Member Info for johnmcclean

Banking in general is running into a huge issue. It may not even apply to BoI but that won't matter.
The world is in a state of fear of a long recession. To counter that they want the safe haven of cash so they are dumping assets. The problem then arises because a massive amount of assets world wide are in dollars. Unfortunately with electronic or virtual money there are trillions more dollars in existence than there is real physical dollars. Now that everyone wants the safety of cash in $ there is not enough dollars to fill the demand. So assets in $ are in trouble while the actual $ itself gains in value because of the demand. It's the last thing the US wants now hense the rapid drop in interest rates to try and slow $ demand.

On the other side of this you have debt. Vast amounts of that is in $ as well. Every time the $ strengthens borrowers need more $ to repay the debt. Basically the world is facing a $ margin call that has banks in a precarious position. As I said before Printing a trillion dollars is not to going to be enough. Interesting to watch the Dollar v the rest currency exchange rates for th he next while
I wouldn't be surprised if there was € $ parity soon.

As many as 24,000 former healthcare workers have contacted the Irish health service to offer their help after the country’s government issued a call to arms.
Retired doctors, nurses, therapists and university students with sufficient skills to register with the health service have been calling in, Reuters reports.

I haven't been watching the STG exchange rate. STG has been totally hammered. that's not good for a lot of Irish exporters.

Governments are asking banks to take on a huge amount of losses in the national interest during this crisis. Not only banks but individuals, businesses, governments and central banks all over the world are going to be laden down with debt when this is all over. So... why would it not make sense for there to be a huge international debt forgiveness program of some sort. Not sure how it would work but maybe allow central banks all over the world to take bonds to a % of GDP and then just burn them. if every country could escape from under the mountain of debt they have think of the cash they would free up because of smaller repayments. It would be a huge boost to the world economy . Hardly that simple I know but it would make sense to me anyway.

People in Sacramento CA have been advised to stay indoors. My brother works for a big company over there. They are meeting now with the expectation that they will shut down operation tonight and temporarily lay off all the workers. His son was sent home from his job in SF yesterday
This is just like domino's falling. I know Trump was talking about a 700 billion package. It's not going to be enough. California alone is the 6th biggest economy in the world. Luckily the US has a very big printing press because it takes a long time to print a trillion plus $. Same goes for the EU and other countries.

https://www.telegraph.co.uk/politics/2020/03/17/uk-prepares-seek-eu-trade-talks-extension-coronavirus-crisis/

Get well soon torquay. there's no better place to self isolate than on a golf course and with spring on the way plenty of opportunities to do just that.

When I mentioned helicopter money earlier I was talking about Europe but the idea seems to be gaining traction. The US seem to be talking along the same lines.

“The pressure on family budgets is only going to get worse as we deal with coronavirus. Congress should pass a bill sending every middle class and low-income adult an initial check for at least $1,000 ASAP. We can’t leave the hardest-hit Americans behind,” Sherrod Brown, the Ohio Democratic senator, wrote in a tweet on Monday. Among the Republicans backing such a plan is Mitt Romney, the Utah senator. "

I hope everyone has a happy St patricks day. certainly one that won't be easily forgotten. Personally I would be careful not to feel too patriotic and dip into BIRG. I would say now for sure the 2020 profit is gone as well as any dividend . The bank will need to dip into it's capital reserve and put cash aside for loan defaults that's on the way. That just 2020. Even in the years after that the CET1 will need to be replenished and I expect increased. Any new bank stress tests will now have a much worse worse case scenario included. I doubt the bank will merge with AIB and they both will be seen as vital to the national interest and so won't be sold. Italy just re-nationalised Alitalia so as never to be left with no option to get it's citizens home during a crisis.

before jumping in just consider the cost to the economy here and in the UK for 2 plus months of a shut down followed by brexit. BoI in right in the firing line of the consequences.

At the minute there is no quick fix. The only action I have heard suggested as a possible help is Helicopter money. ECB prints billions but instead of buying bonds they give citizens free cash straight into their bank account to spend as they wish. Not the worst idea.

where's out friend nuri123. he's (she's) been pumping the share price since 5.00 and calling the bottom at every drop. Must be filling his boots today (again).

So many barging for cash (brave) buyers now but is BIRG? It's going to be carrying the can for years after this.

the fed threw the kitchen sink at the markets yesterday and got back -7% and a shut down on open in return. Not the reaction they had predicted. It dispels the myth held by some that the markets are the safest investment because the FED will always pump in the cash in the event of a crisis. True about the cash but not that it can save the markets. Fear trumps cash.

"Will it need to be nationalised?"

the business (for now anyway) is 100% sound and never better capitalised. It's just the share price that's falling so need to keep this in perspective.

Speaking of the worst....

https://www.theguardian.com/us-news/2020/mar/15/trump-offers-large-sums-for-exclusive-access-to-coronavirus-vaccine

Like every crisis this will bring out the best in people and the worst in people. Guards are to be deployed to stop looting seemingly.

Many top business have drawn down their maximum credit lines and that's reported to be putting huge pressure on bank reserves in the US. The fed can't keep up with dollar demand.
Markets could well be shut down tomorrow.

Brother in California says SF was deserted today. Business are preparing for a shut down. Things are a lot worse than is been reported.

Reports that Ireland will shut down on Tuesday morning. Army to be deployed at supermarkets.

the share price is a bargain and as the general market eventually shakes this virus off it will recover . BUT there have been so many times over the last number of years that I have said it was a bargain just to see it become even more of a bargain that I for one have lost all interest in "averaging down". I like what I hold and accept the dividend (great yield on that now) as compensation for share price. I do worry if the bank can maintain it though. The concentration on farming and SME lending could prove difficult for a while.

"crh and smurfit kappa make up the bulk of my holdings, both been hammered and I'm concerned for smurfit, very high debt laden company"

I have share in SKG as well but I'm not worried about them. They have enough cash to weather the storm and I have no doubt any bonds they might need to issue will be bought up (by the ECB if by no one else). Anyway as long as couriers keep delivering there will be ongoing demand for their packaging. To me their shares at the present price are a lot more interesting them BIRG. Even though the ECB eased up on the capital buffers banks need they did very little that would stimulate an economy. Like Draghi towards the end, Largarde seems to be of the opinion that it's national governments that should act.

All eyes on Lagarde today. Europe's last line of economic defense. Mass buying of corporate and government bonds but hopefully something new to give markets hope that not all is lost, especially after Trump's performance last night. Case of chickens coming home to roost when you elect an incompetent egotist as POTUS.

is there a glimmer of light ? at least there is a recognition in the ecb that ecb policy is destroying EU banking

https://www.bloomberg.com/news/articles/2020-03-10/europe-mulls-relief-for-banks-still-reeling-from-last-crisis?srnd=premium-europe

my personal view is that there will be a lot of good companies very cheap available to buy shortly. Many of them will be a way better investment than BIRG. It was already going no where before this. There is no reason to believe now that it's a good long term bet. If you plan just to trade that might be ok for a short term in and out but for a long term holder like myself there are better places to be looking.