Irish financial engineering...

[yoganmahew]

namawinelake.wordpress.com/2011/ … s-at-1-25/

The cack-handedness with which this financial crisis is being handled here is getting cack-handier. To date we have received €17.8bn from the IMF/EU and most of it is not to fund day-to-day spending or to fund the roll-over of maturing debt at the NTMA. No, most of it was earmarked to recapitalise our banks. The original plan, nay commitment, was to shovel the funding in at the end of February 2011. Minister Lenihan decided to leave the decision to shovel, to the next administration. And the next administration said it would wait until the end of March 2011 to consider the stress test results, and now Minister Noonan has apparently committed to shovelling in the funds pending the successful outcome of a subordinated debt buy-back (what is intended is that AIB and possibly BoI will buy back subordinated debt at 10-25c in the euro, a major offer was made by AIB during the week and we wait to see how many subordinated bondholders will accept the offer). The IMF seems to think that we will have shovelled in the funds to the bank by the end of July 2011.

And so we’re going to be sitting on the best part of €18bn for six months (Feb 2011 – July 2011). And we’re paying approximately 5.8% for it, or just over €500m for six months. That by the way is coincidentally close to the €470m which we will be relieving private pensions of, this year to fund the Jobs Initiative.

[jmc]

https://namawinelake.wordpress.com/2011/05/14/irish-financial-engineering-borrow-e18bn-from-the-euimf-at-5-8-and-place-it-on-deposit-at-banks-which-can-otherwise-obtain-funds-at-1-25/

The cack-handedness with which this financial crisis is being handled here is getting cack-handier. To date we have received €17.8bn from the IMF/EU and most of it is not to fund day-to-day spending or to fund the roll-over of maturing debt at the NTMA. No, most of it was earmarked to recapitalise our banks. The original plan, nay commitment, was to shovel the funding in at the end of February 2011. Minister Lenihan decided to leave the decision to shovel, to the next administration. And the next administration said it would wait until the end of March 2011 to consider the stress test results, and now Minister Noonan has apparently committed to shovelling in the funds pending the successful outcome of a subordinated debt buy-back (what is intended is that AIB and possibly BoI will buy back subordinated debt at 10-25c in the euro, a major offer was made by AIB during the week and we wait to see how many subordinated bondholders will accept the offer). The IMF seems to think that we will have shovelled in the funds to the bank by the end of July 2011.

And so we’re going to be sitting on the best part of €18bn for six months (Feb 2011 – July 2011). And we’re paying approximately 5.8% for it, or just over €500m for six months. That by the way is coincidentally close to the €470m which we will be relieving private pensions of, this year to fund the Jobs Initiative.

Which is why I think grabbing a group of people at random off the streets would do a far better job of running the finances of the country. Set up the equivalent of a civil grand jury, have the options presented to them in clear language and just watch the quality of decisions made improve by several orders of magnitude.

[The_Unwelcome_Guest]

@jmc

Which is why I think grabbing a group of people at random off the streets would do a far better job of running the finances of the country. Set up the equivalent of a civil grand jury, have the options presented to them in clear language and just watch the quality of decisions made improve by several orders of magnitude.

Hardly the point is it… Our “democracy” ensures we get the best of the best… Or so I’m told…