# Burn the Bondholders



## z104 (20 Oct 2010)

If the attached article is to be believed the majority of Bond holders are not poor old Granpa and Granmas pension fund it's high worth private companies and private banks.


http://golemxiv-credo.blogspot.com/2010/10/who-are-bond-holders-we-are-bailing-out.html



Should we burn the people who invested with the knowledge that investments can go down as well as up..

If you invested and the market went against you would somebody come to your rescue?


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## Pique318 (20 Oct 2010)

Niallers said:


> Should we burn the people who invested with the knowledge that investments can go down as well as up..



Yes Of course we should've. 

I still don't understand why we didn't ?

Oh yeah, sorry.....politics !


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## Chris (21 Oct 2010)

Absolutely agree. Bailing out bond holders, which is what the bank bail outs have all been about, was the worst thing that could have been done. All that this has achieved is that bond holders will not require higher interest rates for risky bank ventures in the future, thus leaving the door wide open for banks to make exactly the same mistakes again.


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## TarfHead (21 Oct 2010)

Niallers said:


> If the attached article is to be believed the majority of Bond holders are not poor old Granpa and Granmas pension fund it's high worth private companies and private banks.


 
This was covered elsewhere a few weeks ago. It is important that we don't burn bondholders like Roman Abramovich so that he can continue to pay John Terry's salary .


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## z104 (22 Oct 2010)

Maybe the government do read askaboutmoney.com


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## PaddyW (22 Oct 2010)

Niallers said:


> Maybe the government do read askaboutmoney.com



Just another 35 odd billion to go and we're laughing


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## sunrock (22 Oct 2010)

Its just proves what I have been saying all along.The interests of the super wealthy world banks are more important to the elite in FF than the welfare recipients and tax payers of Ireland.I suppose these FF elite will find themselves in lucrative bank directorships down the road.


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## shnaek (22 Oct 2010)

sunrock said:


> Its just proves what I have been saying all along.The interests of the super wealthy world banks are more important to the elite in FF than the welfare recipients and tax payers of Ireland.I suppose these FF elite will find themselves in lucrative bank directorships down the road.


I don't think that's true. FF definitely had friends in high/low places, but they would take the easy option if it was there. Bondholders don't vote, and to politicians the vote is all important. The only reason they aren't burning the bondholders is that they are afraid of the consequences. 
I would have been in favour of allowing them all to collapse by the way, in true capitalist form, but I don't think FF are protecting these people because they like them.


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## Complainer (22 Oct 2010)

If you want to see who are the Anglo bond holders, check out [broken link removed]. It certainly puts in context recent exortations from Peter Sutherland of Goldman Sachs for Ireland to keep the bondholders sweet.


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## csirl (22 Oct 2010)

The list posted on the p.ie thread certainly blows out of the water the notion that the bondholders are other Irish financial institutions, so if we dont pay them, our other banks will go bust. I dont think there's a single Irish company on the list!!!


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## Godfather (24 Oct 2010)

Niallers said:


> If the attached article is to be believed the majority of Bond holders are not poor old Granpa and Granmas pension fund it's high worth private companies and private banks.
> 
> 
> http://golemxiv-credo.blogspot.com/2010/10/who-are-bond-holders-we-are-bailing-out.html
> ...



I am shocked!  And don't you think that banks and private companies hold our pensions or our savings??? 

I believe that the "burning" would generate such a domino effect on confidence... We all have to pay, but let's get the divorced CEOs of banks who gave so much to their wives pay first...


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## Complainer (24 Oct 2010)

Godfather said:


> the "burning" would generate such a domino effect on confidence... We all have to pay



Why do we all have to pay? I never invested in Anglo. I never borrowed from Anglo. Why do I have to pay for those who played around with a dodgy bank?


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## Godfather (24 Oct 2010)

Good point, I agree. Anyway one way or another we all pay... And if we would let Anglo down then lots of our pensions and savings would be gone already. Dont you have a pension scheme to worry about? Dont you have savings to worry about?

Anyway if we wouldn't pay directly by letting Anglo down, we would pay indirectly somehow, for example by being pushed out of the Euro and by losing completely credibility with the financial world markets... 

Am I the only one to think that in a globalized economy a country pays one way or another to the international community?


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## Complainer (24 Oct 2010)

Godfather said:


> Good point, I agree. Anyway one way or another we all pay... And if we would let Anglo down then lots of our pensions and savings would be gone already. Dont you have a pension scheme to worry about?



