Joseph
Those would be the Fabians and the illuminati banker friends! Insider trading is to be banned soon in US Congress …. no more champagne there, I don’t think!

Sarah the C
Retired people have contracts that are one sided. They do not hope for continued employment, promotion etc. They are more likely to test what may be unlawful. The Government will use taxation, rather than have to backtrack and handover billions to those whom they have frightened into submission. Power, Sarah.

My ol buddy Facthna, Falklands to some, shouted at this minions recently. Why? Illusions becoming thin? How many people are killed in Ireland ‘cos they are in gangs? The Irish act as gangs in all things. The government and loud aggressive would be journos are pushing the largest gangs. I don’t think they will, but ya never know? The government gangs can get a new leader if required. Go gang!

Where do ‘champagne socialists’ fit in with that group of drinkers?

Agree. But we had started…

@Pat

Divisive? Oh c’mon. Colm McCarthy observed during the week on Newstalk (?) that so far the PS pensioners have hardly been hit (remember the pension levy was designed specifically so that the pensions would be spared). Meanwhile the lower paid public sector workers, the very ones saddled with negative equity mortgages are taking the biggest hits. Cormac’s point on the suffering is bang on - there is more to come - and so far those most protected, and least deserving in my view - are the benchmarked retired civil servants.
Cuts must be across the board. That’s not stupid.

Even after savage tax increases and brutal spending cuts, the gap between Irish government revenue and spending remains larger than that of Greece which has yet to see serious austerity measures.

According to the government’s budget figures, the deficit will equal 15% of national income (GNP) this year. Our budgetary adjustments have already reduced the deficit by about 12% of national income. Without those adjustments our deficit would have been a monstrous 27% of national income. And that is before the cost of bank bailouts!

Bottom line: we’re still suffering but if we hadn’t taken the actions we have already undertaken, we’d be suffering much more.

For ex-pats?

Ireland’s rep
Alan Kohler on the ABC news, did not mention Ireland, in relation to the big bailout, but pointed out that the Beer drinkers were bailing out the Wine drinkers. Ireland was in neither group, but were called whiskey drinkers.

Civil service pensioners glory days have to end.

They may surprise American commentators that so-called sclerotic Europe could make bold decisions and anyone else who aches for a return to confetti currency chaos, that the EMU has a powerful central bank.

The talks in Brussels had been delayed Sunday when German Finance Minister Wolfgang Schäuble was hospitalised, after an apparent allergic reaction to a medication. The wheelchair-bound Schäuble, survived an assassination attempt in 1990.

the 440bn in ‘loan guarantees’ is actually going to come via a SPV formed by the national governments and managed by the EU Commission. Lenny, you’ve done it again…

Use the internet for schooling, saving fuel, building etc. All saving is deflationary. Tough! As one parent, sadly often two, will be at home, abolish support for childcare. More women than men may be employed in ten years time anyway! No longer a sex equality issue? Reinstating the family may win votes too!

paul quigley
Of course! But for the purposes of internal stability etc TPTB in localities everywhere identify with the goodness of that stability. Stifling novelty in thought is always top of the agenda. The depression will damage that for a while.

ECB policy : can everyone keep the head please? That’s what we need!

My mother used to say about types who loved bad news: “God, he’d frighten a horse from a feed of oats!”

Thomas Freidman has an interesting column in the NYT on the end of the Tooth Fairy:

We baby boomers in America and Western Europe were raised to believe there really was a Tooth Fairy, whose magic would allow conservatives to cut taxes without cutting services and liberals to expand services without raising taxes. The Tooth Fairy did it by printing money, by bogus accounting and by deluding us into thinking that by borrowing from China or Germany, or against our rising home values, or by creating exotic financial instruments to trade with each other, we were actually creating wealth.

Greece, for instance, became the General Motors of countries. Like G.M.’s management, Greek politicians used the easy money and subsidies that came with European Union membership not to make themselves more competitive in a flat world, but more corrupt, less willing to collect taxes and uncompetitive. Under Greek law, anyone in certain “hazardous” jobs could retire with full pension at 50 for women and 55 for men — including hairdressers who use a lot of chemical dyes and shampoos. In Britain, everyone over 60 gets an annual allowance to pay heating bills and can ride any local bus for free. That’s really sweet — if you can afford it. But Britain, where 25 percent of the government’s budget is now borrowed, can’t anymore.

http://www.nytimes.com/2010/05/09/opinion/09friedman.html?src=me&ref=general

Most politicians and commentators are in denial about the challenges ahead.

