Irish Bond Yield Falls

[canicemcavoy]

Firmly in cheek one would hope!

http://www.breakingnews.ie/ireland/cowen-plays-down-spike-in-cost-of-borrowing-472604.html

Sure he's a gas man when he's had a few pints.

 

[TarfHead]

Now that we're all becoming 'experts' on the international bond market and sovereign debt ..

.. why the fixation on comparing the difference between Germany and Ireland for bond rates ? Is this not like criticising me for not being as fast as Usain Bolt ?

We're a small open economy, dependent on MNCs. They're not.
We've a population of 4.5m. They don't.
We've suffered a catastrophic crash following a property bubble. They haven't.

On what grounds is it valid to compare bond yields against Germany. Why not against Portugal, Italy, Spain or Greece ?

 

[DerKaiser]

On what grounds is it valid to compare bond yields against Germany

The whole point of the comparison is that Germany is as close as there is to risk free in the eurozone, so what we pay for credit in excess what the Germans pay represents our riskiness.

I think it's quite valid to draw conclusions from the fact that we paid 1.5% in excess of the Germans for 10 year bonds less than 6 months ago but we are now paying close to 4% more.

Is this not like criticising me for not being as fast as Usain Bolt ?

Nope, 3 years ago Usain could do the 100m in 10.0 seconds. Assume you are an athlete that could do it in 10.5.

6 months ago you could do it in 11.0 seconds (Usain does it in 9.5)

Now you can do it in 13.0 seconds (Usain still does it in 9.5).

The fact that you are now 3.5 seconds slower than Usain is a valid comparison that highlights your condition has deteriorated significantly over 3 years and particularly badly over the last 6 months.

 

[TarfHead]

The whole point of the comparison is .. that we paid 1.5% in excess of the Germans for 10 year bonds less than 6 months ago

That's the bit I was missing, thanks.

(and the lightning speed of an Olympic champion )