Dec 162010

The lunatics are really coming out of the woodwork now, aren’t they?  A band of assorted Lefty maniacs, including the Financial Times and the billionaire investor George Soros, are saying that the Irish taxpayer should not be paying for the private debts of badly-managed banks.

According to Soros, the markets have already assumed Ireland will default, and have priced that into their calculations, which is why the “bailout” made no difference to interest rates.

The authorities are making at least two mistakes. One is that they are determined to avoid defaults or haircuts on currently outstanding sovereign debt for fear of provoking a banking crisis. The bondholders of insolvent banks are being protected at the expense of taxpayers. This is politically unacceptable. A new Irish government to be elected next spring is bound to repudiate the current arrangements. Markets recognise this and that is why the Irish rescue brought no relief. Second, high interest rates charged on rescue packages make it impossible for the weaker countries to improve their competitiveness vis-à-vis the stronger ones. Divergences will continue to widen and weaker countries will continue to weaken. Mutual resentment between creditors and debtors is liable to grow and there is a real danger that the euro may destroy the political and social cohesion of the EU.

Both mistakes can be corrected. With regard to the first, emergency funds ought to be used to recapitalise banking systems as well as to provide loans to sovereign states. The former would be a more efficient use of funds than the latter. It would leave countries with smaller deficits, and they could regain access to the market sooner if the banking system were properly capitalised. It is better to inject equity now rather than later and it is better to do it on a Europe-wide basis than each country acting on its own. That would create a European regulatory regime. Europe-wide regulation of banks interferes with national sovereignty less than European control over fiscal policy. And European control over banks is less amenable to political abuse than national control.

When the investors themselves are saying they should have to carry their own losses, where does that leave Lenihan, the patriot?

Of course, it doesn’t take Einstein to figure out that the whole thing is a crock of shit.  Typical Lenihan waffle.  Nama can’t and won’t work.  The bank recapitalisation shouldn’t happen. Why? Because we didn’t run up the fucking debts.  Private companies did.  And every time Nama administers a haircut to the value of banks’ loans, what happens?  Lenihan shoves in another ten or twenty billion of public money to make up the difference.

It’s insanity, but it isn’t the only thing in that category.

What else is insanity?

How about the idea that the ECB, which had originally lent the money to the delinquent banks, somehow bullied our government into taking over this liability?  Even though, I repeat, we did not incur the fucking debt.  To put it another way, the Irish taxpayer is now doing the job of the ECB, and paying nearly 6% interest for the privilege, to the same ECB.

It won’t work.  It can’t work.  We will not be able to repay this money, which we should not have borrowed in the first place.

There might be a case for borrowing money to run the country for the next three of four years, but there is no case whatever for borrowing money to prop up failed, and possibly criminal, enterprises.

The Financial Times knows it.  George Soros knows it.  The markets know it.

You know it.  I know it.

Guess who doesn’t.

Not to worry. I have the answer. All we need to do is take the €80 billion and give it to Bertie Ahern to put on a horse.

  27 Responses to “George Soros says Ireland is bound to default on IMF / ECB loan”

Comments (27)

    I, like you I imagine, don’t think that they don’t know it. I reckon they know it well but it goes back to what you said yourself, what do the bondholders have on FF? The sheer bloody mindedness with which they are pushing this through demonstrates that they no longer give a shit about the pretense of democracy or having a mandate. They are out to save their own skins even if it means political suicide.


    Financial Times and billionaire investor George Soros, what would they know compared to the school teachers and lawyers in FF.


    One thing to keep in mind, George Soros is not a philanthrophist. He makes his mony by hedging his bets, you can bet you shirt that he has laid his money on Ireland default soon. He is nobodys friend when it comes to his business dealings.

    Hde wants Ireland to default so that he can clean up.

    That being said we ( Ireland that is ) should do a structered default, while Soros will gain from this also, this country will move along to dealing only with it`s lawful debts.


    One thing to keep in mind, George Soros is not a philanthrophist. He makes his mony by hedging his bets, you can bet you shirt that he has laid his money on Ireland default soon. He is nobodys friend when it comes to his business dealings.

    He wants Ireland to default so that he can clean up.

    That being said we ( Ireland that is ) should do a structered default, while Soros will gain from this also, this country will move along to dealing only with it`s lawful debts.


    Actually George Soros is one of the world’s greatest philanthropists. His record speaks for itself.


    Jaded, if correct, then i stand corrected. Sorry George, he is stll a gambler with the financial affairs of the world, to the detriment of the peoples of the world


    G’way sodacake you bluffer, Soros is a fantastic philanthropist, your a FF who’s using this as a diversion from the main subject. We will default.


    Hey David, of course we will default, indeed i have called for a default myself on a thread here.

    Please enlighten me as to what a FF is? I am serious here.

    As to being a bluffer, is not that the reason we are in the state we are in in the first place. Why answer an argument with a reason, lets just call each other names.

    Sticks and stones etc


    They are too busy stuffing boards up and down the country with cronies to have a debate about anything. That is why we are now living under Marshall Law. Now, the banks will be able to supply overdrafts to… what was it Bertie called them “me friends”.


    Of course we are going to default, it is an unbearable debt burden.

    The question is do we pauperise the country before we default or do we grow a pair and separate the bank’s gambling debts from our genuine obligations and let the bond holders take over the banks.


    It’s a racket, pure and simple. Lenihan always knew we were and are going to default. This is about using the Irish Impotence to make sure we are saddled with debts before it all collapses.
    We are easily fooled and can or will do fuckall about it so the ECB and IMF are thinkg ” Man this is easy money!!!!”

    Lenihan is a lying bastard, just like his father. Everyone knows it – the U-turn on the AIB payments.

