Yeah, show me the senior bondholders who made a 3% return on anglo before the crisis. Get real.
How i see it the senior bondholders lent/invested the money with Anglo to make money only a guess but lets say 3% return, they are now loaning the money to the Irish government to pay themselves (the bondholders) back. but now they are getting 6.5% and all the security on there own money, nice deal, few rumors in there own money markets and the % keeps on increasing. On the good side they will keep lending or they lose there own money next time so carnt see us needing the IMF.
The U.S. government left Lehman Bros go to the wall and billions of dollars are still invested in U.S. treasuries and bonds.
Investors would still invest in irish government bonds if Anglo was left go. Investors would know their money was safe with the government and the interest on the bonds would be much lower.
Lenihan is playing nice guy to the anglo creditors to the tune of 45 billion.......that is e 10,000 for every man woman and child in the country just to cover anglo alone.
If it turns out that if the depositors in Anglo are protected, then the senior bond holders must be protected too, then I say let them all take the hit.
We will have to endure a generation of hardship for the vast majority of irish citizens and I just think that is too high a price to pay for something that the Irish government does not legally have to pay for.
So are you saying that McWilliams argument is unworkable? Do you think he truly believes otherwise or is he just playing up to popular sentiment?Yes because you can compare Ireland and the US when it comes to risk. The default of Lehman almost brought down the global financial system never mind the American banking system.
So are you saying that McWilliams argument is unworkable? Do you think he truly believes otherwise or is he just playing up to popular sentiment?
I don't suppose if these people were to be negotiated with, they would be encouraged to buy government bonds on the basis of the government agreeing to pay X cents in the € for their investment in Anglo? ie. they only get this if they DO takeup government bonds in 2011....or is it naive to think that this could work?
I have to say that as someone with no knowledge of such things, I find it very frustrating that these guys have so much clout that they simply can't lose!!
Or else it means changing out tax model to bring in the income that we need to provide decent public services.Cutting that deficit means reducing wages and perks and pensions to what we can afford.
Two of the biggest sovereign defaults in recent history were Russia and Argentina. At the time it was said by "economists" that they would never recover from such actions. But quite the opposite happened.This doesn't mean that we'll never get lent money again.
If senior bond holders think they will make money, then they'll lend money.
Who lends to other countries that have defaulted in the past?
I agree with you. Bank failures would not mean no more banking and would have a very positive effect in Irish bond yields. At the same time though. I think that Ireland could completely ignore the bond yield if it balanced the budget and stopped borrowing money in the first place.The U.S. government left Lehman Bros go to the wall and billions of dollars are still invested in U.S. treasuries and bonds.
Investors would still invest in irish government bonds if Anglo was left go. Investors would know their money was safe with the government and the interest on the bonds would be much lower.
Lenihan is playing nice guy to the anglo creditors to the tune of 45 billion.......that is e 10,000 for every man woman and child in the country just to cover anglo alone.
If it turns out that if the depositors in Anglo are protected, then the senior bond holders must be protected too, then I say let them all take the hit.
We will have to endure a generation of hardship for the vast majority of irish citizens and I just think that is too high a price to pay for something that the Irish government does not legally have to pay for.
The main argument for bailing out the banks seems to be that if the government don`t, then the money markets will not continue to finance our 20 billion euros a year current account deficit.I wouldn`t leave any sleep over this myself. This 20 billion is used to pay inflated salaries in our economy and results in us being a high cost place to do buisness. This deficit needs to be drastically reduced anyway, otherwise with interest payments etc we will be paying back as much as we are borrowing.
The problem is that the government only wants to take the path of least resistance.
Cutting that deficit means reducing wages and perks and pensions to what we can afford.That means we only spend what we take in in tax which will reduce our costs and make us more competitive.
This idea of taking on the debt of the private bankrupt banks and all the problems associated with them is simply crazy stuff. All the huge expense is then thrown on the shoulders of the irish people and the thousands of high paid jobs of the bureacracy and spin doctors to oversee this fiasco is only adding insult to injury.
Or else it means changing out tax model to bring in the income that we need to provide decent public services.
