A wonderful aspect about having generation upon generation of an Irish diaspora is that the Irish have been almost everywhere. When Jovani – my guide in the jungle by the ancient Mayan city of Copan – heard I was Irish, his face lit up, and he asked me whether I had heard of John Gallagher.
When I said no, he was visibly disappointed. ‘‘But John Gallagher discovered us,” he said.
In 1834, an Irish adventurer and soldier called John Gallagher was fighting as a mercenary for the Honduran independence movement. In the early part of the 19th century, Latin America was full of Irish adventurers; many fought in the Latin American wars for independence and most of them stayed on (if you are interested in this fascinating part of our history, visit www.irlandeses.
org).Gallagher was one such privateer, fighting in Central America. He was posted with a raggle-taggle regiment to the far north-west of this beautiful country. When he heard the locals talking about the lost city in the jungle, he decided to find out what they were talking about, probably in the hope of finding the buried treasure of the ancient civilisation, the Mayans.
Instead of gold, Gallagher discovered, deep in the rainforest, the most striking city-state of the Mayans. It was almost totally preserved and was the capital of the southern part of the vast, pre-Columbian Maya empire. Gallagher was spellbound by what he saw – the huge pyramids, the enormous acropolis and no less than 28 palaces – all hidden away in the jungle. In 1835, he began telling the world about his vast discovery.
The story of the lost cities in the jungle, which had sustained the Spaniard conquistadors for centuries, grabbed the public imagination.
Gallagher, hardly heard of in his own country, became a hero in Central America, and he is the only non-Mayan to be buried in the city-state and the first to be buried there since the day when the people rose up, burned their own kings and evacuated the great Mayan cities, leaving them to the jungle.
The collapse of the Mayan civilisation has fascinated scholars for years. Why did this vast empire disappear? When you are here, looking at the distinctly Mongol faces of the kings and their ornate statues adorned with hieroglyphics, the question is begged: what happened?
This society was the most advanced in the world 1,100 years ago. The Mayans processed knowledge of mathematics and astronomy far surpassing anything in Europe’s Dark Ages at the time. Their farming methods could sustain much larger urban populations than we could, despite the fact that they did not locate their cities beside freshwater. Their systems of canals and storage allowed them to feed huge populations relying on rainwater alone.
For example, Copan in Honduras had an urban population of 27,000 in the 7th century, when most major European centres hadn’t even been founded. Whatever cities we had contained populations that were fractions of the size of the Mayan metropolises.
Their alphabet was phonetic, and their system of trade linked an empire that stretched more than 1,000 miles over what is now Honduras, Mexico and Guatemala.
This empire lasted for more than 1,000 years and thrived, peerlessly, for 500 years. Then it disappeared.
The last that was seen of the Maya kings and temples was a huge pyre, upon which the peasants burned the noblemen because they believed that the noblemen and priests could no longer hold any sway over the gods. How could they, when children were starving?
The Mayans simply ran out of resources. They cut down all the trees to transport rocks from the quarries to make their ornate temples.
Competing nobility, with each chief trying to show he was the biggest, got involved in what could only be described as an ‘‘arms race’’ to build the most splendid palace. This involved huge amounts of labour, which were taken from the farms and massively reduced the amount of farmers available to keep their agriculture going.
They also cut down huge amounts of wood, causing massive soil erosion and flooding. The mad dash to build the most ornate palace used up enormous quantities of materials. To support this madness, the cities needed to produce enormous amounts of food and water, and they needed to pay for it.
This was the ancient equivalent of people consuming far more than they could afford and getting into a monumental ‘‘keeping up with the Joneses’’ battle, which would ultimately bankrupt them. Interestingly, the Mayan currency was devalued during all this.
They had created an intricate financial system based on the valuable feathers of the wonderfully colourful macaw. The hieroglyphics tell of this system being abandoned during the decline.
So the Mayan society collapsed because there were simply too many people abusing their world’s precious resources, unable to see that in their headlong dash for more luxuries and frivolous spending, they were ensuring the depletion of their resources and sowing their own destruction.
At the time, I am sure, the high priests, atop the sacrificial pyramids, were cheerleading the drive for ever-bigger palaces and penning sycophantic odes to the great men who were building these monuments.
The same thing happened here in our building boom. We used all the resources of the country to build useless monuments fuelled by the vanity of our oligarchs. We imported labour to build houses we didn’t need, and deployed other people’s money to finance these schemes, which we could never sell and now cannot pay back.
We too had our ‘‘arse-kissing’’ high priests in the media, the vested interests network and, of course, our political class, who led the cheer, despite the fact that our country’s resources were being wasted.
As a result of all the hype, the Mayan building continued until the very last brick possible was laid by starving builders, driven by deluded noblemen who were paying everyone in IOUs rather than hard currency. Realising the game was up, the people revolted.
One of the last hieroglyphics shows the noblemen and the high priests waving skulls, surrounded by peasants with torches. This scene was supposed to depict what happens when the peasants finally understand the emperor has no clothes.
Apparently, waving the skulls of previous victims was the traditional way in which the noblemen kept power, warning the unruly peasants that if they came any closer, ‘‘you end up like the last malcontent, with your skull hanging on a thread’’. In the end, the peasants saw through this bluff, and slaughtered the kings and their propagandising high priests. The Mayan empire crumbled.
And the moral of the story is . . .
One for John Allen:
http://www.youtube.com/watch?v=BXAPS7eFcWk
Those Mayan buildings will certainly outlast ours.
I have a question . The 90 Billion that NAMA will offload from the banks . Does that include all the mortgages and personal debt that is going to come on stream with everybody losing their jobs ? Is there any kind of figure for these future bad debts ? And why is nobody talking about it ?
No, unless you are in the FF circle of trust, you will be left to rot. The Galway tent will be saved first.
Will some explorer wade through a jungle of weeds in a couple of hundred years and discover the fabled lost city of Deckland ?
Mystic Balls of B&B – In my quill flows the aviary spirit with quivers that will shake all before you in the weeks ahead .What you have witnessed in the past few days will be a small beak compared what you will see and feel unfolding in moments that will soon be upon you .You will have to hatch up your life like never before bolt up and just hold on .Thats if you can .The flock of energy will be immense and scattering and the spirit of the mackaw and it’s cousin the Puffin will all be upon us .Dun Aengus will perform a Bird Dance never seen before and the Dail will rock like a nesting cradle with birds goo everywhere .
Here are your dates : Begining lightly June 28 th
Full Moon Anxiety WK : July 1st – 7 th
Important date of Moon Wobble : July 13th
Dangerous Wobble Moments : July 21 st 22nd 23 rd
As can be seen July is jam packed with fireworks .You have been warned
just witnessed a fat mull e ah barking his head off in the elected chamber of the dail, using the ‘ol dark art’s of ultraviolence and it’s shock effect, too preserve his power and hold the office of taoiseach before his train set is taking away from him and his mummy send’s him to bed early without his T.
Pathetic.
wills, I missed the news at 9, unfortunately; but I did catch the call on whineline earlier today for FG to postpone its Confidence motion and allow debate on the Ryan report instead. It appears that FG has ignored this call. I also gather that George Lee was not allowed to speak in the debate in the Dail today. Now he will see what a farce-act the Dail chamber is. By this time of night, I’m sure he has seen all sides laughing it up together in the Dail Bar. He may even be questioning his decision to join them. I would love to hear an interview with him about it all tomorrow.
tim – GL had a look about ‘em, on Vbrowne news summary, sitting there in dail like he was thinking ‘where the hell am I ….??’.
wills, yes. The look that says (not just “where the hell am I?”) something like:”Oh my God! Is THIS what it really IS? Is this all? Are we depending on this crazy set-up to solve our problems???? OMG, we ARE screwed! I am sitting here, in the Dail on the opposition benches (behind the leader of the opposition, on the second bench) and I cannot DO anything??? I thought I could DO something in here! Why not? Why can’t I do something???”
Eh, George……. you joined the opposition, not the Government!
I want GL’s ideas for our country, wills. Enda Kenny’s ego will not allow him to deliver. I have posted for weeks here that GL is lost to the country by joining FG. I think that he is realising that himself now.
