Comments on: Ireland Bailout

Ireland Bailout

(Arsenio) Hall and (Warren) Oates — Sat, 13 Nov 2010 13:30:05 -0800

The Republic of Ireland is in preliminary talks with EU officials for financial support, the BBC has learned. Q&A: Irish bond crisis.

By: Naberius

Naberius — Sat, 13 Nov 2010 13:35:06 -0800

It's Goldfinger again. He's stolen the entire Irish bullion reserve. The country's in a state of crisis. Now the EU and her Majesty's Government are in talks to provide loans to meet immediate obligations. But you have to find Goldfinger and recover the bullion before the entire financial system collapses. So are you saying that we're in a... Yes, 007, this is an Irish Bond crisis.

By: chavenet

chavenet — Sat, 13 Nov 2010 13:48:08 -0800

Irish aid package could be 45-90 bln euros-sources BRUSSELS, Nov 13 (Reuters) - European Union financial aid for Ireland under discussion could be between 45 and 90 billion euros, depending on whether Dublin would need support for its banking sector, euro zone sources said on Saturday. Ireland has not formally applied for EU aid, but euro zone sources told Reuters on Friday that talks on such a possiblity were already under way.

By: seanyboy

seanyboy — Sat, 13 Nov 2010 14:00:58 -0800

By: Brian B.

Brian B. — Sat, 13 Nov 2010 14:14:29 -0800

At least they have fewer qualms about working at McDonald's.

By: furiousxgeorge

furiousxgeorge — Sat, 13 Nov 2010 14:14:49 -0800

Sounds like austerity is working out well.

By: gcbv

gcbv — Sat, 13 Nov 2010 14:25:59 -0800

I just back from Ireland, after a six month stint there. No one, and I mean NO ONE, is happy about this.

By: Rhaomi

Rhaomi — Sat, 13 Nov 2010 14:28:07 -0800

Erin Go Broke?

By: Catblack

Catblack — Sat, 13 Nov 2010 14:29:23 -0800

I just got finished reading this Rolling Stone article by Matt Taibbi which describe Birmingham, Alabama's woes. Ireland is in similar straights, though on a countrywide scale.

By: the cuban

the cuban — Sat, 13 Nov 2010 14:33:27 -0800

their day has come.

By: Despondent_Monkey

Despondent_Monkey — Sat, 13 Nov 2010 14:37:49 -0800

I wouldn't be surprised if China starts buying Irish bonds - they have done the same for Greece and Portugal. This would probably help "save" Ireland if it happened - huge Chinese buying would depress Irish bond yields and the swaps on them would likely fall. I think China's willingness to step in for the Eurozone and buy its members' bonds has been a brilliant move - not only does it offer China a high yield compared to US Treasuries, it diversifies their foreign holdings. China has an interest in keeping the Eurozone together so that there's a competitor to the dollar as a reserve currency. The EU is also a huge trading partner, so the move earns China significant goodwill. Ireland's economic situation has in many ways mirrored that of the US over the past decade - they had an absolutely massive property bubble fueled by cheap credit (and real estate speculators) that exploded with the financial crisis, and now the country's in bad fiscal shape. Interestingly, a lot of right wing pundits in the US were touting Ireland's extremely low corporate tax rate and encouraging America to do the same - the problem with that, as you can now see, is that the government can't raise any revenue, and so they'll probably have to raise taxes and make brutal spending cuts. I hope Mutant sees this thread and weighs in - I'm very interested to see how these negotiations turn out.

By: Abiezer

Abiezer — Sat, 13 Nov 2010 14:49:40 -0800

Swingeing cuts made as per the neoliberal nostrums, in return further punished by the markets. Might as well have got out on the streets like the people of Spain and Greece. a state of crisis The whole world's in a state o chassis!

By: vectr

vectr — Sat, 13 Nov 2010 14:54:20 -0800

Ireland is effectively insolvent – the next crisis will be mass home mortgage default Direland.

By: psychostorm

psychostorm — Sat, 13 Nov 2010 15:05:08 -0800

And yet RTE and many of the national newspapers are still reporting the Government's denial of any bailout or bailout discussions whatsoever. gcbv, you're damn right that nobody here is happy about this. It appears that the most vulnerable here are the first ones to have services and resources cut as a result of predatory (and in some cases outright dodgy) financial practices they had no part in- but then again, 'twas ever thus.

By: chavenet

chavenet — Sat, 13 Nov 2010 15:05:49 -0800

Poor Celtic Tiger, burning bright.

