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  1. #421
    gerhard dengler gerhard dengler is offline
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    Quote Originally Posted by MayoDub View Post

    the total amount paid over the 15yr or so term is north of 43 billion.
    That would indicate we are paying 31bn + interest (I am assuming the key interest rate here is the 3.7%)
    North of 43 billion is approximately 47-48 billion in total.
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  2. #422
    MayoDub MayoDub is offline

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    Quote Originally Posted by gerhard dengler View Post
    North of 43 billion is approximately 47-48 billion in total.
    sounds to me like we are on the hook for interest + principal (or coupon + interest) or whatever the counterparts are in bond-debtspeak

    I realise this isn't new news but I'm wondering why there is quite a bit of obfuscation based on financial engineering/off balance sheet stuff to downplay what the Irish taxpayer is actually being caught for.
    Also I realise that the structural deficit due to imbalances in tax receipts/current spending are a massive component of what is causing austerity here.
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  3. #423
    gerhard dengler gerhard dengler is offline
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    Quote Originally Posted by MayoDub View Post
    sounds to me like we are on the hook for interest + principal (or coupon + interest) or whatever the counterparts are in bond-debtspeak

    I realise this isn't new news but I'm wondering why there is quite a bit of obfuscation based on financial engineering/off balance sheet stuff to downplay what the Irish taxpayer is actually being caught for.
    Also I realise that the structural deficit due to imbalances in tax receipts/current spending are a massive component of what is causing austerity here.
    Anglo/IRBC is €31 billion in capital repayment with €17 billion in interest charges repayments = €48 billion.
    This accounts for repayments 2011-2025.

    There is speculation that the actual costs of Anglo/IRBC 2026-2031 might well push the final costs to €52 billion
    It's actually discussed at this link (hat tip to Namawinlake)
    Minister Noonan again confirms gross cost of IBRC bailout at
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  4. #424
    MayoDub MayoDub is offline

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    Quote Originally Posted by gerhard dengler View Post
    Anglo/IRBC is 31 billion in capital repayment with 17 billion in interest charges repayments = 48 billion.
    This accounts for repayments 2011-2025.

    There is speculation that the actual costs of Anglo/IRBC 2026-2031 might well push the final costs to 52 billion
    It's actually discussed at this link (hat tip to Namawinlake)
    Minister Noonan again confirms gross cost of IBRC bailout at
    Good link Dengler.

    The reality of 2011-2025 (under current plan of record + any adjustments due to potential losses at IBRC) seem spot on.
    I'm not sure whether I was listening to Alice in Wonderlandonomics this morning.
    Maybe it was smoke and daggers but the distinct impression I got from the economics prof (architect/advisor of the IBRC PNs??) was that the capital/principal made little odds to the repayment schedule and that the interest rate was dirt cheap and likely to get better on account of the ECB key interest rate forecast.
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  5. #425
    clearmurk clearmurk is offline
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    Quote Originally Posted by MayoDub View Post
    Good link Dengler.

    The reality of 2011-2025 (under current plan of record + any adjustments due to potential losses at IBRC) seem spot on.
    I'm not sure whether I was listening to Alice in Wonderlandonomics this morning.
    Maybe it was smoke and daggers but the distinct impression I got from the economics prof (architect/advisor of the IBRC PNs??) was that the capital/principal made little odds to the repayment schedule and that the interest rate was dirt cheap and likely to get better on account of the ECB key interest rate forecast.
    I'd also like to know people's views on the assertion that National Debt never gets paid down. Did Ireland Inc. not do exactly this during the boom years?

    To suggest that National Debt is never ending seems a bit like saying that a credit card never gets paid off. This might work, but is depending on inflation to erode the debt value, and adequate economic growth to fund the interest payments?
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  6. #426
    gerhard dengler gerhard dengler is offline
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    Quote Originally Posted by MayoDub View Post
    Good link Dengler.

