April 5, 2009

No cash for trash, please!

Posted in Banks · 239 comments ·

While practically all of the focus this week will be on the budget, the plan to clean up the banking system will be of more long-term significance to the country. The bank clean-up goes to the core of our monetary policy. Without properly functioning banks, we will not pass any interest rates cuts onto the economy. We will have an engine, but no petrol so to speak.

Unfortunately, Brian Lenihan, the chief mechanic, seems to have an unusual view of how the engine works, while the mechanics around him are just keeping their heads down, hoping to hold on to their jobs.

However, this engine works not only on liquidity, but on expectations, too. Therefore, we have to offer hope to those who are now in debt, so that they will come into work and continue to try to keep the businesses open while the banks figure out what to do. The worst thing now would be to pull the plug, or for the banks to expect to get all their cash back. Hardening loan terms now will only cause more bankruptcies.

But how do we ease the repayment pressures on businesses that have a future but too much debt without making the taxpayer liable for the sins of the delinquent debtor? More crucially, how do we keep the banks on the hook so that they carry the consequences of their recklessness?

A bank plan has to answer all these questions satisfactorily. This is why the current favoured plan, which is a ‘financial skip’ loftily termed an asset management company, won’t work. It falls down on the third issue. If we buy all the banks’ distressed loans at today’s market value, we will let the banks off the hook.

So, how else could we do this while satisfying the second stipulation that this should not cost the taxpayer a penny? First, the state should insist – as its primary stipulation – that the bank plan should not cost the taxpayer a penny. Secondly, it would seem obvious that all the senior management should go, but alas that looks now to be a pipedream and not the way our country works.

In Ireland, the government appears to be willing to saddle the person on the street with the bill for the bankers, and not even demand the heads of the guys who enriched themselves while bankrupting the country.

This is even more galling when those of us who questioned the wisdom of all this and warned that the banks were taking us for a ride five years ago were told to ‘‘belt up’’ by ministers and by the former taoiseach.

Having made the fatal mistake of boosting the property market on the upside to satisfy their own political ends, we now are faced with the equally ‘appalling vista’ of buying bad assets too early with real cash and compounding the problem. We are about to unveil the most expensive ‘cash for trash’ scheme the world has ever seen, and no one is saying anything about it.

The government is asking us to trust it on the price of a piece of land or a house. Why should we trust it? Nothing that the government has done over the past ten months would suggest that it could call the bottom of the market, so the potential for a monumental mistake is enormous.

Once this banking plan is executed this week, the senior management and boards of the banks are free. They will have no bank debts on their books and they will start lending again. Their share prices will rise because we, not they, are taking the rap for this delinquency.

Do you know what these lads will do then? They will consolidate the system. This will result in the delinquent management of the two big banks, swallowing up the smaller banks and they will end up personally in a stronger position after the bust than they were in the boom. If anything reinforces our ‘banana republic’ tag, this move will.

However, it is not just the Minister for Finance who is at fault here. He is, after all, just one man at the top of a deeply – in fact, embarrassingly – out of touch and incompetent group comprising the Central Bank, the Financial Regulator and the Department of Finance. If the top layer in this troika keep their jobs, nothing will change in Irish finance. We have the same institutions that failed to predict anything now charged with overseeing the recovery.

Instead of borrowing a fortune today and realising the losses of the Irish banks at today’s market price, a smarter move would to be to make the banks, not the taxpayer, pay for their mistakes.

Why not entertain the following approach? First, we admit that the bad debts will be €50 billion or even as much as €100 billion. We don’t have this type of money. But the European Central Bank (ECB) does. The G20 said they would do everything in their power to unlock the system, so let’s test this global commitment by asking the ECB in the spirit of solidarity to do something inventive.

The Irish state could set up an asset management company to manage the distressed debts of the bank. This ‘financial skip’ would take over all the management of the debts but, crucially, the banks would still own the debts, because the new asset management company would simply be working out the debts and trying to get the best price. This is the first crucial difference between this plan and the government’s preferred plan.

The banks would pay a set figure of around €6 billion to the state over the ten years of the asset management company’s life. This could go to build hospitals and roads.

This implies no dividends from the Irish banks for years, but the shareholders would get the upside of the stocks rising as the economy recovers. This will help our pensioners and the thousands of Irish people coming up to retirement age, whose nest eggs have been smashed by the greed of the banks’ top brass. As the market gradually recovered, the banks would begin to recover some – but not all – of their bad debts.

The most significant part of this plan is that it doesn’t cost the taxpayer a penny, and the responsibility for the bad loans remains firmly with the banks, so that they recover without being bailed out by us.

If we are serious about moving the country on, and if the G20 is serious about international solidarity, this is the plan for us. However, if the state is in the business of mortgaging the poor to bail out the rich, the current buying at market prices plan will be announced. We may well know whose side they are on by the end of the week.

  1. noonep

    Spot on but as Frank Gill of S&P suggested we need a change of government to move this on, anything better than the ‘Pierrots’ that have mortgaged our future.



  2. Malcolm McClure

    David: You have obviously put a lot of thought into this suggestion. Having the banking problem laid out so clearly by you entails admission by the rest of us that practical solutions lie beyond our human ability to fathom. –So we go to the ECB. They refer us to the IMF. They in turn, know nothing about Ireland but have a formulaic approach that ties the hands of all Irish governments for the next 10 years, unless we can unscramble the problem for them.

    Simply put: We need at least two viable banks. We’ve guaranteed six bank’s debts and deposits. These debts overwhelm those banks collective viability without getting outside backing. Please, IMF, help us with the banks and we’ll put our fiscal house in order.

    • Tim

      Malcolm, “They refer us to the IMF. They in turn, know nothing about Ireland”.

      This is not correct. One “Thomas McLoughlin” is one of the head boyos in the IMF and he was bred, born and reared in Drumcondra; I stayed in “diggs” at his mother’s house while in college; I know him (have visited him in Maryland) and his whole family.

      He is more Irish than I am (I know nothing about YOU). His Father, Christopher, was a “runner”, aged 16, for James Connolly in the GPO in 1916 and I was given a present of his copy of “Bunracht na hEireann”.

      To say that they “know nothing about Ireland”, is erroneous.

    • Dilly

      The IMF are not interested, simply because the current Government are putting their friends ahead of the people of Ireland, they don’t give a fiddlers about the average Joe Soap. Until this changes, the IMF will not bother.

  3. Johnny Dunne

    We can’t afford to ‘crystallise’ the bad debt losses into a financial skip or bad bank, sounds great in theory – generates fees but is madness. We need to generate economic activity by guaranteeing lower taxes, this will generate employment, people will travle to Ireland to work set up business and transfer operations. In turn, residential and comemrcial properties will be in demand and therfore valuations will stabilise. The alternative is one direction….

    Government spending is still out of control (March exchequer returns show a 70% increase in Education from €560k in 2008 to €950k in 2009) and tax terurns are plummeting more than the Government or civil servants in the Dept of Finance admit (same March retruns show a 70% fall of in Corporation tax ffrom March 2008 €167k to ‘just’ €51k in 2009). What’s happening – are all the major contributors to corporation tax dissapearing – might be the ‘property guys’ clawing back previous payments as they terminate businesses and show a massive loss. Whetre is the CT from the MNCs ?

    Knowing this why would Minister Lenihan raise taxes for business and employment ? He guarnatees all ‘deposits and bank liabilities’, if he now transfers the bad loans the valuations will be realised, bank assets will be decreased by billions and the gap will have to be filled through borrowing now as the taxpayer can’t pay. Is anyone highlighting that total borrowings to meet government deficits in the first 3 months this year is €10 billion – annualised on this run rate is €40 billion !

    Structual deficit is a symptom – but economic activity is the problem.

  4. jim

    Its all about trust,pure and simple….IF I need to have an operation tomorrow,my worries should not be compounded by thinking the Doctor could steal some of my organs while Im on the operating table.If you think of Fianna Fail as that Doctor then the History of that Party under succussive Leaders would guarantee you the loss of at least 1 kidney.No Credibility, too close to all the offending Parties.Mouthing off pre-learned scripts to vetted questions.I think the word that everyone is looking for is SLEAZY.Not fit for Office,way too evasive when asked straigh questions, too shifty, too busy trying to protect the wrong type of people.Too accepting of wrongdoing by supporters and sponsors.Ideology all arseways.Too busy running with the hare and hunting with the hound.Public pronouncements mean nothing.Their word is no good. Feckless rogues.I think the general public have had it up to the neck with these chancers.People are to well educated these days to buy the auld shite thay have been peddling for years.NO not Me.Never want to see or hear anything from them again.

  5. jim

    Back to the more mundane world of high Finance, its nice to see Katleen Barrington taking an interest in me auld mate Liam oReilly in Todays Sunday Buisness Post.Liam worked for the Central Bank and then became our first Financial Regulator.Hope He has an eventfull time before the Gubberment Committee.Just follow the money Katleen,your on the right track.Dont forget about the share dealing,Im sure there’s a can of worms offshore.Does people not find it strange that when the Financial Regulator finds something to Investigate it brings Dolittle&Touchy in to do the leg work.Can someone remind Me again just how many people we Pay to attend for duty at the Regulators drop in center for the bewildered,is it 1000? Of course there is always the possibility that some of the bewildered could become whistleblowers if exposed to lets call it “sensitive information”.Maybe the old Reg is better contracting it out and burying the report under some clause and yes I thought of Santa.TOO many cynics on this forum for any sort of meaningfull debate.Chew on that little pearl me hearties.Up Aloft Jim lad were off too Nevis in the Caribbeeeeen.Arrrrrr.

  6. Tim

    # Malcolm McClure Subscribed to comments via email | 05 Apr 2009 12:55 pm

    Noel Whelan ends his Irish Times piece today: “There are now more important things at stake than the political fortunes of the Government.”
    – No, no, no, Noel, not for this government there ain’t.

    Regardless (or indeed because) of their low standing in the polls, FF, in their budget, will put the requirements of its core supporters WAY before the needs of the nation. To do otherwise would be to break their habits of the past 90 years.

    You can almost hear Cowan to Lenihan;
    “Steady as she goes. Don’t rock the boat. 50 cent on a pint of stout and a euro on a packet of fags won’t hurt our lads. Demonstrates our concern for the health of the nation. Sacrifice a few of our government lackeys with promises that “the boys” will look after them. –After all, the IMF is hiding behind the curtains, ready to appear on stage with lightning and a roll of thunder. We’re the lads that they will have to deal with; and WE know how their money should be spent. On public works, teacher’s pensions, junkets for FAS, the Unions, Irish Enterprise, etc.”

