Exchequer may be running out of willing creditors

[nuj]

An SBP article today is also acknowledging that Ireland is running out of an ability to borrow. It says that the €1billion raised last Tuesday when just €1.24billion was tendered compares with €3billion tendered for a similar €1billion bond offering from May last year. Therefore, only circa 40% of the money offered compared to a year ago.
Sunday Business Post | Irish Business News

Cover (i.e. ratio of bids to amount being sold) on euro government bond auctions is, strangely, a fairly meaningless number. For example, a huge chunk of Germany's auctions over the last two years have failed to achieve a cover of even one, which fact attracted huge media attention last November, as if it were a novelty. It's not.

Ireland's ability to borrow isn't impaired - rather, the cost at which it can raise funds has risen. They are two separate issues. That said, the cost of borrowing versus German costs has fallen sharply from the levels of late Jan/early Feb. It is as much the speed and extent of that decline (from 280 basis points, or 2.80%, to under 200bp at the end of this week, in 10 year maturities) that would have diminished the appetite of investors for last weeks offerings.

Ireland is effectively being ranked by markets as a single A entity, versus its majority rating of AA (and still AAA with Moody's, though that's due for review very soon). The cost of borrowing reflects this. The cover reflects little other than conditions in bond markets at a particular time on a particular day.

[Odyessus]

Since the Good Friday Agreement was signed we're all supposed to be great friends with the neighbours, but it has left a Britain sized hole in the Irish psyche.
Never mind.
Brussels is about to step in to the gap.

If we get everything we need from the ECB we're going to be saddled with Lisbon, tax harmonisation, loss of outside investment and unpopular social legislation. Not to mention "there shall arise seven years of famine; and all the plenty shall be forgotten in the land of Egypt;"
Under the yoke of a new foreign oppressor.

Luckily we know what to do in a situation like this.

I'm not saying that we get the ECB to sign up to long term repos on bank held Treasuries and then the 32 County Sovereign Debt Committee start bombing Brussels until they leave us alone ... well OK, that is what I'm saying, but it surely won't come to that. This is the European parliament we're talking about. They'd cave if you threatened to take away dessert.

The government does the SDLP schtick. Condemns the senseless violence, provides the reasonable voice that concessions can be made to.
Come on, we can do it with our eyes closed.

An armalite in one hand, a ten year treasury note in the other.
Bomb and Borrow!
Beir Bua!



And a big hello to everyone in the Garda monitoring unit at headquarters.

..........we get the ECB to sign up to long term repos on bank held Treasuries and then the 32 County Sovereign Debt Committee start bombing Brussels until they leave us alone ...

So it's war, eh? Seems like a good plan, but suppose we win?