Nash Equilibrium Fail: Ireland Wants Senior Bondholder Haircuts

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Sun, 03/27/2011 - 12:09 | 1105467 Hulk
Hulk's picture

No counterparty risk based assets bitchez!

Sun, 03/27/2011 - 12:19 | 1105501 Janice
Janice's picture

That's what I want to know ....the effect on gold & silver.  To the moon because of fiat volatility or to the floor because of debt consolidation, reduction and repudiation.

Sun, 03/27/2011 - 12:39 | 1105613 Hulk
Hulk's picture

fiat always fails, always. We now have first hand experience on the money will continue the move into PM's

Sun, 03/27/2011 - 13:59 | 1105927 Doña K
Doña K's picture

This is to the new Irish leaders and the Irish people. My congratulations for showing off your brass bollocks.

You already threw out your landlords once before.

Time to do it again. Defauly default default. Start over and be lean and mean. The whole world is with you. Show Greece, Portugal and Spain how it's done.

Italy should be able to get out of it selling factory pre-rusted Fiats to the Americans.

Sun, 03/27/2011 - 15:54 | 1106105 Pegasus Muse
Pegasus Muse's picture

I'll have you know the Fiat 500 is one fine auto.  It's fun to drive.  We've enjoyed the hell out it.  Germans like 'em too. 

Go pick on a Mini Cooper, a Kaa or Smart Car.  Don't be bad mouthing my Fiat!

Sun, 03/27/2011 - 16:05 | 1106381 contrabandista13
contrabandista13's picture

1979, Fix It Again Tony, 2000 Spider here...  Love it with passion like a work of art...

Thanks for the easy math question.....

Mon, 03/28/2011 - 00:43 | 1107631 Doña K
Doña K's picture

Mine was factory pre-rusted. Mind you that was sometime ago. I also owned an Autobianchi made by Fiat. Rust all over popping the paint out in 18 months or so. 

Sun, 03/27/2011 - 14:59 | 1106171 bigkahuna
bigkahuna's picture

Hulk, I think the smart money has already jumped ship. We must be dealing with semi-enlightened money now. It is getting difficult to afford. I wonder how long until it is impossible?

Sun, 03/27/2011 - 15:12 | 1106222 Withdrawn Sanction
Withdrawn Sanction's picture

fiat always fails, always. We now have first hand experience on the money will continue the move into PM's


Indeed, fiat always fails…temptation being what it is and human beings being what they are. 

As for smart money fleeing into PMs, if that’s true (and I don’t doubt that it is), then it begs the question, out of what are they fleeing?  Whatever they are fleeing, the assets being sold are the ones that will be deflating—a process BB and his bankster cronies are desperately trying to thwart. 

So the Nash reference in the article's title is quite apt; in that, should Ireland become the first (or second if one counts Iceland), to defect from par payment, the debt deflation tsunami will, in all likelihood, become ustoppable. 


Sun, 03/27/2011 - 15:51 | 1106336 scatterbrains
scatterbrains's picture

If the smartest money with the deepest pockets have moved into PM's then dosn't game theory infer that they are now looking for ways to crash the fiat system and make their PM investments all the more valuable ?


Sun, 03/27/2011 - 16:43 | 1106474 Hulk
Hulk's picture

Feels like a tug of war between two giants at this juncture...

Sun, 03/27/2011 - 14:53 | 1106149 Popo
Popo's picture

How does EUR/USD play out is what I'm curious about.

Does Ben eat the European shit-sandwich, or does Brussels?

Sun, 03/27/2011 - 21:15 | 1107129 pyite
pyite's picture

What I don't get in this whole ridiculous "crisis" is why bondholder haircuts are off limits - when bankrupting the entire government is just fine.

I understand that the default chains are a real problem but it has been 3 years since this situation has gone critical - by now the central banks should have a better picture of how to unwind these bonds as painlessly as possible.


Sun, 03/27/2011 - 12:48 | 1105479 tallen
tallen's picture

About GOD DAM TIME. I just hope England follows down the same route.

Can't wait to see how my short positions and Vix calls open up monday. Happy days.

Then again, the dow will probably open up 100 points. Lack of common sense at the moment is at a record high.

Sun, 03/27/2011 - 12:14 | 1105488 Subprime JD
Subprime JD's picture

OK, say that Ireland imposes haircuts on senior bond holders, cant the ECB simply buy the bonds from the Irish Banks? Basically what the FED did over here, cash for MBS trash. So long as central banks have power to issue currency, it matters not who makes the laws.

Sun, 03/27/2011 - 12:39 | 1105604 Convolved Man
Convolved Man's picture


Abracadabra, Presto Chango...

Your trash is now CASH!!!