I have some funds in a private pension scheme from an old employer. It is invested in a fund diversified across regions and across industries, so a meltdown of Anglo would be a drop in the ocean. It would be the same for any sensibly managed fund.


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## Godfather (25 Oct 2010)

Again excellent point Complainer. It looks like the government has chosen for Ireland to save Anglo instead of the global financial markets to punish ireland (I was reading that one of Anglo's biggest bond holders was a pension scheme fund from Germany)... Only time will tell us which choice would have been best at this stage...


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## sunrock (25 Oct 2010)

I think we all know already.You will know too when the spending cuts hit..unless you are one of the rich elite.The public will have to endure savage cuts because our government want to appease rich banks such as Goldman sacks and rich german and swiss banks.
I would understand if Cowen stood up and said that Ireland will be hit with nuclear bombs if we didn`t pay up.


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## z107 (25 Oct 2010)

> Why do we all have to pay? I never invested in Anglo. I never borrowed from Anglo. Why do I have to pay for those who played around with a dodgy bank?


The big secret that the Government does not want the Irish people to know, or realise, is that we don't have to pay.
All that has happened at the moment, is that the government has agreed on the Irish people's behalf, that we will pay.
Well, I didn't agree to this. I don't remember a NAMA referendum, or a bail out the banks, or Nationalise Anglo referendum. These are huge decisions taken without the consent of the people.

What would happen if people just refused, en mass, to pay for the government's self-made fiasco?


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## truthseeker (26 Oct 2010)

umop3p!sdn said:


> What would happen if people just refused, en mass, to pay for the government's self-made fiasco?


 
How could the people do that - I mean practically?


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## Godfather (26 Oct 2010)

umop3p!sdn said:


> I don't remember a NAMA referendum, or a bail out the banks, or Nationalise Anglo referendum. These are huge decisions taken without the consent of the people.



Maybe those referendums weren't there but saying "no" the European treaty a few years ago instead of voting "yes" for the fear of collapsing would have led the government (pro-Eu) to new elections for sure. Maybe some people might regret having voted "yes" at this time. Europe favours banks, that's very clear, from Trichet & Co. that are dictating rules to the Ministers of Finance since the Euro begans... And that's very clear, I hope you don't disagree


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## Slash (26 Oct 2010)

Godfather said:


> ......(I was reading that one of Anglo's biggest bond holders was a pension scheme fund from Germany)...(



And.......there you have it. Cowen and Lenihan do not want to go to Angela Merkel again, after the Depfra disaster, and tell her that the incompetence of the Irish government  will result in the German economy taking another hit.

In addition to that, we do not know if some of the bondholders are wealthy Irish individuals who are closely connected to FF. I wouldn't do to cause any pain to the largest source of FF funding, now would it?


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## z107 (26 Oct 2010)

> How could the people do that - I mean practically?


Go on a tax strike.

Throughout history this has been done. There's no need for riots or demonstrations, just don't pay. The government will probably be introducing water charges and property tax, well these are easy not to pay. If people run businesses then they can submit returns, but without payment.

The key to this is solidarity.


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## truthseeker (26 Oct 2010)

umop3p!sdn said:


> Go on a tax strike.


 
But how would an ordinary citizen go on a tax strike - my income tax is deducted at source (including levies), I never have my hands on it, VAT is included in the price of good that I buy so there is no way of me buying without paying the VAT.

I agree that it would be easier not to pay property of water tax or for people who self assess not to pay but the majority of people would still be paying income tax and VAT even if they didnt want to.


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## z107 (26 Oct 2010)

> But how would an ordinary citizen go on a tax strike - my income tax is deducted at source (including levies)


It's the ordinary citizens that submit payment for these taxes. At some point, all taxes are submitted by ordinary citizens. Tell your employer that you do not want your PAYE/PRSI payment made. What would happen if enough employees do this?

This is why key to this strategy is solidarity.

