By David Mc Williams
Anyone who worked in financial markets will know that — at its most base — the “market” is in fact only a coked up, whoring 28-year-old from Basildon on hyper-wages, with a Porsche and a Chelsea season ticket.
This is hardly the type of far-sighted leader that we should be depending on, nor the opinion we should be worried about. Has he become the arbiter of economic policy in the early 21st Century? Is this where we have got to? The young lad in London who is “shorting” the European bond market mightn’t easily find Florence on a map and his geopolitical interests might not go further than the price of a footballer’s transfer fees in the closed season and who won ‘The X Factor’…
full article at source:http://www.davidmcwilliams.ie/2011/08/10/banks-that-think-theyre-casinos-put-us-all-at-risk
Sunday, May 29, 2011 – 11:58 AM
According to the Examiner.ie .Minister for Transport Leo Varadkar has warned that Ireland may need another bailout. He is the first minister to make that admission.
Minister Varadkar said it was unlikely that Ireland would be able to raise money from the international bond markets next year as originally planned.
In an article published in the Sunday Times today, Minister Varadkar said we might be able to return to the markets “some time” in 2013.
That “would mean a second programme (would be required),” he said, “either an extension of the existing programme, or a second programme. I think that would generally be most people’s view.”
Former head of Libertas Declan Ganley said it had been obvious since before the General Election that a second bailout would be necessary.
“This is the cost of not purging the insolvency from our economy,” he said. “Ireland can pull out of this…but we have to get rid of the insolvency of the bank debt that has been left hanging over us because otherwise, of course we can’t revisit the markets.
“Government policy today says we should carry this millstone of bank debt around us…Who’s going to lend money to us in that case
Read more: http://www.examiner.ie/breakingnews/ireland/varadkar-we-may-need-second-bailout-506852.html#ixzz1NlVEVRSi
Just last week MR. Edna Kenny Stated in the Dail that there will be no need for Ireland to renegotiate its EU /IMF Bailout loans .There is no need for new loans and there is no need to extend the time we received to pay these loans back .I said then and I say again this is cloud chookoo land this man is living on .We then hear today not even a week gone by when the Minister for Transport Leo Varadkar comes out with this .You couldn’t write this stuff lads. Let this be yet again another warning the sh** is about to hit the fan and it’s all coming our way! The boys are getting ready to sell off anything that isn’t tied down, and I mean everything and anything!
It’s “devoid of any substance and verge on the ridiculous” according to the Greek finance ministry but as Greek 10-year bonds touch even greater highs this afternoon – presently trading at 14.9% mid-point – it seems that something may be afoot in bond markets. The claim is that a Citibank employee was responsible for an email which speculated that Greek authorities might seek to implement a restructure/default/burden-share scheme over the Easter holiday weekend.
Meanwhile, Ireland’s 10-year bond has reversed all the gains since the announcement of the stress test results on 31st March, 2011 and are presently trading at a record 10.28% mid-point compared with a previous record closing of 10.22% just before the announcement of the stress test results and details of the bank restructuring. Portugal’s 10-year bond is also in record territory trading at 9.5% mid-point. If there is any cheer it is thatSpain’s 10-year bond has eased back today to below 5.5%. It is still a mystery on here as to howSpain’s banks are so healthy and their property sector so relatively unscathed by the financial crisis and construction and housing bubble.
The concern is thatGreecewill default and thatIrelandwill follow closely on her heels. And if a default is inevitable forIrelandthere are actions that can be undertaken now to try to make the default as orderly and inexpensive as possible. Dealing robustly with bondholders (senior and subordinated) would fall into that category of discussion.
