September 6, 2009

Dissenters may call it right again

Posted in Banks · 197 comments ·

At the height of the boom, I got used to being accused of ‘‘talking down the economy’’. In fact, this was almost a weekly occurrence as the old vested interests tried desperately to squeeze their last greasy fiver out of the population. Back then, questioning the credit binge was dismissed as ‘‘unpatriotic’’.

Interestingly, it was not just the vested interests who bayed like sheep, but also the mainstream economics profession, the vast majority of whom said absolutely nothing about the likelihood of a crash in the property markets and the probable insolvency of our banks. Maybe they were infatuated by the intellectual game called ‘efficient markets hypothesis’. Whatever their excuse now, it is a pretty unflattering episode for the profession and clearly undermines the credibility of many who are now suggesting policy changes. Outside the economics profession and the banking industry, there was a way of dealing with dissenters; it was based on painting us as incendiary, volatile and in some way beyond the pale.

Exactly this weekend last year, I remember being on a Saturday View panel with Brian Lenihan and Richard Bruton. When I suggested that we’d have a bank crisis by Christmas, the minister slapped down such a suggestion with the retort that even suggesting such a thing was dangerous talk. Bruton agreed with the minister on that occasion, and even he reiterated that the banks were sound. In subsequent public discussions with members of the political establishment, ‘‘loose talk’’ replaced ‘‘dangerous talk’’.

All the while, the editorial line was the same. There is a pattern in the establishment’s approach to contrary ideas. It depends on the put-down rather than on persuasive analysis. Anyone who deviates from the party line is ‘‘dangerous’’ and by extension is endangering the interest of the average citizen with their questioning and their scepticism. We are seeing a similar approach with Nama.The minister is suggesting that any alternative to Nama is ‘‘dangerous’’. So we are back to the position whereby the people who got us into this mess and described those who warned of impending catastrophe as being dangerous are again, despite their own lamentable record, dismissing critics of the Nama adventure as treacherous.

As for Nama, I understand and have sympathy for what the minister is trying to do. He is trying to keep the banks afloat because he believes that they are essential and that nationalising them would be a bad thing to do. He also believes that a bank failure would be tantamount to a sovereign default because the guarantee is in place. Additionally, someone has persuaded him that the global bond trading community would never touch Ireland again if one of our banks failed. So he has concluded that it’s best for all of us to buy land that we don’t want via new government debt that will be honoured only by the European Central Bank. This doesn’t mean it’s not debt – it just means that the only institution willing to take a risk on the ‘hope value’ that Irish property prices will rise again is the politically-driven ECB.

By replacing the bad debts of the banks with the good money of the average citizen, he saves the banks with our cash in the short term.

In the medium term, he believes that the price of property will rebound in Ireland. This might minimise the taxpayers’ exposure to something the taxpayers didn’t want in the first place. If it doesn’t, he will slip the shortfall on to the now growing national debt, and no one will be any the wiser because events will have overtaken Nama, and the National Treasury Management Agency (NTMA) – the institution which will really gain from this – will issue more bonds in your name to be paid for by your children, from its now bigger empire down on Grand Canal Street.

We will then have an average European government debt to GDP ratio, but without all the roads, railways and schools. Instead ,we will have fields in Mullingar. That’s a great deal, isn’t it? But from an optics basis, the minister might ask, what’s the problem? The crisis is over, the banks have been saved and the country doesn’t have the shame of a bank default on its hands. But we don’t have much else.

This is the plan. The only flaw in it is that it doesn’t address the big question, in fact the only question, which is whether Nama will accelerate a national recovery. With high and persistent levels of unemployment, and high and persistent levels of taxation needed to pay for Nama, can the country thrive?

It will only thrive if investors decide that it is a good place to put their money. Investors are not vengeful individuals who want to make countries pay for their mistakes. That is not how traders operate. The trader wants an ‘event’ to clear the air, so that he can invest again. Financial markets have short memories.

The entire story of banking crises around the globe is that the objective is to minimise the cost of the banking collapse. If the cost is too high, then let the banks go as the Swedes did. Once a deal is done with creditors, off we go again. That’s how the market works.

