March 1, 2009

The truth behind the Botox

Posted in Banks · 160 comments ·
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Botox works, but not in the way it is intended. In fact, cosmetic surgery works in the sense that you can’t take your eyes off a woman who has had a lot of “work done”.

But you (or at least I) don’t look at her in the way that you find her attractive, but in the sense that you find her weird.

Last Friday, in New York, I had one of those moments. I was introduced to a young woman and I couldn’t take my eyes off her face.

Her brilliant, bleached-white teeth, her perfect button nose, her sensual bud-like lips and her blemish-free skin, all had the opposite of the desired effect. She was a freak, a classically beautiful woman, but a freak nonetheless.

What made her freaky was not just the lack of any expression in her face but behind that very lack of expression lay a profound absence of a scintilla of interest, curiosity and love of the things that make people interesting – the blemishes, the character faults, the glitches.

This statuesque product of human ingenuity was not beautiful, but repellent. She was playing tricks on herself and inviting the rest of us to share in her conceit. All the Botox and fillers were making her feel like someone she was not and in so doing threw the gauntlet to other women to do likewise.

Interestingly, the economy works in the same way as Botox, or at least credit in the economy does. Credit gives the economy a youthful sheen, which disguises the blemishes and makes the obvious limitations harder to uncover.

It also makes people do stupid things just to keep up and ultimately, like Botox, when credit wears off, it exposes an economy that is much weaker than anyone could possibly have imagined.

The reason both of these thoughts came together last Friday was that I was speaking at an investor conference in New York, appropriately at the Metropolitan Club on East 60th Street. The Metropolitan Club was built in 1894 by the great American banker JP Morgan.

Morgan was regarded as too common by the upper crust of New York back then and was excluded from its swankiest gentleman’s clubs. So he did what every rich man does when he is snubbed – he built his own club, with Italianate opulence that dwarfed all others.

Morgan wasn’t just a great banker, he was a great reader of the human condition and perfectly summed up our modern Irish dilemma with the brilliant quip about investing when he stated “that nothing so undermines your financial judgment as the sight of your neighbour getting rich”.

This observation more than any goes to the heart of the Irish problem and the vicious legacy we now have to deal with.

Another famous visitor to the Metropolitan Club was the brilliant British economist John Maynard Keynes, whose legacy and teachings were fully on display here with US president Barack Obama’s enormous budgetary expansion, announced last week.

Keynes did not just realise that, when a country is in deflation, there is nothing to be done except for the government to spend its way out of the depression. He also was an avid player of financial markets. Indeed, his wonderful remark about financial markets underscores the challenges ahead for us.

In 1931,when everyone was calling the bottom of the stock markets and pleading that, at such low levels, there must be value in fallen stocks, Keynes reflected that “these markets can remain irrational, longer than you can remain solvent”.

Again, this is the Irish dilemma summed up wonderfully – we may well be bankrupt before the markets realise that we were not delinquent enough to go bankrupt in the first place.

In recent days, there has been a lot of noise coming out of ratings agencies suggesting that things in Ireland are not that bad.

While this might be true, its veracity might only be appreciated after we experience our own fiscal crisis. I realise this sounds counter-intuitive, but this is what Keynes was talking about.

One of the reasons for market irrationality is fear, and fear is a function of confidence. Last Friday, I heard from investors what the revelations of the past few weeks in our banks has done to confidence in our country. (Bear in mind, I was the closing speaker at this conference and was asked to talk about Europe, not Ireland, so I had not mentioned the country.)

Scarily, some of the largest investment funds in the world spent a large chunk of the morning session talking about Ireland, our banks and our reputation. If you doubted the dreadful impact that bank cronyism and political mistakes have had on perception of our country, this conference would have confirmed to you the extent of the mess we are in.

Many of these fund managers had not invested in Ireland but those that had signalled “never again” without a moment’s equivocation. They spoke of the pathetic regulation and the appalling cronyism between bankers, developers and politicians.

Our story is now being discussed in the same way that Mexico was mentioned after the Tequila Crisis in 1994, or Thailand after the Asian crisis in 1997 or, indeed, Russia after its crisis in 1998.The problem for us is that our fall from grace is far from unique.

Last week, RBS and Citibank both flirted with nationalisation. But the crux of the problem for us is that these guys have seen what we are like when the financial Botox has worn off.

Without credit, we are back to being the gombeen – up to our elbows in stroke politics, in nods and winks, and doling out jobs for the boys.

There will be no recovery until this perception is changed and there will be no change until the entire top brass of the banks are given their marching orders.

One investor, who had been exposed to Ireland, pitched in that the Bank of Ireland had just promoted one of their own as the new chief executive.

I didn’t know where to look, and that’s when I focused on little Miss Filler and wondered what she’d look like when the Botox eventually wore off.


  1. Tim

    Wow, David! You are completely correct about cronies, etc. and the need to clear them out – just don’t stop at the banks. Keep digging in the other areas of big business and politics. Of course, the botox is wearing off very fast in Ireland and many people are now experiencing “cold turkey”; they will be forced out of the addiction to debt by the inability to pay for it and the inability to get any more of it.

    Watch what happens with the job-losses on the one hand and the pay-cuts/levies/extra taxes on the other: fewer will be able to afford to spend anything on discretionaries and even more jobs will be lost; spiral.

    Some commentators here have told us about the financial market people using the metaphor of “banks on crack”; perhaps your botox metaphor is better, because I have always considered that “social-partnership” delivered beneath inflation “pay-increases” and actually reduced wages in real terms over 20 years, but cheap credit allowed people to “plaster over the cracks” and, now, they cannot do that any longer.

  2. DarraghD

    Hey David, I don’t suppose you have an e-mail address for that Botox bird in the Big Apple!?!

  3. Tim

    Folks, I have placed the “5s” on the IBM link we got from Garry some time back. It is an interesting exercise to search the visualisation for the word “people” in all the “5s” postings:

    http://manyeyes.alphaworks.ibm.com/manyeyes/visualizations/new/word-tree/the-5-proposals

    …. and then, to see “money”.

    I am going to continue analysing them; anyone interested in helping?

  4. Lorcan

    “that nothing so undermines your financial judgment as the sight of your neighbour getting rich.”

    Unusual to get such truth from a banker, but he was completely right. The ‘me too’ easy credit/botox ego massage is certainly more palitable than having to admit one is not as capable a consumer as our neighbour.

    Competitive consumerism (ie where we compete to spend money rather than compete to reduce prices) has driven the credit splurge here and across the western world in the past decade. This seems to have been driven by the (now cliche) that is irrational exhuberance.

    Keynes, who’s time seems to have come again, was very keen on governments been counter-cyclical. Consumers unfortunately seem to think linerally, if prices are going up then they will continue to, we only look to cycles when we are on the downslope, looking for the next up-turn. Our government also forgot about cycles in the last decade, but now are turning to them to excuse the level of debt the nation is getting into. We’ll be alright after the unturn comes. It’ll all be paid off then. To play devil’s advocate for a minute, there is always a chance that the upturn isn’t coming, or is so far away that we may not be able to remain solvent enough to be able to take advantage of it.

    As to investing in Ireland, I don’t know how many people here watch the stock market, but last friday there were 100 million BoI/AIB shares traded. A number way above the normal level. Anybody have any ideas why?

    • Lorcan,
      I can only surmise as with the shenanigans with Anglo, people are talking out of shop and the vultures are circling around the carrion. Nationalisation is imminent across the board and risk is thus borne by the Nation, which is effectively bankrupt no matter how one glosses the figures. But money is being made, make no mistake. Shorting Ireland is a handy way to pay back ones buddies.
      I’d thank you for the sound advice to action a survival plan last Autumn, which I did my friend, and it’s working quite well.
      The botox analogy is quite apt. It misses one succinct element of that particular treatment though. Botox freezes the muscles locally but the rot still goes on necessitating more and more applications.
      Better to cut the head clean off.
      F

  5. An interesting speech from Mr Noel Dempsey T.D. at the Party gathering in Citywest:

    “It’s important, also, for all of us to re-affirm the reality: that Fianna Fail still stands for what it has always stood for:
    A Republican Party in the real, true, deep sense of that word.
    A Party that protects the weak and vulnerable.
    A Party that stands up to vested interests.
    A Party that values hard work and enterprise.”

    What can one say? They are living in a parallel universe.!

    • DarraghD

      Is Noel Dempsey trying to create employment by starting up a laughter lounge of his own??? I haven’t laughed as much, since I heard Billy Connelly telling his story about the wilderbeast called Anges on theSerengeti!

    • I absolutely agree that Fianna Fail still stands for what it’s always stood for.

      - A party that put its own interests before those of the Irish people.
      - A party that appeals to the lowest common denominator
      - A party laden with mythology yet bereft of ideology
      - A party that befriends all vested interests
      - A party that promotes cronyism and psychophancy in all aspects of Irish life
      - A party that has since its inception peddled a kind of romanticised view of Ireland that has been starkly at odds with economic and social reality.
      - A party that unfortunately reflects the attitude of most Irish people and whose popularity is only waning as we realise that we’re “not all right jack” anymore.

      Cynical, moi?

      As a great Irishman once said “democracy is a device that ensures we shall be governed no better than we deserve”. If this economic crisis brings anything I’d hope it would be a bit more maturity from the electorate. Ireland is a young country and we’re having a difficult pubescence.

      On the subject of cronyism, let’s see how the various “corruption” indices published every year regard Ireland after 2008. I suspect we’ll be hammered.