full article source: http://namawinelake.wordpress.com/2011/04/21/citibank-email-sparks-rumours-of-greek-default-over-easter-weekend/
There was a tongue-in-cheek entry on here during the week on the appearance of a new category heading on the debt maturity profile webpage of the NTMA. The new heading of “Liquid assets” had a garish “Barney the Dinosaur” shading and a little fun was had at the expense of the NTMA who had inserted an asterisk after the heading “Liquid assets” but not explained what the asterisk meant. There has been a short reply from the NTMA to say that it has now removed the asterisk and that “Liquid assets” refers to “Exchequer, Deposits and CSRA [Capital Services Redemption Account] account balances”. I am still awaiting a response to a follow-up query which asks if these funds are 100% available for debt redemption and what will happen in 2012 when then the funds will be exhausted. Although the entry was an attempt at some light-hearted relief, it had a more serious edge in asking how Ireland was going to fund debt that was maturing in coming years. And lo and behold, the EU produces a document yesterday which gives us the answer – we need return to the bond markets next year, in fact in a little over 12 months.
The report “The Economic Adjustment Programme for Ireland” written by the Staff of the Directorate-General for Economic and Financial Affairs is described as an occasional paper but we can expect similar reviews in future as part of our participation in the EFSF/EFSM bailout. It seems ludicrous but this document is the first publicly available that has a serious stab at addressing how Ireland is to fund its deficit AND maturing debt in the coming years. And it seems to confirm what has been suggested on here for some time – the €85bn bailout is not enough* to fund the State to 2014 and we will need return to the debt markets earlier – 2012 according to this report which says (PDF page 41)
“The Irish government does not need to tap international bond markets until the second half of 2012, but will gradually return to the markets thereafter. Available funds allow financing fiscal needs amounting to some €30 bn until end-2011, €17 bn in 2012 and €2 bn in 2013. Underlying this are assumptions of roll-over rates of maturing long-term debt of 0% until end-2011, 20% in 2012, and 80% in 2013. A further conservative estimate underlying the programme is that the rollover of short-term debt is significantly impaired in 2011 and access to private short-term debt funding will be restored only gradually.”
The maturing debt according to the NTMA this morning is €13.679bn in 2011, €6.852bn in 2012, €7.137bn in 2013 and €12.964bn in 2014. So it would seem the return to the bond markets in 2012 might be limited. That said, recent GDP projections seem to be consistently undercutting the government’s projections. And I see nowhere a reference to financing needs at NAMA (€5bn, and I note that the NAMA website still says that “Programme details will be published in Q4 2010” in respect of what I understand to be its abandoned medium debt programme) The elephant in the room (or should that be purple dinosaur!) is the future treatment of ECB and CBI emergency liquidity assistance. We can hope that funding markets regain confidence in Irish banks but if not, will the €180bn+ overdraft from the ECB and CBI today need be turned into a term-loan and added to the bailout?
And lastly, this is a politically impartial blog but it seems that the political mantras “we are fully funded to 2014” and “we won’t need return to the bond markets until 2014” are just plain false, which has been clear on here for some time but now the EC has confirmed the need to return early to the markets for funding. Given we are in the midst of a general election campaign, perhaps we might get some constructive and better informed debate on our debt options.
* The €85bn bailout is earmarked for deficit funding (€50bn) and bank capitalisation (up to €35bn). Central Bank governor, Patrick Honohan continues to claim that the bank recapitalisations might be contained in €10bn and that €25bn of the bailout might not therefore be needed. Others have suggested that we will need more than €35bn. The current stress testing of the banks might help clarify the position. There are two main reasons on here for suggesting the €85bn is inadequate – debt redemption of some €38bn in 2011-2014 and the expected need to replace ECB and CBI ELA with State funds.
Again the lies of the current Government have been exposed we were supposed to have taken the IMF/EU bailout in order to be able to stay away from the Bond market for up to 4 years and now we see that we will need to go back in less than 12 months
Is there any credibility in anything any of the established political parties now say?
Roll on “Independence Day” when the people of Ireland will have real people looking at the books!
We need to know the real story and this drip drip feed is only prolonging the severity of the financial crises .The markets need clarity and there will be no recovery until the totally bankrupt Lenihan and his band of misfits in the Department of Finance get the boot.
We the people deserve to be told the truth however bad it is !