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Thread: Ireland: no longer one of the PIGS

  1. #1
    Gadjodilo
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    Default Ireland: no longer one of the PIGS

    I'm genuinely bewildered by the disconnect between politics.ie folk and economic analysts worldwide regarding the Irish economy. Who has it wrong?

    Ireland Breaks From Greece, Spain to Lead European Bond Gains

    March 30 (Bloomberg) -- Irelandís bonds are poised to outperform those of every other euro member except Austria this quarter as investors bet it will be more successful than countries such as Greece in cutting its budget deficit.

    The nationís debt returned 3.2 percent this year, according to Bloomberg/EFFAS indexes. Yields on 10-year Irish bonds fell to within 128 basis points of those on German bunds on March 12, a 14-month low. Credit Agricole Corporate and Investment Bank and Royal Bank of Scotland Group Plc anticipate that spread may drop to about 65 basis points by the end of 2010 as the bonds keep rising.
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    ďIreland has left the pigsty for the time being and it has come out smelling of roses,Ē said Stuart Thomson, who helps oversee more than $100 billion as chief market economist at Ignis Asset Management.


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    The Irish 10-year bond yield will drop to about 100 basis points more than the bund by the end of June and to 65 basis by 2011, according to Harvinder Sian, a senior fixed-income strategist at Royal Bank of Scotland. Credit Agricole forecasts the year-end spread at 60 basis points.

    Much more here:
    Ireland Breaks From Greece, Spain to Lead European Bond Gains - BusinessWeek

  2. #2
    Politics.ie Royalty toxic avenger's Avatar
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    So we are supposed to put value on the word of the same spivs and parasites who didn't see the crash coming in the first place?...

  3. #3
    Gadjodilo
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    Quote Originally Posted by toxic avenger View Post
    So we are supposed to put value on the word of the same spivs and parasites who didn't see the crash coming in the first place?...
    Well, you could explain why, in your view, they all have it so wrong?

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    Quote Originally Posted by Gadjodilo View Post
    March 30 (Bloomberg) -- Irelandís bonds are poised to outperform those of every other euro member except Austria this quarter as investors bet .
    ď[/url]
    There certainly is a disconnect - the markets seem to be buying into "we've turned the corner" stuff from Lenny and are overlooking the situation with the banks and the general state of the economy and public finances. How long this can go on is the question - most of the focus has been on Greece which has deflected alot of attention away from the other PIGS including Portugal who's credit rating was recently downgraded - the outlook for the UK finances also remains on negative watch. This status quo though could change rapidly if Lenny magic tricks are exposed by further deteriorations in the Irish economy and the ongoing large risk of an emergency budget.

    PS: One needs to be wary too of analysists logic on such things as this story illustrates Goldman Capitulation on Dollar Shows Reversal on U.S. (Update3) - Bloomberg.com

  5. #5

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    Not all economic analysts are so impressed with Ireland. See Simon Johnson
    Ireland’s perceived “success” is partly due to its draconian fiscal cuts. The government has cut take home pay of public sector workers by roughly 20% since 2008 through lower wages, higher taxes, and increased pension payments. As the head of the National Treasury Management Agency John Corrigan proudly advised the Greeks (and everyone else): “You have to talk the talk and walk the walk”.

    So is Ireland truly a model for Greece and other potential problems in Europe and elsewhere? Definitely not – but it does provide a cautionary tale regarding what could go wrong for all of us
    But the Irish state was also carrying a large off-balance sheet liability, in the form of three huge banks that were seriously out of control. When the crash came, the scale and nature of the bank bailouts meant that all this changed. Even with their now famous public wage cuts, the government budget deficit will be an eye-popping 12.5% of GDP in 2010
    Ireland had more prudent choices. They could have avoided taking on private bank debts by forcing the creditors of these banks to share the burden – and this is now what some sensible voices within the main opposition party have called for. However, a strong lobby of real estate developers, the investors who bought the bank bonds, and politicians with links to the failed developments (and their bankers), have managed to ensure that taxpayers rather than creditors will pay
    Investors may wish to remain pleased today with Ireland, but Ireland’s “austerity” – reflecting an unwillingness to make creditors pay for their past mistakes – hardly seems a good lesson for Greece, the eurozone, or anyone else.
    When Irish-type banks fail, you have a dramatic and unpleasant choice. Either takeover the banks’ debts – and create a very real burden on taxpayers and a drag on growth. Or restructure these debts – forcing creditors to take a hit. If the banks are bigger, more powerful politically, and better connected in the corridors of power, you will find the creditors’ potential losses more fully shifted onto the shoulders of taxpayers.
    Could The US Become Another Ireland? The Baseline Scenario

  6. #6
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    Default Snake oil etc.

    Quote Originally Posted by toxic avenger View Post
    So we are supposed to put value on the word of the same spivs and parasites who didn't see the crash coming in the first place?...
    It appears most of the recent rally in world stock markets is based on the utterings of these same people who's own self interest is neatly tied in with their own "predictions" - It also appears investors world-wide continue to be suckers for this kind of thing despite their Dan McLaughlin-like predictions just before Lehmens collapsed. They also seem to be overlooking the fact that world-wide governments have taken on the massive debts of their corporate buddies by direct bail-outs, printing money, low interest etc. that are set to gripple the budgets of many countries including the US and UK for years to come and could well generate the next big financial crisis.

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    Quote Originally Posted by toxic avenger View Post
    So we are supposed to put value on the word of the same spivs and parasites who didn't see the crash coming in the first place?...
    Spiv? Back to the UK with you, Brit.

    The word "spiv" would never enter an Irish mans vocabulary.

  8. #8
    Politics.ie Royalty toxic avenger's Avatar
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    Quote Originally Posted by Gadjodilo View Post
    Well, you could explain why, in your view, they all have it so wrong?
    Well, for a start, include NAMA in the debt/GDP ratio, then ignore the bullsh1t about the property market being at the bottom, and you have further massive write-downs to come - taking the figure much higher. Only fools believe the spin that current market values are as low as they can go (the government has already been proved to be wrong once on that score, how many more times?). We are using 266% of our GDP (and that's the conservative figure in advance of tomorrow) propping up financial institutions when tinpot third world countries average something like 50%, while the other so-called PIGS are at about 13%. We are deflating our economy just when everyone else is trying to kick-start theirs. We are propping up banks that should be long since dead and buried. We are entering a decade of sheer pain, we have the mother of all parties to pay for, and we haven't even begun to properly clean up yet...

  9. #9
    Gadjodilo
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    Quote Originally Posted by Ecoguy View Post
    There certainly is a disconnect - the markets seem to be buying into "we've turned the corner" stuff from Lenny and are overlooking the situation with the banks and the general state of the economy and public finances.
    Do you believe that's all analysts do? Read the spin by finance ministers? Surely then they'd be swallowing what other countries' fin mins are saying too.

    Before ye all start panicking, no-one is saying we're out of the woods or that the crisis is over - just that we're in a better position than our erstwhile PIGS colleagues and if the article below is to be believed might soon find our position taken by the UK.

    What Ireland can teach us about spending cuts - Telegraph

  10. #10
    Politics.ie Royalty toxic avenger's Avatar
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    Quote Originally Posted by yayo View Post
    Spiv? Back to the UK with you, Brit.

    The word "spiv" would never enter an Irish mans vocabulary.
    The word 'twat' enters mine every time I read your posts, banjo-boy.....

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