Ireland Exits Troika Bailout To Prepare For Bail-ins: Nothings Changed & Don't Believe Everything That You're Told

Reggie Middleton's picture

A BoomBustBlogger (h/t @johnjoechad) forewarded an interesting report to me this morning. An Irish MEP from Dublin, Paul Murphy, who seems damn bright wrote it and if I didn't know any better I would have sworn I wrote it myself about 4 years ago. Here are excerpts from the document along with my comments. 

Irish bailout exit economic reality 1Irish bailout exit economic reality 1    

  Irish bailout exit economic reality 2Irish bailout exit economic reality 2 

This GDP growth and EC forecast thingy is one of the primary reasons why the EU is taking so long to get back on its feet. A total, complete and unequivocal lack of believability. Exactly how many times can one be caught in the same lie. Let's reference my work 2010 - that's right, nearly 4 years ago. Our (subscriber only) File Icon Ireland public finances projections report shows Ireland getting very, very optimistic with their economic forecasting, to wit:

Irish bailout exit economic reality 5Irish bailout exit economic reality 5

I want you to think about his carefully. The Irish government actually made the EC look conservative. So, if you peruse my other public piece on the topic, Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!:

If this article goes viral around the web, I wouldn't be surprised if the euro tanks and several European sovereign states' spreads blow out. I have busted several of them in another of a long series of "creative" economic forecasting schemes to fudge the appearance of "austerity".

The IMF and the EU have been consistently and overtly optimistic from the very beginning of this crisis. Their numbers have been dramatically over the top on the super bright, this will end pretty, rosy scenario side - and that is after multiple revisions to the downside!!! We can visit the US concept of regulatory capture (see How Regulatory Capture Turns Doo Doo Deadly and Lehman Brothers Dies While Getting Away with Murder: Regulatory Capture at its Best) for the EU, but due to time constraints we will save that topic for a later date. To make matters even worse, the sovereign states have taken these dramatically optimistic and proven unrealistic projections and have made even more optimistic and dramatically unrealistic projections on top of those in order to create the illusion of a workable "austerity" plan when in reality there is no way in hell the stated and published plans will come anywhere near reducing the debts and deficits as advertised - No Way in Hell (Hades/Tartarus/Anao/Uffern/Peklo/Niffliehem - just to cover some of the Euro states caught fudging the numbers)!

Let's take a visual perusal of what I am talking about, focusing on those sovereign nations that I have covered thus far.

The EU/EC has proven to be no better, and if anything is arguably worse!




and the EU on goverment balance??? Way, way, way off.


If the IMF was wrong, what in the world does that make the EC/EU?

The EC forecasts have been just as bad, if not much, much worse in nearly all of the forecasting scenarios we presented. Hey, if you think tha's bad, try taking a look at what the govenment of Greece has done with these fairy tale forecasts, as excerpted from the blog post "Greek Crisis Is Over, Region Safe", Prodi Says - I say Liar, Liar, Pants on Fire!...


Think about it! With a .5% revisions, the EC was still 3 full points to the optimistic side on GDP, that puts the possibility of Greek government forecasts, which are much more optimistic than both the EU and the slightly more stringent but still mostly erroneous IMF numbers, being anywhere near realistic somewhere between zero and no way in hell (tartarus, hades, purgatory...). 

And what about Italy???


 So, have I proven my point yet? Which one of you want to bet me that the EC has accurately and adequately forecasts Ireland's growth at a level that can assure market participants to fund it through the next 20 years??? 

Irish bailout exit economic reality 3Irish bailout exit economic reality 3   

The issue of debt is an interesting one. Our (subscriber only) File Icon Ireland public finances projections report had the most pessimistic forecasts for Ireland that I know of, yet it was still unrealistically optimistic. Add to this the fact that I belive the Irish banks are sitting on a stockpile of unreported and/or unrecognzied debt and we have a bailout du jour, or at least a bail-in du jour followed by a bailout to clean up the loose ends. 


I warned the Germans - Angela Merkel Should Talk To Me If She's Truly Enraged By The Anglo Irish Revelation, For That's Just The Beginning! This warning was based on multiple earlier warnings to the Irish, summarized (more or less) in the posts - Ireland, You May Very Well Be Bust & I Make No Apologies For What I'm About To Show You and The Beginning Of The Great Irish Unwind and  If I Provide Proof That The Entire Irish Banking System Is A Sham, Does It Set Up A Much Needed System Reboot? Let's Go For It. As for bail-ins, I reference: 


 Irish bailout exit economic reality 4Irish bailout exit economic reality 4


See also: 

 Exactly As I Warned, "Cyprusization" Goes Mainstream! Ireland On Tap, Next Up For Citizen Fund Confiscation (Again)

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FredFlintstone's picture

WTF. I was intrigued by the headline. Can someone with more patience and perseverance than me wade through this mess and provide an abstract?

mkkby's picture

Sure.  Ready?

No change.

