December 19, 2008

David on Prime Time: Government Prepares Economic Plan

Posted in News · 6 comments ·
Share 

David was on last Tuesdays (16/12/2008) Prime Time programme on RTE1 alongside Brendan Keenan of Independent Newspapers and Mark Fielding of ISME.

The clip can be viewed here

opens in a new window and requires Real Player

 

The site will be opening a forum to discuss your ideas on what can be done to get Ireland out of the economic doldrums in Jan 2009 – watch out for announcements on the site.

 

 


  1. With the collapse of the bank shares and the fact that the Government cant allow the banks to fail after providing a guarantee back in September why should we not buy these cheap shares knowing that they have to survive?

  2. MK1

    Hi David, you made your points well on prime time, as did Brendan Keenan. It would be good to see yourself, Brendan and Brian Lenihan debate the situation for an hour on a future programme.

    Liam Kelly > why should we not buy these cheap shares

    Yes, it is possible to buy 100% of the banks for less than the 10b by buying the shares direct. The government doesnt want them 100% though.

    Also, I’m not sure if there are EU competition and ‘unfair’ government support issues involved. I’ve heard that there have been some rumblings in EU quarters that all these moves to save these banks is direct government support, yet because all the countries are ‘at it’ and finance is seen as a ‘special derogation’, a blind eye is being turned. Legally, the EU may have to retrospectively go through all of these supports and give them an after-the-fact green light in view of the overall situation. But even with EU support, the government would be reluctant to take 100%. I think they should, but ONLY with major reforms in operations.

    MK1

  3. “The site will be opening a forum to discuss your ideas on what can be done to get Ireland out of the economic doldrums in Jan 2009 – watch out for announcements on the site.”

    @ David: – You are doing what the brightest and best of any nation should be doing. This is real shoulder to the wheel stuff. Which funnily enough, so is Declan Ganley. Is he right or wrong? Is David? we’ll be told, oh these mouthpieces have no mandate but we all know that they have. Its the 5-yearly limited democracy that has NO mandate.

    Isn’t it extraordinary that private businessmen and articulate economists (they’re usually highly inarticulate, in that they can’t explain F all to ordinary people, which Einstein said was a sign of a defo non-genius) are the ones who are championing the true desires and future hopes of the Irish people?

    And some FG dope criticises Dan Boyle in the Seanad for speaking truth, for speaking slightly against government lines (a beautiful spectacle of the British parliament, sadly a rare one here in the 26).

    If you want to leave your mark on the irish people for the next 10 years, stand up now and be counted, because good God, its about to get very ugly. if you’re like Dan McLaughlin, take your severance pay and shut up, because lies aren’t required any longer. How bad is it doctor? Lay it on the line.

    • Fergus

      Is Dan McLaughlin gone? If true, tis great news. The man’s economic forecasts were insane; he was even delivering speeches about the “world’s greatest economy” to FF Ard Fheiseanna which the delegates whooped up. Turn off the lights on your way out Dan, you’ve left some trail of destruction after ya fella…..

      • Unfortunately no, not yet. But he has been very quiet. And that’s a blessing. Or it would be like Chemical Ali raining down Allah’s destructive angels on the infidels while the infidels got on with the practical matter of levelling his immediate scenery.

        Perhaps I should have had one of those forward-looking disclaimer statements at the bottom of my suggestion? A quasi-forward-looking statement/projection metaphor. Not an actual forward-looking statement, as the chap’s probably actually getting down to planning the spending of his bonus!

        It was more of a ‘call to arms’ for obsolete bankers to resign. If .. then … etc.

        Poetic licence. As only a spin-meister might.

  4. It’s really hotting up now. I’d say if David wanted his own “recession channel” on the TV he’d find backers. The smart money is financial armageddon right now :)

    Has it occured to anyone that some of the resignations at ANIB have only modest association with Seanie’s 87 million loan and even more to do with the likelihood that many executives will be ignominiously forced out over the next few months? Either by the government or new investors. AFAIK it’s common for banks to lend to staff at interest rates below what’s generally available in the high street. Although the transparency of the lending is the issue.

    The resignations at ANIB could be a smokescreen. Does anyone really believe it’s a coincidence that this story is appearing now? What’s worrying me here is the closeness of the government to private equity. It really looks like some kind of deal is being put together that enables a consortium of private equity investors to benefit most from a governmental guarantee at our expense. This will be predicated on the assumption that these banks are essentially worthless because of their capitalisation hole and we’re better shot of them. We’ll be lucky to have these white knight consortia! Reminds me of pension holes and other reasons to hand over the benefit of a state investment to private equity in the past. From today’s Indo there’s noises to suggest that institutional investors will actually invest further in the big two if required.

    It strikes me that in some cases it’s a matter of the term within which you expect an asset to perform. Anglo is probably sitting on many assets which will perform over a longer term. Say 10 -15 years, but are an unholy disaster in the term within which the borrowers expected to profit. Many of these are undeveloped landbanks in zoned areas or the oversupply of office blocks and housing estates. If we’re not using many of these in 10-15 years things will be catastrophic anyway.

    A smart economic analyst that I know recommended that the NTMA could take stakes or ownership in specific property assets to reduce the exposure of the banks to developer defaults. If, say, the developer is in default with no short term prospect of remedy the loans should be called in and the developer forced to hand over all or part of the asset(s) to the bank(s). They’ll already have an interest, most of these loans are fully personally guaranteed. Some developers may lose everything but they should have been aware of the risk. Negotiating a price for these assets between NTMA and the banks is a sticking point of course but I’d much prefer to see public money used to acquire some tangible assets rather than shares/bonds/other instruments from troubled Irish banks.

    It doesn’t solve any of the regulatory issues that got us into this mess of course but we need to know what the government is going to get for our money & we need to understand that the Irish people woud be the long term beneficiaries of both the guarantee and the recapitalisation. As for who’s going to run these banks in the future.. we need to find bankers and financial experts who deliberately opted out of the “club”. David and Shane Ross fit this bill but there must be some others. Suggestions to B. Lenihan, Dublin Castle, … Or how about a reality TV show. “The Apprentice Banker?”, “I’m a banker, get me out of here”…

You must log in to post a comment.
× Hide comments