      However, let’s not get too carried away (too late) with the criticism of US fund managers who’s “never again” infvest in Ireland. The US-based bond rating agencies didn’t exactly cover themselves in glory following their unreasonably safe ratings of high risk bonds. It wasn’t just irish regulation whose touch was feather light.

    • G

      Proving the cliche that patriotism is the last refuge of the scoundrel.

      Just look at the faces of the ministers while Cowen made noises, they know the game is up and they have a millstone around their necks.

  6. goinghome

    After that engaging anecdote that sadly confirms Ireland’s currently shameful international reputation (although the sight of your neighbours getting poor may also be affecting judgments; schaudenfreude etc…) let us bear in mind that there is a substance other than Botox whose appearance and modus operandus can flummox the most balanced person –

    Lawrence Livermore Laboratories in California announced earlier this week that it has discovered the heaviest element yet known to science. The new element, christened governmentium (Gv), is utterly unique in that it contains neither protons nor electrons but, instead, consists of one neutron, 25 assistant neutrons, 88 deputy neutrons and 198 assistant deputy neutrons, giving it an atomic mass of 312.

    The atomic cohesion of governmentium is made possible by little-understood particles called morons, while the atom itself is surrounded by lepton-like particles called peons. The absence of electrons renders governmentium physically and chemically inert. Nevertheless, governmentium exhibits a detectable dampening effect on any reaction that would otherwise produce energy or activity: recent experiments demonstrated that reactions which would have taken place in seconds or minutes can be delayed on the order of years or even decades by the presence of governmentium.

    Unlike uranium or plutonium, governmentium does not undergo ordinary decay but, instead, periodically re-organizes its atomic structure every 2 to 6 years, resulting in a net increase in atomic mass over time.

    According to Dr. Conrad Schpilkes, chief physicist for Lawrence Livermore, the remarkable ability of governmentium to increase its own mass can be tied to directly to the morons which give the atom its cohesion. “With each atomic reorganization, significant numbers of morons become neutrons, resulting in the formation of isodopes, a reaction that leads us to believe that governmentium itself came into existence at a point when the quantity of morons in the universe became intensely concentrated. We refer to this moment as “critical morass.”

    When catalyzed with silver, gold, platinum or any precious metal, governmentium undergoes transmutation into administratium (Ad), an element with half as many peons but twice as many morons as governmentium.

    Dr. Schpilkes and his staff are continuing their research in an effort to determine what practical value – if any – governmentium holds for mankind.

    (Tricorn H/T to Grue)
    from http://www.manlyrash.com/blog/scientists-discover-new-element

  7. Ruairi

    Great article David.

    An aside: – in another thread, Josey asked about what masters I was referring to when I spoke of being out of the rat race.

    Quoting David, “She was playing tricks on herself and inviting the rest of us to share in her conceit.” That’s a dear pair of beer goggles she bought for herself. ….This book, ‘The Sacred Path of the Warrior’ is one such text to point to the nude emperor in the corner of your livingroom (Call the Shicalonís in Harcourt St if he unnerves you). Its about getting real. accepting flaws, blemishes. Losing western neuroses. http://www.amazon.com/Shambhala-Sacred-Warrior-Chogyam-Trungpa/dp/0877732647

    Possibly not much use as we head into a deep recession, if you are caught with heavy debts due to prolonged, incorrect thinking. But well worth internalising along with James Allen’s ‘As a Man Thinketh’ and ‘Think and Grow Rich’ (Cornell version only) in order to position oneself to build a life that works.

    As that great student of human interaction Freddie Mercury once said in “Hammer to Fall”
    http://www.songmeanings.net/songs/view/43985/

    “Oh every night, and every day
    A little piece of you is falling away
    But lift your face, the western way, baby
    Build your muscles as your body decays

    Yeah, toe your line and play their game
    Yeah, let the anaesthetic cover it all
    Till one day they call your name
    You know it’s time for the hammer to fall – yeah”

    So when will the hammer fall on poor old Ireland or when will the hammers begin to fall in the auction rooms again so we can put this mess behind us? Ah, the sound of greasy coins clinking…. Sheer bliss.

    Footnote: – I’d love to send the linked ringtone to B Lenihan, Esq. Does anyone have said gent’s mobi?

    ;-)

    It’s like Northern Ireland folks. When you’re in a hole without a ladder, you can laugh or cry. I choose laugh

  8. jim

    Patrick Sneary the Financial Regulator has some very serious questions to answer. 1 A very simple warning sign used by Regulators to identify a Bank exposed to increased risk is rapid balance sheet growth.An annual growth rate of 20% real is often taken as the trigger.Each of the guaranteed Banks had at least 1 year where that threshold was triggered B.U.T. Anglo triggered in 8 of the 9 years between 1998-2008 with an annual growth rate of 36%( yes you have read correctly). Irish Nationwide triggered in 6 of the 9 years with average of just over 20%.So this was a very obvious and public danger sign not only for these two Banks,but because of the destabilizing effect of reckless competition on the entire sector.(Ref. Honohan jan 2009) 2. In March 2006 Sneary increased capital requirements for Banks.The requirement would be for “Banks to set aside MUCH more capital” to back 100% loan to value ratio mortgages.He moved the capital requirement fom 4% ( wait for it folks) to 4.8% or an extra 4 grand on a 500,000 loan. 3. While stress testing loans in 2006(results are dubious) it was found that between 1.6 and 6.1 % had LTV of more than 92% by the end of 2007 that figure had gone up to 60% greater than 92%LTV.with terms of 30 years and greater having become commonplace for first time buyers.It was not clear if developer loans were explicitely looked at in the stress tests.His published findings do not state if all Banks would have remained solvent under stress test.P.S. The stress tests performed in CBFSAI(2006) were predicated on house falls of 20%. I could go onn but suffice to say “its way past time this clown was hauled in for questioning by the relevant authorities” I’d suggest the Garda Fraud Squad for starters.Please ! Please! grant somebody from the Regulators Office immunity so we can get to the bottom of this,and clear the air for once and for all.

  9. Ruairi

    “Again, this is the Irish dilemma summed up wonderfully – we may well be bankrupt before the markets realise that we were not delinquent enough to go bankrupt in the first place.”

    Knowing that history repeats itself and trends, if not turning points, can be spotted and approximated, could we not look at what we have left to FIGHT with and who might want it and give it a few more throws of the dice before we let a generation’s hard work (the 80′s and 90′s) slip away in needless struggling against stockpiled credit poison that must be let run its course and take its victims. Otherwise, the sickness gets bigger and we get wiped out.

    Is it possible to now offer some sort of tax incentives to those with emotionally vested interests (Irish diaspora) to now buy into our HUGE holiday homes stock and get their part of the Irish dream?

    If we fight an economic war against the big guys on their terms, we’d be like the daft and honourable irish officers of 1936-39 who thought a valiant conventional war against British invasion in 1939 more sensible than that which worked so much better 20 years ago for a small, nimble and HUNGRY force.

    Sorry for the rhetoric and chest-swelling metaphors. I’m also an unashamed Republican. Mea Culpa.

    If we do the same things, we’ll get the same results. Time for radical thinking. david was right that the bank guarantee was a swish move. But we have got to keep pulling good stuff out of the bag. Our favourable tax regime and other stuff we pulled in the early 90′s gained us so much ground. Are we going to watch that slip away because our ‘officer class’ isn’t up to the job.

    Bring on the irregulars, the rapparees, the doers. There must be someone close to cabinet who can see a way through this mess that takes account of Ireland’s unique situation, advantages and disadvantages. It can’t just be a mini-me of US or Britain.

    So how do we get through the reality / hysteria phase of financial crisis quickly? For many of us, reality is as simple as clear the bankers and simply all turn up for work, shoulder to the wheel. But many others simply have not woken up to the fact that they must put their shoulder to the wheel. This is it. No rehearsals folks. 2009.

    There is a natural competition between nations and their national interests. It is no conspiracy that UK interests would be improved by Irish disimprovement, we being a natural region of UK corporates outside of the banking sphere. Its no secret that our tax sovereignty is much studied in Brussels. What can we do to keep the dogs from our doors and to produce every possible advantage from this crisis while giving away the least ground. Every country’s in trouble. Even the sober ones like Switzerland and Germany. Flux/activity means opportunity for leverage and fast moving opponents. Lets do what we do (did) best. Change the rules to suit us.

    • Deco

      “Every country’s in trouble. Even the sober ones like Switzerland and Germany.”

      Yes – but the sober ones are not asking the hangover countries for a bailout !!!

      Our hangover condition places us in a very precarious position !!

  10. redsor

    The wan…. sorry bankers are not Ireland’s main problem at the moment. As is the same for most top tier politicianst, they will always remain greedy and will probably find self-serving loopholes to jump through irrespective of what type of legislation or regulation is put in place. They will always worry about accumalating enough wealth to take care of the future generations of little bankers who will be their blood line . They will always deem important keeping their little club intact and not giving a damn about the rest of us. Their existence epitomizes cronyism and eugenics.
    The main problem we face is getting everyone back to work and spending more wisely again. Now that Morgan’s (nothing so undermines your financial judgment as the sight of your neighbour getting rich) observation hopefully has finally clicked with the Irish populous and a sense of the real economic mess sets in, then maybe the extravagance of the Celtic Tiger era may seem like just a dream and a new more frugal lifestyle might take it’s place. Start providing money to fix everything in Ireland (infrastructure) that needs to be fixed, sort out our welfare system , start cutting spending on programs that don’t work, Let’s start looking after ourselves a little bit more instead of acting like Mr and Mrs big shots trying to save the world, nationalize the banks and increase regulation, and slowly we will grow again but with a new sense of what is important and instead of an all consuming obsession to out buy , outdo, outbid one’s neighbour maybe instead we will start supporting each other and helping one another. Then we can start to help the neighbour who lives outside our borders.

