January 18, 2009

Anglo fiasco is Ireland's Enron

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Anglo Irish Bank is Ireland’s Enron, and those responsible for destroying shareholders’ assets should be pursued accordingly. It’s not just the shareholders: the system has also failed the people miserably. We are now in a position where nobody trusts us. The minute Anglo was nationalised, the risk on Irish government debt jumped significantly because this disaster will be paid for by all of us. Our national debt has just – effectively – doubled and dodgy banks are now contaminating everything associated with Ireland.

We will soon be downgraded. This means that, not only will we pay more for our debt, but we can forget about any infrastructural development paid for by public private partnerships. No one will touch us. And if we can’t structure our financing of railways and roads using private investment, how are we going to build stuff?

On a more personal level, to see pensioners’ funds wiped out is heartbreaking. What are these people going to do? Worse still, it is enraging to hear those responsible squirm and spoof while they cowardly stage-manage an egm – paid for by shareholders – to hide the truth from those very shareholders. Is this what we have come to?

Certainly, questions need to be answered, such as: why did you not see executives moving money around the balance sheets and why did you not act in the shareholders’ interests and sound the alarm bell? That is, after all, what an audit is supposed to reveal, is it not?

But it is not just the auditors. Make no mistake about it: it is a story of monumental failure in the banking system. Not one person in a position of responsibility did his or her job and now the taxpayers have to pick up the tab, the size of which no one seems to have any idea.

Let’s look at the players in turn. The Central Bank failed to oversee the system.

Every month, the Central Bank issued statements showing monetary growth in Ireland — which was exploding. This column pointed out time and again that this explosion of credit could only have its balance sheet counterpart in enormous foreign lending. Yet nothing was done. Think about it, banks are given licences to trade.

These should be treated like driving licences. If you drive dangerously, your licence is taken away. Likewise, if you trade dangerously in a manner that endangers the integrity of the entire system, you should have your licence taken away.

But what did the Central Bank – the guardian of the system – do? Nothing, despite all the information to hand. Did anyone resign? No, in fact the governor has just been given an extension!

The Financial Regulator clearly was ineffective, and its chief executive has now retired. The auditors? Well, we know what they did. The last thing they did was carry out a proper audit. Why might this be? Within the bank, things were worse. A sizeable number of the senior management of Anglo surely knew what the chairman was up to, moving personal loans around to avoid detection.

Did they raise this? No. What about those on the boards, these well-paid characters who are supposed to be representing shareholders, such as the pensioners, at the egm? What did they do? They did nothing.

The stockbrokers – who in many cases channelled their clients’ funds into the bank, arranging and dressing up Anglo’s unsecured loans and stuffing them into the hands of unsuspecting credit unions – did nothing. Did they raise any question about the darling of the financial sector? They did in their Swiss! They were making too much easy money.

Finally, there are all the regulators and – presumably — the Department of Finance and their role in the saga in which Sean Quinn invested heavily – and lost heavily – in Anglo through contracts for difference.

Should this CFD position have been let develop without being declared to the market? And was Quinn’s massive contract for difference position unwound and translated into an ordinary shareholding of 15 per cent?

The upshot of this tawdry tale is clear. Our financial system is populated by cronyism and incompetence. This assessment makes the likelihood of contagion all the more probable.

So who is next? Is it possible that one or two of the smaller banks – some with a ludicrous gap between their deposits and their loans – will suffer a withdrawal of funds? No one believes anyone any more, and the flight to allegedly better banks will be overwhelming. Just witness the massive market hit on Barclays Bank in London last Friday.

Faced with this scenario, there is only one thing the Irish government can do to retrieve the situation. It can quarantine large diseased chunks of the Irish loan book in Anglo. In effect, it can turn Anglo into a financial skip, throwing into the bank all the bad debts of the other banks.

Bank of Ireland and AIB, although they like to hold their noses and look down on Anglo, might actually have a worse bad debt position than the nationalised orphan. This is because, in an effort to catch up with Anglo, the big banks accelerated lending at the top of the market from 2005 to 2008. So they need the financial skip as much as anyone else.

It would be unwise to allow them to get off the hook by throwing all the bad debts into Anglo. Brian Lenihan should raise a huge bond on the international markets to finance the bad loans.

The profits of all the banks which have been bailed out should be directed to service the interest on this, and the money will be used to pay the bad debts. Over time, the debt will trade at a deep discount, but as the economy recovers, so too will these debt prices.

The idea is based on the Brady Bond solution to Latin American fiscal delinquency in the 1980s.Hard as it is to get our heads around now, Ireland in 2009 is more Brazil than either Boston or Berlin.


  1. Ger Kennedy

    David

    I dont agree that Ireland is more Brazil than Berlin or Boston. it is more Zimbabwe if anything.

    Brazil are a force to be reckoned with. For a so called third world country they have done some remarkable things. They have figured out how to power their vehicles with sugar cane. No western country have done this. It is a remarkable acheivment. I dont envisage Ireland pulling off a coup like that. (No property angle in it..)

    Having said all of that I see what you are getting at. This article is a good hard hitting article. People like Fitzpatrick should go to jail for what they have done to Ireland’s finances and reputation. I always knew that the property boom in Ireland was a scam. I didn’t buy into it and I moved back overseas a few years ago having spend a few years in the madness. However I, and many more I am sure, was unaware of just how big, corrupt and incestuous a scam it was. I would imagine that many of the bankers and developers believed their own BS as this thing played out and this caused many of the problems. However, our regulator and central bank have a duty of care to the finances of the state of Ireland. Directors of banks have a duty of care to the shareholders of their banks. The government has a duty of care to the nation state. All of these entities have fallen down on the job. Prosecutions are needed. I know with the BS in Ireland probably no-one will go to jail and a bunch of lawyers will make too much money but it would be nice to see a few of these eegits like Neary and Fitzpatrick doing a “perp walk” and spending a night or two behind bars.

    I would imagine that Ireland’s economy will be in tatters for many years to come. I hate to see this. I wish they had realized that they were on to a good thing with manufacturing and exporting like they did in the 90′s. It was great to see the place come out of the doldrums of the 80′s. It is a crime that these egits have put us firmly back in the 80′s again. Or maybe even the 50′s. Who knows.

    Lets hope we manage to dodge the default bullet.

    Ger

    • JoeM

      David,

      There is a huge whole in your argument that Anglo should be used as a financial skip into which all of the other banks bad loans should be thrown.

      How on earth are the government going to value those loans?

      Right now the market seems to think they are worthless so your idea that Cowen should raise a huge bond to buy them up is deeply troubling.

      Are you seriously suggesting that we borrow though the teeth to buy up bad debt that will (in your own words) “never be paid back”? Even if some debt can be recovered, the valuation question remains, how do we ensure that at the very least we do not overvalue them?

  2. VincentH

    Hmmmmm, which breed of skip had you in mind. There are a few you know. But all suffer from the night time fillers. AKA, the scum bag general neighbour with loads of crap, but way to cheap to hire his own. And so you see the wraith-like bobbing weaving and ducking of a well tuned body, while he puts out the wheelie bin. Anyhow, I would watch that skip of yours like a bloody hawk.

  3. Your points are correct. But unlike Enron, this overstretched loan book can be worked over and new investors seeked so this present time , there is no need to value and exit at stupid prices.
    A scam yes. but was has occured has been more led and encouraged from the USA and in some ways we in Ireland like on the in the UK with RBS has been very reckless.
    Sen Boyle said all the board should be culled in December- that still should happen and like you mentioned pursued through the courts for their incompetence and possible rule breaks.
    Like all past cash bonuses or shares that they sold this should be pursued as no one shoudl benefit at times when they were making incompetent decisions.
    You mentioned one Sean who is an unhappy pup, as he has lost through his CFD etc whilst other Seans have helped to destroy and now should be dragged by the scruff abd assist ALL enquires to steadily turn matters around- as Dublin is no Sao Paulo- yet! the charm of the Irish must pull through and unite globally to work sensible solutiosn and the present government must stop forthwith any more cronyism!! and forthwith!!

  4. Aidan

    What about the management of Irish Nationwides role in all of this? They run a building society like a fuedal Barons fief. How about an introduction of Jus prima nocta for Mr Fingleton???

    Yes, the taxpayers will pay – it should just be the shareholders, after all,they got the dividends and the ponzi style capital growth – it would appear that this stuffing the taxpayer is now the best international practice – but at least we don’t need to set up a “bad bank” from scratch and have to retrain the civil service to run it.

  5. johninmunich

    One would expect some gardai investigation to be going on right now, even if it was just a sham operation to show the international markets that we are doing something. Is anything of the kind happening? The guys in Hypo Real Estate are for example being charged with witholding information which influenced market share. What happened at Anglo is at a similar level. Not investigating leaves our reputation in shatters.
    The bad bank scenario was brought up here in Germany a few weeks ago aswell. It came from the banking sector but the German government rejected it as they said in the worse case scenario, the taxpayer would end up with a massive bill. A bit like the guarantee of loans really.
    I hope we avoid it but if we do default it may finally force Irish people to do some badly needed soul searching. I am not just talking about the elite here either. If me, me, me had been replaced by social responsibility the house price madness could have been stopped. In France they would have taken to the streets rather than outbidding each other.
    Ireland may look to it`s diaspora as part of the solution, but the truth is that many of these left the place disillusioned. I know many barroom patriots but I also know many who left Ireland during the boom and want little to do with the place.
    They and those who left in the 80`s know first hand where your money can go if you invest it in Ireland. A bit of law enforcement might show these people that Ireland is finally changing.

    • PaddyinAmsterdam

      As an ’87 UCD Engineering graduate in Amsterdam, I fully support this sentiment. For the last 20 years I have lived mostly in Germany, Switzerland and Holland – places in which people who commit tax and business fraud (including Steffi Graff’s father) get put in prison

    • Colin

      ” I am not just talking about the elite here either. If me, me, me had been replaced by social responsibility the house price madness could have been stopped. In France they would have taken to the streets rather than outbidding each other.”

      John, I fully agree. But there’s still people (read the previous article’s posts) who think house prices rose so high because of cheap credit and cheap credit alone. People marched on the streets around Ireland about how awful Bush was for removing a dictator who murdered thousands of his own people but yet did nothing about unaffordable property in their own country! Why? I suspect because many were adopting the cute hoor policy of inheriting property / getting a site on Daddy’s farm / foolishly believing that house prices never fall and that rent is dead money.

      Kevin Myers is right when it comes to the psyche of the Irish.

