Monday, November 22, 2010

Economics 22/10/10: Bailout that is losing steam by an hour

The immediate fallout from the Irish bailout package is:
  • short sales closing on Irish sovereign markets means profit booking, yields down (although surprisingly slightly -0.323%)
  • Germany gets relief (Irish-German spread is actually up 0.503%) and
  • short seller moving on to new targets: the rest of the PIIGS:
Makes you wonder if Portugal, Italy and Spain bonds brokers have been pushing their clients into losses as hard as our own did...

Contagion is clearly far from over, which simply exposes the fact that EU's EFSF and IMF short-ending for the insolvent sovereigns is not a solution to the PIIGS problems and that the EU has no plan B.


Anonymous said...

Constantin, just an ordinary member of the public but having seen you on RTE for many occasions, know you are the only one who has got the figures correct and frankly are about the only one who's opinion I trust.

Why were you not involved in advising this bunch of arrogant, idiots who seem to have given away every remaining ace, Ireland held?.

Can Ireland still pull out of euro (which to my simple mind seems the cause of so much grief) ?

If it does what fall out for the country ?

Will the next government be bound by terms agreed or can they change them ?

Was the European social experiment ever viable and should we instead have retained the common market as a trade only body?

Interested in any comment you have.

Anonymous said...

Hi Constantin,
Our company has turned the Irish bailout debacle into a short animation. It's funny.

We're NMA animation from Taiwan.