Tuesday, 30 November 2010

Britain faces stumping up yet more bailout money as markets turn on weak European economies

Daily Mail
# Markets attack weaker economies in Spain, Portugal and Italy
# Experts predict Portugal next and Britain will have to pay
# Euro drops to three-month low after traders off load

Ireland's Debt Servitude

"Stripped to its essentials, the €85bn package imposed on Ireland by the Eurogroup and the European Central Bank is a bail-out for improvident British, German, Dutch, and Belgian bankers and creditors.The Irish taxpayers carry the full burden, and deplete what remains of their reserve pension fund to cover a quarter of the cost.This arrangement – I am not going to grace it with the term deal – was announced in Brussels before the elected Taoiseach of Ireland had been able to tell his own people what their fate would be."

Monday, 29 November 2010

Britain is making a HIGHER contribution to the bail-out than the euro-zone members

"Don’t get me wrong: we absolutely should help the Irish. They are our neighbours, our customers, our suppliers, our friends and, in many cases, our relatives. But we don’t help them by keeping them in the euro: it’s the euro which got them into this mess. The way for Ireland to return to prosperity is to decouple, devalue and price its way back into the market. If we really want to help, we should offer a temporary currency link, enabling Ireland to withdraw from EMU without seeing its euro-denominated debts balloon.

But, of course, this isn’t really about bailing out Ireland; it’s about bailing out the euro. Irish leaders never asked for the rescue package: they were more or less forced into it by the euro-zone leaders, who saw the take-over of the Republic as the best way to secure the single currency. "

Contagion strikes Italy as Ireland bail-out fails to calm markets

"Spreads on Italian and Belgian bonds jumped to a post-EMU high as the sell-off moved beyond the battered trio of Ireland, Portugal, and Spain, raising concerns that the crisis could start to turn systemic. It was the worst single day in Mediterranean markets since the launch of monetary union.

The euro fell sharply to a two-month low of €1.3064 against the dollar, while bourses slid across the world. The FTSE 100 fell almost 118 points to 5,550, while the Dow was off 120 points in early trading.

"The crisis is intensifying and worsening," said Nick Matthews, a credit expert at RBS. "Bond purchases by the European Central Bank are the only anti-contagion weapon left. It needs to act much more aggressively."

Sunday, 28 November 2010

Irish fury as EU 'nationalises' Bank of Ireland

"Despite strong representations from the Irish government that Bank of Ireland was secure, the EU-brokered €85bn (£72bn) bail-out is likely to demand that billions more euros of capital are injected into the bank to take its key Tier 1 ratio up to 12pc, higher than the demands of the Basel process.

Sources said that the move will take the Irish government's stake in the bank from 36pc to an effective majority stake and dilute all other shareholdings. "It is nationalisation by any other name," the source said. "

Friday, 26 November 2010

The game will soon be up for the euro

"Why, as I write, is the euro worth 84p, or $1.32? I know the British and the American economies aren’t superb, but the euro is a basket case. "

Thursday, 25 November 2010

'Ireland was just one big pyramid scheme'

"A sticking plaster over the open wound in the eurozone", was the judgment from Ireland's finance workers as their Government revealed a €15bn (£12.7bn) package of cuts. .....But while the austerity package may have held few unknowns for Dublin's financiers, one question is still puzzling them: Where did all the money go?
"We don't know where the money went," added the trader, half in jest, but half in earnest. "We've been debating it all morning. Cars, flat-screen TVs, Bulgarian properties? Everyone round here used to have a Mercedes. The whole country was a pyramid scheme."

Could Belgium be next? Debt crisis spreads across the continent as fears mount over the future of the euro

Daily Mail
# Belgium's debt reaches 100% of annual national income
# Portuguese and Spanish borrowing costs rose sharply
# Standard & Poor's reduce Ireland's credit rating to A
# Eire PM resists EU pressure to raise corporation tax
# Irish families each face 4,600 euro bailout bill

Wednesday, 24 November 2010

Portugal will need EU/IMF bailout, say economists

(Reuters) - Portugal will probably follow Greece and Ireland at some point in seeking bailout funds from the European Union, according to a majority of economists in a monthly Reuters poll.

