Chart of the Day: Bubble Chart of Exposure to and Bailout of Ireland
Here’s a great graphic on the Irish bailout, quantifying the exposure of foreign banks to Ireland as well as the pots of money from which the 85 billion euros for the Irish bailout is coming. My understanding about the ‘ funds which Ireland is only discussing taking‘, the breakdown is as follows: 45 billion for the state, 20 billion to recapitalise banks and another 20 billion just in case. If I hear differently in the next few hours, I will revise the figures.
As for the graphic, hat tip to Barry Ritholtz.
Source: Ireland bailout: Datablog guide – Guardian
What should worry everyone is that while the exposure to Ireland is huge it is the write offs that should be expected that should cause panic. So far losses approaching 70% are expected and on the £524.43 billion exposure to Ireland then write offs of £367 billion for Irish debts alone will cause a crisis in every creditor country.
A further £97 billion write off in the UK will cause the government significant problems when it exceeds the austerity cuts recently announced.
As for contagion, that point passed months ago. Many countries are already fatally infected and the only issue now is which will default. The issue now is which patients can they save? The best thing to do is refuse to bail out the banks and any country that is stupid enough to guarantee its banks and then make creditors face their losses via haircuts. Iceland is recovering nicely now because it did just that. The idiots will be the countries that bailed out the banks.