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 Post subject: Flight of Capital
PostPosted: Sun Feb 22, 2009 10:03 am 
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Next phase of the death spiral

http://www.independent.ie/national-news ... 49052.html

Quote:
Up to €10 billion in funds is believed to have left Ireland in the last seven days as details of the Anglo Irish Bank scandal emerged.

According to financial sources, the significant movement of funds occurred ahead of the release of the Anglo-Irish Bank and the PricewaterhouseCoopers reports.

A spokesman for Finance Minister Brian Lenihan said the Minister was deeply concerned about the flow of money out of Ireland and it is time to put Ireland's reputation back on track.

"There is a lot of focus on Ireland right now, and people need to be responsible at the moment," said the spokesman, referring to media reports.

Labour's Finance spokesperson Joan Burton said yesterday that the events at Anglo and its impact on Ireland's banking reputation is bleeding the country of cash.

"Our reputation is mud, and we are being bled. Between the antics at Anglo and the failed Government strategy in dealing with the banks, huge damage is being done to this country."

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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 10:11 am 
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The lunatics haven't a clue. I compared this country to emerging market tin-pot democracies before and got criticised for it. Does anyone doubt it now? Capital flight, for fucks sake. That's an expectation of disaster.


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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 10:13 am 
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Does anyone have a link to where these figures can be viewed online or are they available to the public?


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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 10:13 am 
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how do they know this?


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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 10:33 am 
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Boston Irish wrote:
how do they know this?


capital adequacy reporting

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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 10:35 am 
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So anybody with cash should move it offshore ahead of the total collapse? So is that why there will be no mortgages given out for topups or trading up for fear that the punters will just take the cash and run with it to start a new life elsewhere?

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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 10:53 am 
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Honest to God, is anyone suprised by this?

The government should at least pretend that they give a shite about all the banking scandals.

But instead they mouth platitudes about how their hands are tied, confidentiality reasons, don't want to jeopardize any future investigations and other assorted bullshit. Well ye're foolin no-one lads.


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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 11:07 am 
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I was just going to post this article. I couldn't believe it didn't make the front page. This should show up in the next set of monthly banking statistics from the central bank. Looks likely that Ireland will be on ECB life support. I'll be keeping an eye on new RMBS and CMBS issues over the coming week. I'm currently keeping some deposits with Irish banks on the assumption that they can access ECB repo. This is a reasonable assumption, right?

The rest of this article is also well worth a read as it throws some light on the limited (probably useless) nature of the PWC report.
Quote:
It also has emerged that the PricewaterhouseCoopers (PWC) report into Anglo Irish Bank, which was released in highly edited form late on Friday night, omitted large sections of the bank's Irish loan book, the bank's structure and failed to "discuss with management about the bank's profit and loss account".

PWC admitted it did not review "relevant financial and management information", and did not "check any underlying information, the adequacy of security or valuation reporting." The PWC team in their Anglo examination failed to have detailed discussions with management on the bank's profit and loss account, and did not discuss reasons for movements of funds.

In addition, the PWC report phase II failed to examine so-called smaller loans under €350m, leaving massive holes in the comprehensiveness of the report.

"We heard that the PWC was going to deep drill into Anglo. How can the Minister call that deep drilling, it barely scratched the surface. Mr Lenihan is playing a dangerous game" said Ms Burton.

The Department of Finance insisted yesterday that nationalisation only occurred after due diligence occurred and that he was not concerned about the omissions in the PWC report.


Today's Tribune contains details of an internal Anglo report they got a hold of. Again, it's not going to settle your belly. The main thing I took from it, is the extent to which a number of banks are cooking their balance sheets (and not just Irish ones). The Regulator comes out badly - nothing new there!


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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 11:39 am 
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yoganmahew wrote:
Capital flight, for fucks sake. That's an expectation of disaster.


I wonder where exactly this capital is "flying" to ? A lot of mine fields out there in these treacherous waters at the minute.
Is this the start of the mad rush into the lifeboats ? :nin

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For now, we are stuck with a system which allows troubled banks to post their keys through the taxpayers’ door and walk away.


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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 12:00 pm 
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Location: Cork and Kerry
Right now I've got a decent sized 6 figure sum of cash savings sitting with Northern Rock.

Reading all of the above and every day I get scared of being stripped of my hard earned savings.

Any suggestions on what to do with the funds?

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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 12:02 pm 
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Its a run on the country.

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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 12:04 pm 
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wii4miinow wrote:
Right now I've got a decent sized 6 figure sum of cash savings sitting with Northern Rock.

Reading all of the above and every day I get scared of being stripped of my hard earned savings.

Any suggestions on what to do with the funds?


German government bonds.


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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 12:04 pm 
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Open Window wrote:
Its a run on the country.

It's all pinsters fault..........just wait for this to be mentioned sometime soon.


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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 12:12 pm 
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kerrynorth wrote:
Open Window wrote:
Its a run on the country.

It's all pinsters fault..........just wait for this to be mentioned sometime soon.


I'm looking forward to it.

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 Post subject: Re: Flight of Capital
PostPosted: Sun Feb 22, 2009 12:14 pm 
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wii4miinow wrote:
Right now I've got a decent sized 6 figure sum of cash savings sitting with Northern Rock.

Reading all of the above and every day I get scared of being stripped of my hard earned savings.

Any suggestions on what to do with the funds?


This issue has come up before. I think it goes like this:

1) the country survives - money in NR is safe
2) the Irish banks go to the wall - money in NR is safe
3) the Irish government defaults - money in NR is safe
4) we leave the Euro - chance money in NR is converted into new currency
5) the UK gov defaults - money in NR is not safe
6) everywhere defaults - no money is safe anymore.

So as far as I can see, the biggest risk with NR is if we leave the Euro. Although some people suggest that this will happen overnight, I believe that there will be a few days or hours between announcement and the bill being passed. During this time the government might be able to freeze Irish bank accounts, but I don't think they can freeze NR. So NR is a good deal safer than Irish banks, but if you are convinced that the irish state will completely collapse, open an account in a german bank, buy gold, spend like there's no tomorrow or (heaven forbid) buy property.


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