Ireland - Hero to zero!

Conrad

As a finance broker I've had several dozen Irish clients over the years many of whom were pilots.
It always struck me how uber positive they were, very much more gung ho than your'e average Englishman.
To a man every pilot I dealt with had a B2L portfolio - twas just hard wired into them.

ILW

Conrad wrote: »

As a finance broker I've had several dozen Irish clients over the years many of whom were pilots.
It always struck me how uber positive they were, very much more gung ho than your'e average Englishman.
To a man every pilot I dealt with had a B2L portfolio - twas just hard wired into them.

Are rents standing up enough to service the mortgages?

Spiv_2

Fitch downgrades Irish Republic's credit rating

Ratings agency Fitch has cut the Irish Republic's credit rating because of the soaring cost of its banking bail-out and its continued economic woes.
The rating was downgraded one notch from AA- to A+.
The agency has put a negative outlook on the rating because of uncertainties over the economic recovery.

http://www.bbc.co.uk/news/business-11483696

worldtraveller

Ireland's financial troubles loomed large Wednesday as investors — betting that the country soon could join Greece in seeking an EU bailout — drove the interest rate on the country's 10-year borrowing to a new high.

The yield on 10-year bonds rose above 8 percent for the first time since the launch of the euro, the European Union's common currency, 11 years ago.

The cost of funding Irish debt has risen steadily since September, when the government admitted its bailout efforts of five banks would cost at least euro45 billion, equivalent to euro10,000 for every man, woman and child in Ireland. That gargantuan bill, in turn, has made the projected 2010 deficit rise to 32 percent of GDP, the highest in post-war Europe.

The yield, or interest rate, on 10-year Irish notes rose steadily from 7.94 percent to reach 8.18 percent by midmorning. As the value of bonds fall, buyers demand ever-higher yields as compensation.

Bond traders increasingly believe that Ireland soon will be forced to tap Europe's emergency fund for euro-zone nations facing a threat of bankruptcy. The 16 nations of the euro zone created that euro750 billion backstop in May as the EU and International Monetary Fund provided an emergency euro110 billion loan to Greece.

Another bailout would send more shock waves through the currency union, which has struggled to find ways to keep individual governments from overspending and threatening the currency's value.

AP

Generali

The yield is the interest payable on a bond divided by it's current market price. The higher it is, the less investors want to lend you money. This is what happened to Irish yields yesterday in graphic form:



From Reuters via the FT.

michaels

I think as well as the headline yield we need to look at the bond price half of the equation for its impact on UK PLC.

I understand that the UK is the biggest holder of Eire bonds - anyone have any idea by how many billions the mark to market value of those holdings fell by yesterday?! (Lets hope the UK banks have been sensible and covered the backsides with CDS hopefully counter-partied by German and French insurance companies)

worldtraveller

If you have the time to read this article in the Irish Times by Morgan Kelly, it's an interesting read IMHO:

IrishTimes.com

He finishes "You have read enough articles by economists by now to know that it is customary at this stage for me to propose, in 30 words or fewer, a simple policy that will solve all our problems. Unfortunately, this is where I have to hold up my hands and confess that I have no solutions, simple or otherwise.

Ireland faced a painful choice between imposing a resolution on banks that were too big to save or becoming insolvent, and, for whatever reason, chose the latter. Sovereign nations get to make policy choices, and we are no longer a sovereign nation in any meaningful sense of that term.

From here on, for better or worse, we can only rely on the kindness of strangers."

System

Notice the way the Welsh and the Scots are clamouring for financial independence so that they can pursue a similar Irish dream.

The buoyant Scottish economy will have no problem taking on all the costs of propping up RBS, and paying for their share of QE.:rotfl:

worldtraveller

RBS down 7% today, largely due to their exposure in Ireland (£37.8 billion of loans and £4.3 billion of sovereign debt according to stress tests in July).

worldtraveller

The Irish Government has been forced to make a second denial in two days that it is preparing to go to the EU for a multi-billion euro bail-out.

On Saturday night reports suggested that Irish officials had already held talks with the European Financial Stability Fund about a rescue package of between €60bn (£51bn) and €80bn.

European Central Bank officials were also reported to have urged the country to take emergency aid in order to stop concerns about the Irish economy spreading to neighbouring countries.

Germany is said to be pressing Ireland to seek aid before a November 16 meeting of European finance ministers to calm market volatility and win agreement on making investors help pay for future bailouts, according to Bloomberg, citing a German government official.

However, a spokesman for the Irish government told The Sunday Telegraph: "There are no talks on an application for emergency funding from the European Union."

Telegraph.co.uk