How much of our banking debt should be taken up by the Eurozone?

McDave

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You apparently expect widows and orphans in this country to pick up the tab for the stockmarket losses of investors. Every investor knows the phrase ''Caveat Emptor'' and losing your investment is a hazard of the profession. Expecting to be bailed out by widows and orphans because your investment failed is ludicrous. I'd no more expect bonds from Enron to be guaranteed by the USA than bonds from AIB/Anglo/Boi etc to be guaranteed by the Irish State.
I expect adult Irish voters to pay the price of their profligacy and irresponsibility. All that "growth" we experienced over the last ten years was the frontloading of asset and consumer spending at the expense of future generations. It was obvious to me as it was happening. It should have been obvious to others as well. But somehow average Irish people chose to ignore the reality under their noses and go along with the charade. Now the game is up, and it's time to pay the bill.

As to widows and orphans, unfortunately it will probably be the weakest who suffer the most. But, hey, that's not my fault Fionn. I never voted FF.

Notwithstanding this, I should put it on the record that I hope the new government revisits Lenihan/FF's sell-out of the Irish people for Anglo and INBS and makes it clear to the EU that their losses must accrue to bondholders. Hence my OP.
 


atlantic

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People are more interest in" I'm some sort of a yoke get me outta here " dancing on ice, x factor or what ever they are called them other reality shyte shows.We have a dumbed down society, listen to the people on Joe Duffy today spending 40 euros ringing in to vote on the show Mary from Tesco's was on, another woman was threatening to slap the other wan that won around the place .If you start talking any bit of economics or politics to people they run for the hills ,it bore the heads of them.I was warning builders friends of mine that a major crash was coming and watch out ,I was laughed at.I was lambasting Ahern and his policies for years and nearly got clattered a few times, people do not want to hear the truth.
I honestly think responsible adults should do the following:

- Vote for responsible political parties;
- Take responsibility for their financial affairs.

Voting for FF, paying double the value of a house, buying an SUV, bingeing on credit cards is not responsible behaviour. If voters buy propaganda, then more fools them. I've no respect for people who fell for Ahern's superficial charms. We live in a democracy. And a democratic society is only as good as the what it's adult voters make it.
 

McDave

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People are more interest in" I'm some sort of a yoke get me outta here " dancing on ice, x factor or what ever they are called them other reality shyte shows.We have a dumbed down society, listen to the people on Joe Duffy today spending 40 euros ringing in to vote on the show Mary from Tesco's was on, another woman was threatening to slap the other wan that won around the place .If you start talking any bit of economics or politics to people they run for the hills ,it bore the heads of them.I was warning builders friends of mine that a major crash was coming and watch out ,I was laughed at.I was lambasting Ahern and his policies for years and nearly got clattered a few times, people do not want to hear the truth.
That's true to a much larger extent than I'm personally happy to accept. If citizens are content to subcontract their responsibilities out to politicians, dodgy or otherwise, then they have to live with the consequences of not thinking for themselves. The bottom line remains though that if someone is able to incur a debt, then they've got to be able to deal with the consequences of paying it off. I can't help concluding though that this X-Factor mentality is a large part of the reason why we're in the doodoo.
 

atlantic

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We live in a nanny state , the government love it that way ,it makes people more dependent so buying votes and using other people money comes easy for our political classes ,that why they always run out of it.How many people Mc do you know that are employee's know how to calculate their own taxes , feck all ,all they know is what they want into the hand.They do their job go home don't worry watch xfactor and relax , leave the worrying to someone else until it's to late .

That's true to a much larger extent than I'm personally happy to accept. If citizens are content to subcontract their responsibilities out to politicians, dodgy or otherwise, then they have to live with the consequences of not thinking for themselves. The bottom line remains though that if someone is able to incur a debt, then they've got to be able to deal with the consequences of paying it off. I can't help concluding though that this X-Factor mentality is a large part of the reason why we're in the doodoo.
 

Libero

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But it's my contention that even when it comes to the bank debt, a high proportion of the responsibility for it has emerged from this country's institutions and the people who made them what they are. That includes a very high proportion of Irish citizens - people who have direct responsibility for their futures with the choices they make
The problem with that rhetoric is that is has no place in deciding the question in the thread title. That's a legal question and should be met, in the first instance, by reference to the terms of the relevant bond debentures, which generally don't make any reference to collective public responsibility for private bank debt.

There's a fair few people out there running with this narrative of collective responsibility for bank debt, grounded on a supposed collective participation in the property credit boom and/or regulatory failure. That point of view would carry more credibility (i.e. > 0) if it had ever been outlined before the end of that boom. But whoever said anything like "If this boom ends, the public should have to pay for the banks' debt"? What bondholder ever said "If this goes bang, you lot will have to pay me back rather than the bank itself"?

