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

fontanalis · 17-02-2011 02:58PM

I thought Bond Holders were the Atlas's; the wonderful capitalists who represent the free market. I would have thought they would be able to spot a buble and a dodgy bank with their wonderful knowledge of the financial world. They took the risk. Anyway in Michael Lewis' recent article he mentioned a trader from Merril Lynch who wasn't expecting anythign back from Anglo Bonds.

Debthree · 17-02-2011 03:19PM

I absolutely hate the way they're saying "burn OURSELVES" - since when did the likes of Dermot Desmond and the other fat cats associate themselves with the ordinary Irish person?

I wonder if social welfare was eradicated would we hear Desmond saying "but we're only hurting OURSELVES"??

sollar · 17-02-2011 03:24PM

Wouldn't it just be amazing if we found out that many of these bondholders are indeed irish people but they are the super rich who don't bother their arses paying any tax in this country.

Burn burn burn if thats the case!!!

FreudianSlippers · 17-02-2011 03:30PM

This thread and AH in general is idiotic when it comes to default and burning the bondholders.

1) we can't afford to default
2) we can't burn the bondholders.

WHY? Because we need to borrow to run the country. Sure, it seems like a good idea to just walk away from our debts and stick our fingers up to those who took risks... but that's because you are a moron and you don't understand world economics, are short sighted and probably went to a "special" school and wear a helmet at all times.

IF WE DEFAULT WE WILL NOT BE ABLE TO BORROW MONEY ANY MORE!!!!!

Listen you idiots. Just shut up for a second, listen and think.

Remember when we were all griping about the interest rate we'd have to pay if we borrowed on the market? Yeah? The reason we needed EU/IMF loans to be earmarked? (earmarking is next weeks lesson you simpletons...)
Yeah, you do? Ok... so if we default on our debts it makes it so that those interested in buying Irish bonds in the future (so we can turn the lights on basically) will be more worried that we would default on them... so they'd demand MUCH higher levels of interest.

Can people not see and understand, or is it sheer idiocy?
I understand that the situation is intense and confusing, but think for a god damn second. If you defaulted on a loan from the bank do you think they'd turn around and give you another loan?

Sure the EU/IMF lending is not ideal, but what other choice do we have? Seriously... give me one valid option.

fontanalis · 17-02-2011 03:36PM

FreudianSlippers wrote: »

This thread and AH in general is idiotic when it comes to default and burning the bondholders.

1) we can't afford to default
2) we can't burn the bondholders.

WHY? Because we need to borrow to run the country. Sure, it seems like a good idea to just walk away from our debts and stick our fingers up to those who took risks... but that's because you are a moron and you don't understand world economics, are short sighted and probably went to a "special" school and wear a helmet at all times.

IF WE DEFAULT WE WILL NOT BE ABLE TO BORROW MONEY ANY MORE!!!!!

Listen you idiots. Just shut up for a second, listen and think.

Remember when we were all griping about the interest rate we'd have to pay if we borrowed on the market? Yeah? The reason we needed EU/IMF loans to be earmarked? (earmarking is next weeks lesson you simpletons...)
Yeah, you do? Ok... so if we default on our debts it makes it so that those interested in buying Irish bonds in the future (so we can turn the lights on basically) will be more worried that we would default on them... so they'd demand MUCH higher levels of interest.

Can people not see and understand, or is it sheer idiocy?
I understand that the situation is intense and confusing, but think for a god damn second. If you defaulted on a loan from the bank do you think they'd turn around and give you another loan?

Sure the EU/IMF lending is not ideal, but what other choice do we have? Seriously... give me one valid option.

But are you not setting an example by saying if you make a bad investment decision then Ireland will bail you out.
So if Ireland let bond holder take the losses on their decisions (capitalism glorious capitalism) and then bond holders get snotty then what kind of system is that?

CJhaughey · 17-02-2011 03:40PM

We will default. Its inevitable.
How can a nation of 4 million people of which there are about 1.5m working pay back the colossal sums owed?
It may not be called a default but thats exactly what it will be.
All we are doing is whiling away the time until it happens and in the meantime causing massive social upheaval and suffering, and this is only the beginning.

FreudianSlippers · 17-02-2011 03:43PM

fontanalis wrote: »

But are you not setting an example by saying if you make a bad investment decision then Ireland will bail you out.
So if Ireland let bond holder take the losses on their decisions (capitalism glorious capitalism) and then bond holders get snotty then what kind of system is that?

I agree there should be punitive measures implemented, but this is a systemic problem rather than an individual problem.
Unfortunately we need to learn the lesson, reform and move on.

