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A Greek, An Austrian And An Irishman Enter A Bailout Bar... Ireland Joins The 2nd Round European Collapse Brigade
Just in case you needed some more validation for a "strong" Euro thesis, the latest bit of news out of Europe shows that all those problems that were initially swept under the rug, just like in a crappy Japanese horror movie, find a way to reach out and haunt Central Bankers worldwide. First the Baltics, then Greece, then Austria, and now, once again, Ireland. 50% state ownership of Ireland's two leading banks is now on deck. To keep this as surreal as possible, may we suggest that Fred "Iceman" Mishkin quit his job in Columbia where all he does is spread completely factual and thoroughly undiscredited economic non-bullshit and run for president/despot/tyrant/monarch of Iceland.
From Dow Jones:
Irish banks will need significantly more capital and 50% state ownership of the country's two leading banks is "quite possible," Patrick Honohan, governor of Ireland's central bank, said Tuesday.
The governor said significant additional capital will likely be needed in the two main banks taking part in the forthcoming National Asset Management Agency -- Allied Irish Banks PLC (AIB) and Bank of Ireland PLC (IRE).
Speaking to a parliamentary committee, he said: "To the extent that needed capital cannot be sourced by the banks themselves, the government has indicated that it will be prepared to make the necessary investments."
And yes, this won't be a big policy change for the latest government to get the Bernanke itch:
The government already has an effective 25% stake in both Bank of Ireland and Allied Irish Banks after injecting EUR2.5 billion respectively into each bank. Both banks are taking part in transferring loans to the forthcoming National Asset Management Agency or so-called bad bank.
And just in case you thought America is the only place where no one can get a loan, ever, a quick trip to the Liffe will set you straight:
On the subject of the current state of the banking system, Honohan said that credit is not growing and [interest] spreads have widened, and suggested that loan appraisal technology in the Irish banking system could be improved.
Who knows: maybe Spain's 20% unemployment and the complete lack of any "we'll print our way out of this shit" prospects will make the ethnic joke in the title truly complete.
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Moody's sovereign misery index,
http://ftalphaville.ft.com/blog/2009/12/15/112331/moodys-sees-sovereign-...
Dollar gets strong because Eurozone is going thru this crisis.
Dollar up ----> gold down
gold down ------> stocks up
That explains why stock up----> dollar up is the "temporary" anomaly here.
But for how long, before the long awaited correction.
So far there is always something to push stocks higher
The heynas are surronding aunt Angie from all sides.And since Trichet seems to be running the show in Europe,she migmight as well jus step down and give him the post...
spainish banks are operating on a 20% unemployed economy and they are still posting profits. all the southern towns are filled with emptly buildings. how is that possible? anyone care to explain?
The spanish banks have huge loans out to developers and to individuals. These loans have not been written down to reflect the likely non-performance of the loans and the demise or near demise of the developers. It is extend and pretend.
Honohan said that credit is not growing and [interest] spreads have widened, and suggested that loan appraisal technology in the Irish banking system could be improved.
Yeah, that's it. It's not that bank loan officers are no longer willing to make dodgy loans, it's that their loan appraisal technology is lacking. They need to develop some models that you can shove bad numbers into and get a good projected outcome. Or maybe they could just purchase them from the investment banks, Moody's and Standard & Poor's.
run for president/despot/tyrant/monarch of Iceland.
Do you not mean Ireland?? Though from an economic stupidity standpoint it's easy to confuse the two 'economic miracles'.
Also, I haven't seen much coverage of the ECB/Austrian bailout of Hypo Group Alpe Adria and may be about to nationalize another one - OeVAG...
The Irish can take a large amount of pain - we can pay our sovereign debt infact we have never defaulted But this madness that we can bail out shareholders and senior bondholders must stop! This is a crazy situation - these bozos took a risk with their capital and after making catastrophic decisions we are still paying these assholes.
I'm perfectly willing to borrow just to get the ball rolling, but no rate above ZIRP, please. That's my limit.
Q: How many Austrian bankers does it take to finance a project of Poles screwing in a light bulb?
A: Only one at a 30-to-1 leverage ratio.
Did you hear about the worst airline disaster in the history of Poland? A 747 crashed in a graveyard?
Over 9000 bodies recovered so far?
Ok , so it's not financially related.
But it IS funny!
HAhaha!
There are some of us who preferred Ireland when it was third world country; the second homes in Donegal were cheaper for a start!
I preferred it when it was a second world country and Donegal is not really a part of Ireland , it is a independent entity
I love it when Tyler rips Mishkin. Just the sound of his self aggrandizing, gerbil-ese-like voice on CNBC makes me want to run ice-picks(no pun)into both my eyes, while holding my ears and singing "Danny Boy".
Ireland's banking establishment probably rivals any in the Western world for brazen awfulness. http://www.amazon.co.uk/dp/1844882160/ is a pretty good introduction if you enjoy looking at this kind of horror show.