      • Colin, the ‘foolish believers’ are being hurt now by the market. If you stick around and have faith in the market, one day you’ll get your dream house too.

        You really don’t the farmers do you? What do you pour on your cornflakes? They’re a selfish shower in fairness when it comes to the bobs, but at least they work hard.

        Inheriting anything is not ‘cute hooerism’ ; at the end of the day, if somebody wants to pass on something to their family or friends when they die, that’s their right.

        Paddy

  6. I think at this stage of the crisis that we need a reality check. Doing nothing postpones the inevitable unwinding of the bad loan books which appears the most logical approach. The current situation breeds a lack of trust and lack of clarity. Investors want clarity and a reasonable ability to assess risk, or they just won’t buy into any private equity buy-in to the remaining banks.

    So what if Anglo does call in their bad loans? The same debtors with other banks too will have their security called upon and the loans pulled would contribute to form the “bad bank” loan book. We have to cross that bridge, not pretend we are not there yet.

    The system needs an unavoidable enema, sooner rather than later. The indignity remains the same, but it is over and done with.

  7. Furrylugs

    Brazil is closely tied to Neo-US where big business rules the roost. It is a bastion of US influence in South America counteracting Chavez’s populist socialism. The downside is 50,000 gun deaths pa, native forest dwellers ran out of town by deforesters and unwanted street children culled by police waste disposal units. All disguised by a veneer of Copacabana and Carnival In short, capitalistic hypocrisy.
    We have the same hypocrisy but thankfully no death squads or relatively speaking ,rampant street crime.

    But Brazil is morally defunct and exist for the benefit of a few wealthy families so economically speaking, there are similarities.
    Any advances in technology exist for the benefit of the few and any social change takes place for the avoidance of international embarrassment. More similarities there.
    On page 10 of this document , http://www.sephis.org/pdf/murilo.pdf , there’s an interesting note on patrimonialism which could have been written about Ireland.
    Our culture is still ex-colonial and the practices inherent in the main political party could be taken from the divide and conquer handbook.

    So long as this culture exists and flourishes, the science of economics cannot be applied to Ireland. Patrimonialism will interfere in any logical decision to further the State because, by its very nature, Patrimonialism, the nemisis of meritocracy, is a “State within a State”

  8. Furrylugs

    “nemesis”
    mea culpa

  9. My Lost Generation

    Great comment Furrylugs!
    So would Patrimonialism explain the move by Brian Lenihan on Anglo, save the ‘patrimoines’ of a the wealthiest including Sean Quinn?

  10. John ALLEN

    I thought FF always subscribed to ‘patrimoines’ aka ‘south dublin’ is the geographical location shifting elsewhere ?

  11. John ALLEN

    for once i seem lost for words to say that have not been said here before except to say that the longer it is seen by the international community to take our law enforcement to act on Anglo the quicker the remaining ‘reputation ,confidence ‘ will be lost in Irl Inc and the sooner the oncoming social unrest will follow

  12. Deco

    Well in the context that business magnates can do what they like in Brazil, you are correct. In Boston company directors who deceive the shareholders and the regulators, get fined, have their assets seized, and end up in jail. In Berlin company directors who deceive the shareholders and the regulators, get fined, have their assets seized, and end up in jail. In Ireland they disappear into the leafy suburbs, get backslaps at local rugger clubs, popup at high society parties, and get spotted in Portugal hanging around with former business associates.

    Though in fairness to Brazil – Brazil does not have wobbly banks. And I don’t think the Brazilian taxpayer get tapped to bail out failed enterprises.

    Also in consideration of the fact that ANIB has a branch in the Isle of Man, does this give the revenue ‘interesting information’. I imagine that this is information that the Revenue were always seeking concerning the speculator class. There will be a withdrawl freeze on accounts above a certain size.

    John Fitzgerald of the ESRI is on newtalk – “economy is in serious trouble”, “competitiveness is a complete disaster”,”we don’t have (a plan)”,”don’t fire teachers and nurses, if you have to hire them again-it’s bleddy expensive”. “Inflation minus three, (and quite possibly more)”. -> deflation. “Wages are being cut across the private sector – in some cases upto 30%”.

    We are finally getting some accoutability-as a result of disenchanted shareholders. There now appears to be a class action coming against directors of ANIB. I presume that there will be similar actions by disenchanted shareholders of other financial institutions. I just wonder, will this all lead back to the former head of the Financial Regulator ?? Will the Commercial Court get more answers to questions that were never answered in the Dail or the media ??

    • Furrylugs

      “Will the Commercial Court get more answers to questions that were never answered in the Dail or the media ??”
      Deco, They wouldn’t have the gall to set up another Tribunal , would they?

      • Deco

        Property prices are down in South East Dublin. And the plebs are getting really annoyed with authority, and distrusting their betters. Surely this must be the biggest calamity of all….so what does authority do…instigate a phantom body of accountability…called a Tribunal….as usual nobody will be liable for anything….it will take forever to find out nothing…and the barristers will charge whatever they like…and the PAYE sector foots the bill….but great for the property market in Cabinteely and Foxrock.

        If a tribunal is set up, it would be to prevent the people finding out what was happening. This is in line with historical experience in recent years. Look at the amount of effort required by the McBrearty brothers in the Barr Tribunal to get accountbaility – and they were saved by the fact that one of the senior Gardai had an ongoing row with his ex-wife, and she then spilt the beans on the entire shenanigins !!

        Whatever chance of getting honest opinion in rural Donegal as a result of a family fued, there is absolutely no chance of high society in Dublin 4 breaking ranks, and letting the rest of society know what is happening. Just look at the “Annabels night club” case. These people close ranks and keep the truth to themselves. Their contempt is stronger than any sense of duty to the wider society to tell the truth. I calculated that it would be difficult to get firm of lawyers to take on a class action, unless it came from Cork or Galway. So far only one firm has made itself available. But they would all want to be involved in a tribunal, because tribunals are a gravy train, that are particularly ineffective at punishing anybody.

        That said, should we be surpirsed, if we see the Labour Party, and The Irish Times, asking for a Tribunal into the ANIB loans event ??

    • Did you hear John Fitzgerald when he was asked whether top civil servants should take a 30% pay cut?
      “Eh ah … eghhh … well … ah …. oh …. mmmmm …. well ……..”. Eventually he got the word he wanted out.

      No.

      Earlier he espoused how our policy makers carry the ‘national interest on their shoulders’. Well the above
      goes to prove that if there’s one sure thing that supercedes the national interest, it’s self-interest.

      David, this bad bank malarky doesn’t add up for me. The umbilical cord between it, and between the banks
      it is helping to clean up, is not severed. In other words, when AIB & BOI go to service the interest on these
      bonds either the banks profits will have to be impaired for a very long time, or else their profits will not suffer and
      the banks will raise the money in another way. Yes, you guessed it, the customer will pay. Higher fees, higher
      loan costs, less interest for savers. One things for sure if this is left unsupervised ; the Ballsbridge brigade ain’t
      gonna pay.

      Deco, for once I can’t agree with you about Europe being the problem. The problem is internal ; our bankers
      and politicians were warned repeatedly about the economy going out of control. Champagne Charlie, and the
      narcissist fool Bertie, were too fond of kissing babies, appearing on the Premiership, and backing horses, to listen. They knew better. Belvo and Biffo are now left holding the baby. Or more accurately, you and I are.

      The sheepskin brigade saw that Ireland would benefit from the overspill of the US technology bubble, and opened the spigots to finance a property binge, aided and abetted by Paddy the Plasterer. In doing so, they condemned many of the young educated, vibrant, skilled population to a life of debt and penury. They creamed off inordinate rewards for themselves, cheered on by every two-bit middle man in Ireland.

      The binge is over. In a just world, the Sheepskin brigade would be thrown onto the dole, and put on bread and water. But we’re propping them up for the ‘wider economy’, and the latest catchphrase ‘our international reputation’. What needs to happen is that the banking apparatus in every town is preserved, but the failed intellectual apparatus that underpins it is thrown onto the scrapheap. Likewise with the stellar self-reward.

      It’s not enough for the odd figurehead to walk the plank. Cronyism and nepotism is alive and well in Ireland, and ultimately, unless we clear the decks, Anglo will be replaced with ‘Son of Anglo’.

      Paddy

  13. Deco

    Just found out that there are 1000 people employed by the combined institutions that are the Irish Central Bank, and the Irish Financial Services Regulatory Authority. What are they doing ? What have they been doing for the last ten years ? How much are they earning ? How many of them are ‘management’ ? How many of them are appointed because they have political contacts in other state institutions, or in the three largest political parties ?

    And why aren’t there any plans to sack some of them, and replace them with people who actually do some work ?

    I can see what bus drivers are doing. But the CBI and IFSRA are underperforming, overstaffed, and unaccountable – and there must be a lot of people in there who are underqualified, disinterested, corrupt, lazy, and possibly overpaid. No doubt, the current ‘crisis’ will be used as justification to keeping all these 1000 people on the payroll. Even though their failure to do their job properly in the first place caused the problem. And because they are ‘connected’, we can expect IBEC to be pushing for the bus drivers to get the sack, while nobody will ask for an overhaul of the CBI / IFRSA.

    What is acheived in Ireland in terms of ‘reform’ becomes the result of twisted political manoevring, and rarely has any real economic basis. Forget about any recovery-which has no basis in fundamental economics. It just won’t work. It will achieve nothing meangingful.

  14. John Q. Public

    There was a run on this bank so lets say it like it is. Our minister is a liar! How much does this bank have on it’s loan book exactly? It is the figure by which our national debt has increased and we already owe 50 Billion.
    Who can we trust to look after this ‘financial skip’ David talks about? Nobody Irish that’s for sure.

    • Deco

      He was on the radio at 1pm (Radio 1 News). He was adamant that the department of Finance had carried out an exhaustive search into ANIB, and analyzed everything it had and owed. And he said that they were happy with what they are taking on. Minister Lenihan then said that the takeover of ANIB was taken on the basis of the systemic risk posed by an event or crisis occurring in ANIB. That this was a preventative measure. And that this measure was to instill confidence of International institutions in the Irish Financial sector.

      This all sounds very positive. Problem is, that we have seen many statements like this, since mid 2008. And at later stages they have been retracted.

      Until we rebalance our export sector, and then this causes a floor to form in the residential property market, the dynamics are forcing more problems to emerge like ANIB. The real problem is the Minister for Industry, and the failure of regulatory authorites to tackle the various vested interests, who are contributing to our overall cost ineffectiveness as an economy. We are back again to the Economic Rent Infrastructure and our Industrial base. That is where today’ problems arise. Attempts to prevent deflation – like what occurred in Japan during the lost decade – increase public debt,and achieve nothing. Lets do deflation, and do it properly – and protect our export sector.