    National priorities? –Don’t make me larf.
    Reply to this comment

    * Tim | 05 Apr 2009 2:29 pm

    Malcolm! I am surprised at you! Juxtaposing “teacher’s [sic] pensions” and “junkets for FAS”.

    You usually seek and expect honest and accurate posts and usually provide same.

    This one is not just inaccurate, it is wrong. To present hard working teachers who PAY FOR thier pensions over 40 years as if they are in ANY way related to the dishonesty (if not downright Fraud!) of certain highly paid manangement figures in FAS is disingenuous in the extreme.

    Moderate your misdirected ire, please.
    Reply to this comment

    # Malcolm McClure Subscribed to comments via email | 05 Apr 2009 3:29 pm

    Tim: Happy Birthday. –’Teachers’ pensions’ was merely shorthand for the outright featherbedding of the public service, provided to ensure that insiders happily continued to support FF through thick and thin.
    I have no doubt and know from experience that most public servants work very hard to keep the show on the road, in the sure knowledge that their terms of employment are so much better than anywhere else in Europe and possibly the world. Of course you and your colleagues will continue to support FF whilst this remains the case.

    For their part FF realizes that it needs to keep the PS (especially teachers) sweet. As Garrett F. said in IT today: “In 1977, the Lynch government had blown the economy off its course, by abolishing rates and road tax and by huge public spending increases — including, as I recall, expanding public service employment by 5 per cent in 1979, and simultaneously raising average public service pay by no less than 29 per cent.” This established a recusant symbiosis, operating to the detriment of the rest of society, which still continues today.

    Thank you for the opportunity to make this point clear, and Many Happy Returns,– so long as they are not FF candidates.
    Reply to this comment

    * Tim | 05 Apr 2009 5:14 pm

    Malcolm, I am appalled that you have not withdrawn your equation of teachers with fraudsters.

    People with Post-Graduate qualifications earning less than the average INDUSTRIAL wage are hardly “featherbedded” and, indeed, Garrett’s “29 per cent” was and IS skewed by the extraordinarily highly paid top civil servants and politicians.

    If you admire Dr. Fitzgerald so much, ask him to explain why AIB wrote off his mortgage in the 1980s and then decide whether he is a hypocrite or not.

    I supply, for your edification, this from Gene Kerrigan today:
    Reply to this comment
    o Malcolm McClure Subscribed to comments via email | 05 Apr 2009 6:34 pm

    Tim: The equation of teachers with faudsters is in your mind , not in what I wrote above. It is typical of apparatchic chicanery to imply what is not there.
    Do you really think that 50 year old teachers “who are ecperiencing (sic) professional difficulties, cannot keep up with modern trends and technology” would rise effortlessly to earn €70,000 in an INDUSTRIAL environment and would immediately be granted a €35,000 pension to step aside?
    Gene Kerrigan just delivers an ill-digested diatribe against the masters of the Dark Arts who he equates with the bankers. A much more reasonable and responsible take on the situation is by Ulick McEvaddy in an interview in today’s Indy. “It [social unrest] is the only thing I could see triggering a general election, but hopefully that won’t happen. I would discount it, but a lot of people are talking about it.”
    Reply to this comment
    + Tim | 05 Apr 2009 7:18 pm

    Malcolm, no; you included “teacher’s pensions” in your negative litany above, so the equation was made by you, not in my mind.

    50 year old teachers do not earn €70k and what they do is hardly “effortless” – why don’t you accept the offer I made last week and try it yourself? At least, then, you might have some understanding of what it is you seem intent upon attacking.

    A pension of €35k is not “granted” to any teacher; they have to PAY for it over 40 years in order to get it.

    You do Kerrigan a grave injustice, I fear; Like DMcW, he has predicted/explained/indicated what was going and what is going wrong for at least five years – please read his archive.

    Those he refers to as “the masters of the Dark Arts” are, correctly, equated with the bankers because they are the “economists” who work for the bankers and paid handsomely to lie to us for many years.

    Ulick McEvaddy is a member of the D4 circle and part of the problem, so I am surprised that you cite him – I took you for more discerning.

    Perhaps stop “taking the Times” and read more broadly. The IT represents a very small and narrow club.
    Reply to this comment
    # Malcolm McClure Subscribed to comments via email | 05 Apr 2009 8:33 pm

    Tim: My assertion about €35K pensions was quoted directly from your email of 10:45 last night , which included your letter to the Minister of Ed and Sci. (It follows directly from your points 1) and 2a).) The minister replied:
    ‘a teacher aged 50 years or over… has the option of an immediate cost-neutral early retirement pension and lump sum on resignation.’
    –Nice work if you can get it, particularly if the teacher has lined up a job in politics for afterwards.

    Years ago, there used to be a moratorium that those with jobs in the public gift were precluded from meddling in politics, apart from joining a union. That all seems to have gone by the board, along with other useful points of honour. Once elected, their contributions tend to become incestuous, as their own field assumes exaggerated importance in their minds, to the detriment of the industrial worker and other issues.

    I agree with Ulick McEvaddy that the castigation of the bankers has gone too far; they were part of a universal expansionary culture that eventually got out of hand, mainly due to the lack of regulation by the Central Banks. Some serious mistakes were made but their legacy will endure.

    I read very broadly, thank you.

    # Philip | 05 Apr 2009 6:37 pm

    My fundamental problem with a lot of these geniuses in the financial circles and with those who ape them is their fundamental view of debt – which is … to grow (economically), you need debt and to pay it off you need to grow more. Aside from being fundamentally unsustainable, this fact alone illustrates all too well why bubbles form becasue debt generated inflation (e.g. property) creates the illusion of increase wealth without the corresponding increase in productivity. The ponzi scheme depends on growth to keep the ball rolling.

    When this recession ends, wages will be lower, things will find their “true” value and the debt taps will be opened again and I can guarantee you that this rollercoaster will start again. So when these plonkers are asking for cuts and PS cuts and lowering of minimum wage etc. for the sake of competitiveness blah blah, all we are doing is priming the pump for the next wave of lunacy.

    I propose we look for things to stop. No growth. No Debt take on. Treat banks like drg pushers and let the debt sodden toxic wastepiles collapse. Growth for extra population, but no extra personal wealth (except for those you clearly need it). Keep that car for another 100-200K miles an keep a genuine car industry going – not the new car brokerage nonsense. Loose that gut of yours and take up walking/ cycling. A 10 mile cycle to work is well within the range of most people. Visit the library more and get the allotments going. Get back to school and get healthy. You want to pay few taxes…have as low as wage as possible!! Stop taking on debt! Buy what you need. Dream on? .but honestly folks, if we do not start thinking like this soon we are going to be in deeper trouble within a decade and the financial whizzkids will have other excuses.
    Reply to this comment
    # Tim | 05 Apr 2009 10:45 pm

    Malcolm, “‘a teacher aged 50 years or over… has the option of an immediate cost-neutral early retirement pension and lump sum on resignation.’”

    This is correct, but without your assumed “grant” of a €35k pension.

    Yet again, I say to you: Teachers must pay contributions for forty years in order to qualify for their “full pension”, which is 40/80ths of their finishing salary. (If they finish at age 50 and we assume they have paid for their pension for 28 years, they receive 28/80ths of their finishing salary, which is nowhere near €35k). In fact, most people do not do this: most people are not thinking of or planning for their retirement in their twenties; the 28 year example I give here actually assumes that a young person of 22 years old starts contributing to their pension immediately upon starting work – highly unusual, I think you will agree. Most people only begin thinking about their future pension in their late 30s or early forties – that is one reason why private sector pensions are so much more expensive than PS pensions: no-one encourages the private sector worker to start pension contributions early and they end up trying to make provision for their pension over 15 or 20 years instead of over 40 years, as most PS workers are encouraged from day one to do.

    “Years ago, there used to be a moratorium that those with jobs in the public gift were precluded from meddling in politics, apart from joining a union.” I will have to check this; Padraig Pearse was a teacher, I believe, and he certainly “meddled in politics” (but, as I say, I will have to research this).

    “Once elected, their contributions tend to become incestuous, as their own field assumes exaggerated importance in their minds, to the detriment of the industrial worker and other issues.” Here, I will refer you to the slew of Dail contributions, from former teachers and otherwise, over innumerable years, constituting inertia (at best) towards education/pupils/teachers and downright vitriol in many cases. See, in particular, the ASTI industrial action of 2001 Dail discussions – see, too, the “doctored” photograph on the front page of the Irish Times of 12/12/01, insinuating that a teacher could not spell the word “Minister” – that tabloid rag. Do you really believe that teachers are some kind of protected species of government? Pampered? Have you ever worked in similar conditions? Rats, mice, squalor, ceilings falling in, damp rooms, 30/50 year old furniture/equipment/doors that spontaneously lock and cease?

    I refer you, also, to the current TDs who are former medical professionals and the fact that they are NOT assuming any exaggerated importance for the health service; for the plight of underpaid nurses, overworked junior doctors (do YOU want to have a traffic accident and go to A&E and be attended to by a doctor on his 69th hour of work that week?)

    I am going to finish this with you soon, Malcolm, because this little “joust” may be putting off other posters with interesting matters to raise, but I will address one further point first, if I may:

    “I agree with Ulick McEvaddy that the castigation of the bankers has gone too far;”.

    I disagree with you and with McEvaddy vehemently here. The chief bankers are guilty of TREASON and they are still alive, still at-large, still free, still RICH and, critically, STILL doing what they have always done: taking money from good, decent, honest and hard-working people.

    I will offer, in conclusion, Malcolm, that if your intention was to deliberately “raise Tim’s Hackles” because things were quiet here and you thought to have a bit of fun, you have succeeded – my blood is boiling at your affrontery, so well done!
    Reply to this comment

    * Malcolm McClure Subscribed to comments via email | 05 Apr 2009 11:33 pm

    Tim: Quoting you from 9:45 pm Saturday “I will offer my services as minister for education and science in the DMcW Party.”–This demonstrates my point that the public servant’s main spur to enter politics is the belief that they could improve things in the field that they know most about, rather than attempt to improve matters for society at large.

    Regarding the McEvaddy piece, did you actually read what he said? Have you any rational (non-mindless-invective) comments?
    I think McE speaks a lot of sense and the points he makes deserve calm consideration here.

    Tim, I had no intention to “raise your hackles”. I merely advanced a reasoned point of view. That is the nature of polite discourse. I am sorry if your blood is boiling, but a necessary requirement in any political discussion is to remain cool.
    Reply to this comment
    o Tim | 06 Apr 2009 12:28 am

    Malcolm, “the public servant’s main spur to enter politics is the belief that they could improve things in the field that they know most about, rather than attempt to improve matters for society at large.”

