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Ireland Seeks To Extend European Commission Bank Guarantees As Top Banks See €25 Billion In Maturities This Month
Even as the melt up continues with the US economy double dipping, things in Europe are just getting plain worse by the day. First it was the disappointing series of PMI data out of the old continents, with a focus on the periphery, where pretty much every number missed expectations. Now Reuters is reporting that due to refinancing requirements to the tune of €25 billion by its two most insolvent banks Anglo Irish and Allied Irish, the banks, and the government of Ireland itself, has quietly request an extension of the European Commission bank guarantee program which bailed out the country back in 2008, and which is needed to bail it out all over again. "Ireland's guarantee, which is set to run out at the end of the year, saved its financial system from collapse when it was first issued in September 2008 and has continued to be a lifeline for lenders since the Greek crisis shut off their supply of term funding. Both Anglo Irish and Allied Irish Banks, the country's second-largest lender, have called for the guarantee to be extended and the government said it was in discussions with Brussels about its future." In other words, nothing continues to work in the European banking world, except that which is explicitly backed by the ECB, which in turn is implicitly backstopped by the Fed. If there was a reason for the melt up to surge another 3-4%, this is it.
More from Reuters:
"The government is united in its determination in relation to the resolution of the Anglo Irish Bank issue," it said in a statement.
"The government is working with the EU authorities to that end; it is also in active discussion with the EU commission about the future of the bank guarantee".
Analysts are expecting the guarantee will be extended as Irish banks face having to refinance around 25 billion euros in debt this month.
The central bank governor said last month that any extension of support should be in quarters rather than years.
Anglo Irish has to refinance 7.2 billion euros this month.
And the 25 billion it appears is merely a lower estimate: On Wednesday, a junior minister cautioned that the 25 Then again, with China and US already 100% behind government-directed central planning, why should Ireland, which also got downgraded recently, react any differently. In fact, as we recently suggested, Ireland should riot and strike, in order to get the same cost of capital that the Greeks achieved so easily 4 months ago, with a little Molotov cocktail-facilitated theatrics. And furthermore what is 25 billion any way? The US Treasury auctions off that much on any given Tuesday.
billion euros figure may rise if the state-run "bad bank" or
National Asset Management Agency (NAMA) demanded a higher
discount than the 65 percent cited by Aynsley.
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The moment of ZEN:
http://www.reuters.com/article/idUSTRE6805JO20100901?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28News+%2F+US+%2F+Business+News%29
FED is done for, out of bullets, other ammo and will. There will be plenty of statements but little of actual QE action.. cause it's obvious now that any farther QE won't do much to stop the credit de-leverage.
They might and probably will attempt the $ devaluation though, other than that it just became a sitting confused inert duck.
Bull, nothing a little papering over won't fix!
I disagree. This is the start of finger pointing between the FED and the enabling and totally corrupt Congress and Administration. The politicians eat their young when their ass is on the line so expect the FED to cave in. Look for more stimulus programs which Ben will stealth fund through his printing press and more direct easing by the FED in purchasing more MBS's and possibly muni bonds to address that ticking time bomb.
In the meantime, the jawboning will continue.
yep
Chart: NQ
The melt up has ended.
http://www.screencast.com/t/OWMwYTc3ODkt
I CAN'T WAIT TO SEE ONE OF THE PIGGS ON FIRE. MAYBE THAT IS WHAT IT TAKES FOR US TO IMPEACH OBAMA AND GET RID OF THE MARXISTS IN POWER.
BURN, IRELAND, BURN
WHOA!
I don't see a Dickus at all. Tittus, maybe.
+ !!
definitely tittus
PIIGS on fire = Obama impeachment ?????
Vodka! It's what's for breakfast every day!
Vodka? Hell no, not before 10.00 am
Eastern time?
GMT, of course.
I just got a mail from a Nigerian prince who's going to solve all that business.
He just need as many social security numbers and everybody's bank account numbers to get started.
Anybody want to contribute?
did he mention "oil wells" too? that's what mine said.
