Goldman Says Ireland Won’t Face Greek-Style Crisis

Discussion in 'Economics' started by ASusilovic, Sep 24, 2010.

  1. Sept. 24 (Bloomberg) -- Ireland is “very unlikely” to experience a financial crisis as severe as the one that forced Greece to seek an international bailout earlier this year, said Goldman Sachs Group Inc.

    “A repeat of the Greek debt turmoil in Ireland is very unlikely,” Michael Vaknin, a senior fixed-income strategist at Goldman in London, said in an e-mailed note. “With Irish spreads already at all-time highs, we would argue that refinancing risks in the Irish debt market is aggressively priced-in already.”

    The extra yield that investors demand to hold Irish bonds over German bunds has surged to a record as investors fret about the country’s ability to cap the cost of its bank bailout and cut the budget deficit. The spread today widened 12 basis points to 430 basis points and has swelled 112 basis points in the past month.

    At least one thing is for sure : strong sell for Irish stocks. :cool:
  2. Ireland was the first country to give 100pc guarantees for deposits, leaving it with potential liabilities of twice its GDP.
  3. I have a few Clients in Ireland. Both are in the Shipping business. They said that Ireland's economy took a beating but it is coming back. Their volume is up from last year.

    Its a tiny economy with a small population.

    The biggest problem in Ireland is liquidity. They told me that the Banks, like in the US, are not lending.

    This has frozen the credit markets.

    In their industry, the had over-growth of new business starting up. So, now the failed business are leaving way for the strong. Typcial and natural economic reaction.
  4. Yep, they are too busy with balance sheet repairs.
  5. Why they should be lending to people who won't pay?