Ireland - Risk of Default on Public Debt 50/50

[Outlander]

http://www.marketwatch.com/news/story/asian-shares-mostly-lower-japan/story.aspx?guid={E3CA15E9-9AF0-4E59-85DF-E271C1DF150E}&dist=msr_1

MarketWatch

BNZ strategist Danica Hampton expected risk appetite and stocks to remain the key driver for the currency market this week; "while the new U.S. stimulus package has the potential to inject some optimism into markets we suspect this will be overshadowed by fears about the eastern European financial sector and worries that Ireland may default on its debt."

Irish government faces growing fears of debt default | World news | The Guardian

Guardian

Moody's has warned there is a more than 50% chance Ireland will lose its triple A rating within 12 to 18 months.

Top business stories from the weekend of Feb 14-15 - Telegraph

Telegraph

There is an increasing risk that Ireland could default on its debt and the issue should be pushed to the top of the international agenda, according to Simon Johnson, the International Monetary Fund’s former chief economist.

Failure to save East Europe will lead to worldwide meltdown - Telegraph

Telegraph

This article shows that we are not alone in Europe and concentrates on Western European exposure to distressed loans in Eastern Europe, for example Austria has outstanding loans of 70% of GDP or €230Bn.

So if we were hoping for any help from the EU:

Whether it takes months, or just weeks, the world is going to discover that Europe's financial system is sunk, and that there is no EU Federal Reserve yet ready to act as a lender of last resort or to flood the markets with emergency stimulus.

Europe is already in deeper trouble than the ECB or EU leaders ever expected. Germany contracted at an annual rate of 8.4pc in the fourth quarter.
If Deutsche Bank is correct, the economy will have shrunk by nearly 9pc before the end of this year. This is the sort of level that stokes popular revolt.
The implications are obvious. Berlin is not going to rescue Ireland, Spain, Greece and Portugal as the collapse of their credit bubbles leads to rising defaults, or rescue Italy by accepting plans for EU "union bonds" should the debt markets take fright at the rocketing trajectory of Italy's public debt (hitting 112pc of GDP next year, just revised up from 101pc – big change), or rescue Austria from its Habsburg adventurism.

<Mod> This thread has been merged with "Sunrise Market Commentary - Fears are mounting that Ireland could default!" </Mod>

[BodyofEvidence]

a 50% chance of a downgrade doesnt translate into a 50% chance of default.
But, its grim..

[jpc]

How much longer for the Euro?
How much are German savers going to be out of pocket?

[seabhcan]

This worry is really overdone.

Ireland has very low debt at the moment, and everyone is in trouble. We're starting at 26% debt while Italy is starting at 106%.

I think the global english language press has picked on Ireland simply because its easy for them to look at our media and read the doom and gloom. You don't hear half as much about the dire situation in Hungary - mainly because their media is not in english.

Financial journalists across the world are incompetant and lazy. They were happy to report the economy was fine up to 2008. Now they are hyping the gloom because its an easy topic to report and people expect to hear that sort of thing now.

The situation was worse than they reported in 2001-2008. Now its better than they are reporting.

[MortgageBroker]

a 50% chance of a downgrade doesnt translate into a 50% chance of default.
But, its grim..

a downgrade does guaranteed that treasury rules with lots of international institutions will limit the % of money they can hold here and that will cause a massive capital outflow which will be the first domino.

[jpc]

This worry is really overdone.

Ireland has very low debt at the moment, and everyone is in trouble. We're starting at 26% debt while Italy is starting at 106%.

I think the global english language press has picked on Ireland simply because its easy for them to look at our media and read the doom and gloom. You don't hear half as much about the dire situation in Hungary - mainly because their media is not in english.

Financial journalists across the world are incompetant and lazy. They were happy to report the economy was fine up to 2008. Now they are hyping the gloom because its an easy topic to report and people expect to hear that sort of thing now.

The situation was worse than they reported in 2001-2008. Now its better than they are reporting.

The problem is the financial system has stopped creaking its starting to break now.
The 26% figure you quote is due to go to over 40% this year.
Things are getting worse dramatically not incrementally.

[seabhcan]

The problem is the financial system has stopped creaking its starting to break now.
The 26% figure you quote is due to go to over 40% this year.
Things are getting worse dramatically not incrementally.

At 40% we are still below where the UK was when this crisis started.

I'm not saying things aren't bad - but we are not the worst by far.

[BodyofEvidence]

This worry is really overdone.

Ireland has very low debt at the moment, and everyone is in trouble. We're starting at 26% debt while Italy is starting at 106%.

I think the global english language press has picked on Ireland simply because its easy for them to look at our media and read the doom and gloom. You don't hear half as much about the dire situation in Hungary - mainly because their media is not in english.

Financial journalists across the world are incompetant and lazy. They were happy to report the economy was fine up to 2008. Now they are hyping the gloom because its an easy topic to report and people expect to hear that sort of thing now.

The situation was worse than they reported in 2001-2008. Now its better than they are reporting.

While I agree that the reporting is overdone, the TREND here is very very negative. Plus, we are far worse placed than we think as there is no effective givernment, or hadnt you noticed!

[Dios]

Telegraph

This article shows that we are not alone in Europe and concentrates on Western European exposure to distressed loans in Eastern Europe, for example Austria has outstanding loans of 70% of GDP or €230Bn.

Heh, the Telegraph would be only too delighted to see the euro sink. Unfortunately for them it looks more like the UK will be forced to drop the pound sterling at this point. Makes a handy distraction for the masses for a while, though.

At 40% we are still below where the UK was when this crisis started.

I'm not saying things aren't bad - but we are not the worst by far.

Public debt was swapped for private debt during the boom. Its now swinging back extremely rapidly, with no reduction in private debt, leaving us with the unique situation of having to finance both private debt via the banks and public debt via taxes. And this is just to keep the lights on. Its worse than the numbers tell.

[seabhcan]

Heh, the Telegraph would be only too delighted to see the euro sink. Unfortunately for them it looks more like the UK will be forced to drop the pound sterling at this point. Makes a handy distraction for the masses for a while, though.

The euro will not 'sink' and neither can the UK join. Neither is an option.