What a pity!
tim – with you on your post up too half way and transition into opposition point i am of the p o v that GL will be very potent is his presence and am very optimistic on that front.
wills, I know you are with me up to that point. I am glad that you are optimistic thereafter.
It is entirely possible that I am too cynical about the way the Dail works.
But I am just throwing my heart-felt ideas out there for consideration, wills.
Let’s keep at it!
BTW: Dick Roche claims that he is surprised that so many people voted for Declan Ganley. He should not be surprised; and if Dick was in touch with the people, he would know why. (And he is an erstwhile friend of mine, so knocking him is not a game).
Folks, Michael Gallagher is a very good man. His son, Aidan, was killed in the Omagh bombing and Michael and other relatives of victims finally got a court to state the names of four people responsible for killing their loved-ones. It was a civil case, with financial awards made. Michael does not want the money; he just wanted the ruling. He stated on Prime-time tonight that, if the men responsible have any money or property “apart from their family home”, it should be garnered. He would leave them their family home. That’s what a good man he is. I saw him, many years ago, on the Late Late Show special, where he appealed to the television audience and everyone in Ireland, not to retaliate against the RIRA so that violence would not proliferate.
I was impressed by his magnanimity back then. I am again.
He would allow his son’s killers to keep their homes for their families. He had to put his 21 year old only son in the ground.
I do not believe that I could be so gracious in those circumstances.
Then, I heard ringing in my ears what had been said at the beginning of the report: “The cost of taking the civil case came to approx 1.5 million pounds, some of which was contributed by Bill Clinton, and some by the British government.”
No mention of Our govt.
Did our govt allow Bill Clinton (personal money, not the US govt, I presume) and the British govt pay money to help these people pay for their civil action and contribute nothing? Good Lord!
Shame!
Folks, Donal O’Connor said that he did not consider it appropriate to discuss the personal debt to our Bank of the former managers. When questioned about this, he deferred to “The Government-Appointed (new) Director of the bank”;
He told the Oireachtas committee that it’s all grand.
Sure, okay, so.
“Good man, Willie!”, yet again………
George Lee will prove to be FF’s worst nightmare.After 17 years in RTE with access to all the Media accross the Country,I’d say there’s very little He does’nt know about Irish Politics,including all that goes onn behind the scenes.He had the look of a man on a mission about Him today as He stared accross the Dail Chamber.Two Economists Lee&Bruton versus two Solicitors Cowen&Linehan.Kenny will sit back and just cut His boys loose on the Economic state of the Country.FF are about to be ripped to shreds and the Media will be cheering Lee onn from the wings..E-mails and txt’s will be flying out hard and fast to all the FF cumann,telling them to clog up the internet forum’s,phone-in programmes etc in defence of the Party.Any Local papers or Local Radio stations will be put under pressure to spout the Party line.It will be seige mentality from a failing beseiged Party in its final death throw’s.FF’s only support is from Jackie Healy who promised His support as long as Tralee Hospital remains intact….Michael Lowery who met Cowen today with a new Shopping list for North Tipperary,the Greens with more Ministers than County Councillors(worse than the PD support) and so onn.Fianna Fail’s Election manifesto from 2007 is as worthless as the Audit’s and Accounts produced for Anglo in 2008, and the further down we drill in both cases,the more our suspicions are confirmed.Cowen et al should realise that this Country will not stand idly by and be Bankrupted by Him or His fellow travellers from the Galway tent…75% of the Electorate cannot be wrong,not in a Democracy……
Regarding the recent elections, well I think ff have sufficient time to turn things around and win the next election.
You have only got to look at the Galway council results, where a convicted fraudster ex ff, topped the pole, defrauded the very people who elected him.
What more can be said, the people of Galway are martyrs for punishment.
The people of Ireland will also be martyrs at the next General Election. How blind/ stupid can people be.
While Biffo & Co. are preparing to depart on their long summer holidays, the country is in free fall. I think that that these long vacations should be scrapped for all in the public sector including teachers. All that expensive infrastructure lying idle for three months when the unemployed could be receiving crash courses in language and numeric skills – leave the pay as it is, but up the output and then the whole system gains. Why should the private sector have a longer working year than some in the public sector, anyway? We posted a vacancy for a job with an agency and the response was so overwhelming that we pulled it down after one day – it’ll take for ever to go through the cvs – what amazed us most was the number of highly qualified experienced candidates that had been made redundant in the last year and are now desperate. The government would want to up its game and fast if serious trouble is to be avoided.
Well said. It is immoral that the people are kept in employment by the taxes on those who are the least secure in our society. There is an unwritten social contract that is in the main kept by most people. We get along most of the time as long as there is a perception that complying leads to an easier life. The desperation I see could change that very quickly. Wake up FF!
Ah ed, to be fair, that would be a big change to teachers jobs and would be out of order.
In the public sector trivial changes are negotiated over years and sold as some great leap forward, something like that just aint going to happen.
Though maybe the ministers could go back to the classroom and learn what a billion is.
The bigger issue is the banksters…Anglo, Now they have the guarantee, they are robbing every last cent and even threatening that they screw us over with a 50B bill if they are shut down.
Like the cuckoo in the nest they will devour everything, shove the rest out, exhaust the parents and when they are strong enough they will fuck off to better things anyways.
Serious trouble is inevitable.
Garry, today’s piece in the indo. about ANIB director’s loans being written off, only rubs more salt into the public wound – It’s obvious as to why Joe Higgins got such good support.
http://www.independent.ie/national-news/senior-staff-at-anglo-struggling-to-repay-loans-worth-millions-1767743.html
this equates with banksters bank robbing banks in an invisibility cloak.
On the pretext of the loan between Permo and Anglo, I believe that this Minister for Finance has the authority to throw Anglo out of the government gaurantee scheme. Essentially, Anglo was lying concerning it’s solvency, and it’s deposit base it was playing games. It facilitated a mistake by the government.
Therefore the DPP should bring a case against Irish Life and Permanent immediately for attempting to distort the accounts of Anglo Irish Bank. And then kick them both out of the government gaurantee scheme. They will both collapse. So will EBS and INBS. And it will be over and done with. Compensation for depositors will come to about 15Billion at the 100 000 limit that exists outside the state banking gaurantee. And that would be the end of it.
BoI and AIB can sell their non-core assets. Then they can sell preferential shareholdings to the state. And we can proceed. The property market will collapse. But inside of 12 months it will be over.
Fortyhouses Fahey was on the Matt Cooper show last night, extolling the virtues of NAMA, and saying how delighted he was the ANIB would be kept afloat as a ‘going concern’.
Those who owe money to the bank will be pursued for the full value of the loan apparently, but Lenihan let it slip the other week on the radio when he said “Ultimately you must accept you can’t get blood from a stone”.
Fortyhouses is happy this morning because he thinks the banks will be able to lend hand over fist again to punters, propping up the imaginary value of his portfolio.
The spanner in the works is that the collateral damage from this crisis cannot be avoided. Either the bank goes under – with irreperable damage to the shareholders, bondholders, and savers. Or the bank survives – with the writedown bill from NAMA choking the taxpayer of disposable income, confidence to borrow, and ability to repay.
Either way, it’s a trainwreck.
Paddy.
Paddy.
ANIB is basically a money pit. Moral cowardice – the inability to make tough decions is stopping us from allowing ANIB to fail. ANIB failing will cause 12 months of utter mayhem.
INBS, EBS will fail as a direct result. Permo is a slow motion trainwreck and it will fail as the residential property market builds up it’s debt heamorrage. EBS, INBS and Permo are all dependent on foreign repurchases of bonds to sustain them, whilst their asset books keeps sinking at differing, irreversible rates. This is a slow motion trainwreck. Four banks – all completely messed up, dysfunctional and flawed. It only takes the failure of one to collapse all four.
BoI and AIB (post both of them selling all ot their foreign assets) have some chance of success. It would be better to simply say – we have 19 billion Euro to allocate to save the Irish banking system. We will make it available to the big two, and allow the others to be liquidated. And then no more ponzi-property nonsense asset bubbles.
