US credit downgrade/General recession thread

[culloty82]

Papandreou was set to resign an hour ago, but now apparently isn't, while there may or may not be a national unity government formed in the coming hours - basically, it's like a repeat of Cowen's botched reshuffle day. A general election appears to be the likeliest solution to the chaos.

[pineapple stu]

Don't think I've ever heard a foreigner speak English in a Native American accent before. Sounds weird!

[pineapple stu]

Sky News now reporting the referendum has been scrapped. Greece had earlier been told to accept the bailout or leave the euro. The euro ain't going down without one hell of a battle.

[Dodge]

There's no clause for leaving the Eurozone, but they can leave the EU (which, of course, means leaving the eurozone too)

[Mr A]

Europe seriously needs to get its act together.

Specifically by all ganging together and invading Russia. The winter isn't far away, it's the last thing they'd expect.

[John83]

Europe seriously needs to get its act together.

Specifically by all ganging together and invading Russia. The winter isn't far away, it's the last thing they'd expect.
Definitely. No one's ever tried that before.
http://pandora.cii.wwu.edu/vajda/russ110/images/kremlinpic15.jpg

[Mr A]

Meh. Third time lucky.

[pineapple stu]

That is what so brilliant about it! We will catch the watchful Hun totally off guard! Doing precisely what we have done eighteen times before is exactly the last thing they'll expect us to do this time!

One step closer to a world where there's a Blackadder quote for every occasion. :)

[BonnieShels]

Papandreou was set to resign an hour ago, but now apparently isn't, while there may or may not be a national unity government formed in the coming hours - basically, it's like a repeat of Cowen's botched reshuffle day. A general election appears to be the likeliest solution to the chaos.

That was one of my favourite days' ever. It was a car crash from start to finish. *sigh*

Was gonna go to bed early tonight but VB is gonna be a good un.


I still haven't received any confirmation of the RS ratios. God bless the DoE. I've re-sent the email today.


Did you ever get a reply on that?

Well, completely forgot to get back on here to tell you my response.

I sent a third email basically outlining how ridiculous it is that the DOE could ignore my query when I know that I would get into s1it for doing the exact same thing AND they are my ultimate boss (I work for a local authority).

Almost straight away (within a day or two), I received an acknowledgement for all my emails at once and then I was told someone will be onto me with an answer.

Two days after this I received an answer which went something a little like this...

"Thank you for your query. The DOEHLG do not administer RS so do not have the appropriate figures. Please contact the Department of Free Money (Social Protection).

Now, to be pedantic, the DSP didn't administer RS at the time of my email. They do now, but the HSE did then.

Anyway, the reason they were queried on the question was because I thought (wrongly) that all the RAS and RS and housing waiting list stats that we emailed into the DOEHLG on a regular basis went towards the creation of an overall picture and helped to formulate and guide social and housing policy. They should have the figures.

I give up.


http://www.youtube.com/watch?v=SCFyHEnIf8Q

[dahamsta]

That's what they want you to do. :)

[culloty82]

Looks like the next Greek PM will be Lucas Papademos - an ex-governor of the Bank of Greece, a Vice-President of ECB and member of the Trilateral Commission, presumably he'll step down after the February elections.

[culloty82]

Berlusconi to quit - when the reform bill is passed through parliament. Elections are unlikely to happen before February, and given the vast number of parties in the Italian parliament, the outcome is a bit of a lottery.

[pineapple stu]

Yeah, Italy edging towards needing the IMF. Borrowing at 6.6% - seems 7% is the tip-over point. We're at 8.5% or so, and Greece are at 33%.

Debts of E1.8 trillion, so dunno how that'd possibly work out. Is it too simplistic to say that if they go broke, they're just straight out of the EU? I know everything'll be done to avoid that, but it's not really working.

[culloty82]

No, if they hit 7% it's pretty much game over, the euro collapses almost instantly, and time to get the punt templates back out of the Central Bank. There was talk last week that the only way Greece could leave the euro would have been to exit the EU, but it seems Italy's still the world's 8th largest economy, so business as usual couldn't cater for a collapse that size.

