At what yield would you invest in Irish Govt. Bonds?



Astral Peaks

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While the Brians are in charge?

You have to be kidding...
 

selkies

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Think I might start investing money into Irish bonds now, if I make money on it then I can invest it into online democracy websites, if I lose money on it then the outrage will be so strong that online democracy websites won't need any help :)
 

MPB

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105% for a 2 second bond.

And they would be the longest 2 seconds of my life.
 

sport02

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The way things are going, it would be like putting money in your pockets, only to discover huge holes in your pockets later.
 

Legacy

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'€8 per bond' ;)

Seriously though, I would not consider investing a red cent because I dont believe the current government know what they are doing. Much better chance of a return if I put my money on an old nag in the 3.15...
 

feargach

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Although I find this rampant egotism deeply repellent, I wouldn't have any intellectual argument against it. If somebody wants to betray his nation, that's acceptable, regardless of how morally disgusting it is.

It is disgusting, of course. It is a factor common to all human societies that traitors such as Judas or Benedict Arnold are held is such amazingly low esteem. This appears to have evolutionary roots, as a mechanism to ensure group cohesion.

But no matter how much we emotionally identify with "ask not what your country can do for you..." I can accept the wisdom of tolerating the traitors who do the opposite.

And Ireland has given a lot to these traitors. In terms of things with a monetary value I suppose membership and citizenship of the richest political entity on Earth, the EU is the biggest one. How about no compulsory military service either, a rare fact in this world?

And the "thank you" they give when it's Ireland's hour of need and the nation needs an interest-bearing loan. Only if it bears a ruinous interest pay-off.

Repellent.
 

cozzy121

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Although I find this rampant egotism deeply repellent, I wouldn't have any intellectual argument against it. If somebody wants to betray his nation, that's acceptable, regardless of how morally disgusting it is.

It is disgusting, of course. It is a factor common to all human societies that traitors such as Judas or Benedict Arnold are held is such amazingly low esteem. This appears to have evolutionary roots, as a mechanism to ensure group cohesion.

But no matter how much we emotionally identify with "ask not what your country can do for you..." I can accept the wisdom of tolerating the traitors who do the opposite.

And Ireland has given a lot to these traitors. In terms of things with a monetary value I suppose membership and citizenship of the richest political entity on Earth, the EU is the biggest one. How about no compulsory military service either, a rare fact in this world?

And the "thank you" they give when it's Ireland's hour of need and the nation needs an interest-bearing loan. Only if it bears a ruinous interest pay-off.

Repellent.
Another sales pitch for the solidarity bond?
 

inthemire

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I'm sure Anglo must have some lending personnel who know a good deal when they see it......have they gone for it yet????

......... and AIB too of course...another financial institution of probity, and sound judgement....
 

Squire Allworthy

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It all depends on how you think the eventual default will occur and the form of that default.

If it is extending the repayment period then it is a question of how you view inflation in the years to come.

If you think that the restructuring will require one of those infamous haircuts, then what percentage? 30% 50% what? In that circumstances the bonds are overpriced. Say on 10yr it was 30% someone buying now would face an immediate loss in addition to considerations regarding inflation and the prudence of this and future governments.

I would not touch them even at current yields. It has nothing to do with loyalty or disloyalty. Why gamble on the actions of the Irish government when there are more predictable opportunities?
 

nuj

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Default, if it were to occur, would probably be in the nature of a reduction in the face value of the bonds, of some percentage or other. The bonds at this stage are travelling (certainly those in the 10 year area) at around the mid-70s per €100 face value.

For example, if there were a "restructuring" default of, say, 20% (I don't think even the gloomiest is talking outright 100% default,or anything like it), the current Irish 10 year bonds, in the mid-70s, would in fact give you your money back, and still give you a return on your investment of around double that available on German or French 10 year bonds.

On no default, they're as cheap as all get out. On a default, you have to assess both the timing and size of default you think likely. Depending on that call, you make up your own mind.

They're certainly better value than they were at 5% yields, or 6%, or 7%. Better might mean good, or just not as bad, though. It certainly looks today like some people have decided to place a bet on them being value, but it'll take an awful lot more of them to keep coming out of the woodwork, at ever higher prices, to say "panic over".

BTW, the bonds are issued by the government on behalf of the state. They are Ireland bonds, not FF/Green bonds.
 

ALAN42

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although i find this rampant egotism deeply repellent, i wouldn't have any intellectual argument against it. If somebody wants to betray his nation, that's acceptable, regardless of how morally disgusting it is.

It is disgusting, of course. It is a factor common to all human societies that traitors such as judas or benedict arnold are held is such amazingly low esteem. This appears to have evolutionary roots, as a mechanism to ensure group cohesion.

But no matter how much we emotionally identify with "ask not what your country can do for you..." i can accept the wisdom of tolerating the traitors who do the opposite.

And ireland has given a lot to these traitors. In terms of things with a monetary value i suppose membership and citizenship of the richest political entity on earth, the eu is the biggest one. How about no compulsory military service either, a rare fact in this world?

And the "thank you" they give when it's ireland's hour of need and the nation needs an interest-bearing loan. Only if it bears a ruinous interest pay-off.

Repellent.
+ 1000
 

feargach

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It all depends on how you think the eventual default will occur and the form of that default.
Are you saying there is any plausible form of bailout that would be so painless?

The terms of the bailout will be so brutal that it will dwarf the opportunity cost of lending to Ireland at low rates.

At absolute most, the total reasonable opportunity cost of significant (€5bn minimum) lending to Ireland is no more than 1.5%. If you try to get exposure to other assets, the risks and costs will eat away any other difference.

So, to make your choice rational, the burden that will be imposed by the IMF will have to be so tiny as to be worth only about 0.3% of GDP.

Do you really think that the burden that will beimposed on Ireland, and by extension, you will only be one three-hundredth of GDP per annum? Don't be stupid, it'll be somewhere between 1.5% and 5%.

So, in order to save one €1, you'll be spending €5.

I would not touch them even at current yields. It has nothing to do with loyalty or disloyalty. Why gamble on the actions of the Irish government when there are more predictable opportunities?
It's not your disloyalty that bothers me so much as your crazy failure to see that you will lose more money under the IMF that you would by buying the damn bonds, (provided you bought the bonds in concert with a large group of similar citizens).

Done correctly, buying the bonds is a way for you to lose less money. Pure selfishness and a normal desire for self-preservation ought to be motivating you here. But you're failing to include the costs of a Greek-style bailout into your calculations.

At a bare minimum, the amount you pay in taxes and service charges will shoot up by 10% when the IMF bailout arrives. And these charges will continue for decades.

Any vaguely numerate person should be able to see that the gargantuan sum represented there is vastly greater than the small discount on what you would receive as payback for the bonds, compared to other investments.

The only way that it could make sense for you is for you to emigrate, so that the IMF-imposed taxes and service charges do not apply to you.
 


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