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[UPDATE]: LTE on Irish bail-out published by the Irish Times

by Frank Schnittger Thu Nov 25th, 2010 at 02:58:04 AM EST

Now also available in Boo and Orange where it's my first time on the rec list.

To my great surprise the Irish Times has published my long letter on the bailout in full:

The Irish Times - Letters

Madam, – I am currently in southern Africa where there is some incredulity at the current state of Irish affairs. Having been told for so long that export competitiveness is the key to economic salvation people here wonder how a country where exports continue to [be] at twice the level of imports can be in such trouble.

This incredulity is reinforced when I tell them the real Irish economy is growing despite the best efforts of the Government to close it down and that the debt to GDP ratio was as low as 25 per cent as recently as 2007. How can Ireland now be on the brink of bankruptcy and close to having its sovereignty removed by EU/ECB/IMF diktat? I tell them it is because the Government has stolen circa €70 billion of the public’s money (almost 50 per cent of Ireland’s GNP!) and given it to foreign investors in bankrupt banks.

When they ask what these bank investors have done to deserve such largesse, I tell them that they fuelled an unsustainable property bubble which made it almost impossible for our young people to join even the bottom rung of the property ladder and which threatened to make the whole Irish economy uncompetitive.

“Surely”, they wonder, “investors in such banks do not deserve to be rewarded for such irresponsible and destructive behaviour particularly when it is their victims who must now pay the price – home owners in negative equity, the sick seeking health care, the aged and those made unemployed seeking social welfare? Did many of those those now unemployed not lose their jobs because of the irresponsible behaviour of the banks and their investors in the first place?”

At this point, I admit to being stuck for an answer. Perhaps your readers can help me out and explain why it is that the victims of this crime must pay the perpetrators with money they don’t have and must now borrow from many of these same “investors” at increasingly ruinous interest rates and why the Government is actively colluding in this process?

Would the proper process not have been what is known in business as a “debt equity swap” and which would have made those foreign investors shareholders in the banks they had so seriously misled in the first place?

Sorting out the banks would then, very properly, have been their problem and Irish citizens, who had no hand, act or part in the running of those banks could have looked elsewhere within the EU for their banking services if they so desired or required? Why do bank profits belong to their investors and bank losses to the public?

The Irish Constitution (Article 40.3.2) guarantees the right to property and Article 43 acknowledges that these rights ought to be regulated by the principles of social justice and the common good. By what principle of social justice are those with no ownership of the banks made liable for the losses of those who do? Has the Government not acted unconstitutionally in this case? – Yours, etc,

FRANK SCHNITTGER,

Red Lane, Blessington, Co Wicklow.

Many thanks for all the comments and suggestions on the draft below. The Irish Times published the earlier rather than the revised draft I sent them, but I don't think that effects the overall sense of the letter unduly.


Display:
Maybe you can get some fodder from here?

European Tribune: Germany continues to be helpful

RTÉ News: Euro 'at stake' in Ireland bail-out - Germany
The German press on Tuesday stressed how important it was for Germany to step in, for its own interests.

'German investors have a good €100 billion lying in Ireland and an Irish bankruptcy would send shockwaves,' the Suedeutsche Zeitung said.

Meanwhile, the Berliner Zeitung wrote in an editorial: 'The money of German savers and insurers is being saved in Ireland. Let's finally have a debate about common economic governance and economic and fiscal policy before it's too late.'

Oh, dear, sanity from the German press, going where the Finance Minister dare not tread.


Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Wed Nov 24th, 2010 at 07:04:26 AM EST
This whole crisis, if nothing else, underlines how interdependent Eurozone economies now are and how little sense it makes to have so little by way of fiscal policies in common. The popular recognition of this may lay the groundwork for more concerted action, and perhaps a new Treaty in due course. However first we must overcome the German fixation with being a net exporter to other Eurozone economies.  This simply isn't possible in a stable common currency zone.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 24th, 2010 at 01:47:22 PM EST
[ Parent ]
Wasn't the biggest German bailout for a German bank that had purchased Irish banks?
by rootless2 on Thu Nov 25th, 2010 at 08:47:45 AM EST
[ Parent ]
A small nit. Last sentence, fifth paragraph.  The sort of typo that I often make and never see when proofreading.

Otherwise, an excellent work.