    No, I’m afraid: their main spur to enter politics is the money and power. So many teachers in there and they allow Education in Ireland to languish at 2nd from the bottom of the entire 32 countries in the OECD in terms of investment. Surely, this, alone, disproves your assertion?

    Same “Hedge-schools”, new “Landlords”.

    Believe me that I remain cool outwardly, though my blood boils when good people are denegrated for no reason. I have read McEvaddy’s piece, but he is a disingenuous miscreant (thanks for the link, though).

    I believe that I have maintained “polite discourse”, but I cannot accept that you advanced a “reasoned point of view” when you included teachers in the same sentence as morally bankrupt FAS managers’ junkets. Nor will I.

    I also believe that my comments are NOT “mindless-invective”; I truly believe what I say, both here and in my life; I try to be honest and truthful, thoughtful and respectful. I would not insult you, or anyone I meet along the way with “mindless-invective”.
    Reply to this comment

    # Tim | 06 Apr 2009 12:47 am

    Malcolm, since you push me, may I remind you of what McEvaddy, whom you triumph, was quoted as saying in the article to which you referred me?

    “Mr McEvaddy once again came to the defence of former Anglo Irish Bank chairman Sean FitzPatrick.

    “He seems to have been written as the villain of the piece, but Sean FitzPatrick was very much a stalwart of the Irish economy.

    “He shouldn’t have hidden those loans. There was no reason to hide them, but he was probably afraid of the public perception of having such large loans.

    “He made one mistake and paid the price for it. But he was a tremendous engine for growth in the Irish economy.””

    I rest my case.

    • VincentH

      It is a rare spud that can get a full 40 from the get go. Teachers are normally hanging for years before they have position.

  7. Malcolm McClure

    Tim: I think the pendulum about bankers has swung too far and comments like yours above: “The chief bankers are guilty of TREASON and they are still alive, still at-large, still free, still RICH and, critically, STILL doing what they have always done: taking money from good, decent, honest and hard-working people.” do nothing to advance a clear analysis of where we stand, vis-a vis the banks, at this critical point in Ireland’s history.

    We all seem to be agreed that the banks are a completely indispensable feature of the Irish economy. Some bankers have indeed taken liberties with the implicit rules that govern their behaviour. However, all is not fair in Love, War, Commerce or Banking. There are winners and losers. Ultimately the only rules are the Darwinian rules of the jungle, moderated hopefully sometimes by the excellent moral precepts inculcated in school by teachers like yourself. To be an effective teacher you must live by those precepts and you expect all others to do the same. Real life is not like that. Most people fortunately retain at least the outward appearance of abiding by those precepts. Others develop a thick skin and don’t give a damn what anyone thinks so long as they stay out of jail. I am not condoning this, just recognizing the reality of what I have observed. A complete education will, of course introduce moral dilemmas to strengthen judgement. But well-brought-up people tend to avoid contact with the scoundrels out there, so they are always surprised when they get taken for a ride. This, of course is a failure of an education system that doesn’t prepare them to enter the real world.

    McEvaddy has lived in the real world. He has learned to deal with a lot of very slippery characters, so his judgement about Seanie is worth considering. Mere invective about rich bankers won’t get us anywhere.

    • Tim

      Malcolm, “Tim: I think the pendulum about bankers has swung too far and comments like yours above: “The chief bankers are guilty of TREASON and they are still alive, still at-large, still free, still RICH and, critically, STILL doing what they have always done: taking money from good, decent, honest and hard-working people.” do nothing to advance a clear analysis of where we stand, vis-a vis the banks, at this critical point in Ireland’s history.”

      WE HAVE TO TACKLE THESE BANKERS; Don’t you “get-it”, yet?

    • Tim

      Malcolm, mow, I accept THAT as a “reasoned argument”. Thank you.

      However, I still disagree with you about your precept that Seanie Fitz is okay and a grand fella, really.

      I will ALWAYS disagree with you on this, Malcolm; because I have children. He screwed me AND them.

      That’s it.

    • gquinn

      Tim: I agree with you.

      Malcolm McClure: “Some bankers have indeed taken liberties with the implicit rules that govern their behaviour.” – Your sentence here is wrong as it should read “All bankers have indeed …”

      Im a banker myself and I know what Im talking about. The banks got themselves into a situation where they started believing there own spin, property prices can go up forever, what a joke. Not only did each bank CEO bring their own bank but they also brought the country to bankrupcy. Yes, we should now admit it and get over the denial phase. In diplomatic terms the country is screwed and bankrupt and we should all brace ourselfs for another 15 – 30 year recesion with the present government.

      By the way Ireland is now not in a recession its in a DEPRESSION. GDP contracting by 7% that is very very very serious and on top of that our exports are down 20% come on look at the propblem, the country is going down hill fast. We need that 1 Trillion dollars that the G20 came up with and on top of that we need help from both the IMF and the ECB to help the country out.

      If you think about the problem the country has:
      1 Exports are now down 20% on last year and this has been the trend for the last 6 years. Since the Euro is at an all time high our exports are going to decline even more and at a faster pace.
      2 Unemployment is now at 12% and still rising, this will have a big effect on the housing market, it will push prices much lower.
      3 All tax receipts across the board will keep falling.
      4 GDP is now down 7% and still falling
      5 Energy prices are still too high
      6 The cost of doing business in Ireland is still too high
      7 Repossessions of Houses, Cars, Credit Cards and Personal loans have not hit the banks yet. This is a very serious problem to come and it will come because look at the unemployment rate.
      8 Pensions will be hit very hard in Ireland, why because all the banks invest a significant portion of the pension funds into there own shares. Imagine most peoples pension are now down 60 – 80%.

      How does the government adress the above:
      1 They raise income tax, levy tax, VAT etc thereby reducing consumer spending. The one thing that can help the Irish economy
      2 They raise tax on petrol and oil. Increasing energy prices, the cost of doing business and the cost of living.
      3 They cut back on capital projects where this could be the opportunity to reduce the unemployment rate.

      So far I would give the present government a grade of NG (No grade) because they are hopeless. Every time in London I go into an Irish pub and watch the 6 o’clock news I end up getting angry and more angry at the hopeless incompetence of our present government. This has got to change.

      Im voting for Libertas as I want to see completly new people in the Dail and if I see new people running for office then they have my vote.

      • Malcolm McClure

        gquinn: Your analysis above provides a very helpful summary of our present predicament. It will be interesting to see how the budget addresses each of the issues that you identify.

        We all seem agreed that the present government must be changed. We have discussed occasionally the question of who is there out there who can be trusted to do a better job. The have been few suggestions as the consensus seems to be that all possible ‘clean’ candidates are in somebody’s pocket if the truth were known. Obama is having the same problem filling his cabinet posts as many of those asked have had to withdraw because of skeletons in their own closets.

        I suppose we could fill the entire cabinet with squeeky-clean teachers, who would then set us enough homework to keep us off the Live Register. You can just imagine the scene in Cabinet: ‘Quiet at the back, there Nelligan or you’ll be off to Áras an Uachtaráin for a dressing-down.’

    • StephenKenny

      Malcolm has a very valid point, which we should be very careful not to ignore.
      There is a very strong argument that since the banks compete with each other, they will go as far as the law, and the regulatory framework, allows them to. It is the politicians, and their staff and advisors, that set the rules within which banks operate.
      It is of no surprise to me that there is such finger pointing at the bankers – after all, politicians do this sort of thing for a living: obfuscation, misdirection, and just plain lying.
      The bankers are guilty of being complete, utter, and total, failures. In a market economy, most senior bankers would never get a responsible job again.
      You can, with justification, accuse the banks of two further things: Firstly, they encouraged the politicians not to regulate some areas, and to relax regulation in others. But the bottom line is that bankers do not create the laws, it is the politicians do that, so whatever the encouragement, the final decision was with the politicians and their advisors.
      Secondly, the bankers have almost certainly aided, probably by omission (looking the other way), in all sorts dirty dealings.
      It is as we keep on saying: If the politicians and media are saying ‘look over here, look over here’ what they are really saying is ‘and don’t look over there’.

      • gquinn

        I disagree.

        Its all about being responsible for your actions. If each board director in a bank had a big stake in the banks then you would have seen a different outome, one where the banks would not need any additional capital.

        Socialism takes responsibility away from people whether they are running a business or looking after their family. This is why Socialism does not and is not working.

        Under Capitalism, everyone is responsible for there actions. If board company directors screw up then they go bankrpt end of story.

        • StephenKenny

          You disagree with what? What you believe should be the case, or what actually is the case?
          Are you suggesting that company directors should be personally liable for the looses incurred if their companies go broke – essentially getting rid of Limited Liability? Not the shareholders who elect them, and benefit so substantially during the good times? In either case, I suggest you consider the hundreds of companies currently going down, and consider whether it would be sensible to penalise their directors in the way you suggest.

          As things currently look, the bank directors acted perfectly legally. From where I sit, that tells me that there is something very wrong with the definition of ‘legally’, and that, to me, points to those who created the laws.

          • gquinn

            Hi Stephen, I said nothing about directors being personally liable. Read the following line again and slowly: “If each board director in a bank had a big stake in the banks then you would have seen a different outome, one where the banks would not need any additional capital.”

            From where I sit the running of the banks was a disgrace, the directors allowed the bank(s) to be leveraged to the hilt. The leverage was so much that a slow down in the economy would mean they would need additional capital. The leveraged amount was an irresponsible amount and was not conservaitly done and all the board of directors from all the banks should all be replaced for doing a job badly done.

  8. Why did we get the whole Tim – Malcolm conversation repeated here in this thread?

  9. Tim

    article, sorry

  10. Tim

    Malcolm, I am, personally, PAYING for Seanie, ……. (alotta money, by the way!)

    Are you?

    • Malcolm McClure

      Tim: We all feel your hurt through the comments you have made above. It’s good to get it off your chest but remember that you still have your health, strength, intellect, your family– and your job. Rejoice.

      Seanie or his mates didn’t impact my finances directly, although I’ve ‘lost’ a few hundred on Halifax shares that I got for free. I’ve always had a cautious attitude when dealing with banks as it’s an open secret that they are all motivated by greed. However they do provide an important service to society by oiling the wheels of commerce and we should be grateful for that. Bankers are in the risk business, dealing with a lot of chancers every day. Their operating model allows them to vastly exaggerate the extent of their resources and society turns a blind eye to this so long as the wheels of commerce don’t come off. Now they have, and we have to rethink the model to make sure it doesn’t happen again soon.