By: Diablevert

Diablevert — Sat, 13 Nov 2010 15:11:05 -0800

this new tiger economy was just as flawed as the old. Eh, you were doing alright right up until you guaranteed your banks. Of course the fact that seemingly half the budget was stamp duty was also a wee bitty problem. The Wall Street Journal actually had a quite excellent and readable summary of the crisis earlier this week. (If the link is paywalled for you, google the article title and click in from google; WSJ drops the paywall for searchers.)

By: (Arsenio) Hall and (Warren) Oates

(Arsenio) Hall and (Warren) Oates — Sat, 13 Nov 2010 15:13:36 -0800

What's the article title?

By: Diablevert

Diablevert — Sat, 13 Nov 2010 15:15:06 -0800

Oh, sorry, that was rather thoughtless of me. "Ireland's Fate Tied to Doomed Banks" is the title of the article.

By: Malor

Malor — Sat, 13 Nov 2010 15:18:00 -0800

Remember when the tiger economies collapsed, and everyone laughed and they said that would never happen in Europe. And they renamed Ireland the new tiger economy... Obvious now, but at the time I didn't see we were all lying to ourselves, and this new tiger economy was just as flawed as the old. This is the nature of economic booms. People love, love, love them, but it's very rare that they're sustainable. The bigger the boom (or the bubble), the more waste and fraud accumulates. The vast majority of perfectly honest businesses and workers just get sloppy and lazy about money and debt, and the genuinely bad guys are pulled in like roaches. You essentially always get a bust for every boom, where the waste and fraud are purged. The busts are incredibly important to capitalism -- it's how bad ideas are removed from the system. What they've been trying, for the last thirty years or so, is boom-only capitalism, driven by excess liquidity/outright monetary disorder from the Federal Reserve. This is another way of saying fraud- and waste-only capitalism. The poisons of lack of fiscal discipline and excessive debt issuance have accumulated to the point that they're taking out the the fringe economies, the ones on the periphery. They're collapsing early because they were small and weak to begin with, but the rot will continue to spread inward, taking out larger and larger economies as it goes. Essentially, the entire world has turned itself into Ponzi Economics, and it's all being driven by the United States. Between our profligate Congress, with its absolute refusal to pay for what we use, and our profligate Fed, which will do anything required to prevent even minor economic adjustments, the poisons just keep spreading. Eventually, countries are going to figure out that using dollars as the world's reserve currency is an extremely bad idea, and that pain today to avoid a great deal more pain tomorrow is worth suffering through. Once they internalize this truth, things are going to go into crisis, here in the center, in very short order.

By: Marisa Stole the Precious Thing

Marisa Stole the Precious Thing — Sat, 13 Nov 2010 15:24:14 -0800

Its current deficit is an unprecedented 32% of gross domestic product, if the one-off cost of bad debts in the Irish banking system is included. Holy moly.

By: mullingitover

mullingitover — Sat, 13 Nov 2010 15:29:33 -0800

Malor: "Eventually, countries are going to figure out that using dollars as the world's reserve currency is an extremely bad idea, and that pain today to avoid a great deal more pain tomorrow is worth suffering through. " I think the rationale for using the dollar and propping up the US is that a rich person with a stunning array of weaponry is a lot less scary than a desperate and poverty-stricken person with a stunning array of weaponry.

By: Throw away your common sense and get an afro!

Throw away your common sense and get an afro! — Sat, 13 Nov 2010 15:29:39 -0800

Malor, we've been out here all goddamn day. The sky hasn't moved one tiny bit.

By: vectr

vectr — Sat, 13 Nov 2010 15:31:21 -0800

~~celtic~~ paper tiger.

By: Malor

Malor — Sat, 13 Nov 2010 15:31:29 -0800

Oh? What's your house worth these days? Feeling secure about your employment? Shame about Greece, eh?

By: vectr

vectr — Sat, 13 Nov 2010 15:34:28 -0800

Grecian ~~earn~~ urn

By: wierdo

wierdo — Sat, 13 Nov 2010 15:37:41 -0800

Malor wrote: "What's your house worth these days? Feeling secure about your employment? Shame about Greece, eh?" More than it was two years ago when we bought it or five years ago. Yes, quite, my clients are mostly doing pretty well. Yep, damn shame.

By: AmbroseChapel

AmbroseChapel — Sat, 13 Nov 2010 15:38:28 -0800

I would very much like to hear from Malcolm Gladwell on this topic, as he's the one who explained to me back in 2006 why Ireland's economy was so strong.

