“The market obviously doesn’t believe the position at the moment”

Andy may fear for the children and idealists, but Taoiseach Brian Cowen’s main concern, as previously acknowledged by his Finance minister, is re-establishing lost international market confidence.

And while a national consensus may prove elusive, despite the re-assurances of EU Commissioner Olli Rehn, those markets have given their initial verdict on the Irish Government’s judgement that a total cut of €15 billion is needed over four years to reduce the budget deficit to 3 per cent by 2014.  The iol report has the money quote

Senior dealer at National Irish Bank Owen Callan said that market sentiment is still turning against Ireland.

“The market obviously doesn’t believe the position at the moment,” he said.

“They believe that the Government’s fiscal adjustment plan may potentially be too ambitious and that they won’t be able to follow through on it.”

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  • Dermot MacConmara

    Is Slugger ignoring the lead story in the Irish News today about Gerry Bradley or are you getting a little slow on the uptake?

  • Nordtrader

    While the increasing yields are of interest to investors they won’t afftect the sovereign / fiscal position. At least not until mid next year when the government goes back to the markets. And who’s to say where we’ll be then. As an investor I’m tempted by that kind of yield from a sovereign.

  • Greenflag

    Meanwhile our former Taoiseach has been on the road in Poland saying to all who will listen to him that if he only knew then, what he knows now, that he’d not have believed all the Central Bank told him about the state of the banks in Ireland . Nothing like hindsight eh ? But then Bert Ahern is not alone among western politicians or leaders who can claim ignorance of the financial sector as their excuse . From Washington to Westminster and from Berlin to Brussels there are literally thousands 🙁


  • Alias

    The state guaranteed circa 500 billion of eurosystem debts for the stated purpose of creating the elusive “market confidence.” Given that the long-term result of bailing out the eurosystem will be several hundred billion added to the national debt, that means that the previous two years’ worth of “market confidence” cost taxpayers circa 25 billion a month. This short-term “market confidence” buzz is more expensive to the nation than the buzz that Americans get from cocaine.

    The markets don’t have any confidence in the ability of this euro-locked state to generate the 1.67 trillion (plus interest) in wealth that it needs to generate in order to repay the 1.67 trillion (plus interest) in borrowed eurosystem wealth that it owes to the eurosystem during the term of those loans – and if any folks in those markets did have such confidence then they should be immediately fired.

    They might have some confidence about the ability of the state to keep its finger stuck in the dyke while the eurosystem brings in an “orderly default” mechanism but that’s about it.

    The EU has sovereignty over policy in this area so the government simply do what the sovereign power tells them to do having no power under the constitution to do otherwise. At any rate, the government told a pack of lies to its citizens about the extent of the eurosystem debts they would be guaranteeing in order to get those citizens to bail out the eurosystem. The strategy was to play down the debts while they got them on the hook and then to reveal more of it, claiming that ‘we are where we are’ and can’t get off the hook now. The outcome of that strategy (apart from treason) is that is undermined the “market confidence” they claimed they were buying, since no one of sane mind would now believe a word this rogue government tells them.

  • Greenflag

    I’ m sure Alias you are not suggesting the course of action suggested to President Kirchner of Argentina by former USA President Bush when Argentina faced a financial meltdown.

    Kirchner headed Argentina from 2003 to 2007 as it struggled to recover from a crippling financial meltdown.

    In an interview with the filmmaker Oliver Stone last year, Kirchner recounted a conversation he had with then-President George W. Bush on war and the economy.

    Oliver Stone:
    “Were there any eye-to-eye moments with President Bush that day, that night?”

    Nestor Kirchner: “I say it’s not necessary to kneel before power. Nor do you need to be rude to say the things you have to say to those who oppose our actions. We had a discussion in Monterey. I said that a solution to the problems right now, I told Bush, is a Marshall Plan. And he got angry. He said the Marshall Plan is a crazy idea of the Democrats. He said the best way to revitalize the economy is war and that the United States has grown stronger with war.”

    Oliver Stone: “War. He said that?”

    Nestor Kirchner: “He said that. Those were his exact words.”

    Oliver Stone: “Was he suggesting that South America go to war?”

    Nestor Kirchner: “Well, he was talking about the United States. The Democrats had been wrong. All of the economic growth of the United States has been encouraged by the various wars. He said it very clearly. President Bush is—well, he’s only got six days left, right?”

    Oliver Stone: “Yes.”

    Nestor Kirchner: “Thank God.”

    War may be an option for Israel, the USA , India , Russia and even the UK . Alas the only war available to Ireland is civil war and no thank you we’ve had enough of those .

  • Greenflag

    ‘They might have some confidence about the ability of the state to keep its finger stuck in the dyke while the eurosystem brings in an “orderly default” mechanism but that’s about it.’