Feck Off Euro-Socialists

Guido Fawkes
"Euro-Socialist and Green MEPs have tabled a motion calling on Ireland to double corporate tax rates as part of a quid pro quo for a bail-out. Not a single Irish MEP has supported the motion. Ireland should just tell them to “feck off”… A World Bank report from back in May 2009 “What went wrong in Ireland?“ written by Patrick Honohan, Professor of International Financial Economics at Trinity College Dublin, put the blame squarely on joining the euro and having the wrong interest rates. Writing in 2009 he said

…the underlying cause of the problem was … too much mortgage lending (financed by heavy foreign borrowing by the banks) into an unsustainable housing price and construction boom. The boom seemed credible to enough borrowers given sharply lower interest rates with adoption of the euro … it was Economic and Monetary Union (EMU) entry that really started the housing price surge by sharply lowering nominal and real interest rates, thereby lifting equilibrium asset prices…

Ireland unveils austere €15bn budget to cut deficit

"The Irish people will begin to feel the pain next year when 40pc - or €6bn - of the €10bn in spending cuts and €5bn in tax increases will happen.The effect of the measures - required as the precondition for an EU-IMF bailout - will mean the average Irish household will have to pay up £3,000 in extra taxes. "

Tuesday, 23 November 2010

Ireland bail-out: euro slides on contagion fears

"Uncertainty in Ireland's politics also unnerved investors as the country begins two weeks of political maneouvring over an austerity budget on which a multi-billion euro EU/IMF bailout is riding.Investors fear that far from stemming the eurozone debt crisis, Ireland's bailout has given it fresh legs with Portugal and Spain the next in the firing line. "The market believes the Irish bailout has failed," said the well-followed financial blog zerohedge. "

Monday, 22 November 2010

Ireland bail-out: Markets brand rescue package a failure due to lack of detail

"As the country descended into political chaos, hopes that the deal to pull Ireland back from the brink would stem contagion across Europe were also quickly dashed. The cost of insuring Spanish and Portuguese government debt rose, while the euro also closed down against the dollar and sterling. "

Sunday, 21 November 2010

Margaret Thatcher knew the single currency would devastate Europe

"...Margaret Thatcher may have been the first victim of the single currency, but there have been many more since: the millions who have lost their jobs and the nations that are being stripped (as she forecast) of their pride and independence. Baroness Thatcher has often been accused by her politically motivated enemies of callousness. But backers of the European project are today happy to countenance unlimited human suffering in their mission to enforce economic and monetary union. Mrs Thatcher knew this would be the result of their deranged plan, which is why she fought to stop it. Her last battle as prime minister could not have been fought in a greater or more compassionate cause."

Guilty Men: When are supporters of the euro going to apologise?

"Even more hilariously wrong is this piece by the Environment Secretary, Chris Huhne. Every line is rich in comic irony, but perhaps the best is this one:

If we get rid of sterling and adopt the euro, we will also get rid of sterling crises and sterling overvaluations. This will give us a real control over our economic environment. Our manufacturers, farmers and other trading businesses would be able to rely on the exchange rate against our main continental trading partners staying unchanged forever.

Not that I want to pick on Lib Dems. Michael Heseltine thought it was “barking mad” not to join at the beginning. Peter Mandelson averred that “the price we will pay in lost investment and jobs would be incalculable”. Ken Clarke agreed, saying “Britain’s economy would be damaged if we stayed out too long”. Five minutes on Google will show similar sentiments from Tony Blair, Chris Patten, Gordon Brown, Vince Cable, Peter Hain and the rest."