But the Irish people are not ready for that. We are still in a state of denial concerning the lifesyle that has been supported in the last ten years. We are in denial about the ineptitude of the Irish concept of management, and there is no effort to fix it. We are in denial concerning the ineptitude of the state institutional framework. We are in denial about the cost base of the economy being way out of whack. And in the centre of all of this we have Coughlan – who is in denial of just about everything, and Lenihan who is living in a “make believe world”. Lenihan’s world has bankers who are all honest fellows, and has state institutions led by intelligent, diligent, upright, hard working sorts. The opposite is the reality of the situation. And Lenihan is in denial. And David McW gets criticised whenever he attacks the denial mode.
There are serious real problems with our competitiveness and they need to be fixed. Immediately. And we need to stop living in denial. You cannot be in denial mode, and at the same time claiming to be responsible !!! The current policies are assuming(or hoping) that property valuations will go back to previous levels. Impossible. Even on a ten year timescale it is a real hit and hope job. A combination of Angela Merkel, ECB Pres Trichet, our cost base, Minister Coughlan, the declining value of sterling, the increasing price of oil, and the state finances makes this completely impossible.
brilliant analysis deco.
POnzi Rep’s government’s debt capacity is raising eyebrows and giving jitters to international bond buying investors.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ah_V3qT1kqpg
All eye’s are on,
1) unemployment slowing and leveling off and decreasing…..?????
2) the property market stabilizing,
..to restore confidence in our GOv’s cred in the eyes of international bond buying investors.
Thus, if one does the math on 1 and 2 materializing one will come up with an answer equalling, “don’t think so”.
So, at some point our gov’s threshold too sell bond’s to balance the book’s will short circuit.
This then open’s up a chapter for the sovereign state in the area of ‘odious debt’, particularly in relation to NAMA.
http://en.wikipedia.org/wiki/Odious_debt
Add to this the fact that the rest of the world is having problems…http://www.independent.ie/business/world/managers-of-biggest-bond-fund-in-world-say-outlook-looks-bad-1767794.html
Wills,
You’re entering tricky territory here with your “odious debt”
While O’Connor stated that the developers have political connections, Micheál Martin rubbished it on Monday’s Q&A. He venomously denied that any such connections existed – he would never perjure himself, now would he?
Today‘s indo. -“Mr O’Connor emphasised several times that big developers would be treated just the same as other clients despite their political connections”
David McW. People are finally realising that you gave an accurate assessment of the Irish economy a long time ago. And that it was you that said that it was unsustainable – at a time when all sections of the media, and all sections of the political spectrum were talking about their favourite schemes and causes – which always amounted to vote buying. Ah yes, that menacing phrase from the boom era “the country is awash with money”….
http://www.independent.ie/opinion/letters/lee-encouraged-spending-frenzy-1767725.html
Now, the country is awash with debt !!!! If the muppets in the Dail listened to David then this mess would not have occurred. Instead they jumped over one another to devise schemes for buying power from the electorate.
George Lee was not always accurate. But he was honest in saying what he believed in a terribly decietful era. If somebody who gets it right half the time raises the competence level of the Dail – which is awash with pretenders that get it wrong most of the time.
Somebody mentioned Eddie Hobbs. Hobbs had a campaign concerning our rip-off business culture. And he got it onto RTE when the TDs were on holidays. Good idea Mr Hobbs. What Hobbs told us was entirely accurate. We are a free market economy, but the market is always rigged, by a coalitions of vested interests. The contents of the ‘vested interests’ category would shock you. In fact as Eamon Dunphy said once, the entire professional class in Ireland is involved in some sort of market rigging or other our of a professional organization that has a head office and a brass plate on the door.
If Hobbs had been taken seriously we would have fixed our competitiveness. Instead he was swept under the carpet. And nobody in the Dail commented because a lot of them regarded Hobbs as a serious threat to their ‘bread and circuses’ orientation.
From listening to him on the tv recently I’d say what he meant by the country being awash with money was the oversupply made possible by the banks borrowing abroad.
On Vincent Brown 2 or 3 weeks ago I was struck by Alex White’s blatant attempts to cut him down to size – “Now you’re in politics you’ll have to learn to listen to other people as well as yourself”. The politicians came across as a private club with more in common among its membership than with anyone else. Also those twerps roaring and shouting (and singing!) at the counts are a red rag (sure hope Tim doesn’t do that!) and it reminds me of elections of old in England where there’d be a Con, Lab and Lib troika outside every polling station demanding to know how you’d voted – they seemed to have more in common among themselves than with anyone in the real world. I think there is an unhealthy interest in elections here as a form of sport, like horseracing, where people know a lot about who’s who and their ‘form”, in other words they are interested for the wrong reasons – appearance rather than substance. Maybe electronic voting isn’t a bad idea.
coldblow, I agree that it was unfair to try and cut down GL so early. I also agree that his reference to “awash with money” was in the negative: that it was dangerously awash with debt; I am open to correction on this, but I think GL was on the right track.
No, coldblow, I do not engage in the “roaring and shouting (and singing!) at the counts”. When I am able to, as I was not last weekend ( my wife was working and minding my children takes priority), I am a very enthusiastic “tally-man”. I love the smell of democracy on the floor of a GAA Club.
I abhor the notion of “e-voting”.
People should be crucial to the democratic process – not machines.
When my candidate wins, coldblow, I shake his/her hand, as is the custom among my people when someone is chosen for a job. Unbridalled triumphalism has no place in the appointment of an individual to a job that carries responsibility for the collective citizens. It is a serious business, not a sport.
I declined to be a front-line tally-man last saturday, because I knew I could not give the task my full attention. I “cast my eye over” the proceedings in two count centers, though.
I have never done the “roaring and shouting” thing. I enjoy my politics rather quietly, until pushed.
Coldblow. I remember the phrase “awash with money” and George Lee said is a lot. And it concerns me, because I was hoping George wuld get into the Dail. Mostly because the quality of debates on economics in the Dail is not sufficient to result in intelligent decision making. And I was hoping that if he raised the standard of economics knowledge in FG that would have an effect on the rest.
I trust Lee for the reason that he left a position in RTE, that was safe and pensionable. He left the type of job that people get involved in politics to attain. Lee is a servant of the people, and not another opportunist full of soundbites. And even if Lee was not as accurate as David McW, George is making himself available in this moment of crisis. It reminds me of the episode of the Simpsons where Marge becomes an estate agent, and fails to sell a single house because she tells the would-be buyers the truth, and does not make attempt to play on their weaknesses. Lee has human qualities and is trying to do the job properly. Let’s hope he does not start learning the professional code of conduct of a politician, and stays “his own man”.
You comments about George trying to negotiate his way through all the double-speak and deceit in Irish politics are true. He is a lamb in the midst of the wolves. It is a pity he has not been made FG spokesman on Enterprise, to face down Coughlan (the weakest link).
Deco – with you all the way on analysis of GL and den of vipers. GL is carrying virtue through hooker mainstreet entering himself into the bent-ster house / dail. Will GL walk the talk and suffer a lynching or not. My p o v is GL’s confidence in his own abilities will see him through into leadership of FG and on into political office as taoiseach. Some reckon jealous will sabotage his ascendency,. I reckon GL has the god’s on his side. FG can’t believe their luck. I ‘m looking forward to FF’s return volley and shoving a FF’r GL forward,,,,, … benjee outta the riordans perhaps..????
Whats the Mayan for “green shoots”
“YA’AK CHUNS” means “green stems” thats as close as I can get.Its yucatec,close enough to original Mayan.
Trifid
sorry I meant Triffid
Deco – I agree with your prognosis that because of the deception by the Board of ANIB that the Gov Guarantees are not enforceable and should be withdrawn immediately .I would like opinions from Malcolm , Wills, Phillip, Tim , Furrylugs et al. There could be lots of YA -AK CHUNS in this idea and might save the nation.
We won’t get anywhere by ignoring how Lenihan sees the situation. he was interviewed on Monday morning on Newstalk. He reminded listeners that his background as an academic expert on banking law equips him, perhaps uniquely, to understand this crisis.