Other taxes you could easily not pay:
- Motor tax
- TV licence
- bin charges


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## sunrock (26 Oct 2010)

Refusing to pay ones taxes is no solution. And will be easily dealt with by the government who have all the levers of power. If you are not happy with the governments policy ,you know how to vote in the next election. However the next government will inherit the mess and the cuts will continue.
Blaming Europe for our problems doesn`t make any sense. We were constantly warned by Europe about our reckless financial policies during the boom but choose to ignore it.Europe did not make our government to bail out the banks and give a blanket guarantee.We can`t cast ourselves off from europe as Ireland receives a lot of money from europe.Also the Multi national companies would leave immeadiately as access to european markets is vital.To blame europe for our problems is wrong and is only a "muddying of the water exercise" by those who are trying to distract the blame away from where it should be.
One other point is that irish customs should make those who go shopping to the U.S. pay the vat on their purchases when they return.


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## Chris (26 Oct 2010)

umop3p!sdn said:


> Well, I didn't agree to this. I don't remember a NAMA referendum, or a bail out the banks, or Nationalise Anglo referendum. These are huge decisions taken without the consent of the people.


I agree, but this is exactly what you get when there is zero restraint on the powers and actions of government. Iceland got its vote, the people voted no and the country did not decend into chaos.



Godfather said:


> Good point, I agree. Anyway one way or another we all pay... And if we would let Anglo down then lots of our pensions and savings would be gone already. Dont you have a pension scheme to worry about? Dont you have savings to worry about?
> 
> Anyway if we wouldn't pay directly by letting Anglo down, we would pay indirectly somehow, for example by being pushed out of the Euro and by losing completely credibility with the financial world markets...
> 
> Am I the only one to think that in a globalized economy a country pays one way or another to the international community?


The only reason we all now have to pay is because of government actions. If the government had paid off all sovereign debt during the boom, had a balanced budget now, and not bailed out banks, then the cost of borrowing would irelevant. Bond holders would take the hit and pay the price of risky investments, not the taxpayer.



Slash said:


> And.......there you have it. Cowen and Lenihan do not want to go to Angela Merkel again, after the Depfra disaster, and tell her that the incompetence of the Irish government  will result in the German economy taking another hit.


Depfa became a German problem when it was bought by Hypo Real, and then became a German sovereign problem when the state bailed out Hypo Real. Blame for this cannot be pointed at Ireland.


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## Mpsox (26 Oct 2010)

If we were to let the bondholders burn, we actually don't know what the full consequences would be, but we could take a reasonable guess as to some of the impacts
-Anglo Irish would go out of business. The impact of that is that any deposit holders would either have some or all of their funds wiped out or the Govt would have to bail them out under the deposit protection scheme.
-Other banks viability would be threatened, potentially with their own borrowing costs going up (which they would then look to pass on to the consumer), a further restriction of credit to entreprises at a time when that is the last thing we need and potentially one or more banks may go out of business. Again, the issue with depositors would still need to be resolved and in the long term, competition would be diluted further
-Cost of Govt borrowing would rise, asuming anyone would actually want to lend to us. If they Govt could not borrow money to pay day to day bills.........

I honestly don't believe anyone wants to pay off the bond holders and we can ramble on about tax strikes etc etc but back in the real world, if we don't, I fear the long term consequences for making ourselves feel better for a few hours/days, may be far more serious


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## Chris (26 Oct 2010)

Mpsox said:


> If we were to let the bondholders burn, we actually don't know what the full consequences would be, but we could take a reasonable guess as to some of the impacts
> -Anglo Irish would go out of business. The impact of that is that any deposit holders would either have some or all of their funds wiped out or the Govt would have to bail them out under the deposit protection scheme.
> -Other banks viability would be threatened, potentially with their own borrowing costs going up (which they would then look to pass on to the consumer), a further restriction of credit to entreprises at a time when that is the last thing we need and potentially one or more banks may go out of business. Again, the issue with depositors would still need to be resolved and in the long term, competition would be diluted further
> -Cost of Govt borrowing would rise, asuming anyone would actually want to lend to us. If they Govt could not borrow money to pay day to day bills.........
> ...



I disagree. The last thing Ireland needs is more credit. Ireland is the most indebted nation (per capita) on earth, which means that credit is the problem not the solution. Negotiating with bond holders and other creditors is the only solution that will provide any positive long term effects. 
The total chaos picture simply does not hold up to reality when you look at what happened in Argentina, Russia and Iceland (to name a few) when they partially defaulted on debts.


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## z107 (26 Oct 2010)

> Refusing to pay ones taxes is no solution. And will be easily dealt with by the government who have all the levers of power. If you are not happy with the governments policy ,you know how to vote in the next election. However the next government will inherit the mess and the cuts will continue.


