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You can see a quick snippet of my contribution to the Bloomberg report on Ireland today here.
But for now, the main piece of news of the week so far is the S&P downgrade of Irish Banks.
The downgrade is the second in just 4 months – took Ireland’s Banking Industry Country Risk Assessment from Group 1 (prior to December), to Group 2 in December and now to Group 3. We are now in the sick puppies crate with Portugal, Austria and Japan. The first (December 2008) downgrade was based on S&P’s negative assessment of banks loan books exposures to housing and construction. The latest downgrade is based on an all-but-silly argument that Anglo Irish Bank loans scandal has undermined reputation of Irish Banking, as if a litany of bad loans did nothing of the sort, or as if unethical manipulation of the banks books via cross deposits between IL&P and Anglo did nothing of the sorts.
More importantly, S&P has also threatened a further downgrade due shortly – this time on the back of “significantly weaker long-term prospects for the Irish economy”. Such a downgrade will place us in a banking ICU with Greece, Israel, the Czech Republic, Slovakia and Slovenia in the neighboring beds.
But the real unspoken issue remain unaddressed. Link to article.