He said that if he were to follow the advice of the Brutons and Lees of this world allow ANIB to collapse and default on our obligations the situation would quickly become ten times worse. He reminded us that Ireland is completely dependent on access to foreign loans for out current day to day expenditure and these would dry up overnight if ireland were to default.
IMHO there is no use in making Gung Ho statements that the foreign lenders should bear the penalty of their risk in lending if our hospitals and schools have to close next month because there is no money to pay staff. No money to pay pensions or the dole. No money to sweep the streets or collect the rubbish.
Although FF stood idly by and fiddled while Ireland burned its credibility, no matter who replaced them, they would still have to confront the same problem. We cannot opt out of the world economy, and if we are to survive we must abide by its rules. George Lee is not Jesus Christ and it is unrealistic to expect him to feed the 5 million with a few fish and some loaves of bread. Get real!
Malcolm – this is a legal issue. And it is possible that Lenihan actually knows what is talking about.
But the state took over a bank, and the accounts for the bank were a compiled, in a fraudulent manner. And another bank, Irish Life & Permanent were willingly distorting the books. This is as close to fraud as you can get. And regardless of what our (stupid) banking regulations state, there is a principle in the Common Law to deal with this sort of representation, upon purchase. Lenihan should spell out the exact situation here.
The economics of holding ANIB are terrrible. Having ANIB wound up would result in the bankruptcy of INBS, EBS and possibly Permo.
If we are still relying on foreign loans to sustain our financining to the degree described by Lenihan, then we are still ‘living beyond our means’.
I do not think Lenihan is lying. I think he is trying to make an accurate assessment of the situation. And he is trying to make a balanced judgement of the situation. He has trusted these crooks, and now the state has been fooled in the process. Lenihan is adament that NAMA will not be some sort of pussy-cat, and that it will be ruthless. Given the tradition of the Irish state with reference to corporate enforcement, this is a big aspiration, and would represent a first if attained.
Lenihan is correct in the sense that once a country is blacklisted, all credit flows in stop immediately, regardless of what the jokers in Moodys, Fitch etc. have to say about the matter.
The weakness of Lenihan’s policy is the failure of Ireland to get it’s cost base competitive. To make Lenihan’s NAMA project work, the cost base must drop fast and definitely, so as to increase the volume of private sector enterprise. This is not happening. This has to happen. And there is no progress here. None. Couglan even seems to be preventing progress.
John Allen is correct. Let us all continue this conversation because it is the key issue now for our economic future.
Malcolm,
“He said that if he were to follow the advice of the Brutons and Lees of this world allow ANIB to collapse and default on our obligations the situation would quickly become ten times worse.”
I’m intrigued by his use of the word ‘obligation’. Why should ANIB be our ‘obligation’ in the first place?
“He reminded us that Ireland is completely dependent on access to foreign loans for out current day to day expenditure and these would dry up overnight if ireland were to default.”
To minimize this exposure, Brian Lenihan should therefore be bringing our expenditure comes back into line with our earnings. Cue Bord Snip. Presumably he is serious about curtailing spending, and not borrowing ad infinitum?
Paddy
Malcolm, I agree with your deferral to BL here. However, I am interested in why he did not mention the view of Alan Ahearne.
John ALLEN – My p o v is moreso lateral than deco, malcolm. Reason why is down too ANIB crew knew all along their banking ethics would end in disaster, it’s not an accident. One must, in my opinion, analyze this not just from a strictly legal p o v or as malcolm as usual so eloquently articulates, a pragmatic p o v. I fear ANIB is crunch time for the Irish rep and the skeletons in the wardrobe are bursting too get out which may explain at time’s my colorful prose.
Fully agree with deco this is a critical issue, and most deserving of serious debate.
I’ll post my considerations after good ‘ol mull on it.
First off, i agree with Deco in every point and i agree with malcolm in cost – benefit analysis if we go with deco’s wind – up on ANIB.
Now, can Ireland sustain a banking meltdown of the sort neatly and accurately denoted by deco and audited by malcolm..?
Secondly, is the cost as high as Lenihan warn’s.
Lets assume it is. THen one is compelled to ask, what’s the cost by continuing to go this bailout route. Deco i reckon concludes the cost is in the long term less if we pull the plug on ANIB, at this stage, particularly now that it’s been ascertained one cannot believe anything ANIB declares, ANIB is Ireland’s ENRON.
In my p o v the cost to Ireland by continuing to bailout ANIB is in the final analysis going to be worse than the aftermath of pulling the plug on ANIB, which will take gut’s and soul and a massive blowback from a large section of Ireland who bought into the POnzi Rep orgy of easy living.
It’s looking like ANIB always knew the loans to staff where never going too be paid back, and everyone was robbing the cookie jar and ANIB was and always was a massive well organized madoff type POnzi scheme.
This is the potential truth here. ANIB is in fact a deliberate in your face POnzi scheme and if one takes the p o v one see’s that it’s collapsed and the truth on the level of stealing is immense.
And then we are into Ireland and social networks and everyone knowing everyone and this ANIB ponzi money flowing like champagne and who ever drank it are involved.
This is a Ponzi scheme this bank. Lending monies to staff is Ponzi. Everyone on board at ANIB were running a POnzi scheme.
Should a democratic elected Gov pay for the bill’s chalked up from an entity that was a POnzi scheme on the basis that to not prop up the POnzi outfit bank will trigger a chain reaction throughout interlocking entities cratering the gut’s of the financial and banking system.
My answer is,……. a collapsing POnzi scheme is a financial black hole that must be let destroy itself and anyone not within it’s parameters ought to steer clear of it until nature has it’s way.
**************in post above, my assertions are assuming Gov no longer obligated on guarantee regards to ANIB.
I have just been told that George Lee did something never heard of before.
Apparently GL was sitting in his seat, looking around him at the Dail. And he seen some people sleeping as they sat in position. So he stood up and told them that there were people in this country without any jobs, whilst they were sleeping on theirs…That this was no way to be going on when the country was in crisis.
Now, this is on his first day in Dail. It is like as if this was always going on, and nobody ever commented on it and in walks George Lee, and states the blindinly obvious. And nobody ever did this before !!!
It is almost like as if there is an agreement between all the participants to not bring up this issue of TDs sleeping in their position. A case of them all certainly being at it, and saying nothing about by some sort of common aggreement. Shower of scoundrels. It just shows that the Dail is all about theatre,and has nothing to with actually running the country or intelligent policy making !!!
It is pure theatre. I was in there doing work for a company back around 1998. The place was like a holiday camp, they spent the whole morning trying to decide whether thrown someone out, because he kept speaking out of turn, then they all pissed off for lunch.
> On Sabbatical: David is taking leave from writing articles until August while writing a new book. More details on this over the summer.
Aww. David, we need your commentary and opinion on the economic situation even during the summer months. An economy never sleeps! Do consider dropping in here from time to time and writing a blog only article.
As for this:
http://www.rte.ie/business/2009/0610/anglo.html
Well, dont say I told you so! Now Cowen is saying today that we have to pony up the 4 billion “recapitalisation” of Anglo Irish Bulgarian Bank because if we didnt it wold collapse and the bill to us (the government) would be 60-68 billion!!! That’s what that government guarantee madein Sept has cost us.
Cowen/FF et al said at the time that wehad to do the guarantee or face the consequences. Now he is saying that we cant let AnIB fail becaise of the guarantee thats in place. It defies the logic of a 2 year old.
How FF/Green Party got even one vote in the country is beyond me! Turkey’s, or lemmings, in this case do vote for Xmas.
MK1
MK1, that’s it in a nutshell.
Now who was it that came up with the idea of a blanket guarantee of the Irish banks?
Mmmmm …….
Paddy.
David, I wish you all the best in writing the new book, but I agree with MK1 that we need your commentary and opinion.
Please consider his idea of writing blog articles.
We approach your site from myriad walks of life and perspectives; we feed eachother information here that is often not highlighted in the mainstreem media. Your article sparks the discussion that develops. Your articles are important catalysts for intelligent discussion and the proliferation of ideas.