  15. Deco

    Listening the Gay Mitchell(FG) lamenting that “the one thing that we really did wrong, we did not set aside the money we got during the boom, for when thisngs got difficult”. I find this amazing.
    Didn’t he, his party(FG), and even more vociferously his allies (Lab), lambast McCreevy for putting money aside in the National Pension Fund. Really, is it any wonder we end up with FF in power ? The opposition is abysmal, and always assumes that we might forget it.

  16. AndrewGMooney

    DMcW: ‘The minute Anglo was nationalised, the risk on Irish government debt jumped significantly because this disaster will be paid for by all of us. Our national debt has just – effectively – doubled and dodgy banks are now contaminating everything associated with Ireland.We will soon be downgraded. This means that, not only will we pay more for our debt, but we can forget about any infrastructural development paid for by public private partnerships. No one will touch us.’

    How likely is it, in percentage terms, that this Enron-esque contagion is limited to Anglo? Enron, like Anglo, could only thrive in a petri-dish of corruption which was assiduously lab-grown by other parties. The corruption that was Enron was the portent, the pre-cursor for the whole Wall Street meltdown. The stables weren’t swept by Dubya. It was covered up. Anglo will be covered up, whether by a ’toxic skip’ or ring-fencing/insuring the petri-dishes in the top security biohazard basements. All costs to be borne by as many generations of Irish Citizens as required. Any investigation or punishment will have to be foregone as it’s too ‘commercially sensitive’ to involve the police or the judiciary. How convenient.

    Do not be surprised to find other Irish banks have been running biological weapons programmes in their own basements. Only the Sovereign State now has the resources to detoxify the nation. But: There’s a real problem here.

    In order to prevent collapse, the Government must take ‘resolute action‘ against an entire hierarchy of arrogance, delusion and corruption if not overt criminality. But it appears to be at the top of that hierarchy and by it’s ‘protective’ actions toward miscreants further down: The Government has trashed it’s own credibility beyond repair. Ditto The Central Bank, The Regulators, all down the line. There isn’t just one ‘class act’ going on here. It’s the whole cast!

    If there was a functioning, credible Government it could force the other banks to finally come clean about the petri-dishes they have been cultivating, before the whole backwoods interbred banking system bankrupts the country. But there isn’t a functioning, credible Government. Is there?

    The crises will roll on until ’outside agents’ deem it appropriate and propitious to take over on their terms, with their lists of demands, no negotiations, no more ’upstart’ talk regarding treaties or terms of surrender. Just submission. Capitulation. And governance by an entirely different political and business culture which they will decree, as many are starting to warn:

    “What I am saying is that if Ireland continues hurtling down this road which is close to default, the whole of Europe will be badly affected. The credibility of the euro will be badly affected. Then Spain might default, Italy and Greece,” Mr McWilliams said.

    He told Marian Finucane on RTE radio:

    “So it is very, very essential that we go to Europe and say: ‘Listen, we have a serious problem but the way we get out of it is either we default or we pull out of the euro, both of which is a disaster for us, bad even for the European project’.

    “We have to go to Europe and be more vociferous in the sense that we need more European financial solidarity; and by that I mean, if we have a single currency there are obligations and responsibilities from both sides, and the idea that Germany and France can just hang us out to dry as has been the talk in the last couple of days should not be taken lying down.”

    http://www.independent.ie/national-news/national-government-backed-by-73-per-cent-1605906.html

    The way to prevent the terms of this ’rescue’ being so onerous as to threaten the very integrity of Ireland as a Nation State is to enlist the assistance of your nearest neighbours, Britain and America. They will show Germany and France they have a cricket bat and a baseball bat in the boot of their respective cars, and will use it if ’fair play’ is abandoned during this temporary breakdown of ’the rules of the game’. Having been lectured endlessly by both Sarkasticy and Madame No! I’m sure they’ll quite enjoy showing that the Anglosphere version of State-Managed Capitalism hasn’t capitulated to the smug, simplistic platitudes of the ECB.

    In the longer term, this catastrophe may be the only thing to wake Irish people up to the fact that this is a War. There is an enemy. It is the enemy within which has used the rhetoric of 1916 liberation to disguise the fact it acts as colonialist masters to it’s own people. For the second time in 30 years, the country faces the abyss. It’s time to face up to that fact.

    Lenihan’s attempt to place the blame for Ireland’s woes on Britain retaining it’s right to a free-floating currency was the last throw of the dice of a desperate, incompetent loser. Nothing can change until he is escorted from the building. Needless to say Cowen cannot possibly continue as a figurehead for the nation.

    http://www.independent.ie/national-news/lenihan-attacks-uk-over-slide-in-sterling-1597840.html

    Or will the Irish people be fooled again?
    Will they, once more, give one more chance to their beloved ‘soldiers of destiny’?

    Regards.

  17. AndrewGMooney

    DMcW: ‘The minute Anglo was nationalised, the risk on Irish government debt jumped significantly because this disaster will be paid for by all of us. Our national debt has just – effectively – doubled and dodgy banks are now contaminating everything associated with Ireland. We will soon be downgraded. This means that, not only will we pay more for our debt, but we can forget about any infrastructural development paid for by public private partnerships. No one will touch us.’

    How likely is it, in percentage terms, that this Enron-esque contagion is limited to Anglo? Enron, like Anglo, could only thrive in a petri-dish of corruption which was assiduously lab-grown by other parties. The corruption that was Enron was the portent, the pre-cursor for the whole Wall Street meltdown. The stables weren’t swept by Dubya. It was covered up. Anglo will be covered up, whether by a ’toxic skip’ or ring-fencing/insuring the petri-dishes in the top security biohazard basements. All costs to be borne by as many generations of Irish Citizens as required. Any investigation or punishment will have to be foregone as it’s too ‘commercially sensitive’ to involve the police or the judiciary. How convenient.

    Do not be surprised to find other Irish banks have been running biological weapons programmes in their own basements. Only the Sovereign State now has the resources to detoxify the nation. But: There’s a real problem here.

    In order to prevent collapse, the Government must take ‘resolute action‘ against an entire hierarchy of arrogance, delusion and corruption if not overt criminality. But it appears to be at the top of that hierarchy and by it’s ‘protective’ actions toward miscreants further down: The Government has trashed it’s own credibility beyond repair. Ditto The Central Bank, The Regulators, all down the line. There isn’t just one ‘class act’ going on here. It’s the whole cast!

    If there was a functioning, credible Government it could force the other banks to finally come clean about the petri-dishes they have been cultivating, before the whole backwoods interbred banking system bankrupts the country. But there isn’t a functioning, credible Government. Is there?

    The crises will roll on until ’outside agents’ deem it appropriate and propitious to take over on their terms, with their lists of demands, no negotiations, no more ’upstart’ talk regarding treaties or terms of surrender. Just submission. Capitulation. And governance by an entirely different political and business culture which they will decree, as many are starting to warn:

    “What I am saying is that if Ireland continues hurtling down this road which is close to default, the whole of Europe will be badly affected. The credibility of the euro will be badly affected. Then Spain might default, Italy and Greece,” Mr McWilliams said.

    He told Marian Finucane on RTE radio:

    “So it is very, very essential that we go to Europe and say: ‘Listen, we have a serious problem but the way we get out of it is either we default or we pull out of the euro, both of which is a disaster for us, bad even for the European project’.

    “We have to go to Europe and be more vociferous in the sense that we need more European financial solidarity; and by that I mean, if we have a single currency there are obligations and responsibilities from both sides, and the idea that Germany and France can just hang us out to dry as has been the talk in the last couple of days should not be taken lying down.”

    The way to prevent the terms of this ’rescue’ being so onerous as to threaten the very integrity of Ireland as a Nation State is to enlist the assistance of your nearest neighbours, Britain and America. They will show Germany and France they have a cricket bat and a baseball bat in the boot of their respective cars, and will use it if ’fair play’ is abandoned during this temporary breakdown of ’the rules of the game’. Having been lectured endlessly by both Sarkasticy and Madame No! I’m sure they’ll quite enjoy showing that the Anglosphere version of State-Managed Capitalism hasn’t capitulated to the smug, simplistic platitudes of the ECB.

    In the longer term, this catastrophe may be the only thing to wake Irish people up to the fact that this is a War. There is an enemy. It is the enemy within which has used the rhetoric of 1916 liberation to act as colonialist masters to it’s own people. For the second time in 30 years, the country faces the abyss. It’s time to face up to that fact.

    Lenihan’s attempt to place the blame for Ireland’s woes on Britain retaining it’s right to a free-floating currency was the last throw of the dice of a desperate, incompetent loser. Nothing can change until he is escorted from the building. Needless to say Cowen cannot possibly continue as a figurehead for the nation.

    Or will the Irish people be fooled again? Will they, once more, give one more chance to their beloved ‘soldiers of destiny’?

    Regards.

  18. David,

    ‘Brian Lenihan should raise a huge bond on the international markets to finance the bad loans.The profits of all the banks, which have been bailed out, should be directed to service the interest on this, and the money will be used to pay the bad debts.’?

    Need to get a grip here. The interest payment on a bond of the size necessary to cover all potential bad debts is likely to cost more than Ire Inc., has ever seen, or will ever see, in a millennium of so-called ‘Celtic Tigers’.

    This is a global problem and the world has already borrowed itself to a standstill. We are witnessing its entry now into an era where bonds will become more expensive and eventually disappear. Ire Inc won’t be alone in this slide down the black hole to where all banks, all economies and all monies go ‘belly-up’.

    It’s an entertaining column with some entertaining comments but the solution hasn’t appeared yet. I can’t even see it on the horizon.

    • b

      Bullshit. The global problem argument is a red herring. We made this problem and we will never ever ever learn. The global crisis just highlighted problems that the deaf, dumb and blind could see with the Irish economy and the fraudualant fiasco that we allow and condone.

      Next election we will elect FIANNA FAIL YET AGAIN!

      We are a shower of thicks. We have no idea of risk and we believe that doing nothing is the safest option. Doing nothing is the most crazy, stupid and insane thing we have ever done.

      We need to open the Anglo Irish wing of Mountjoy and throw half of FF and Anglo into it. Maybe then we will get answers.

      All we have is Belvedere boy telling us that he has saved the world when in fact he has picked all our pockets to save his mates arses.

