been driven up due to speculation and fear mongering, not by me or any other poster on this site but by the moneymen. My inane rambling on this forum won't change that one iota but the situation exists and the exorbitant rates are a reality even if the basis for them is not. I'm not proposing to be an expert of any kind but even I know this is not exactly great news for the country.

If you don't like the thread don't post or look at it, I'm sure there one with lolcats somewhere round here.

MrMatisse · 20-09-2010 07:08PM

Sticky_Fingers wrote: »

We'll be bailed out sharpish because they definitely don't want to see a repeat of the what happened with Greece but Ze Germans are not going to just hand over the readies, there will be strings attached though then again if we don't like the deal we could tell them to stuff it. We'd be fooked but it would probably bring down the Euro so we have a few outs if we need to deal with them.

This thread wasn't posted to scare people but to let them know something was up. It was posted in AH to inform boardsie's who don't usually go into the politics forum about the situation. No one here can do anything about the situation, its in the hands of the markets. The price of borrowing has been driven up due to speculation and fear mongering, not by me or any other poster on this site but by the moneymen. My inane rambling on this forum won't change that one iota but the situation exists and the exorbitant rates are a reality even if the basis for them is not. I'm not proposing to be an expert of any kind but even I know this is not exactly great news for the country.

If you don't like the thread don't post or look at it, I'm sure there one with lolcats somewhere round here.

No, your idea was, oh good citizen, I feel I must educate the rabble in after hours of the fate which awaits them tomorrow, sort of an economic Mother Theresa.

Posting this hyped up chatter from politics Phd's and the like who havnt a clue and are trying to worry people. If people wanted to read about the Irish economy theyd go there, not here, where the usual fair is worlds greatest fart etc and people escape from the worrys of the world.

I will comment when this sort of misinformation and ****e is posted to a wider audience then politics.

MrMatisse · 20-09-2010 07:11PM

Can we please get this depressing shi-te out of after hours!!!

skyhighflyer · 20-09-2010 07:14PM

Really-Stressed wrote: »

Can we please get this depressing shi-te out of after hours!!!

Apt username / post combo

LevelSpirit · 20-09-2010 07:17PM

Really-Stressed wrote: »

We come to afterhours to get away from this **** , scaremongering by armchair experts.

Quote of the year.
The amount of sh1te I have to listen to from "armchair experts" about bonds, CDFs, Short selling and so on is frightening.
Pulling out the buzzwords and trying to impress everyone.

Most people I talk to dont have a clue about bonds, CDFs, Short selling etc when quizzed on it.

They should go and spread bet for a while. Put their money where the arse they are talking out of is. Then maybe they'll learn something.

And I wont even go into the people on the low tax rate or even zero tax rate complaining that "OUR taxes are being wasted". And "the rich should pay more". Fukcing idiots saying this arent even paying enough tax to keep their own street lights on.

Sticky_Fingers · 20-09-2010 07:25PM

Really-Stressed wrote: »

No, your idea was, oh good citizen, I feel I must educate the rabble in after hours of the fate which awaits them tomorrow, sort of an economic Mother Theresa.

So you would rather the great unwashed of AH not to know whats going on? How benevolent of you oh wise one. Why I hope they didn't catch the news this evening since it was the second story after Biffo's and Lenny's comedy double act. Why there must be nothing to worry about so, I surprised they didn't fill the slot with some fluff piece about kitty cats dressed like people instead of some boring economist who was talking about needing to reassure the markets and the possible need for more cuts in spending. Silly goose couldn't possibly know what he's talking about now could he because Really-Stressed thinks its all hot air and we shouldn't mention it because we might scare the children.

Posting this hyped up chatter from politics Phd's and the like who havnt a clue and are trying to worry people. If people wanted to read about the Irish economy theyd go there, not here, where the usual fair is worlds greatest fart etc and people escape from the worrys of the world.

I'm sorry I didn't see the mod notice under your name. I am sorry for transgressing into your domain with a topic that I felt might interest people who actually gave a sh!t what was happening in this country and what could possibly end up affecting them in some way.

I will comment when this sort of misinformation and ****e is posted to a wider audience then politics.

What misinformation is that, have I gone and got my numbers wrong again, is 6.5% actually good? Gee I was under the impression that it was kind of bad, thats for clearing that up for me, gee what am I like :rolleyes:

* After Hours enough for you

Merch · 20-09-2010 07:27PM

topper75 wrote: »

Whilst I am being frank and drawing enemies - Paying people almost 200E not to work every week whilst we struggle to borrow money to keep the show afloat makes zero sense. Simple arithmetic. Look over and see what you get in the UK. I think it is the first thing any IMF person would look at. The IMF don't have to be elected or re-elected remember.

I can say I disagree with you completely, but at least a lot of the recent recipients have contributed to the economy in some way (ie they were recently unemployed) and they are probably using it to stay afloat tthemselves, On the other hand the money we are handing over to certain private institutions that we owe nothing but are bailing out??