  11. Garry

    In the financial world, its currently impossible to tell who is healthy and who is a walking zombie. So its back to the playground, or indeed the office when layoffs are threatened…. all the other bankers and investors are behaving like insecure kids………………Find the weakest and keep harping on about their faults in the hope attention doesn’t focus on you…

    But remember this is just human nature…….. the banksters and regulators in Ireland have brought this on us through their participation in and tolerance of corruption.

  12. Bo-Peep

    On the front page of Irish Times this morning you will see a photo of Cowen ( Humpty Dumpty ) standing below directly in front of Berlusconi ( 70 + ) while the hands of the Italian stud holds Dumpty’s ( 50′s ) shoulders .
    Botox is written all over the Italian Magnate and his face is that of a poker player with a bad play of cards on his hands ( Humpty ) .Is our PM being cermoniously accepted into the Mafia de Mediterranee or is one of them going to topple ?
    Maybe we should all know now it is Time to DIVE .

  13. [...] to find €2 billion and stands dazzled into inaction, hoping something will come along.  David McWilliams writing in yesterday’s Sunday Business Post warns that waiting in hope is a dangerous option. In [...]

  14. mcsean2163

    If only David didn’t recommend a blanket guarantee of the banks and BL didn’t follow his advice we could let Anglo collapse and leave the rest to sort out their own problems…..

  15. Original-Ed

    Tim, Why don’t you do some work for your employer, your country – you’re on this blog continuously. It’s obvious that you’re a fulltime paid ff plant from their ministry of propaganda and enlightenment Re. Dempsey’s speech about innuendo at city west, well Mr. Dempsey, we’ve got it up to here with ff and their brazen cronyism and corruption all the way from Dev down to this present day – why don’t you lot (only 22% of the population) pack your bags and go find a state all of your own, preferably on the other side of the world and then you can fool around all you want, bit not at our expense.

    • Deco

      Ed – Tim is doing something for his country which not enough people do for their country. He is thinking about the current predicament. He is trying to figure out what might solve it. Disagree with the contents of his comments by all means, as is your right. But he has a right to comment and contribute also. With rights come responsibilities. The responsibility to analyze the situation, and make a point of view on how to resolve the situation.

    • Tim

      Original-Ed,

      “It’s obvious that you’re a fulltime paid ff plant from their ministry of propaganda and enlightenment Re. Dempsey’s speech about innuendo at city west, well Mr. Dempsey, we’ve got it up to here with ff …..”

      It was my understanding that we had corresponded before now and that we had arrived at a mutual respect in terms of our comments here. Perhaps I was incorrect; in which case, I am prepared to begin the process anew.

      I will request, however, that you do NOT associate me/my ideas with “Minister Dempsey”, as his odious comments and general demeanour render me apoplectic – when apoplectic, I find myself incapable of rational engagement, thus, completely unproductive. I WANT to be as productive as I can be. We all need to be.

      The Minister that you refer to has, in my opinion, FAILED in absolutely EVERY portfolio that he has ever held. He has, personally, insulted ME (when I have questioned his policies – from “within” and “without”), as I attempt to promote true “fairness”.. Look at his track recdord? e-voting machines, teacher strikes, abuse of an post workers, shell-to-sea and, now, wanting to fire bus-drivers, while in a “green-partnership-government”?

      Attack my ideas, if you want to, certainly, PLEASE do so, if you believe my ideas are incorrect/wrong;

      But, please, do NOT associate ME with THAT man!

      Deco, thank you, so much, for the “pick-up”/defense; I really appreciate it. ( I admire your posts so much and we need them – thank you; I do not require your assistance in this type of defence, but I REALLY welcome it, so, please keep doing it!). Thanks, Deco, for defending me.

    • Tim

      Original Ed, there is an inherent anomaly in your post: if I were a “ff plant” (which, I accept, I might be, from your point of view), “fulltime paid ff plant”, then, I WOULD, actually be working for my employer by doing this. Not so.

      I am a teacher who runs his own business to payfor his “Teaching-habit”. So, I see the current economic matters from both sides and, I believe, the public and private sectors should NOT follow the media spin and oppose one-another.

      We should UNITE.

      I add this because I want us to work TOGETHER, a opposed to alienating you, with earlier posts.

      Please, let’s work together? NOT “against” eachother? I am not the enemy.

  16. CREST

    At the end of the day, in a so called democracy like Ireland, the people get the government that they deserve.

    When will you learn to kick ass.

    Glad I got out on time.

  17. gadfly55

    Excellent article, telling it like it is, with the most appropriate analogy. Confidence is word abbreviated to con, as in con artist, con job. We have had the confidence of the trickster, giving the mark what he wanted, including investors, the government, the developers and the panic buyer signing away her and his life. Sin in haste, repent at leisure, and we will have plenty of time to pay back for the sins of the fathers of FF. Cowen inspired no one on Saturday, and is not capable of leading the country because he is defeated and knows better than most the desperate condition of a tiny fraction of an island not longer able to compete on international markets with its exports or for investment. Welcome to the first North Atlantic banana republic.

    • Lorcan

      I must object to people refering to Ireland as a banana republic, but on purely technical grounds.
      The term ‘banana republic’ was coined because of the said republics reliance on simple agricultural output.
      We do not have the weather for bananas, and I think we are sufficiently beyond the pale of international good governance to have earned our own moniker.
      ‘Potatoe Republic’ perhaps.

      Or maybe we can drop the republic pretence altogether and, in a nod to Vaclav Havel’s ‘Absurdistan’ label for pre-nineties eastern europe, christen ourselves ‘Absurderland’?

      • Deco

        We share important common features with a banana republic. Oligopolies. Incestuous class based networks dominating private companies. Wholescale price fixing, market rigging. Rural depopulation, and concentration of poverty. Corruption. Police who ignore crime. A legal framework that is full of loopholes. An obsession with aping the colonial power, or aping somebody else to prove that we are now beyond aping the colonial power. Pockets of diehard socialist nonsense. A hyper capitalist clique who have an influence out of proportion to their relevance (the PD rump) and who do things for purely ideological reasons. A media who hide the truth from us, until it is unavoidable. etc…

        • coldblow

          Deco: could I add to your list the following structural problems shared with the other banana republics (as identified by Crotty)? Dynastic political elite reliant on patronage (independence was demanded and won by those elements who had prospered most under colonial rule when they finally felt confident enough in the security of their own position to challenge their former backers). Unjust social and economic system. Dependence on foreign credit. Dependence on FDI. Stagnating agriculturual output. Cost of implementing land development projects (and land reform elsewhere as in Latin America), agricultural credits etc more than their yield. High food prices. Failed attempts in the past to protect home industry. Doomed attempts to engineer economic takeoff (on the assumption that the boom years were down to credit). Continuous emigration until recently meant that the show could stagger on, the audience remained in their seats and refrained from rioting and everyone could pretend that the bananas on stage were just for decoration.

        • G

          well outlined by you both. I was in several ‘so called’ banana republics last year. In one country, Guatemala, children lined the country road for miles and miles, two hours we drove past children waving for the foreigners to stop to give them something on Christmas day.

          We share many similarities indeed, the extent to which the above scene will be repeated here is unlikely though, the extreme poverty in those countries may not hit Ireland, but it is hard to tell as events are changing by the hour.

          One thing is sure though, the gap between rich and poor is enormous in central american countries, the same could be said of Ireland.

  18. Garry

    “One investor, who had been exposed to Ireland, pitched in that the Bank of Ireland had just promoted one of their own as the new chief executive.
    I didn’t know where to look…………”

    I depend on business from European customers and have been in this situation several times in the last year….

    Nobody at government level seems to understand their strokes, their corruption and cronyism is destroying the Ireland’s reputation and anyone from Ireland trying to make an honest living by exporting their products or services.

    • gquinn

      In Ireland we do business like the Russians.

      We only believe in monopolies and property Oligarchys and all the top jobs are only for the people in the golden circle. This might surprise alot of people but this is the way business has always been done in Ireland.

      The Irish Government dont listen to people because the Irish people dont know any better and who the hell are they any way.

      If you ever had an argument with a TD they always reply, well who the hell are you. In which I reply Im part of the people who elected you and I’m telling you a problem that I see.

      Again we are like the Russians and like the Russians we are screwed.

  19. Ciaran

    I don’t share your confidence about Keynes I’m afraid, Hayek showed the holes in his theories in the 1930s. The stimulus won’t work, it will likely turn a recession into a depression and result in inflation in the longer term.

    http://www.mises.org/story/3353

    • Deco

      Ciaran, like you I am not a fan of Keynes. There was crowding out of investment in the private sector, as the public infrastructure funds chased scarce money and thereby prolonged a depression in expenditure.

      Infrastructure spends should of themselves lay in terms of economic and societal benefits. This means they should make sense. the Hoover dam did make sense, and so did the Tennesse Valley Authority. But there were also many ridiculous schemes with people walking around picking up leaves in Washington DC to justify a pay packet.

      The problem is that currently in the Western world we have a policy of “capitalism for the poor, and socialism for the rich”. The waste and misallocation of resources is performed on a completely obscene scale. Just look at ANIB, or RBS in the UK. This is going to create a market distortion in the market economy, and massive funds distortion in the social economy. It is the lasting legacy of the bankrupt intellectual movement that predominates in several countries at this point in time, including Britain, Spain and Ireland. It predominated in the US until the electorate voted out the Bush crowd.