Even then, I doubt many people speaking this rhetoric believe in it. It serves to cover either their self-interest, or to mask the raw power politics involved when a government cannot countenance bank failure and accepts any offer to avoid this in the short-medium term.

A lot of the Irish bank bondholders have made off with 100% of their investment, thanks to others taking their place as creditors of the banks (principally the ECB and the Irish state). The ECB took on that role with its eyes open, and is well placed to absorb considerable losses. On almost any objective analysis (welfare, desert, legal), it is grossly unjust for the ECB to run up that tab and then draw up a plan for the tab to be passed to the Irish taxpayer, using threats of apocalypse to scare the Irish government into agreement.
 
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GDPR

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I expect adult Irish voters to pay the price of their profligacy and irresponsibility. All that "growth" we experienced over the last ten years was the frontloading of asset and consumer spending at the expense of future generations. It was obvious to me as it was happening. It should have been obvious to others as well. But somehow average Irish people chose to ignore the reality under their noses and go along with the charade. Now the game is up, and it's time to pay the bill.
I find that a pretty weak argument for bailing out stockmarket gamblers. In fact no rational argument exists to justify such an action.
I agree we have to pay our sovereign debt (that was never an issue with anyone) but this Banking Crisis is a different kettle of fish. Widows and orphans cannot be held responsible for the actions of fraudsters and incompetents who walked away with huge pensions and absurd payoffs. The public cannot be held responsible for the actions of a private company which has its own legal personality. Its' a huge crock of sh1t in fact. Bailing out the bondholders looks like a mechanism to stop the bondholders investigating into what actually happened and bringing those responsible to justice. Everyone who has been in government over the last 10 years should be on trial for treason and fraud.
 

McDave

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I find that a pretty weak argument for bailing out stockmarket gamblers. In fact no rational argument exists to justify such an action.
I agree we have to pay our sovereign debt (that was never an issue with anyone) but this Banking Crisis is a different kettle of fish. Widows and orphans cannot be held responsible for the actions of fraudsters and incompetents who walked away with huge pensions and absurd payoffs. The public cannot be held responsible for the actions of a private company which has its own legal personality. Its' a huge crock of sh1t in fact. Bailing out the bondholders looks like a mechanism to stop the bondholders investigating into what actually happened and bringing those responsible to justice. Everyone who has been in government over the last 10 years should be on trial for treason and fraud.
I'm not arguing for the banking bailout. The bailout is a fact, albeit a repulsive one. And not one made with my electoral consent. It was imposed by a government put in power by a credulous section of the electorate. The Anglo/INBS bailout was applied by Lenihan. How did he get into the position to make the decision? Because he and his government colleagues were appointed by colleagues elected by actual voters. Frankly if any widows voted for FF, then they deserve what's coming down the line to them.

Once again I have to reiterate, the Irish electorate made the bed we're living in. A bed inhabited by FF, its cronies and its sneaking regarders. Ireland's polity is responsible for this mess, and it is Ireland's elected politicians those on the European stage have to deal with. Hopefully the new government can retrieve the situation somewhat. That's why I ask what part of the banking debt can we expect the Eurozone to take responsibility for. It's a practical question rooted in the reality of the economic quicksand we have been thrown into by FF.
 
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blinding

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I am going to forward the number of Gamblers anonymous to the Gambling bankers and to FFailure, Fine Gael and Labour.

I hope this is going to be some help to them but I am not going to finance gamblers that are not prepared to face their problem and loss's.
 

Boy M5

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What I neglected to mention in my earlier post about corporate debt restructurings is that the bondholders will attract / hire US law firms.

That's what's been reported today - Bingham McCutcheon are apparently trying to act for AIB sub debt holders.

AIB bondholders 'may take action' - The Irish Times - Mon, Dec 06, 2010

The other firm to watch out for is Houlian Lokey
 

Libero

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McDave said:
Once again I have to reiterate, the Irish electorate made the bed we're living in. A bed inhabited by FF, its cronies and its sneaking regarders. Ireland's polity is responsible for this mess, and it is Ireland's elected politicians those on the European stage have to deal with.
In a democracy, all lawful decisions of government can be traced back in some way to the electorate.

But let's not be so daftly reductionist. Irish politics is strongly local and many a FF vote was cast with no consideration for national policy issues. Even if a voter did vote FF in approval of that party's love of the property bubble, it's still a big leap from that position to the bank guarantee; the bank guarantee wasn't all that foreseeable as a consequence of the bubble, especially for someone who didn't expect it to burst.

You might as well argue that if a democracy's government suddenly declares war - against all promises and expectations - the country's population deserves whatever it gets.
 

McDave

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In a democracy, all lawful decisions of government can be traced back in some way to the electorate.