By: kgasmart

kgasmart — Sat, 13 Nov 2010 15:44:48 -0800

Essentially, the entire world has turned itself into Ponzi Economics, and it's all being driven by the United States. Between our profligate Congress, with its absolute refusal to pay for what we use, and our profligate Fed, which will do anything required to prevent even minor economic adjustments, the poisons just keep spreading. I think that's right, but the part we often tend to leave out is that governments specifically seek to mitigate (or eliminate) the "bust" part out of a need to preserve social order. The U.S. unemployment rate is at 9.6 percent even with the rot; what might it be were the powers that be to say - you know, we're just going to let this forest fire burn and consume what it will, so when it's over we'll have a healthier forest. That may very well be the case; but how many get burned in the meantime?

By: Damienmce

Damienmce — Sat, 13 Nov 2010 15:45:01 -0800

No one, and I mean NO ONE, is happy about this. Just get the bus North. I believe they're called Unionists.

By: Elmore

Elmore — Sat, 13 Nov 2010 15:48:50 -0800

Well, all I can say is that I'm glad Metafilter only cost me a fiver.

By: Elmore

Elmore — Sat, 13 Nov 2010 16:06:00 -0800

Flagged for reminding me on a Saturday night that my future is mightily bleak.

By: R. Mutt

R. Mutt — Sat, 13 Nov 2010 16:06:49 -0800

When I was a kid, there were times that my Irish Catholic mom would make us potato pancakes for dinner - two or three nights in a row. At the time, I had no idea that it was because of money issues. They were wonderful. (Wipes tear .... buys crappy potato pancake from prepared food section of Whole Foods.)

By: Elmore

Elmore — Sat, 13 Nov 2010 16:18:38 -0800

That reminds me of the story some old fogey told me about having bread, milk and point. You had a cup of milk, a slice of bread and the point of a finger at the salted bacon hanging over the fire for flavour.

By: ersatz

ersatz — Sat, 13 Nov 2010 16:22:22 -0800

The IMF and EU had to step in with a 110bn-euro bailout package for Greece in May, sparking a Europe-wide sovereign debt crisis. Probably meant to say sparked by a Europe-wide sovereign debt crisis. wiki # 27 Apr.: S&P downgrades Portuguese debt two notches and issues negative outlook, warning that further downgrades to junk status are likely. Stock indices around the world drop two to six percent on the news. # 28 Apr. S&P downgrades Spanish bonds from AAA to AA- I'm glad that the EFSF exists, but this is going to be tough on the Irish nevertheless. My Greek-Irish friend mustn't be in a great mood right now.

By: KokuRyu

KokuRyu — Sat, 13 Nov 2010 16:36:25 -0800

In 2004 I moved back to Canada after spending 10 years in Japan. The housing boom had been in full swing for a couple of years, and things would only continue to heat up. As a result, my wife and I shared a house with another couple our age who for various reasons were shut out of the housing market, too. They were from the UK originally, waaaay back, but had emigrated in the late 80s to Canada, and were working class through and through. They occasionally returned to Britain, notably in 2005. "Everybody's got a second house, man," is what they said. "Everyone has got a little summer place in Spain. Friends of ours who are prison guards own a Porsche and BMW motorcycles. Britain is doing really well. It's easier to get ahead there than Canada." Of course, it was all borrowed money, and the world came crashing down. Canada has suffered over the past couple of years, but it's nothing like Ireland, Britain, or the US.

By: dhens

dhens — Sat, 13 Nov 2010 16:42:22 -0800

Jeremy Paxman's interview with Ireland's Finance Minister, Brian Lenihan, 9 November 2010 Paxman asks Lenihan if Ireland will have to go to the EU for a bailout. Lenihan starts out by saying no, though he later says that he can't guarantee anything.

By: Skeptic

Skeptic — Sat, 13 Nov 2010 17:12:41 -0800

Remember when the tiger economies collapsed, and everyone laughed and they said that would never happen in Europe. And they renamed Ireland the new tiger economy... I think that the conclusion is that, if your country is named a "tiger" by the usual shills in the financial press...it's time to get the Hell out of there.

By: wallstreet1929

wallstreet1929 — Sat, 13 Nov 2010 18:02:14 -0800

Fiscal Crises and Imperial Collapses: Historical Perspectives on Current Predicaments, Niall Fergeson.

By: humanfont

humanfont — Sat, 13 Nov 2010 19:55:38 -0800

The Chinese need to stop printing RMB to keep their currency artificially low and stimulate exports. They need to stop selling things to Americans and Europeans and sell more stuff internally. They need to buy things other than mortgages from the United States and Europe. Then everything will kind of work itself out.