  20. SLICKMICK

    The worst part of the weekend was watching all the goons who turned up to pay homage to the “dear leader”.A right bunch of simple minded lick arses incapable of thinking for themselves.We will have another generation of Lenihans and Cowens running/attempting to manage another crisis in 2030.Nice to see Eugene Sheehy has retained his cushy job while AIB goes south.Contrast the treatment of Fitzies pension with that of Fred Goodwin-the latter was inept while the former is a sneak.

  21. gquinn

    Excellent Article David but It’s not just the banks that have to change we also have to change our entire political structure because TDs are able to inherit there political seat to someone in the family, this is not democracy but a dictarotship of a government.

    The whole political structure must be changed so there is no cronyism in politics and also politicnls wont be able to keep it in the family.

  22. Dilly

    I just hope the politicians read this article.

  23. Thermus B. Airgetinin

    It has been suggested that all the money that has been “lost” in this catastrophic financial meltdown does’nt really exist, that its really just “cyber” money, so why are we, the taxpaying fall guys, responsible for making good this “bankster/globalizationist” generated (and widely accepted as) manufactured collapse? The country has been put in hock for at least a generation to come because “cyber” losses, for some reason, can’t be paid off in like for like “cyber” money… that would be too easy, and would’nt necessitate what has become the greatest con trick in the history of all mankind… the hoover like sucking up of the worker generated wealth of all the planet’s industrialised nations. This must surely be the case because exactly the same things (excuses) are being said by every political and financial “leader”. It’s as if they are all reading from the same script (and of course they are) verbatum. These lies have been well rehearsed in the smoking rooms and parlours of the wealthy “gentlemens” clubs, in the secret cabinet meetings of governments comprised of millionaire ministers with vested interest in the globalist cause and the board rooms of the “bankster shysters”. Is this not an indication of the damage that “creep up behind you” globalization is doing to our lives and our livelihoods. Has life become nothing more than a greedy scramble for money? If we are being robbed blind, do you think they are going to tell us that they are robbing us blind, of course not. Are we to accept that Banksters have become our masters and we must pay them their “pound of flesh” on each and every occasion they demand? No-one has ever explained to me just exactly who all this multi-billions of our money has been “lost” to. Has all this money simply disappeared or has it been recieved by someone? If it has disappeared, where to? if it has been received, then by whom? in other words… who owns or benefits from the “black Hole”? and if you can truthfully answer that then you can truthfully answer this…who’s gonna come out of all this soaked in scent and who ends up covered in crap? These are the opinions of many, many people down this end of our “fair society” and which only reinforces for them the old addage… same S**t, different day!

    • McGoo

      Read up on Fractional Reserve Banking: http://en.wikipedia.org/wiki/Fractional_reserve_banking
      It can be hard to get your head around, and frightening when you do, but it explains why most of the money moving around in an economy doesn’t actually exist. It’s a confidence trick, and when confidence disappears so does the non-existant money.
      That’s my understanding, anyway.

      Now, I’d really like someone to explain the Bond markets. With loads of governments and corporates trying to sell bonds, and no-one very keen to buy them, surely the laws of supply and demand should push the prices of bonds down? But bond prices keep going up, some people even say it’s aother bubble?

    • Caen

      Its gone to the oil exporters (Arab nations; Russia) and the emerging market countries of Asia (China namely). The focus of our future trade delegations should be to the East.

  24. It’s very simple.

    The dead and diseased limbs must be pruned from the tree to promote new growth and branches that can bear fruit.

    Until then the rot, canker and mildew will continue to spread.

    Get out the sharp implements people, the economic winter of discontent is the time for pruning.

  25. gadfly55

    Paul Krugman in his article in the NYT yesterday;
    http://www.nytimes.com/2009/03/02/opinion/02krugman.html?_r=1,
    “Revenge of the Glut,” has linked Ireland with Iceland and Latvia. The Ukraine is also featured with a picture of the mob crushing against the window of a failing bank. When Krugman says “deep crisis”, any investor within cyber-shot of the NYT will simply file Ireland into the dustbin of history, and our reputation goes the way of Uruguay.

  26. Da Wu Yu Code

    When I consume my coffee in my office I am fortunate to have it N’Esspresso Style ‘ because it is a ‘pure art’. Nothing else can explain it .Before, my satisfaction was from the aroma , strength and watching the cup release the goodness of life.The Noissette has a special favour .Like in ‘Boheme’. It shows the circulars twirls rising from beneath the cup.
    The Noissette holds a wonderful secret for all of us that could deliver what we have lost or about to lose.

    Lets suppose we want to reverse time by using just a circulating beam of light .Light is energy , and energy can cause spacetime to warp and bend , just like a gigantic spinning cylinder.Should we create circular beams of light we would create a vortex in spacetime.That would be a Eureka Moment.

    If you walk into this ‘time tunnel’ -which would resemble a large vortex of light a few feet across – you could emerge at some point ‘in the past’. We could do endless things if we wanted to .We could repair the damage and return to the present .We would then have a Top Secret Weapon.

    We need not worry anymore .We already have such an opportunity .We have the oldest spaceship in the world in Dun Aengus on the Arann Islands.We should repair this and make it a complete circle like the cup that you drink your Noissette from.Then we would reclaim our Time Machine.

    Da Wu Yu Code – ( google it )

    – the code of before time and after time
    or – the code of before Merrion Square / Bankers and after Time.

    Gov Warning – this is Botox free

    • Thermus B. Airgetinin

      “Cicular” only implies the longest route to get to the same point. A word of warning though, don’t take you’re time warped circular journey in reverse… you may disappear up you’re own pompous arse.

  27. MarkC

    Crikey……..sounds like you were knocked back David!

  28. Philip

    @John Allen. Apparently, the snag with that light loop is that it only will send to back to the time you switched it on. So unless Dun Aengus has one lying around ( and I’d be very keen to see the power unit that drives it) that’s been turned on for a few years, we’re stuffed.

    @Thermus. It’s all down to confusing money with credit. Money is going back to its owners and credit is evaporating as are all the ponzi schemes it propped up. And unfortunately, many of the workers of the world have been employed on the basis of this credit and since we have no other mechanism for paying for work, we’re stuffed.

    @Thrift Criminal. Spot on! “A green winter, a new graveyard; a white winter, a green graveyard.”

  29. coldblow

    “Their will be no change until the entire top brass of the banks are given their marching orders.” There was a good article yesterday from the Observer’s political correspondent, Andrew Rawnsley , which ties in with this.

    http://www.guardian.co.uk/commentisfree/2009/mar/01/fred-goodwin-pension-rbs

    I particularly like the line “Men like Fred the Shred feel no shame, they only feel their wallets.” He recommends that Brown makes a similar speech in Washington and spells out to everyone exactly what happened. It ties in a lot with Ireland. Malcolm mentioned Obama’s speech the other day and recommended listening to the whole speech and not rely RTE’s highlights. As I recall it the “highlights” on the 6 O’Clock News on RTE consisted of just one sentence, two at most, and that was just standard Obama rhetoric. Why is this?

  30. Ruairi

    Look, the solution is so simple. We just print loads of dollars asap before it plummets. The Yanks have been at it themselves for years legally, albeit not morally. Funnily, when you step out of line with them, as Sean Garland did many times, they hit you with trumped up charges that are EXACTLY the same crime they’re committing against their own people for the last 15+yrs. Debasement of their currency.

    Wills view of the supposed ‘loans’ and their actual validity may indeed be correct. Of course, if we default on them, all bets are off. But the reality is that the ‘real economy’ behind all this officialised ‘funny’ money is so much smaller and until we get back to real value investing and value creation, we are indeed stufffed!

  31. Ruairi

    Fantastic broadcast by Weiss Inc which, as a part of a bear Market survival tips pack, discusses ‘aversion to career risk’. Its what we’ve been hearing from the 2 Brians on behalf of the Banksters, who Vincent Browne firmly believes they have naively taken at their word as to the reality of Ireland’s sudden credit crunch. “Oh its happening everywhere now, we’re just a little (Asgard II anyone??) sailing ship on the big ‘perfect storm’ North Atlantic. And so Sheehy (and other of his ilk) keeps his job (while Alistair Darling ups the game a little by demanding pensions back) where most realise he might not even be capable as a good safe seller in rural County Cavan.
    http://weiss.streamlogics.com/bearmarketsuccess/

  32. Malcolm McClure

    Tim: You haven’t yet responded to the criticism of Fianna Fail’s claim to be a Republican party, that I made in the previous thread.
    I am becoming persuaded that FF is in fact a nepotism/cronyism party masquerading under a formerly noble Republican banner.
    Indeed, I should probably have been a supporter of the ’98 brand of Republicanism but various factions in Irish politics since independence have conspired to equate Anti-partitionism with Republicanism, so that they are now virtually synonymous. Think of the semantic distinction between Nationalism, with its aspirations of polite respectability and Republicanism. which now seems to stand for ‘Do it our way–or else’. As gquinn pointed out, FF has adopted the “Who the hell are you?” aggressive-protective-aristocratic mentality that we thought we had gotten rid of when we emerged from colonial status.

