The Bailout - why now? why the panic?

johntrenchard

Well-known member
Joined
Nov 7, 2009
Messages
991
In all the threads and discussion about this potential EU bailout , there has been no explanation as to WHY this is happening and WHY is it happening now?

Can anyone on politics.ie explain why the push has happened, and why it is happening now? I thought we were "fully funded" until the mid of 2011?

There has been very little discussion of the background of this on the media, beyond the usual stuff about the "bond markets".
 


Gryire

Active member
Joined
Feb 5, 2009
Messages
282
In all the threads and discussion about this potential EU bailout , there has been no explanation as to WHY this is happening and WHY is it happening now?

Can anyone on politics.ie explain why the push has happened, and why it is happening now? I thought we were "fully funded" until the mid of 2011?

There has been very little discussion of the background of this on the media, beyond the usual stuff about the "bond markets".
We are being told lies by FF. The ECB know the truth. They are propping us up at the moment.
 

ManOfReason

Well-known member
Joined
May 24, 2007
Messages
4,286
Because Ireland's continued denial of reality is also damaging the ability of Portagal and potentialy Spain to borrow at a reasonable rate.

Having money into next year was only part of FFs plan to get out of office before the bailout comes when that money inevitably runs out - then in years to come FF would be able to go around saying 'if we were kept in office there would never have been a bailout'
 

john_galt

Active member
Joined
Jun 16, 2010
Messages
137
In all the threads and discussion about this potential EU bailout , there has been no explanation as to WHY this is happening and WHY is it happening now?

Can anyone on politics.ie explain why the push has happened, and why it is happening now? I thought we were "fully funded" until the mid of 2011?

There has been very little discussion of the background of this on the media, beyond the usual stuff about the "bond markets".
Hi John,

the reason is that the smoke screen that the government has been using has broken down. There has been a run on irish banks since we announced the scale of the banking baillout. People both inside and outside of Ireland do not trust them and have moved their money out of here. Talk that it escalated after Lenihan's statement that "ireland is an island!" is unsubstantiated but it adds fuel to the fire.

The banks are on the way out and something needs to be done. The government is funded until mid next year, BUT ONLY THE EXCHEQUER, IT DOES NOT INCLUDE THE 6BN+ OF T-BILLS THAT ROLL OFF IN THE SPRING! The NPRF does not have 25bn, it only has 5-8bn depending on whom you listen to, so whilst the government have claimed one thing, the reality is different!
 

Doodah

Well-known member
Joined
Nov 14, 2010
Messages
1,067
Maybe, when dust settles a little bit, the whole episode might be looked upon in the context of the international currency wars. The recent QEII by the USA was not appreciated by Germany. QEII lowers the dollar value, EU Debt anxiety lowers the Euro value.
At the moment the wood cannot be seen with all the trees in the way.
 

johntrenchard

Well-known member
Joined
Nov 7, 2009
Messages
991
interesting answers folks .. QE2 and the currency wars are probably the big elephants in the room that have forced the hand of the ECB.


Good answer on Spain/Portugal - our crisis is obviously spilling over like a viral disease into their financial systems.
 

johntrenchard

Well-known member
Joined
Nov 7, 2009
Messages
991
Interesting article from Bloomberg about the "domino" effect of failing Eurozone states..

Euro Dominos Will Fall Until Currency Is Split: Matthew Lynn - Bloomberg


"This crisis will keep moving from country to country. The only permanent fix is splitting up the euro into more manageable currency areas. Until the euro-areas leaders recognize that simple truth, every bailout they come up with is only going to shift the attacks elsewhere."
 

johntrenchard

Well-known member
Joined
Nov 7, 2009
Messages
991
from the telegraph, an interesting explanation on the "why now" aspect of the crisis:

Contagion hits Portugal as Ireland dithers on rescue - Telegraph


Simon Derrick from the Bank of New York Mellon said the negotiations over Ireland's bail-out have been astonishing. "The creditors say please take the money, and the debtor says 'we don't want it'. It's very odd."

"Still, the EU is doing the right thing to try to create a fire-wall as quickly as possible. They learned from Greece that once bond yields reach this level they have 10 trading days left to avoid a self-feeding crisis. They cannot allow this to spread to a large country because at that point contagion would become uncontainable," he said.
Definitely looks like #bondwatch was the trigger, and they are trying to prevent Portugal and Spain being picked off.
 

Mar Tweedy

Well-known member
Joined
Dec 12, 2008
Messages
625
Always do the complete opposite to what this government is saying to you.

In other words - your savings ARE at risk.
If you're looking to answer the why now question, the liquidity problems caused by the run on the banks over the last months is one factor. I guess you reap what you sow.
 
Last edited:

roc_

Well-known member
Joined
Dec 5, 2009
Messages
6,369
It was clear a long time ago that there were massive holes in the banks' balance sheets (larger than ever admitted) due mainly to their handing out of trillions of euro, that were mainly backed by the collateral of mythical and mystical inflated land values.

It suddenly became apparent one day that the mythical and mystical collateral was indeed, mythical and mystical.

However, our government, as it was deeply complicit in encouraging the belief in these mythical and mystical inflated land values, decided that it would continue in this belief.

As long as they continued in this belief, it could be posited that the massive holes in the banks' balance sheets were only temporary. - To demonstrate how strong their belief was, they even consummated the relationship between the state and the banks, by pledging that we were all one together in this.

However reality has been hammering harder and harder on the bubble that comprises this belief in the mythical and mystical. Especially, this week.

But it seems they are still going to try and hold out for a while longer. Sure, isn't this the country where the mythical and the mystical has always held sway. You just have to believe hard enough.
 

johntrenchard

Well-known member
Joined
Nov 7, 2009
Messages
991
Ollie Rehn confirmation just announced on Radio 1 news.

So basically Dermot Ahern and Dick Roche are lying sacks of sh1t?
 
Joined
Feb 12, 2009
Messages
35
Here's what Rehn said at lunchtime:

I am quite concerned about the public debate in the eurozone and I want to call on every responsible European to resist alarmism. We need to restore unity and the most pressing problem is in Ireland now. The EU is talking with the IMF and the ECB to find a solution and are working to resolve this very serious problem.

Irish sovereign debt is well funded until next year. The real problem is in the banking sector but you cannot seprarate the two. Ireland is very different to Spain and portugal. This is not a matter of survival of the euro — this is a very serious problem for the bank sector in Ireland.
 

HarshBuzz

Well-known member
Joined
Feb 28, 2008
Messages
11,815
G

Gimpanzee

In all the threads and discussion about this potential EU bailout , there has been no explanation as to WHY this is happening and WHY is it happening now?

Can anyone on politics.ie explain why the push has happened, and why it is happening now? I thought we were "fully funded" until the mid of 2011?

There has been very little discussion of the background of this on the media, beyond the usual stuff about the "bond markets".
Partly because the numbers coming out of the likes of BOI in recent weeks gave credence to the belief that the estimates for the banks that were 'nailed down' in September look too optimistic. We've finally reached the point where it simply does not seem credible, no matter how optimistic, that we can get ourselves and the banking system out of this mess especially given that the environment in which we'ed need to do so is not stable. Nothing is going to change enough between now and middle of next year to change that, so we are a bailout waiting to happen. And that is causing problems for others right now.
 

constitutionus

Well-known member
Joined
Feb 19, 2007
Messages
23,284
its simple

ireland + portugal + spain in the EUSF = bye bye euro.

thats literally where we are.
 


New Threads

Popular Threads

Most Replies

Top