Wt Iseq 20 Etf Discussion Threads

[lbo] 31/1/2011 12:59

It turns out that even though the EFSF is borrowing funds at 2.89%, Ireland is in effect being charge nearly 9%. This is a higher rate charged on come credit cards in mainland Luxemburg where the private EFSF is based (it is a structured investment vehicle a la Enron fame).

Ostensibly Ireland is paying approximately 6% but in fact the Emerald Isle will receive only 66% of funds raised, though taxpayers must fully guarantee 100% of the principal and interest. Thus when you add fees and funds withheld the real rate, according to my math, is 9% approx.

Clearly something went wrong and it looks like heads are set to roll.

It is expected that Brian Cowen will dissolve the Irish Parliament before next Wednesday February 2nd. The election campaign that will follow is set to be one of the most contentious in living memory with implications for the future of the Irish parliamentary system and the stability of the wider Euro project.

Watch this space folks it's going to be a wild ride

[lbo] 04/10/2010 21:09

Ireland's austerity programme was bogus

[lbo] 24/8/2010 20:25

Judging by the ISEQ Overall Index, which is where it was at the start of the year, too many companies are not making a good fist of explaining what they do to themselves or potential shareholders.

Of course, uncertainty about the country's ability to fund itself is playing on investors' fears, but Irish companies have been particularly bad at finding a new narrative now that the old one about Europe's fast- growing economy and young, mobile workforce is no longer too popular or relevant

[lbo] 05/7/2010 18:33

Irish Economy Is Still on Life Support

[lbo] 10/6/2010 23:10

Ireland is ten quarters into twin crises of credit contraction and house price declines which [can be expected] last for 33 quarters unless radical policy changes are made according to Dr Constantin Gurdgiev. Dr Gurdgiev was speaking at the annual national conference of the Institute of Certified Public Accountants (CPA) in Carton House, Maynooth, today.

Dismissing optimistic reports of an imminent recovery Dr Gurdgiev said: "Since May 2009, we've been "turning corners" to a recovery more often than Michael Schumacher on a World Grand Prix circuit."

According to Dr Gurdgiev, Ireland's combined Government and economy-wide debt is the worst of any of the other so-called PIIGS (Portugal, Ireland, Italy, Greece and Spain) states and the other three EU member states which he groups with them in terms of economic difficulties – Belgium, Austria and the Netherlands (BAN).

"The structure of our fiscal spending is working against us", Dr Gurdgiev told the conference. "Fiscally we have excessive structural deficits of 50-60% of the total deficit and, courtesy of the banks we are now accumulating off balance sheet structural deficits. Our deficits are the worst in BAN-PIIGS group."

Ireland's asset bubble implosion is also set to continue for some time. "Asset bubble crashes last longer than our policies anticipate", he said. "The OECD average is 10 quarters of credit busts for 18% average contraction and 19 quarters of house price falls for a 29% average price decline. Ireland's bubble of a 60% decline in credit supply implies 33 quarters of credit contraction and our 50% house price fall implies 33 quarters of price declines. We are currently roughly 10 quarters into these twin crises."

[lbo] 13/5/2010 09:25

Reliance of banks on European loans not in proportion to assets



Reliance of Greek and Irish banks on European Central Bank (ECB) loans is out of proportion to the size of their assets, according to Fitch Ratings.

Greek banks accounted for 6.6 per cent of the €749 billion the ECB lent to financial companies by the end of 2009, although they only held 1.6 per cent of the euro-zone's banking assets, Fitch analysts reported.

Irish lenders took 12 per cent of ECB funding, compared to a 5.24 per cent share of the region's bank assets.

[lbo] 11/5/2010 22:08

Protesters tried to break through the gates of the Parliament building during a march against Government plans to inject billions of euros into the country's banks.

Dozens of people broke away from the march and ran at the gates of the Parliament's main building, Leinster House.

They wrestled with police, who tried to force them back while attempting to secure the gate.

At least one man suffered a head injury during the scuffles, with organisers appealing for calm.

[lbo] 10/5/2010 21:41

Irish market loses all 2010 gains over Greek debt crisis



Close to €6bn has been wiped off the value of Irish shares in the last two weeks as dithering by the ECB and European leaders led to concerns that Spain, Italy, Portugal and Ireland could be hit by a debt crisis. The entire Irish market is now worth less than €40bn, following a near 15 per cent crash over the last two weeks.

