Ireland implodes

[Mega]

http://www.independent.co.uk/news/bu...t-1664517.html

Mike

[Diarmuid]

Re: Ireland implodes

I watched the budget in Ireland today

economic recovery have has four main facets

1. Raise tax on the middle class

2. Investment in the "smart economy" and the export economy :eek:. What the the f**k is the smart economy?

3. Recapitalisation of the two major banks AIB and BOI and a the creation of a bad bank to take toxic assets (property assets in Ireland) off the books of the banks.

Same excuse given as elsewhere we need the banks to start lending again - not mentioning the fact that most people in Ireland are completely underwater sitting on property assets which have lost 40% of their value with no sight in end for where this devaluation will end and there ain't no jingle mail in Ireland rather there is however jail time for loan defaults in some cases. There wont be anybody taking "credit" in the near future in Ireland.

4. Rentention of a competitive tax base to maintain inward investment - I nearly chocked at this since most of the inward investment to Ireland is US based and I dont think many funds will be flowing inwards from the US corporations in the coming months.

Of course as usual with these things the scandal is in the detail!

Genius!! :eek:

The gang bang being undertaken on the Irish tax payer is in full flight


Forecast: Ireland budgetary position to get progressively worse in the coming months and IMF / EU funds before the end of the summer

[Paddy]

Re: Ireland implodes

This is truly depressing....

I left there in 1994, just as things were starting to improve. Never went back except to see the old folks, and I've a feeling that all the gains made since then are about to be given back. There is massive corporate and personal debt in Ireland, and while the govt debt starting off is low, the fiscal deficits will be 10% or so of GDP each year for the next 3-5 years, and that is without absorbing the massive bank losses about to transferred to the taxpayer, just like in the USA.

Notice in the Budget how there was much more tax increases than reductions in public services or public sector pay....they are afraid to grasp the nettle

Predictions:

Renewal of massive emigration

Further severe reductions in property prices.

Further collapse in tax receipts

Eventual default of some kind, with bail out from IMF/EU. (Diarmuid, not sure they get there by the end of the summer)

In 10 years when I buy a retirement home there, it'll be 30-40% of the current price...

They won't leave the EU/euro. There is really nowhere else to go, and everyone realizes it.

[Diarmuid]

Re: Ireland implodes

This is truly depressing....
the fiscal deficits will be 10% or so of GDP each year for the next 3-5 years, and that is without absorbing the massive bank losses about to transferred to the taxpayer, just like in the USA.

Hi Paddy

the goverment are perdicting 10.5% fiscal deficits I think this is optimistic (a euphemism to say the least) Irelands main trading partbers are the UK and the US and I dont think either of these is going to be doing much trading in the coming months and the country is virtually entirely dependent on export income - IF there is a recovery in these two economies in the coming months we should be fine :eek:





Predictions:

Renewal of massive emigration agree

Further severe reductions in property prices. all ready happening

Further collapse in tax receipts see above

Eventual default of some kind, with bail out from IMF/EU. (Diarmuid, not sure they get there by the end of the summer)

In 10 years when I buy a retirement home there, it'll be 30-40% of the current price... you may well be buying the land from a German

They won't leave the EU/euro. There is really nowhere else to go, and everyone realizes it. agree

[GRG55]

Re: Ireland implodes

I watched the budget in Ireland today

economic recovery have has four main facets

1. Raise tax on the middle class

2. Investment in the "smart economy" and the export economy :eek:. What the the f**k is the smart economy?...

"Smart Economy", formerly known as the "Knowledge Based Economy", and prior to that simply as "The New Economy" [circa 1999]. Still eagerly anticipated by desperate politicians who expect to see it arrive any day now via "The Information Superhighway" [apparently invented by Al Gore, in his spare time, before he discovered the world was melting :rolleyes:].

Note: Incompatible with "Shovel Ready Infrastructure"

[Diarmuid]

Re: Ireland implodes

"Smart Economy", formerly known as the "Knowledge Based Economy", and prior to that simply as "The New Economy" [circa 1999]. Still eagerly anticipated by desperate politicians who expect to see it arrive any day now via "The Information Superhighway" [apparently invented by Al Gore, in his spare time, before he discovered the world was melting :rolleyes:].

Note: Incompatible with "Shovel Ready Infrastructure"

LOL Thanks for that however after watching that fiasco today now it only hurts when I laugh

[labasta]

Re: Ireland implodes

I agree with the predictions made here, except the one about renewed emigration.

This recession is global. There may be emigration to those lands which recover first in the decade ahead, but that is a while off. The Irish will have to wallow in their own piss for a few years yet.

Speaking of which, fiancee was talking to an ex-employee (around 25 years of age) who she bumped into at the chemist. All of this girl's peers who left to find work in Australia are returning back after a few months. They found no work.

This seems to be a GLOBAL recession.

[cjppjc]

Re: Ireland implodes

and I've a feeling that all the gains made since then are about to be given back.

Not just in Ireland.

[Paddy]

Re: Ireland implodes

One other thing on this budget.....

From the Irish times.. www.irishtimes.com

"Under the system proposed by the Minister impaired assets will be transferred from the banks to the new agency with the “purpose of ensuring that banks have a clean bill of health, their balance sheets are strengthened and uncertainty over bad debts is reduced”.
He said this was to ensure a “sustained flow of credit on a commercial basis to individuals, households and businesses in the real economy”.
Distressed land and development loans in Irish banks will transfer to the new agency as these “pose the main systemic risk to the banking sector in Ireland and the most significant obstacle to the recovery and restoration of lending by the banking system”, Mr Lenihan said.
These assets will be purchased by using Government bonds, resulting in a sharp increase in gross national debt.
Mr Lenihan said the cost of servicing this debt “will be offset, as far as practical, from income accruing from the assets of the new agency”.
He said the potential maximum book value of loans to transfer to the new agency was estimated at between €80 and €90 billion, although be believes the final amount paid will be significantly less than this.
However, if the agency falls short of recouping all of the costs the Government said a levy would be applied to recoup any shortfall. All borrowers will be required to meet full legal obligations for repayment."