I, for one, will really miss your articles over the summer.
Folks, I am struggling with the economics of ANIB and NAMA and the “should we? Or shouldn’t we? Debate.
In my life, so far, I have been able to learn to understand most things, at least to a degree that I can be content with; that they do not annoy me with complete befuddlement. One exception was when I tried to learn how to sight-read music, over 21 years ago. I had to admit defeat, even after the stalwart assistance of an acclaimed music professor with a Phd. I simply do not have the prerequisite synaptic connections in my brain for that task. But I think that music is a pure and exact science. I think that economics is not.
Economics seems very inexact and impure, actually. It draws upon many factors outside of itself in order to exist at all. (Desire, greed, pride, confidence, one-up-manship, snobbery, ego, psychological insecurity, deception, spin and a host of other elements.) Actually, the second truest statement I ever heard uttered by Bertie was the one about not playing “Smokes and Daggers”. In that one coinage, he summed up both politics and economics for me: Snakes and Ladders is a game; Cloak and Dagger is the subterfuge and back-stabbing that goes on in the background; Smoke and Mirrors is the deception and spin, the tools of the con-artist and the confidence trickster. Gambling dressed up as trading on the financial markets.
Because I still believe that I have at least some grasp of these things, I am not admitting defeat in trying to understand this economic situation yet. Logic and lateral thinking exercises that I encourage my students to engage in always rely upon going back to what you know, review the things you know and build from there, piece by little piece, to solve the problem.
So, what do I know? Well, I read DMcW’s book in 2007 (Pope’s Children), having only known him from Agenda and Newstalk before that – only occasionally reading his article in the SBpost; didn’t even know he wrote one for the indo at the time. In June 2007, a friend of mine told me in a chat after dinner about Quinn and Anglo (in the context of the DCC scandal at the time – her husband had worked there in the 90s), saying that it would be the next big financial scandal if it ever got out that Anglo was loaning the money to big-boys to buy its own shares.
For twelve months, I think, that little dittie remained a closely kept secret; during those twelve months to June 2008, we were lied to. We were lied to alot, by a great many people: the fundamentals are sound, etc. Even if the govt was not telling lies, because it was unaware, because it was being lied to, we know that the banks were telling lies, the Regulator was telling lies, the Central Bank was telling lies and the media, either due to libel laws or under threat of losing advertising revenues, was telling lies.
What else do I know? Well, I know something about the cut and thrust of politics and Trade Unionism in Ireland. I knew about the “sleeping in the Dail” thing; I have posted here a few times about the rude awakening that George Lee would get when he finally witnessed what goes on. I know about the Fitzpatrick report to An Taoiseach in 1998, which planned ways to reduce the Public Service pay and pensions bill. I know that the govt and the Trade Unions got together with IBEC and decided that they would spin benchmarking as a wonderful thing for ordinary ps workers, the union bosses would sign their members up to the deal and get a salaries relativity with politicians and senior civil servants as payment for fooling the members; IBEC officials getting the same pay-off for spinning that benchmarking was screwing their private sector workers. They pitted the sectoral workers against each other for the whole of the last decade so that ordinary workers would not be looking at what was really going on. I know successive Presidents of my own trade union have been shocked to discover the way that deals are done behind the scenes and how they have been dissuaded/prevented from promoting members’ interests in favour of govt and IBEC.
I know that the principled idealism of Joe Behan was so offended by how the system operates, when he took a Dail seat in 2007, that it was a matter of time before he would have a crisis of conscience. When he saw the gambling in the banks being paid for by education cuts of the worst kind, plus the targeting of the over 70s medical card pettiness, he resigned from FF. I am proud of him. I used to be disappointed because I thought he could no longer help me to reform FF from within. I have learned in the last week that he can still help alot and he is.
This brings me to what we all know now: The bankers have all been telling lies and they still are. The regulator and central bank too. The Government is also telling lies. It says it will protect the vulnerable, yet it has cut social welfare, medical cards for the elderly, mental health services, general health and hospital budgets, school books for children, teachers for children, course grants for children, child benefit, free bus travel for the elderly, etc………
Donal O’Connor says the taxpayer exposure at ANIB is 50 billion and Brian Cowen says 64 billion. One is a lie. O’Connor is refusing to release information on the loans to managers at ANGLO to the owners of that bank – us, on the assertion that it is commercially sensitive information. More smoke and daggers: game, obfuscation and the threat of more “pain” if he tells the whole truth.
We know that Eamonn Keane and Eamonn Dunphy spilled the beans yesterday on how the politicians and Big Business controls the media through the flow of advertising revenue and information/interviews. This ensures that the people never learn the whole truth.
We know, therefore, that we cannot trust our media.
We know that our government is spending more than the tax revenue it is taking in. We know that it is borrowing to keep the country going. We know that it is using the media to convince us that this is because of the public sector bill, rather than the billions being given to private sector banking business.
We know that this is unsustainable and that we are slipping down the graduated bond market rating.
I know that Brian Lenihan wants to do the right things and that Brian Cowen is preventing him. I know that O’Keefe and Coughlan only got their portfolios because they are his drinking-buddies, not for their acumen.
I know that we are in deep, deep trouble financially. I know that we are being lied to directly and being fed spin in the media. I know that most people believe alot of what they read in the papers, see and hear on the television and radio. I know that this disinformation of our citizens is a huge problem.
I do not know if we should let ANIB fail of save it.
I know that many of those who tell me we should save it are telling me lies about other things.
So my gut tells me they are telling lies about this too. So my gut tells me we should let the bank fail: it did it to itself; why should poor kids in my school pay for the gambling losses of the big boys at Anglo?
Why?
Can someone here, with a better understanding of economics explain to me why poor kids in my school next September cannot have books because millionaires at Anglo and elsewhere lost their bets?
Folks, case in point about our media: RTE news says the govt won the confidence motion by “a comfortable majority” of 6 votes! More spin!
There is nothing comfortable about a margin of 3 voters!
And all while the victims of abuse marched outside………..
wills, we need more “truth-bombs”.
Let’s keep at it!
tim – pure intelligence > impure / artificial / POnzi intelligence
wills, sorry…. I do not understand your reply to my post…….. Help?
PONzi merchants ply their trade on befuddling intelligence and clogging understanding. So purifying this intelligence undoes their skullduggery and white daisies gain the upper hand.
Tim – you wrote the above eloquantly . May I add that in an Orchard to preserve the Good Apples they are placed in a straw pit by the farmer .Daily they are inspected and checked and ALL the BAD apples are Completely Removed so as not to distroy the remaining healthy apples .
Nature has a message in this banking dilema of CLoak & Dagger and Obfuscation and we must be seen to remove all what is BAD immediately and face the real music so we know where we can start again.
GL is a good farmer and we will see him do the work all good farmers love doing .
John ALLEN, I appreciate your encouragement of a “novice” such as me. Thank you.
I spent my years 9 to 18 growing up on a farm not far from you, in Bruree. Dairy farm, but we had an orchard. I just do not understand whether you are saying that we should abandon those bad apples, or remove them for re-visiting later. On my father’s farm, we discarded them and let them rot. Nama seems to want to keep them for some reason.
Perhaps, you are saying that NAMA is the straw pit, from which the bad apples will be removed.
I have been looking at the Tree, not the pit.
Hmmmmmmmmm…… Thinking……….
pure intelligence = good apples
impure intelligence = rotten apples
Once upon a time in a political jungle controlled by the Soldiers of destiny there existed a fabulous “City of Gold”.
The city was peopled by fabulously wealthy developers and numerous minions who were subject to them.The subservient serfs/minions occupied humble dwellings within the city-some large enough only to house a dog and his owner.
These workers often complained about their 40 year mortgages,and negative equity, but in general they knew their place-and some of them even bought a few sites(or dogboxes) and got above their station in life by involving themselves in the activity of golddigging.
Their rulers and crony developers dwelt in palatial homes, earned incredible salaries,and owned extensive property empires in Dubai,Docklands, and Dallas.