By: atrazine

atrazine — Sat, 13 Nov 2010 21:26:55 -0800

They need to stop selling things to Americans and Europeans and sell more stuff internally Most Chinese manufactured products are actually sold internally.

By: raysmj

raysmj — Sat, 13 Nov 2010 21:47:19 -0800

Rupert Murdoch moved to the US because federal law required him to have citizenship if he wanted to own TV stations here. He apparently was not eligible for dual citizenship. It was money, not love, that brought him to the States.

By: raysmj

raysmj — Sat, 13 Nov 2010 21:48:53 -0800

Woops. Wrong discussion. Please delete! Thanks.

By: happyroach

happyroach — Sun, 14 Nov 2010 03:51:13 -0800

Remember, life in Ireland is sooooooooo much better than it is in the U.S., so everyone should move there. And the Irish will really appreciate tens of thousands of expats coming in to get jobs and use public services. And even better, if you need a job, you can just teach English!

By: humanfont

humanfont — Sun, 14 Nov 2010 04:32:17 -0800

Most Chinese manufactured products are actually sold internally. My point is that domestic consumer spending in China accounts for 35% of GDP and exports makeup another 35%. This is atypical. Look at India where it's 57/24.

By: Wolof

Wolof — Sun, 14 Nov 2010 04:43:33 -0800

if you need a job, you can just teach English! *snickers*

By: The Lady is a designer

The Lady is a designer — Sun, 14 Nov 2010 04:56:23 -0800

Eventually, countries are going to figure out that using dollars as the world's reserve currency is an extremely bad idea, and that pain today to avoid a great deal more pain tomorrow is worth suffering through. Once they internalize this truth, things are going to go into crisis, here in the center, in very short order Funny dat, at a party last night I got into a conversation with the regional head of a Nordic bank and she actually brought up this exact point. The eurozone has many challenges - different cultures, countries, languages, higher barriers to worker mobility etc etc as compared to the equivalent sized economy of the US, which is one nation. Otoh, as was described to me, it sounded like the very challenges could also be a strength, that is, the diversity of the eurozone was a strength. You have strong arms and weak knees or whatever :) I gathered a sense of community and helping each other out, like a squabbling yet close knit family (i.e. Greece and Portugal's problem for eg) which may point to greater resilience in the longer run. There's been talk of choosing between basket of currencies and the Euro for some years now and I recall discussing that with Mutant. It seems to me that now its moving more towards the Euro itself, as the risk is distributed across a wider range of economies. I'm sure that the ideal for all the bankers would be make the shift with as little pain as possible, especially to China who would have the most to lose. Its becoming like "Oh, go to the dentist already and get teh rotty tooth pulled out" ;p I think the question now is when to have the crisis - in the spring or the summer - rather than how not to have it.

By: WPW

WPW — Sun, 14 Nov 2010 07:55:30 -0800

Dang, Abiezer got there first with the Sean O'Casey. I've been thinking of Juno and the Paycock since the Guardian's spread on Ireland earlier in the week. Great play. Britons, this is what austerity gets you. Cameron had better ready the Number 10 guest rooms for the men from the IMF.

By: Naberius

Naberius — Sun, 14 Nov 2010 14:29:06 -0800

And even better, if you need a job, you can just teach English! No, that doesn't sound right. I'm pretty sure you're thinking of Scotland.

By: wierdo

wierdo — Sun, 14 Nov 2010 21:26:40 -0800

The Lady is a designer wrote: "It seems to me that now its moving more towards the Euro itself, as the risk is distributed across a wider range of economies." The irony is that that wider range of economies generally run bigger deficits (as a percentage of GDP) and have a worse debt-to-GDP ratio than we do, especially as the Eurozone takes in more former Soviet bloc countries. Not that I think diversification is a bad thing for anybody but the US.

By: kernel_sander

kernel_sander — Sun, 14 Nov 2010 22:19:52 -0800

I've seen a lot of talk since this crisis began about moving from the dollar to the euro as reserve currency, but I must confess I don't understand a word of it. Germany and France may be doing well but Greece, Ireland, Spain, Portugal and Italy are all in various stages of disaster. Not only that, but Greece and Italy are both excellent examples of how outrageously Eurozone countries can flaunt the rules and still be part of the union. I'm not at all convinced they represent a better solution than the dollar. I think there is no solution. The fiscal crisis is global and systemic; we'll all just have to tough it out and hope.