I agree, reduce SW but after they drop Anglo first
and in line with SW cuts would have to come serious re org of the public sector, pay and positions
but not while still supporting the banks, I dont think the public would stomach that much, we take a lot of sh*t without doing anything about it (just mutter to ourselves) but that would be too much
Maybe a serious re org of SW, Public pay (starting at the top and work all the way to the bottom) and jobs and ditching support for some banks would help with what the OP is saying?
or maybe Im naive?

skyhighflyer · 20-09-2010 07:28PM

For anyone who would like to know more about bonds, there's a very informative write-up here:

http://www.investopedia.com/university/bonds/bonds1.asp

btard · 20-09-2010 07:29PM

The only thing that surprises me is that there are still mugs out there willing to lend us money. I wouldln't risk a penny in this basket case, no matter what interest rate I got.

skyhighflyer · 20-09-2010 07:33PM

btard wrote: »

The only thing that surprises me is that there are still mugs out there willing to lend us money. I wouldln't risk a penny in this basket case, no matter what interest rate I got.

So do you keep all your money under your mattress?

Investment bankers and their clients are far from mugs, my friend. If they're pumping money in here (and they are), there's a reason. Like, we're paying them 6% on the euro on a low risk investment.

btard · 20-09-2010 07:36PM

skyhighflyer wrote: »

So do you keep all your money under your mattress?

Investment bankers and their clients are far from mugs, my friend. If they're pumping money in here (and they are), there's a reason. Like, we're paying them 6% on the euro on a low risk investment.

Don't make me laugh.

Wertz · 20-09-2010 07:38PM

Wertz wrote: »

Balance sheets of about €700,000,000,000.
What comprises a balance sheet: future mortgage/loan repayments and current assets (cash on deposit/property/bonds/gold) or just current assets?
If Irish institutions hold this much in assets then why the need for recapitalisation?
If it includes property(s), then how can a balance sheet be accurate when no-one seems ot know how much a lot of that property is worth?

Budget's going to be some fun this year...

Anyone? Or is this all one way traffic?

dvpower · 20-09-2010 08:06PM

btard wrote: »

Don't make me laugh.

I can't see how we could be considered at high risk of default. We have access to the ECB fund at 5.5% (I think). So there's no question of us not being able to raise money and we have some certainty of the rate.
So it's just a question of whether we can get our house in order before the burden of debt repayment overwhelms us.

Micky Dolenz · 20-09-2010 08:15PM

dvpower wrote: »

So it's just a question of whether we can get our house in order before the burden of debt repayment overwhelms us.

And that's it really. I have no doubt we can get it together, if even over the very long term.

skyhighflyer · 20-09-2010 08:16PM

Wertz wrote: »

Anyone? Or is this all one way traffic?

My example was just an illustration as to the relative importance (or lack thereof) of Irish government debt as a proportion of the banks' balance sheets.

A balance sheet is a financial statement that summarises a company's assets, liabilities and shareholders' equity at a specific point in time (not just assets). Just because the totals come out at €700bn doesn't mean there can't be a gaping, €50bn Anglo-shaped hole in there somewhere.

Mr Benevolent · 21-09-2010 11:20AM

So how's the bond sale going?

dasdog · 21-09-2010 11:33AM

Confab wrote: »

So how's the bond sale going?

Ireland sold 500 million euros of debt due in 2014 at an average yield of 4.767 percent, compared with 3.627 percent at the previous auction on Aug. 17, the National Treasury Management Agency in Dublin said today. It also auctioned 1 billion euros of 2018 securities at a yield of 6.023 percent, up from 5.088 percent in a June sale.

http://www.bloomberg.com/news/2010-09-21/ireland-sells-1-5-billion-euros-in-debt-as-borrowing-costs-rise-fears-ebb.html

Mr Benevolent · 21-09-2010 11:36AM

That's good news. Crisis over. For now.

thebaz · 21-09-2010 11:47AM

yes we are all still alive after another few days of scaremongering by greedy speculators ..

could someone who knows, explain to me and others in plain English, why when the banks chiefs and in particular Anglo came crawling to the government for the blanket guarantee in Sept 2008 that the government did not just telll them to go **** off , they took a punt , they lost , similar to the nags ... there hardly charitable organisations ... Anglo and Nationwide should have been burnt at the stake

topper75 · 21-09-2010 11:48AM

Sticky_Fingers wrote: »

If you don't like the thread don't post or look at it, I'm sure there one with lolcats somewhere round here.

dasdog · 21-09-2010 12:05PM

thebaz wrote: »

could someone who knows, explain to me and others in plain English, why when the banks chiefs and in particular Anglo came crawling to the government for the blanket guarantee in Sept 2008 that the government did not just telll them to go **** off , they took a punt , they lost , similar to the nags ... there hardly charitable organisations ... Anglo and Nationwide should have been burnt at the stake

For Anglo I suspect if they had let them go we may have found out about a lot of political corruption from the very top down to questionable planning permission being granted by councillors. Lenihan equated Anglo's debts to Irish govenment debt and the rest is very expensive history (in the making). Also factor in Merkel's call for no European bank to be allowed to fold at the height of the crisis and I would think a lot of those bond holders would have been German/French investors.

gurramok · 21-09-2010 12:06PM

Confab wrote: »

That's good news. Crisis over. For now.

Not for the taxpayer at those high interest rates.

If the next budget does not do bring proper austerity measures, we will need a bailout as the interest rate demanded will get higher and higher at the sign of non-action on the deficit.

Irish bond prices

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