      McEvaddy is aware, as you apparently are not, that Irish bankers were operating in a culture of excess that extended to UK, USA and Spain, to name but a few. It was a game of keep-it-up, with a ball that was constantly expanding. Eventually the Fed pulled Lehman Bros out of the game ad the whole thing collapsed. The end was not inevitable but could have been avoided with an agreed round of world-wide inflation. If you don’t like inflation, you’d better get used to it because you’re going to be seeing a lot of it. Seanie was naughtie but he was just caught with his pants down. Charities, pensioners, widows and orphans (or NGOs, senior citizens, spouses and dependants–as they are now called) paid a high price. Commiserations to you too Tim. You’ll get over it.

      • Tim

        Malcolm, “Charities, pensioners, widows and orphans (or NGOs, senior citizens, spouses and dependants–as they are now called) paid a high price.”

        The price is yet to be paid. So far, the govt has just been tinkering around the edges. I am not confident that tomorrow’s budget will show the full story either, but I am reasonably sure that it will be ordinary folk that will be hit again – education and health and low-middle earners; some window-dressing measure of a few % from the wealthy, just for the optics.

        Jeez, it’s like waiting for the jab!

  11. Jelly Fish Economics – have you ever seen a jelly fish bleed or see their brain? Will you ever see cash flow again or a rational government budget and banking policy ?
    Jelly Fish have no blood and are transparent .They also have no brain and some can sting and kill any man immediately .There is no antidote to their poison .Nevertheless their tentacles paralyse everything within reach and are destined to take over the world.
    Some animals can eat them .
    So buy a dog that barks.

  12. MK1

    Hi David,

    > While practically all of the focus this week will be on the budget, the plan to clean up the banking system will be of more long-term significance to the country.

    BOTH are needed. The budget is important. Getting the PS costs back into kilter is important.

    > Without properly functioning banks, we will not pass any interest rates cuts onto the economy. We will have an engine, but no petrol so to speak.

    Cant we ‘park’ our sick banks, and bring in other Euro banks that are not bad-debt-laden? They may say they may not have a branch network but if the state nationalises BOI and AIB, the state then could rent the branch network to the euro banks (at least two of them for competition reasons). Problem solved, a working bank system.

    No-one has been able to logically and financially explain to me why we HAVE TO save “our” banks! We just need working banks, thats all. Whether it says BOI, BSCH or HSBC or DB on the outside I dont give a fiddlers.

    > Therefore, we have to offer hope to those who are now in debt, so that they will come into work and continue to try to keep the businesses open while the banks figure out what to do.

    People are not closing businesses because they feel like it, or are apathetic. Most are doing it because they have no choice. The banks have stretched credit lines to enormous lengths and the government guarantee has allowed them to do so further, as will the 3.5 billion recapitalisation. But from what I heard/read there are 50 billion of ‘stessed debts’. This wave of crashing credit/debt may be more than Ireland can swim through!

    > But how do we ease the repayment pressures on businesses that have a future but too much debt without making the taxpayer liable for the sins of the delinquent debtor?

    Its very hard to tell which businesses have been good and bad. Remember, many businesses also only experienced growth based on a credit bubble as they bought their way into a market. We need to let these bad businesses ‘go’ ratherr than giving them more credit.

    > This is why the current favoured plan, which is a ‘financial skip’ loftily termed an asset management company, won’t work.

    Okay, now you agree with me. Good.

    > If we buy all the banks’ distressed loans at today’s market value, we will let the banks off the hook.


    > First, the state should insist – as its primary stipulation – that the bank plan should not cost the taxpayer a penny.

    Hold on. It already is. The guarantee has. The recap has. Can we restart?

    > it would seem obvious that all the senior management should go

    plus cultural reform, root and branch reform, slash and burn …. think of apocalypse now rather than the brady bunch having an off day and Marsha being sent to her room!

    > In Ireland, the government appears to be willing to saddle the person on the street with the bill for the bankers

    Yes it is and so far the electorate is letting it get away with it. There is not enough anger or demonstration out there to chaneg the government. The opposition are semi-complicit. You could call us a failed state politically and electorally and you would not be far wrong. What a mess!

    > in fact, embarrassingly – out of touch and incompetent group comprising the Central Bank, the Financial Regulator and the Department of Finance.

    Unfortunately yes. We have allowed a system to be created which has failed us.

    > Instead of borrowing a fortune today and realising the losses of the Irish banks at today’s market price, a smarter move would to be to make the banks, not the taxpayer, pay for their mistakes.

    Yes, so how exactly did the guarantee and the recap do that???? It didnt!

    > First, we admit that the bad debts will be €50 billion or even as much as €100 billion. We don’t have this type of money.

    We dont. And not many are gonna give it to us either. Our only answdr is to change the way we work/produce and work harder. The sooner we do that the better. And a new budget is needed to start that, plus many other actions and on a grand scale.

    > This implies no dividends from the Irish banks for years

    No-one has been able to explain to me how two duopolistic banks such as AIB and BOI extracting excessive operational returns from their businesses is goof for Ireland and the business community. It isnt! We really need to lance the boils, yet NO-ONE in power has come to the same conclusion.

    > However, if the state is in the business of mortgaging the poor to bail out the rich

    The state is. Wake Up to Ireland, its with O’Leary in the ‘grave’.


    • Philip

      “Our only answdr is to change the way we work/produce and work harder. The sooner we do that the better. And a new budget is needed to start that, plus many other actions and on a grand scale.” I think people work very hard already and now a lot are working harder than ever before just to get a job. Let’s face it, we are not going to be able to pay back the 50-100bn and this debt will baloon as more businesses fail. We have to take a new tack on economic development and leverage resources we have now to help ourselves now. The old paradigm of Economic Growth = Prosperity needs to be retired. It is only working for some and ultimately destroys our society and our environment.

  13. gadfly55

    Spot on, and a new factor, the G20 intentions, but seriously, there is no way JOSE the ECB will sustain the banking system here indefinitely. Eventually, losses and bankruptcy will ensue, as sure as Atlantic gales blow in March, and now in April. The assessment of the political culture in this benighted fraction of an island at the northwestern periphery of the Eurasian land mass spells prolonged depression, much like the weather, and keeping the elite comfortable while the democratic deficit deepens. Until people change the way they vote, because they have changed the way they think because they feel so terrible at what has been done to them by the elite, and their political pawns in FF, and inevitably FG an even more right wing business focused cabal, the little people will be drained of the few coppers left in their bisquet tin.

    • Deco

      Gadfly55 – the problem for the ECB is the dangerous precedent that they are establishing with respect to the support they are providing for the Spanish Banking system.

      If we want the ECB to bailout the Irish banking system (and I don’t think it should happen), then the precedent has been established. And besides Permo already has a 12 billion Euro loan supporting it (source:Phoenix Magazine-current edition). We are already getting bailed out. The Euro itself is a sort of a bailout – our cost infrastructure is a problem making it completely ineffective. IBEC will ensure as the most powerful lobby group, that Ireland’s cost base will continue to be a brake on us getting out of this problem.

  14. Tim

    Folks, I am confused by the optimism spin in the media about the G20 $1 Trillion:
    Isn’t Ireland’s private sector (non-banking) debt €1.6 Trillion?

    That’s Ireland ALONE. How much in other countries? Multiple trillions in the U.S. and UK, other PIGIS, Eastern Europe?

    $1 Trillion, surely, is not even a “finger-in-the-dyke”?

    Can any of you explain this to me, please, because I think that the G20 thing is just gibberish and “window-dressing” for the sheeple.

    • gadfly55

      Tim, the world production value of annual goods and services is 55 trillion dollars. Problem one, what is a dollar worth? Problem two, what is the value of everything in existence from which wealth can be produced, including known commodities, property, production systems, agricultural land, infra-structure, never mind any paper wealth, that is certificates redeemable, and then there is the total amount of cash actually somewhere, or some of it lost. So, in all this, what is a few trillion, very little, but when you consider the cost of human lives, in terms of all the resources necessary to support a dignified progress from birth to death, let’s say 80 years later, and then multiply this by a population explosion from 2 billion to 8 billion some 80 years later, you can see there is a huge problem. We clearly cannot all live like the masters of the universe, and it is these masters who have decided to make their move to gather as much as possible, before the system collapses on everyone else.

      • Tim

        gadfly55, so, Ben Elton was pretty close in “Stark”. You are confirming the fears I have held since last September.

    • gadfly55

      Very simply, at this point, consolidate your position, meaning consider the future essential requirements for your sustenance, security, and satisfaction. We are moving down, down, down the standard of living ladder to survival of the smartest. This has huge consequences for the control of the population by delayed gratification necessary for education, training and cultural indoctrination necessary to keep the majority in line and obeying the rules. The rules have enabled an incredibly wealthy elite to take control of the laws and resources including human resources of the planet. But they will perish, inevitably, by immutable laws of the natural order because the life we have now is out of balance, and in many ways, dangerously delusional. The time for those who can think as responsible individuals has arrived for them to make the break from the system.

  15. Philip

    I can sense a bit of an end game here in this Blog. DMcW’s final comment on whether it’ll be on the side of the bankers or the remaining working people says it all.

    Originally we wer gabbing on about the demise of the Celtic Tiger and its inevitable collapse. We have now “arrived” and the shock of it has yet to dawn on those people with jobs. Tomorrow’s April 7th Budget will sort that out pretty quick.

    I hope for all our sakes that Malcolm’s description of a Darwinian landscape in the corridors of power is not the whole story. From a distance, it certainly looks that way and if so, we are guaranteed societal unrest in the coming months and who knows what’ll happen after that. All may not be fair in love and war, but when nothing is fair, we are in different territory.

    I fundamentally disagree with preserving the banks. They are defunct organisations (Reason? No one has been fired. I’ll settle for firing and never being allowed to be a director in Ireland again. They can go free, take all their pensions etc. ). But then there’s the matter of the foreign creditors – well tough guys, we are not prepared to screw a nation on your behalf. Maybe indeed this is not an option.

    Whatever happens in the coming days, it must look and be seen to be fair. The dogs are awake.

    • Malcolm McClure

      Philip: Try to think of Irish bankers as our ‘Dogs of War’. We don’t like them, but if we got rid of them we would leave ourselves exposed to global predators that would eat us up and spit us out. Better the dog you know than the one you don’t.

      “Whatever happens in the coming days, it must look and be seen to be fair.” –Better to say: ‘it must look and be seen to be equally unfair to everyone.’

      • Philip

        1st paragraph Not buying it. Having worked in multinationals and other irish companies, I have seen how the guys at the top will bow to the highest bidder. National Interest comes close to the bottom of their priorities. FF, Sean Fitz etc have zero national interest and even if they are our little monsters, they are out of control.

        Totally agree with the better worded (than mine) 2nd paragraph.