But let's not be so daftly reductionist. Irish politics is strongly local and many a FF vote was cast with no consideration for national policy issues. Even if a voter did vote FF in approval of that party's love of the property bubble, it's still a big leap from that position to the bank guarantee; the bank guarantee wasn't all that foreseeable as a consequence of the bubble, especially for someone who didn't expect it to burst.

You might as well argue that if a democracy's government suddenly declares war - against all promises and expectations - the country's population deserves whatever it gets.
With all due respect, who carries the can? If voters didn't understand wurled eccenomix, at the very least they should understand the value of property.

As for the bank guarantee, it wouldn't have been necessary had our government been on top of financial regulation. But they were busy stoking the flames of our bubble economy. And to the applause of the electorate writ large.
 

dresden8

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Naturally. They couldn't have lent to us individually, could they? That's why we have a banking system. And the reason why that system is in crisis is because our state took no meaningful measures to regulate it. Ireland Inc. didn't take care of business. Go you really expect other countries to pick up our tab?
Nope. I expect gamblers who speculated and lost to cry over their losses and then fnck off.
 

GDPR

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Once again I have to reiterate, the Irish electorate made the bed we're living in. A bed inhabited by FF, its cronies and its sneaking regarders. Ireland's polity is responsible for this mess, and it is Ireland's elected politicians those on the European stage have to deal with. Hopefully the new government can retrieve the situation somewhat. That's why I ask what part of the banking debt can we expect the Eurozone to take responsibility for. It's a practical question rooted in the reality of the economic quicksand we have been thrown into by FF.
No politician was ever elected on a mandate of putting the country onto its knees and selling the country lock stock and barrel to overseas owners. The whole bondholder bail out issue is fraud pure and simple.

Nope. I expect gamblers who speculated and lost to cry over their losses and then fnck off.
+1

A company going bankrupt is a hazard of investing. No stockmarket gambler should be bailed out ever. Neither should fraudsters be bailed out for their actions. Its their problem not ours. They can chase Fingers and the bosses of Anglo for the money.
 

McDave

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50 or so posts in (mostly mine?!?), and the response to the OP has been pretty much overwhelmingly hostile. Most of the posts are from posters I respect, so I'm going to take it that there is a widespread view on P.ie that as an absolute point of principle we shouldn't be giving a penny to bankroll private investors (a sentiment I instinctively agree with having seen the Irish state intervene twice already to bail out financial bodies - PMPA and AIB).

However, I have to admit that I'm astonished that there has been little or no recognition of the political responsibility for our particular brand of crisis. I'm firmly of the view that the Irish electorate is responsible for the kind of crony government we have all had to suffer (especially non-FF voters) over the last 13 years. Voter unwillingness to hold our governing politicians to account has given FF a free hand to do nothing and then to act with impunity. I honestly think we must factor this (and individual borrowing behaviour) into the extent of our banking collapse. And thus I think Ireland as a whole has to bear some of the responsibility for the bank bailout, revolting as it is (a situation I hope the incoming government can rectify at least in part).

Anyway, I've bashed on about it for long enough. I guess my point is out there. :)
 

Libero

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With all due respect, who carries the can? If voters didn't understand wurled eccenomix, at the very least they should understand the value of property.

As for the bank guarantee, it wouldn't have been necessary had our government been on top of financial regulation. But they were busy stoking the flames of our bubble economy. And to the applause of the electorate writ large.
Who carries the can?

Is it really unreasonable to suggest that where an investor provides funds on the basis of a legally-enforceable bond debenture, that investors' legitimate expectations begin and end with the terms of that debenture?

I don't disagree that a foolish electorate, electing a foolish government, will naturally end up suffering some negative consequences. But I can't agree that where the government goes and does something truly bizarre, unprecedented and unpredictable (i.e. the blanket bank guarantee), the resulting public suffering is just and natural and has a sound basis in morality.

McDave said:
Voter unwillingness to hold our governing politicians to account has given FF a free hand to do nothing and then to act with impunity. I honestly think we must factor this (and individual borrowing behaviour) into the extent of our banking collapse. And thus I think Ireland as a whole has to bear some of the responsibility for the bank bailout, revolting as it is (a situation I hope the incoming government can rectify at least in part).
I don't think many critics of the government disagree with that. But one can take disgust at popular opinion too far, wishing upon the populace even the worst, most unprecedented consequences as a sort of righteous punishment for their sins.

I hated the bubble, and the popular sentiments behind it, but I don't think Ireland deserves the full extent of the calamity falling upon it - including the fallout from saving utterly undeserving bondholders and the ECB's funds.

(To take a bit of a shaky comparison, I disapprove of Victorian sensibilities, but don't look back at squaddies heeding Kitchener's propaganda, marching to the trenches, thinking "you lot had it coming". Likewise, the Japanese people accepted that they acquiesced or supported a vile military regime before and during WW2 - but only the cruellest and most morally absolute can look back at the resulting suffering and think it was in anyway proportionate or justifiable.)
 
