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(an email exchange)

   
>   On Tue, Oct 14, 2008 at 12:30 PM, Karim wrote:
>   
>   BN 11:02 Lenihan Says Irish Economy to Contract Next Year by 0.75%
>   
>   BN 11:02 Ireland’s 1% Levy will apply to all incomes
>   
>   BN 11:01 Ireland’s 2% Income Levy will apply over 100,000 Euros
>   
>   Ireland raising income taxes to pay for bank bailouts; also
>   raising VAT and fuel taxes.
>   
>   If others do same, will pressure ECB to cut rates further to offset economic impact.
>   

Yes, but rate cuts won’t offset fiscal drag.

Instead, the budget deficit will rise due to falling revenues and rising transfer payments, and Ireland’s own credit rating and guarantee of bank deposits will lose credibility.


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4 Responses

  1. Hi Warren,

    How is the German govt bonds CDS trade going? What is the bloomberg symbol to see them?

    regards,

    Mike

  2. Yes.

    Latest $offerings:

    THE TOTAL IS NOW UP TO 354 BILLION INCLUDING 100 BILLION IN OVERNIGHT FUNDS ADDED BY THE ECB.

    HAVEN’T SEEN OVERNIGHT FUNDS BY THE BOE OR SNB.

    HAVEN’T SEEN ANY BOJ NUMBERS.

    Oct. 15 (Bloomberg) — The European Central Bank, Bank of England and Swiss National Bank loaned financial institutions a combined $254 billion in their first tenders of unlimited dollar funds, stepping up efforts to ease strains in markets.
    The Frankfurt-based ECB lent banks $170.9 billion for seven days at a fixed rate of 2.277 percent. The Bank of England allotted $76.3 billion and the Swiss central bank $7.1 billion at the same rate, also for a week.

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