    After the American revolution succeeded, Republican ideals led to the French revolution and Bolivar’s revolution in South America. Later they were used to underpin post-colonial regimes throughout the world. But those early Republican ideals quickly and almost universally became a cover for nepotism/cronyism by the ruling parties. Republican Presidents became either a cypher for the ruling party, or Dictators supported by the military or military-industrial complex. The rights of the people –as Furrylugs has repeatedly pointed out– are there in our constitution but are ignored. There are no checks and balances on Republican regimes, no way to displace them easily, because they retain the levers of power during elections and can use them to discourage their opponents.

    Coldblow: That Andrew Rawnsley article is really hard-hitting. It echoes Furrylugs comment above– ‘Better to cut the head clean off.’

    David: American investors suspect involvement with Ireland because they look jealously at our politico-financial set-up and see a mirror image of what they have been doing themselves for generations. But they are the ones caked with Botox and filler; we are still young enough to recover our bloom of youth after a night on the tiles.

    • Tim

      Malcolm, I have not “yet responded”, because I cannot defend it. What the party SHOULD be, I will continue to promote from within. I am losing that battle at the moment, but I cannot give up yet.

  33. Living in Finland and be continually asked why – in the late 90’s – I left; followed by, “I as on holiday, did/do some business, it’s Booming/GREAT there.
    My answer was always: “I know what it’s really like,” followed with a wink.
    It was always about who you knew, your address. You could be as thick as you like, they’d find a place for you. Cronyism- jobs for the boys.
    In the last ten years here in Finland I say a drift towards the same thing, ”networking” they call it. I began to lose hope with the drift to the center right like Sweden. Small business replacing employees, all contracting, and employment agencies, no direct hiring which meant cutting more and more workers entitlements: holidays, pension, health which was (like Ireland) left in the hands of fly-by-nights; a nightmare tracing these contractors your retirement contributions.
    I know I know, you’re supposed to keep a record, that’s it the ordinary working person has to be an accountant into the bargain thee days to survive in the labor market.
    I find a lot of commentators on this site completely out of field about what this financial crisis is really all about, or in denial more like.
    The market capitalist model has failed, and I fail to see how you miss that made evident by your possible remedies of how to get it back on its feet. It’s not going back on its feet ever again, and (please excuse the slightly exaggerated term, but) the financial apocalypse is only beginning. The warning has been flashing in your face for quite a long time now so stop the bull, and organize before the extreme (the man behind the fall of the Lisbon Treaty) right step in and really give ye no choice of a decent future.
    Paddy in Finland

  34. More Astrology : those that remember what I said before eg ‘ Moon Wobble’ etc – well from tomorrow we have a different and new gravity pull commencing and you will all notice it gradually over next few days – you can expect a surprise event taken place and were the protest march taken place this week end coming it would be very emotive.Drive slowley and ‘Go SLow’ in life in general …speed of any kind will be dangerous – it will only wane away from wednesday next week.

  35. lff12

    I strongly agree with you David, but I nearly wince at this phenomenon as sadly, until we hit the kind of unemployment rates that REALLY hurt, such as the 70% plus that is common in African countries, it will not hurt enough to really change things. I suspect much of this is down to the political gombeenism that came with the so-called rebellion of 1916. I say so-called as ultimately it only led to what Dublin striked against in 1911, cronyism, middle-class gombeenism, a horrendous suffocating and twisted version of Catholicism that utterly oppressed people, and a total lack of vision in society. I think there is a real terror of the truth in the occasionally whispered “would we have actually been better off remaining under British rule?” Which perhaps is why such sentiments are so taboo.

    Problem I see is that up until now we’ve always had a safety value called emigration which effectively prevented unemployment and the “great hurt” from reaching a point where people might actually vote against that gombeen man whose main agenda is self-enrichment, as anybody elses expense. All in the name of mother Ireland of course. And of course in the 1980s we had the heroin epidemic to numb the pain for at least some of the people who were hit.

    What worries me is that the current rise in unemployment is HUGELY disproportionately impacting the under 25s. This is the one group who can off it to USA, Canada or Oz but also they are woefully poor at putting their names on voters registers in order to run the buggers who are currently doing a great job at making a complete and utter tatters of Ireland’s reputation and indeed its fortunes. The big challenge is how we can bring together great minds and political vision to make changes AND get such people to vote for this kind of change. I certainly don’t see it coming from FF.

  36. Deco

    David – your mention of Botox reminds me of the comment in your TV documentary a few years ago, at the height of the boom. I think you said that euro loans from Germany were making the Irish economy look better than it was in reality. That we were fooling ourselves. Of course this fitted perfectly with how were were beginning to see ourselves. We started a pride mania in the late 1980s, and it has got ramped up every year until 2008. Pride became an obsession with the Irish psyche. It was the end all and be all. Looking good was of ferocious importance. So Botox, and the high spending consumerist lifestyle are both an expression of pride. And they fail to change the underlying reality.

    I detect that there is currently a mood change in the Irish people. I have read Kunstler and I find him an amazing reader of the human condition. Kunstler warned that the people like sheep in a comotose state will yearn for somebody to give them an easy option. Kunstler was indirectly pointing the finger at Hillary Clinton. A shrewd politician who presses all the buttons for each vested interest group. A fantastic rabble rouser. A media savvy operator. Somebody who promises that there will be no day of reckoning. Somebody who sustains our delusions. Well we have our Hillary Clinton type politician – we have Eamon Gilmore. And the crowd are starting to follow him. And RTE and the Irish Times want him to suceed.

    Now this type of political leader is to serve a very important purpose. Somebody to sustain our intellectual nonsense, who will ensure that the underlying psychological delusions in the Irish mindset never get disturbed. Because that is the change that must not be permitted. If the Irish people came to their senses, then life would be different, for an awful lot of people in Ireland. Gilmore will not say to the Irish people – ‘you elected stupid politicians’, ‘you paid for the rip-off republic’, ‘now live with the consequences’ or ‘start being responsible’. He should. But he will not. And there are things that I like about the man. But he is surrounded by idiots, and never seems to add anything up. And people who add things up are a severe danger to the sleep of the Irish nation. George Lee added things up, and he got castigated on the street for it. Eddie Hobbs added things up, and RTE marginalised him – admittedly at the behest of “Ditherer”. Because adding things up makes people see lots of things that are unjustifiable. Plank, Gerry uRyan, uRyan Tubridy, and Tintan O’Foole would all have to take a pay cut. Bono might even have to pay more taxes. The national blindspots must be preserved, for the sake of it’s beneficiaries. The chief national blindspot is Pride. Not adding things up is another. People do it in private. But never in the media. The media seems to regard itself as guardian of the long running national blindspot with regard to authority, also. The real danger for those in power, is always that those outside of power will start to think differently. And this is the usefulness of Gilmore – Gilmore will serve a purpose to make sure that those outside of power will continue to have faith in the system – by having a man who expresses their anger within the system. And thereby reducing the necessity for people to think outside the box, outside the system, and to abandon faith in authority Ireland, and the Irish model of authority. Gilmore will not be able to reform anything. He is surrounded by people within his own party who are clones of what they oppose in Fianna Fail. In that respect Gilmore has more a lot in common with Cowen. Reforming the institutional framework of Irish society will have to go much deeper. It will have to go to the very essence of our relationship with authority and the culture that pervades with relation to authority. It will have to go to the very issues mentioned in the latest report of Transparency International on corruption here. These issues are costing us jobs. And that is causing pain in the people. So we have to fix these issues. We really need to stop thinking about the veneer, and starting thing in terms of cause and effect and tackle these issues head on. That means New York style handcuffs for bad bankers, and deceitful directors. That means possible fines for parties involved in funny dealing, etc..It means that authority in Ireland will have to come to account. It means that all the old priveleges will have to die. And phony criticism of authority will have to be thrown aside in favour of a more out-spoken, honest, no holds barred, blunt approach.

    Authority is under seige and is coming up with ways to preserve it’s existence. We even had an editorial in the Irish Times today asking for more resources devoted to management excellence. This the IT tells us will get things rolling again. No mention of the fact that we have a widespread culture of promoting people to positions of authority, for completely unprofessional reasons. Anything, just about anything, except and honest acceptance that the entire culture of Irish authority has failed. The IT position is probably music to the ears of incompentent managers everywhere in Ireland, who are looking for money for training, when they should be stepping down. This culture of delusion is still predominant. And until the delusions are destroyed, this country will be meandering along aimlessly from crisis to crisis. I take the viewpoint that the predominant Irish culture of management has failed. This is dovetails with the latest report from Transparency International, and everything that Shane Ross has said for the last twenty years.

    Now what I have said so far leads me to Noel Dempsey. I have seen comments above concerning Noel Dempsey. He has a track record of incompetence. He is the epitome of everything that is wrong with the Irish system of management. He has been through a range of responsibilities, and in each case he had neither expertise or knowledge. He has a really serious responsibility now. And he is fumbling (once again). And I am disappointed that he cannot spend more of his time fixing the problems of this country, which incidentally is what we are paying him to do. I did get to listen to Cowen’s speech. And it is clear that if Brian Cowen is to follow through, and fix this country, as he claims he intends to fix this country, then first thing he will have to do is fire useless ministers. And ND must surely be at the front of the queue. In fact, ND is even rumoured to be the next EU Commisioner. When he gets to Brussels, the Irish Times will forgive his previous mistakes, like they forgave Pee Flynn his indiscretions in a previous term. “Officially” there is no corruption in Brussels. Another happy delusion, except this is evident across much of Europe. But that is an argument for another day.