Some of them lived in flash mansions in the rural backwaters of Erin, and others in understated affluence on the Ailesbury Road. Many of them travelled by helicopter to the Galway Races to pay annual tribute to the Lords of the Galway Tent
Bankers borrowed money from frugal Fritzs’ in Deutchland and elsewhere to fund the lunacy.
Those bankers who had loaned the rulers of the City of Gold the money to prosper beyond their wildest dreams, woke up one morning to the realization that the serfs could no longer afford to buy the dogboxes-and worse still many of them that had already bought ,were now queing up for unemployment benefit .!
When the Developers Bank was unable to pay back Fritz and Hanz his money, the Soldiers of Destiny promised that if they were all patient, and did not all rush-all at once- to get their money out of the Developers Bank (which did not have any money)- the good dogbox owners who dwelt in the City of Gold (and still had jobs) would pay them all back-eventually.!
And so the bankers of the great Euro-empire loaned more and more money to the Soldiers so they could pay back the investors and pension funds who had loaned them so much money,so that their destruction would be averted and the Euro empire would not collapse in utter disarray.
And so the people of the City of Gold were reduced to penury and enslavement for decades,as their political masters continued to borrow more and more money to fund the bankrupt bank, until the citizens finally rose up in fury against the false promises of the Soldiers of Destiny and the carnage was terrible to behold.
tirnanog33, as usual, a salient post. I just hope that your final paragraph turns out to be incorrect.
At this link the lowdown is savers at ANIB would loose 50 Bil without gov prop up of ? BIl.
http://www.google.com/hostednews/ukpress/article/ALeqM5gKCQBFjanMgafL6478BBxpdXCh2Q
Why not compel savers to cough up the bailout fund of 4 -7 Bil on the basis if they don’t they loose it all.
They would gladly oblige i’m sure.
****this assumes gov no longer obliged on guarantee.
At this link, now that gov did prop up ANIB the savers savings of 60 bil is secure.
So, why don’t savers now withdraw savings that bailout kept secure and then once all savers get savings gov’s concern on savers savings is over.
http://www.davidmcwilliams.ie/2009/06/07/moral-of-the-mayan-meltdown/comment-page-2#comments
wills, I think it is because the savers’ money is not in the bank; it has been given out in multiples, according to the bank’s “mulipliers” and “derivatives” and “securitisations”, as loans to people who cannot repay them.
They conjured, out of thin air, sums of money, based upon real money that they held, imaginary sums of money, using “systems” they dreamed up out of no-where!
Now, they want Joe Soap to pay for this “no-where” money; in essence, this means that Joe Soap will have to create (owe) THE MONEY THROUGH HIS DAILY WORK AND PROFIT-GENERATION FOR THE BOSS by “greater efficiencies” and more “productive work practices” and by more “competitiveness”.
Ergo: working harder, later and for less money per hour.
Hear Brendan McGinty of IBEC on newstalk this evening? Oh , yeah! The people who earn 17K a year are the problem now! They are creaming it! We must have a system that allows employers to pay them less than that, selon McGinty!
I taught his daughter; I know this man, though he never faced me at a parent/teacher meeting – sent his wife to me instead, while he saw other teachers. Sent his son to a famous fee-paying boys’ secondary school in Blackrock in Dublin, while sending his daughter to a non-fee-paying girls’ school.
What does that say about him? Two things:
1) He believes that private school is better than free school;
2) He believes that his son is worth more than his daughter.
I rest my case on this man.
Tim
Emotion sometimes interferes with logic:
Maybe he believed the free girls’ school is better academically – with teachers like yourself in it – despite the lack of exorbitant fees.
And maybe the son was sent to Blackrock to play rugger (the only hope for him!)
Or maybe the wife (who maybe came to you because she liked you!)
made the schooling decisions in the family. Wouldn’t be the first time.
I’m not defending this chap. Maybe you are 100% right about him.
I cannot deduce the two conclusions from your post, however.
mishco, Okay. Your logic here is fine. But I watched his little girl grow, every day of school, from 12 to 18. Emotion overtakes logic sometimes.
whoops wrong link there above,….!!!!
I suppose if Davids having a Sos Don Samhradh we could do worse than keep an eye on MH over at Finfacts. This is a particularly good article;
http://www.finfacts.ie/irishfinancenews/article_1016881.shtml
Furrylugs, yeah, MH is really good.
bit strident though,.!! (joke on self)
wills, like me, you can take it.
Let’s keep at it…….
Surely anyone with savings in ANIB must have withdrawn down monies at this stage based on all the bad press for ANIB, which means there is no savings there for gov to worry on cos customers emptied out accounts…!!!
tim – so ANIB’s lent out all the savers savings..!! So they lent out 50 bil which became toxic loans. So ANIB savers are suspended in animation presently. SO, how is it no sign or sound from these savers on whineline or the meeja shouting their heads off for their cash to be given back to them.
I’m watchn VB here and i’m beginning to think no – one is telling the truth on any of this stuff, this is getting into monty python, ……..!!
wills…… yep!
Richard Bruton defending FF actions……….
Boyohboy!
Something major is being hidden!
my better half just said those exact words too tim…!!!!!
Does anyone out there know if ANIB’s savers are locked out on walking into ANIB tomorrow and retrieving their savings…… aaaaaaaaarrrrrrrrggggggghhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh
I strongly recommend anyone interested in entrepreneurship in Ireland should read this blog post from the former CEO of IONA Technologies, Chris Horn
http://chrishornat.blogspot.com/2009/06/boxing-above-your-weight.html
Shane Dempsey, thanks, Chris is a good man.
check out 3 paragraph on this link, 75% of funding for ANIB is foreign,………….!!!!!!!!!!????????????????????????????????http://www.irishtimes.com/newspaper/finance/2009/0610/1224248536571.html
http://www.irishtimes.com/newspaper/finance/2009/0610/1224248536571.html
There is no way savers are keeping 60 billion euro right now in ANIB.
Surely to god savers at this stage took their monies out of ANIB,…
wills, that might be the exact problem, but the bonds ANIB bought are based on those savings………
Smoke and mirrors and daggers……
ANGLO has a loan book of 72 billion, now.
(says Irish Times Finance correspondent on VB).
So, we had O’Connor saying 50 Billion at Oireachtas committee yesterday, Taoiseach saying 64 Billion in the Dail today, and me man saying 72 Billion tonight on the TV3 Vincent Brown Tonight Show.
How far up is this number going to go. with these gamblers that poor people and children and ordinary workers are expected to pay for?
Did any of you see what was done to the Children’s Hospital in Crumlin this week?????
Quote:
“SOME senior staff at Anglo Irish Bank who borrowed millions from the bank to buy properties and shares are now unable to repay the loans, the lender’s executive chairman revealed yesterday.
Donal O’Connor said the bank had written off these loans to senior staff and directors and they would now have to be repaid by the taxpayer.”
Does this mean that these guys are now impoverished and a judgement has been lodged against their family home,assets etc?
Or have they all miraculously escaped the fate of us lesser mortals who would dare to renage on a bank debt of even 5000 Euros.??
Seanie is still driving his hundred grand Mercedes around and living in his palatial pad in suburbia according to media reports..maybe its all in his wife’s name.?
tirnanog33, This means that these boyos will continue to live in their mansions and that you and I will pay for them. They bought them with electronically transferred money that did not really exist, but you and I will pay for them with money that we really will not get in our pay-packets.
So, the 50 billion at stake in savings is a lie, a ruse to secure the prop up from the gov. It’s a cover story. So the real truth is ANIB is been propped up with gov bailout for a reason we are not been told. Is ANIB a money laundering outfit,. is it tied in with the lisbon vote about to be rammed down our throats, is ANIB a spectacular POnzi scheme puling in all walks of life in D4 social elite and a wind down would reveal documents rather to sensitive for public notice.
If ANIB is wound down does this mean NAMA is obsolete due to most of the toxic loans originating from ANIB and NAMA not needed if ANIB is shut down,. So ANIB is been kept alive to get NAMA up and running.!!!!!!
wills, You said earlier: “so ANIB’s lent out all the savers savings..!! ”
wills, the answer is way worse. ANIB multiplied the savings its savers had and lent out multiple billions that ANIB borrowed on the strength of its savings.