Now where are we going and what's with the handbasket?

by budr on Wed Nov 24th, 2010 at 07:58:39 AM EST
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 24th, 2010 at 12:53:21 PM EST
[ Parent ]
It's very good, Frank. Just a couple of small edits I would suggest:

having its Sovereignty removed sovereignty overruled by EU/ECB/IMF diktat?

deserve to be rewarded for such irresponsible and destructive behaviour

("irresponsible behaviour" is repeated in the same paragraph).

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Nov 24th, 2010 at 08:18:16 AM EST
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 24th, 2010 at 12:59:43 PM EST
[ Parent ]
Well written, Frank!

I think you should be clearer in some sentences. For example:

I tell them it is because the Government has stolen c. 70 Billion Euro of the public's money (almost 50% of Ireland's GNP!) and given it to foreign investors in bankrupt banks.

I tell them it is because the Government has stolen c. 70 Billion Euro of the public's money (almost 50% of Ireland's GNP!) and given it to foreign investors who hold bonds of bankrupt Irish banks.

Oh, and here is some ammunition:

FT Alphaville » Extensive Irish forbearance, what was it good for?

Nothing quite comes near to the boom and bust experienced in Ireland, does it?



"People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them." - Jean Monnet
by Melanchthon on Wed Nov 24th, 2010 at 08:29:31 AM EST
The graph is very stark but LTE pages don't accept graphs!  The point is uncontroversial enough not to need supporting evidence.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 24th, 2010 at 01:08:06 PM EST
[ Parent ]
nice one Frank.
amazing the perspective one gets by travelling and looking back at the home situation from the outside. good for those africans, it sounds they'd do a better job running euro economies than our economists/bankers do...

one more typo, "KIND regards'

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Wed Nov 24th, 2010 at 01:25:46 PM EST
[ Parent ]
I don't know how that one got through!

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 24th, 2010 at 01:32:36 PM EST
[ Parent ]
most accidents happens almost home... :)

"We can all be prosperous but we can't all be rich." Ian Welsh
by melo (melometa4(at)gmail.com) on Wed Nov 24th, 2010 at 07:06:46 PM EST
[ Parent ]
Aren't you conflating the roles of the Irish banks' management, shareholders and bondholders when you talk about (foreign) "investors"?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Wed Nov 24th, 2010 at 08:35:22 AM EST
European Tribune - Draft LTE: Bailing out Banks against the Constitution?
Would the proper process not have been what is known in business as a 'debt equity swap' and which would have made those foreign investors shareholders in the banks they had so seriously misled in the first place?
In particular, in what way can a bondholder be said to have misled the issuer of the bonds?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Wed Nov 24th, 2010 at 08:39:13 AM EST
[ Parent ]
I have changed the offending sentence to
would have made those foreign investors shareholders in the banks they so unwisely invested in the first place?


Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 24th, 2010 at 01:21:31 PM EST
[ Parent ]
'invested in in the'

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Wed Nov 24th, 2010 at 01:47:27 PM EST
[ Parent ]
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 24th, 2010 at 01:55:04 PM EST
[ Parent ]
Along with debt equity swaps, you might also mention bond exchange with haircuts, like this :

FT.com / Capital Markets - Anglo Irish bondholders agree new terms

The bank last month offered to swap its outstanding junior bonds at 20 per cent of their face value for new government-guaranteed paper as part of its efforts to reduce its liabilities. The deal is being watched closely across Europe for the precedent it could set for future bondholder forfeits in failing banks.
...
The exchange offer has stunned the City with the harshness of its terms because it contains a rare "sweeper" clause. In addition to the 20 per cent pay-out, acceptance of the offer also counts as a vote that allows the bank to punish any holdout bondholders by paying them just 1 cent per €1,000 of bonds held, which one banker called "bondholder cannibalism".


"People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them." - Jean Monnet
by Melanchthon on Wed Nov 24th, 2010 at 08:51:53 AM EST
That's not cannibalism, it's depilation.
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Nov 24th, 2010 at 09:02:15 AM EST
[ Parent ]
The Anglo Irish deal of course raises the question as to why the Government did not do the same, although the infamous Bank guarantee was probably the reason.  The LTE is already too long and too complex for publication - most published LTEs only make one point so I think I will have to stick with the single alternative mentioned as far as the letter is concerned.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 24th, 2010 at 01:26:29 PM EST
[ Parent ]
If you feel like cutting something, I would suggest cutting the constitution bit and ending with

Why do bank profits belong to their investors and bank losses to the public?

