Irish bond yields

[EvotingMachine0197]

So, I guess this means that it makes sense to pay the damned IBRC bond next month, the 1.25 billion one, given that it would be in our interests to continue this price trend?

[publicrealm]

Squirrels are as high as they can go. When the Euro explodes those holding cheese will be smiling like Cheshire cats.

I piled into cheese early and it's now so high its unbearable.

[ibis]

One must ask whether the yields coming down is the result of "real" private demand (i.e. confidence in Ireland's economy) or merely a technical result of some European banks using some of the 489 billion euro (640 billion dollars) received in loans from the ECB to buy government debt.

As the Washington Post puts it:
European Central Bank will loan $640 billion to debt-laden banks - The Washington Post
"...some governments also hope the loans will make it possible for banks to buy government debts when cash-strapped governments issue bonds early in 2012. In effect, the reports said, this would be an indirect way of having the ECB become the lender of last resort for indebted governments — something it is forbidden from doing directly by its founding statutes."

(This same method was being used in Ireland by Irish banks, i.e. borrowing from the ECB at 1% and then using this borrowed money to buy Irish govt bonds for 5+%, up until the bailout of 2010. It was done in a semi-secret way, however, with little publicity...)

One should not read too much into this reduction in bond yields, as it would appear to be a result of an extraordinary release of liquidity by the ECB into the system. It remains to be seen whether the ECB will continue to act in this manner into the future...
I do not think it should be read as a validation of the strength of the Irish economy.

Phew...for a moment there I almost felt less than bleak. Thanks!

[ibis]

So, I guess this means that it makes sense to pay the damned IBRC bond next month, the 1.25 billion one, given that it would be in our interests to continue this price trend?

Absolutely nothing, under any circumstances, should in any sense be taken by anyone to be any kind of even slight justification for paying people their money back. Everyone - everyone who counts, anyway - knows that the markets do not pay any attention at all to whether they're likely to get their money back - it's of no interest to them at all.

[Taxi Driver]

No - closing value yesterday.

Ah yes. Cheers.

[EvotingMachine0197]

Absolutely nothing, under any circumstances, should in any sense be taken by anyone to be any kind of even slight justification for paying people their money back. Everyone - everyone who counts, anyway - knows that the markets do not pay any attention at all to whether they're likely to get their money back - it's of no interest to them at all.

They don't care a jot. Nor would I if it was my money.

[seabhac siulach]

Phew...for a moment there I almost felt less than bleak. Thanks!

Well, they say false hope is worse than no hope!

[Marvar88]

So lads, how low does the yield have to go before we can go into the markets.

In my opinion we are not far off it at the moment. If we were to get to 6.8% or about that should we take the plunge? Or as the Gov have time time before they make the next hard decisions will they bide their time and see if the yield drops further.

[Astral Peaks]

CS won't like this?

[ibis]

So lads, how low does the yield have to go before we can go into the markets.

In my opinion we are not far off it at the moment. If we were to get to 6.8% or about that should we take the plunge? Or as the Gov have time time before they make the next hard decisions will they bide their time and see if the yield drops further.

7% seems to be regarded as something of a watershed. Given the average rate of the bailout loans is apparently around 3.7%, I would say you'd need quite a bit of justification for paying 3% over the odds.

I presume they'll stick to the plan of offering some short term debt later this year.