Most of what it lent out was to property speculators/developers and when the bottom fell out of the property market, there was no house selling to Joe Soap to repay the loan through the builder, back to ANGLO.
= “Collapse”!
music stopped and not enough chairs left = panic!
= “Help me, government boyos, who have benefitted over the years!?”
= “Good man, Willie”!
tim – so, technically speaking, the bailout is to prop up a bank which has no savings which means lenihan is lying to the public when he asserts we have to do this to protect the 50 bil savings.? is that accurate…
Anyone have any idea were ANIB gonna get back SAvers 50 billion.
wills, the 50 billion may well be still sitting there; or not; but, certainly, the 50 billion is leveraged in the multitudes: “I have 50, so will you lend me 150 on the strength of it?”
“Of course I will!”
So the 50 billion is nominal collateral for three times its value, at least (could be more).
wills, that is what I have extrapolated from many people here and elsewhere. But my grasp of these matters is not so good. I hope that others will weigh-in here and clarify for us both.
tim – there is no way would savers leave 50 bil in ANIB based on last 8 months bad press…!!!! would they..? I would’nt..
wills, I’d say you are right there.
Some savers will for the following reasons.
1) It’s government guaranteed and nationalised
2) They’re being offered a high rate of interest to encourage them to stay.
Effectively, the nationalisation+high-interest is a bribe to depositors to leave their money in ANIB. I know a few people who still have money there. They’re all looking around for alternatives and will probably seek to move towards the end of this year. ANIB deposits are a ticking time bomb as the government can’t prevent depositors from withdrawing their money. If we don’t consider an “orderly” wind-down plan we could find the state bankrupt based on depositors pulling cash out in a panic. Foreign depositors will not care about Irish taxpayers!
It’s a game of poker with the Irish taxpayer picking up the tab for all players. As I’ve said before, we’ll own all the debts based on the current scheme. It’s genuinely terrifying. This is what enrages me about those criticising Morgan Kelly’s comments that the bank should have been let go. They seem to have missed the point that the current strategy could lead to national bankruptcy.
If we ignore the deposits, ANIB also sold a range of capital bonds to support borrowing. I know one person who was sold one of these as a “part of her pension fund” (in her own words). The risk wasn’t explained. These bonds are now effectively worthless, with no coupon for the foreseeable future. I wonder how many others find themselves in the same position. It sickens me that the bank’s staff would be provided with debt relief or absolution when their frankly unscrupulous selling practices and collapse have put so many in financial hardship.
wills, what scares me is this:
When I bought my house back in 1995, they had a rule in banking that you could only borrow a maximum of 2.5 times your income.
By the peak of the “boom”, I saw banks lending money to the tune of nearly 15 times a person’s income (people earning 30k pa buying houses for 500k -600k!).
If the banks allowed THEMSELVES to borrow on the wholesale market in these multiples, we may get a terrible shock, yet!
What if the likes of ANGLO had 50 billion in savings/investments and were allowed to borrow 15 times that?
Would that go some way towards explaining why our private sector non-banking debt is 1,600 billion?
wills, but who is gonna tell that truth to the bond-holders who considered ANIB to be the most successful bank in the most successful economy in Europe?
So “successful” that it even made AIB and BOI jealous so much that they started playing the same game in 2005 and in less than two years had racked up nearly enough ponzi debt to kill themselves?
Seanie’s big loan book swinging around D4 for all to see, like Chaplin’s umbrella,and the commensurate bonus-payments drove the other bankers mad with egotistical rage and jealousy.
A warning for those of you tempted to withdraw your savings from the bank:
http://news.bbc.co.uk/2/hi/middle_east/8092942.stm
mischo, that’s the second time you have saved me from myself tonight!
David,
Please read Bill McKibben’s Deep Economy.
http://www.billmckibben.com/
While your sharp take on socio-economic behavior is fun to read, I would like you as an economist to articulate the sustainable economy that we think we need. Bill may get shot down as an environmentalist, but his thesis on local deep communities has alot in common with community values in local Ireland.
Thanks,
Michael
George Lee recieved His first yellow card from the Ceann Comhairle today.The Ceann told Him that some FF members could be meditating,and just because their heads were down and their eyes were closed and they were not moving,it did not mean they were asleep.He went onn to say that this often occured in the past and Lee was not to read much into this.SSSOOOOO there we have it folks,while some people on this forum,myself included have suggested in the past that Cowen et al were asleep at the wheel of the Economy,it turns out we were totally incorrect,and the fact is that Zanu-FF were merely engaged in group meditation…..Now why cant I get that ridiculous vision out of my head of Cowen sitting in the Buddha position ,meditating on top of the Cabinet Table with Coughlan sitting beside Him humming as they prepare for Leaders question time.Maybe that explains why all these Buddha’s have turned up for sale in the big Dept.stores ever since this boom started.This use to be a Catholic Country.at least when I lived there.Whats wrong with FF bringing in Rosary Beads with them into the Chamber and saying a few Decades for the Nation instead of this auld meditation mullarkey???????.P.s. I said Decades above and I forgot everything is measured in billions these days….O.K just for ye Pagens out there and that includes the “Druid from Limerick” I’LL start ye off ” The Angel of the Anglo declared unto Mary and She concieved of the Holy bailout…….OOPPS now were back to Religion,Mayan’s,total collapse,and kicking head’s around Kildare St…….Gooodnight Ireland….Sleep Well….
Tim – Applegate Intelligence is more appropriate to what I was trying to explain as ‘wills’ rightly read it .Normal Apple Farming requires picking the ripe fruit apples and removing them to a storage area .In the past serious fruit farmers with apples usually only had a straw pit to place the fruit for preservation for the farmers market .In order to sell the best fruit and to hold more stock without contamination the farmer routinely inspected the apple storage pit and daily removed the bad apples so they would not cause the good apples to become bad.
The Moral is : if a Bank cannot give the goodness to the market ( Irish Taxpayers ) then it should be removed and discarded because in Time it will only distroy all around it ( Irish Industry and Jobs ) .
Those that claim that Bad Apples must be preserved ( O’ Connor et al ) are displaying a Greed that they themselves alone can only benefit from at the expense of the Market ( Irish Taxpayers & Irish Gov ).
George Lee is a Good Farmer and he understands this intuitively without a batter of his eye lids . GL is a taurean earth sign and as we say in astro- science ‘his eyes are in his hands’ .This meaning what he sees is by touching with his hands .So a good farmer has eyes in his hands because his game is a touching business and removing the bad apples is done so by hand.
( I would have imagined in the dail he went to the sleeping dawlies and touched their shoulders to wake them and issue his dogma .The energy these dawlies received at that moment must have been electrifying.This is the hand power he has and these dawlies will never forget this nightmare for the rest of their lives )
Going off track here a little but I wonder if any poor sod that looses his, job, his house and wife because he is broke will actually try and send Bertie to an early grave and some of his other crooks that had robbed the good people of this country, I mean some people that loose everything in there life might just think they have nothing to lose by doing so…..its been done before.
Divide 2 Conquor – From the 70′s the country was divided into favourable and unfavourable tax zones to do business eg
1 West of the Shannon -it was possible to get 120% capital allowances on equipment against income and also an imediate 100 % write off without having to take it over 5 years like the unfavourable parts received; and
2 Farmers west of Shannon and in other favourable areas were often given low rateable valuations eventhough they might have hundred of acreas .This gave them the benefit of paying low rates and sometimes they were exempt from tax; and
3 Shannon Airport was the first financial industrial tax incentive area with duty free , export tax free relief, no customs duty , etc etc
4 There are lots more too numerous to write .
The point I am making is that I believe now is the time to re-write new incentive areas to serve our needs to include the following :
a) New foreign cultural intensive development areas ; and
b) Independent free banking zone areas free from the maw of invading D4 & Oh – Folly Political Dynasties ; and
c) Newly independent Controlled Financial Areas administered Cantons grouped into Development regions and administered by one Local Council ; and
d) Remove most tax collection from D4 and their civil servants ; and
e) Register new Regional Banks with other reputable and recognised Regulated areas in Europe that are outside the jurisdiction of Dublin; and
d) Other independent ideas to be discussed .