It has also emerged that the National Pensions Reserve Fund held close to €870m worth of Greek, Spanish, Portuguese and Italian government bonds at the end of 2008, according to its most recent annual report



At the end of 1997, total bank lending to Irish residents stood at €56bn.

Most of this lending, €48.8bn, or 87 per cent, was financed by Irish retail deposits. Fast-forward to the end of December 2009, and bank lending had risen six-and-a-half fold to €365bn while deposits had less than quadrupled to €171bn. As a result, the proportion of Irish bank lending funded by Irish deposits has fallen from 87 per cent to 47 per cent over the past 12 years.

there are growing signs that, as the Irish economic downturn enters its third year, many companies that survived the initial shock are now experiencing serious difficulties. While the level of economic activity may have bottomed out, with the cash economy now almost a quarter smaller than it was less than three years ago, the situation remains desperate.

With the Irish economy likely to do no more than bump along the bottom for the next few years, many companies that are now hanging on by their fingernails are unlikely to survive long enough to see the return of better times.

So what can we do? It must now be as clear as daylight that there is no way that a €126bn economy can support a debt load of almost quarter of a trillion euro. By attempting to do so we will merely prolong the agony. We urgently require some sort of debt restructuring, default, call it what you will. Otherwise the Irish economy will remain mired in depression for a decade or longer.

[man overbored] 06/5/2010 22:20

Read that LBO. I must say that BoI's lending criteria were amongst the most irresponsible I've ever seen, particularly in self-cert cases.

What we now see is little more than an act of contrition; they will be 'at it' again asap.

Abhaile.

[lbo] 06/5/2010 21:59

Bailed-out banks 'stifling credit' to lower-paid workers

[lbo] 26/4/2010 22:15

We sail perilously close to disaster

Ireland's true difficulties are masked by another technicality. In most countries there is only a minor distinction between Gross Domestic product and Gross National Product (GNP), but in Ireland the gap is as much as 25 per cent because of the strength of our multi-national sector.

The GNP figure is a much more realistic representation of the Irish economy and our deficit, expressed as a percentage of GNP, as it heads into truly terrifying territory. Despite three budgets in 14 months, wage cuts, spending cuts and tax increases, Ireland's position remains perilous. There will have to be further cuts in government spending in each of the next four years and there will be increasing pressure for tax increases and for new taxes.

[lbo] 22/4/2010 23:14

IMF report on global financial stability



Interesting note on the equity markets. looking at historic P/E ratios, the IMF staff concludes that back in February 2010 "For advanced economies, equity valuations are within historical norms". Except for Ireland, which deserves its own note: "Forward-looking price-to-earnings ratios of Ireland appear elevated due largely to sharp downward revisions in earnings projections."

So, read this carefully: Irish stocks were overvalued - based on forecast forward P/Es - back in the time of the paper preparation. Using z-scores (deviation of the latest measure from either the historical average or the forward forecast based on IMF model) for Irish equities are: +2.1 for shorter horizon (a simplified 96% chance of a downward correction) and +0.9 for longer term forecasts (roughly 63% chance of downward adjustment). In other words, the market is overpriced both in the short term and in the long run. Worse than that, we have the highest short and long term horizon over pricing in the world!

In housing markets, our price/rent ratio z-score is +1.1 (74% probability of deterioration), which means we are somewhat close to the bottoming out but are not quite there. How big is the 'somewhat' the IMF wont tell, but it looks like we are still 1.1 standard deviations above the equilibrium price. Price to income ratio - the affordability metric is at +0.8 stdevs, so prices might still have to fall further to catch up with fallen incomes (57% probability).

[lbo] 18/4/2010 22:54

Yawning Exchequer deficit is the problem
The reason our deficit crisis isn't making headlines is because Nama and Greece are providing useful decoys

[lbo] 15/4/2010 21:37

Pharmaceuticals account for just 2pc of jobs but about a quarter of exports

[lbo] 14/4/2010 21:05

Regulator's warning on mortgage rates

[lbo] 08/4/2010 21:05

Citigroup warns about Irish bonds





Ireland 'among most vulnerable' to peak oil

[lbo] 07/4/2010 17:49

It's not Quinn that's insolvent, it's Ireland