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ECB Stepped In To Rescue Ireland
Another sovereign bankruptcy, another stick save by the ECB. The FT has confirmed Friday's rumors that it was just the ECB's intervention that prevented domino number two - Ireland - from toppling, and taking with it all of Europe. "The European Central Bank intervened to stabilise the Irish bond markets on Friday after a report by a leading UK bank triggered investor fears that the country might turn to the international community for a multibillion-euro bail-out." As readers will recall, the half a percent spike in Irish bond yields was precipitated by a Barclays report that the IMF would be needed to rescue the Emerald Isle, coupled with confirmation that the Irish government was negotiating with AIB bondholders about an imminent bankruptcy. At least now it is doubtless that domino #2 is now on a ventilator, in the critical condition ward, and should Doctor ECB's attention be diverted elsewhere, say to quell riotous mutiny in Greece, that the house of cards will finally fall.
More from the FT:
Although investors said Dublin would only need financial help in the event of more unexpected banking losses and a deterioration of its economy, the Irish sell-off highlighted the continued fragility of eurozone bond markets.
Traders said the intervention by the ECB was small – in the tens of millions of euros but the report by Barclays Capital still prompted the International Monetary Fund to state it did not envision that Ireland would need financial assistance.
The Irish government will test investor sentiment on Tuesday with an auction of four-year and eight-year bonds that bankers warn could see the country having to pay high yields to attract demand.
Domenico Crapanzano, head of euro rates trading at Jefferies, said: “There are just no buyers out there for Ireland because of worries over its banks and economy. Ireland and also Portugal are very much the worry for investors.”
The Barclays report said: “If the macroeconomic conditions deviate from our baseline recovery scenario and unexpected losses crop up in the financial sector, then the government’s best option at stabilising adverse market dynamics would indeed be by drawing on financial assistance from the EU-IMF.”
Michael Noonan, finance spokesman for the conservative Fine Gael party, said: “There is no doubt that the political developments of recent days have also added to the concerns of the international markets.”
The country’s underlying deficit – stripping out the cost of the bank recapitalisations – is poised to be one of the highest in the EU at 11.6 per cent of gross domestic product in the current year. Its bank rescue has already added close to €25bn to national debt, projected to peak at 100 per cent of GDP in 2012.
The Barclays Capital report also said: “We believe that the Irish government has to a large extent deployed the right economic and financial policies thus far. The problem is that, despite these policy efforts, the government has very few options left of its own.”
So now that we know that Central Banks are performing daily interventions in both FX and
bond markets, it is "certain" that equities are completely safe from
JCT and Bernanke's tender loving care. Of course, when the missing confirmation finally appears, hopefully everyone will finally leave every asset class, all of which have now become merely a venue for global central banks to conduct domestic policy, and have lost all traditional capital formation and forward looking properties.
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Madoff was a piker.
Don't believe he was the only one. Many, many, more to come to the fore.
Madoff fell on his sword to save his Wall Street brethren
It's a good thing the beacon of unconflictedness, virtue and purity that is the SEC was diligent otherwise Madoff would have gotten away with his crimes for many years. [/sarcasm]
I liked how Peter Schiff suggested they should make him Treasury Secretary.
+
The ridiculous outrage at Madoff was clearly directed at his being caught.
Doug Noland at Prudent Bear has a particularly good piece this weekend on the countervailing trends of developed-world disinflation and developing-world inflation, gung-ho US corporate debt re-flation and flight from the Europeriphery, pre-QE2 dollar weakness and Japanese competitive devaluation. Which straw breaks the camel's back, place your bets.
http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10436
Dominoes, bitchez.
Bono made another concert speech?...LOL.
Monday, bloody Monday, Monday bloody Monday la la la
Amazing how this information always comes out on a weekend so they think people have forgotten by Monday.
The bankruptcy was going to fall on Monday so Daddy Euro moved in to head it off.
the article was out Friday
ECB intervenes in Irish bond marketsBy David Oakley in London and John Murray Brown in Dublin
Published: September 17 2010 19:25 | Last updated: September 17 2010 21:31
Haha, yeah at 7:25pm. That would have made it around midnight in Europe.
The bank runs cometh. That's the great thing about a ponzi. The crooks have to run faster and faster just to keep the damn thing going.
Jim Willie has a nice phrase: 'eerie quiet', for how markets will behave in the next weeks. Calm before the storm.
Another disaster? Guess stocks will be up again tomorrow...(sob)
Yep, and they'll go up because stocks are cheap, and definitely NOT because of covert manipulation.
PMs are the only thing they can't manipulate - as long as you take delivery. This house will come crashing down.
I recall back when it tooks weeks, perhaps months to discover that VIPs lied to the population at large. Now, the truth is discovered within days.
One wonders what will happen on the markets, when the half-life of the average VIP lie drops below a day.
NO BANK LEFT BEHIND!
Default and bankruptcy are forbidden words in the neo-mercantilist world.