We should not have let banks holding personal deposits invest in other banks and/or invest said deposits in speculative holdings etc.

The problem with burning the bondholders is that we are the bondholders I believe.
I think that AIB and BoI have invested our personal deposits in the junk bonds.
Burning the bondholders would only destroy our banks and the more fragile banks in Europe.
Remember, we're late to the party... the world economy already crashed and is barely starting a recovery that is so fragile that the wrong move by us could bring it down.
We're also the first domino next to the other PIGS.

I am a capitalist, but the problem is that the banks are too big to fail... and it's our own fault owing to greed that we allowed them to get this way.

squod · 17-02-2011 03:58PM

This is just more of it. Pretty typical of the FF/FG election poster BS that has destroyed the economy so far. We can't afford all the debts, that's actual fact. Even if some of those bondholders are Irish citizens I can bet they were the first of the many people who withdrew their capital from the banks because they knew what was coming down the line.

If individuals what to step up and volunteer to pay for these bail-outs, fine. Don't count the rest of in for this non-sense approach of guaranteeing an unmanageable mountain of debt.

FreudianSlippers · 17-02-2011 04:00PM

squod wrote: »

This is just more of it. Pretty typical of the FF/FG election poster BS that has destroyed the economy so far. We can't afford all the debts, that's actual fact. Even if some of those bondholders are Irish citizens I can bet they were the first of the many people who withdrew their capital from the banks because they knew what was coming down the line.

If individuals what to step up and volunteer to pay for these bail-outs, fine. Don't count the rest of in for this non-sense approach of guaranteeing an unmanageable mountain of debt.

Yeah, whatever... this is like saying that your house is dirty so just burn it down. Where do you live then?

It's not just Irish investors btw. It's the banks speculating personal deposits actually.

Seriously, tell me what the alternative is and I'll listen... but default and burn sounds great until you actually use your brain and think "so how do we pay for things? where will our money come from?"

BTW don't ****ing insult my intelligence by insinuating that I'm following some party politic bullshít. this is not be spouting FF/FG propaganda... I don't give a flying shít about FF or FG - both idiotic parties but slightly less idiotic than labour :rolleyes: or SF :rolleyes:x3

Monty Burnz · 17-02-2011 04:03PM

fontanalis wrote: »

But are you not setting an example by saying if you make a bad investment decision then Ireland will bail you out.
So if Ireland let bond holder take the losses on their decisions (capitalism glorious capitalism) and then bond holders get snotty then what kind of system is that?

It may well be the system we have. It's a market. If you default on a loan from the bank, would you blame the bank for being snotty when you asked for another one?

Having said that, I'm not 100% convinced we'd be shut out of the bond market if we default on the banks' debts - but if we risk defaulting, we have to be prepared for that possibility.

sollar · 17-02-2011 04:04PM

FreudianSlippers wrote: »

Listen you idiots. Just shut up for a second, listen and think.

:rolleyes:

We are going nowhere meekly paying everyone back. In 2013 the rules are changing. How are we going to enter the markets in the future with astronomical debts around our neck. We won't be able to borrow for decades. So we will be slaves to the IMF/EU.

We must convince the EU partners to share some of the burden or allow us to default on some debt. Never default on sovereign debt and make that clear.

We don't have to go to the same people we burned (for private banking debt).

FreudianSlippers · 17-02-2011 04:05PM

Monty Burnz wrote: »

It may well be the system we have. It's a market. If you default on a loan from the bank, would you blame the bank for being snotty when you asked for another one?

Having said that, I'm not 100% convinced we'd be shut out of the bond market if we default on the banks' debts - but if we risk defaulting, we have to be prepared for that possibility.

We obviously would not be shut out... banks love giving high interest loans and you could be sure that we could certainly float bonds on the market... but over 7% interest.

Sure, we could go get the money we're supposed to be getting from the EU/IMF from the bond markets tomorrow, but we'd be paying higher interest!

That's what I don't understand about people who are opposed to the EU/IMF bailout... we're getting the same money we have to get anyway at a lower interest rate... what's awful about that?

sollar · 17-02-2011 04:06PM

FreudianSlippers wrote: »

I am a capitalist, but the problem is that the banks are too big to fail... and it's our own fault owing to greed that we allowed them to get this way.

Tripe of the highest order.

FreudianSlippers · 17-02-2011 04:07PM

sollar wrote: »

:rolleyes:

We are going nowhere meekly paying everyone back. In 2013 the rules are changing. How are we going to enter the markets in the future with astronomical debts around our neck. We won't be able to borrow for decades. So we will be slaves to the IMF/EU.