[BonnieShels]

They're at 7.45 now...

[culloty82]

At best, you'd give the euro about 12 months given the way affairs are progressing at the minute. Berlusconi now plans to retire totally, rather than contest the next election, his PdL party is an FF-style catch-all coalition of "Christian democrats, liberal-centrists, liberals, social democrats, liberal conservatives, national conservatives and grassroots (?)", so that looks likely to implode without him as the glue.

[legendz]

I hope this payment last week is a long ball game as suggested on the Frontline that'll see an IOU cashed in down the road. Before seeing the comments and being influenced, if possible, it's what's my view on it was. Austerity measures in some sectors isn't bad for the country anyway. The money wasted in public services, I'm not looking to brandish everyone with the same brush not all are reaping big money, but public expenditure on social welfare and public services has to be brought under control.

[Macy]

I hope this payment last week is a long ball game as suggested on the Frontline that'll see an IOU cashed in down the road. Before seeing the comments and being influenced, if possible, it's what's my view on it was.
Well it may keep us in a reduced size euro zone. Probably saved us being thrown in to the Greek and Italian Crisis that's happened subsequently. Relative to the amounts already paid and promised, it was hardly the time for "Ireland Defaults" headlines for the amount that was paid.

I honestly don't think anyone has a plan, but you'd have to wonder is it time for controls on the secondary bond markets - there's no real reason for Italy to be in this position but for speculation!


The money wasted in public services, I'm not looking to brandish everyone with the same brush not all are reaping big money, but public expenditure on social welfare and public services has to be brought under control.
It's all about genuine reform though. Too early to say whether that'll come from Croke Park, but if the alternative is simple pay cuts then that's not the answer either. Similarly with Social Welfare - if there is Welfare Trap (and I think it's a very big if), the solution doesn't have to be rate cuts, it can be retention of some benefits if you take up employment, and easy on and off benefits if short term work comes available. But again, the debate centre's around rate cuts. Pay and Welfare Cuts aren't the hard decisions, they're the easy, and lazy, ones.

[bennocelt]

Max Keiser is predicting that China will buy a lot of Italian gold (4th biggest supply in world), before the IMF come in (ie loss of sovereignty), which is interesting if it happens, but I dont know what china needs with a lot of gold!

[legendz]

It's all about genuine reform though. Too early to say whether that'll come from Croke Park, but if the alternative is simple pay cuts then that's not the answer either. Similarly with Social Welfare - if there is Welfare Trap (and I think it's a very big if), the solution doesn't have to be rate cuts, it can be retention of some benefits if you take up employment, and easy on and off benefits if short term work comes available. But again, the debate centre's around rate cuts. Pay and Welfare Cuts aren't the hard decisions, they're the easy, and lazy, ones.

I don't know much about these thing payments I have to admit. There is a difference though between social welfare and dole if that's right? People who've worked for a number of years and have stamps built up should be covered by a certain amount for a certain lenght of time. The dole I understand is when the payments based on stamps run out. That should be a different rate level.

[Dodge]

Doesn't need the gold. Could do with a European country in the back pocket though

[Macy]

I don't know much about these thing payments I have to admit. There is a difference though between social welfare and dole if that's right? People who've worked for a number of years and have stamps built up should be covered by a certain amount for a certain lenght of time. The dole I understand is when the payments based on stamps run out. That should be a different rate level.
There already is a difference - Jobseekers Benefit is based on stamps, Jobseekers Allowance is the basic, but it's means tested.

[culloty82]

Be afraid, be very afraid. (http://www.guardian.co.uk/business/2011/nov/09/european-debt-crisis-eurozone-breakup)

[BonnieShels]

Be afraid, be very afraid. (http://www.guardian.co.uk/business/2011/nov/09/european-debt-crisis-eurozone-breakup)

Awesome. :)

This is gonna be fun. Where's me popcorn.

