Monday, November 22, 2010

Irish Bailout Imploding

That was quick.

Irish credit default swaps are trading in the 520 area. On Friday, they closed at 507.

Moody's is expected to do a multi-notch downgrade of Irish debt. Moody's is saying that the EU/IMF bailout will shift the burden of supporting Ireland's banks onto the Irish sovereign, and would therefore be "a credit negative for Ireland."

The Irish Green party has announced it will quit the Irish government in January, leaving PM Brian Cowen without a majority in the government, and leaving the door open for elections, and thus a complete undoing of the bailout.

As ZH puts it, "Looks like yesterday's [bailout] announcement will be the shortest rescue in history."

UPDATE: Irish Green Party leader John Gormley calls for elections, says the Irish  "people feel misled and betrayed."

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