Shamwreck Banks

Ireland's banking woes are now well known, even though fairly little scrutiny has taken place so far on the extent of their property lending operations. For example, if you want to see a grandiose example of that hubris, head to the north of England, where dozens of half-finished apartment blocks are starting to fray. The speculative developments that the Irish banks got themselves into (no doubt to partner with their friends the property developers) are a sight to behold.

Now the scale of the damage is forcing the Irish government to drastic measures. Strange that such a mid-sized country is the first to go full throttle on the toxic bank road - in this case, the toxic bank is the government, as it will buy up debt from their ailing banks.

Granted, rating agencies are hardly the sharpest market participants, but even they smell trouble down the road, hence the first (of many?) downgrades today.