Plus ça change …

Barroso reported as considering a ban on short-selling of bonds, and on the writing of CDS. Oh great. That’ll solve the underlying problem, which obviously is speculation rather than mismanagement and imbalance, in jig time.

It’ll be a long week.

Many thanks for the mighty debate:

‘Bonds now are politicised IOUs… that is, they ever less a function of economic fundamentals. That is a key take for investors from the shenanigans of this weekend and the past days’

‘Economic fundamentals’ is a useful concept, but it can serve to obscure the facts of history. The global economy is mostly an imposed, rather than an agreed order. Creditor nations, and their banking institutions are defenders of a polarised global system.

The reality is that ‘haute finance’ has always has been political. Financial institutions have power, and governments have power, so pragmatic accommodations have usually been reached. That’s what’s needed here, with less finger pointing at ‘profligate governments’. People will learn.

Part of this story is that European debtor nations are export markets for the centre. ‘Backward’ populations are sold lifestyle and aspirations which are not compatible with the level of their economic development. Serious money is made in lending and in exporting on that flawed (maybe even cynical) basis.

Now that sovereign default is on the horizon, the big European banks are naturally looking to the centre for rescue. As others have pointed out, this is a test for the European project. Fair enough.

Lets hope that the traditional divide between the ’savage’ periphery and the ‘civiilised’ centre is seen, by bankers and politicians alike, for the nonsense that it is. There is only one economy and we are all in it.

One thing that we need to wake up to is the nature of international economics and canabalisitic profit seeking.

Our national notions that once we arrive there on paddys day with a bowl of shamrock, sure, wont they think were grand!!!

When/If the current test on the euro passes, surely it will head east to test the pre euro EU states??

Night

ECB policy : can everyone keep the head please? That’s what we need!

btw, I think talk of the euro breaking up is overstated. We’re going to end up with more integration, not less, when this is over.

Also talk of Spain and Portugal being asked/told to commit to further fiscal “consolidation.”

“€440bn in guarantees”

What are guarantees?

well the “subsidy” given to the banks via the ECB repo is probably worth a maybe 5-10bn to the entire banking sector this year (lets say 1% on 700bn). As such, its not a particularly large amount given the size of total EZ GDP or EZ banking balance sheets. So yes, its QE by stealth, but not at a massive level, as opposed to the 600bn plan outlined above which quite clearly falls under the tag of “massive”.

‘Bonds now are politicised IOUs… that is, they ever less a function of economic fundamentals. That is a key take for investors from the shenanigans of this weekend and the past days’

The F

what im hearing now is the following:

it’ll be €60bn in loans, €440bn in guarantees and €100bn from the IMF for a total of EUR600bn. The loans will actually be granted by the EU Commission, while the guarantees would be granted by the national governments. As such, it probably doesn’t require new legislation. There would also be additional liquidity from the ECB for the banking sector. This is pretty real and big.

Also, @ Zhou, i think ur earlier feeling about the UK looking to back out may be true (ie they were expected to join in), and while its a bit of a problem, it wont be a deal breaker, more an annoyance.

@ MickeyHickey
Government has “sought expert advice and is following it”. Doubtless. Politicians make choices all the time, and they are driven by much more than the technicals. The sovereign “charity” vs “tough love” approach has won out, much to my surprise. Investment decisions are somewhat rational as driven by obvious goals, politics far less so. Unfortunately, this politicisation of finance in Europe scares investors, and severely undermines confidence.

But now we have the PROOF:
“The Department of Finance advised Anglo Irish Bank’s chairman not to express concern in his 2008 annual report that it could require billions of euros in emergency funding.

Documents obtained by The Sunday Times give an account by Donal O’Connor, Anglo’s former executive chairman, of how the Department of Finance watered down a statement he intended to make to stakeholders. In minutes of a meeting signed and dated by O’Connor on February 18, 2009, the former chairman said the Department of Finance told him that the letter was “too negative” and “should not refer to emergency funding”.

http://www.timesonline.co.uk/tol/news/world/ireland/article7120781.ece
(Courtesy of Newsy on another forum)