      • Woodsey

        @b

        No, we didn’t make the problem. We just joined the problem and the deaf, dumb and blind borrowed their way to oblivion. There is absolutely NOTHING that a tiny half-nation like Ireland can do to ‘spend our way out of a recession’ or ‘kick-start the economy’. There’s not enough money left on earth that can do that. Stop lashing about and start campaigning for half-decent representation. Even the Yanks succeeded in that!

  19. Peter

    Ernst & Young earned a combined €6.2 million in fees for its audit of Anglo Irish Bank and related accounting services over the last eight years, according to an analysis by The Sunday Business Post.

    In 2007 and in previous years, Ernst & Young signed off on Anglo Irish Bank’s accounts stating that they gave a true and fair view of the company’s financial position.
    http://www.thepost.ie/story/mhididmhgb/rss2/

    On face value this looks like negligent performance. Doctors get struck off and have to carry medical indemnity insurance to cover their liability for failure to diagnose systemic failures and ensure early, effective and corrective treatment.

    If this is Ireland’s ‘Enron’ then the auditors should be sued and indicted for potential criminal negligence, just like Arthur Anderson, Indictment of U.S. v. Arthur Andersen, LLP. http://news.findlaw.com/hdocs/docs/enron/usandersen030702ind.html

    This cosy cronyism, clientism and ‘tent class’ consensus thinking that has pervaded and still pervades in Ireland is a major obstacle to sorting out this mess going forward. FF and the Taoiseach presided over this and they are part of that systemic malaise and buffoon culture that resulted in this mess.

    This cosy consensus culture pervades the government, the HSE (horrendous waste on ‘Taj Mahal’ offices for administrators in Manorhamilton, maladministration of pensions, injury grants, sick pay schemes and no accountability through any corporate governance systems), Fas and other state agencies.

    FF and Mr Cowen have bottled this and need to go.

    Are we back to Boomtown Rats Banana Republic or was it thus all along?
    http://www.sing365.com/music/Lyric.nsf/Banana-Republic-lyrics-Boomtown-Rats/93C86456EB97023E48256E8C00112E23

  20. Deco

    Maybe part of the problem is “Europe”. I say “Europe” in invereted commas, because it is a positively spun euphemism for EU Institutional power. We are always told that Europe is essential to any solution. But here it seems to have caused the problem. And it seems that we are being striaghtjacketed from evaluating options that would preserve the working people considerable expense.

    The biggest losers in a collapse of ANIB, would be the Continental banks who funded them. The next biggest losers would be the large depositors, who are beyond the deposit gaurantee limit. These two categories would take the loss. The Irish taxpayer is now being asked to bail out private banks in Frankfurt, and the speculators at home. We do not have sovereingty when we end up doubling the national debt, to the benefit of people whom we do not see or here. We are not even capable of acting independently.

    Secondly the ECB and the Euro has inflated property in the PIGIS economies, particularly Ireland and Spain. Local politicians in these countries behaved recklessly. But the ECB kept lowering rates when they should have been raising them,and increasing them when they should have been lowering them. All so that we would have everything in line with the German economic cycle. This is really Euro-centrism at it’s most stupid. The urge to have all EU countries on the same level (even when it equates to mediocrity) is utterly stupifying.

    The Irish taxpayer is being asked to foot a bill ‘for Europe’. I wonder would we even had been given the option of allowing ANIB to sink. It seems that Lenihan conferred with Brussels throughout this episode, so that Brussels and Frankfurt would be informed of all developments. Now doubt, private bankers in Frankfurt are ready to slap Lenihan on the back for saving their necks. We must also remember the elite of this country who once again seem to do whatever is in their own interests to the detriment of all others. The role of Ahern is similar to Bush in America – [ act 'folksy', whilst looking after the big shots, the wheelers and dealers ('me freinds')].

    • Robert

      Deco, What on Earth are you talking about?

      So suddenly you’ve realised it’s all Europe’s fault?

      How is the EU responsible for greedy and selfish IRISH bankers and property developers/builders screwing the Irish people and then getting a massive bail-out by the Irish taxpayer!

      “The ECB kept lowering rates when they should have been raising them,and increasing them when they should have been lowering them” . . . .

      For whom do you refer? Was the ECB setup for the Irresponsible PIGIS Economies. Get real – The ECB sets interests rates for 500m people and it is not going to be too worried if a population of 4m in Ireland have decided to allow themselves to get ripped off by banks & property developers.

      What bill is the Irish taxayer “footing for Europe”?. The collapse of ANIB has nothing to do with Europe. Lenihan has to keep Frankfurt informed as we are members of the Euro and we have just increased our national debt by goodness knows how much!

      Absolute nonsense you’re talking.

      • Deco

        Two responses
        i) European Institutions should be open to criticism for their decisions-especially when they are not in the interests of 500 million people. We should examine ECB interest rate policy.

        ii) Criticism of EU institutions should is not {absolute nonsense} (your phrase) or any sign of madness, or as being deficient in some manner. The concept of being somehow more sophisticated than average because of affiliation with the EU institutions deserves to be questioned.

        Firstly, I did not make the EU is not responsible for the reckless behaviour of individuals, and cadres (groups of like minded individuals) in Irish banking. But that does not mena the EU should be allowed to escape the blame for creating the conditions that gave rise to what has happened. The environment created by the Euro, low interest rates, and the cross border lending are definitely supportive to the entire Fiasco.

        The ECB interest regime over the last eight years has been benign to Germany. Sure the Germans provide the biggest part of the EU budget. But let’s be honest – Ireland (plus Spain and the the other PIGIS) did not need low interest rates between 2002 and 2005. In fact low interest rates ensured that there would be asset bubbles in countries where interest rates were previously higher.

        Germany did need low interest rates. The PIGIS in population are larger than Germany plus Benelux, though smaller in economic output. The politicians in the PIGIS economies in this period (especially Ahern and Zapatero) behaved like idiots. Likewise bankers behaved recklessly. There was a housing bubble in half of Europe thanks to low interest rates – but the ECB made a few ‘pronouncements’ (which were derided by BOI economists etc..) and left interest rates alone. It created a ‘honeymoon period’ in the aftermath of the accession countries joining the EU. Was this a political objective taking precendence over the economic objective ? We have typical EU horsetrading. The Germans foot the bill, and in return the ECB places their interests first. The PIGIS get grant assistance, they are ‘enthusiastic’ supporters as a result, and their politicians start prancing around like economic geniuses. The low interest rates sustain Euroland demand and act as a boon to the East European countries. For five years after the integration of the new accession states, cheap money in Western Europe fights deflation caused by lower cost bases in Poland. And to make sure that there is no deflation, France and Germany ban Poles, Czechs, etc from joining their labour markets in an unrestricted manner. But they can go to Spain, Irl, UK in any case.

        The ECB should have increased interest rates, but instead waited for Germany to hold it’s economic output. This caused two economic cycles. A boom in the PIGIS, and a easing of a bust in Germany/Benelux. It also caused crowding out of investment in countries experiencing housing bubbles, and malinvestment. The EU pontificated, whilst facilitating the Germans.

        Secondly, there is this perception that “Europe” is somehow or other sacrosanct. Criticism of “Europe” is just deemed an immediate sign of madness. But we have been here before. “Europe” has become a bit like the concept of “Holy Christendom” before Luther hammered his Theses to Wittenburg Cathedral. Any scepticism about the real effectiveness of EU institutions, and the interests at play in the way European Institutions operate is deemed to be a form of contemporary heresy. Basically critics are to be labelled in such a manner that the rest of society will not listen to them. The real danger is always that they might open up the minds of other human beings to analysis of their situation. Luther won because he had the printing press. Jan Hus and his supporters were murdered a century previously, because they could be isolated and then silenced. The Vatican has since apologised for it’s behaviour in both the Jan Hus and the Luther episodes, with the deepest remorse.

        I do not trust authority frameworks that disregard all forms of criticism, by calling the critics intellectually challenged. Wait and see who the next EU Commisioner will be. Or even better look at the former British EU Commisioner – who walks from one scandal to the next. Just like Medieval Rome acted as a magnet for the Borgias, contemporary Brussels seems to attract all sorts of corrupt elements. Hey – look at the time we sent over Pee Flynn. Pee was a problem here. But in Brussels Pee fitted right in and got on great with everyone – except Patricia McKenna. The Irish Times never said a bad word about Pee when he became Commisioner Pee. As a EU official he was granted an indulgence of sorts, (too borrow from the Reformation). Pee repented, dropped all his previous declared stances faster than a Borgia Pope could hide all his illegitimate children, and announced that he was always a bit of feminist. Pee, it seems, then became competely absolved of all of his previous sins :)))) Like the thief in the village after buying his piece of paper from Johann Tetzel, Pee was on his way to official rehabilitation.

        And Pee seemed to have picked up a thing or two from life in Brussels. We know he picked up a fondness for having multiple residences and servants on hand. He also developed a taste for the finer things in life. He discovered a tendency to answer no questions to the media – just walk a way and say nothing – which he has to this day. Brussels left Pee a much different class of politician. He just learned to do as he wished and never say a word afterwards.

        In fact it was a disgruntled nobody called Gilmartin who was the undoing of Pee. When challenged afront with Gilmartin’s criticism of him, resolved that his critic was “not at all well – well you see his wife was a very sick….and it had a terrible effect on him….he is not at all well”. Another typically EU enthusiast type response :)))

      • I’m more inclined to believe the ECB sets interest rates for around 82 million people in Germany. The rest of us tag along. Of course it’s not their fault we were irresponsible but people are irrational and irresponsible, which creates booms and busts. It’s simply human nature. Hence, governments have always had to use financial policy instruments to try and stop them from financially killing themselves and to reduce/increase financial pressure at the right time. We handed over control of that valve to Germany.

        Also, German bankers were big consumers of sup-prime derivatives. They weren’t nearly so dull and conservative as we would have hoped. Sometimes we get caught up with national stereotypes and forget that everyone can be greedy and stupid regardless of their circumstances.

        The oft-made argument that Britain didn’t change to the Euro but still have problems doesn’t work either. They’re affected by their main trading partners in the EU. The need to maintain “competitiveness” dictates financial policy even if we’re competing like lemmings to jump into the nearest abyss.

        The major culprits seem to be poor or “light touch” regulation in the PIGIS and the debt frenzy created by a sustained period of low interest rates which are set by the ECB. I don’t think Deco is talking nonsense. However, it’s doubtful whether any Irish government would have moved to raise interest rates internally if we had opted out of the Euro. It would be seen as stifling our competitiveness. EMU is an elephant in the room that we can’t just ignore.

