Irish Bonds and the ECB - Bond Sales Watch - the Risk of Sovereign Default

[PaddyJoe]

Massive cut in forecasted growth by the DOF today:

DUBLIN — Ireland on Friday slashed its growth forecast for this year to 0.7 percent from last December's budget estimate of 1.3 percent as depressed consumer demand drags on the eurozone economy's recovery.
The government also revised the 2013 growth forecast from 2.4 percent gross domestic product expansion to 2.2 percent.
"The government is keenly aware that the near term remains challenging and that there are very real risks to the forecasts due to the economic uncertainty within the eurozone," Finance Minister Michael Noonan said.

http://www.google.com/hostednews/afp...4129a02ac31.b1

[PaddyJoe]

THE BODY that manages Norway’s sovereign wealth has sold its entire holding of Irish government bonds, as part of attempts to limit the country’s exposure to the crisis in the eurozone.
Norges Bank Investment Management sold off all its Irish bonds, as well as its Portuguese ones, apparently believing the two bonds were not ‘predictable’ enough.

Cue government adviser head scratching on how to spin this as a positive development

http://businessetc.thejournal.ie/nor...39816-May2012/

[Baron von Biffo]

Cue government adviser head scratching on how to spin this as a positive development

http://businessetc.thejournal.ie/nor...39816-May2012/

The move by Norway underlines the need for a Yes vote...

Norway sold the bonds because of fears of a No vote...

God is punishing Ireland for allowing fornication...

[C. Flower]

Celebrating a year since the first publication of Morgan Kelly's article "Ireland
's Future Depends on Breaking Free From the Bailout"

WITH THE Irish Government on track to owe a quarter of a trillion euro by 2014, a prolonged and chaotic national bankruptcy is becoming inevitable. By the time the dust settles, Ireland’s last remaining asset, its reputation as a safe place from which to conduct business, will have been destroyed.

Ireland is facing economic ruin.

http://www.irishtimes.com/newspaper/...R-Km15.twitter

[PaddyJoe]

Celebrating a year since the first publication of Morgan Kelly's article "Ireland
's Future Depends on Breaking Free From the Bailout"




http://www.irishtimes.com/newspaper/...R-Km15.twitter

We're well overdue another blast from Morgan Kelly

[C. Flower]

We're well overdue another blast from Morgan Kelly

Well, there was this one last summer on "divided, corrupt" Ireland - "The best way of looking after your future is to join Fine Gael"

http://www.politicalworld.org/showth...Kelly+Kilkenny

[C. Flower]

The Central Bank financial figures for Ireland for the last quarterof 2011.

National debt has hit a new high.

http://www.centralbank.ie/press-area...andQ42011.aspx

Household sector results show:

• Households’ liabilities declined by 1.1 per cent over the quarter, to reach €184.6 billion or €41,169 per capita. Overall households’ liabilities have decreased by 13 per cent or €27.6 billion, since their peak of €212.2 billion at Q4 2008.
• Despite this reduction in household liabilities, the households’ debt[2] to disposable income[3] ratio, an indicator of household debt sustainability, continued to increase until Q1 2010. This trend reflected the continued decline in households’ disposable income, as measured by a 4-sum moving average, between Q4 2008 and Q3 2011.
• Households’ debt to disposable income ratio stood at 207.8 per cent, its lowest level since Q2 2007.
• Household net worth[4] declined further during Q4 2011, reaching €457.2 billion or €101,962 per capita. This represented a decline of 3.4 per cent on the previous quarter.
• During Q4 2011, households continued to be net lenders. This trend partly reflects households’ continued investment in financial assets, but, more substantially, a reduction in households’ liabilities.

Government sector results show:

• Government liabilities continued to increase during Q4 2011 reaching €173.3 billion, their highest level to date. This represented an increase of €3.2 billion or 2 per cent on the previous quarter. The increase in government liabilities over the period reflected the receipt of further funding from the EU/IMF programme of €7.7 billion.
• The increase in Government liabilities during Q4 2011 was mitigated, to some extent, by a decrease in the value of securities over the period.
• Government net financial wealth declined further during Q4 2011 as the increase in Government assets over the period was outstripped by increased Government liabilities. At Q4 2011, net financial wealth stood at minus €109.7 billion, a decrease of €1 billion or 1 per cent over the quarter.
• Govenment deficit decreased from €3.8 billion in Q3 2011 to €3.5 billion during Q4 2011, when capital injections are excluded. The deficit including capital transfers declined further during Q4 2011 from €7.7 billion to €5 billion.

