I see Paul Gogarty is also ranting away on twitter. he has upset the liveline masses now.
As for this country, hopefully whoever is in government in the future (if there is one) starts bringing draconian legislation for bankers who lend recklessly and government representatives who sit on their hands while the bankers run wild. Oh yeah and maybe some decent politicians who fall on their sword when they fuck up.
I think the Greens won’t stay in Government for long after the Budget. In fact, I imagine they’ll toddle off early in 2011 and we’ll have an election around April time.
I see that the lad who drove the truck into the Dail yesterday is actually a property developer, who owes Anglo a stack of money.
These figures really make you want to borrow Gutless Gilmore’s strategy of saying nothing and promising nothing so damned eloquently.
Paul Somerville said on Vinny last night that if Ireland cancelled its bond auctions there would be a run on Ireland within 24 hours. Well…
This was in tiday’s FT. Only realised when I got to the bottom who Danny McCoy was.
Ireland will recover quickly from bank crisis
Financial Times ^ | 09/30/2010 | Danny McCoy
Posted on Thu Sep 30 2010 17:47:14 GMT+0100 (GMT Daylight Time) by WebFocus
The announcement of the final scale of its bank rescue plan concludes a month in which the troubles of Ireland’s economy have again been centre stage. Rating agencies and analysts have questioned the capacity of our small economy to cope with its emerging debt. Ireland has also become a test bed for state recovery strategies, including the introduction of austerity measures and the resolution of complex banking problems.
Thursday’s figures reveal the undeniably high, but manageable, costs of the domestic bank bail-out. The one-off impact is to push the ratio of deficit to gross domestic product to 32 per cent. However, the Irish government has also committed to framing a budgetary plan to reduce the underlying deficit to 3 per cent by 2014. This plan will help to satisfy market concerns by providing clarity on the scale of the painful, but deliverable, fiscal adjustments needed in coming years. And underneath, Ireland’s economy is much stronger than it at first appears.
Ireland’s rapid downturn wiped away more than one-fifth of economic activity, exacerbated by the collapse of a bloated construction sector. The end of the property boom dragged down tax revenues and gave rise to significant public deficits. A tripling of the unemployment rate followed and, due to the overexposure of our banks to the property market, the state guarantee of the banking system.
Difficult though the situation is, the state has reacted swiftly. Stern measures to address the public finances – including public sector wage cuts, expenditure cuts and increases in personal taxation – have been introduced with widespread acceptance by the public. Measures to fix the banking crisis through a new National Asset Management Agency have received a more mixed reaction. However, the aim of taking bad property loans off bank balance sheets to enable recapitalisation is sound.
Following the rescue package, Ireland’s debt-to-GDP ratio is expected to peak at about 115 per cent, not exceptional in international terms. For a labour force of approximately two million people, debt servicing will cost about 10 per cent of national income. Future debt concerns will be diminished by ensuring that the gap between revenue and expenditure in the public finances is bridged. This task is under way, although further credible budgetary measures will be needed to ensure its achievement.
The more important question is where growth will come from. Here the first half of 2010 has disappointed somewhat, but there are signs that substantial and sustained growth is emerging. Private sector activity, accounting for approximately four-fifths of Ireland’s GDP, has received markedly little attention as the public finance drama has played out.
Yet businesses have used the crisis to address their costs and productivity, bringing a substantial improvement in competitiveness. Unit labour costs have improved by nearly 10 per cent in relative terms within the past year. Other business costs are also falling. More adjustment will follow, but this improvement is fuelling export growth. The balance of payments deficit, a good indicator of competitiveness, is diminishing and may be eliminated within a year as world trade expands.
Businesses operating from Ireland, indigenous and foreign-owned, are also diversified, with strength in important clusters such as medical devices, technology and pharmaceuticals. While Ireland continues to attract substantial foreign direct investment, outward investment by Irish companies actually now matches FDI, giving an international footprint to Irish business.
Growing exports, however, must be balanced by measures to stimulate domestic demand, both to bolster the public finances and create employment. Household incomes are still amongst the highest in the European Union. However, ongoing worry about income and jobs has seen the personal savings ratio more than double to 11 per cent. In the absence of certainty about the scale of further budget adjustments, the Irish are over-saving.
Ordinary households and international analysts alike have become preoccupied with the spread on Irish bonds. Both have sought a firm line from the government on the scale of the banking and budget crises. Thankfully this is now materialising, bringing much needed confidence. Ultimately, however, it is Irish business and, foremost, our exporters that will lead recovery. The bond markets and other observers can be assured that competitive Irish companies are quietly doing just that.
– The writer is director-general at the Irish Business and Employers Confederation
Are you implying this commentator may be less than impartial in his analysis? Gowayoutta dat. Didn’t Mr Burns from the Simpsons used to have this job before Danny?
It’s hardly Black Thursday, sure the Anglo panto has been priced in or around 30bn before today. I’m probably showing myself up here, but is the real problem not the scale of the bank bail out but rather the fact the country is taking in 20bn less than it spends every year? And while the bank thing is sensational and important, if we were generating a surplus of a couple of billion each year it actually wouldn’t be that big of a deal. How to reign in that deficit and stimulate growth is quite the pickle.
I presume the ECB/IMF/Financial God of choice is already here and is basically formulating Lenihan’s budget, putting him up to present it. Maybe they’re not formulating it but they’re surely vetting it and changing it, and the 4 year austerity plan budget is a further indication that the ECB/IMF are calling the shots now and not the government. At least that’s what I want to believe.
Presume the ECB are buying shit loads of Irish bonds on the sly as well.
A superb piece of perceptive non-committal analysis by me there two years ago. :lol:
There’s some great reading in this thread from two years ago.
Always worth bumping this thread so people can have a read back over the first couple of pages :lol:
I think Jugs made the worst contributions. I wasn’t blessed with great foresight but at least I mentioned Anglo and dodgy in the same sentence which Jugs objected to! They’re the soundest of all the banks apparently. Great stuff.
Jugs’ effort was superb indeed. He came across as a real sneery banker with the terminology he used too. Wanker.
Sensational thread.
All recessions are cyclical though TTK, those AIB shares will be worth a few bob yet.
How come AIB are still trading higher than BOI, 34c V 27c?
There has been 7 times the amount of BOI shares traded today than AIB, does that make any odds?
If anyone feels like a punt a spreadbet on the Irish banks might be worth a shot. Keeps the stakes small though as it’s a pure gamble and no one knows what’s going to happen.
Did it myself a while back when BOI were trading at 12c, went for $10 per point so my downside was limited to $120. Ended up getting out around the 50c mark and had a thoroughly enjoyable time tracking the price on a daily basis.
Much fewer shares of AIB in circulation. AIB currently has a market cap of 372million.
BOI is 1.457 Billion