        So when David calls for us to reevaulate our Euro membership I’m a bit skeptical. We’d have to change our thinking (and our leaders) radically for that to have any lasting benefit.

    • Malcolm McClure

      Deco said: “We are always told that Europe is essential to any solution. But here it seems to have caused the problem.”

      There is no EU treasury or debt union to back up the single currency. The ECB is not allowed to launch bail-outs by EU law. Each country must save its own skin, yet none has full control of the policy instruments.
      Germany has vetoed French and Italian ideas for an EU lifeboat fund. The former knows exactly where that leads. It is a Trojan horse that will be used one day to co-opt German taxpayers into rescues for less Teutonic EMU kin.

  21. Robert

    There may be some people out there who believe that things will change as a result of what has happened over the past 18 years.

    I refer you to:

    http://www.timesonline.co.uk/tol/news/world/ireland/article5537405.ece

    Maybe this is what Cowen means when he talks of “business as usual”.

  22. Sam

    David in your SBP article you have gone overboard a bit. Anglo is not Ireland’s Enron. If this is the worst that gets thrown at us (and I doubt that it will be), then we have got off very lightly indeed. Nobody has even suggested fraud.

    To elucidate:

    Enron’s share plunge from $90 to 50 cents occurred after revelations that much of its profits and revenue were the result of deals with special purpose entities (limited partnerships which it controlled). This wheeze was to ensure that many of Enron’s debts and the losses that it suffered were not reported in its financial statements.

    Sixteen of Enron’s executives pleaded guilty and were indicted on fraud, money laundering, conspiracy charges and wire fraud.

    Five others, including four former Merrill Lynch employees, were found guilty at trial. Oh, and Enron gave approximately US$7 million to political figures. (Hmmmm?)

    Arthur Andersen was convicted of obstruction of justice for shredding documents relating to its audit of Enron.

    No, Anglo is not Enron; but wait for it….. there’s one to come. It’s simmering slowly at present.

  23. Rob

    I completely agree with the last comment and Deco you are way off the mark…even blaming FG for the current crisis that made me laugh…if anything the FG/Labour coalition put a lot of the groundwork for the actual boom into place only to see it hyper extended and ultimately blown by FF. For the country to gain back respect and credit worthiness heads will need to roll, not for the sake of it but lets be honest because those heads have failed. Ireland is still very ultra catholic in mannerisms, you can sin and sin again and yet all is forgiven. In essence a very cosy cartel of bankers, senior civil servants, politicians, accountants, auditors even media have failed the people, this generation should in fact be sacked and pensioned off with a fairly modest pension so they can reflect on the damage they have done to this country. A real sense of power must lie in an elected government (which this government is not) where land is seen as something to be built on ‘in the common good’ and not as speculative profits. A sense of balance, fairness and lets face socialism must come into the framework and lets face it we have seen the worst side of capitalism and of socialism in this country let loose. For Ireland Inc to forge ahead we are going to actually need some fairly radical shifts in thought and behaviour. The frightening scenario is that we may not have the belief/confidence/ability/will power to adopt these methods and we will become a kind of ghostly backwater place that David painted in one of his documentaries…(Uruguay/Paraguay…i forget which)…..

    • Deco

      I do not recollect FG at any point in the boom ever recommending to place money aside for the rainy day – and certainly not Gay Mitchell. Gay Mitchell has a tendency to come upwith stupid comments from time to time – bringing the Olympics to Dublin, demanding a full apology from off the cuff remarks by the German Ambassador, etc.. Mitchell’s comments are pure opportunism. Labour spent the last five years complaining about everything FF did not do. That was about all they did. Regardless of whether or not FF got it right or wrong. In fact whenever FF got it right, Labour went really overboad. Labour derided FF for putting money in the National Pension Fund, when they had ideas themselves on what to do with it. Joan Burton savaged McCreevy “for taking money out of the economy” when he created the SSIA savers scheme. Burton also challenged it as an “ideological move” by McCreevy – when he gave taxpayers back their money – instead of throwing it into an inflationary economy. McCreevy’s efforts to get people saving in a private capacity during the boom garnered severe criticism from Joan Burton.
      Joan Burton made a speech before Christmas where she complained that the problem was a ‘lack of money in the economy – that there is no money in the economy, and the government are to blame’. Amazing insight on an economy at a time of recession, from somebody who wants to run the Finance Ministry. [Joan, we are in a recession - there is usually a big lack of money in a recession.... ]. The entire approach of Labour leaves me convinced that they are absolutely clueless about this problem – except maybe in opportunist terms.

      The point I am making is that FG and Labour are going to have to come up with better than changing their minds about what their policies were during the boom. They seem to think that slightly better than FF, with loads of spin is sufficient to get back into power.

      I don’t care whether it is or not. Neither have a framework for fixing this country. I am particularly disappointed in Richard Bruton, the lone economist in the Dail – who seems to be flip-flopping on how to handle bankrupt banks, and bank nationalization. I was hoping he would be an anchor for FG policy.

      I found myself agreeing with Gormless, for what must have been the first time ever, this week. Gormless declared that ‘the opposition are just playing politics…I want to hear from them what concrete proposals they have for dealing with this crisis…so far they have come up with nothing concrete…just criticism’. For once, Gormless was right. There is no policy framework to deal with the crisis. Basically the opposition can attack – but they have nothing to offer the people. Despite this, Eamonn Gilmore still thinks he should be Taoiseach. I think he should come up with better. And he should replace Burton-her grasp of recessionary economics is inadequate, to say the least.

      Really – nobody in the Dail knows what to deal with this. Senator Shane Ross knows more than the lot of them put together.

    • Colin

      I think you’ll find the church’s view on forgiveness is not the wishy washy view you portrayed. To be forgiven at confession, you must be truly contrite and endeavour not to sin again. Absolution is not given to the man who comes into the confession box every monday saying he spent the weekend spending all the household’s money on drink and drugs, went home to beat up the wife, raped his wife in the morning and so on.

  24. My Lost Generation

    To get back to the patrimonialism raised by Furrylugs ealier today, it seems that FF are protecting the interests of the wealthy class of Ireland. This has been proven and agreed many times.
    Also the chances of creating the same boom years are extremely unlikely in our lifetime.
    Therefore is FF trying to save and get as much money and safety as possible for themselves and their protected friends before they move aside.
    Sometimes I wonder if that is not part of the plan, a bit like the Bertie Ahern exit,
    >create havoc and indignation among the irish citizens but then again,
    >once they would have left their responsibilities, not be accountable anymore and have filled their bank accounts, secured the financial interests of most of their friends with tax payers’ money, eg Pension fund.
    Does anyone think so?
    Would a general election be benificial to FF once they finished looking after themselves and the wealthiest with the tax Payers’ money? Is that what they are getting at?

    • Furrylugs

      My Lost,
      It stands to reason that if the nepotism discussed here over the past few months is actually in existence, then it stands to the reason of the common man that protection of the few for the greater good must be implimented.
      Thus the “phoney war” period has afforded those with something to hide ample time at the shredder.

      FF, FG, Labour and all the Soaks up in Dublin are playing politics on the back of a catastrophe to position themselves for power. Same old. Same old.

      Do you think that the pensioners that demonstrated came from rural villages and hillsides? No. they were the retired Civil Service Fathers and Mothers who put the current crew in place. They were just giving young “Johnny” a bloody nose to protect their birthright.

      It’s alright generalising about sections of the country, PS or whatever, but we need to be specific now and start with the “families” who have the birthright. Strip them. Then move on.

  25. John ALLEN

    the facts are that our government have abdicated and our army in foreign lands and foreign predators are ‘vulture-like ‘ ready to devour our decimated economy , replace our obnoxious laws , demote our PS , deny our rights to a Lisbon Vote again , and commit us to Slavery. In the meantime Cowen & Lenahan are in a Dug Out Bunker Drunk spluttering gibberish nonesensical impure thoughts and rehersing their lines in The Fall of Berlin only this This its REAL

  26. gearoid

    Only the threat or potential threat of non-mainstream politicians standing , or some loose alliance of independents standing as anti-corruption or anti-establishment canditates in the local elections will produce any kind of serious change from the main poticial parties.
    For that to happen ordinary people will have to take an interest and be willing to stand up and be counted.
    Email affords us all an opportunity to make an impression on both local and national politicians. Even as individuals sending emails to our TDs and Councillors, we can make an impression, collectively we can make an even bigger one.
    Obama has proven the power of the internet.
    Are there people logging on to this site willing to take part in as simple an action as sending emails demanding full discloure of the reasons why Anglo is being nationalised and demanding to know who exactly will be benefitting – we know it is not the taxpayer or the shareholders ?

    We must put up or shut up !

    • Deco

      Like Senator Shane Ross !!

    • Johnny Dunne

      Georoid, good idea.

      I think at this stage the Government and the Dept of Finance need to communicate clearly on why they are nationalising Anglo after already guaranteeing ALL the liabilities of the covered banks ? Reading papers today, it seems a ‘rush’ job without even the Taoiseach in attendance at the Cabinet meeting on Thursday. Who is giving ‘independent’ advice ? Merrill Lynch ? Are they seeing the ‘wood from the trees’ ? Do they understand ireland ?

      Or maybe they have just been ‘spooked’ by some of the suits in the city of London- see FT Lex comment on Friday – http://specials.ft.com/vtf_pdf/170109_BACK1_ASI.pdf

      Here is a response I got from Minister Lenihan when I expressed concern about the potential exposure of the guarantees of all liabilities….

      “I am directed by the Minister for Finance, Mr. Brian Lenihan, T.D., to thank you for your recent e-mail. The Government’s objective in introducing the Credit Institutions (Financial Support) Scheme 2008 was to maintain financial stability for the benefit of depositors and businesses in general, and the Irish economy as a whole. This action was taken following advice from the Governor of the Central Bank and the Financial Regulator about the impact of the recent international market turmoil on the Irish banking system. The guarantee is being provided at a charge to the covered institutions. The scheme provides a detailed framework for the authorities to oversee and guide the assessment of strategic options by the banks themselves in support of the objectives of the scheme, which include preventing any abuse of the guarantee and minimising the potential cost to the Exchequer and taxpayers.”

      The Department of Finance say this about the “advice from the Governor of the Central Bank and the Financial Regulator” and then go for nationalisation – so I assume they now think this minimises the exposure to the taxpayer ? But how ? Will we hear the answer from the Regulator (decisionmaker?) before or after he retires ?