[Macy]

Be afraid, be very afraid. (http://www.guardian.co.uk/business/2011/nov/09/european-debt-crisis-eurozone-breakup)
As I said earlier, our compliance should see us in a reduced eurozone though. Now whether that's a good thing or a bad thing is a different debate - at this point I'd say good thing. We've missed the default, exit, devalue boat.

[Lim till i die]

Should I be spending all my mattress euros now or what??

[Macy]

Should I be spending all my mattress euros now or what??
Would you not donate it to Athlone like the other fella?

[Real ale Madrid]

Few interesting tips in here if Football Philantrophy is not your thing......

http://preparefordefault.ie/

[dahamsta]

Sites like that run by people that don't have the balls to identify themselves aren't worth the pixels they're written on.

[Battery Rover]

How much longer can the Euro last with all this debt. Spanish 10 year bonds almost reached the supposed point of no return (7%) during their bond auction this morning finally selling at 6.975%.

[Spudulika]

Now we have our masters coming in to "check" our budget - shouldn't Enda just go around full time in his gimp costume.

[Macy]

Now we have our masters coming in to "check" our budget - shouldn't Enda just go around full time in his gimp costume.
I think the clue in that was when we signed up to the IMF/EC/ECB Programme! A lot of commentators seemed to have missed the bit about FF/ Greens signing away our economic sovereignty the last couple of days, so now we have this mock outrage about a measure that was in the feckin memorandum of understanding!

[Spudulika]

Macy I think it's more about the BS and outright lies FG and told to win the election, and now they're been shown to have no new clothes. I believe if they'd told the truth during the election they'd still have won - but now they're caught. Lovely to see the blame being laid on "eurocrats", as you point out, this is part of a wider plan to make sure the government do what they're told - unless the gimp Kenny behaves we'll have another hand picked person (as in Greece and Italy) placed to rule. Regime change by a different process.

[Macy]

Niether FG or Labour went in saying they'd pull out of the Programme. The only thing they said was they'd improve the terms, which they've done and they're continuing to work on. Maybe not to the methods Labour (in particular) indicated, but renegogiating with some success nonetheless.

Personally, I think they're using the right tactics at the moment. No one saying we should be playing hard ball has adequately explained the consequences if our bluff is called, if we went that approach.

[Dodge]

Now we have our masters coming in to "check" our budget - shouldn't Enda just go around full time in his gimp costume.
They've checked the last few.

[Spudulika]

Niether FG or Labour went in saying they'd pull out of the Programme. The only thing they said was they'd improve the terms, which they've done and they're continuing to work on. Maybe not to the methods Labour (in particular) indicated, but renegogiating with some success nonetheless.

Personally, I think they're using the right tactics at the moment. No one saying we should be playing hard ball has adequately explained the consequences if our bluff is called, if we went that approach.

Labour said - Frankfurt's way or Labours way (kinda know who won that "showdown"). FG stated they'd get a better deal AND pay no more to the banks - they did neither.

This leak is simply a bodyblow to knock the wind out of the public body so that come budget day the head shot will knock everyone out. It's classic soften up approach and also puts the blame elsewhere.

I don't agree about those who advised playing hardball not looking at consequences, plenty did - I'd just use David McWilliams as an example. However this isn't what the government and their backers want, too many are making too much off the back of the whole debacle that it has to continue.

Dodge, our budget is always checked (under EU law) though playing the b!tch is not engendering great hope for the country. We needed a proper representative for Ireland, instead we got another DNA political dodo and his grasping backers.

[Macy]

Labour said - Frankfurt's way or Labours way (kinda know who won that "showdown"). FG stated they'd get a better deal AND pay no more to the banks - they did neither.
Both said they'd stay in the programme though. And they've got changes to the interest rates and terms of the programme. The electorate had options of parties that said they'd tear it up totally - they didn't get the votes to form the Government.

I don't believe this is a way of kite flying by the Government, as there was no need. The VAT increases are in the published Memo of Understanding. People seriously weren't paying attention if they didn't know this was coming, and weren't really paying attention beyond the soundbites if they thought that FG or Labour were going to tear up the programme. Gilmore had rowed back from that comment within hours iirc. Nobody was conned or lied to on this issue, and there were political options that outright didn't support the programme that the electorate could've voted for.