  16. JohnD15


    I entirely agree that the ironically McWilliam’s promoted ‘financial skip’ plan is not the way to go – you have seen the light maybe or not. I have said many times before on this site when you were strongly urging government to push forward with this plan that it was unworkable for many reasons. This has been a big talking point for those working within the sector since it was first put forward – and I have not heard one voice of recommendation (other than at the bank executive levels through the media).

    Some of the contributors above have nailed the key point; crystallising all the losses upfront triggering either insolvency of the participating banks or the state having to subsidise the toxic loans(take your pick). It will of course be the latter, which will only be welcomed by the bank’s shareholders (see share prices rocket again today for the main banks) AND not with the PAYE workers who will get an almighty kick in the teeth tomorrow.

    The other point which seems lost in the discussion on just bad property development loans, is that, from chatting with loan officers at two large domestic lenders, the first quarter of this year has apparently revealed a massive up-tick in bad debts across nearly ever other class of lending (credit cards, home loans, investment and personal loans). SO are we to expect ‘toxic bank part II’ later this year to deal with these other problem debts? The point is impossible to draw a line under problem loan exposures when the economic situation keeps getting worse!! Tax increases tomorrow will accelerate the problem as Ireland inc goes deeper into its death spiral.

    ALSO it does seem unusual that the government would choose this timing to reveal another ‘bailing out’ of the banks with an expropriating budget which will almost certainly hit middle/higher income PAYE workers. NOT the multimillionaires who borrowed the toxic loans in the first place as they will have the facility to slip away to sunny Malta ..and NOT our gold-plated social welfare regime recipients.

    The answer is (and always has been) to leave the toxic assets where they are, possibly ring fenced within the offending bank so that they (management) cannot escape responsibility for properly working out the loans that they procured and paying the financial and political price if they are not successful. If this road leads to eventual nationalisation through more capital injection etc. – then so be it.

    The principal with any failed organisation is that the shareholders must be first to take the hit – it seems our government have decided the inverse is true!!

    This toxic bank plan expected to be revealed tomorrow will ultimately fail to fix the problem and worse it will provoke public outrage when mixed with the expected tax increases.

  17. Mr. McWilliams, money is for stoopid people.

    I just read your posting about ‘The Pope’s Children’ and thought you may enjoy my video concerning The Pope and George Harrison’s influences…..

    Stay on groovin’ safari,
    Tor Hershman

  18. Garry

    I’m losing the will to live reading thru articles on bankers, asset insurance, toxic debt etc. At this stage I cant be arsed trying to understand the article above, to try to decode the language and see if I’ve understood it correctly. And I started out interested. Just imagine what normal people think.

    I reckon a newsreader could tell a story about pigmys and polar bears and provided they started the item with the words Anglo Irish Bank or recapitalisation, nobody would give a f***

    Thats dangerous

    So a request.. Can someone provide a worked example later this week for what is announced in the buget or else can the media demand this from the government?

    Take Sean Dunnes purchase and explain what the new plan means to the banks who loaned the money, to Dunne himself and to the public tapayer.

    Because if the budget means we are going to buy this back (from Sean Dunne or the banks) at anything like the 260M he paid for it, Leinster House should burn.

    So no more grand plans without a clear worked out example.

    • Malcolm McClure

      Garry: I think even David is beginning to lose the plot when it comes to offering solutions. Therefore, whilst his continued accommodation of this website is much appreciated by us, it continues to be a useful sounding board for him. Fact is that we are all learning a lot from continued participation here, since David’s articles provide a fairly secure base from which we can explore the implications of what is an extremely complex ongoing situation. We don’t have the answers here, but if we keep cool and use our heads, we can at least make better personal decisions about how we should react to ongoing events.
      This blog is about you, what you know and how you react, rather than being about Sean Dunne, Seanie Fitzpatrick or anyone else. It enables David to take the temperature of informed national opinion.

  19. MK1

    @Philp> Let’s face it, we are not going to be able to pay back the 50-100bn

    I agree that it wont be paid back, but who the ‘we’ is is important. Its senseless for the taxpayers to ‘pay it back’ or even lessen the blow for those that are responsible. I’m all for the Darwinian ‘destruction’. You may be sick of my manta – lance the boil!

    The banks operating here, if bust, should be allowed to go bust. End Of. And those responsbile for the morass should be held accountable. End Of. Bankers, regulators, government. David originally was stating we can do this later. No, we need to cleanse NOW. The sooner the better. S&P are calling that Ireland wont be redeemed UNTIL there is a new government. They are right.

    @Tim> Isn’t Ireland’s private sector (non-banking) debt €1.6 Trillion?

    It is certainly huge, I dont have the exact estimates to hand. Damien Kiberd used to follow the nmbers quite closely and pointed out a time-bomb coming up. Property is a large swathe of that, both residential/consumer and developers, etc.

    But your central tenet is correct, which many financial analysts have alluded to, and that is that the G20 ‘wishy washy’ fix of 1 trillion is not the panacea that many think that it might be. Money/credit does not grow on trees. It can be created out of thin air but not without any consequences. And lets face it, these governments are in debt as it stands. Its not as if they have a 1 trillion war chest on the sideline looking for a return, an investment home.

    @JohnD15> massive up-tick in bad debts across nearly ever other class of lending

    Agreed, and there will be more of this. We are only entering a storm. This is far from the end game, far from it. And its a negative spiral. The pain is only starting to being felt.

    I have no idea how bad its going to be or where we are going, both as a country and internationally/globally, but I dont have much confidence in our governance decision making ability and foresight for helping us out of this hole. The problems are many and deep. The fixes require major change and will be fought against. Our progress to date is far form satisfactory. No wonder there is little optimism about. I cant blame anyone taking their chances elsewhere, can you?


  20. gadfly55

    Newsweek has a major article on Paul Kroogman, the way he pronounces it, worth a read for bloggers on this thread.


    He is a outside the establishment, yet gets calls from the head kiddies. The Obama boys shout practical, no can do, and Krugman does not do nitty-gritty, bit of the similar attitude here.

  21. gadfly 55 – international Tax havens have been named and shamed and many are now complying to norms again.The rest will follow in good time.We can in time name and shame our new super elite and make a condition of honour to hold an Irish Passport if we remain issuing them next year.

    General – I was told by an old lady who plays bridge that among the elders they notice a shortage of barry’s tea in a particular supermarket .Has anyone else that experience?

    • gadfly55

      I am not holding my breath as this is persiflage grade 1 for mass alert to those who have and who hold. We need a world currency, with chip and pin accounts for everyone, one account only, and an GPS attached to it. You can run, but you can’t hide, and the government authority issues you credits from birth for essential services for which it taxes you upon attaining the age of 21. You pay back, then build up your account for services provided by the government of the world.

  22. The government are schizophrenic just like US Treasury Secretary Timothy Geithner.
    They speak about what has to be done and do exactly the opposite.
    It would appear ”private is better” at any cost, but even he has mentioned putting top executives in place. I wonder, is it only talk after the AIG bonus mess up brought into the light.

    So if it’s obvious to all, what is going on.
    Is there any fight left in people at all.

  23. gadfly55

    We have the technology, but the biological determination of the forces of sustainable living for all living systems, are beyond the control of human management systems. We are particles in a river, now falling into the chasm from the tectonic shift generated by internal combustion engines and electricity. Take those away and the balance will be restored, indeed the hydrocarbon bonfire of great expectations will soon be expired, and the population will crash in about 30 years as food and water resources along with climate change precipate famines beyond measure, refugees in hundreds of millions, and the disintegration of super-cities. This is only the beginning. Self-sufficiency, rather than absurd globalisation is necessary for human society to survive in a sustainable balance. On the other hand, the mind of man will continue to cohere into a consensus of values, political controls, and management of individual life spans.

  24. Deco

    I am coming around to the ‘isolation’ theory concerning the banking crisis. This is the complete reversal of what the government are doing. It is a polar opposite of New Labour economics in Britain, which thanks to media support (read support from our advertising sponsors), is gaining ground in media circles. Gordon Brown is there to save all banks, including those with the most reckless and liberal lending policies. Brown will support banks whose philosophy does not add up. And he will subsidize them until everything appears well, confidence returns, and the votes increase. It is economic nonsense, and is rooted in fear for being labelled as one of history’s biggest buffoons. From my reading of the situation, history will record Gordon Brown as the man who undid the gains of 19th century Britain. In other words Brown will bankrupt Britain.

    Basically we should allow some banks to fail. We should do nothing to save INBS (which is heading into trouble). And when the time comes (and reading the current edition of Phoenix, I think it will come), I think we should let Permo and the EBS go also. The state should handle AIB and BOI as a venture capitalist. Unfortunately, we are stuck with Anglo – so we should use Anglo to buy up the bits of the others that are released for sale when the time comes.

    Then rebalance the state accounts, and hold the rest of the pension reserve fund for what it was always intended – looking after the old.

    Socialism for capitalist enterprises is the ultimate Marxist paradox. It is also the perfect application of the thinking of the generation that grew up under the shadow of the 1960s and who do not like hardship or taking anything on the chin. The West has two models of leadership in adapting to this crisis. The one we are chosing is personified by Gordon Brown. It has no basis of economics. If anything it based on looking at too much ‘happy-ending’ type television programs, and is made in the Disneyland. Brown is not being a prime minister – he is being a cartoon character hero. He applies arrogance instead of intelligence. His assumptions are flawed. Unchecked he will leave England is a terrible state – and this will impovrish even the most die-hard rebel song nationalist living along the border.
    The other is that personified by Merkel. Merkel exacts a heavy price from the banks for their failures. The bankers get no compensation. The society and the taxpayer get priority. The banks are given no solace, and are told to learn to behave responsibly. I think that Lenihan tried the Brown approach, and when unchecked by the EU will do so repeatedly. In addition the civil service have every interest in complicating both the taxation system, and the government expenditure system as much as possible. It is further complicated that nobody seems to know what is happening, or how to respond to it.
    We have a human intellectual capacity deficit in both the civil service, and in the political establishment. This is the result of years cross-fertilization, nepotism, and acceptance of incompetence. They question arises – what exactly is the the state doing with all the tax revenues it already has. We knew long before the state ran out of tax revenue, that there was wholescale waste in the system. It was common knowledge. It still is common knowledge. Even last week we found out that there was doublejobbing going in government quangos. In fact it would seem that mulitple directorships,and multiple expense claims are widespread right across the 400 useless quangos. It is also widespread that IBEC represents the interests of careerists with positions in the private sector, and that the same careerists also have positions in the public sector. There is no clear line between the public and private sectors. The same cronies seem to be running both. There is also a massive overlap with the political parties. Mr. Italian Job was a classic example. Unlike most of the others he had proven expertise in management. I still don’t know what exactly Rody Molloy’s CV before he joined FAS. I still don’t know exactly Anne Heraty (former director of ANIB, CPL Resources and Bord na Mona) knew about bogs that nobody else did not already know. Yet, there is widespread organizational incompetence in the state sector. And money is never a barrier to a badly conceived plan making progress.
    The latest is a 2 Billion (at least) plan to build a tunnel from Inchicore to Pearse Street. This will link Connolly and Hueston Stations. The fact is – there already is a link joining the two stations – in fact it goes under the Liffey and the Blanch-Maynooth line. But rather than repair the existing line, and put a fraction of the 2 Billion into trains running on it, instead there will be a new line under the city with a station under Kildare Street and then continuing to Pearse Street. { Maybe we can call the Kildare Street station – Kildare Street Circus ? }. The existing infrastructure will not be used. Even though it is 10% of the cost – it is slower – but it could be installed very quickly. Meanwhile bus drivers are being sacked to save costs. Clearly costs will not be saved when the egos of the managers running CIE is transgressed !!!