    You could be right there. In the overall interest of the EU /Eurozone but it won’t happen just yet .

    As for the ‘market’ . The ‘sane ‘ market has as we have seen demonstrated it’s sanity these past few years ? And if they (the international bond holders) could hold the USA hostage as per Clinton’s expletive to his Treasury secretary at the time – they’ll not have a problem holding Ireland or any other country hostage either .

    So Alias . Lets hear your solution for the Irish economic predicament ? Is it war or is an application to rejoin the UK oor have you something else in mind . Be realistic now ;)?

  • Munsterview

    Abstract from to-days Wealth Daily

    See third line from the bottom……people have already read and reacted, that is the reality coming from a major US international finnancial conference……MV

    Over all, most of the speakers reinforced the common belief that the current system rewards greed and yet does not punish the risk takers. As Mr. Talib states above, traders will always game the system. Furthermore, regulation gives a false since of security.

    The European speakers were extremely bearish on the euro. Many believed that Greece would default within two years, and the euro would not last in its current form.

    Germany wants a strong euro. The PIGS need a weak currency. Every trader worth his salt has a Buy list for the Greek default — right down to the beach house on the Island of Santorini.

    The Indian nationals were extremely bullish. They pointed to the fact that due to regulation, the Indian banks survived the crisis unscathed.

    The Canadians were equally smug, claiming that regulation coupled with a conservative banking culture saved their banks.

    Crystal ball

    Last year, my good friend and cohort Adam Sharp went to the first Buttonwood conference.

    He recorded what the who’s who of global finance predicted. It turned out to be right on the money.

    You can read last year’s review here.

    The upshot from this year simply reinforces what I’ve been saying for months:

    Sell the dollar, sell California, sell Greece, Ireland, Spain, and Portugal.

    Buy India, Sri Lanka, Brazil, Chile, and other emerging markets.

    As they say in Mumbai, “Please do the needful”,

  • Greenflag

    ‘and yet does not punish the risk takers.’

    There are risk takers and risk takers in the international finance markets . There are those like the Ponzi world champion Bernie Madoff who were simply criminal and who fooled (maybe) the regulatory authorities in the USA by the super con use of brass neckery . But so far among all of the major world economies the only country to have actually put a ‘banker’ i.e legitimate risk taker behind bars, is France .

    Fine Gaels Leo Varadkar was in ‘populist ‘ form in the Dail demanding that some of our more reckless bankers should be jailed a.s.a.p. It was’nt quite clear from the dispatches whether or not he was keen on the judicial process being allowed to find them guilty 😉 Nevertheless MIchael Noonan the FG finance spokesman did point out that the ‘investigations’ have been in progress now for almost two years ? And could the Dail (and the people) not be informed of any progress.

    Perhaps the reason the ‘bankers’ can’t be jailed is that they may drag a lot of our politicians along with them as they sing their way to Mountjoy ?

    BTW Mr Talib of Black Swan fame got it somewhat wrong.

    .Germany does’nt want a strong euro nor a weak euro -they want a stable euro and while the Pigs need a weak currency now but like the UK in the 1970’s that particular medecine is bad for them longer term .

  • “He said the best way to revitalize the economy is war and that the United States has grown stronger with war.”

    That is a moronic thing to say, and it defines the idiot indeed. The Vietnam War dodger, Bush, must have read this …… http://www.lexrex.com/enlightened/articles/warisaracket.htm

  • Greenflag

    He may have read ‘Report from Iron Mountain’ which dealt with the ‘society strengthening effects’ of war -economic , social and preventing the population from becoming too eh peaceful . We would’nt want Americans to conduct their foreign policy like the Swedes or Danes now would we 🙁 ?

    ‘Report from Iron Mountain; has been described as a hoax but there are those who say the ‘hoax’ developed after it had been leaked.


    Here’s an ‘unembedded’ report from Afghanistan which tells a different story to the embedded Petraeus version .


    And heres how you go from shooting 50/60 rounds at unarmed prisoners at point blank range to being selected by the GOP as a candidate for Congress:(


  • Greenflag

    ‘That is a moronic thing to say,’

    He had six days left in office so I guess he was ‘venting’. 🙁

    Alas the only the only part of his legacy that has grown ‘stronger’ as a result of war is that the US deficit has increased from under 10 trillion dollars to over 13.5 trillion dollars . The only President ever to have run a war entirely by national credit card . When Obama eventually withdraws from Afghanistan probably post election and in the new year they can say goodbye to at least a trillion dollars 🙁

  • Greenflag

    As for the hundreds of thousands of dead , maimed and traumatised in Iraq, Afghanistan , and the 5,000 USA soldiers killed and the tens of thousands maimed for life and or traumatized well that’s the price of oil and keeping America safe from invasion by Iraq or Afghanistan or Iran 🙁 not to mention keeping Haliburton in business 🙁