Trying to untangle the kites flying around Anglo?

So, the old chestnut (at this stage so old and withered it’s a conker) of floating a bond to replace the anglo Irish bank promissory note has rared its head once again. The report in the times is fair, if the headline is not. the headline is ” 40-year bond could be issued to save State billions on Anglo” , which is untrue. The report states inter alia ”A long-term bond would not, in iteself, cut the total cost of repaying the State’s debt in relation to Anglo, merely postpone them. ” This is correct . The bond will not save us billions. The overwhelming likelihood is that any bond structure will be such that the present value of the bond represents the present value of the promissory notes. While there might be a liquidity boost in the state paying out < 3.1b per annum that is not a solvency boost. We got into this whole sorry mess by confusing solvency and liquidity.

This smoke and mirrors shell game seems to be consequent on a hardening of the teutonic attitude towards us. In fairness to Frau Dr Merkel, the government keep saying everything is grand, grand..We in ireland know that we would say that even if the state was overrun by parasitic wasps armed with hot stingers, but the germans take people at their word. So, it seems that the prospects for a deal on the debt are receding faster than the chances of the Kerry team winning a three-in-a-row.



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brianmlucey.wordpress.com/2012/09/18/trying-to-untangle-the-kites-flying-around-the-anglo-irish-promissory-note-a-guide/