By: dng

dng — Tue, 16 Nov 2010 05:23:27 -0800

They were from the UK originally, waaaay back, but had emigrated in the late 80s to Canada, and were working class through and through. They occasionally returned to Britain, notably in 2005. "Everybody's got a second house, man," is what they said. "Everyone has got a little summer place in Spain. Friends of ours who are prison guards own a Porsche and BMW motorcycles. Britain is doing really well. It's easier to get ahead there than Canada." This isn't and wasn't ever a realistic picture of Britain, except possibly for a tiny middle-aged, middle-class subset that were helping to fuck everything up for everyone else. It was easier to get ahead only if you were lucky enough to already be ahead, especially in regards to the housing market.

By: wierdo

wierdo — Tue, 16 Nov 2010 06:23:14 -0800

dng wrote: "This isn't and wasn't ever a realistic picture of Britain, except possibly for a tiny middle-aged, middle-class subset that were helping to fuck everything up for everyone else. It was easier to get ahead only if you were lucky enough to already be ahead, especially in regards to the housing market." What was realistic among the middle class set (IOW, the ones who already owned houses) was selling their house in the UK around 02-03 and coming here and buying a huge new house in Florida and still having some money left over. They're the ones who don't care that their home price has fallen by half because their house more than doubled in value between the time they bought it and 2008 when the market fell apart.

By: The Lady is a designer

The Lady is a designer — Tue, 16 Nov 2010 10:06:10 -0800

The Lady is a designer wrote: "It seems to me that now its moving more towards the Euro itself, as the risk is distributed across a wider range of economies." The irony is that that wider range of economies generally run bigger deficits (as a percentage of GDP) and have a worse debt-to-GDP ratio than we do, especially as the Eurozone takes in more former Soviet bloc countries. Not that I think diversification is a bad thing for anybody but the US. I'm still digging for the link because I can't recall if it was one of kliuless' or something else I read that said that the countries that were suffering in the eurozone were the ones who had most closely followed the pattern of increasing debt, rising housing bubble and playing the stock market.

By: wierdo

wierdo — Tue, 16 Nov 2010 12:22:14 -0800

You'd think that would be the case, but you'd be (mostly) wrong. Yes, the countries with the larger housing bubble are the ones stealing the headlines. What nobody mentions is that banks in every Eurozone country were lending money on what has now turned out to be a pile of shit, not just the banks in the bubbliest countries. Those German banks got into just as deep shit as the Irish banks or anybody else. They're just bigger so they were better able to paper over their losses. Sort of like JP Morgan or Bank of America here in the US. They're just as fucked as anybody, even as the eyes have mostly been on Citibank. Sure, Citibank might be more fucked than the others, but they're all so fucked that it's a difference between failing spectacularly and failing slightly more spectacularly. I have no doubt that there will be more bank rescues. And it's looking like the Euro is about to get into some deep shit itself. It'll be interesting to see what happens.

By: The Lady is a designer

The Lady is a designer — Tue, 16 Nov 2010 12:27:05 -0800

Yes, you are right. What was I thinking...

By: dng

dng — Sun, 21 Nov 2010 13:00:13 -0800

Ireland confirms EU financial rescue deal The Republic of Ireland and the EU have agreed a financial rescue package, Irish Prime Minister Brian Cowen has confirmed. Mr Cowen said the amount and terms would be negotiated in the coming days with the EU and the IMF. Irish Finance Minister Brian Lenihan said the amount would be less than 100bn euros (£85bn; $136bn).

By: Elmore

Elmore — Sun, 21 Nov 2010 14:04:22 -0800

Press Conference

By: Elmore

Elmore — Sun, 21 Nov 2010 14:11:05 -0800

More seriously, TV3 will be broadcasting a "Crisis Special" without IP restrictions in about 20 minutes. (Warning: obnoxious ad).

By: Abiezer

Abiezer — Mon, 22 Nov 2010 00:17:16 -0800

Paul Mason's take:

What I don't think most people have realised is that the moment has just happened where Ireland's "shared sovereignty" with Brussels has tipped into very scant economic sovereignty. The IMF will be on their case in real time: probably quarterly reviews where the EC or IMF can just come in and tell them to intensify austerity. The Irish politicans on the TV are still talking about shared sovereignty as if nothing's happened. But, as they say, "Earth to Ireland's political class and media": getting your country's budget controlled from outside is not a normal part of the shared sovereignty arrangement. It is abnormal. Likewise Anglo-Irish and Allied Irish banks look like they will soon be sold at knockdown prices to bigger, more solvent EU banks. Losing nationally owned banks is not normal either.