    And we are worried about a bit of fucking snow!!!

    Fuck it, I take back what I have said before about my irish countrymen – we are fucking idiots and if we cant spot c*unta riding us up the arse, then we might just deserve it


    does anyone know why can’t anglo be sold as a loss making asset? sell it for a euro, debts and all. change the laws on bankruptcy ( to protect the patriot who buys it) and then tell the world we are no longer renewing the deal on protecting existing bondholders, only future ones. the bond holders would not be long getting off their arses and doing something then.


    What we should default on are pensions to politicians so that the people who have caused so much damage to the country and who are responsible for handing it over to supranational bodies are not rewarded for their treachery.

    Taking their “money” off them it would be far better than sending them to jail. I would like to see Willie play acting with the Rubberbandits for a living rather something he is preeminently qualified for.

    BTW if this requires legislation which it will then let us have a referendum on it.


    Anyone in this country who has called for the burning of bondholders has been dismissed as crank, deluded or “not living in the real world” by this government and a variety of media pundits for the past two years. It looks as if the FT and Soros have joined the ranks of Middle Earth.


    Whenever George Soros says anything, the only thing you need to ask yourself is “what bet has he taken that is more likely to pay off if people believe what he just said”? So if he says Ireland will default, he must believe it won’t. He must be long on Ireland.

    Maybe there’s some comfort in that, or maybe he’s wrong.


    At the same time, he’s right when he says that recapitalisation of the banks is something that needs to be done Europe-wide instead of each country acting on its own.


    No doubt he’s right. But he has no interest in idle comment on Ireland’s default risk. He is a professional investor and one of the best in history. if he says Ireland will default, he’s either already short Irish bonds and is trying to scare-monger a quick default (like he did with Sterling) or he’s trying to depress bond prices so that he can buy more at a lower price. Maybe he’s short the creditors’ bonds and is trying to engineer a default to hurt their bond prices. But it’s hard to one investor to force a sovereign default, especially with an election looming and a new government on the horizon, so I think he’s fundamentally optimistic about an Irish recovery and wants to load up on irish bonds cheaply. It’s not a bad bet actually, since the markets look to be overreacting to our long term prospects- for example, we are much better off than Greece, who cannot do anything without risking national anarchy. In Ireland, you can raise taxes, cut benefits and force a generation into penury, and what happens? Everyone goes to the pub and grumbles about the price of a pint, but life goes on.


    Hey Cynical Joe, I would refer you to my post at 7. I am in total agreement with your post here.


    #Sodacake ; Your statement about Mr. Soros is shallow and incorrect. This is a man who’s main drive is to foster a climate that will keep us on a path to peace in Europe. You really need to look deeper into what you think you’re seeing. Just because Soros states what he see to be facts, you should not conclude he’s not also got a good solution to propose. I really believe he has already done much more than you or anyone else has in recent times to avert political conflict in Europe. Wealth needs to be distributed as widely as possible and that is what he’s about.


    Read this with great interest. In Ballyhea we have started protesting, every week since the start of March, our seventh march this Saturday evening at 8.15pm. Get out and do something practical – organise your own march, start walking. For more information, have a look at this link:


    The same as your experience, I found myself walking behind Sinn Féin banners on a recent Limerick march. I won’t be attending another unless there’s some guarantee it won’t happen again.


    Bock, Only way you could do this, would be to organise a march where no political banners of any description are allowed. I think this would be very difficult, if not impossible to organise. You could bring your own banner saying you disassociate yourself with all Political parties on this march, or disassociate yourself from the following list of parties.
    Not really practical is it?
    Sometimes you find yourself on Marches with people or parties you would not normally be seen with. But on this protest march you may have certain areas or common ground where you are in agreement with the individual or party on the march. This is the nature of protest. Them’s are the breaks my friend.
    Now if your suggesting that Sinn Fein hijacked the protest for their own political agenda, well that’s another story. Otherwise I think my comment is a valid one


    You’re most welcome to join us, just up the road in Ballyhea, and that guarantee CAN be given – the people’s protest, all united behind just one banner – NO TO BONDHOLDER BAILOUT. As a nation we have our own level of culpability in all this, and we accept that; I’m not even related to an economist but I suspect the bondholders too would have accept their own share of the pain had not our government, under pressure from the ECB, interfered with the natural order of things and given that blanket guarantee. It’s still not too late, still up to 33billion to be fought over, if Constantine Gurdgiev is to be believed (and I do). That’s why we’re on the road every week in Ballyhea, and will continue our protest for as long as it takes. Sure we’re only half an hour from Limerick!


    I’m saying that the Sinn Féin banners dwarfed everything else and cost the marchers the support of many onlookers who might otherwise have joined in the march.


    Weel maybe the Ballyhea model could be reproduced in Limerick or better still nation wide. Wher no political banners are allowed. The only protest Flag/Banner allowed would be to “Burn the Bond Holders” or “No to Bondholder Bailout”


    Well maybe the Ballyhea model could be reproduced in Limerick or better still nation wide. Where no political banners are allowed. The only protest Flag/Banner allowed would be to “Burn the Bond Holders” or “No to Bondholder Bailout”


    Long John, Bock, hope ye don’t think I’m being pedantic here, but not alone is it possible to have a march where all party political banners are excluded, that is one of the conditions for being allowed march with us, in Ballyhea. We have turned down requests from various parties, and will continue to do so; the emphasis is on unity of purpose, unity in protest. This is a link to the TV3 Morning Show from today, in which we tried to explain what we were about, but there are photos from a few of the protests inserted in the broadcast and you can see for yourself – two banners, one in front, on at the rear, both with the same message.

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