Hi, could we please have some more money so we can loan it out to Greece?
oh, yes young man. oh, yes indeed. but first we must bail out "we." you in?
oh yes, young man indeed we can. but first "we" must bailout "we." you in?
Free money for every bankster, country, USA city and investment TBTF.
ECB = Unlimited Free Money
FDIC = Unlimited Backstop Guarantee
IMF = Unlimed Free Money
Federal Reserve = Free Loans To All (TBTF)
Plenty of free FIAT currency to go around yet.... too little physical gold when TSHTF. This will all end bladly except for those with physical items of intinsic value (gold, silver, copper, etc).
don't forget f-150's, f-35's, CVN's, CSX and trish reagan
Burn !!!
don't forget "turn, baby, turn" too
Why would you guys wish misery on a few million people?
Karma is a bitch fellas!
Ireland "burns" then Europe burns then the USA burns.
Can you imagine the stockpile of CDS that will blow up? There are no financial silos and nothing will be safe.
You think you guys are somehow going to escape the burn? or it will be all over in a couple of months?
The system needs to collapse otherwise we will never get out of debt slavery and I'd rather it happened tomorrow than in 10 years, Burn!!!
i think mine could end in the next couple of minutes
Karma is a bitch fellas!
Ireland "burns" then Europe burns then the USA burns.
Throw in the cayman islands and you got a deal.
http://www.youtube.com/watch?v=xNnAvTTaJjM
Those wacky Europeans! If you want to end the suffering, just issue "revised" economic numbers. Problem solved. Economics is just a huge head-fake anyway.
whatever it takes for a lookback. then you know you've got it.
Meanwhile we're only 30 handles + today and something smells like upside surprises yet to come....blah blah blah....I'm going to puke!
Updated S&P500 charts:
http://stockmarket618.wordpress.com
There are two different things involved here. First, there's the ECB's support of insolvent sovereigns and commercial banks across Europe through bond buying but also, first, and mainly through emergency repos. Second, there's the Irish government's explicit, binding guarantee(s) of virtually all the Irish banks' debt. It's the latter which "saved" the Irish banks in September 2008, and which are due to expire around this September. (IIRC the emergency repos hadn't even begun at that point.) These guarantees require EU approval, but they're guarantees by and at the initiative of the Irish state. In fact, the Irish government showed extra-keen initiative in September '08, making guarantees first and worrying about EU approval, and EU law, later. So the Irish government has considerable responsibility for spreading the TBTF rout to Europe.
As I mentioned elsewhere, and a bit OT, I still think the Greek PMI was THE eco number of the day. A sharp deterioration means there is absolutely NO chance (if there was ever one) of the country getting out of debt. Please proceed to the default stage.
If you look at the debt held by Irish Banks via Reggie Middleton's research you will
see the Irish govt cannot possibly support that grandiose gesture. The debt is spread nicely through Europe and is enough to cause a domino effect IMHO.
The Irish taxpayers are supporting a large civil service, social services and a crap load of immigrants and their extended families across Europe. Blood from a stone and all that.
Their GDP was something crazy like 70% based on construction and related before the bust. Not including the black market under the table economy.
Construction and related is in the toilet.
At some point the govt hopefully will do right by their citizens and let the damn banks fall and say screw you bond holder etc. The debt is unserviceable with the current tax base.
I'll agree it seems inevitable that it will all go up in smoke but I wouldn't wish it on anyone.
This news is not a great surprise to those who have been following Irish issues and the decline of their banks. For ages Anglo-Irish Bank has told everyone it is turning a corner except it is always for the worse and not the better. According to notayesmanseconomics here is the latest update on this.
"You see it has been placing assets into the Irish bad bank NAMA as a way of clearing up its finances. So far it has had to take an average haircut of some 58% but going forwards it assumes that future haircuts will only be 34% which is a curious drop when you consider that the Irish commercial property market appears still to be in decline. This improves her figures by around 4.5 billion Euros."http://notayesmanseconomics.wordpress.com
Nothing an extra few hundred billion in SDR's on central bank balance sheets won't fix.
That's why gold was down $10 from the opening in NY.
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