Is it just me, or is there something of the “grumpy drunk” about the way in which our government is conducting itself during this crisis.
You know, you have a friend who always gets “messy” with a few drinks, the one night after being out with them, they fall over and crack open their skull. As the blood streams down their face, you, as any good friend would, offer to help, only to be met with a flailing arm in your direction backed up by a barage of abuse and the inevitable “F#*k off, I’m all right, just leave me along, I’ll be OK”, as they gingerly pick themselves up and stagger aimlessly along the street, haemorrhaging.
The IMF . There is not a employee of the IMF on the face of the earth who could not be bought and sold by your average FF 'er in about 5 minutes . Wait till they cop a load of Healy Rae and Son
They will visit Government buildings and will be met by some very grave and serious men . There will be lots of stroking of chins and what not .Charlie Bird will swallow the micrphone as the tension outside government buildings will be so high .
After that it will all be a blurr and they will wake up the next morning with a shocking hangover with The Book Of Kells ( Its priceless ) and a tenancy agreement on several of 40 gaffs properties .
The timeframe is too tight to be seen as some sort of due diligence. “a definite decision on this in the coming days” – this sounds like the decision has already been made and only a few details need hammered out. For political and social expediency, they’re giving the Irish government a couple of days to spin. Fianna Fail will cry ‘banks’ but the mechanism and policy intervention will be a sovereign bailout. The EU will want to kick the Irish can three years down the road. I’d be surprised that they will accept a solution that may require revisiting 6 months from now.
About 90 bn in ECB repo, 20 bn in sovereign bonds bought by the ECB, 34.5 bn in repo at the ICB.
That’s just the banks (but it probably includes the promissory notes and the NAMA bonds, though the end of them haven’t been reached).
Add in 70bn for the deficit…
Look at it this way. The guaranteed liabilities of the banking system were about 650 bn euro. A normal bust with a financial crisis will cost about 30% of that. That’s 195 bn euro. Some of it will be absorbed by the banks, but not very much.
We can’t expect asset writedowns of C&D and commercial of 60% (on average) and residential (both PPR and investment) of 40-60% without there being that cost somewhere. This is leaving aside all other types of loans. So much of the performance of loans was based on the underlying assets increasing in value and the income from them rising every year. Competitiveness isn’t going to return until rents fall, in turn driving a reduction in other costs. As a poster in retail on the 'pin pointed out, rent is the biggest element of his/her costs - and this in an industry that is primarily service related. Staff costs should far outweigh rent costs, IMO.
So rents will continue to fall and therefore asset values and income on loans will too. If you leverage the whole economy, that leverage will come back to bite. Sorry, repeating myself now!
When you sweep away the smoke and mirrors, all that’s happening is that you mugs will be on the hook for another massive capital injection into the banks, which will then be sold off to major European banks. Meanwhile France and Germany view the weakening Euro with satisfaction.
And once again a terrified sheeple, led by crooks, morons and BWUDs, tugs the forelock.