Ireland Exits Troika Bailout To Prepare For Bail-ins: Nothings Changed & Don't Believe Everything That You're Told
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 1
Irish 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) Ireland public finances projections report shows Ireland getting very, very optimistic with their economic forecasting, to wit:
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?
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 3
The issue of debt is an interesting one. Our (subscriber only) 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.