Reggie's incomprehensible rambling never makes sense.  To long, not worth reading.

michael_engineer's picture

"This is nothing new.  Substantial growth has consistently been two years away.  The problem is that it never arrives and there are no indications that it will arrive this time either"

Could the lack of growth be the structural change and common thread that ties together so many of the topics and problems that ZH covers and reports on?  Bail out, bail in, Zirp, Nirp, etc.

mkkby's picture

There is NEVER going to be growth until the debt bubble pops, one way or the other.  The world will have to suffer through either a hyperinflation or deflation to get rid of the debt gorilla on everybody's back.  Or they can kick the can for a few more decades.

Until then, nobody in their right mind is trying hard to produce/invest because there's no margin of safety that gains can be kept away from thieving hands.


michael_engineer's picture

I'm more of the mindset that resource constraints are going to prevent growth, irregardless of debt, margins of saftety, thieving hands, ...

ebworthen's picture

Dust is gathering on my "The Euro is Dead!" party hat.

C'mon Ireland and Greece, default already, I need the room in my fridge, champagne taking up space.

pashley1411's picture

Meh, the story remains the same; the government and its cronies and hangers on can't live within the taxable base.

Back in the bad old days it would be saddle up and raid the other guy's farm.  

Now, in the bad new days, its was fleece foreign taxpayers with Troika loans,  But that's so "2011".  Even the poor German sheeple-taxpayer has wised up to this scam.

Since the governments have assume effective ownership of banks, the new new looting is to slice the bank accounts of those smucks still using the system.

Personally I prefer my scams to come in the shape of "a Prince in Nigeria..."  letter.   More creative.  

Grin Bagel's picture

Reggie; why do your charts stop several years in the past and not current?

Vegetius's picture


Calling it the way it is Reggie, massive increase in Debt, still borrowing money for day to day expences, Banks still holding a huge amount of bad debt and bad property. So its all fixed up real good until it is not, check out a bit more Reggie as to why the Irish did not get that 10 billion they tried to squeeze from the Germans, there is a story in that. Lets be honest Ireland is a basket case and it will fall, question is when.


Politics is the strife of interests masquerading as a contest of principles. The conduct of public affairs for private advantage.

Ambrose Bierce


Madcow's picture

When bail-ins come to the US - and confiscate savings over $20K (or whatever) - the vast majority voting public will not care and will probably cheer for the bankers.  Its easier to be bankrupt and homeless if EVERYBODY is bankrupt and homeless. 


andrewp111's picture

Wrong. If the Gubbermint does not honor the $250K in FDIC insurance, the politicians will have holy hell to pay, and they know it. Therefore, the USG will honor that guarantee no matter what it takes - even if trillion dollar coins are required to do so.  However, the fate of any deposits above that guarantee are in the realm of pure speculation.

novictim's picture

This is why the Ireland example is so important.  Unlike Iceland, Ireland chose to honor its debts to the larger banking sector that had gambled and lost on real estate.  The Irish people were asked to accept painful cuts to all spending in society in order to "secure a future prosperity".

Ireland was to be an example of how "cutting back to the bone" and pursuing AUSTERITY would create "confidence" and spur renewed investments and growth.  But what austerity does is ignore the real problem, which is the lack of shared financial wealth leading to consumer collapse, and compounds that problem by accelerating wealth transfers from the consumer worker to the capitalists and bankers.



You can't squeeze blood from a turnip.  If Ireland wants to get back on its feet then it needs to look to Iceland, not Greece.


chubbyjjfong's picture

Getting tired of hearing about this "Iceland is the poster boy" shit.  Iceland wanted to be baild out.  It WANTED to honor its debts. Iceland would have taken anyones money to bailout its banking sector.  Trouble is that it fucked up its loan processes so bad that no body COULD lend them any money.  They let their banks fail NOT on purpose, but because they had no other choice.  Yes it turned out well for them, only by good luck rather than by good judgement.

lasvegaspersona's picture

What does the economy of Ireland (or any other individual country) have to do with the health of the Euro itself?

Sure the countries of the EZ have overborrowed but the currency is not mired in multitrillions of debt like the dollar.

The Euro has 10,800 tons of gold to defend itself with as well as an abundance of treasuries. If it is in trouble it can defend itself. 

The various countries using the Euro may be in trouble but just as California and Illinois can't kill the dollar, so it is that Greece and Ireland can't kill the Euro. When California and Ireland go broke the currencies will still be there.

The Euro's problem is political not economic.


andrewp111's picture

A major political reorganization of the Eurozone may be required, though.

DOT's picture

Simply amazing that GDP forecast was for 4.5% in 2012.

That must have been some potent Kool-aid!

lasvegaspersona's picture

The higher your GDP estimate the better you are at forecasting...ask the Fed, they're really good.

no more banksters's picture

"It is almost certain that, the banksters will laugh this time, with the European Economic and Financial Affairs Council's (ECOFIN) decision, taken about a month ago, concerning the participation of shareholders and depositors in future possible damages of the banks, what they called "bail in". And this because, in such deregulation conditions, banksters will have the opportunity, not only to get away without paying a cent, in a potential banking crisis, but on the contrary, to gain from such a situation according various possible scenarios."

Sedaeng's picture

Somebody stole me lucky charms!