Ireland forced to take EU and IMF bailout package

"G7 and euro zone finance ministers including George Osborne, the Chancellor, held emergency telephone conference talks on a combined EU-IMF rescue package of up to £77 billion.British taxpayers now face paying a bill of up to £7 billion as under a deal signed by the last Labour government, British taxpayers are liable to share in the cost of any EU bail-out.On Monday Irish and euro zone governments will be watching the markets after Greece, which received a £94 billion bailout in April, warned that the EU’s debt crisis was not finished yet.Portugal has already warned that there is a “high risk” it might need economic help. If investors are unconvinced by the Irish rescue package, the euro could come under pressure while the cost of borrowing for the Dublin government could rise. "

Brown earns £60K for 50-minute speech... about the economic crisis

Daily Mail
"Gordon Brown gave his first paid speech since leaving Downing Street yesterday, earning an estimated £60,000.Mr Brown – who has barely been seen in public since he stepped down as Prime Minister in May – was a keynote speaker at a summit in New Delhi, the Indian capital.He gave a 50-minute speech on the global economic crisis and how to prevent another one, which is estimated to have earned him around £1,200 per minute.Other speakers included the Dalai Lama and former U.S. Vice President Al Gore. A source said that Mr Brown was chosen because David Miliband – who lost the Labour leadership battle to his brother Ed – turned down the invitation."

Friday, 19 November 2010

Ireland faces showdown over 'unfair' tax rate as IMF negotiates £70bn bail-out to save its crippled banks

Daily Mail
# Cameron warns Britain will have to borrow more to help save Dublin
# EU and IMF inspectors start poring over crippled banks' books
# Rising fury on the streets over bail-out threat to national sovereignty

Thursday, 18 November 2010

Was it for this?

"The true ignominy of our current situation is not that our sovereignty has been taken away from us, it is that we ourselves have squandered it. Let us not seek to assuage our sense of shame in the comforting illusion that powerful nations in Europe are conspiring to become our masters. We are, after all, no great prize for any would-be overlord now. No rational European would willingly take on the task of cleaning up the mess we have made. It is the incompetence of the governments we ourselves elected that has so deeply compromised our capacity to make our own decisions.

They did so, let us recall, from a period when Irish sovereignty had never been stronger. Our national debt was negligible. The mass emigration that had mocked our claims to be a people in control of our own destiny was reversed. A genuine act of national self-determination had occurred in 1998 when both parts of the island voted to accept the Belfast Agreement. The sense of failure and inferiority had been banished, we thought, for good.

To drag this State down from those heights and make it again subject to the decisions of others is an achievement that will not soon be forgiven. It must mark, surely, the ignominious end of a failed administration."

This is one Eurozone country we must help

Daily Mail
"On the face of it, to ask British taxpayers to help bail out a bankrupt Irish financial system is pretty rich. Not content with virtually beggaring ourselves to tackle the home-grown consequences of the credit crunch, we now have to prop up our even more profligate neighbour. The harsh reality is Britain’s banks lent £140billion to Ireland – with the almost wholly taxpayer-owned RBS leading the pack – and it accounts for seven per cent of UK exports."

Why the UK needs a Dublin bail-out... Britain's banks are owed £88BILLION by Ireland

Daily Mail
"The proposed Irish bail-out could be crucial for Britain's beleaguered banking sector after it was revealed UK banks have a massive exposure to the debt-ridden country.According to the latest Bank of England figures, total lending to Irish households and companies totals £88billion.The Royal Bank of Scotland, which is largely owned by the British taxpayer, is the most exposed at £54.4billion, with £53.3billion of retail and commercial exposure, a third of which is residential mortgages.The bank also has about £1 billion in exposures to Irish sovereign debt in its investment-banking trading book.Lloyds Banking Group has £27billion of Irish loans outstanding, including £11billion of problem loans, largely related to the property and corporate sectors.The news comes after the Governor of Ireland's Central Bank today said he expects the country to get a loan worth tens of billions through an International Monetary Fund-European Union rescue package."

