We are in unprecedented territory and should expect the IMF to be here for some time

cyberianpan

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Ireland has a fundamental economic crisis, with two threads:

1) An unsustainable fiscal deficit
2) A still unknown black hole in the banks

These two sare strongly tied to the overall economy. Addressing one is quite simple, and the imf can do that... However the second item, essentially a systemic banking backed property bubble... will be very challenging

The Irish government thought it was the actor of last resort in Sep 2008, then the ECB thought it could be same: their efforts failed also. We had a bank run, the realm money lerft the country, not merely are we teetering on insollvency, we are teetering on illiquidity. The IMF will give us a sticking plaster for that, however planning the surgery. On the propeerty/banking bubble will take months.

Ireland is in fundamentally novel economic territory, barring extra terrestial life: we are now dealiing with the true agency of last resort. They have a very tough problem to solve, and the results will be tough to deal with. I wish them well, as we've no other options
 


FakeViking

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Fear not, Biffo is rushing out with a cunning plan. But it'll take some time, he's currently too busy up in DSW, shaking babies and kissing hands.
 

H.R. Haldeman

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Ireland has a fundamental economic crisis, with two threads:

1) An unsustainable fiscal deficit
2) A still unknown black hole in the banks

You left out a huge #3 cYp: our balance sheet.

As far as I can see it we now have a €100b national debt, another potential €100b from the IMF (+5% interest pa), as well as another €19b being added to that annually (falling over the next few years to c. €4/5b pa). This does not, I don't think, include the €40b we are down on NAMA (which we might get some of back) nor the losses that will come on what remains on the banks (non-NAMA) loan books.

And that's just the sovereign: we also have hundreds and hundreds of billions in private debt secured against rapidly declining asset values.
 

TODevastated

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You left out a huge #3 cYp: our balance sheet.

As far as I can see it we now have a €100b national debt, another potential €100b from the IMF (+5% interest pa), as well as another €19b being added to that annually (falling over the next few years to c. €4/5b pa). This does not, I don't think, include the €40b we are down on NAMA (which we might get some of back) nor the losses that will come on what remains on the banks (non-NAMA) loan books.

And that's just the sovereign: we also have hundreds and hundreds of billions in private debt secured against rapidly declining asset values.
how on earth can we possibly finance the repayment of it all without some element of debt writedown??

as i understand it the IMF go in and do their stuff fairly quickly, they don't hang around is that not correct??
 

cyberianpan

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You left out a huge #3 cYp: our balance sheet.

As far as I can see it we now have a €100b national debt, another potential €100b from the IMF (+5% interest pa), as well as another €19b being added to that annually (falling over the next few years to c. €4/5b pa). This does not, I don't think, include the €40b we are down on NAMA (which we might get some of back) nor the losses that will come on what remains on the banks (non-NAMA) loan books.

And that's just the sovereign: we also have hundreds and hundreds of billions in private debt secured against rapidly declining asset values.
Once we solve problem 2, the true state of our balance sheet will be known

Currently Ireland Inc is a toxic, unpriceable asset due to problem 2, hence the bond markets reflevting this unkown, as high rates

We simply cannot survie with this unknown
 


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