So magically they are going to transfer euro90bn assets/loans which are on the books of the banks to this agency, and pay for them by increasing government borrowing. Notice that there is no mention of paying market prices for these "assets" (which would obviously be much lower), as that would show to the world that the banks really are insolvent. That discussion has not even entered the MSM over there.

They hope to pay for the interest on this borrowing from the "earnings" on the loans. If that falls short they'll introduce a levy on the banks.

This is such a rip-off of the tax-payer that it boggles the mind. These loans in the end will probably be worth 50% of what they're booked at...Total Irish GNP is around 45-50bn euro, so total eventual losses that will have to be absorbed by somebody will be 100% of GDP. (90bn by 50%). And no one seems to realize it. They made a big deal about injecting 7bn into the banks and they are about to lose multiples of that, and that is not included in the projected 10% fiscal deficits.

Even if I'm exaggerating, this is extraordinary and dwarfs what is happening in the US.

I'm now wondering if I should buy AIB, BOI etc etc. This is the equivalent of the US government buying the toxic assets of C at the marks they're currently carried at, no questions asked.

Rant off......

[Diarmuid]

Re: Ireland implodes

One other thing on this budget.....



So magically they are going to transfer euro90bn assets/loans which are on the books of the banks to this agency, and pay for them by increasing government borrowing. Notice that there is no mention of paying market prices for these "assets" (which would obviously be much lower)

Thats not fully correct they will be purchasing them at a write down - what this is remains to be seen but you can be sure j6p will be fleeced as it is virtually impossible to price these assets now but for instance some of the so called assets may include stuff like green field sites around Dublin purchased for 100 Million plus - who is going to purchase these sites now for even grazing, even more distressing is the fact that they may cover speculative assets outside of Ireland in the UK and elsewhere.

This is such a rip-off of the tax-payer that it boggles the mind. These loans in the end will probably be worth 50% of what they're booked at...Total Irish GNP is around 45-50bn euro,

34B now and falling[/quote]

I think people know they may not be finance experts but then again you dont need to be an expert in the Karma Sutra to know when you are being f**ked

Concering the emigration question saw this in the gaurdian maybe people can move to China and become Comatalists

http://www.guardian.co.uk/world/2009...china-recovery

[Paddy]

Re: Ireland implodes

...and I've just realized why they're doing that. Instead of the FDIC limit of euro 250k, the government back in September or October 08 guaranteed all deposits, bonds and other liabilities of the banks. At the time they said it would not cost a cent. When they did that, they effectively absorbed the 100% GDP losses I mentioned above, they just didn't realize it. It is the equivalent of giving PIMCO govt guarantees on all the bonds they hold. So when the asset side of the bank balance sheet collapses, they've already promised to make the depositors and bond holders whole.

What is new is that this is the first time the scope of the problem is being noted in public (90bn euro), even if only in a sideways manner.

I guarantee you this will slip past the public, as everyone obsesses about the tax rate and the cancellation of the child benefits.....

[Paddy]

Re: Ireland implodes

Thats not fully correct they will be purchasing them at a write down - what this is remains to be seen but you can be sure j6p will be fleeced as it is virtually impossible to price these assets now but for instance some of the so called assets may include stuff like green field sites around Dublin purchased for 100 Million plus - who is going to purchase these sites now for even grazing, even more distressing is the fact that they may cover speculative assets outside of Ireland in the UK and elsewhere.

I doubt they've written them down that much, or at least not close to where they should be....did you see the article in the times about the developer selling 50 apartments in a week somewhere in Dublin at 1999 prices.....no way the banks have these loans carried anywhere close to their true value.

I think people know they may not be finance experts but then again you dont need to be an expert in the Karma Sutra to know when you are being f**ked

Thats funny, that is.

Concering the emigration question saw this in the gaurdian maybe people can move to China and become Comatalists

http://www.guardian.co.uk/world/2009...china-recovery

Maybe you're right about the immigration piece....first time the whole world has been screwed.

[Diarmuid]

Re: Ireland implodes

...and I've just realized why they're doing that. Instead of the FDIC limit of euro 250k, the government back in September or October 08 guaranteed all deposits, bonds and other liabilities of the banks. At the time they said it would not cost a cent. When they did that, they effectively absorbed the 100% GDP losses I mentioned above, they just didn't realize it. It is the equivalent of giving PIMCO govt guarantees on all the bonds they hold. So when the asset side of the bank balance sheet collapses, they've already promised to make the depositors and bond holders whole..

They need to take a page out of the US play book have the banks mark assets to model for the duration of the deposit gaurantee, once this period is covered the people can start to wheel out the spits and Guillotenes - dodgy finance practise for the people and by the people ;-)

[ThePythonicCow]

Re: Ireland implodes

This is such a rip-off of the tax-payer that it boggles the mind.

That's irrelevant. Those accounts don't matter anymore.

Debt, private or public, taxes, savings, ... are all old school bookkeeping. It would be stuff for the history books, except we won't be the ones who get to write them this time.

A new world order is emerging. Do not adjust the set. You are no longer in control.

[vanvaley1]

Re: Ireland implodes

A new world odor. Can't disagree with that.