So let it be written, So let it be done. Yet another Bitchslap to all the naysayer critics who keep saying bailouts wont work. Armegeddon postponed. Tyler back to his photoshop theroys. Roubini back to his whining like a fucking Sissy girl. I am so pissed right now. Come on Tyler, Please post some charts showing us just how bad these bailouts are, Because i am actually starting to Hale Bernanke as a genius.
Its true. Printing money seems to have no adverse effect. You know, we are actually being stupid. We should stop all working and just print money. That way we can all live rich without working.
At the end of kick-the-can some kid always cries out, "Ollie-ollie-oxen-free," and we all go home to enjoy some of mother's hot cocoa.
The Bernanke corollary to the Cheney Doctrine: "Reagan proved that deficits don't matter, Bush proved that bailouts don't matter, Obama proved that monetizing debt doesn't matter, and I will prove that the only thing that matters is the power of positive thinking".
This Yugoslav proverb best describes the role Tyler plays for us here in identifying the coming disaster brought on by central bank interventions and bailouts:
“He is not an honest man who has burned his tongue and does not tell the company that the soup is hot.”
Calling bailout policy successful—stealing money from American citizens in a volume never experienced before in economic history and giving it to a criminal ruling class to buy luxuries and votes – doesn’t make it successful monetary policy.
We are in an unbelievably devastating recession brought on, egged on, and pushed forward by these criminals. Millions are suffering and only bought economists and prostitute media outlets say it’s working.
Just now comes the news that the Western lumber industry (eleven states) has had its worst year in 2009 since records have been kept and that the outlook for this year is even more dismal. Statistics from the Western Wood Products Association show production in each of the states dropped by double digits from 2008 (nationally off 19.5% from 2008).
Five years ago the Western mills produced 19.3 billion board feet of lumber valued at $7.7 billion. The 2009 production was worth $2.69 billion, down 26% from 2008.
The NPD Group, a leading market research company from Chicago, has just reported that.the San Francisco Bay Area lost 290 dining spots from spring 2009 to spring 2010, most of them independent and full-service.
Its analysts, who’ve seen the restaurant business in steady decline throughout the country in the past two years, expect it to get worse. They project that restaurant traffic will increase by only 8% over the next decade—falling under a predicted population growth of 10.1 percent. In past decades, restaurant traffic has exceeded population growth.
In short, Fed policy is driving America deeper into depression, all to pay off its insolvent financials’ gambling debts.
I know that. But when is it going to end? I needs to know
I get the feeling it's only going to end when people, who are not TPTB, end it.
I heard a similar one but it is from Romania. The man burned by the soup blows on the yoghurt.
LOL. The perfect corollary.
"The Irish government will test investor sentiment on Tuesday with an auction of four-year and eight-year bonds that bankers warn could see the country having to pay high yields to attract demand."
The bond auction like the portugal auction will rally markets no?
The answer is a resounding YES. It will be oversubscribed.
Repeat after me, reality is what the CB's decide it is. Everything else is eyewash.
Sure with IMF and ECB underwriting and buying their issues, yields are even expected to be "better-than-expected", sending all assets higher in the next 2 months. ZH would no doubt bring us the good news, maybe CNBS would beat ZH to the celebration of these forthcoming successful auctions.
Snapped up in a heartbeat by ECB puppets.
Reaction by MSM: "Disaster averted in Eire Bond Markets, Sail on, All is Well."
/vomit/
Let me save you the time. Its a small, 1bill euro bond auction. It will go well. They'll breathe a sigh of relief and the markets will rally.
Same bullshit we saw all summer.
Painting over the rust spots does not strengthen the hull.
ECB DEBT METER
http://williambanzai7.blogspot.com/2010/09/ecb-debt-meter.html
LOL
Whoa there. First, AIB is Allied Irish Bank[s] (Peter Sutherland's old gig) not Anglo Irish Bank. Totally separate and quite different insolvent banks. Allied isn't even nationalised yet, though it probably will be in time for Christmas. The latest news about Anglo (not Allied) is that the government (possibly with the help of the opposition) is trying to hustle some discounted bond buybacks out of the creditors in the hope of getting Anglo some debt relief without actually having to do a restructuring or windup. The bank guarantee now largely expires at the end of the year, so at that point the government could, if it wished, shut Anglo without defaulting on any sovereign commitments. (It almost certainly doesn't wish, more's the pity.)
TL;DR: AIB = Allied Irish Bank[s]. Allied Irish Bank[s] != Anglo Irish Bank.
Please to adjust copy accordingly, Mr. Durden.
PS.: Are you a ZH reader? Here are some good Irish-crisis blogs that may interest you:
Neither of which are associated with me at all.
TYPICALLY!
You Irish are never associated, involved in anything. AND BEFORE YOU KNOW IT BOMBS START EXPLODING!!
PS: I HATE U2!
Awwwww, it's Debt! Domodomodomodomodomokuuuuuun. Have a cookie!
PS: Plenty of people around here who have gone off our most famous tax exiles too. Me, I don't mind 'em.
