Why is Cowen borrowing debt at 6.5% and lending to Greece at 5%?

Tommythecommy

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Why is Cowen borrowing debt at 6.5% and lending to Greece at 5%?

Is it not time we switched our debt to the 5% rate the EU are lending to Greece at?

The ECB are riding us
 


Conor

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HarshBuzz

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Tommythecommy

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But when his bonds are rolled over the bill will grow

But when his bonds are rolled over the bill will grow
 

Conor

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Asparagus

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Why is Cowen borrowing debt at 6.5% and lending to Greece at 5%?

Is it not time we switched our debt to the 5% rate the EU are lending to Greece at?

The ECB are riding us
Its called scorching the earth

1% is a small price to pay not to have the truth let out.
 

jmayo

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Why is Cowen borrowing debt at 6.5% and lending to Greece at 5%?

Is it not time we switched our debt to the 5% rate the EU are lending to Greece at?

The ECB are riding us
The Germans told him to do so.
The Greeks owe the German banks and if they defualt German banks will take a very big hit.
Thus they get some more suckers, including us and the German taxpayers, to lend some money to Greece to pay back the European banks.

Don't knock the idea since we might be in need of the same quiet soon.

Anyway IMHO it just goes to show how the Euro is doomed.
 

smitchy2

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Lenihan said we would make a profit out of this lending at the time.
Great minister of finance......
 

kerdasi amaq

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Well, he couldn't say that we'd make a loss.

but, if it was a profitable loan, why didn't the free marketeers shoulder him out of the way and insist on making the loan themselves?

It's a total violation of the free-marketeering philosophy that governments should make a profit on economic activity.
 

Conor

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Radix

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Lenihan said we would make a profit out of this lending at the time.
Great minister of finance......
I don't think you give Brian Lenihan and his advisors enough credit for all they've been doing.

Could it be just possible that he sees a much bigger picture than a lot of the guys posting here? Things are not always as they first seem, there's always a bigger story behind the obvious. For example, the initial "bank guarantee", like an oral contract, wasn't worth the paper it was written on. However it had a positive effect in that there was no serious run on the banks at street level, and secondly we didn't see bad behaviour shall we say, at street level either.

'Lending' money to Greece is doing something similar, (especially when you don't have any).

What it does, is illustrate some semblance of 'fiscal community spirit' within a political eurozone which is struggling for survival. It recognises that political survival depends on something deeper, on an intercommunity level.

(It also gives the perception in Ireland that, hey if we're lending money to help some poor ould Greek sod, then firstly we must have the money in the first place, and secondly following on from this, we can't be as bad as the Greeks in our prodigality.)

Finally, if money truly is 'made round to go around', then surely the inherent logic is that we will see it again. Financial systems are ultimately inherently just. Yes these systems have been abused, (on a large scale by some people), but they recognise a certain morality at work in the world. On a basic level, if I lend you money, you pay it back. If you run into genuine hard times, I may forgive you that debt. If you try to pull the wool over my eyes, I may make your life miserable and make sure that no one else gives you money either. It's just not as simple as short term percentages.

However if I see you while broke, making some sort of effort to help another, in this case Paddy the Greek; well then this might just 'buy' you some kudos, and the Father may indeed see from afar his repentant son, and order the killing of the fatted calf.
 

Asparagus

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You're sure about that are you???


From the NTMA Auction results

Lowest Price Allocated in Full - 90.350 = yield of 6.046 %

did you misread 6.046% as 6.5% by any chance???
coz 6.01% is something to get naked and celebrate?

IT'S CRAZY STUFF.

I hope the next government ringfences all the FF caused debt and reports on it as a seperate line item each budget or when ever FF tds betch about lack of money for hospitals.
 

Tommythecommy

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No http://www.cnbc.com/id/39229487

You're sure about that are you???


From the NTMA Auction results

Lowest Price Allocated in Full - 90.350 = yield of 6.046 %

did you misread 6.046% as 6.5% by any chance???

No News Headlines

I am not arguing against lending to Greece

Cowen is paying a mugs price

He is too weak to secure a good deal on our borrowings
 

cjudge

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I don't think you give Brian Lenihan and his advisors enough credit for all they've been doing.

....... if I see you while broke, making some sort of effort to help another, in this case Paddy the Greek; well then this might just 'buy' you some kudos, and the Father may indeed see from afar his repentant son, and order the killing of the fatted calf.
I see exactly where you are coming from. It makes no sense, but is rational.

(Will someone please remind me of the section and verse for the following -it's driving me nuts)

There are 2 circumstances in which a member state can refuse to participate in a bailout. The first is if the constitutional court of a member state declares the bailout to be illegal ( we await with interest the outcome of the constitutional court challenges in Germany). The other is when a member state has to borrow to fund the bailout at a rate higher than will be recovered. This is clearly such a case. ( I recall that one of these provisions relates to members of the Eurozone only - can't remember which)

Is it necessary that should we fund the Greek bailout, where provision has been made for an impecunious member state to decline to participate?
 


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