It'd be extremely surprised if you voted for Labour, and I'd be surprised if you even voted FG. Most of the people that make out they were lied to tend to be people who didn't actually vote for the current Government Parties anyway in my experience.


I don't agree about those who advised playing hardball not looking at consequences, plenty did - I'd just use David McWilliams as an example. However this isn't what the government and their backers want, too many are making too much off the back of the whole debacle that it has to continue.
There's then and now. In the past the options were discussed. I don't believe many who are still saying it (eg Ganley), are explaining the consequences of doing it now.

[Spudulika]

I didn't vote Labour or FG or FF, because I had Moan Burton (overrated and over the top), Leo Verucca (codologist of the highest degree and as trustworthy as an LOI boss) and the late Brian Lenihan (egotist, idiot and all round saint). I was doorstepped and listened to what they had to say, asked serious questions and each one -Joan in the Blanch centre, Leo in Leinster House and Brian at a local GAA club each claimed that their party were going to "stand up to Europe". I refused to vote for any of them and (even on here) questioned Labour getting into bed with FG. Now they're showing their true socialist colours by hammering their core constituency and acting in the same manner as New Labour.

Wait Macy, you said No one saying we should be playing hard ball has adequately explained the consequences if our bluff is called, if we went that approach. I pointed out just one person who has a clear record of breaking down the situation and rationally explaining it and the options available - with consequences of each choice - don't then just dismiss this and use Ganley as an example. There are other courses available, but nothing that will damage the status quo of the moneymakers and their puppets in government will be done. As per usual money wins out.

[Macy]

Can you link to an article from the last month, for example, from McWilliams where he's outlined what happens if we play hard ball and our bluff is called? He's had a few where he's said we should be going for the same deal as Greece on debt write down, but nothing about what would be the consequences if we didn't get them (just an assumption that we would and the benefits of that).

[Spudulika]

Macy, he's spoken often enough about our options, far more so than the clowns in Leinster House. Don't just rely on what he churns out for the SBP or Indo, he's far more elaborate at his presentations or workshops. However he will never be listened to as he gets slagged off for being ginger and a media luvvy.

[osarusan]

However he will never be listened to as he gets slagged off for being ginger
Could you point out one serious commentator who has slagged him off 'for being ginger'?

[Macy]

Macy, he's spoken often enough about our options, far more so than the clowns in Leinster House. Don't just rely on what he churns out for the SBP or Indo, he's far more elaborate at his presentations or workshops. However he will never be listened to as he gets slagged off for being ginger and a media luvvy.
So that's a "no" on the links then.

I did check out his own website for articles, where presumably he isn't nobbled (if that's what your suggesting INM and SBP do), and I couldn't find any within the last month or so. Several saying "we should do this" and basically assuming the EU would say yes. None saying what would happen if they said "go ahead, but we'll stop supplying low rate funds to your banks".

And for what it's worth I do have time for McWilliams. He's being scapegoated for the guarantee imo. Agenda was a great TV programme. Not a fan of his recent books, but more the style than the substance.

[pineapple stu]

Hungary off to the IMF (http://www.bbc.co.uk/news/business-15820340) now; that came a bit out of the blue.

House prices (http://www.irishtimes.com/newspaper/ireland/2011/1122/1224307948877.html) suffer the biggest one-month percentage fall in two years; random person predicts prices to rise in 2013. Exactly the reason I like having a shifty through the quotes thread (http://www.thepropertypin.com/viewtopic.php?f=4&t=2631) on propertypin. Though you do have to wonder why we continue to bother getting quotes off people like this.

And a little graph (http://www.bbc.co.uk/news/business-15748696) from the Beeb on how much we all owe each other. Britain owes us more than we owe them! And we each owe E400k per person in foreign debt, presumably due to the bank guarantee. Nice manageable figure...