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He3

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Who carries the can?

Is it really unreasonable to suggest that where an investor provides funds on the basis of a legally-enforceable bond debenture, that investors' legitimate expectations begin and end with the terms of that debenture?

I don't disagree that a foolish electorate, electing a foolish government, will naturally end up suffering some negative consequences. But I can't agree that where the government goes and does something truly bizarre, unprecedented and unpredictable (i.e. the blanket bank guarantee), the resulting public suffering is just and natural and has a sound basis in morality.
Michael Lowry might explain it to you. He has given it deep thought.
 

Green eyed monster

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With all due respect, who carries the can? If voters didn't understand wurled eccenomix, at the very least they should understand the value of property.

As for the bank guarantee, it wouldn't have been necessary had our government been on top of financial regulation. But they were busy stoking the flames of our bubble economy. And to the applause of the electorate writ large.
That's true to an extent but Europe was involved as well, it was only too happy to stoke the property bubble with cheap cash loans, those financial experts forced fed the Irish Patient, now she is throwing her guts up they are only too happy to stick the bill for the meal in front of her, with a 7% interest tip for the service. This association with Europe does not show a benefit of solidarity or understanding now, rather there is usurious exploitation. I had hoped that Europe would exert some kind of control or extend a wise hand of advice upon our Government (a past hope that i had for the EU), that the EU represented the interests of citizens (that delusion was only partly faded by their contempt for our vote during Lisbon) and would restrain loan sharking.

The following article sums up where we are at...

A colony once again...

How one large part of the UK economy may avoid an Irish fate | Michael Burke | Comment is free | guardian.co.uk

The Irish bailout, like Greece before it, is a form of international loan-sharking, where Europe's banks demand repayment in full of existing debt by means of loading Irish taxpayers with ever-greater debts. These banks are headed by British ones, which hold £140bn in bonds issued by Irish borrowers, the biggest national exposure to Irish debt. Almost unremarked here, but not in Ireland, is that the interest rate on these new EU loans will be approximately 7%, compared with just 3% on IMF loans.


Therefore, the key difference between Ireland and Britain is that a flow of tribute will continue to benefit Britain's banks at the expense of Irish taxpayers.
The first clear, clean path to the exit doors from the EU and we should take it (and this not reactionary thinking on my part), we cannot trust being in a Union with these people any more than we can trust being under Fianna Fail. As has been said many times, for the privelege of paying back this loan so we can pay for the bad debts of European superbanks - they are extracting a usurious 7% rate - much higher than the IMF.
 

McDave

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That's true to an extent but Europe was involved as well, it was only too happy to stoke the property bubble with cheap cash loans, those financial experts forced fed the Irish Patient, now she is throwing her guts up they are only too happy to stick the bill for the meal in front of her, with a 7% interest tip for the service. This association with Europe does not show a benefit of solidarity or understanding now, rather there is usurious exploitation. I had hoped that Europe would exert some kind of control or extend a wise hand of advice upon our Government (a past hope that i had for the EU), that the EU represented the interests of citizens (that delusion was only partly faded by their contempt for our vote during Lisbon) and would restrain loan sharking.
In all honesty, Ireland hasn't shown much solidarity with its EU partners by encouraging the recycling of corporate profits in the IFSC courtesy of our CT rates (as distinct from our industrial manufacturing and IT sectors). That's a gratuitous act of beggaring thy neighbour. Granted, others do it too. But they're not the ones up the creek like we are.

I'd also argue that now is not the time for solidarity. Now is the time for us and countries like us to straighten out or finances. I think it's better for the Eurozone to keep its powder dry until it really needs it and can act in a structured way underpinned by legally-sound economic and financial instruments.
 
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Cassandra Syndrome

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In a democracy, all lawful decisions of government can be traced back in some way to the electorate.

But let's not be so daftly reductionist. Irish politics is strongly local and many a FF vote was cast with no consideration for national policy issues. Even if a voter did vote FF in approval of that party's love of the property bubble, it's still a big leap from that position to the bank guarantee; the bank guarantee wasn't all that foreseeable as a consequence of the bubble, especially for someone who didn't expect it to burst.

You might as well argue that if a democracy's government suddenly declares war - against all promises and expectations - the country's population deserves whatever it gets.
Exactly. McDave seems to forget that 32% of his beloved Germans democratically elected Hitler to power in 1932 and establish the 3rd Reich. So are the German people to blame for the evils of the Nazi Party?

If so why should they have received so much in the Marshall Plan after WW2? Why should the founder of the European Commission be allowed to proceed despite being a high ranking official of the 3rd Reich?

By McDave's logic, of having such contempt on Irish people for the mess this country is in, are we to assume that if Germany had a direct democracy system in the 1930s and 1940s, 6 million Jews would have still been gassed to death and incinerated?
 


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