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Ex Domestically Sourced Pension Funds, Blended Irish Rescue Interest Rate Is 7.25%
Everyone expected a number between 5% and 6.7% on the Irish rescue interest rate. However, when one considers that the NPRF, which will serve as a source of capital in the rescue package has a zero interest rate (Ireland will not be paying interest to itself), and amounts to 20% of the total bailout figure, it appears that the blended rate of new money is actually 7.25%. From politics.ie: "Presumably the pensions reserve funds are at 0%, as its already our
money. They form about 20% of the total amount. If one fifth of the
amount is at zero percent, and the average is 5.8% - what is the
interest on the rest of the money? I calculate 7.25%"
The rape of the Irish people by their new European banking overlords is reaching legendary proportions.
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High Five Bankers, Mission accomplished...
Yeah, well at least they did't get this deal:
http://www.creditcards.com/credit-card-news/first-premier-79-rate-fees-credit-card-1265.phpIreland, please grow some balls and make my heritage proud. Default on the god dam debt. Bank bondholders and sovereign bondholders are NOT special - repeat after me - they are NOT special. Default for the sake of the people. Follow the actions of Iceland on the road to national sovereignty.
Iceland is No Ireland
Inquiring Irish minds just might be interested to see how Iceland fared after they told EU bankers to go to hell. For the answer, please consider Iceland Is No Ireland as State Kept Free of Bank Debt
Pigpen
That would be a real TEOTWAWKI event....
No it wouldn't. Default on the Euro. Re-issue a sovereign currency without interest and without debt. Could be done virtually overnight. The people would come together.
The alternative is a slow grind into poverty and slavery, perhaps marked by a tipping point into chaos.
Source: http://www.angrybearblog.com/2010/11/ireland-is-bankrupta-letter-from.html
http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html
This is capital destruction: take savings (if indeed their pension funds have savings, and their cash is actually net of liabilities unlike in the US) and "lend" it to a profligate party who will consume it with no ability or intention to ever repay it.
And what do they do for an encore when this money runs out, and the pension fund has been depleted? Just print the capital that was destroyed??
No more calls, please. We have a winner.
Please examine the events you described. You did not describe capital destruction, you described theft. :)
Spain, Portugal, Italy, France ..... Tick,tick,tick.
A slow moving trainwreck.
Warp core breach in ...
I still find it simply amazing that the Icelanders showed the way and everyone else prefers slavery. I cannot be more proud of Iceland and the Fuck the Banks stance for Liberty. I wish they would invade and conquer the US. Maybe that is the only way back.
Iceland invade/conquer the US?
We all have hopes and dreams.
They can send the wave of blonde girls first...
Iceland did not show the way. Iceland debt was not swapped 80 ways to Tuesday. All this other shit is. THAT . . . THAT is the definition of TBTF. It's not asset size or equity base or anything else.
It's swap total. THAT determines TBTF.
Only the bankers care about the swaps. Perhaps the swaps were created so that they would become TBTF.
Sure, it will bring down the system. So be it. Issue sovereign currencies without interest and without debt. All the banks will fail. So? We don't need them anyway.
A long-weekend bank holiday. Emergency provision of a sovereign script. Remark all goods and non-banking contracts in the new denomination. Off and running.
Collapse will come eventually - either plan for it and make it an intentional transition, or crash into chaos at some point...
Just move to Iceland.
I looked into it.
Some say Iceland's immigration laws are the strictest among Western Democratic societies. If you are not from another Nordic country, permanent residence may prove to be a challenge in Iceland.
Language Test- Foreigners wishing to obtain Icelandic citizenship must pass a language test unless they are too old (65 years old, but they must have already lived in Iceland for seven years), too young (not yet junior school age) or able to medically certify their inability to take the test.
Read more: Icelandic Immigration Laws | eHow.com http://www.ehow.com/facts_5150933_icelandic-immigration-laws.html#ixzz16bcBvzMY
Spooky, I had just read that comment on that site when I flicked back here, I think the key phrase is "I calculate 7.25%", lets be honest he could have been in the pub all afternoon, either way the deal is a total stitch up
There will be no defaults. There cannot be. Swaps preclude it. You guys KNOW this. Why do you hold out hope?