End of an √Čire

Guido Fawkes
"Thousands died in the transition from being England’s first colony, to an Irish Free State and finally an independent Republic. The ironies arising from the situation in Ireland are many. Joining the Euro, hugging the state tight to the whole European project and Dublin’s politicians slavishly obeying their new masters in Frankfurt has ended in disaster. Why fight the English for 400 years for sovereignty only to surrender it to Germany? "

The horrible truth starts to dawn on Europe's leaders

"“We’re in a survival crisis. We all have to work together in order to survive with the euro zone, because if we don’t survive with the euro zone we will not survive with the European Union,” he said.

Well, well. This theme is all too familiar to readers of The Daily Telegraph, but it comes as something of a shock to hear such a confession after all these years from Europe’s president.

He is admitting that the gamble of launching a premature and dysfunctional currency without a central treasury, or debt union, or economic government, to back it up – and before the economies, legal systems, wage bargaining practices, productivity growth, and interest rate sensitivity, of North and South Europe had come anywhere near sustainable convergence – may now backfire horribly."

Ireland set to tap €80bn loan as it opens door to IMF mission

"Irish central bank governor Patrick Honohan has said he "absolutely" expects the country accept a bail-out worth “tens of billions” of euros from the European Union and International Monetary Fund. "

Wednesday, 17 November 2010

Ireland's debt crisis in pictures

"Abandoned building sites, vacant office blocks, protests over job losses and angry graffiti tell the story of the victims of Ireland's financial agony. "

Tuesday, 16 November 2010

Ireland's debt crisis could kill the European Union stone dead, EU president warns

Daily Mail
"The debt crisis facing Ireland, Greece and Portugal could threaten the future of the whole European Union, EU President Herman Van Rompuy warned today.'We must all work together in order to survive with the eurozone, because if we do not survive with the eurozone, we will not survive with the European Union,' said Mr Van Rompuy.He spoke out as finance ministers tried to keep Ireland's market turmoil from triggering a domino effect that could topple other vulnerable nations and rock the region's currency union.Only months after saving Greece from bankruptcy in May, the 16-country eurozone has been shaken by concerns that Ireland will be unable to sustain the cost of its banks' failure.European nations are worried the tension is making borrowing more expensive for countries like Portugal and Spain, threatening to push them to the brink of default."

Monday, 15 November 2010

Greek debt position worse than feared

"The EU’s statistics office, Eurostat, issued its final revised accounts for Greece over the past four years. They showed that in 2009, the country’s debt was 126.8pc of gross domestic product (GDP), higher than Italy’s, previously the worst in the EU at 116pc. Greece’s debt is set to jump to 144pc of GDP this year. Greece’s deficit last year at 15.4pc of GDP was also worse than Ireland’s, at 14.4pc, the latest eurozone country to come under pressure to seek a bail-out. "

Fed's second round of QE draws new fire in open letter from economists

"The Federal Reserve's new $600bn round of quantitative easing has come under renewed fire from a group of economists and former Republican officials, as the political unity that accompanied the central bank's first dose fractures. "

Eurozone debt crisis: the PIGS at risk


"As Portugal becomes the latest European Union country to admit it could need an EU bail-out, here are the other countries, or PIGS, at risk. "

Friday, 12 November 2010


Channel4 (More4)
"..Story: Film maker Martin Durkin explains the full extent of the financial mess the UK is in and presents his argument of what needs to be done to make the economy boom again."


Thursday, 11 November 2010

Ireland bailout likely before end of 2011 - Reuters poll

(Reuters) - Ireland will seek international rescue funds before the end of next year, according to two thirds of economists and bond strategists polled by Reuters on Thursday.

Twenty of the 30 analysts surveyed said Ireland would not make it through to the end of 2011 without tapping external funds. The value of any bailout would be around 48 billion euros (40 billion pounds), according to a median of forecasts from the 10 respondents who gave a figure.