The effect is that the hand that feeds the ailing ANIB will disapear and the regional areas will blossom and bloom .Regional politics is a strong center now filled with radicals that want to make a change in Irish Politics as we know it .We must be seen to make that happen .
John ALLEN – if these measure’s secure credit provision from the hand’s of oligarch’s, prosperity will rain down like manna from heaven for all. But if these measures can be circumvented financial oligarchs will cast their shadow.
Spent some time reading Finfacts.
Came across a link that hits a lot of issues spot on.
http://www.finfacts.ie/irishfinancenews/article_1016854.shtml
It might be a good idea to have a ‘travel ban’ for the entire contents of the Dail – except on EU business, supporting the IDA, or supporting our mediocre banks.
Also it would save a fortune if the TDs started to use CIE a bit more. Our expenses regime is even more obscene that that which exists in the British Parlaiment.
Perhaps Joe Behan might table a private members bill to get full transparency, or to get a drop in the mileage allowance. (He has already annoyed most of them, but this will annoy them even more). Most of the time, the Dail sittings are practically empty -so in all probability a lot of travel to the Dail is unnecessary.
There seems to be no connection in public policy between the allocation of tax money, and the concept of getting a good return for the taxpayer. There is a lot of take about it. But that is all it is.Talk. Worthless talk.
Shane – “if we don’t consider an orderly wind down plan we could find the state bankrupt based on the depositors pulling cash out in a panic.”
……..Why.? Surely if savers pull their monies well they’re fine, they’ve got their savings and are on their way, why is there a risk there for the state.?
If all the depositors get their savings so be it. If the savings are not there and the savers come along and try to pull their savings is that the problem..? does the eejit guarantee mean Irish gov must cough up the savings pay out for depositors when they come for savings and there is nothing there to pay out ‘cos ANIB lent all savings out.
Are the gov capital injections actually a pumping in off cash flow into bank for bank to be able to pay out savers when they come for saving’s.
And if this be the case this would mean that all customers of ANIB will be pulling their savings out soon , there is no way will anyone keep their savings in this bank any further, so does this mean the gov will be funding ANIB cash to pay out all savers until no more savers.
If so, this means Gov will be paying out 50 billion anyway then ‘cos the gov is on record stating there is 50 billion in savings at ANIB.
So, are the gov slowly introducing the idea to the taxpayers of Ireland the unbelievable fact that the gov are in full knowledge they wil be using 50 billion in taxpayers cash to pay all the savers of ANIB due to the guarantee and dont know how to disclose the info to irish public without causing a revoultion.
ALso, who are these savers. ANIB is a business bank primarlly. Who are these savers with 50 Billion in cash in this bank. Do they really exist. Or is it a ruse through which taxpayers cash is been siphoned off by oligarchs salted away into off shore accounts, the next stage of the ANIB POnzi scheme.
Can anyone, any bloggers help answer any of the questions in my post above, please, i would be very much appreciative.
If all the savers look for their savings at the same time, the money to pay them isn’t there. This is true for any bank, not just ANIB, because they only keep a certain percentage of the liabilities in reserves. ANIB don’t have the money to pay off their depositors all at once ; the Government took it onto themselves to guarantee the banks latching onto a 3.00a.m brainwave by David McWilliams, and they don’t have the money either.
Too many of the loans given out by ANIB are non-performing, so the bank is failing to take in enough money from their asset base, to adequately cover the calls on their on-demand deposit liabilities. The imbalances in this balancing act is the fundamental problem in ANIB.
I’ve no idea who the depositors are of this bank, but like you, I’d like to know. Also, who are the bondholders, and in the event of a liquidation scenario, who would be looked after and who wouldn’t, and why?
Another consideration is, in an immediate liquidation scenario, how would loan assets be priced, and would there be knock-on effect on other institutions.
Paddy.
paddythepig – thks. Isn’t it reasonable to presume all saver’s with ANIB are withdrawing deposits en masse due to ANIB fiasco so this means then if it’s the case that the irish gov is providing the fund’s to ANIB to pass onto any savers signing out from ANIB. Thus, this been a very possible scenario underway now as we post, this then means that Gov/taxpayer will overtime end up footing the bill for all savers savings withdrawn – 50 billion, irrespective of anything else.
wills, not necessarily in my opinion. Shane Dempsey has a good post above on this. Some depositors will choose to leave their money with ANIB, because it’s government guaranteed, and because they are paying high interest for deposits. Others will differ.
The tsunami whereby all depositors simultaneously, or over a short period of time, demand all their deposits, would be a big problem for any bank, not just ANIB.
As for the recent 4 billion injected by the Government? That may well have been to bolster cash reserves due to deposit withdrawals, I honestly don’t know what is it being used for.
And for the 50 billion total deposit liability? Maybe that is the figure. But remember all liabilities, be they deposit liabilities or borrowings, will be either partly or fully counter-balanced by the banks performing assets.
Paddy.
Paddythepig – appreciate feedback. From what i can ascertain ANIB ‘s performing assets are non performing, high % of toxic asset’s, thus revenues very low, so, little available funding on it’s own to meet deposit withdrawals on a day to day basis, thus Gov are bridging shortfall here.
Let’s just assume above is close to truth of present situation. The chances of ANIB’s performing assets returning to higher stream revenues is remote. Property bubble will not return to previous levels. Thus write downs and NAMA transfers and ANIB will be pulling in much less revenue for long term.
Meanwhile savers continue to pull savings. THus, ANIB can only but rely on GOv to bridge the gap. ANIB cannot continue with high i rates on deposits either and if they do it looks like the gov is funding that too.
So, the taxpayer is paying for the running of a bank who will never return to a profit that will see it out of the liquidity trap it find’s itself in now.
So, the irish gov are propping ANIB up until it wind’s itself down over a period of time through savers jumping ship overtime.
???????
The main problem as I see it is that ANIB was a notoriously big lender on property plays, many of which have gone sour. Their loan book doubled over a relatively short period of time, implying that at least half their loans are at highly inflated prices. Their international property plays were in schemes that looked expensive and exuberant. Look at http://www.bestchicagocondos.com/blog/collapse-of-anglo-irish-bank-could-topple-chicago-spire/ for example.
ANIB was a by-word for Irish extravagance. The ultimate “good-time” bank. I cant’ remember the precise figures but I seem to remember from looking at their balance sheet that as they rapidly expanded their debt they also invested more in the bond market, picking instruments which could give short term gain and liquidity. I.e. RISK! I’d say if you were to take a look under the hood of the ANIB balance sheet you’d see troughs of worthless bonds, 50% of their assets virtually unsaleable in the current market and some awful debts, many of which are concentrated on developers with tens and hundreds of millions in exposure. The market decided that 99% of the value of this bank should be wiped out over a short period of time and who are we to argue. 99% is some “hair-cut” to use the phrase-du-jour. Remember that they couldn’t find a single private equity consortium willing to take on the operations of the bank (even at a 99% discount off their peak value) without a full governmental indemnity on depositors and inter-bank loans.
If the depositors (mostly foreign apparently, tax exiles???) were to pull their money over a short period it would be an unmitigated disaster for the country. This is a risk for any bank but rare. They try to manage this risk through selling debt derivatives. Try claiming some of them now. Remember that David has subsequently called for the guarantee to be rescinded. This isn’t flip-flopping. He’s just figured out, like a few others, that things were actually much worse than we thought. The national and intenrational crisis coincide to produce, potentially, the perfect banking storm.
We have no legal power to stop despositors from withdrawing their money with only recourse to a poor asset base, deteriorating cash-flow & _other depositors_. The very definition of a Ponzi scheme. I think Kelly was right all along. We should have let this bank fall.
I forgot the last recourse, the humble (and increasingly screwed) tax payer.
Can’t see too many tourists coming to see the ruins of a row of pebbledashed five bedroom south forks five hundred years hence.