    Oh yeah, forgot to mention – that 2 billion does not grow on trees – us taxpayers will foot the bill. And don’t expect it to be a paying proposition-now matter how expensive. Every ticket will cost eat into the PAYE tax take also.

    It would seem that nobody, nobody has the courage for institutional reform. Even Fine Gael are not sure themselves. It is like as if they need to hedge their bets in case they need the Labour Party – and we are then back to ‘tail wags the dog syndrome’. McCreevy tried to get relocation within the Civil Service, and the Irish Labour Party suffered a stroke over it, in one of the most ridiculous and absurd versions of exaggeration ever mounted. Thanks to a union arranged blockade of the program, the program died somewhere in Deckland, and never got to the regions. A substantial part of Fianna Fail – the North Dublin maFFia, plus power magnates like O’Rourke, Cullen, Dempsey, Roche were also interested in buying popularity when the tax revenues were high – seemed little interested in being firm in any way when dealing with negotiation tactics. When McCreevy left for Brussels it cleared the way for such elements and Ahern to get back to being the dominant socialist party in Ireland, entertaining every social program, and making a good few social programs where none where necesary, and where the PDs did not seem to have a vested interest.

    David – you, and Shane Ross are our best hope of reform of our society. You are pointing the way. I am telling people to read these articles that you print, so that they will see your analysis. In the hope that Ireland might achieve an intellectual ‘step-up’ and produce a more effective society. By focussing on improving the intellectual capacity of our society. But it is the very thing the vested interests do not want.

    • Philip

      Until all the communities of interest which were built up over the profligate years find their respective revenue streams cut off, we will see no significant change at the top. PAYE workers on the other hand will be expected to stump up on the based on the flawed view of our recently reduced cost of living.

      These communities of interest are now in survival mode. They will pull every trick out of the bag to justify their existance. We are currently looking at many departments sandbagging their budgets to the tune of billions when a fraction of that will suffice. They’ll attempt to engineer things to allow them take the cuts and make the “sacrifices” with no impact to themselves. Stuffing the head count with Temps and Contractors as sacrificial buffers to keep the balloon afloat. Keeping loads of pointless projects in the pipe is yet another. The only way you fix these guys is a full demolition job. Full functional wipeout.

      This is where the ECB can do us all a favour. No handouts!! Let this thing wither. Starve the fever before it kills us.

  25. [...] David McWilliams puts his finger on the gigantic scam that the government is about to perpetrate in order to bail [...]

  26. Since our leaders are going to do what they want irrespective of what the ordinary fir agus mna at the crossroads think, (or indeed the man on the Santry omnibus) here’s something on a lighter note to prove you cannot keep proletarian initiative down;


    • Garry

      :) very good
      hope life is treating you well over there Furry

      • Thanks Garry.
        Just keeping the head above water. And damn fine to be lucky to be able to do it.
        Just filling the fridge. Keeping it simple.
        And enjoying the commentary.
        I’ll jump in if I’ve anything relevant to say but the heavyweights are covering all the bases thus far.

  27. noonep

    ‘A Quarter of Junior Minster to lose their jobs’ More denial http://www.breakingnews.ie/ireland/eyauojgbidau/

    Why not cut the whole lot, they don’t know what they do anyway.

    Keep digging boys sure we’re doing grand! Gives a song there boss, diddly idle deedle doo, tis singing on de back of de lorry we go, 110 miles/hr downhill and we never got those ould brakes fixed.

  28. Philip

    I know everyone is all hung up on what the government is trying to do – i..e getting us taxpayers to water down the debts incurred by the managements therein. But in a way, we are all to blame. We took a higher quality of life that was not due to us. Blaming the bankers and their profits etc. is not wholly honest. And while I accept that the Government’s role is purely based on looking after the interests of its own before the nation, it still does not change the fundamental fact that we are all in the $h1te together one way or the other.

    The concepts put forward by Gadfly55 are still sadly too advanced and far away for anyone to care. Humanity’s track record has always been about everyone for themselves. The problem presented is too awful to comprehend and is still unbelievable. There is an emerging consensus that we are in deep global trouble by the 2040s with the decline starting very soon unless we wake up. What is galling is where science has popular credence in such areas as in immortality research and botox – and of course, media nand video games. We are all looking for the cancer cure, the heart attack cure, the diabetic cure etc. when there are places not 7 hrs flight from us where poor sods cannot get a clean cup of water.

    Economics is the science of managing scarce resources. So far, we are all hung up about CDSs, derivatives, futures and financial instruments to faciliate growth via a myriad of debt leveraging schemes. Yet no one is asking about how people are going to have a decent quality of life and how the debt buildup of injustice and gluttony is going to be mitigated. I want to know how the real cost of our way of living is being paid for. So far, I see little serious discussion on this matter – and before someone says it has little to do with Ireland, I would say that this crisis has at its basis the impoverishment and damage to trillions of dollars worth of the people and environmental capital (in Ireland as well – anyone bother counting that!?!) which will directly impact you within a decade irrespective of what magic the G20 or Brian or the ECB will do. Nature and Injustice has a way of getting its debts cleared – most of it is sticky.

    I think our double entry accounting system needs to be updated. We need new entries for example in the environmental impact and for low cost labour . We need to understand how much of our lives are due to the lives of others and we need to actively set money / credit aside to redress that balance.

    Fundamentally, the whole economy is really a barter system. Money just hides that fact. We need to review what was bartered away in the background to see the real debt incurred. Ah, but we could’nt let that happen could we?

    • Tim

      Philip, “But in a way, we are all to blame. We took a higher quality of life that was not due to us.”

      This is not true. We are not all to blame. We did not all take a higher quality of life, whether it was due to us or not. Some of us just worked as normal and lived as normal.

      The govt and the media have been using this spin for months in the sure knowledge that if the sheeple become convinced of it, they will not identify the crooks who really are to blame and exact justice upon them.

      • Philip

        I say “in a way”. In buying a Dell PC, there is acceptance of the firing of 1000s of staff in Limerick. If flying Ryanair, there is acceptance of the diminishing of rights of workers. If buying a house at ridiculous prices, there is acceptance of the mortgaging of the future lives of others. If buying in a store a product for less than what it cost to make due to the massive procurement muscle and bullying of small suppliers we are accepting of the unethical practices. We are all to blame and ignorance of the “ethical law” is not an excuse. This is all tied in to what we are all talking about. We need to become conscious of what we are doing.

        • Malcolm McClure

          Philip: Thank you for the above thoughtful posts, which help unlock the deeper levels of our consciences, beyond the threshold of mere survival. There has been too little discussion of the ethical limitations of a darwinian directive in economics, but those are what make us human.

  29. Malcolm McClure – in the desert people would tell you that you have the wisdom of a thousand camels

  30. Malcolm McClure

    John Allen: When I was in the middle of the Calenscio Sand Sea I came across a 200 head camel train crossing the Sahara from Nubia to Sirte.
    I exchanged greetings with the drovers but none of them told me that.
    Maybe there weren’t enough camels for them to work that out.

  31. Tim

    John ALLEN and Malcolm McClure, What a moon-pull this is! Are the camels defending seanie, now, too? Sheesh!

    BTW, John, see poor Italy? ((wobble))

  32. Moon Pull – the pulling is strong now and becoming stronger until 10th – emotion swings are in action – it is liken to a form of being drunk on water and in a split second concentration can be lost thus accidents occur – the chatters have suddenly increased their orations in operatic proportions – I hope the site does not collapse or run out of band width as did happen on last two full moons – keep up the output allow the nation learn more.
    Don’t forget from next tues I will reveal the next moon wobble happening this month and what to expect.

  33. Preview from Brian

    Dear John,

    Every family in Ireland is affected by the recession. The global economic downturn has led to a gap in our public finances which we simply must bridge.

    Tomorrow in the Dail, I will introduce a budget that proves Fianna Fáil is the right party to lead Ireland. Our budget will strike the difficult balance between higher taxes for those who can afford it and necessary spending cuts. Our strategy for recovery is based on everyone making a contribution.

    This Budget is one step in a series of measures we will continue to take between now and 2013 to get our finances in order.

    The Taoiseach has made a video statement on the budget. Watch it now and pledge your support for the measures we are taking to return Ireland to growth:


    The Opposition have put forward their proposals and some of them are constructive. But they avoid the difficult decisions that we all know have to be taken to get this economy back on track. Ours is a serious, balanced plan that will forge a pathway to renewal.

    Enda Kenny says Fine Gael would get Ireland out of recession without raising taxes. Yet he proposes to both reduce the threshold and abolish the ceiling for PRSI – this has the same effect as a tax increase. He also calls for major cuts in public spending without specifying what should be cut. Difficult decisions are required; Fianna Fáil will not shirk them.

    Labour opts to raise taxes and borrow more so that they don’t have to make difficult public spending choices. But their plan would not bridge the gap in the public finances.

    The budget I will deliver tomorrow doesn’t shirk its responsibilities. It strikes a balance where everyone in Ireland contributes a share to getting the country back on track.

    Watch the Taoiseach’s video statement and support our strategy to restore the public finances and bring about recovery:



    Brian Lenihan, TD

    • Tim

      John ALLEN, got that too, thanks – will watch it later and comment then, if it merits comment.

    • Tim

      John ALLEN, you left this bit out of that post:


      Brian Lenihan, TD

      P.S. You’ll be able to watch the budget live on the Fianna Fáil website tomorrow and submit questions for me about how our plans will affect you. Visit http://www.fiannafail.ie/budget at 3.45 pm tomorrow to have your say.

      Folks, anyone interested in asking our minister for Finance some questions should TAKE NOTE!

