Interesting article and graphic from Fisher Investments MarketMinder.com on Ireland’s finances, and strides they have made to manage their debt – Thomas Ek, Vice President,
The Other Fightin’ Irish
While one Irish team saw their hopes swept out with the tide Monday night, another is seemingly poised for a better spring: Ireland is nearing a full return to debt markets and continues planning to launch a new benchmark 10-year bond. In fact, progress was made along those lines Tuesday when Ireland launched its first syndicated bond deal since its bailout in late 2010. This follows its first medium-term debt offering, which was made last summer.
Combined with Irish yields, the news paints a picture of a country which has made significant progress since a property market crash tied to 2008’s global financial crisis caused Irish lenders Anglo Irish Bank Corp. and Irish Nationwide Building Society to effectively fail. As shown in Exhibit 1, Irish yields have fallen meaningfully—and the spread between Irish bonds and German bonds has narrowed significantly, falling from a high of over 11 percentage points to under 3 (2.85, to be precise). In fact, Irish yields are now below Spain’s and are effectively equal to Italy’s.
Exhibit 1: Peripheral European 10-Year Yields
Source: Thomson Reuters, as of 1/8/2013.
Full article: The Other Fightin’ Irish
What’s all this about a platinum coin worth $1 trillion? Get Fisher Investments’ insights on that and more on the debt ceiling – Thomas Ek, Vice President, Fisher Investments
The Fed’s Commemorative Coin Collection
By Fisher Investments Editorial Staff
With another go-round of the debt ceiling debate already in the offing, some creative solutions are being floated. Like the increasingly discussed idea of minting a commemorative coin for the debt ceiling. Now, the coin isn’t meant to be sold to the public to honor the debt ceiling’s great contributions to America. Rather, the purported aim is to expressly solve it.
Across the web, advocates and opponents are debating the possible creation of a $1 trillion platinum coin to fund the government without issuing more debt—an end-run around (yet another) debt ceiling debate. As the theory goes, the Treasury, thanks to a loophole allowing the creation of platinum coins in any denomination, could mint a couple of coins worth $1 trillion each and deposit them at the Fed. In turn, the Fed would then write checks against the coins to cover the government’s bills. No more debt ceiling. No more debt ceiling debates.
You might ask: Why platinum? Why $1 trillion? Which are, of course, excellent questions. But we have another: Why bother in the first place?
To revisit, the debt ceiling is primarily a political machination, used now mostly as a wedge issue for politicians looking for (re)election. It’s effectively window dressing, allowing politicians to argue they’ve “restrained” debt. The debt ceiling, however, doesn’t limit anything at all. Exhibits 1 through 105 of that principle are the debt limit increases since 1917—not exactly the disciplined debt brake politicians would have you believe. Full article: The Fed’s Commemorative Coin Collection
For more from my co-worker Lara Hoffmans, visit her blog on Forbes.com: Lara Hoffmans, author, columnist and Forbes contributor.
— Tom Ek, Vice President