[pineapple stu]

Germany only able to borrow 2/3rds of what it was looking to borrow. (http://www.independent.ie/business/european/debt-crisis-dday-for-the-euro-as-merkel-and-sarkozy-meet-in-strasbourg-2944572.html)

Have we a popcorn smiley?

[Dodge]

That wasn't unexpected. They wanted to borrow at 2% (lowest level ever).

[Macy]

That wasn't unexpected. They wanted to borrow at 2% (lowest level ever).
Yeah, but quite what they were thinking trying to pull that of now, I'm not sure. Surely they must have known the headlines would be they failed to sell, leaving off the bit about why they failed to sell.

When are the German elections, so we can stop this arsing about?

[geysir]

Both said they'd stay in the programme though. And they've got changes to the interest rates and terms of the programme. The electorate had options of parties that said they'd tear it up totally - they didn't get the votes to form the Government.
The change to the interest rate was an effect of the negotiations with Greece, rather than any negotiations by the Irish government. The interest reduction deal was simply offered to ireland and other countries after the negotiations with Greece.
http://www.euinside.eu/en/news/informal-meeting-of-the-euro-area-a-weissbier-for-ms-merkel
In fact, the coalition government has not achieved anything on that level that Fianna Fail couldn't do, assuming Fianna Fail could resist the weak calls from Europe to raise corporation taxes.
The 2011 election promises, manifesto promises and election rhetoric, were less than worthless.

I'm not sure about McWilliams plan of what we could try to do at this time, considering all that has been done and decided since 2008. He like many others are supporters of capatalism and free market dogmas but he shudders at this form of capitalism. He thinks this is not capitalism, that the rules of the game are being twisted and perverted, but this is capitalism, the reality is that rules are always changed to preserve the economic status quo.
Basically all the core ideological values were slanted by politicians firmly towards preserving status quo, right from the earliest signs of a collapse, with appropriate crocodile tears of course. The Labour Party in Ireland is no different from the extreme free market, pro EU, social democrat parties around europe.

[Macy]

The change to the interest rate was an effect of the negotiations with Greece, rather than any negotiations by the Irish government. The interest reduction deal was simply offered to ireland and other countries after the negotiations with Greece.
http://www.euinside.eu/en/news/informal-meeting-of-the-euro-area-a-weissbier-for-ms-merkel
In fact, the coalition government has not achieved anything on that level that Fianna Fail couldn't do, assuming Fianna Fail could resist the weak calls from Europe to raise corporation taxes.
The 2011 election promises, manifesto promises and election rhetoric, were less than worthless.
We can only speculate whether going in with a hard line would've got the same or different (either better or worse) than the more behind the scenes diplomacy the Government are persuing. We got the reduction without much fuss. We got changes to the programme. Achieving that was better than FF managed - they managed to negotiate us a higher interest rate than Greece had already got ffs.

Some of the pre election promises weren't realistic, and Labour were paniced into them. FG did the same trying to get an overall majority. Whether it's legitimate or not, without an overall majority parties always have the cover of coalition Government compromise. The next election will tell how the people feel.

Personally, I think Labour should've stayed out and let FG cobble together a coalition, but can see why they went in. If they hadn't, they'd still be getting attacked from all sides - from the left wing parties saying they should be in protecting people, and from the right who just hate the idea of a Labour Party.

I don't think Labour is extreme free market. It's clearly pro EU, and there's different wings of the party (The more you go to the centre, the more social democrat).

[geysir]

We can only speculate whether going in with a hard line would've got the same or different (either better or worse) than the more behind the scenes diplomacy the Government are persuing. We got the reduction without much fuss. We got changes to the programme. Achieving that was better than FF managed - they managed to negotiate us a higher interest rate than Greece had already got ffs.

We don't have to speculate that the cut in interest rate was achieved without any effort from the coalition government's part.
We have no evidence that the Fine Gael approach to the Euro zone is any different than Fianna Fail.
We can speculate about a lot of things.

but behind the scenes efforts?
Yes, negotiations are obviously behind some door, but there is a public record of a meeting taking place, papers/minutes being signed and some form of an announcement/spin afterwards. Behind the scenes efforts can take place in the context of an intent to formally negotiate a position or/and actual formal negotiations taking place.
But decisions are taken at a formal meeting and documents signed according to the EU protocol.