    We need to change the culture we have towards responsibility. This post-colonial nonsense of ‘I am not responsible’ has to go. We have to accept responsibility for our actions. This means that the people who squandered, who had three holidays per year, who went to the modern Irish status pilgrimages like the rugger World Cup, Cheltenham, 1000 km stag weekends, Australia, pick your journey of status significance, etc. -all need to admit that this sort of behaviour comes at a cost. We also need to accept that we are not as competitive as we once were. That our costs are way out of line. We need to accept that our collective consumer behaviour allows Tesco etc. to rip us off. We have people in this country who boast about getting ripped off. So the status obsession needs to go. This status obsession/pride thing has all just crashed – or is in the process of crashing. Irish society is in a state of shock, because the core belief of the last generation is proven to be complete bull5h1t. The delusions need to be undermined, and we need to start thinking intelligently about our society.

    We will now see tax increases. I am concerned that once again the Department of Finance will devise a scheme that will take an enormous amount of bureacracy to bring in a small amount of money. Another repeat of the debacle with regard to medical cards for pensioners. It is clear that some people on the Irish tax system are paying very little tax, and this needs to be rectified. Institutional reform of the public sector is impossible – because neophyte managers (many of them political appointees) and politically astute union bosses (concerned with getting onto FAS boards etc) give secondary consideration to the effectiveness of the public sector to the consuming public. Basically there are a collection of gatekeepers preventing reform from taking place. Plus you get Mary Harney trying to take parts of the sector and turn it into cash cows for private investors (her pals), and thereby cripple the effectiveness of the entire structure.

    Lenihan is working on a deal to ‘sell’ Anglo Irish Bank. My advice, get rid of ANIB at any cost, before the state ends up having to takeover the other clown operations like ILP, EBS, INBS. The timeline here is bad. Morgan Kelly expects INBS to run out of cash. Shane Ross regards EBS are an outfit run by clowns. And I personally regard ILP as a high octane gambler in the most overpriced sector of the residential property market. The probability of more trouble here is high. If the state is holding four clown banks, the borrowing spreads will be frightening, and the hospitals will have to be closed. In fact the only bank in the scheme that we can be sure of surviving is AIB. I am totally unimpressed at the new head of BOI. He presided over reckless liberal lending policies in his tenure of head of retail banking in Ireland. He also had a stint in RBS – another outfit where all sorts of stupidity and nearsightedness infested policy decisions. New BOI head Boucher is a walking disaster. Even Noel Dempsey has a better track record. And that is very telling indeed. The taxpayer is a 50% shareholder in BOI now – and we need a better manager.

    We cannot run BOI, FAS, the ESB or any other critical peice of infrastructure, either private or public on the basis of nepotism. That is the first thing that needs to end.

  37. Mise Eire

    One inconvenient truth. In post-WW2 Germany, the whole judicial structures had to be reformed: this was done largely NOT by replacing the Nazi judges, but by changing the rules of the game & incentive structures. Hitler had basically destroyed all serious opposition since 1932. There was a severe shortage of qualified personnel. Scapegoating war criminals had to be combined with keeping many of the same legal experts in positions of power in a new era, The countervailing pressures of denazifying the formally independent legal system and the severe shortage of untainted legal professionals had to be balanced.

    Thus Germany in the 1980s still held a number of (non-Jewish) ex-communists who never received compensation for their treatment in Concentration camps, and many more ex-Nazi soldiers who happily holidayed in the Mediterranean funded by their army pensions.

    It certainly wasn`t justice as the punters would view it, but it allowed the majority to get on with their lives.

    Something similar will pretty much have to fall out from the banking crisis.

    Also Ireland really is not alone in this – we are an easy butt for international jokes. It`s at least partly to be seen as the price of the jealousy we engendered with a seeming unending boom which even 9/11 didn`t impinge on.

    • Deco

      You are correct. Ireland is not alone in the current crash of highly leveraged, excessively indebted, corrupt, financial engineering obsessed countries. In fact we seem to be an easy case study for others to deflect attention from themselves. And two parties in interest need to deflect interest from themseles. Let’s do a quick survey of the other candidates for selection in the shortlist for “case study of macroeconomic mismanagement, political deceit, financial reckless and economic stupidity”.

      1. Britain. Britain is governed by a mishap prone fool who is advised by even bigger fools. If you disagree, I recommend you ask any five British people as a survey of what they actually think of Brown/Harriet Harmon/Lord Meddlesome/Alistair Darling New Labour at this point in time. Britain has an awful lot of fear in it. Take out the Finance Industry, and North Sea oil (both in shock mode currently) and you have a declining economy. Like Ireland, the leadership in Britain spent the last thirty years telling the great unwashed, to feel as proud as possible about their own self importance. Like the Irish, the British are discovering how stupid all of that is now.

      2. Spain. Spain is currently the basketcase of Europe. Unemployment is rocketting faster than in Ireland, and Spain has unemployment twice our rate. A massive acheivement considering they do have our proportion of female employment, and also that Spain has a much lower cost base. The government has a twin policy platform of covering up the problem with state spending, and blame somebody in another country. (a different scapegoat is selected every few months). Spain is the beneficiary of ECB assistance via bond buying to support the Spanish banking sector. Brussels is terrified that Spain will collapse, and is doing everything to cover up the mess. And the politicians are worse than those in Ireland. Terrifying. How bad are things in Spain ? Madrid holds enough currency to pay for the next six weeks imports. Yet the media and Brussels imposes a form of censorship on Spain. Spain is just pushing it’s problems out into the future, where they will show up in the one afternoon and expose all involved parties.

      3. Portugal. Sitting quietly while attention is drawn to Spain. Portugal is in another fiscal dilemma. Portugal has a more diversified economy than Spain. And the politicians are not as dire. But Portugal is also slipping down the slippery slope.

      4. Greece. Fiscal crisis. Strikes. Protests. Unpopular government. Striking public sector workers. Youth unemployment. Bread and Circuses type political leadership. Ireland has a lot in common with Greece. Except in Greece talking things over is just not done, until both sides have spent a few months engaging in street battles.

      5. Italy. A land of creative genius. Inventors. Great creative people. Plus centralisation of authority. Complex laws that nobody understands, and few consider necessary in the conduct of the everyday lives. Corrupt state officials. Corrupt politicians. Corrupt media organizations. Oligopolies. A fractious left wing element which shoots itself in the foot. A fractious right wing element that is always squabbling over nonsense. Provinces where national policy is disregarded, and where Europe is a eupemism for grants, just like in the West of Ireland. Italy is a country that usually does enough things right, to make up for the things that are done wrong. Everybody is just wondering how long will it last, before the current prime minister makes a complete mess of it. But nobody will point the finger at the Italians because of all the good things they have given us.

      Then there are the established, fully certified basket case economies. Hungary. Ukraine. Iceland. Latvia.

      The funny thing is – we have a lot in common with all these countries listed above. So, it is impossible to single us out for criticism, without mentioning the others. It is also highly unfair, and intellectually dishonest. But the current crisis is built on deceit. Therefore we should not expect the deceit to stop as long as the crisis is unravelling. Basically there is a lot of deceit in all the finger pointing at the Irish financial sector. We ourselves point the finger because we want the thing reformed. If only other societies could be as honest in their reflection on their own economic structures, so that they too could reform their societies.

  38. MK1

    Hi David,

    Yes, I agree with your analogy, Credit was a drug that covered up and masked. I used the Heroin = Credit (too much) analogy. But whatever analogy we use, its clear that we and other countries over-indulged in credit. It washed through our economies like a wave/flood, finding places to expand, property bubbles here, businesses flipped there, sub-prime in the US CDO’s, etc.

    Here’s a mental exercise for you and other readers alike. Supposing we (Ireland) saw this coming and did not over-lend, etc, what would be our situation now? We would most likely be experiencing a contraction due to the general slow-down in export markets, etc. But overall, what amount of the problems that we are seeing were self-inflicted and what would have happened anyway? This is what the Government need to fess up to. Did we mae our situation twice as bad due to ineptitude?!?

    We also need to be clear what steps we need to take long-term and short-term, and they may be different. For example, long term, what level of credit should be allowable? An EU-wide solution is needed in open markets.

    Lorcan> last friday there were 100 million BoI/AIB shares traded. A number way above the normal level. Anybody have any ideas why?

    Perhaps the share levels got so low that major sell orders were trigerred/came through from fund managers still holding them. When share prices get lower volumes tend to rise. The volumes for the last 5 days are thus:

    http://uk.finance.yahoo.com/q/ta?s=BIR.IR&t=5d&l=off&z=m&q=l&p=&a=v&c=

    Btw BOI was as low as 17c today.

    > governmentium (Gv)

    very good but probably far too intellectual for the govermment themselves. By the way, does this element have a half-life? (Yes – i Know there are half-lifes within it! ;-) )

    MK1

    • Deco

      MK1 – can we assume that the fund managers selling BOI shares to a record low price – that this is an indication that the market has 0 confidence in the new CEO of BOI ?

      To me, this certainly seems to be the case. As a taxpayer, I have no confidence in his ability to get above the mistakes that he has been practicing in his career in BOI, and before that in that even worse junk bank RBS. Today, RTE are focussing the spotlight on Eugene Sheehy. Other media organs are along the same wavelenght. But Sheehy is a genius compared to the BOI’s Boucher. Nobody on the media is commenting on the proven incompetence of the new BOI CEO. I am not defending Sheehy. Sheehy has definite questions to answer. But Boucher is getting the kids gloves treatment here-and as a taxpayer I detest that. I am waiting to see if Tintan O’Foole attacks Sheehy in a manner that was completely absent from his coverage of the ANIB/ILP loan scandal – where Tintan declared that ILP was a “respectable institution”.