  34. pera

    I have been thinking about this financial skip/asset management solution etc.. and it seems to always return to the fact. Ireland has borrowed too much to fund non value adding activity (like buying land banks, building houses and buying houses) There is only one way to get a return of investment in this case, and that is by rising asset prices, and with the amount of money already invested in this sector, it would be madness if asset prices rose, as this sector has no real ROI

    In short, Ireland has borrowed money to buy irish land which they owned in the first place.

    Devaluation, creating a new currency, financial skip etc seems to me to be ways of trying to imagine that we dont have to pay back the money. The only sensible solution for the banks is too lay low , and earn money on their current loans and not taking any new risks. After a few years doing this they will probably be back to a loan to deposit ratio of 1. Which ofcourse is detrimental for the rest of the economy during those years.

    I think the bank guarantee has made things worse, since all banks were guaranteed, but I suppose the guarantee will run out in 18 months or so, so we should be seeing some interesting things coming up.

    But considering a financial skip/asset management, when the government has guaranteed the banks
    - If the government is taking over the bad loans, it should try and buy them as cheaply as possibly, anything else would seem strange
    - But if they buy it cheaply, the bank they buy from, must writedown the cost, leaving a huge hole in their balance sheet
    - This hole then needs to be filled by the government, through another round of recapitalisation
    - so if the government takes over the asset cheaply, they will have to somehow make up the difference to the bank in anycase

    So now they cant let the banks fail, because of the guarantee, but why could they not have let them fail in the first place.

    I suspect that maybe some changes in accounting rules on how assets are priced would be the best chance for irish banks. But I dont understand how they are able to keep pretending that their balance sheets are somewhat ok, if they are meant to follow a fair value principle of their assets, when developers are not paying interest on their landbank loans. But maybe this is part of the government strategy, hold out, and hope that things will improve before they have to come clean. But in anycase, I just dont see how the financial skip /asset management is going to work, without costing the tax payer a fortune. There is no incentive for the banks unless they get to sell at overprice, so why buy it at overprice?

    One thing I realized was when reading an article from Norway. It was stated that a manufacturing company had received an order worth 4 million Euro. That is a big order for a small community, it means that the company based in a small town would be able to keep the business running for a year with say a 100 people directly employed, and more indirectly, and the company might even make a profit of a couple of 100k on the order as well.

    But then I realized something, which I have thought about since I arrived and which Philip also pointed out previously. The focus on business in Ireland is the making a profit, not so much the actual process and what the company means to the local community. This has probably been even more distorted with the property craziness, as no other activity and investments could even come close to competing with the potential rewards in property

    4 mill euro: that would be what any self respecting company owner would expect his dublin home to be worth
    Acouple of 100k: Would not even buy you a shed Dublin

    So if the focus of activity is to make money and be able to retire early, it would under no circumstances make senseto invest in anything but property, as nothing else could compete with the imaginary profits from that sector. I think Ireland has also seen quite a few industrialists moving into the property market and getting burned

    But I am optimistic now, as other investments now has a much better chance of competing for the capital against property (although I did notice someone in the irish times property supplement trying to say that the market had bottomed out and now is the time to invest, and coming up with investment properties, where you will lose money if the interest rate goes up by 0.25% and calling it a good buy to let, sorry slight rant)

    I hope that getting investments to projects that are non property related might be easier, either through banks or private capital, and I suspect the capital required for this is much less than was needed to sustain the property boom. and more importantly people will be more focused on non property related areas, and start realizing that 200k profit can be very good.

    • Tim

      pera, great post and worthy of more detailed perusal than I can give tonight; I’ll have a go at it tomorrow, but there is alot in it that I think I like. Bit worried about the slant on property, though, at cursory glance.

  35. Tim

    Folks, Quangos and Spanners presents us tonight with “a business woman” who reckons that axing just five junior ministries is a great move.

  36. Tim

    “Business woman” is Lorraiane Sweeney and she said: “I am not in business to create employment; I am in business to make profits; 40% of my turnover goes on wages”.

    So, 100% of her turnover is earned on the backs of other people, who only receive 40% of the fruits of their labour. (I know there are overheads, etc. and that she is entitled to money for taking the initiative and all that, but it is the mentality that bothers me).

    This “profit is the be-all-and-end-all” notion is at the root of our problems. I have said before that I know business people who run efficient companies that provide a decent living for the people who work in them. The bosses are happy to run the business on that basis alone. The boss earns a living, the employees earn a living and all are content. The employees are not squeezed for “higher productivity” to increase profits. They are not “downsized” to cut wages from the balance sheet while remaining former colleagues work harder to fill the gap. The bosses and the employees work together in symbiosis. This is the way to go. The “profits-up-wages-down” brigade like Lorraine Sweeney and IBEC and free-marketeers and bankers have been following a flawed and, now, failed model. This model must be buried with the “boom”.

    Leave it there, now. Try the symbiotic route.

    • jim

      AH Tim I finally got a handle on you,your from the old Dev school of FF, Jasus man your a lamb to the slaughter God help ye.Your a decent guy and I’d trust you enough to buy a second hand car off ya,but your going to need to accept the fact that FF changed when Haughey became leader.It’s accepted fact that He was the first leader of this State to turn His back on the People.Haughey ushered in a structure that resembled the Mafia.Property and power became the new drug’s and its been that way ever since.Sorry man but I shit you not :-((

      • Tim

        jim, you are correct to a degree, but Lemass would be more my man than Dev. I tell a Dev story because it amuses me, but it is the political philosophy of Lemass that interest me.

        “a lamb to the slaughter”, I may be, but I keep getting back up again to be a thorn in the side of the shysters. It kills some of them that the “grass-roots” keep agreeing with me.

        Let’s keep at it.

  37. jim

    News at 1 featured George Lee and when He was asked how the Economy had gone from crises to catastrophe He said ” THAT’S A DIFFICULT QUESTION TO ANSWER IF YOU WANT TO KEEP YOUR JOB AT RTE”………………I’m sure Sean oRourke did’nt see that one coming. I was gobsmacked,and that as ye know on this forum is a rarity.LOL.:-))

    • Tim

      jim, I am really warming to that gloomy man!

      “Business woman”, Lorraine, is boss of Four-Star Pizza, Beshoffs, Woodlands Hotel, Bray, Esplenade Hotel, Bray and LS Catering; she was formerly CEO of Campbell Catering (didn’t they close Bewley’s on Grafton Street?).

      Anyway, she employs alot of people, so I really hope, given her attitude, that these businesses remain sufficiently profitable for Lorraine’s tastes, or the jobs are gone. She wont keep them just to “get by”.

      • Philip

        And if you buy a crumb from anything that lady owns, you are to blame for the continued impoverishment of the people employed there. I bet she pays less taxes than you as well.

  38. jim

    Back to that charlaton from Limerick Mr.John Allen and His pronouncements of Munsters reclaiming of Leadership of this Country. Kilkenny 4-23….Cork (couple points) CASE DISMISSED.

  39. Robert

    Todays Bank Bailout (Part 3) is going to make Januarys €7 billion bail-out look like loose change!


    • jim

      That figure of 56 billion in the Times is based on report published by the infamous Brokers last week.It shows 16.9 billion from Anglo and I can tell you from my sources in Anglo that they expect that figure could go to much higher depending how the portfolio’s in England and the US hold up.They expect the worse from Ireland, sentiment and moral very low in the subordinate ranks.Trust me when I say that these People down the ranks feel as let down as anybody,they thought they had a future and now they just want out.

    • Garry

      So we are going to pay cash for trash….Now to repeat my call for a worked example….

      How much will this add to the national debt?
      How much will this add to our current and future debt repayments?
      How much this will potentially add to the pockets of bank shareholders?
      Who sets the value of these assets and how? What track record did these valuers have in predicting the current drop in values? Will public auctions be used to set a clearing price or will the value be set in smoky rooms?
      Who gets the cash? It wouldnt suprise me if Fianna Fail organise some way for their developer cronies to further rob the system.
      Who, if anyone gets commission for the transactions?
      Who provides oversight of these transactions to ensure all transfers are public knowledge?
      What happens developers debts? Are they still able to stay in business? Those that dont honour their debts, can they still remain as directors of companies?
      What if any guarantees are in place to ensure developers cant welch on their debts and then in a few years buy the assets back off the state with the state losing out twice?

      How do we know this scheme has worked? (apart from the private Fianna Fail agenda of bailing out their biggest donors, whats the public success criteria for this scheme)
      When this scheme is shown to have failed, who resigns, and with what golden handshake?

      Follow the money…

  40. jim

    It’s important to know who Linehan is taking advice from to know what to expect from the upcoming Budget. Patrick Honohan will be advising on the Bank reform issues based on His experience as an advisor to the World Bank.Decent bloke, hope He makes the right calls and is not too heavely swayed by Linehans Political considerations.Next up is Philip Lane so based on His ideas you can expect a Tax on Child Benifits, Tax reliefs for the well off to be removed, and some sort of Redundancy package and other measures to bring down the cost of the Public Service’s.They will be the key areas and the rest of the Budget will be the old reliables and tweeking of the Tax bands,levy’s etc etc.The important thing to remember is Lane will be the Tax and cut guy,while I think the key to the success or failure of the Budget will be down to Honohan from TCD. and how He sees this Bank thing unwinding.He’s a good man but I hope he does’nt become another fall guy for FF,he does’nt deserve that.One thing I’ll say about Him is that He does have integrity and if His proposals come up short,or are undermined by vested interest’s, I for one will not cast any aspersions on His character. On a side note His brother Edmund who is Master of the High Court does’nt take any bullshit from lending institutions and always gives Joe Public a fair crack of the whip. Here’s hoping for the green shoots of recovery as Spring is in its final Month.

  41. Robert

    Should be take bets as to whether or not Gobshite Backbench Lickarse Fianna Fail TDs will stand up and clap after the delivery of the budget?

    My guess is that they will.

  42. Robert

    Have a look at this and ask yourself if Ireland is going to change in the future with this shower in charge?


  43. noonep

    Fianna Fail, ‘peasent class politics for our peasent class people’

    Platitudinous claptrap from a maladministration.