Neat Speed Camera Locator

E.M.Smith (USA)
While making the run out here, I had the experience of hitting about a half dozen “speed cameras” in a row outside of Phoenix on I-10… The good news is that my general driving rules prevented me from triggering them. The bad news is that they are there… Drivers rapidly become aware of the location and at that point, there was a rapid slow down of the traffic with the attendant crowding and risks… It is a great traffic jam generator as it starts a peristaltic slowdown wave into the rush. The wiki said that the Phoenix cameras are set to trip at 11 mph over. Hope your speedometer is accurate…"

Wednesday, 10 November 2010

Ireland admits investors uneasy as bailout fears mount

(Reuters) - Ireland's central bank governor conceded on Wednesday a huge bank recapitalisation programme had failed to reassure investors, as borrowing costs mounted along with concerns its new fiscal plan would not avert a bailout.

Tuesday, 9 November 2010

Ireland: a sinking basket case

Catallaxy Files (Australia)
"..Karen Maley over at Business Spectator, however, has an interesting article on the most recent developments in Ireland, which include a marked spiking in the yields on Irish government bonds. A prominent Irish professor of economics is arguing that the country is in effect bankrupt because the capacity of the taxpayer to fund the bail-outs of the three big Irish banks, that are extremely exposed to the ailing property sector, is insufficient to meet the calls at the higher yields. (I’m not sure he is correct to recommend that that the Irish government should have allowed those banks to fail, in effect, however.) Fiscal austerity will not be enough.

Is it time for the IMF to come in to sort out the mess? And I’m not so sure now that the Celtic experiment will have been worth the candle."

Monday, 8 November 2010

Gold breaks through the $1,400 barrier

Daily Mail
"Gold has broken the $1,400 mark to hit a new record high following comments from the World Bank on adopting a new gold standard.The spot gold price hit $1,407.2 at 5.30pm today – a new record level for bullion.Gold fell back slightly after hitting the new high and was trading at $1,406 at 6.15pm – or £870 an ounce."

Sunday, 7 November 2010

The rest of the world goes West when America prints more money

"Last Wednesday was a hinge point in history. The United States decided to drop all pretence of being interested in leading – or even being part of – a coordinated global policy response to the most serious economic crisis in more than 70 years. America is now isolated and the rest of the world is furious. The widespread use of capital controls and even a lurch into 1930s-style protectionism are both far more likely than just a few days ago.

The Federal Reserve's words may have been anodyne. "We will adjust the programme as needed to best foster maximum employment and price stability," said the US central bank's Open Market Committee. But by announcing another round of "quantitative easing", America is rightfully incurring the wrath not only of the emerging giants of the East, but the eurozone too. "

Saturday, 6 November 2010

UK economy in danger of being sucked into Ben Bernanke's great inflation

"The great inflation is under way, its source is the US but we are close to being sucked in too. Investors are fleeing into equities as a hedge against inflation. The US is now being run by experimental economics, a $600bn (£372bn) experiment to be precise as Ben Bernanke, chairman of the US Federal Reserve, hopes to re-float the sunken American property market and punish savers, transferring wealth to debtors through negative real interest rates. "

Friday, 5 November 2010

Der Spiegel: Geologists Warning Of “Mega-Eruption”

"Der Spiegel reports on the growling-ever-louder Indonesian Merapi volcano in an article titled: Geologists Warning of Mega-Eruption of Merapi. ......'The Merapi eruptions are becoming more violent – and the big bang could be just ahead. The Indonesian volcano has been spewing 800°C ash clouds for days. .....A rough estimate indicates that there is three times more magma than what was ejected by the Indonesian volcano Tambora in 1815 – the biggest eruption in the last 10,000 years, which led to a cooling of the climate globally.'

