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.