Some of the pre election promises weren't realistic, and Labour were paniced into them. FG did the same trying to get an overall majority. Whether it's legitimate or not, without an overall majority parties always have the cover of coalition Government compromise. The next election will tell how the people feel.
What could possibly be legitimate about deliberate lies and deceit done in the form of election promises, in order to get into power?

We have evidence that the coalition are just as duplicitous as Fianna Fail were in government.

Lets take the recent payment of Anglo related subordinated debt €730m, assuming Labour for their part in the coalition would not vehemently object to this part of
Fine Gael 2011 election manifesto
Agreed Procedures for Restructuring the Debts of Troubled Banks: Fine Gael in Government will forcecertain classes of bond-holders to share in the cost of recapitalising troubled financial institutions. This willbe done unilaterally for the most junior bondholders (owners of preference shares, sub-ordinated debtand similar instruments), but could be extended – as part of a European-wide framework – for senior debt,focusing on insolvent institutions like Anglo Irish and Irish Nationwide that have no systemic importance.

and we have a quote from Noonan RTE 2011
http://www.rte.ie/news/2011/0615/noonan2-business.html
“Look, it’s no longer a bank. Anglo is now merged with Irish Nationwide. It’s a warehouse for impaired assets. Its deposit base has been moved out into the pillar banks. And it doesn’t work as a bank anymore. You can’t put your money on deposit in Anglo Irish. You can’t get a loan from Anglo Irish. So the only thing that gives it the name of a bank is because it has a banking license. It needs the banking license to access the monies from the Central Bank. So I said that as far as I am concerned, this is not a real bank. This is a warehouse, and we need your assistance in dealing with the senior bond holders because we don’t think the Irish taxpayer should have to redeem what has become speculative investment.”




We have 2 choices here to judge the merits of Fine Gael, knowingly lying through their teeth when they made that election promise after 18 months of scrutiny of the overall state of affairs or just plain old ineptitude or gross ignorance, even to that June 2011 interview.
In fact this debt had to be paid, not just in accordance with the written/unwritten understanding with the Euro zone/ECB, but according to the laws as they stand.
http://namawinelake.wordpress.com/2011/10/21/what-would-happen-if-anglo-didn’t-repay-the-1bn-bond-maturing-on-2nd-november-2011-part-1-of-2/
(http://namawinelake.wordpress.com/2011/10/21/what-would-happen-if-anglo-didn’t-repay-the-1bn-bond-maturing-on-2nd-november-2011-part-1-of-2/)
(1) bondholders ranking equally with depositors so if we want to imposes losses on bondholders then we need do the same with depositors and (2) since Anglo has minimal deposits remaining and presumably these are associated with lending accounts, following the sale of Anglo’s deposits and accompanying assets to AIB in February 2011, that Anglo has deliberately disposed of assets which might have been used to repay bondholders which might expose the bank to actions under a fraudulent conveyancing heading and (3) since Anglo has received €29.3bn of state funding, it is a solvent bank and normally it would be the shareholder (that is the government on our behalf as citizens) that absorbs the first loss.



I don't think Labour is extreme free market. It's clearly pro EU, and there's different wings of the party (The more you go to the centre, the more social democrat)
I understand and appreciate that there are different wings inside Labour.
In my mind there is no difference between clearly pro EU and clearly pro EU free market. The EU are fanatically pro free market, whether it be economic trade or finance.

[pineapple stu]

All eurozone countries put at risk of downgrade (http://www.bbc.co.uk/news/business-16042346). Apparently there's a 50% chance that any of the six AAA countries - Germany, France, Austria, the Netherlands, Finland and Luxembourg - will be downgraded in the next 90 days. We're on the list too. Really does seem to be lurching from chaos to chaos. Wonder if we're at the end of the beginning or the beginning of the end?