Emm , the taxpayer ?
I don’t know what Greece are doing with their €120n from the Euro rescue fund, but if we got such an injection I think a large chunk of it would go to writing off debt and filling the resultant holes in the banks balance sheets. Our biggest problem is that we are being stifled to death by our debt. Even if we can address the deficit by cutting things to kingdom come and accepting a lower standard of living, the debt would still remain. So I’d like to see:
Ireland access bailout money
Ireland commits to slashing the deficit very quickly, irrespective of negative multiplier
Bailout money used to fill in holes in banks after we cut collective debt burden
Hopefully the outcome is a massive internal devaluation (wage, price, debt), with all of that stifling debt lessened giving us some breathing space to innovate and grow
Layman’s opinion there BTW - I have no idea whether this is kosher in a technical economic sense. And of course not having to blow €40b on Anglo would help enormously as part of this overall work-out.
Larry - you’ve just outlined the best possible case.
My take is there will still have to be a large amount of pain in the residential market as there is no way the ECB / IMF are going to underwrite wholsesale mortgage forgiveness with attendant moral hazard. Along with massive public sector cuts there will need to be some visible reckoning for those who have stopped repayments - pour encourager les autres - as the Spanish and Portugese will be watching, not to mention the long suffering Bild-reading German proles who will be paying for the whole mess.
No, but we all have our suspicions, don’t we? Cosy loan anyone? Who’s the go-to bank now that Fingers is unavailable? I’ve an unassailable opportunity on some NAMA lands on sale on the QT…
Isn’t Obama’s interest free loans in this article equivalent to Mortgage Interest Supplement? Why would we have both?
Doesn’t look like Wilbur will be riding in on a white steed to rescue under-water borrowers so.
That hardly narrows down the list of candidates…
Eh? Read the first part I quoted.
I probably didn’t need the second one though.
Eh, Wilbur is riding with Cardinal. Tonto I think they call him:
Haha. Thanks, obviously I completely missed that when I scanned the article.
So is it game on then or what?
He may get a second bite at the cherry when IL&P face up to their mortgage problem regardless.
Wilbur Ross is part of the Cardinal consortium, so he’s still in the hunt.
Just assume for a second that the bondholders were to take a bath…
Would the institutions holding those bonds (mainly German) be at risk and what would the condequences of that be? It’s why the Greek “rescue” happened after all.
As expected, the bidding is down to IL&P and Cardinal. The only thing I don’t understand is how IL&P can raise the capital to take EBS over.
It seems to me that the decision regarding a mortgagee bailout has already been made behind closed doors but that it won’t be implemented until we can absorb the cost. Does anybody care to estimate how much this would cost? If we actually gave people the option to walk and be debt free in three years I think we would see widespread default. The other point though is that if we are deferring this until we can ‘afford it’, it might not be for a long long time. Maybe these people will have to suffer on for five years or even ten. Some of the threads on AskAboutMoney.com from people who over stretched themselves are very sad. I know they made mistakes but at the moment they have no reasonable way out.