Kind regards,

But that is if you feel it needs to be shorter.

As I see it, the LTE is mainly about how absurd the economy of the crises looks from the outside, a literary vehicle that you use well. The question about legality is not really framed within the same vehicle and thus detracts a bit from the format but adds a political pointedness.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Wed Nov 24th, 2010 at 02:12:42 PM EST
[ Parent ]
I'd send just those words. It's the key question that needs to be asked - and answered.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Nov 24th, 2010 at 02:13:57 PM EST
[ Parent ]
The constitutional question is probably the only new point (for me) in the letter - and I was hoping that it would persuade the Editor to publish. They don't like publishing points that have been made before - although I think it is the combination of points made and the mounting absurdity of the situation that makes the letter effective.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 24th, 2010 at 03:18:26 PM EST
[ Parent ]
Which I have incorporated above as best I could.

The letter is obviously written by an Irish person for an Irish audience, but I wonder whether a more generically worded letter could be sent to all leading newspapers in EU countries - as a sort of ET project?

Most of the points made are probably not well known across the EU, and need to be made to better educate the public as to what is really going on.

If people think this is a good idea, I could have a go at doing a first draft (in English).

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 24th, 2010 at 01:53:04 PM EST
That's a great idea. In most places, this is being spun as a rescue of the Irish from their own stupidity, rather than a rescue of the German bondholders from their stupidity.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Nov 24th, 2010 at 01:55:58 PM EST
[ Parent ]
Can't expect the Germans to point that out, can we?

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 24th, 2010 at 06:04:09 PM EST
[ Parent ]
No, not really.

But I would expect the reality-based parts of - say - the Danish press to point it out.

Ah, but who am I kidding. "Reality-based parts of the Danish press." Right.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Nov 24th, 2010 at 06:43:04 PM EST
[ Parent ]
An LTE might be as good as it gets for a while.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 25th, 2010 at 12:17:20 AM EST
[ Parent ]
It has been pointed out in the German press, to a much greater degree than during the Greek crisis.
by MarekNYC on Sat Nov 27th, 2010 at 11:07:32 AM EST
[ Parent ]
I don't think you could have said it any bettet, Frank.

Well done.

by redstar on Wed Nov 24th, 2010 at 02:21:03 PM EST
This is my 200th. Diary since I joined ET 3 years ago. Many thanks to all who have made blogging on ET such an enjoyable and educational experience for me.  Hopefully we have also played a role in raising issues that needed to be raised in public consciousness.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 24th, 2010 at 03:34:57 PM EST
congrats Frank, that's a huge body of work, one that has made a thorough and grounded contribution here.

Thanks!

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Wed Nov 24th, 2010 at 07:10:29 PM EST
[ Parent ]
Nice one, Frank.

A debt/equity swap is certainly needed, but as you know, I advocate

doing it a bit differently

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Thu Nov 25th, 2010 at 04:45:55 AM EST
Good letter.

The Obama administration is rarely credited properly for forcing GM and Chrysler bondholders to pay the price of their reckless search for high return, but it did exactly that - much to the shock of the bondholders.

by rootless2 on Thu Nov 25th, 2010 at 08:51:44 AM EST
Congrats, Frank!

I am very glad to see your LTE published in its entirity. What surprised me most was that all but one of the letters opposed the settlement and demanded that the bondholders take a hit. One advocated for government default. Only one attempted to defend the actions of the government. What are the chances that this sort of recognition of the root problem and demand for changes at the root will spread?

A letter from Emmet Moorehouse notes: "The political classes of this country have failed - the government by its inept bungling and the Opposition by its bovine acceptance of the premise that we must borrow to save private institutions." How likely are such sentiments to motivate opposition parties to take a less accommodating stand and reject these terms? By so doing Ireland would actually be doing the citizens of much of the world a great favor by setting an example of how to deal with fraudulent bankers and their enablers.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 25th, 2010 at 10:53:08 AM EST
I don't have much faith in the opposition parties - all they have to do is take no risks, avoid faux pas, and a landslide victory is theirs.  They are not going to support a policy which could be attacked as irresponsible or unrealistic.