      Alternative course of action needs to be considered or at least the downside covered in the legislation on Tuesday. At the time of the guarantee Lenihan said the banking system would have collapsed without the guarantee of financial support from the government. A takeover from the Irish Government would have been the only alternative to collapse (which they are doing now with Anglo and who knows with AIB/BOI next ??), if all went ‘wrong’ afterwards then the ‘maximum’ the tax payer would be out for would be the compensation payment to the shareholders. The government could make a commitment to compensate any deposits ‘ring fenced’ to ‘Irish’ resident customers & business accounts only and not be exposed to the liabilities owned and held outside the state which could be over €70 billion in the case of Anglo alone ? Nationalising can’t prevent all of these guys from taking thier deposits elsewhere or calling in the loans to Anglo – so what is Neary thinking ?

  27. I think the buildind skip ”BAD ASS’ BANK” (buying up bad/toxic assets) seems a sensible move.
    But how do you know how deep the hole is, how much these (the complicated packages) are worth. They might be toxic but on paper they’re worth quite a sum (to the bank/s) under ”normal circumstances.” What will the (”BAD ASS’ BANK”) the STATE (taxpayer) pay for the bad assets.

    The State pay the toxic debt with the huge amount of money made: the bond on the international markets. The banks must do enough business to service the interest.
    You’re counting on the economy to recover, and asking the rich to pay more or in effect, take less in return for their investment that’s keep the (recovery) economy going.

    It seems to me just the short way round to admitting the reality (which is no doubt a good thing) or is there a bit I’m missing …the bit in between the recovery (5/10 years, or would it be immediate after we admit: ”we were all cowboys, but we’re all alright now.

    Could anyone explain this to me without being a smart ass. In layman’s terms how this would turn the economy around.

    • McGoo

      As I understand it, the idea is that with all the toxic assets moved to one bank, the wholesale money markets will start lending to the other banks again, who will in turn lend to businesses, and so keep the economy “greased” with credit.

      I’m not convinced. Since it was too much credit that got the world into this mess in the first place, I don’t see how even more credit is going to get us out. But I’m not an economist.

  28. John ALLEN

    taxpayers are strugling to earn a decent living and pay just taxes and if the gov are to ask them to play casino with a skip bank then that cannot be equity – a reality check is needed

  29. Big Bad BoB

    David says Anglo is an Irish Enron.

    Others on here say no.

    The day the Govt. start up a “Mahon” type tribunal into Anglo is the day the boys all get off.

    Drumm and his excutives pals and the Chairman who played legal kiting will all keep their big houses and their big pensions all paid for by the muppets who are resident tax payers of this country.

    This Govt is afraid to go after these pillars of society , more likely because , like rats on a sinking ship , the Govt, know that the boys in Anglo wont go down on their own without bringing others with them.

    Like so much of this country’s sordid history , Heads in the sand, sleeping dogs lie, lie …….

  30. Mo Sizlack

    “no, Anglo is not Enron; but wait for it….. there’s one to come. It’s simmering slowly at present”.

    Sam would you be hinting at another fine Banking establishment ?

    A big Two , or as DMcW refers to them as…….. “they like to hold their noses and look down on Anglo”

    • Sam

      No, a very toxic small one. A facilitator. We don’t really need to create a “bad bank” or skip, we already have one…. and it’s not Anglo. The loan shortfalls there will make Anglo’s losses pale into insignificance.

  31. Enron was a tragedy for its employees and shareholders but AIBC may have implications for taxpayers for years to come.

    The reputational impact on international investors who have been the majority owners of Ireland’s top public companies and on foreign direct investment – - the US government says Ireland is more dependent on US firms, than any other developed economy – is also likely to be significant.

    As for using the threat of pulling out of the euro as a bargaining tool for a European bail-out, countries such as Germany and France should give a resounding PFO until Cowen produces a credible plan to put Irish finances back on track.

    We took German money, then became arrogant nouveau riche and now we’re back rattling the tin ponny after the likes of McCreevy and others told the Commission to take a hike when it warned about the casino economy.

    There is also a sense of déjà vu about the proposal to turn the ancestral home of Obama’s great-great-great grandfather on his mother’s side, into a heritage centre.

    All we need now is to give the old victim’s cross a fresh lick of varnish and we’ll be away in a hack!

  32. Sam

    To reply more fully to Mo:
    Anglo Irish is not the worst bank in terms of exposure to toxic property loans. That honour falls to Irish Nationwide. The bank that provided the “bed and breakfast” to Sean Fitzpatrick’s loans.

    A relevant question is “was the “B&B” recipricated?” Why is this a relevant question? Answer: Because the IN Chief Executive, Michael Fingleton also participates in the property market in partnership with bank customers and provides mezzanine finance to them on a large scale. Mezzanine finance, is of course, far riskier than normal lending as it provides funds for the equity that is at risk before the bank’s proportion is vulnerable. It is therefore the first money to be wiped out totally if there is any reduction at all in the sales price of the underlying property asset.

    Anglo Irish very rarely, if ever, participated in profit share deals with their customers and had the buffer of the equity injected by those customers plus the cross collateralisation of other assets including personal guarantees. Mezzanine finance provied in return for profit participation has no such buffer. In terms of size Irish nationwide may be smaller than Anglo – but in quality terms, its loan book is more toxic by far.

    • Deco

      INBS Irish Nepotism Building Society. Their debt rating has been downgraded substantially to nearly junk status. This is the problem – once you save one – you end up exposing the taxpayer to them all.

  33. Malcolm McClure

    David said:” Brian Lenihan should raise a huge bond on the international markets to finance the bad loans.”
    Sorry, David I just don’t get it. Who in their right mind would put a bent penny into a bond issued expressly to finance bad loans?
    If the bond issue is intended to keep the Skip Bank solvent, then as more and more bad loans are tipped in the skip, there is greater liklihood that the entire Irish financial system will sink beneath the waves.

    We obviously need a Keynesian solution to this mess but no can do, because he ECB is not allowed to launch bail-outs by EU law. Each country must save its own skin, yet none has individual control of base interest rates or money supply.

    My previous once-off capital raising suggestion was that we package hypothetical tax and royalty revenue from future oil, gas and mineral discoveries both on- and off-shore and seek bids for 50% of that perpetual revenue stream (which might be small but could be enormous.)

    • Sam

      Correct Malcolm, Ireland has guaranteed its whole banking system, which is five times GDP in a currency over which it doesn’t even have sovereignty.

      Further, the eurozone is not a homogenous economic bloc. There are weak economies and strong ones, and there is stress in the system. It is questionable whether the euro can survive in its current form over the long term. It will be severely tested in the next two years. There may need to be a two tier euro. Euro A for the stable economies and Euro B for the weaker ones. The weaker ones are known as the PIIGS (Portugal, Ireland, Italy, Greece and Spain).

      We are already feeling the pinch in terms of interest rate spreads. Within the euro, ours are going up. That should tell you what the market thinks of our chances of staying with the “big boys”.

  34. John ALLEN

    part of the solution i believe is

    a new republic

    claiming a sovereign chapter 11 bankruptcy

    bankrupt the toxic banks

    devalue but this time pegged to euro with a new anglopunt

    create more jobs with lower costs

    rejoin the EU

  35. roc

    David,

    I’m thinking that a large part of the problem loans will be ordinary people. Mortgages, credit cards etc. The extent of these problem loans will become worse as time goes on.

    If the government owns these loans, they will then have a duty to taxpayers to pursue these loans, at least as hard as the banks would have pursued them.

    Since the government is so much more powerful than the banks (at least in the power it can publicly manifest), I’m a little worried that we will be setting up the conditions for more totalitarian government.

    Actually, I’m very worried about this.

    • Tim

      roc, I am too. Remember what government ordered Revenue to do in the ’80s? Thousands of small businesses closed and fined and all employees dumped onto the dole. The amount of tax owed …… 2,000 -4,000 punts for some. Yet the government enforced the rules RUTHLESSLY on the little-guy, even though it would have been better for all of us to just leave them alone and let them keep their handful of people each employed.

      roc, your fears are well-founded.

  36. John ALLEN

    today as part of my regular 2000meters swim i could only swim 500 meters all the time i was looking at the bottom and that reminded me of Anglo

  37. Mo Sizlack

    Thanks Sam,

    The Mezzanine type loans would the big two have been offering them to their clients ?

    Would Both the big two have been involved in Global syndicated deals with the like of HBOS, RBS etc etc that would include these type of loans.

    If the loan goes bad in a syndicated deal do all particpants take the hit of just the lead bank ?

    Would alot of the big Irish property deals been syndicated amongst Irish Banks ?

    Or were they done as 100% deals , or in Poker terms …..”All in”…..om a pair of 6′s

  38. Tim

    Deco, we need the other Mitchell, the Senator from The US, back here to manage this thing – you know the guy who reallt did the work up North? No more tribunals; Mitchell could be a financial ombudsman with strong statutory powers to prosecute.

    • Deco

      Actually Eliot Spitzer has some excellent qualities and a great track record in dealing with networks of cronies, and taking them head on. He used to be Attorney General for New York State. He spent the time trying to tackle corrupt practices on Wall Street. George Mitchel might be too soft. We need a public official who could be really tough on these people. Not just ANIB. But others like INBS as well. Tough on the auditors. Apparently EY earned multimillion Euro fees for each audit of ANIB. Clearly they were not doing a great job for all that expense !! EY deserve a mention in Eddie Hobbs new magazine as being a king sized rip off merchants. :))) The new ANIB won’t need that expense – the Department of Finance can do the job themselves.

      There are requirements for David McWs “Untouchables”.

      We need prosecuters who are not in any way connected to the system of address book privelege that exists in Dublin. It has to be an outsider – but an outsider who is tough. Training as a commercial lawyer or an accountant in the financial services industry would be beneficial. We need somebody with a tough egaliterean streak, who has no time for all the ‘networks and notions of privelege’ manure, prevalent in Dublin corporate hierarchies, in particular.

      I am sure that there are plenty of people from the West of Ireland working in the City of London or perhaps even New York, who could be called upon to do the job. People who would have been good enough to get a job in finance in Ireland, but for all the nepotism and favouritism that predominates in it. It would help if we got somebody who knocked around a bit – because we can only assume that his eyes would be opened in a way that would never occur in innocent places like London or New York.

      According to today’s Sunday Indo – there is a commercial lawyer in Dublin trying to build a class action suit against the former directors of ANIB. Alan Shatter TD, in offering his opinion, in the same newspaper, mentioned that he thinks that Patrick Neary will be brought into this as well, as a liable party. So Neary, you have not escaped.