Iceland defaulted - swaps be dammed - reset the system - remove the debt and start over - stop paying banker bonuses when the banks they work for are insolvent - this is truly and existential crisis - why do certain banks exist?
Where is Kierkegaard when you need him?
How do you justify bankers bonuses on the backs of the poor and working class?
You cant - that is why you have to frame the argument as people vs. bankster (criminal class) - keep it simple.
Cheers,
Pigpen
You do not understand. Iceland banks weren't that extensively swapped. They were nothing. They are no model. The swaps are the be all and end all. Sarkozy and Merkel have BEGGED their banks to get out, and THEY CAN'T. Any try to unwind would be smashed by a disappearance of buyers.
The swaps are essentially forever -- at least until oil makes it clear there is no tomorrow.
Abrogate the swaps - problem solved - there is no will to do so bc the path of least resistance has been bail out the banks on the backs of the distracted unorganized taxpayers. Finally, the slumbering idiot taxpayer is realizing they have been had.
Abrogate the swaps - remember bank bond holders and sovereign debt bond holders are NOT special - they are like any asset class who is trying to price risk - sometimes they underprice risk and FAIL.
Time to fail bank bond holders and sovereign debt holders - sorry your time has come
Cheers,
Pigpen
Agreed, pigpen, agreed.
simple me, if they let debt get written off, that means that various equity securities HAVE to take losses. Debt is senior to Equity, and Ponzi can't let that happen. Debt has to be protected so that Equity stays whole.
His calculation is 20% of the total funding is at 0%. That's the pension amount.
The total is at 5.8%. That's 100% of the funding, on average, so the calculation depends on it being the average and not 5.8% on just the 80%.
If it is 100%, then yes, 80% of the funding is 5.8% so 5.8 / 0.8 = 7.25%
That's how the calculation was done. It may or may not be real. If the 80% funding is at 5.8%, then it's not correct.
Let's see, if we can copy Europe's Health care plan, then we can copy its Insolvency Care Plan. In other words Americans...do you know where your pension401K money is? (Or will be?)
The problem is that raiding the pension funds at 0% still becomes a future tax liability. To maintain solvency and pay out future pensioners the fund managers have to calculate some sort of return on their investments. That is the flip side of the problem to the artificially low interest rates here in the U.S. and I would say even in Europe. Historically, you could figure about a 5% return on safe investments over time. At 0% most pensions will have severe problems and become a bailout case somewhere down the road. However, this does allow the government's favorite tactic of "kicking the can down the road" and solving short term problems by creating longer term problems for future generations...and politicians.
Treason
Treason
Treason
Treason
+1776
The "markets" will work out in a nanosecond that Ireland cannot do this.
Portugal just got f*cked.
The ten yr Ire bond over 10% tomorrow.
This is disgusting. They are joking and pretty much high-fiving. Worthless maggots. It is like they think this is it, problem solved.
You're right Al89.
They were laughing.
They think they are Masters of the Universe.
Like all Masters of the Universe they will discover that they are not.
Yes it was disgusting.
Apparently no: the 5.8% is on the non-Irish portion. But you could still calculate what the interest rate of the EU portion is, once you exclude the IMF (at 4.5% or whatever) and the bilaterals with the UK, Denmark etc. Significantly over 5.8% I would wager.
Update: Peston sez 6%
Q: How can you justify the taxpayers footing the bill for the private sector over and over?
A: The tax payers automatically pay up...(loads of bullshit follows).
Might have been lost in translation but some how I doubt it.
Funny how the live coverage of the bbc ended right in the middle of the answer to the 'is this fixed or variable rate interest' question.
Call me a cynic but he was clearly bullshitting around the issue when they cut back to studio.
there will probaly be a short lived jump in the EUR/USD. Looks like a good time to get in if you haven't already.
The numbers for Bloomberg's Euro futures indicate a very mild rise. This event is not looking big.
Retribution for taking so long to sign the Lisbon accord