Lend it wisely.

Sun, 03/27/2011 - 12:43 | 1105622 InconvenientCou...
InconvenientCounterParty's picture

at the moment, I can't imagine why they would not do this. Nothing placates the masses like free notional money. The spectre of alternate currency just won't die for some reason.

Sun, 03/27/2011 - 13:31 | 1105826 Raymond K Hassel
Raymond K Hassel's picture

IMF will do it - clearly this is what they started preparing for last week.

Sun, 03/27/2011 - 13:34 | 1105839 Raymond K Hassel
Raymond K Hassel's picture

And by IMF, I mean Ben.  Added bonus, he can be one additional layer removed from scrutiny and oversight. 

Sun, 03/27/2011 - 13:10 | 1105738 Lord Welligton
Lord Welligton's picture

The ECB has run out of road. €130bn of road.

So, they get the ICB (Irish Central Bank) to lend €50bn.

Now the ICB never had that money (not did the ECB).

So the Irish banks have, say, €200bn of Central Bank money that never existed before the crisis.

And the head of the ICB says that it is "manageable".

I think he's a gobshite.

Sun, 03/27/2011 - 12:16 | 1105496 TaxEstate
TaxEstate's picture

Guess this means S&P futures will be up 100+ by morning, right? Can't wait until the BTFD robots have their "Harry Mudd" moment.

Sun, 03/27/2011 - 12:30 | 1105561 Ray1968
Ray1968's picture

That's what I was thinking while reading this....just another irrational excuse for a rally.

Headline: Investors "shrug off" Irish situation....... yadda yadda BS.

Sun, 03/27/2011 - 16:50 | 1106500 KinorSensase
KinorSensase's picture

hahahaha...nice link

Sun, 03/27/2011 - 12:19 | 1105505 Clockwork Orange
Clockwork Orange's picture

Yup.  Endgame is good fodder, but it only begins with ending the bankers.  This just takes us one step closer in the awareness of sheeple-ville.

Sun, 03/27/2011 - 12:18 | 1105507 breezer1
breezer1's picture

it appears that the natural laws of hard money are raising their ugly heads.

Sun, 03/27/2011 - 12:18 | 1105508 traderjoe
traderjoe's picture

But, but Leo said things would be fine just the other day...

Sun, 03/27/2011 - 19:35 | 1106912 Zero Govt
Zero Govt's picture

behind every curve head up his arse Leo, that Leo?

Sun, 03/27/2011 - 12:21 | 1105514 Yardfarmer
Yardfarmer's picture

Analysts widely expect the government to impose losses on senior bondholders in nationalized lenders Anglo Irish Bank and Irish Nationwide because they have sold their deposits and are being wound down. 

channeling Yahoo verbatim. attribution? or is that just Reuters?

Sun, 03/27/2011 - 12:33 | 1105583 Tyler Durden
Tyler Durden's picture

Reuters reports: "....

Sun, 03/27/2011 - 12:21 | 1105517 High Plains Drifter
High Plains Drifter's picture

bond holder haircuts?  now we are back to square one, no?

Sun, 03/27/2011 - 12:49 | 1105650 Sophist Economicus
Sophist Economicus's picture

I've got a machete I can lend them for them, there haircut. Cuts square and true

Sun, 03/27/2011 - 12:21 | 1105518 Manipulism
Manipulism's picture

It seems that also these dumfucks Schwaben as the aboriginies of Baden-Wuertemberg are called had enough of this corrupt little asshat Mappus.

This gangster has sold out this land.

Die fucker and take Merkel thisd pig with you.

Sadly if this happens the followers will be the same shithats with another label.

Same as in the USA.

Im goin to vomit a bit.

Sun, 03/27/2011 - 12:22 | 1105530 dildo o flaherty
dildo o flaherty's picture

Begorrah,de boys might just be wakin' up in the Emerald bullion will be shoining!

Sun, 03/27/2011 - 12:25 | 1105534 Horatio Beanblower
Horatio Beanblower's picture

"German Chancellor Angela Merkel's coalition is set to lose the key state of Baden-Wuerttemberg after six decades in power, exit polls suggest." -


"Angie, Angie, when will those clouds all disappear? 
Angie, Angie, where will it lead us from here? 
With no loving in our souls and no money in our coats 
You can't say we're satisfied 
But Angie, Angie, you can't say we never tried..."


- M. Jagger/K. Richards

Sun, 03/27/2011 - 12:25 | 1105543 cossack55
cossack55's picture

I'd be happy if Angie just went with the clouds and disappeared.

Sun, 03/27/2011 - 12:40 | 1105611 goldfish1
goldfish1's picture

They might want to keep Angie now that she's figured out the game.

