Irish debt downgraded to ‘junk’
Ireland has become the latest European nation to have its debt downgraded to junk status. That means the Irish government may now be reliant on another financial bailout to fund its spending. Roger Montgomery believes the central issue is debt and it will take many years for it to be paid off and shares his thoughts with David Taylor for the ABC. Listen to the podcast.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
Pat
:
The state is now the biggest property owner in Ireland after taking over the bad loans from the banks. Property includes hotels, houses and factories. Most of these were built as a result of a government policy of providing tax exemption incentives. There now are over 300,000 empty properties, thousands more that have lost their jobs and cant pay their loans on properties that have halved in price.
Unemployment is pushing 16% immigration about another 3 to 4%.
Interest on loans will have to be paid. Bond defaults and loan restructuring will have to take place. It’s a ten-year project not five.
Not a pretty sight.
Roger Montgomery
:
Really helpful insights Pat. Thank you!