Default is inevitable. Discuss.

dan_d wrote: »

What??

Well, if that's what Angela Merkel did when she heard we were guaranteeing the banks, I think her fears have proved to be groundless. If anything, it's the other way around - deposits are/were leaving Irish banks.

At the time there was a rush of deposits into Irish banks. I don't want to sound overdramatic, but our guarantee could have pushed several Eurozone countries over the financial brink. The British in particular were spitting blood down the phone at the Irish government.

I think most Irish people don't understand just how much hatred the Irish stirred up with the guarantee, while Europe was working towards a common solution we decided to go on a solo run that was supposed to solve our problem but put everyone else at risk and forced them in turn to take on liabilities they wanted to avoid. Then Lenihan had the gall to say it was a template for everyone else.

hmmm wrote: »

At the time there was a rush of deposits into Irish banks. I don't want to sound overdramatic, but our guarantee could have pushed several Eurozone countries over the financial brink. The British in particular were spitting blood down the phone at the Irish government.

I think most Irish people don't understand just how much hatred the Irish stirred up with the guarantee, while Europe was working towards a common solution we decided to go on a solo run that was supposed to solve our problem but put everyone else at risk and forced them in turn to take on liabilities they wanted to avoid. Then Lenihan had the gall to say it was a template for everyone else.

Sucked in a good chunk of deposits - first red line there is the announcement of the Guarantee, second is its expiry last year:



http://i54.tinypic.com/zmjsav.gif

That's about €17bn in Irish deposits that moved from other places, and about €40bn sucked in from "rest of world" - mostly the UK:

Savers on both sides of the Irish Sea started to empty accounts of UK banks and put the proceeds into Irish-owned banks in the wake of a controversial plan by the Republic of Ireland yesterday to guarantee all deposits.

Dublin was accused of making matters worse for non-Irish banks, with corporate treasurers and large savers pulling money out and putting it into the safer haven of Irish banks.

“If this is legal, then I’m a banana,” one disappointed senior British banker said, arguing that the Irish guarantee amounted to unfair state aid.

and:

Asked if he would go further and copy the Irish plan, Brown told the BBC: "Let's remember that the Irish are dealing with taxpayers' money here. We have got to get what is right and also what is reasonable."

He added: "I want people to know that we will do whatever is necessary, however it is necessary, to ensure the stability of the system."

The Daily Mail said the Treasury was working on a proposal that could insure 1.9 trillion pounds of deposits in British banks. It said such a plan would carry significant risks as it could shake confidence in sterling and saddle the government with huge debts.

The Independent newspaper reported on Wednesday that senior bankers were pressing the government to guarantee bank deposits in full.

British banks fear they could lose out competitively to Irish banks that enjoy the full guarantee, the report said.

The Irish pledge on Tuesday to guarantee the country's banking system triggered a flood of cash from businesses to Irish banks, a senior Irish stockbroker said.

cordially,
Scofflaw

dan_d wrote: »

What??

Well, if that's what Angela Merkel did when she heard we were guaranteeing the banks, I think her fears have proved to be groundless. If anything, it's the other way around - deposits are/were leaving Irish banks.

We do not need to threaten to leave the EU. How on earth do you perceive any benefit in that? Have all the hundreds of endless threads around here not got it through to people that sure, we could default, but we'd be the biggest losers at the end of it all? We have not got any money. Our banks are on their knees. We have put ourselves in a position whereby we are getting money from the EU, yes, but it's not a deal that's cast in stone for the next X number of years, that can't be budged. It can be.Maybe not straight away, but we will be able to negotiate it to some extent.

Merkel went nuts when Lenihan guaranteed the bank debts, google it. I think renegotiate the debt is what ppl are all talking about...It is bllsht...I owe the bank a few grand, hows about u pay it for me, in fact ill loan you the money to pay the debt and charge you interest, thanks...We can negotiate the rate as long as you let me sleep with your sister (being the CT rate)....cheers

Leaving the EU does not have to be forever, its been said by lots of commentators as a solution, leave, devalue our currency and come back in the future, i dont like that but we shud threaten to do it, play ball, stop being pussiess etc. Sarkozy and Merkel want us to increase and harmonise CT Rate so foreign multi national will go to central EU countries namely Germany and Europe, so they dont give a fk about us, so fk them... The EU leaders want the EU to work more than anything, so much power in a federal europe, like federal US and thats the end game here.

Well from what I have been reading and listening to some commentators OUTSIDE ireland, this is important as its these outside forces that would have an OBJECTIVE view. Anglo wud ahve collapsed, but so what, never took money from and Anglo ATM cos they had fk all deposits, it was property developer bank...WE could have guaranteed the deposits only.

These people recognise that the bank debt is not our debt, we are not like Greece but these outside commentators cant understand why were such push overs and just taking this, why accept this bank debt as soverign debt. greece people own there debt but there rioting on the streets, we just bitch and moan on boards.ie, trying to act like we know more than the next..