It's not good enough just to say that not paying taxes will be 'easily dealt with'. You have to give a reason why.

Give me a break with the 'voting' thing. Irish democracy is a farce. Hmmm, who will I vote for, the corruption party, or the incompetents, or Fianna Fail lite?
Consider that 18% (1 in 6) people will still vote Fianna Fail! Shocking, but true.

So, how will not paying taxes be 'easily dealt with'?


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## Mpsox (26 Oct 2010)

Chris said:


> I disagree. The last thing Ireland needs is more credit. Ireland is the most indebted nation (per capita) on earth, which means that credit is the problem not the solution. Negotiating with bond holders and other creditors is the only solution that will provide any positive long term effects.
> The total chaos picture simply does not hold up to reality when you look at what happened in Argentina, Russia and Iceland (to name a few) when they partially defaulted on debts.


 
I'm not saying it's ideal that Ireland needs more credit, but the reality is that even excluding the costs of the banking crisis, it's debatable if Ireland can raise enough money to pay it's day to day costs via taxation until the economy recovers.

I'm glad to see you mention negotiating with bondholders, that is very different from simply giving them the 2 fingers as some people would seem to like to do. Even if we do negotiate, it would be naive to assume that there would not be some negative consequences, for example, it took a number of years for the Argentinian economy to recover and there was a lot of short/medium term pain that had to be endured there


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## shnaek (26 Oct 2010)

Mpsox said:


> it took a number of years for the Argentinian economy to recover and there was a lot of short/medium term pain that had to be endured there


True, and things are still very cheap there. Look at the price of housing, for example. Prices here would have to fall another 50% to get down to that level.


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## sunrock (26 Oct 2010)

Anyone who receives a government or company cheque can be taxed at soucre. That includes all PAYE workers and all welfare recipients, all farmers, doctors etc.
So who is left then...only the self employed and there isn`t a lot of them left.
I can`t understand posters who say the government should bail out private banks or otherwise we will be worse off.Anglo alone is going to cost the taxpayer about 50 billion euros...thats more than 10,000e for every man ,woman and child in the country.In year 4 of the 4 year austerity plan it is going to cost the country 16 billion..that is an average of 4000e for every man ,woman and child in cuts. 
Thousands of small private buisnesses are going under,first from lack of credit, then from lack of spending power in the economy due to the cuts...no bail out here.
How can you say things would be worse if the government don`t bail out these private banks...remember the government is under no legal obligation to do so.
Can you not see beyond the government hype and spin? In reality the government is pandering to the rich bankers, their shareholders and bondholders and have decided that the ordinary taxpayers will take the pain.


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## Chris (26 Oct 2010)

Mpsox said:


> I'm not saying it's ideal that Ireland needs more credit, but the reality is that even excluding the costs of the banking crisis, it's debatable if Ireland can raise enough money to pay it's day to day costs via taxation until the economy recovers.
> 
> I'm glad to see you mention negotiating with bondholders, that is very different from simply giving them the 2 fingers as some people would seem to like to do. Even if we do negotiate, it would be naive to assume that there would not be some negative consequences, for example, it took a number of years for the Argentinian economy to recover and there was a lot of short/medium term pain that had to be endured there


It is certainly not a painless solution, and in the short term the pain would be more severe than what we are experiencing now. But all that is happening at the moment is that the inevitable is being postponed and the taxpayer has become guarator.
Negotiating with Anglo bond holders is the first step, and I think 20 cent on the euro is on the high side for subordinated bond holders, nevertheless its a start. The same should be offered to all bond holders.
The same would have to be done for government debts as well.



sunrock said:


> Anyone who receives a government or company cheque can be taxed at soucre. That includes all PAYE workers and all welfare recipients, all farmers, doctors etc.
> So who is left then...only the self employed and there isn`t a lot of them left.
> I can`t understand posters who say the government should bail out private banks or otherwise we will be worse off.Anglo alone is going to cost the taxpayer about 50 billion euros...thats more than 10,000e for every man ,woman and child in the country.In year 4 of the 4 year austerity plan it is going to cost the country 16 billion..that is an average of 4000e for every man ,woman and child in cuts.
> Thousands of small private buisnesses are going under,first from lack of credit, then from lack of spending power in the economy due to the cuts...no bail out here.
> ...