      I wonder what AIB’s newest volume shareholder Dermot Desmond will make of it all. A Corkonian by birth, and a Northsider by choice, it seems that Dermot Desmond avoided BOI like the plague, and chose AIB to be the eventual winner instead. It seems that Dermot Desmond does not want anything to do with the nepotism rife BOI, and is only getting involved in AIB out of pure opportunism. It might be interesting, to see how Desmond intends to implement a turnaroud in AIB, so as to make maximum profit.

  39. StephenKenny

    MIse Eire

    With the media and politicians screaming at the banks, it is sensible to look elsewhere. The banks operate within the laws that cover banking, and the laws are created and passed by the judiciary, civil service, and the politicians. The bankers, of course, also lobby to have those laws changed.
    The Canadian banking system is pretty much untouched by all this, not because their bankers are inherently more honest than ours or US bankers, but because Canadian law is much tougher, than elsewhere. The banks simply weren’t allowed to get involved in all the nonsense that others were.

    It is interesting to note, that in the current situation, it is neither in the interests of the politicians, nor the bankers, nor the judiciary, nor the civil service, to do anything other than refloat the banks – at any cost to the taxpayer. When people said there was a systemic problem, they were right, but it wasn’t the financial system that had it, nor was it just the politicians. It is our system of government.

  40. wills

    Hi Bloggers.

    My interpretation on Davids Botox analogy……

    Botox = Dysfunctional Credit production run amok frankenstein style like

    in the community.

    • wills

      ALSO…

      ….. the Botox is then used to cement a master/slave regime set up
      to the benefit of some and to the utter defiling of others.

      • wills

        Hi Bloggers.
        I’ve an idea, one cant be arsed doing a proper days work
        for real earnings using real capital so what one can do is unleash
        a dysfunctional credit production system into the community and
        this enable one to make piles and piles and piles of money through
        untold war misery rape and destruction and all one has to do is get
        in on a piece of the action, just give the wink and nod that signifies
        your not one of those “f#cking dipsticks who see’s the best in things
        and wants to do things honestly f#cking dope”.

      • wills

        Hi Bloggers.

        I’ve an idea, one cant be arsed doing a proper days work
        for real earnings using real capital so what one can do is unleash
        a dysfunctional credit production system into the community and
        this enable one to make piles and piles and piles of money through
        untold war misery rape and destruction and all one has to do is get
        in on a piece of the action, just give the wink and nod that signifies
        your not one of those “f#cking dipsticks who see’s the best in things
        and wants to do things honestly f#cking dope”.

  41. Tim

    Malcolm McLure,

    “FF has adopted the “Who the hell are you?” aggressive-protective-aristocratic mentality that we thought we had gotten rid of when we emerged from colonial status.”

    Malcolm, sure, that is why I have quoted Yeats, here. Our “boys” have, simply, REPLACED the “absentee-landlord”.

    That’s my whole point.

    Obviously, you get it, but you mis-understood me. I must work on my communication-skills.

  42. noonep

    “The market capitalist model has failed,….remedies of how to get it back on its feet. It’s not going back on its feet, …….the financial apocalypse is only beginning”.

    Too right!

    Ireland needs to own up to its ‘Dorian Grey Syndrome’, and fetid dysmorphophobic, narcissistic character traits, and arrests in national psychic maturation and move on. http://en.wikipedia.org/wiki/Dorian_Gray_syndrome

    This seems the ‘Second coming’ shift of global economic wealth and power axis.
    “Turning and turning in the widening gyre
    The falcon cannot hear the falconer;
    Things fall apart; the centre cannot hold;
    Mere anarchy is loosed upon the world,
    The blood-dimmed tide is loosed, and everywhere
    The ceremony of innocence is drowned;
    The best lack all conviction, while the worst
    Are full of passionate intensity”.
    WB Yeats,

    “It has been said that politics is the second oldest profession. I have learned that it bears a striking resemblance to the first”.
    (Ronald Reagan)

    “Recession is when your neighbour loses his job. Depression is when you lose yours. And recovery is when Cowen et al loses theirs.” (R Regan)

    “We might come closer to balancing the Budget if all of us lived closer to the Commandments and the Golden Rule”.
    (R Reagan)

  43. wills

    Also……

    ……… this Botox is used against a portion of the population to deny them any
    status other than one that puts them in servitude to a laizy greedy perverted
    greased up grossed out will never do a proper days work child abusing
    sly sneaky cunning smart bunch stretching from the lower class up up up
    into the ruling elite tied together in a master/slave set up keeping in fear
    and need the slaves who have been sexually abused in childhood to shut
    them up and program them into servicing the master into their old age to
    wipe their fat flabby laizy arse in their old age and to facilitate any infantile
    type like perversion along the way that amuses.

    • wills

      Hi Bloggers.

      Botox = dysfuntional credit production = power of money creation in the hands of private banking industry

  44. Deco

    David.On reflection, this article might be your best yet. Because it cuts to very essence of the delusion that was created concerning Ireland.

    Botox applied to “M’Asal Beag Dubh” does not create a win the Derby.

    We need wholescale institutional reform of our state system. And thereafter of the private sector, especially with regard to the tenets in Article 45 of the Irish Constitution.

  45. a shot of Botox would hardly have deadened the expression on Martin Cullen’s face when the door fell off his Air Corps helicopter when he was doing what he does best- jollying around the country, at great expense to the long sufferin’ taxpayer.
    Could have been worse of course-it could have been a property market “landing”.
    The fright he must have gotten might save us a small fortune..if it brings him down to earth for a while.!
    (P.S. I love that “Governmentium” analogy.)

    • Deco

      No mention of Cullen and the expensive trip he got in to visit the Beijing Olympics. A pity that junketting is not an officially recongnised event in the Olympics. Our politicos would bring home gold medals in both the individual and team categories.

      Can somebody tell me again – what purpose does Martin Cullen serve for 120 K per year plus expenses ? It seems to drop out of my memory very quickly. And nobody else I ask seems to know either !!!

  46. jim

    I have been browsing through some Irish blogs lately following the property slump and some of it makes strange reading.As you would expect builders and developers who are selling at LOWER prices now are coming in for some heavy stick from buyers.All sort of tactics are being suggested to buyers by people on blogs,offers of 30-40% below asking price are common suggestions and if the sellers say no,then all sorts of profane language are being suggested ,hang tough, tell the so and so what you think of them.What’s strange about all this is the people now buying are by and large people who never bought before and were not caught buying at inflated prices ,but are being encouraged to bury the hatchet in builder/developers by angry people who have a score to settle.Basically it seems to boil down to telling a first time buyer to “go up to the builder,curse him into the ground,offer him 40% below price,he say’s no,curse him again,walk away,go back after 4 weeks and repeat the process”Estate agents are attracting the same abuse.People are making appointments to view houses and leaving the EA’s sitting with no intention of keeping appointments.Abusive phone calls.etc.It’s becoming a blood sport in a sort of way.The thing that bothers me about all this is what happens when an Estate Agent is trying to sell a house for someone who has lost their job,forced emigration,or some other distressed circumstances.No doubt the EA has suggested to the person selling to drop their price to what the present market will pay to help a speedy sale.(which helps the EA’s turnover for the cynics among ye) and so the distressed seller goes to the market to be met by,yes youve guessed it,.. the bloggers baying for blood.Word of caution in these peculiar time’s,when you see someone selling their HOME, leave the hatchet in the woodshed where it belongs,dont blame everybody for the builders/bankers,because you never know,someday,”there but for the grace of God go I “.or taking from hill street blues “let’s be carefull out there”.

    • Garry

      The wheel has turned and now there is absolute certainty that prices are only going one way…. down…. some buyers are putting the boot in now that the shoe is on the other foot, these complaints would have been from the other side a few years ago, know several people who were left sitting by estate agents….Either way its not a pretty sight, whoever is doing the gouging.

      I think right now nobody knows where the floor is on prices which is the problem, those lower prices you mention still look high when compared against wage multiples and job prospects. Im sure we’ll overshoot on the way down as well as on the way up.

    • I know what you’re saying but the issue is exaserbated by the bluster of estate agents who are still talking up the market. Over the past few weeks of tentative house hunting I’ve hard “the market will rebound within 12-18 months” loosely paraphrased about 5 times. Maybe it will but where will the market be then?

      Customer’s are offering 40% below the price as that’s probably a reasonable price for it. On this blog David mentioned a reasonable multiple of rental income for a house at around 17-18 times gross annual rental income. A friend of mine owns a house he’s renting for 700/month. He used to get more but it’s dipped by 100/month. Indicatively the house should be worth around 150k. Let’s be generous and suggest 180k. Yet he paid 340k for it in 2006. He was loaned around 7.5 times his salary at the time and tempted by interest-only and low rates. I could use general figures but I don’t think anyone would disagree that this is a microcosm of the problem at the moment. House prices reached prices which were ludicrous but otherwise smart people (many of the them young) were encouraged to get on the property ladder. They are now consoling themselves that they bought the house to live in it (if they did) and watching on in horror as their “sound” investment quickly depreciates.

      As I’ve said before the government needed to act to provide debt relief for mortgage holders, Shoring up the banks will only help for a while but it’s personal debt which is crippling. By providing the debt relief to the banks we’ve sought to control write-downs and plateau the crash. Nobody outside Ireland believes our property market isn’t still wildly overvalued (I’ve heard 60-70% from peak) so it’s a move for home consumption only. It isn’t working. I agree that there’s a lot of hubris coming from buyers at the moment but we need to start dealing with the possibility that there’s no short term recovery and understand what that means for our economy.