    The reality of 2011-2025 (under current plan of record + any adjustments due to potential losses at IBRC) seem spot on.
    I'm not sure whether I was listening to Alice in Wonderlandonomics this morning.
    Maybe it was smoke and daggers but the distinct impression I got from the economics prof (architect/advisor of the IBRC PNs??) was that the capital/principal made little odds to the repayment schedule and that the interest rate was dirt cheap and likely to get better on account of the ECB key interest rate forecast.
    If Noonan is telling the Dail that the Anglo/IBRC promissory note mechanism is going to cost €48 billion, I think that reasonable to take what Noonan says at face value.
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  7. #427
    MayoDub MayoDub is offline

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    Quote Originally Posted by clearmurk View Post
    I'd also like to know people's views on the assertion that National Debt never gets paid down. Did Ireland Inc. not do exactly this during the boom years?

    To suggest that National Debt is never ending seems a bit like saying that a credit card never gets paid off. This might work, but is depending on inflation to erode the debt value, and adequate economic growth to fund the interest payments?
    Yes - stag-{de}-flation won't cut it .. totally unsustainable.

    Regarding the Promissory Note element .. it seems to me that the repayment schedule includes both principal/capital + interest and any idea that the 31bn capital component can just accumulate into some never-never accumulating wodge of debt to be inherited by our children/grandchildren seems obscene.

    I guess by restructuring the PNs into a 40 year term ... the interest payments get spread over a much longer period of time ... much like the Treaty of Versailles for WWI Germany.
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  8. #428
    MrFunkyBoogaloo MrFunkyBoogaloo is offline

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    Quote Originally Posted by hammer View Post
    Thanks FF / Greens.............€34 billion re Anglo / INBS.

    Shower of traitors.

    And yet your lot continue to stump up the cash.

    Thanks FF / Greens / Independents / FG / Labour.
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  9. #429
    Sucker Punch Sucker Punch is offline

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    Quote Originally Posted by Taxi Driver View Post
    I don't know what those numbers are but they definitely don't represent Ireland's primary balance. This year the deficit will be 13.4 billion. The interest bill will be 6.3 billion (less than 1/4 of which is due to "the banks").

    That leaves a primary deficit of 7.1 billion or around 4.3% of GDP. We are still a good way from running a primary surplus.
    That is the figure for 2012. The figure we should be talking about is for 2013, which is less than a month away. This forecasts a primary budget deficit of 1.9% of GDP.

    The point I'm making is that alleviation of odious debt, i.e. banking related debt would hasten a primary balance and place the economy on a much surer footing.
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  10. #430
    Taxi Driver Taxi Driver is offline

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    Quote Originally Posted by Sucker Punch View Post
    That is the figure for 2012. The figure we should be talking about is for 2013, which is less than a month away. This forecasts a primary budget deficit of 1.9% of GDP.

    The point I'm making is that alleviation of odious debt, i.e. banking related debt would hasten a primary balance and place the economy on a much surer footing.
    It may come as a surprise to you but the "banking related debt" actually REDUCED the annual deficit in 2012. This is because the annual revenue from the various banking measures introduced exceeds the annual interest on the debt generated for the banks.

    Revenue includes €1 billion of Guarantee Fees, €1 billion of Central Bank Surplus, €450 million of preference share interest, €300 million of subordinated bond interest. The interest bill was around €1 billion.

    Minus the banking measures and there'd have been a deficit of around €15 billion in 2012.

    The primary deficit for 2013 is projected to be 1.9% of GDP. It's moving towards balance but still has a bit to. There might be a small primary surplus in 2014.

    Any change to the bank debt will do NOTHING to the primary balance. The primary balance is the balance excluding interest payments. If for some reason interest payments were reduced to zero the primary balance would be completely unchanged.

    Also note that much of the interest bill has nothing to do with the banks. It was €2 billion in 2007 before any collapse. Since 2008 there have been around €75 billion of 'normal' deficits. They have added more than €3 billion to the interest bill. That is close to 80% of the 2012 interest bill.
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