Saturday, November 27, 2010

Ireland vs the banksters

The crooks who are currently destroying Ireland have a very similar MO to the folks who attacked Iceland.  Only Ireland, so far as I know, is not calling for a new constitution.

A guy who is something of an expert on banks and their ridiculous assumptions, the infamous Nick Leeson thinks Ireland should just default.

Rogue Trader Nick Leeson To Ireland: Ignore The IMF And Default Already
Courtney Comstock | Nov. 26, 2010, 12:42 PM 
It seems like Nick Leeson, the rogue trader who was arrested and jailed for six years for losing Barings Bank, his former employer, $200 million, is itching to get back in the game now that he's off Wall Street and working at Galway United, the soccer club.
He told Galway News recently that Ireland should default ASAP, not wait for the IMF to bail it out.
He said:
“Ireland has to default on its debt to the bond holders, and the time to do that is now – if you get involved with the IMF, it will be too late.
“The Government needs to postpone the budget, resign and call a General Election, because any other course of action will be too severe for the country. The size of the bailout being discussed cannot be repaid by a country with a population of less than five million people, it just can’t be done.
“The right thing to do is default on repayments to bond holders and start afresh, but that has to be done before any support is accepted from the IMF, as once that support is accepted, it will be too late." more
Of course, a guy like Simon Johnson cannot say such rash things so he reassures us that Ireland with do the "right" thing.
Will Ireland Default? Ask Belgium
By Simon Johnson
On the face of it, Ireland seems poised on the brink of default. Its debts are very large relative to the size of its economy, most of this money is owed to foreigners and – unless there is an unexpected growth miracle – the country will struggle to pay its debts in full for many years to come.
Yet all the indications are that, as part of the historic rescue package to be introduced this week by the European Union and the International Monetary Fund, Ireland will not default on or otherwise restructure its most substantial debts. Why not?
To be clear, Ireland owes a huge amount of money to the outside world. In the best scenario, Ireland’s government debt is likely to stabilize at more than 100 percent of gross national product (G. N. P.); in the worst scenario, with greater real estate losses and a deeper recession, this level could reach 150 percent.
That’s a higher number than you see in many news reports, in part because officials are still focused on gross domestic product, a misleading statistic in the Irish case, as Peter Boone and I have been arguing in this space for some time. (Update: some news reports are currently using a higher number for Ireland’s debt, implying that the country owes 10 times its GDP; this is based on misreading the statistics regarding off-shore financial transactions that are run through Ireland. This misunderstanding will be cleared up when the Ireland-IMF-EU package is announced.) more
Meanwhile, the President of Iceland wants us to know that his country is MUCH better off than Ireland.
Iceland Is No Ireland as State Free of Bank Debt, Grimsson Says
By Jonas Bergman and Omar R. Valdimarsson - Nov 26, 2010 8:21 AM 
Nov. 26 (Bloomberg) -- Iceland's President Olafur R. Grimsson talks about the country's progress since receiving a $4.6 billion International Monetary Fund-led loan. He speaks with Mark Barton on Bloomberg Television's "On The Move." (Source: Bloomberg)
Iceland’s President Olafur R. Grimsson said his country is better off than Ireland thanks to the government’s decision to allow the banks to fail two years ago and because the krona could be devalued.
“The difference is that in Iceland we allowed the banks to fail,” Grimsson said in an interview with Bloomberg Television’s Mark Barton today. “These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.”
Ireland’s Prime Minister Brian Cowen said this week his government has discussed an 85 billion-euro ($112 billion) bailout with the European Union and International Monetary Fund after the country’s banks threatened to bring the euro member to the brink of bankruptcy. Iceland’s banks, which still owe creditors about $85 billion, were split to create domestic units needed to keep the financial system running, while foreign liabilities remained within the failed lenders.
As a consequence, “Iceland is faring much better than anybody expected,” Grimsson said. The Icelandic state’s liability on foreign depositor claims stemming from Icesave accounts at failed Landsbanki Islands hf should be put to a national referendum, he said.
“How far can we ask ordinary people -- farmers and fishermen and teachers and doctors and nurses -- to shoulder the responsibility of failed private banks,” said Grimsson. “That question, which has been at the core of the Icesave issue, will now be the burning issue in many European countries.” more

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