We must convince the EU partners to share some of the burden or allow us to default on some debt. Never default on sovereign debt and make that clear.

We don't have to go to the same people we burned (for private banking debt).

I never said anything that necessarily disputes this. So clearly an inability to think is coupled with an inability to read as well.

FreudianSlippers · 17-02-2011 04:08PM

sollar wrote: »

Tripe of the highest order.

And how so? It does seem very easy for some of certain levels of intelligence to post comments such as this without actually making any logical counterpoint.

Banks saw a way to make money out of no money and did it and we didn't complain. In fact, we lapped it up.
To say that isn't greed that we fuelled is tripe of the highest order.

wolfpawnat · 17-02-2011 04:09PM

I don't care who they are, what nationality they are, or what they used to pay for the bonds, tough on them, they took a risk and that means they knew this could fail!

Why should people pay with their pensions for this?

sollar · 17-02-2011 04:12PM

FreudianSlippers wrote: »

I never said anything that necessarily disputes this. So clearly an inability to think is coupled with an inability to read as well.

Sorry Fruedianslippers but you are showing an inability to think when you simply follow the lenihan line that there is no way out. We are being laughed at by the outside world and thanks to meek attitudes like yours we could well be doomed for generations.

hatrickpatrick · 17-02-2011 04:12PM

You make a bad investment, you lose your money. AKA just about every shareholder in Anglo, for instance.

EQUALITY, right? ALL people are EQUAL. Why should some investors be bailed out and not others?
If we're going to pay back bondholders for their risky investments, will we also reimburse everyone else in the country who bought bonds or stocks during the boom and now finds their investment worth peanuts?

That's capitalism, right?

But no, I forgot... Under "capitalism", those who are part of the elite establishment don't have to play by the same rules as everybody else.

From wikipedia:

Bonds and stocks are both securities, but the major difference between the two is that (capital) stockholders have an equity stake in the company (i.e., they are owners), whereas bondholders have a creditor stake in the company (i.e., they are lenders). Another difference is that bonds usually have a defined term, or maturity, after which the bond is redeemed, whereas stocks may be outstanding indefinitely. An exception is a consol bond, which is a perpetuity (i.e., bond with no maturity).

Now correct me if I'm wrong, but when you buy a "security" and it turns out to be sadly less "secure" than anticipated, it is YOUR fault and YOUR tough luck?
Why is one of my friends who invested 1500 in Anglo not being bailed out by the taxpayer, but institutions are?

EDIT: Just to clarify, I'm saying we either bail out all investors or none. I don't see why there should be double standards just because some investors are bigger entities than individual people.

martinn123 · 17-02-2011 04:12PM

sollar wrote: »

Tripe of the highest order.

Very well atriculated argument, anything more to offal

FreudianSlippers · 17-02-2011 04:12PM

wolfpawnat wrote: »

I don't care who they are, what nationality they are, or what they used to pay for the bonds, tough on them, they took a risk and that means they knew this could fail!

Why should people pay with their pensions for this?

It's very likely that it's their pensions which were invested.

Why should they have to use their pensions to prop up the banks? Well, I'm sure their imaginary pensions will be totally useful when we have no banks, no way to move money and the Euro drops in value.
Yeah, great... now you have no pension and no banks and a worthless currency and now not 80 billion in debt but 160billion in debt. Congratulations.

sollar · 17-02-2011 04:13PM

FreudianSlippers wrote: »

And how so? It does seem very easy for some of certain levels of intelligence to post comments such as this without actually making any logical counterpoint.

Banks saw a way to make money out of no money and did it and we didn't complain. In fact, we lapped it up.
To say that isn't greed that we fuelled is tripe of the highest order.

What sort of moderator are you on here calling people stupid. Get a grip of yourself.

fontanalis · 17-02-2011 04:14PM

Monty Burnz wrote: »

It may well be the system we have. It's a market. If you default on a loan from the bank, would you blame the bank for being snotty when you asked for another one?

Having said that, I'm not 100% convinced we'd be shut out of the bond market if we default on the banks' debts - but if we risk defaulting, we have to be prepared for that possibility.

I was talking more about not guaranteeing bondholders in Anglo than defaulting on the IMF/EU package.

Monty Burnz · 17-02-2011 04:15PM

FreudianSlippers wrote: »

That's what I don't understand about people who are opposed to the EU/IMF bailout... we're getting the same money we have to get anyway at a lower interest rate... what's awful about that?

I guess the hope is that we have to borrow far less to cover our total debt, even if it is at higher interest. I'd rather pay a high coupon for a short time on a smaller debt than a slightly smaller coupon on a far bigger debt. There is also the possibility (?) of rolling over the expensive debt with something cheaper when the economy stabilises some years down the road and we look like a better risk.

