When is a bank not a bank but a black hole?
When its Anglo Irish Bank of course, now set to cost the Irish taxpayer about $35 billion or thereabouts.
The second quarter losses at the bank just announced were $10 billion, the GNP of many a small African country.
The New York Times report had the following amazing headline.
"Ireland Tries to Keep a Bank From Pulling It Under"
Think about that for a minute-- a country could be pulled under by a medium sized bank says The New York Times.
The first sentence of the article reads "Can one bank bring down a country?"
When you see that headline and lead in The New York Times you better start to worry it might.
The government is propping up the other banks too, to an ultimate cost of $90 billion.
This commitment to Anglo and not letting it just bankrupt itself is not impressing the financial press over here not to mention the ratings agencies.
The Wall Street Journal wrote " Standard & Poor's Corp. last week downgraded the sovereign's credit rating to AA- from AA, and estimated the government's bank bail-out costs could reach EUR90 billion. Two of the country's other major banks, Allied Irish Banks PLC (AIB) and Bank of Ireland PLC (IRE), are part state-owned after a series of capital boosts.
Where does it leave us all? A sane man might say let Anglo go bankrupt and save the Irish taxpayer billions of dollars.
A less sane man might say it can't be allowed because the international financial system will lose all confidence in Ireland repaying its debts.
But isn't that happening now anyway - see The New York Times.
Better to lose a leg to gangrene than let the whole body rot I say.
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