Thursday, 4 November 2010

Fed's $600bn gamble risks throwing away America's biggest asset

"Apparently, there's been an election in the US. The BBC tells us that America's wholly unsurprising verdict on the past two years is frightfully important and signals the end of the Obama dream, whatever that may have been; it was never entirely clear. .....It didn't seem to occur to him that Obama's drubbing was not so much a case of haplessly falling victim to economic circumstance but was in fact largely down to incoherent legislative experiment, blind disregard for the deficit and chronic mishandling of the economy. Americans had reasonably expected better. Obama's punishment will make little if any difference to the mess the US economy finds itself in and in any case is something of a sideshow against the latest high risk policy initiative the Federal Reserve is visiting on an already battered nation. The Hill can't act, but the Fed still stands ready and willing at the roulette wheel.

The fresh $600bn (£372bn) infusion of quantitative easing announced on Wednesday may or may not provide a lift for beleaguered domestic demand – both Goldman Sachs and HSBC have said much more is needed to escape a real or imagined liquidity trap – but one thing it certainly does do is further debauch the currency. Never before has dollar hegemony been so much under threat. By flooding the world economy with yet more freshly minted dollars, America further undermines faith in the greenback as an internationally reliable store of value and is thereby squandering an economic and geo-political asset of huge importance to the nation's history.

The dollar's reserve currency status means that America can borrow at will in its own currency from the rest of the world, and at favourable rates to boot. This privilege is being recklessly thrown away. Every time the Fed prints more dollars to fight the domestic recession, it further devalues that debt. The lenders are understandably getting restless.As is now becoming steadily more apparent, dollar hegemony was a major underlying cause of the crisis, for it allowed America to go on an unrestrained borrowing binge; the developing world is ever more minded to think its demise part of the solution.

The Fed is taking a massive gamble with America's long term future by blindly pursuing further monetary stimulus; it may take time, but the dollar's all powerful reign on the world stage is drawing to a close."

Wednesday, 3 November 2010

Ireland is running out of time

"Ireland has been desperately unlucky.

The bond crisis is snowballing out of control before the country has had enough time to let its medical, pharma, IT, and financial services industries (don’t laugh, some of it is doing well) come to the rescue. Yields on 10-year Irish bonds surged this morning to a post-EMU high of 7.41pc. Yes, Ireland is fully-funded until April – and has another €12bn in pension reserves that could be tapped in extremis – but that is less reassuring than it looks. The spreads over German Bunds are mimicking the action seen in Greece in the final hours before the dam broke."

G.O.P. Captures House, but Not Senate

"One after another, once-unassailable Democrats like Senator Russ Feingold of Wisconsin, Representatives Ike Skelton of Missouri, John Spratt of South Carolina, Rick Boucher of Virginia and Chet Edwards of Texas fell to little-known Republican challengers.

“Voters sent a message that change has not happened fast enough,” said Tim Kaine, chairman of the Democratic National Committee.

Republicans did not achieve a perfect evening, losing races in several states they had once hoped to win, including the Senate contests in Delaware and Connecticut, because some candidates supported by the Tea Party movement knocked out establishment candidates to win their nominations. But they did score notable victories in some tight races, like Pat Toomey’s Senate run in Pennsylvania. "

Republican tsunami: Democrats lose control of the House as voters slam Obama with worst losses for 62 years

Daily Mail

Spending watchdog ran up £4.8m bill for hotels and used taxpayers' cash to fund gay rights workshop for staff

Daily Mail
"A public spending watchdog lavished millions of pounds on entertaining, staff parties and fine dining for its managers, it was revealed yesterday.Events funded by the Audit Commission for its staff included a gay rights workshop, a Christmas party at an exclusive restaurant and a ‘conflict management’ course.The quango also paid £10,000 to sponsor a book to be published by the Smith Institute, a charity with links to Gordon Brown which was criticised in a Charity Commission investigation for allowing itself to appear too political. More money went on landscaping the grounds around the commission’s offices and a ‘stakeholder briefing’ at a golf and country club."