Negative effect for who, Chris? Possibly for those who can best afford the negative effect? As opposed to our current negative effects on those who can least afford it?Increasing taxation always results in a negative effect on the private economy especially if it is levied on wealthy and/or large companies. The private economy is the only thing that can create a recovery. If you reduce the incentive of the productive economy you will reduce productivity.
Maybe you could be more specific about which services are 'not needed'? I often find those who criticise public services the loudest are those who don't need public services, because they available of their private medical services (subsidised by the Govt) and private education (subsidised by the Govt) etc etc.And throwing more money at bad services, most of which are not needed or would be much better and cheaper to the public if they were private enterprises, is a vicious circle. All this does is incentivise providing poor services running over budget. There never is an end to the amount of money government services will waste.
There seems to be no legal way to protect my savings and not the deposits of the senior bondholders.
Just for the record, depositors were already covered up to €100k per person before the guarantee.Doesn't this mean that we have really bailed out the depositors then?
Or else it means changing out tax model to bring in the income that we need to provide decent public services.
I agree that throwing money at anything isn't a great approach. That doesn't mean that we walk away from the importance of providing good public services.It has already been proven that throwing money at Irish 'services' does not result in better service, let alone 'decent' service. The health 'service' is a prime example. It's rubbish.
Negative effect on the economy as a whole and therefore on every member of society. When you increase taxation on large, wealthy companies or individuals four things happen:Negative effect for who, Chris? Possibly for those who can best afford the negative effect? As opposed to our current negative effects on those who can least afford it?
Yes it does, but it is at most 1%, and dependent on where you live the maximum income tax you pay can be as low as 22% on income over CHF750k; and VAT is less than 8%. You can even negotiate a fixed amount of tax with the government. I read a few years ago that Michael Schumacher pays a fixed CHF750k in tax per annum to live in Switzerland. The reason Switzerland is doing so nicely is precisely because the overall tax burden is so low and individual contons are looking to reduce it even more.Come on, now - even your beloved Switzerland survives quite nicely with a modest wealth tax. We need to start bringing in more taxation to fund decent public services.
I don't want to move to far away off topic, but here are some to start with that I have mentioned on other threads:Maybe you could be more specific about which services are 'not needed'? I often find those who criticise public services the loudest are those who don't need public services, because they available of their private medical services (subsidised by the Govt) and private education (subsidised by the Govt) etc etc.
The wastage in government far far exceeds that in large and small private organisations. It is not even on a comparable level! If a private organisation wastes too much it risks going out of business. When government departments waste too much the budget is increased and more money is taxed or borrowed to pay for it. The reason private enterprises provide vastly better services than public ones, is because a private company only makes profits if it attracts customers who are free to make a choice. The profit is a reward for providing the best product at the best price, i.e. the result of best serving the public. When it comes to government services you do not have a choice. And because wastage is not punished, but rewarded, more government services will only increase overall wastage.There is indeed waste within the Govt, like there is waste is almost all large organisations. And this waste does need to be addressed urgently. We are a long way off. There are many, many unmet needs in public services today. Here's one quick example - mental health services. If you need counselling, it is rarely available on the public health system. We need more public and better public services.
You somewhat critisize or ridicule my repeatedly mentioning Switzerland (Quote "even your beloved Switzerland"). But can you explain to me why the Swiss health system, which is based solely on private insurance, does not only provide more services (including mental health), but is cheaper than the Irish system?
What we need is less government monopolies and less taxation, and let freely competing companies try and attract customers through the best products they can provide.
There is a lot in the Swiss model to be admired but the average health insurance pemium for a Swiss adult is over €3000 a year. Not saying the idea of compulsory insurance isn't a bad idea but there are difficulties in implementing it.
Yes it is about €3000 per year. But the cost of the HSE is about €3500 per annum, per man woman and child. Add to that what is spent on private health insurance and you you get a better picture.
There is a lot in the Swiss model to be admired but the average health insurance pemium for a Swiss adult is over €3000 a year.
But in Ireland the average person on 35k pays 2,500 per year on PRSI and another 1000 on private insurance.