PeakOutput · 17-02-2011 04:15PM

FreudianSlippers wrote: »

This thread and AH in general is idiotic when it comes to default and burning the bondholders.

1) we can't afford to default
2) we can't burn the bondholders.

WHY? Because we need to borrow to run the country. Sure, it seems like a good idea to just walk away from our debts and stick our fingers up to those who took risks... but that's because you are a moron and you don't understand world economics, are short sighted and probably went to a "special" school and wear a helmet at all times.

IF WE DEFAULT WE WILL NOT BE ABLE TO BORROW MONEY ANY MORE!!!!!

Listen you idiots. Just shut up for a second, listen and think.

Remember when we were all griping about the interest rate we'd have to pay if we borrowed on the market? Yeah? The reason we needed EU/IMF loans to be earmarked? (earmarking is next weeks lesson you simpletons...)
Yeah, you do? Ok... so if we default on our debts it makes it so that those interested in buying Irish bonds in the future (so we can turn the lights on basically) will be more worried that we would default on them... so they'd demand MUCH higher levels of interest.

Can people not see and understand, or is it sheer idiocy?
I understand that the situation is intense and confusing, but think for a god damn second. If you defaulted on a loan from the bank do you think they'd turn around and give you another loan?

Sure the EU/IMF lending is not ideal, but what other choice do we have? Seriously... give me one valid option.

i used to think this but it turns out its not actually entirely true

firstly the bond markets have already factored in the possibility of us defaulting

secondly the imf were in favour of burning the bondholders so if we did it they would still lend us money in the interim(as would the eu)

there was an economist on the other day talking about a story in the wall street journal about an irish bond holder who had already decided he was willing to take 50cent on the euro and then woke up one morning the the goverment guaranteeing 100 cent and couldnt believe his luck

afaik iceland defaulted and they are back in the bond markets now and on the way to a (slow) recovery

and finally the original bond holders have long sold on the bonds at a loss say 80/90cent willing to take the smaller loss instead of taking a possibly inevitable total loss. the people who bought these bonds know the risks they are taking by buying them

hatrickpatrick · 17-02-2011 04:18PM

Oh BTW, can we differentiate please between government bonds and bank bonds. I quite agree we have an obligation to try out hardest to repay our government debt. But bank debt? They are private institutions, the taxpayer should never have had any involvement in it at all, and only does because our dear leaders didn't want any awkward silences between them and their personal friends over dinner after allowing their friends to go bankrupt as they deserved. Bank debts? Bank's problem. Let 'em rot.

Monty Burnz · 17-02-2011 04:18PM

fontanalis wrote: »

I was talking more about not guaranteeing bondholders in Anglo than defaulting on the IMF/EU package.

Yeah, as I said earlier, those guys should have definitely lost their money - indeed, so should the AIB, BOI, and INBS guys, but FFailure guaranteed the lot. :mad:

The question is, how to best handle the post-guarantee mess that FFailure have left us.

FreudianSlippers · 17-02-2011 04:18PM

sollar wrote: »

Sorry Fruedianslippers but you are showing an inability to think when you simply follow the lenihan line that there is no way out. We are being laughed at by the outside world and thanks to meek attitudes like yours we could well be doomed for generations.

Firstly, that's not at all what I'm saying. I'm not agreeing with the status quo - I think there is an alternative but I'm not apprised of all the information so I can't tell you exactly what that is.
I do know, though, that the answer is not default and burn. There may be a degree of that necessary, but it's not a black and white issue.

Secondly, it seems to be the idiots last resort here to attempt to insult someone by clumping them in with some certain party. I am not into party politics and just because I believe a certain method is preferred over another does not mean I am some FF diehard supporter.

Monty Burnz · 17-02-2011 04:19PM

hatrickpatrick wrote: »

Oh BTW, can we differentiate please between government bonds and bank bonds.

Patrick, the problem is that the government MADE the bank debt into government debt with the guarantee.

twinytwo · 17-02-2011 04:20PM

Irish Slaves for Europe wrote: »

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.

also the rate of return they are getting on the money that was borrowed is huge... they were happy to throw the money at us. If they wernt going to make some sort gain out it we would have been told to **** off.

hatrickpatrick · 17-02-2011 04:21PM

Monty Burnz wrote: »

Patrick, the problem is that the government MADE the bank debt into government debt with the guarantee.

IMO it was a corrupt decision made by a corrupt government, and rather than our next government honouring it, they should instead investigate and prosecute those politicians who very obviously made these agreements for personal rather than national reasons.

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

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