I would like to know the answers to your questions as well. I don't know how turning private debt into public debt is even remotely a solution that can be contemplated, especially when you look at the levels of debt in Ireland. It was a dumb mistake to start with and hasn't solved one bit of the problem; actually things are worse, rather than having a broke banking industry we now also have a broke government.
I don't believe that companies are going out of business due to lack of credit. The majority are going out of business due to lack of customers, and are desparately looking for funding to tie them over to the "next boom". Unfortunately too many businesses came into existance during the artificial boom, and an awful lot of them will have to be liquidated. The economy simply cannot sustain all the businesses that are/were dependent on a credit fueled boom.


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## sunrock (26 Oct 2010)

"Negotiating "with the bond holders is a pointless exercise...its a bit like negotiating with the public sector unions. The government doesn`t negotiate with the creditors of small private buisnesses and quite right. Yet it sees fit to pay off the debts of one private bank to the tune of 50 billion with taxpayers money.
If the government had made clear they wouldn`t bail out the banks the interest rates on our borrowings would be lower as investors realise we are on a sounder financial footing.
I have no problem with the government paying back the public debt they incurred.It is only fitting that this should be paid back.


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## Chris (27 Oct 2010)

sunrock said:


> "Negotiating "with the bond holders is a pointless exercise...its a bit like negotiating with the public sector unions. The government doesn`t negotiate with the creditors of small private buisnesses and quite right. Yet it sees fit to pay off the debts of one private bank to the tune of 50 billion with taxpayers money.
> If the government had made clear they wouldn`t bail out the banks the interest rates on our borrowings would be lower as investors realise we are on a sounder financial footing.
> I have no problem with the government paying back the public debt they incurred.It is only fitting that this should be paid back.



I couldn't agree with you more. But unfortunately Ireland is now int he legal position where it is liable for the Anglo debt, and I believe that it has to be "negotiated" down.


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## sunrock (27 Oct 2010)

I don`t fully understand this.If Ireland is now legally liable for the anglo debt  why would the senior bondholders want to negotiate?
My understanding is that it is the subordinate bond holders that the government is negotiating with.These subbies i believe aren`t covered by the guarantee and should be torched.


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## shnaek (27 Oct 2010)

Anyone spot this this afternoon:

[broken link removed]

And that  7.9bln wasn't included in the billions announced for Anglo by Lenihan earlier this month. Watch the yield on our debt rising...


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## Chris (27 Oct 2010)

sunrock said:


> I don`t fully understand this.If Ireland is now legally liable for the anglo debt  why would the senior bondholders want to negotiate?
> My understanding is that it is the subordinate bond holders that the government is negotiating with.These subbies i believe aren`t covered by the guarantee and should be torched.



Well, what I was trying to say is that Ireland should go to the senior bond holders as well and tell them they will not get all their money back and invite them to negotiate. The Irish debt problem, public and private, is not going to go away. It is at a level that simply cannot be repaid in any meaningful way or time period.


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## sunrock (27 Oct 2010)

I hope you are right.
However I`d imagine that the senior bond holders would say they are covered by the guarantee and demand full payment.


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## PaddyW (28 Oct 2010)

shnaek said:


> Anyone spot this this afternoon:
> 
> [broken link removed]
> 
> And that  7.9bln wasn't included in the billions announced for Anglo by Lenihan earlier this month. Watch the yield on our debt rising...



That page isn't loading correctly Shnaek


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## shnaek (28 Oct 2010)

PaddyW said:


> That page isn't loading correctly Shnaek


Just checked it there and the article seems to have been pulled.


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## PaddyW (28 Oct 2010)

shnaek said:


> Just checked it there and the article seems to have been pulled.



Ah, ok so. No problem, thank you.


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## Chris (28 Oct 2010)

shnaek said:


> Watch the yield on our debt rising...



Right on the ball there: http://www.bloomberg.com/news/2010-...-on-deficit-reduction-political-concerns.html


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## Ancutza (15 Nov 2010)

[broken link removed]

I wonder do FF read opinion polls and if they do , do they actually give a tinkers curse as to the opinions of those they were elected to serve?


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## wavejumper (23 Nov 2010)

Bloomberg suggests that it would be better to burn the bondholders, doesn't seem a bad suggestion at this particular node...

http://www.bloomberg.com/news/2010-...a-bailout-for-irish-patient-matthew-lynn.html


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