  44. Da Hour Hath Commeth –

    we are now closer to the revelations we have waited for so long and it would appear that this forthcoming movie is in 3D to experience that touching feeling that raises the hair on our necks.These Looney Moments are very changing and what you get is only what you see .
    Lets see if we can peep in to the invisible budget brief case while the finance minister is choking on his breakfast toast this morning and the taoiseach is in a cubicle on a colonial mission stuck in mars.What might some recent evidence tell us that might conjure a thought before it is history ?
    I am selecting some signicant information I believe is relevant as follows:

    Recent Earthquake in L’Aquila .The name of this town means ‘Eagle’ and significant radon gas was registered there recently before the accident. Has the Eagle landed or was it buried and risen from beneath ?Easter Sunday is this week end .My guess is that the Eagle has risen or will rise .So what does an Eagle have that may be of significance .It is strong , good looking,a killer, fast ,perfect sharp eyesight ,flies higher in sky,and travels long distances.
    Radon gas is poisonous and did accumulate before the release from captivity of the Eagle.Our Minister for Finance is an Air element ( Gemini ) and his doings is liken to poisonous gas accumulating above the life of the nation.Our Taoiseach is an Earth sign ( Capricorn) and the dungeon in which held in captivity the Eagle.The question is , is the budget poisonous or is it the key to a greater moment our nation has waited for ? I believe it is both .
    The budget will cause major disruption on a plain that never before happened and the people voices will rise to be heard once more having been buried for so long .Time will tell .

  45. Philip

    Was reading National Geo.You know how much gold is mined in the world? 165,000 tons. 50% in the last few decades. Would barely fill 2 olympic pools. That’s about 5,7bn Oz. At about 1000 USD/ Oz, that’s 5.7Tn USD. And Trade is about 50-60 Tr. And Ireland’s debt is about 20% that or 40% the size of an Olympic Pool filled with Gold.

  46. The Eye

    Ireland is iceland on ice,
    Financial pressure grips like a vice,
    There’s nowhere to go with the meltwater flow,
    We sink and its no very nice.

  47. SeanOC

    TIM: “This “profit is the be-all-and-end-all” notion is at the root of our problems”

    Sorry but reading this I must rant. I am sick and tired of this socialist drivel. We had a successful business woman who expressed her pro-business views (poorly I agree) and she was then attacked AND on the other hand we had a marxist spanner from the Daily Star daily comic book and the donkeys in the audience thought he was great!! Look, it’s quite simple as much as the likes of Vincent Browne, Fintan O’Toole and the rest of the Irish Red Brigade wanabees would love to see socialist paradise in little Ireland – it will never work – but it apparently works well in North Korea so please go there !!

    Whether we like it or not this statelet is set up and is almost entirely dependent on developing and attracting large ‘profit seeking’ corporations – why else do they come? Our fantastic transport system – I think not.

    Today you will witness a budget which will completely f**k up the economy, the corporate sector and anyone of course anyone lucky enough to have a job. It will be the usual cr&p from FF designed to keep their buddies in the unions happy and the billions of euros wasted on social welfare – I cannot believe that they will not cut welfare which is totally abused, it is 4 times higher than the UK and when the cost of living has gone down. NO instead the middle and higher paid PAYE workers will get a smack in the face and have to bail out the welfare nation and not to mention the bank shareholders – UNBELIEVABLE! Whats more, they will announce more taxes on the way, including property taxes i.e. ‘broadening the tax base’ they say….”not a tax on work” WELL who do you think will have to pay a property tax Mr Lenihan,…. YES that’s right those who are in work SO sorry it is a tax on work.

    Count how many times Lenihan and our so-called opposition use the word “FAIR” in today’s budget farce. It seems fairness in Ireland means throwing more money into the black hole public expenditure and taxing the sh&t out of the so called rich.

    After today’s budget I urge everyone who is fortunate (not me sadly) to be in good employment with e.g. multinationals or whatever and have the opportunity to transfer abroad – DO IT, DO IT NOW!! BUT before leaving please send a short note to Mr Cowen telling where he can shove his “Patriotic Duty” taxes!!


  48. Malcolm McClure

    In the exchange with Tim he copied to this thread above, I drew attention to the incestuous, sybiotic relationship between PPublic Servants and FF, We will find out the reality this afternoon but meantime we have lenihan’s preview on RTE covered in the IT today:
    “Two-thirds of our spending is now welfare payments and payments to public servants. If you want an adjustment on the spending side you have to cut pay for public servants or cut rates for social welfare, I have not seen many people advising me to do that. Let’s get real where the balance has to be struck here. Anyone who suggests that this cannot be done without tax is deceiving themselves.”
    Lets try to hack our way through all the double and triple negatives obfuscating his message in the last sentence.

    If we are deceiving ourselves by suggesting that it cannot be done without tax then Lenihan is saying that it CAN be done WITHOUT tax increases.
    Is he actually admitting that welfare payments and the Public Service are heading for a major chop this afternoon?

    • Garry

      Before predicting lets see if we can agree on the basics…

      1) If they try to raise tax revenue without significantly cutting public spending, they are looking after the bureauachy.
      2) If they significantly cut public spending and make adjustments to tax, they are trying to balance the books with and are show some concern on the impact on the public who pay the bill.
      3) If they frame the cuts to target the bureauachy but attempt to minimize cuts in front line services they are doing the best they can in these difficult times.

      So to predict

      1) The measures to raise revenue will be set in stone and effective immediately.
      2) The measures to cut spending will be a target for An Bord Snip, which will report in Autumn, which will give the bureauachy time to protect themselves.
      3) The budget measures will be nowhere near enough to address the problem, informed opinion will talk about a mini budget in Autumn
      4) Insofar as they put forward a plan it will be dependant on the global economy returning to ‘normal’ in 2010. Normal in their language will be the post 2001 boom.
      5) Irelands politicians and public servants will still be better paid than their counterparts in the UK and Europe, there will be no cuts in basic pay.

      would love to be wrong

  49. The Eye

    Agree with you seanoc, Social Welfare for too many people here is a lifestyle choice there are longterm unemployed people who were too Lazy to work during the boom while a Polish guy with no English or skills was prepared to work.
    recently laid off people should be looked after by the system and encouraged not to loose face, but i would be inclined to get the lazy ones out to pick up litter or something for their dole.

  50. JohnD15

    SEAN OC – I am ashamed to admit that I was one of the 40% that voted for these clowns in the last election. Looking back I think it was the fear of Enda that Joan Burton as the alternative that made me vote FF. NEVER, NEVER, AGAIN.

    After the budget today I think there is an argument for a snap election I can honestly say that I would even vote for Dana if it meant kicking out these FF/Green half-witts AND I believe that is view of the vast majority looking at the polls.

    The point is that after this “Fair” budget which will in fact be totally unfair on middle and higher workers (ironically the jobs that FF say they want to keep in Ireland, what a laugh!) As you say they will leave welfare untouched. Judging on Willie O’Dead last night it seems very clear that our gold plated dole payments, ridiculous lone parent subsidies etc. will remain untouchable – this will be seriously bad news as it will mean taxes will have to go up again, again, again…to pay for this €21bn and growing festering boil.

    I share your despair, but unlike you I think I might be able to transfer to London along with about 30 others in my unit – I just have to convince the wife. So some good news i.e. 31 less people to pay the FF levies and let ‘Fintan OToole’ and his mates have his ‘soviet soclialist fairer Ireland’.

    If I am successful in my move I will take you up on your advice to send Lenihan and Cowen a not so polite letter telling where stick his fairness budget and his taxes on work (not that he will read it of course – he is not so good at that apparently). This is not like the 80s when it was a nightmare to move to any counry other than Britain, this time we have a much more mobile workforce and more open Europe. Contrary to what the media are peddling WE ARE worse off economically than other countries. Good jobs can be found elsewhere SO you dont have to pay massive taxes which will keep rising over the 5 years+ if you can, leave!

    By the way I agree with you on the property tax. I have previously stated on this site that it wont work. For many this will be just a further form of income tax, on top of highway robbery management fees and stamp duty. And contrary to what McWilliams and Alan Ahearne are preaching, this property tax will be a tax on work, because if you are not working you wont have to pay it. Period.

    • Deco

      JohnD15. We really are stumped for choice. It is a case of “clowns to left of me, jokers to the right, stuck in the middle….”. We will have it again in the Euro elections, and to an extent in the local elections. Apart from Kathy Sinnot – who is in a different constituency – I cannot think of one single candidate out of 40 or so that is of either sufficient integrity to represent the ordinary people. Maybe Marion Harkin. Both are independents. And the (D4) media hates independents (because they are far too concerned about their consitutuents). That is a 95% incompetence rate or greater. The candidates in Dublin inspire the most apathy. Amazingly enough thanks to television coverage, the four Euro-phulles representing Dublin stand an immensely strong chance of getting back in. In fact all they represent is slick PR campaigns. There is no substance, and the style is running thin on the electorates impatience. I just hope Dustin the Turkey puts himself forward – so that we can at least let it be known that we consider him one turkey amongst many :))) I would not put the four of them together in charge of an ice-cream van.

      As regard Tintan O’Foole – well Tintan’s newspaper made a fortune out of the property boom – and his newspaper encouraged all sorts of excess. Whenever Dan McLaughlin or Austin Hughes wanted media access to make their ‘bullishly optimistic’ economic forecasts – the Irish Times was always on hand. In fact the Irish Times was the newspaper that gave us Peak Arrogance, with it’s relentless cheerleading of Irish indebtedness. The Irish Times was also the last major media outlet to admit that we were approaching a recession. It is hilarious that the newspaper of choice for estate agents and (dodgy) bank economist to peddling their spin for the last fifteen years – has suddenly turned socialist. Or maybe turning socialist is the perfect way to survive in a capitalist media market, by trying to acquire loyalty on any section of the public that will buy it :))))

      Unfortunately for Tintan, we are all wising up. Putting his mates from the Labour Party in charge is only going to ensure a continuation of Ahern socialism with Gilmore characteristics. There will be less tax breaks. But the same culture of rampant waste, and nepotism will exist – with an entirely different set of beneficiaries.

      The most critical thing is that the people take over the political process – by continually ratchetting up the ante on the politicians. The best example of this was the Noonan meltdown in Fine Gael. It was the best thing that ever happened to Fine Gael, as it made them produce something new, and also throw out a lot of the nonsense. Now the electorate needs to do the same with the two ‘buy your votes with your own tax money parties’ (FF, and Labour). There is merit in voting for Dustin the Turkey, Ming the Merciless, Donald Duck, or even the local drunk on your street/estate/village etc.. There are a lot of old bores that need to be moved out of the way. This means of pulverising the staid hierarchies within the Irish political parties, and thereby reinvigourating them over a period of two-three years, by dragging the younger elements forward.

      • JohnD15

        Well if Dustin runs in my constituency (where my choices include Lenihan, Burton, Varadkar and Joe Higgins – f~~king fabulous) I will not only vote for Dustin I will go door to door campaigning for him !!! :-)

      • Dilly

        The night Ming the Merciless secured over 750 first-preference votes in Longford-Roscommon, he was abused by a certain group of people, outside the polling station. Lets just say they were from a well known family, and from a party begining with F. Covering my ass here, it’s a small country.

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