It is just about possible they will take a fresh look at the situation when they get into Government,  The problem is that their options may be v. limited at that stage.  Most of the original bond holders have already been repaid in full.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Nov 25th, 2010 at 02:10:13 PM EST
[ Parent ]
Excellent, Frank! This one was a good length, and having made it so, gave less opportunity for editorial scissors or argument-changing paraphrasing.

Pity the LTE rulebook doesn't allow headlines, but professionally, I would put the core meme:

Why do bank profits belong to their investors and bank losses to the public?

..at the top, as the title.

It's the killer question that has been half-formed in the general public's mind for quite a time, but they could never quite put their digit on it, with all the obfuscation.

I hope your LTW helps to focus the obvious public anger onto a debate that even the Irish media can't avoid. That debate would be very interesting for the rest of Europe to follow, imo.

Your question is one that 730,000,000 Europeans should be asking.

You can't be me, I'm taken

by Sven Triloqvist on Thu Nov 25th, 2010 at 11:17:30 AM EST
It appears they're already asking it.

ARGeezer:

all but one of the letters opposed the settlement and demanded that the bondholders take a hit. One advocated for government default. Only one attempted to defend the actions of the government.


Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Thu Nov 25th, 2010 at 11:24:54 AM EST
[ Parent ]
Yeah, pretty good for a sample of six, but how representative are they?

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 25th, 2010 at 11:36:48 AM EST
[ Parent ]
If they were selected by the editorial staff, that's also significant.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Thu Nov 25th, 2010 at 11:45:26 AM EST
[ Parent ]
It is indeed significant.

The Double Bind the LTE editors find themselves in is not being negative about the advertisers or their field, and yet still retaining the loyalty of an audience to be sold to said advertisers. Lose the former and the business model doesn't work, antagonize the latter and you've got nothing to sell.

So I'd say the editorial choice of LTEs reflects a trend: audience attitudes are changing, and editorial expression of them is not going to hurt ads too much.

I don't know the make up of The Irish Times advertisers, but consumer-directed advertisers are probably neutral or on the side of the loyal audience. Money in the local audience's pockets is more useful to them than in the pockets of foreign investors.

You can't be me, I'm taken

by Sven Triloqvist on Thu Nov 25th, 2010 at 12:36:16 PM EST
[ Parent ]
Frank,

Your cross-post in orange seems to be a hit. Several thanked you for explaining the situation so clearly and properly informing them! Now what is needed is some group with enough resources to challenge in court the actions of the Irish government in bailing out the banks. This could create enough uncertainty around the prospects of the bondholders to make acceptance of onerous conditions moot.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 25th, 2010 at 11:40:41 AM EST
Yep, its my first time ever on the DKOS rec list.  Many thanks to all here who recommended there - it's no harm at all to give the Irish issue some airtime in the US.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Nov 25th, 2010 at 01:39:35 PM EST
[ Parent ]
That's a heckuva job, Frankie!

"People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them." - Jean Monnet
by Melanchthon on Thu Nov 25th, 2010 at 02:18:40 PM EST
[ Parent ]
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Nov 25th, 2010 at 02:48:21 PM EST
[ Parent ]
Thanks!  These things are so fleeting and tomorrow its on to the nest Obama story...

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Nov 25th, 2010 at 03:30:24 PM EST
[ Parent ]
I though when they said he's an alien, it meant he was born overseas, not that he was actually hatched from an egg on a different planet.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Sun Nov 28th, 2010 at 04:36:44 AM EST
[ Parent ]
Then those aliens had better crank up the orbital mind control lasers to prevent the Tea Partiers from picking up on the alien egg story.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Nov 28th, 2010 at 09:26:19 PM EST
[ Parent ]
I'd be thinking it was a rival alien race that was using the mind control rays to incite the Tea Partiers.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Nov 29th, 2010 at 02:14:15 AM EST
[ Parent ]
Dueling orbital mind control lasers -- a comic classic if ever there were one.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Nov 29th, 2010 at 12:24:47 PM EST
[ Parent ]
... rival sets of alien invaders.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Mon Nov 29th, 2010 at 04:32:33 PM EST
[ Parent ]
With the humans as the straight men, naturally.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Nov 30th, 2010 at 12:24:38 PM EST
[ Parent ]
Excellent..