      It remains to be seen how the department of Finance ‘manages’ ANIB. And, most importantly – what will they find in ANIB, when they look inside the engine. I actually think Lenihan is doing what he thinks is his best – it is just that he is completely out of his depth both in terms of his knowledge of finance, and even more so in terms of his knowledge of human motive and deception. Lenihan is just too innocent for these gangsters, and the way they operate. I am also concerned that Lenihan might have acted at the behest of the other bankers – who wanted to prevent ANIB sinking, in case their careers would follow. You just never know what all the agendas at play with these people !!

  39. John ALLEN

    irish mindset is Atlantean and unlike mainland europe and its culture came from Ossetia via middle east & mediteranean sea ( da wu yu code )

    • b

      Seriously! Shut it.

      • Tim

        b, please stop trying to censor John Allen.

        That’s once; I have asked you.

        • b

          I am not censoring. I am tired of the new age astrology crap that keeps appearing under the name JOHN ALLEN.

          If Dee Noblesse (John Allen) started using sentences, grammer, punctuation and spelling instead of trolling this site with crap about her book the Da Wu Yu Code we might get somewhere.

          I would remind you Tim that I am one of the only people to actually be censored on this site.

        • Tim

          b, how were you censored? and John Allen has very useful contributions on occasion, so give him a break, will ya? We are all only trying our best to contribute something.

          Let’s not stifle anybody.

          The D4 crowd managed to do that to DMcW for the last 8 years; look where ignoring the dissenting voice has brought us to?

        • b

          1. I got banned tice by the site moderator.

          2. John Allen isn’t a John and I have had enough of the Da Ja Wu Code. Its not relevant.

          3. “Lets not stifle anybody” I read as being Politically Correct. Look where that got us.

          The D4 crowd of which David McWilliams is/was hasn’t stifled anyone. If anyone it was the Drumcondra Mafia and the general public willingness to suspend their faculties and flip houses and “invest” in property. Lets not abdicate responsability totally. D4 took advantage but they didn’t force you to sign on the dotted line. Most of the stifling is self censorship and groupthink.

          I got thrown out of the D4 crowd you refer to and I have no love for them and their ways but we got the politicians we deserved and the economy we deserved by not asking the hard questions.

          We never asked the hard questions of Dev, Charlie or Bertie. What makes people think its going to change now?

  40. goinghome

    Coincidentally today I watched the Enron film documentary (The Smartest Guys in the Room). Several observations by interviewees drew my attention. The main initial whistle-blower opined that the saga was not an aberration but was facilitated by the diffusion of responsibility. One of the brokers was sure that it couldn’t have happened without complicity across the board, from banks, trading and accounting companies, politicians etc. A senator commented that the free market left to its own devices is dangerous for the customer.

    So now Enronesque behaviour is exposed in Ireland, and as in the US, the normality of irregulaties and its accommodation by authorities, is dawning. Is it human nature to profit from opportunities and continue ratcheting up inequalities, or has our social culture, as is suggested in the film and elsewhere, taken a turn for the worse in capitalist accumulation? Is there a realistic alternative to the routine unsavoury fall-out from the primacy of economic growth?

    Thanks David, for your years of refusal to be taken in. : )

  41. Ed

    Tim, you’ve reminded me of the carry on with the revenue during the 80s – they were so out of control. My brother had a audit in the 80s and the opening remark from the tax guy was “ I can floor you “ my brother was so confused and shocked by the remark that he retorted “ physically, you mean”- “no” says he “financially”.
    I had a company in the 80s and the revenue duplicated it on their records – every two months we’d have a visit from the sheriff looking for an amount equal to tax the paid by the first. This went on for years and now way would they stop pestering us – the attitude back then among civil servants was that they if you were in business, you were a criminal and they would just laugh at you if you called them over a phone.
    In the end it became almost impossible to have a potential client come to the office for fear that a tax guy would arrive during a meeting.. Once we had this English businessman over to discuss a proposal and a tax guy came barging in shouting “tax”- needless to say, we didn’t do business with him. In the end we just wound it up and left the country for a period. I know, it’s laughable now, but we could be back to those days again very soon.

    • Furrylugs

      If those sort of jobsworths arrive on the scene Ed, there definitely will be blood spilt this time.

    • Tim

      Ed, now, see, that’s a perfect example of what I am talking about. We do not want to go back there. Not only because of the reasons cited, but for another, clever one, that Charlie McCreevy (actually) sorted out in (I think) his first year as Finance Minister: the cost in terms of “man-hours” put in by the revenue auditors to “catch” the miscreant businessman for 4,000 punts actually Cost the exchequer 30,000. RIDICULOUS! But this is what they were doing: regardless of the cost of the investigation, it was pursued! Crazy!

      You chase the TAX, you get the TAX; you pay more to get the TAX than the TAX is and, in the process, put ten people on the dole, which the exchequer, then, has to pay – with ZERO productivity from the payees.

      Let’s NOT return to that kind of revenue zeal.

  42. VincentH

    Certain problems go back to the early eighties when it became an imperative that the debt ratio of the books of all big public companies was such that this debt became a brake on takeovers. But as time went on this debt ratio expanded exponentially. And it became like the housing market where it was not the income that was important but the increase in the value. This was always going to hit a huge wall.
    We have been since 98ish on a rollercoaster speeding faster and faster to the end of the track. Hoping against hope that someone was building extra track or at least a loop. And property was the fuel. Had we went for more investment in business start ups, but no. If I might change to the idea of a gold rush, old style, where there is little or no law. Nor gold for that matter.
    All we did was continued with the model of subcontracting we have used all over the world , and this works when there is an Design, an idea for the over all.
    Anyway I see a few problems, the level of debt on the books- waterford glass, Eircom etc. The banks, and the amount of private property debt. And that China India ect, has removed all employment from the middle middleclass and below. For the basic problem with toxic debt in the USA is not that the loans were given, but that the loans could not possibly be serviced. And the moving of even more manufacturing to China et al was bringing even more loans into the area of the toxic.
    Similar here, once rents which were paying the loans went above a level. That little free thread would pull a good deal more along with it. There really is a time in life when living like a student gets pale.

  43. alan

    Looking at Finance Minister Lenihan on TV over the last few days, I suddenly feel for the guy on a human level. He looks desperately unhealthy and has the look of a man with insufficient sleep, a very bad diet and has the look of having suffered severe stress in recent weeks. On tv tonight he looks like a man who could do with a few days off where clearly this is not practical right now. This begs the question, who is assisting the man, are there sufficiently able people within his department available to assist, to step up to the plate so to speak? (There are certainly a considerable number of individuals drawing down salaries of a level which would suggest there are)
    The oft mentioned Merrill Lynch (or should that be BOfA now?) advisors are conspicuous by their absence in my mind – exactly how many people have ML made available to assist and what are their areas of specialism? What are they bringing to the party?
    The point being, I understand the people making these decisions are operating in a high pressure environment where decisions need to be made very quickly and where reasoned logical judgement is critical. However, do we have stable hands at the tiller?

    • b

      Who cares how tired he is. Who honestly cares who is advising him because the ‘advice he got up to now is useless. He sat there like a fool for the last 11 years telling us it was all great when it is patently obvious that is was not!

      We need a stable hand in a crisis but the crisis is of our own making. Anyone who said anything contrary to the party line during the Celtic Tiger era was told to go and jump.

      Our problems started when there was an oversupply of money not the sudden stop in supply. If we were the rich country we thought we were we would weather the storm. As per usual Fianna Fail excelled in the bullshit department and nowhere else.

      The man may be under pressure and if he cracks replace him. Replace him with a shop dummy. The lack of leadership and lack of decisions will be the same.

      • Tim

        b, “the rich country we thought we were “;

        Not all of us believed the spin; Not allof us fell for it; Not all of us even saw the celtic tiger; not all of us “got drunk on property”; not all of us pursued wealth above all else; not all of us bought a second house; not all of us bought new cars.

        Some of us, actually, just scraped by. Some of us just “lived”, as normal, and wondered why the media and the government were telling us, every day, that we were all rich.

        I was not; I am not; I do not mind; its not what I want.

        Why did so many people think that it should be what I want?

        • b

          When you see more Range Rovers than Micras then there is something wrong.

          We did think we were a rich country. In the same way that some people don’t drink some didn’t buy the Celtic Tiger either.

          “Why did so many people think that it should be what I want?” Because thats what we get from our leaders. They say one thing and do the opposite.

        • Colin

          Tim,

          Tell me of another country whose taxi drivers own properties in spain?

          Tell me of another country whose hairdressers go shopping in New York?

          Tell me of another country whose bar owners part own english football clubs?

          Tell me of another country whose electricians drive SUVs?

          Tell me of another country whose barbers charge €20 for a proper gents haircut?

          Tell me of another country whose plasterers own multiple properties?

          I could go on. All of the above are not professionals, they are your traditional working class folk. Are you still trying to tell us that we collectively didn’t think of ourselves as rich? Have you never heard anyone tell you that €100 in your pocket isn’t enough for a good night out?

          You didn’t need to participate in it to notice it. All you had to do was walk around with your eyes and ears open. Not everyone participated in it, but it was still the predominant choice of lifestyle.

        • Deco

          Colin….
          Tell me of a country where…..etc…
          …not any more they don’t….that was 2005-2006.
          That was all based on borrowings. It was not based on real earnings. The problem was that the Irish way of inflation and profiteering went completely overboard. We completely lost our bearing as a society. The media whipped it up – especially The Irish Times, 2FM, and TV3. Ahern became the celebrity Taoiseach. Our entire mainstream popular culture was of excess.

          But not everybody went along. Many just ignored it, and queitly went about their duties, slightly suspicious of the entire thing.
          Every citizen has the right to their own independent mind, their own conscience. And some people did decide that the annual mad rush to Cheltenham was excessive. Some people did think that flying to New York for shopping was beyond the realms of necessity. Mostly people who opted out, were never consulted for their opinions. They were as welcome as Shane Ross at a bankers AGM. Opinions voicing scepticism about the state of the economy, and the bubble in borrowing were completely absent from the Gerry Ryan show in 2006. Eddie Hobbs was scaled down in RTE to make sure he never ever threatened ‘consumer confidence’. Banning him would have aroused suspicion. And there were a lot of people sceptical of Ahern. If you look at the last election, you will see a string of constituencies in the provinces, many along the Atlantic coast, where FF were losing their seats they held for generations. There was even an episode where a woman even threw an egg at Bertie Ahern in Sligo.