My, what fine looking Potatoes.
http://www.youtube.com/watch?v=6GO-irf4ZP4
What a clever well thought out post. Bravo sir.
I hope that Tyler will address the 2 issues raised in these comments --first that the news was in the market Friday, not released this weekend; second that the AIB referred to is Allied not Anglo.Don't these facts change the ZH import here?
725pm Friday is after the markets closed.
Looks like the Irish found the pot of gold at the end of the rainbow!
LEPRICON MASSACRE WEEKEND BITSHES!!!
Treaty of Lisbon
http://europa.eu/lisbon_treaty/index_en.htm
Move along peasants, nothing to see here. Turn on your TV to watch breaking CFR news.
The Real Face of European Union >> begin @2:00m
http://www.youtube.com/watch?v=uoJHyRk7voM
Sound familar America?
Pelosi Pole Vault
http://www.youtube.com/watch?v=i5iUlXBenXM
Looking at the left hand, not watching the right.
I heart sovereign cds as long as it happens in the next four years. That should be plenty of time.
*knocking on wood*
Looks like ECB is dabbling in witchcraft too.
Have you ever seen a man (government) keep several plates (banks) spinning (solvent) on tall sticks (high amounts of leverage)?
It takes quite a bit of effort (capital) to keep them all going (solvent) but sooner or later the man (government) gets tired (lack of capital) and the plates fall to the floor (bankruptcy).
Its a wonderful show (empire) but we all have a good laugh (depression) when the plates (banks) hit the floor (bankruptcy). Then the show is over (empire) and we move onto other amusements (new empires).
Cheers,
There's always a catch:
Plates that are designed not to fall. (Too big to fall...I mean fail)
Granddad was a Black & Tan resistor who because of his affiliations was hunted and forced from his homeland into exile 45 miles north of Ellis Island.
It's safe to say that he is rolling in the ground at the thought of these economic perversions.
Well done.
What a coincidence, my grandfather was a Black and Tan and then a 'B' Special. It's a funny old world. I don't think your grandfather is the only grandfather spinning in his grave at the present moment in time.
I just don't understand, what is it going to take? The world could be bailing out all sorts of entities for the rest of time. The markets hardly reacted on Friday, I'm mean yeah, they sweep it under the rug, but it was known....
I just don't understand, what is it going to take? The world could be bailing out all sorts of entities for the rest of time. The markets hardly reacted on Friday, I'm mean yeah, they sweep it under the rug, but it was known....
I just don't understand, what is it going to take? The world could be bailing out all sorts of entities for the rest of time. The markets hardly reacted on Friday, I'm mean yeah, they sweep it under the rug, but it was known....
What are the chances of pub hours being extended?
What a Gordian Knot this has turned out to be. And what a repeated fuckstory for the smarter shorts out there.
Too manipulated to short, but not enough conviction to go long? "The best lose all conviction; while the worst\are full of impassioned intensity."
What can I conclude beyond any reasonable doubt; or at least to the level of conviction that I can make a move and sleep nights? That money is getting diluted. And that the USD will remain the currency of last resort even as itself gets diluted; because we have the best air force. Sad but true. The USD will remain the Least Worst.
Buy the other side - commodities. Otherwise you just crack your brains forever on this one. Oil, PMs, and U.S. cash money. And if you live in the U.S.A., adjust for a long slow slide.
The Zombification of the Eu continues. Where is the outlier event? Its not going to be in the Eu for obvious reasons.
Ol Virg .. China will be 'The Event'. Watch what happens their closely.
Well, that or Katla.
The best piece of advice for Ireland would be for her to take notayesmanseconomics advice I feel.
"As Ireland has strengths that Greece did not have for example she ran a much better fiscal policy before the credit crunch and took more decisive initial steps to respond she in my view could add to those strengths by again acting decisively and calling in the EU/IMF to help her. For once a country could get ahead of events rather than just respond to them."
It woud get her ahead of Portugal in the queue but I guess this is the Eurozone and there is plenty of dithering and vacillating to come from them instead.
http://notayesmanseconomics.wordpress.com
The ECB as the 'Black Knight' .......
http://www.youtube.com/watch?v=dhRUe-gz690
I wouldn't be worried about old Paddy. Day are usedtoit.
Dig a little deeper in this peat bog. My My My thats going to hurt when the tide goes out
http://noir.bloomberg.com/apps/news?pid=20601109&sid=aDBuQH_OUe3g&pos=14.
think Lehmans on steroids
Would ya like a little bit more debt?
Awww goooo onnnn...
What would ya say to a rescue by the ECB?
Feck off rescue!
http://www.youtube.com/watch?v=3DpMbhdIwrw&feature=related
Guess who may benefit from all this turmoil in Eirinn?
Two words: Semtex, bitchez. The Real IRA plans to blow up British bankers and I bet the "austerity" program isn't hurting their recruitment efforts.
http://dailybail.com/home/real-ira-threatens-to-blow-up-bankers-explosiv...