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Um, so the problem was one of solvency? Did the Irish government just guarantee the debts of 6 insolvent banks?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Wed Oct 1st, 2008 at 11:30:20 AM EST
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I don't know.  At least they weren't hedge funds, or sub-prime mortgage providers or "investment banks" trading in derivatives big time - but a lot of their loans are secured on property which is now of dubious value.  It all depends on how far down the property market goes....

Vote McCain for war without gain
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 1st, 2008 at 11:39:03 AM EST
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They weren't? So who were they? And why did they need the liquidity?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Wed Oct 1st, 2008 at 11:40:49 AM EST
[ Parent ]
A "crisis of confidence" and apparently foreign hedge funds betting against them. The small scale of the Irish market makes it very vulnerable to manipulation by the big boys...

Vote McCain for war without gain
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 1st, 2008 at 11:53:32 AM EST
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So the Irish government stepped in to prop up the share value?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Wed Oct 1st, 2008 at 12:03:37 PM EST
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That's not really the way to behave for the state. Our banks were down 10-20 % that fateful day, but that's just life you know? Sucks to be a shareholder, but no reason for the state to step in.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Oct 1st, 2008 at 12:10:43 PM EST
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Apparently so.

IHT: Ireland 'blank check' to banks raises questions (October 1, 2008)

That Irish blank check amounts, in a doomsday scenario, to a maximum estimated liability of €400 billion (US$560 billion) -- just to repay the debts and deposits of six banks. That's double the country's annual gross domestic product, nine time the national debt and €95,000 ($135,000) per citizen.

But Ireland's government leaders themselves have stressed that they made the unprecedented promise only because they calculated, by doing it, shares would rebound, foreign capital would flow in, and they would never have to spend a cent of taxpayer's money bailing out a bank.

Prime Minister Brian Cowen said he had "not handed over any money to any bank. I have provided the reputation of this state to the banks."



A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Wed Oct 1st, 2008 at 05:22:23 PM EST
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