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Thread: Are International Bondholders safe taking a punt on 4 year Ireland bonds?

  1. #1
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    Default Are International Banks safe taking a punt on 4 year Ireland bonds?

    What should buyers of 4 year bonds consider before putting (other peoples') money into Ireland?
    NTMA to tap bond markets ∑ Business ETC


    Firstly, the positive track record:
    - no senior Bondholder for banking debt has been left behind
    - the troika is still in town for another few months to oversee the natives
    - the permanent government will modestly propose the eating of children before the State defaults on sovereign debt.
    - the recent overhyping of oversubscription for purchase of bills not over 3 months.

    Secondly, the current state of play
    - a deficit of €14bn being celebrated like it's 2009
    - current plan is to have deficit to be 120% of GDP (growth has not met forecasts in at least 5 years)
    - stability in government with same policies being pursued from September 2008 to present.

    Thirdly, the problems coming down the tracks:
    - years of austerity (excluding the Public Sector pay and pensions , headline SW rates and tax rates as they were electoral promises) to come, thereby dampening domestic demand of all taxpayers
    - interest rates to rise from 0.5% causing thousands to default on mortgage, to cause banks to be further recapitalized thereby depleting monies available to repay bonds acquired by 2017 when tomorrows bond falls due
    - long term problems such as huge hole in ability of State to pay State pension (as if), effect oil price increases on an island nation dependent on car travel, emigration and lower birth rate from 1990 reducing workforce/tax payers
    - the euro crisis and risk of its breakup and being repaid in punt nua
    - the risk of SF being in government after a 1915/16 election and keeping its promise to say not to put another (red) cent in banks, thereby making the leap to sovereign default being much smaller.


    If you were an international Bank/bondholders would you take a punt on Ireland?
    Last edited by Con Gallagher; 8th January 2013 at 02:34 PM.

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    Green shoots: Investors offer to lend €7bn as Ireland goes to bond market - Irish, Business - Independent.ie

    "Green Shoots" - at what price?

    (perhaps this could be moved to economy forum, even if the joke is ultimately on us. It is being discussed here http://www.politics.ie/forum/economy...ml#post6250714)

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    Politics.ie Member leftsoc's Avatar
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    "current plan is to have deficit to be 120% of GDP (growth has not met forecasts in at least 5 years)
    "

    Why is debt/GDP ratio always used when it is accepted that GNP is correct measure for this little tax haven? What is the debt/GNP ratio scheduled? 150% ? is that not accepted as unsustainable?

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    Quote Originally Posted by leftsoc View Post
    "current plan is to have deficit to be 120% of GDP (growth has not met forecasts in at least 5 years)
    "

    Why is debt/GDP ratio always used when it is accepted that GNP is correct measure for this little tax haven? What is the debt/GNP ratio scheduled? 150% ? is that not accepted as unsustainable?
    The answer to your second question is indeed 150% (though as you observe we will miss that on the bad side).
    The answer to your first question is contained in your last question.

    Though I suspect you knew that.


    While the Irish media jump around cock-a-hoop about "getting back into the market" and "only" 6%, know that in the wider world of financial markets all risk premia have come plummetting down over the last 2 years - dare I say, a la 2006.

    Lots of free money metaphorically chasing anything in a skirt, with rapidly and ever declining discriminaton.

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    I'm really worried about international bondholders. I'm on the brink of tears here.
    Last edited by Iphonista; 8th January 2013 at 03:30 PM.

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    Quote Originally Posted by Iphonista View Post
    I'm really worried about international investors. I'm on the brink of tears here.
    U Ok Hun? X

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    Short term bonds-yes, long term bonds...no fcu**ing way josť!!
    Fianna Fail - The Anti Democratic Party & The Anti Constitutional Party. Traitors of Irishmen and Irishwomen.

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    Quote Originally Posted by meriwether View Post
    U Ok Hun? X
    Sniffle....yeah, I'll poke you later on Facebook, okay?

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    Quote Originally Posted by Iphonista View Post
    Sniffle....yeah, I'll poke you later on Facebook, okay?
    K, LOL, xxx.

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    Politics.ie Member statsman's Avatar
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    Quote Originally Posted by Iphonista View Post
    I'm really worried about international bondholders. I'm on the brink of tears here.
    Especially the ones who think we still use punts.
    Put a thief among honest men and they will eventually relieve him of his watch. Flann O'Brien

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