A spanish blog (who knows who) took the liberty, freedom, face to reproduce a paragraph...

http://avionesdecercanias.blogspot.com/

I think it is fair use :)

Very good Frank.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Nov 25th, 2010 at 04:20:56 PM EST
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Nov 26th, 2010 at 12:57:03 AM EST
[ Parent ]
It looks as if the only way a reasonable deal can be negotiated is to kick out the Government and start again...

Penal interest rate the price of €85bn bailout - National News, Frontpage - Independent.ie

SOME of the €85bn bailout loans Ireland is to get will cost us a penal 6.7pc in interest -- far in excess of what was expected.

There was shock last night as it emerged taxpayers will have to shoulder a much higher-than-expected interest cost that will run into billions of euro a year.

By contrast, Greece, which earlier this year borrowed almost €115bn from the European bailout fund and the IMF, is paying an average interest rate of about 5.2pc for its loans.

Most of the money we are borrowing is coming from the expensive European Union contingency fund overseen by Klaus Regling, the head of the bailout fund.

That fund will charge 6.7pc a year in interest, a figure that will be hard to bear for a country only expected to grow next year by 2.5pc.



Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Nov 27th, 2010 at 05:07:42 PM EST
Penal interest rate the price of €85bn bailout - National News, Frontpage - Independent.ie

In a separate development, it emerged that taxpayers will also have to shoulder most of the burden of an €85bn bailout of the country and the banks to be announced this weekend.

Despite intense market speculation, the money loaned to Ireland will be repaid mainly by Irish taxpayers, not investors who put money into the banks.

While so-called junior bondholders will be asked to make a contribution to the costs of the bailout, senior bondholders are to remain sacrosanct as they have a state guarantee that cannot be reversed.

Package

It is understood that the Government will get a €50bn loan to fund the country for the next three years, while the banks will get a €35bn loan. Among the other elements of the package to be announced are:

  • AIB will be nationalised, leaving shareholders nursing huge losses.
  • Bank of Ireland is meanwhile fighting government control and wants to raise any money itself if given "time".
  • Thousands of loans are to be stripped from the banks and moved to another agency or sold to private investors in auctions.

Yesterday markets reacted strongly to suggestions that senior bank bondholders, previously off limits, could have their investments slashed to help the banks raise the additional money. But guarantees given to these investors by Finance Minister Brian Lenihan means this cannot happen.

Thus, logically, Brian Lenehan and his Government has to be rejected at the polls for the issue of senior bondholders to be revisited...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sat Nov 27th, 2010 at 05:10:53 PM EST
senior bondholders are to remain sacrosanct as they have a state guarantee that cannot be reversed.

Baloney.

Stuff & nonsense.

senior bondholders are to remain sacrosanct as they have a state guarantee that cannot be reversed Irish politicians are tied too deeply to their purse strings to do the right thing and make them fork over the cash.

Fixed.

Skepticism is the first step on the road to truth. -- Denis Diderot

by ATinNM on Sat Nov 27th, 2010 at 05:25:01 PM EST
[ Parent ]
They should pay senior bondholders off in "sacrosanct euro bills" which could be as simple as notes written in crayon

"The bearer of this note is entitled to ___ sacrosanct euro bills transmitted by miracle at any Temple of Cash. Or not. Depending on whether the market so decrees."

by rootless2 on Sat Nov 27th, 2010 at 05:47:32 PM EST
[ Parent ]
... has been agreed, but the Irish pension reserves which were intended to provide (unsurprisingly) for pensions, or at a pinch, for economic stimulus, now have to be poured into the black hole of insolvent Irish banks, along with any other extant cash reserves.  This deal reduces Ireland to debt-slave status without any cash to invest to possibly pull itself out.

People here are suspended between incredulity and fury.  The chances of seriously violent unrest are ratcheting up.

One commentator made the justified comment that the ECB is as culpable as the authorities here, having a supposed regulatory role over European banks.  Logically that means they should suck up half of default.

by Pope Epopt on Sun Nov 28th, 2010 at 03:09:40 PM EST
And the bondholders get away scot free.  Again.
by Pope Epopt on Sun Nov 28th, 2010 at 03:22:40 PM EST
[ Parent ]


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