          It took a lot of courage to stand up to the “done way of doing things in this country”. John Allen will tell you all about it – he was bringing charges against the banks in the 1990s on the basis of fraud – until he discovered the law was inadequate, and the gardai were afraid to help him in case the parties in the Dail got annoyed – and not just FF either. The banks were lobbying all the parties at that stage.

          It took a lot of courage for Eddie Hobbs to stand up and present Rip Off Republic in 2003. He got away with it because all the government ministers were on holidays – abroad. Hilariously enough, there were very few opposition front benchers available for comment either. In fact the joke in 2003 was that Eddie Hobbs was the opposition. Hobbs was backed up by Colm McCarthy (UCD) and Robbie Kelliher of Davy Stockbrokers. They were both made scarce on RTE as a result of their defence of Hobbs. In contrast Dan McLaughlin and Austin Hughes were in The Irish Times business supplement, week after week peddling the same rubbish. Kelliher (much more accurate in his predictions) was called upon every now and again.

          By the way – it is possible to get a gents haircut for €10…as Eddie Hobbs sez…as Mama Harney sez “shoparound” :))))

          It does pay to be very sceptical of the “official story”. Just ask an electrician driving an SUV :)))) Before he hands back the SUV – they were all “Bertie Fans”. To some of us he was always “ditherer”.

        • Colin

          Deco,

          When I did shop around for a cheaper haircut, I got scalped. Then the mantra of “you get what you pay for” will be rolled out.

          “Tell me of a country where…..etc……not any more they don’t….that was 2005-2006.”
          - just because this unique phenomeneon has eased off in the last 2 years doesn’t mean I was wrong. I did happen here, but nowhere else. As far as I know, these tradesmen & tradeswomen haven’t brought down their prices. It seems like they’d rather starve on no income before they’d bring their prices down.

    • Furrylugs

      No alan, we don’t.

    • Deco

      Minister Lenihan should ask Shane Ross to take over the Finance Ministry for the next six months. Shane Ross is the only member of the Oireachtas who knows what is really going on. Minister Lenihan can be his understudy. It would be better for Minister Lenihan’s health – and it would also be better for the country’s finances.

      I also think Brian Lenihan is in a complete state of denial concerning the real state of the nation’s banking sector. And as somebody who comes from a tradition of people who have lived on public salaries, he does not appreciate that failure in the private sector is to be expected – and preventing it is completely counterproductive. Basically, I detect that he is incapable of seeing how the failure of ANIB might actually be in the best interests of the Irish taxpayer.

  44. alan

    Sorry chaps, my point was more based on a concern that stress may be clouding the man’s judgement given the remarkable pace of events over the last week or so. Most people would struggle under the pressure he is under I would guess. That said, I am extremely sceptical of the depth of analysis which is being made available to him based on all of the reactive decisions made thus far. Given ML are probably pocketing huge consultancy fees for their support, we have every right to question what value they are adding.

    We cannot afford any further mistakes at this juncture.

    There is definite value in the suggestion to co-opt Senator Ross, or David McWilliams or both into the decision making process in order to add some more considered and logical input to what is developing.
    To facilitate this however would involve Mr Lenihan acknowledging he is struggling to cope. Pride being what it is, there is more chance of Osama being Obama’s special guest at the inauguration on Tuesday.

    • b

      Seriously Alan. The mistakes have been made. This fiasco has been on the stove bubbling away since 1998.

      What we have now is headless chickens making hasty and irrational decisions. They have no options, no tools and no idea.

      The Taoiseach went off to Tokyo on the middle of all this. Why? Why now? Why not when the crisis at home is solved? Why not send the minister for Trade and Employment?

      The Dail is on its Christmas holidays and the minister for Finance is trying to menace journalists by telling them they are asking “dangerous” questions.

      Anyone competent to help the problems are being made sit outside like little schoolboys thrown out of class. Their only crime, not being in Fianna Fail.

      A complete farce. A complete disgrace and we will be paying for this bullshit for decades.

  45. nolene

    Hi all, Im a long time visitor but new to posting on this site.

    I read in the ‘indo’ that Anglo Irish Shareholders are taking action against various Anglo directors and Ernst&Young. How much could an independent case like this uncover about the workings of Anglo? Could there be tossing and turning in the ministerial beds tonight?

    • Furrylugs

      Welcome nolene.
      The comments above point to a new tribunal. Ministers in Ireland don’t do sleepless nights. Life is too good.

      BTW, if anyone addresses you as a “Lad” (see previous commentary), the colloquial hailing henceforth shall be “Folks”…….not “Hey Lads”.

      We need to take this serious gents as the next Tee-Shuck will be female on the basis that the last 10 males have got nowhere.

      Night all. Heh Heh.

    • Off the top of my head, in such a case they could reasonably seek discovery on all documents which pertain to misleading the auditors and/or shareholders about the extent of directors’ loans which have undermined the credibility of the bank, damaged its viability as an independent business and caused demonstrable loss to each shareholder of what is a public company.

      Such documents would include communications between board and auditors, minutes of board meetings, minutes of audit board meetings, certificates regarding directors loans etc.

      My gut feeling on this is that we got nowhere with the bloody tribunals so, if shareholders feel aggrieved, they’re better off taking legal action than waiting for the results of a state investigation (i.e. from the regulator). However, taking on a nationalised bank would be one of the most expensive undertakings someone could consider so these shareholders better have deep pockets and a grudge big enough to sustain some huge legal fees.

    • Tim

      Folks, I REALLY hope it does not turn into another “Tribunal”.

      In fact, let’s lobby our TDs to make sure it doesn’t?

      Just ………. “Off with their heads!”

  46. Sideshow Bob

    “today as part of my regular 2000meters swim i could only swim 500 meters all the time i was looking at the bottom and that reminded me of Anglo”

    Mr, Allen you could have swam 20km if you had the water wings that the Govt have given the bankers……

    Though if any Anglo Executives or Board members were off swimming today they probably couldnt finish 20 metres without stopping , and hitting the Government provided oxygen.

    They must be laughing their heads off at the pocket bursting craic they have had …..
    Leaving all us muppets to big up the tab.

    One of Drumms last acts was to sign off bonus payments, now that WE as the country own the Sh++hole, can these payouts be stopped or can WE the people look to have them stopped.

  47. Tim

    Folks, (thanks, Furrylugs!) the first thing to do, recognising a problem, is LISTEN to as many voices as possible; listening to the voice of dissent is particularly important because it is the only voice that calls upon us to question what we say. (thanks, Mary)

  48. martin

    What a stupid name-Anglo Irish Bank-you’re either Anglo or you’re Irish, you can’t be both. I never liked their graphics anyway-too much Orange. Good riddance to them! And all that shower of old fogeys at the EGM, Gay Byrne included-tough luck, more money than sense I say. The second and third layer of Irish society being fleeced by the first-lol!

    Wait till the Germans come in and take over-1€ jobs and all that-that’s the kind of mess this shower have lead us into to. And your man calling for patriotic duty as his crowd have destroyed any notion of Patria with the amount of foreigners setting up shop here. No-one ever mentions that; how a reckless, indeed downright self-destructive immigration policy only served to help the buliders et al at an immense cost to the treasury of this state.

    Here’s how it went back in GHQ-’How about we leave in a load of Poles and other assorted post-communist debris (as nice and all as they are, how many do you personally know?), a load of Africans as well just for colour, and we can slash wages, engender fear in the locals and get them-the foreigners-to rent out the very houses they build.’ Brilliant lads!!

    And now that everything’s gone haywire who has to foot the bill (some 25% of dole recipients being foreign nationals) only the Irish PAYE worker. And then they wanted to take the medical card off those you built this place up-disgraceful! Not to mind the added expenses of language courses, hospitals, housing, blah, blah, blah. Of course the developers and bankers couldn’t care less, they have their money, through Polish sweat and Anglo-Irish (sic-and it does make me sick) bogus credit to pay them. Patriosim my a~*e! Fianna Fail without the fada-they’ve destroyed this country.

    There, I’ve said it. Call me provincial if you want, I couldn’t care less because I am, and what’s more, my faith in this Dublin led Republic is fading fast. Nothing but a load of nice buildings inherited from the British, an over-priced tram, some misty folklore, a brewery now owned by the French,a language not even our own and a parasitic golden circle who have fallen into place through nepotism. All built on the backs and the media gullibility of the average Seamus Soap who’s been demoralised by generations of Catholic guilt, dispossession and drink All sad but true I’m afraid.

    Restore the Kingdom Of Muskerry now!

    • Colin

      You forgot to mention all them wonderful Dublin characters you see walking around in tracksuits & pyjamas with gold dripping off them, who go around muttering “Story?” or “Howareyiz?”.

    • Joe H.

      Sinn Fein …(remember them?) have (or had anyway) a proposal to run the country province by province … you know, a Munster parliament etc.

      Wouldn’t it be funny if instead of turning on immigrants etc. we turned on ourselves .. jackeens v culchies and all that. Has this ever threatened to break out before?

      I remember my Public Administration lecturer in UCC telling us that it would make a lot more sense if we were organised more like Denmark. A lot more local taxes but with power devolved to the local level. Central government really just handled defence, foreign affairs etc. but the things that affect people such as health, education and transport were locally run.

      Here is Spain, where I now live, yes things are macroeconomically bad but at least they are bad in many different ways. As each region has a high deal of autonomy (and the 3 nations almost independence) its wasn’t the one big central bet like there was at home.

      Similarly Ireland is dependent on Cowan/Linehan/Coughlan to sort things out. If they choose to do nothing then then that’s it really. Its their call. The Prime Minister here might be another “do nothing/don’t be talking down the economy” type but at least the regions/nations each have their own elected head who can choose to act.

  49. Josephine Soap

    Im not the first one to notice of course but isnt it strange that the government appointed Donal O Conner Chairman of the Dublin Dockland Authority to take over from disgraced Anglo chairman Sean Fitz.
    Is the same Dublin Dockland Authority, a state sponsored body, a quango even??? where Fitzie himself served as chairman from the late 90s. And currently also on the board of the DDA is a senior member of Ernst and Young (now best know as accountants to Anglo).
    So, how is O Connor a wise choice for such a sensitive role? For whom is he a wise choice? For people who are calling in favours to keep their own roles in the Anglo fiasco hidden? Are we looking at the Bertie Boom equivalent of brown paper bag deals. And what was a smart operator like Quinn doing buying up all those shares at a time when the banking sector was heading for a crisis.
    This is the sort of story that could make a hungry young investigative journalist famous.

    • The DDA seems to be some kind of rite of passage to managing Anglo. Makes sense if you think about the (possiby still) valuable land they hold sway over. Virtually the same job, meeting the same characters everyday…

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