Irish Debt/GDP Soars to 125.1%

Irish Debt/GDP Soars to 125.1%

businesspost.ie/#!story/Home … 6d73424772

What would it be if it were GNP?

Astronomical

150%

If the US and EU ever get around to removing the “legal flexibilities” that Ireland offers with regard to transfer pricing, then the Irish GDP numbers will look significantly lower.

Blue Horseshoe

cormaclucey.blogspot.ie/2013/07/ … ng-of.html

Great article on why we should expect a total collapse in the irish economy due to the level and ignorance of rising debt. I’m not a daily mail fan but Cormac is the closest celebrity economist to reality that I can assess

Even if a debt write down is secured, the need to balance the budget will be a given, I can’t see how one could run a deficit after a write down? The debt increase is relentless and the interest is growing the deficit, so in effect Ireland is defaulting on its interest only payments by diverting the tax to ‘lifestyle’ spending we are a mortgage defaulter in arrears, a wont pay rather than a cant pay

How can the state act with any moral authority regarding the arrears gang when it’s deeds don’t match it’s dialogue!

the debt cant be paid and wont be paid be it private or public. All this bs about about repaying, extend and pretend is just going to lead to the country paying all its tax trying to service an ever increasing unmanageable debt burden. and how long will it take people to realise this? I mean there are slow learners, dumbos and then the irish! although in fairness it seems to be malaise affecting the great unwashed worldwide. Would u buy a house now in a country that is hopelessly insolvent and without any leadership in sight?

lord vader,
If on the one hand the debt will never be paid, then how will the country finance the ongoing deficit? I could understand an argument that private debt made public during this debacle may end up not being paid but hardly without a fight and when your hand is outstretched looking for more to pay current deficit spending, it is hard to throw back the IOU for the other stuff. The country is dependent on handouts in the guise of myriad EU grants as well as low interest loans from the ECB, the wonderfully low corporate tax is bringing in a pittance compared to the deficit, all the new taxes are just keeping the river banks from breaching while a flood of private debt is held off with an array of wooden dams an otter would be proud of. One sneeze in global financial markets and the whole damn thing is gone with the torrent, nothing to be seen from the pain of the past 5 years and counting.
So who is Ireland going to default to, the only source of financing available to it or to the plebs in the street, get ready for Noonan to start talking shite about turning ever more corners while laying it on heavy in the budget, there is no option.

the deficit wont be financed by conventional methods and u will have an insane mess of a budget with forced cutbacks, bailins of deposits and private pensions (if anything is left) and loads of funny money printing to paper over teh deficit. the country will be high and dry in a dire predicament forced into a default/devaluation with no bloody plan B let alone plan A from this shower.

I am trying to buy at the minute as, notwithstanding the above, this can run for another 10 years and would prefer negative equity over confiscation or bail-in.

Morgan Kelly in 2011… viewtopic.php?f=4&p=528124

Another 12 bn this year from the deficit…

NTMA Year End Accounting Trick

independent.ie/business/ntma … 45744.html

That is one way to play smoke and mirror games and make it look like debt-to-GDP is going down.

Is there any point to this political chicanery? Will it save money? Or how much extra will it cost?

By my calcs Irish Debt to GNP / GNI is just below Greece post this act.
Don’t want to be the country at the end of the bar chart in the Goldman report?

Greek Debt is 155

Before
Ireland Debt to GDP is 125
Ireland Debt to GNI or GNP is 156
(Ireland’s real like for like metric)

After
Figures are 123 and 153

It’s not chicanery and is not window dressing (at least not for Ireland), that’s just the Indo’s thin knowledge of finance. In reality many debt agencies engage in buy backs when bonds are nearing maturity. There are many reasons, including:

a) cash management: why have to redeem €billions on a single day (and possibly need to issue Tbills to cover it) when you can spread it around a bit
b) clearing the decks: government bonds typically become less liquid over time, so if the treasury is planning to issue in the near future it can make sense to mop up some outstanding
c) opportunism: market conditions vary so buy back when it looks cheap rather than wait for a fixed redemption date (which can’t be postponed)

This particular instance is probably mostly a combination of B & C. The government has already announced plans to issue in the new year, plus in the current environment many institutions are reporting their peripheral sovereign exposure. There’s probably a few investors that would be happy to lower their Irish exposure for their Dec 31st numbers (which won’t show time to maturity) and step back in later – in other words, redeeming now will save the taxpayers a few quid. (So ironically the government can take advantage of other people’s window dressing)

This looks like smart open market operations by the NTMA

+1 Rawk

This isn’t the first buyback

Also, Ryan McGrath (cited by Indo) is a broker/dealer not a trader

Kelly said we’d have 200 billion euro national debt by 2015.

Looks like he was wrong…we have 200 billion euro national debt by 2013/2014!

Pharma dropoff is not going to help the GDP fudge.

Interest payments are running something at 8.5 billion euro at moment.

Extra borrowing at a couple of billion so its hard to call, but they better pray for external food fortune! That’s if you subscribe to the national debt vs GDP/GNP paradigm.

When you say debt interest payment of 8.5 billion on revenues of 50 billion euro it doesn’t look good at all.

Its obvious to me that the Irish Government know that the national debt is unsustainable.

The reason why they have been such good soldiers so far is that they have a realistic expectation that some day soon there will be a massive write down.

And you know, they might just be right.

Tax revenue will be around 41 bn, expenditure north of 50 bn. Income tax is around 15 billion so over half goes to pay the interest.

If memory serves me correctly, back in the '80s about 75% of our income tax went straight to pay the interest on our national debt.

But I think the interest rate was c10%.

More mature pinsters may recall the exact figures.