Sun, 03/27/2011 - 12:26 | 1105537 cxl9
cxl9's picture

but the ECB is opposed to treating senior bondholders, which are ranked on a par with depositors, in the same fashion

If bondholders are "on par" with depositors, then they were receiving the same interest rate on their money, right? I know, dumb question..

Sun, 03/27/2011 - 12:27 | 1105545 lizzy36
lizzy36's picture

Imagine....gasp....what will happen when senior bond holders, are forced to take a haircut, and the world doesn't implode. Perhaps, this will lead to.....shudder.....risk starting to be properly priced (a girl can dream) and an element of TBTF, starting to recede.

Alas one will believe this outcome when she sees it. Because as we all know, once this gate is open, once the MAD thesis is debunked, the citizens of states where austerity is being imposed, are going to start DEMANDING that banks/senior bondholder start sharing the pain.

Summer of 1968, redux in 2011?

Sun, 03/27/2011 - 12:41 | 1105616 wandstrasse
wandstrasse's picture

are going to start DEMANDING that banks/senior bondholder start sharing the pain.


Oh! Impossible! in that case, you know, 9 trillion jobs would get lost (just in Europe - worldwide many more!) plus no pensions for nobody, the usual government blabla when sb. tries to restrain banks/big investors.

Sun, 03/27/2011 - 13:03 | 1105711 Hulk
Hulk's picture

Well stated lizzy, but at what cost does this level of risk price in?

Sun, 03/27/2011 - 13:11 | 1105741 snowball777
snowball777's picture

Mutually Assured Derivatives? JBETF (Just Big Enough...)?

If you think senior bondholders getting scalped is funny, wait until it's the señor bondholders in Floyd's chair.


Sun, 03/27/2011 - 14:34 | 1106070 css1971
css1971's picture

Much as I agree with the sentiment... We have both in the UK and EU, a lender of last resort which removes the need to price risk.


Sun, 03/27/2011 - 21:21 | 1107138 pyite
pyite's picture

Standard bankruptcy procedure, it is a no brainer that this must happen at some point.  Admittedly it is a much more complex problem than e.g. the S&L crisis in the 1980's - but behind the scenes every government in the world should have been preparing for this.


Sun, 03/27/2011 - 12:27 | 1105549 scratch_and_sniff
scratch_and_sniff's picture

I will be heartbroken if the euro fails, its a peach to trade.

Sun, 03/27/2011 - 20:02 | 1106951 Zero Govt
Zero Govt's picture

there will be other 'peaches' to trade

while the so-called 'Eurosceptics' in Britain like MEP Danial Hannan and Old Tory Norman Tebbit are having a field day knocking the Euro and EU both forget the problems of the undemocratic EU are the same problems of Govt everywhere. Similarly they knock the Euro but Sterling is no better having actually lost chunks against the Euro since its inception which gives the lie to Tebbits insistence a currency needs a central bank not 16

Westminster stinks as much as Brussels which stinks as much as Washington and Berlin and the same goes for any currency with a centralised control structure as Hannans and Tebbits beloved Sterling will shortly find out

But at least Irish politicians are shaving a little off the blocks of treason and Keynsianism with these latest (small) moves. Great from these 'Professional' politicians who when they went full-time and were paid professional wages many moons ago was supposed to bring in a new better age of Govt (proved to be BS as usual)

The age of 'professional' politicians has brought us to bankruptcy in every country, truly brilliant! ...and none of them will vote for Christmas (ie. an end to Govt) or to free the currency to the free market ... this Irish move is a baby step, there's a long, long way to go yet

Sun, 03/27/2011 - 12:28 | 1105551 Dr. Porkchop
Dr. Porkchop's picture

Shave and a haircut...

Sun, 03/27/2011 - 13:10 | 1105744 snowball777
snowball777's picture

2 gigabits.

Sun, 03/27/2011 - 13:48 | 1105893 SwingForce
SwingForce's picture adjusted for "no" inflation.

Sun, 03/27/2011 - 12:29 | 1105565 A Man without Q...
A Man without Qualities's picture

The state of Baden-Württemberg was formed in 1952, and held by the FDP for one year, until the elections of 1953, when the CDU won control which they have retained ever since.  They won 44% of the votes in the last election in 2006.  

According to exit polls, the Green Party looks set to win 25% of the votes compared to the 11% they won last time.

Big changes are afoot in the heart of Europe, with even the traditionally conservative and affluent growing tired of the extend and pretend.  I speak with many people in Germany and the mood, especially towards Portugal, is there is no point pretending they can pay their debts any more, and now might be as good a time as any to stop the lunacy.  The boys at the Fed aren't going to be happy...

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