When a company is insolvent and in examinership they renegotiatie everything, from rent ,lease agreement to creditors.. and this company would owe the debt. Were finding it impossible to even talk about renegotiating to merkel and sarkozy

It turns out Lenihan did not have to guarantee the bondholders, it was a solicitor doing a finance job, its as simple as that, he had no clue what was going on, running up to McWilliams who said look at what the Swedes did and then Lenihan went off and fkd that up. He basically made us liable for foreign private investors, this we all know now. At the same time he pissed off merkel etc by doing this thinking he was clever and sealing our fate

But the important issue or the elephant in the room is that we will not be able to pay this crazy debt, if ppl think we should re-arrange or renegotiate then we really are fkn idiots, we shouldnt even be thinking of renegotiate, all we should be doing is trying to find legal loop holes to get rid of debt..Change our thinking. I would pay off anyone elses debt, why should any of my taxes pay for foreign investors debts, fk offfff. Are we the biggest clowns the world ahs ever seen, YES if we take it up the assss, like we are. The world is laughing, just watched the film Hallpass and they take the piss out of the Irish twice, we are the laffn stock of the planet.

Why pay foreign investors bad bets, we need to change our thinking away from renegotiate to 'go fk urself' were not going to be puppets paying off these debts, not even the bondholders thought the bets wud be guranateed as it says in the article Irish Eyes are Crying, the bondholder interviewd thought and ACCEPTED he lost everything and woke up with 100% guarantee, insane.

My point about leaving the euro etc is to show we have some balls, some dignity, we have been royally screwed and will be paying debt with our taxes for decades not just ten years, instead of improving our schools and hospitals.

Theres lot of chat about our natural resources and that there is estimated to over 400 BILLION of gas off west coast. Statoil own 25% of corrib gas field. They pump all there proifts from gas/oil in a pension fund for Norweigen people. We give away our gas to shell/statoil for nothing, because we dont have the balls to take it under control. That makes me sick to think the Norwegian oil and gas industry in controlled by government for the befit of the people, the pension fund is one of the biggest funds in the world....

I just think our problems come down to our political system, the qualtiy of our politicians leave alot to be desired, some i like but there not qualified for the job... Now we have a school teacher for Taoiseach and teacher for Minister for Finance, if Bruton didnt fk up he wud be the Min for Fin, at least he would be qualified, so again the best interests of the people are parked over rivalry issues...

Again ill put these two articles up and please read them....

http://www.afri.ie/wp-content/uploads/2010/05/The-Great-Gas-Giveaway_2009.pdf

http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103

ei.sdraob wrote: »

Subject will be discussed on prime time @ rte1 on at 9:30 this evening

Thanks for letting us know, although I feel like its a deja vu moment, reminds me of morgan kelly moment telling us we are going into economic crisis and all the EXPERTS telling us were fine, were different...

Now everyone believes this banking debt should be shouldered by us AND we can handle it...

http://www.youtube.com/watch?v=11CCxv2ueiQ

Hopefully Morgan Kelly is on the show tonight because he has repeatedly got it right, not one person on boards.ie could even pretend to know whats going on, so listen to him.........

Read this article, it makes me sick, literally, we should all be on the streets tearing the heads off Fianna Fail, not voting back in Brian Lenihan, the ppl who voted for him should be ashamed of themselves, for either not knowing how he screwed us or knowing and voting...

'Mr Lenihan said he had no regrets" of his time as minister for finance.' ...No embarassment, he just got voted the worst finance minister in Europe...No he is blaming Cowen for lack of leadership...Bunch of clowns, I was thinking they wud end up with great jobs in europe, but i dont think they wud take these rejects. It really goes to show wth a bit of pull and nerve anyone could be taoiseach. Lenihan probably wud have become the next taoiseach, now we have two ex teachers running the show noonan and kenny

http://www.irishtimes.com/newspaper/opinion/2010/1108/1224282865400.html

or even people who didnt bank with dodgy casinos like AIB and Bank of Ireland.

The point is that these have the largest bank branch networks in the State and the ordinary punter has his account there because these are the only two banks in his town, not because of a judgement on their lending policies, he relied on the government to ensure that these were sound enough so that he would get his money back.

I see there is a primetime on tonight which will be looking at the Subject of Ireland and Default:
http://www.rte.ie/news/2011/0315/blog-15march2011_primetime.html

A Question Of Default (VIDEO)

Ian Kehoe blogs ahead of tonight's Prime Time, which tackles the thorny and contentious issue of default:

Despite the pre-election rhetoric, the Irish Government is not seeking to burn those banking bond holders. However, they have now acknowledged that the burden of the bank liabilities, coupled with our historic debts, would soon reach a point where sustainability would be a major issue.

PeterIanStaker wrote: »

Default is inevitable. Discuss

Here is an alternative take on it that generally goes by the numbers. It concludes (emphasis mine): I don't think there are too many commentators who think the final cost will come in at around €80 billion. Many suspect it will be €100 billion (or more!) but it the absence of actual figures the piece makes a nice counter balance. I hadn't really considered that a portion of the money wasted on the bank bailout won't actually be borrowed. It suggests the extra debt burden will be something around €53 billion but I can't really see us being able to sell the big banks at a price to reduce this coming to pass.