Non-Finacial Corporate sector results show:

• During Q4 2011, the non-financial corporate (NFC) sector’s financial assets increased by 2.8 per cent or €18 billion to reach €671 billion and its liabilities grew by 3.2 per cent or €28 billion to reach €878 billion.
• Over the quarter, overall net financial wealth fell by 5 per cent to minus €207 billion.
• The sector’s liabilities grew as their value increased by €34 billion and their transactions increased by €6 billion.
• The NFC sector was a net lender, in the most recent quarter, although at a reduced level of €640 million compared to earlier quarters.

[C. Flower]

The proof of the pudding is in the eating. Ireland is going to try a little bond sale.

http://www.independent.ie/business/i...e-3147541.html

[ang]

Bunds Looking Less Robust -

After flocking to the safety of German government debt since the onset of the European debt crisis, some of the biggest names in the bond market have started cutting back. Among their concerns: whether Germany can continue to provide shelter should the European crisis deepen.

http://online.wsj.com/article/SB1000...373043062.html

[C. Flower]

Bunds Looking Less Robust -



http://online.wsj.com/article/SB1000...373043062.html

And let's face it, there's limited attraction in putting cash into a 0% or negative return.

[DCon]

The Irish State may be going back to Mr Market

The NTMA aims to raise €500m in what will be its first such auction since September 2010.

NTMA chief executive John Corrigan said it was "an important first step in our phased re-entry into capital markets".

A full return to markets would mean borrowing larger amounts over longer periods, and is unlikely to happen until next year.

http://www.rte.ie/news/2012/0703/eco...tma-bonds.html

[Stanley 2]

Someone has to pay for the politician's salaries and expenses as well as the PS, wonder what % of the 500m will go to them, the future is still to be in hock or are they borrowing to pay off some bank bonds, Peter and Paul stuff.

[PaddyJoe]

Interesting to see the first new bond sales since the bailout. Kenny says it's a sign of confidence from the markets. Hmm, we shall see.

Speaking today, NTMA Chief Executive John Corrigan said: "We are very pleased with the success of today's transaction, particularly the fact that investors committed more than €4 billion of new money to our first long-term issuance since September 2010.
"This marks a very significant step for Ireland on the way to full bond market access. As a result of today's transaction, the NTMA has now covered a significant proportion of the €8.2 billion bond maturing in January 2014 which up until now has been seen as a challenging "funding cliff," he added.

http://www.rte.ie/news/2012/0726/ntm...-business.html

[C. Flower]

...

Comment by Minister for Finance, Mr. Michael Noonan T.D. on Ireland’s Return to the Bond Market

“The NTMA’s return to the bond market today is a very welcome and positive development. This auction marks the first time the NTMA has raised long term funds in the markets since September 2010.

Today’s commitment from investors of €5.23 billion represents very strong demand, the majority of which I understand to be from foreign investors. The strong demand and the fact that over €4 billion of this is new money is a significant step for Ireland in regaining our economic sovereignty.

Our strong programme implementation and decisive Yes vote in the recent referendum on the Stability Treaty is being recognised by investors. More importantly, the commitment from the European Heads of State and Government at the June summit to break the negative link between the sovereign and the banks is having a very positive impact on the market’s perception of Ireland.

While today’s auction is an important step, the true indicator of Ireland’s success will be our full emergence from the programme and the return to the international markets at sustainable rates. It is clear from today’s auction that investors are reacting favourably to the commitment by the Heads of State and Government to break the negative link, to examine the Irish programme and that similar cases will be treated equally. However, in order to make a full return at sustainable rates to the markets this commitment must be delivered upon.

Today’s market re-entry will reinforce our determination to deliver a deal on Ireland’s banking debt in line with the commitment and the timeframe of October that was set out by Commission Vice President Rehn following the Eurogroup meeting earlier this month. I have no doubt that once a final agreement is reached and announced, the markets will react favorably.”

[riposte]

It back-fired on them .... they thought they would be made offers at a much lower interest rate.

It was an effort to show that our "good boy" status would translate into a shock lower rate for Ireland.

If it had succeeded, then Ireland would have been seen as a much better bet than Spain or Italy ......and would spiral into a much lower interest rate for the big bond auctions next year.

The look on Noonan's face on the Six-One News told the whole story. It wasn't just a failure today .... it was a failure next year as well.