      The implications are that many people simply can’t sell. Think of married couples separating at the moment. There are often NO assets to divide as the family home is in negative equity. That’s grim and foreclosures are inevitable.

      Unless the government comes up with some reasonable strategy to protect families from foreclosures and reduce their personal debt burden the situation will get much worse.It really is tragic yet we’re obsessed with balancing the books like this was some leaving cert-grade accountancy problem. I think we’re compounding a bad situation and predict that we’ll probably see much angrier protests than last month’s march.

      • Garry

        The problem is very simple to understand if not to solve
        1) Private, corporate and public debt is too high
        2) There is not enough money in Ireland to bail out people; there is just about enough money for the govt to pay itself, run basic services, and reward a few cronys.
        3) Similarly. There is not enough money in the EU to bail out Ireland without some pain for the EU and severe pain for Ireland

        I dont believe there is any appetite to provide debt relief for mortgage holders either from the government or the banks.

        The banks are in the game of trying to move debts from individual developers to as many buyers as possible…. On the basis that mortgages for say 1000 people will probably be lower risk than debt from 1 developer. Any money that is going they want for ‘recapitalisation’, code word to add to their cash reserves.
        The govt don’t care, because the people mortgaged to the hilt are too busy to protest and scared of losing everything…. government home choice loans and affordable housing and other initiatives are schemes to help developers, in this case debt transfer via sub prime lending from developers to individuals with subvention from the state.

        The harsh truth is the most effective way to reduce overall bad debts is to have as many owing as much as possible and with the prospect of losing everything if they don’t pay up…Hence the ever more desperate attempts to lure more people into the debt trap.

  47. MK1

    Deco> this is an indication that the market has 0 confidence in the new CEO of BOI ?

    Financial stocks took a battering across the globe. Any holders of BOI can dump their stock at any time, as lets face it, a value of 200m on BOI is more or less worthless. People will only get in now using ‘betting’ money. So I dont think its a pure reflection of the CEO appointment although that clearly wouldnt have added much confidence. But 0 confidence + 0 confidence = 0 confidence!

    Its the same for AIB, as in being in a bad situation, although Desmond is right in that if one bank was to be saved AIB is in the bext position to be saved, the single Good Bank scenario, that could be AIB. However, that is not certain either. We know that yesterday AIB have increased their bad debts to 1.8 billion in their latest financial results. That means they will not get that money back – ever! And their bad debt provisions will only increase as this ‘crisis’ plays out. This is a 25 year “storm”/correction, a 75 year one or some would say a 100 year one. I say we have never been here before because the system is different than in times gone past. Some are predicting that bad debts in AIB will be anywhere from 9 to 18 billion. That could dilute any shareholder down to zero, especially if the government lets the bank go. Or maybe even the IMF! They may not do so of course which is what Desmond is betting on, if he’s in.

    I know people look for scapegoats, someone to blame, etc, its a natural human reaction, but these bank problems were not caused by just a few ‘bad’ bankers. It was systemic, as StephenKenny pointed out (and I’ve bleated on about it). If it wasnt Fitzgerald or Boucher (if he is culpable) it would have been some other sap.

    Looking at what’s happened in Canada will be interesting. That’s where we could have been now. Maybe worthwhile doing an article on Canada David, a good place for a trip too although I would personally wait until it gets a bit warmer over there.

    “I’m a lumberjack and I dont care …..”

    MK1

    • wills

      @mk1. Suggest bad bankers meaning gangsters abusing credit production to fake monies and pretend its real wealth
      to play on thick as two planks joe bloggs and hook em into the usury fraud and endless worry seen em into his
      grave as to whether he can pay his bills at the end of the month.

  48. Malcolm McClure

    The trillion is the new billion. At the European level the credit crunch is several orders of magnitude greater than has been admitted or even realized.
    Up to now we have been shuddering at the extent of Ireland’s potential indebtedness, whilst largely ignoring events elsewhere.
    Eastern Europe is the real basket case, heavily indebted to banks in Austria, Sweden, Switzerland and other western countries, including AIB’s stake in Poland. The IMF has ‘only’ $142 Billion dollars quickly available to bail out the eastern borrowers who are being squeezed by currency depreciation. Last week European leaders agreed to increase IMF funds by $250 Billion, although nobody seems to know where that extra liquidity is coming from.

    The Daily Telegraph wrote on the 11th February: “European banks may need £16.3 trillion bail out, EC document warns.” –In the article, the reporter revealed that he has seen a secret document produced by the EU Commission that briefed the union’s finance ministers on the true extent of the banking crisis.– Less than 24 hours later, the article’s header was changed to “European bank bail-out could push EU into crisis” and two paragraphs had mysteriously disappeared.

    Here they are:
    “European Commission officials have estimated that “impaired assets” may amount to 44pc of EU bank balance sheets. The Commission estimates that so-called financial instruments in the ‘trading book’ total £12.3 trillion (13.7 trillion euros), equivalent to about 33pc of EU bank balance sheets.
    In addition, so-called ‘available for sale instruments’ worth £4trillion (4.5 trillion euros), or 11pc of balance sheets, are also added by the Commission to arrive at the headline figure of £16.3 trillion.”

    If this report is confirmed, we may conclude that the IMF’s $400 Billion is inadequate to balance total impaired EU assets of $22.8 Trillion by a factor of 57. That is the size of the Euro crater that we need to start digging to fill. It could require a Euro devaluation of about 100 to 1 to remedy this situation.

    These magnitudes are practically incomprehensible, even to those of us who are used to dealing with big numbers.– ‘We ain’t seen nuthin’ like this before’.
    What assets will retain some value after that kind of inflation? –Property in prime locations, agricultural land, utilities, food industry, fine art, rare stamps, gold, diamonds.
    Even guaranteed cash will become worthless.

    • Deco

      Despite this….our leaders….who either got us into this mess….or who tried to get us into this mess and were denied the opportunity…will be instructing us that our fate is inextracably linked to Europe….

      Do they really expect us to take them seriously ???

      We could have prevented this by calling a halt to the property boom some time after Eddie Hobbs did his “Rip-off republic” series, or around the time David did his documentary on the boom. But the media steered us backon course for the rocks. We created this mess by our own tendency to believe in BS.

    • wills

      @malcolm, our money has been worthless since it turned fiat in ’71

    • Garry

      The trillion is the new billion.

      Post of the week

  49. Deco

    Essential reading for all taxpayers !!!

    Davy have been the most accurate private sector Irish based forecasters with respect to the Irish economy in the last three years – unless I am mistaken. I can even remember Robbie Kelliher of Davy getting savaged on Sunday morning radio on RTE when he started forecasting that Dublin property prices would collapse. Kelliher was kept off RTE for a long time afterwards – and would pop up on occassion on Today FM.

    http://www.davydirect.ie/Generic?page=MorningNews2

    We are 50% shareholders in both these outfits by means of the only rainy day fund we have for this crisis – The National Pension Reserve Fund. (The NPRF is the fund that Joan Burton wanted scrapped in 2002 because it was a drag on the economy back then, and because she disagreed with the idea for putting money aside at the time – since then she has changed her tune completely). So basically we have limited chips for this gamble.

    In any case Davy is predicting a serious property crash. A bit like David himself stated before Christmas with his ‘dropping like a stone analogy’. AIB are not as seriously exposed as everybody else. Still no update on the ANIB deal. We are now entering the core part of the property crash. A massive sectional squabble has already started concerning who will pay for the readjustment of the Irish economic imbalance. This is Irish society at it’s ugliest. Basically everybody will be shouting louder than each other. There will be a lot of lies, deceit and pretence. I am not confident that we will have an honest discussion about the matter. We did not have an honest dicsussion in the 1980s, or in the early 1990s. There was a lot of sensationalism in the media, and a complete avoidance of the core problems of the Irish economy then. And I expect this again.

    Therefore we must, as far as possible all do our best to keep the discussion honest and fact based, and not biased to be on benefit to any vested interest or lobby group. And we must also ensure that we perform a proper economic and social assessment of the role of any vested interest before agreeing with their proposal. In particular we must ask questions concerning all forms of market rigging, and all promotion activity in favour of sectors which deliver little or no benefit, either economic or societal to our country. Taking the old boars away from the swill, seems to be a proposal that is fully endorsed by the young boars waiting in the wings to get their snouts in there instead. Only radical overhaul of the system, with deep institutional reform will amend that. I think that we are not going to get the reform we need to rescue our economy. Basically the vested interests are very strong, and there is a widespread culture of vested interests flexing their muscles going back to the 1970s, to gain at the expense of society as a whole. And this is contained in all the political parties in the state. The media have demonstrated that they are swayed by advertising contracts, and can be bought to deliver the subtlities required to protect their paymasters.

    We need to be alert – in a high state of intellectual awareness, so that we are fooled less often than we used to be. That should be our goal, on this board.

    • Dilly

      I did notice, that RTE seemed to suddenly lose interest in Davy, and started getting their stats from others. Someone must have had a word in their ear.

  50. wills

    Hi Deco,

    in other words i suggest on your following point

    “perform a proper economic and social
    assessment of the role of any vested interest”

    one would be wise to begin at the start which i suggest is the blatant corruption
    of the utility of ‘credit production’ and turning it into a Botulism
    contagion to destroy personal sovereignty.

    …but this then kills the complacent blah de blah chit chat and meanwhile disaster is heading in our direction.

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