The last thing the trader wants is a country wracked by political instability, where taxes are rising and growth is falling. The trade has no interest in a country that is suffering unnecessarily to keep banks afloat. Why do you think we are paying a huge premium over Germany for our borrowing? It is because investors need protection because they don’t believe in Nama.

They have taken the view that no democratic government can lumber the people with taxes to pay for the sins of a few. That’s not how the world works. So they are looking at the pressure cooker, waiting for it to blow. Once it blows, the pressure eases and we are back to business. Remember: the world is full of money.

The German, Chinese, Gulf States and Japanese current-account surpluses have to be spent somewhere. But to get this cash, we have to offer an attractive option, a new option that sends a signal that everything has changed. Nama merely tells the world that the ‘lads’ are still in charge and nothing has changed. There is a better option than Nama, which will impress international bond investors much more. This is what rational businessmen would do. We’d tell the creditors of the bank that we don’t want to extend the guarantee. It will lapse, as was envisaged, on October 1, 2010.

At the moment, with the guarantee in place, the creditors know that they will get 100 per cent of their money back. On October 1, 2010, they know that they will get close to zero because the banks they took a punt on are bust. So the clock is ticking, what do they want to do? Where do they want to deal? At what price are they prepared to trade? Is it 30 cent in the euro? 50 cent?

This will focus their minds because, at the moment, it’s a one-way bet, with you and me acting as underwriters. This approach allows us, the Irish people, to get out of the way and let the creditors deal with the banks, with the government acting as broker rather than principal.

So we do a deal with the creditors and maybe give them equity in a new Irish bank in a debt-equity swap, which we will help set up. The state issues a deposit guarantee, paid for with a guarantee insurance product. We then have an orderly examinership of the bank, selling – let’s say – the branch network of AIB or other assets to the new bank, and off we go.

Problem solved. No need for Nama, and land prices stay low, allowing us to ‘lock in’ the fantastic competitive opportunity that a fall in land prices gives us. Then a New Ireland would truly be open for real business again and we could begin to talk up the economy with confidence.

  1. adamabyss


  2. wills

    David, ok your article states the common sensical approach most if not all
    reasonable thinking individuals with an ounce of
    wherewithal in economics would arrive at.

    Unfortunately though, the NAMA fraud underway is not about finding the correct solution to the banking crisis.

    NAMA and its loony tune proponents is all about preserving the ‘old order’ going forward into a new economic paradigm, knowledge based economy.

    NAMA is in the eyes of the ‘old order’ / vested interests / crony capitalists / elites merely a means through which
    the reins of power has it’s way with the taxpaying serf.

    What’s that,.. ?? it is the indentured servitude chestnut.

    The powers at be know all too well NAMA is a fraud when it comes to
    solving a credit flow block in the banks.

    These feudalist gangsters know exactly how to solve the credit flow
    problem as outlined by your good self above.

    They are not interested in a solution that works on an egalitarian basis benefiting everyone.

    The experts who run the banking system know the truth of it.

    So, what’s becoming real here is a narrative most find very concerning and sickening.

    Ireland is not a functioning democracy, it is a society under the
    control of a dictatorial regime which is now embarked
    upon a plot called NAMA carrying with it
    an agenda still to this day remaining mysterious
    secretive and by candle light in behind
    the scenes slowly day by day reaching
    its final day of reckoning.

    The ‘NAMA agenda’ is the locus of our investigative powers
    and emergency is not the word for it, moreso, tyranny
    coming down on our heads like an asteroid.

  3. Puschkin the Black and White Cat

    Very good David

    Remember next Saturday 12-Sept-2009 at 14:00 there will be an anti NAMA march in Dublin city centre.

    Please come and show the FF/Green fools your displeasure at being robbed.

  4. Tim

    Surely there is some form of Constitutional/legal impediment to Oireachtas members with bank shares and outstanding property loans casting their vote on the #NAMA bill?

    Obviously, if our democracy were a healthy one, Article 45 would be adhered to. Since it is not, is there any other possible impediment? What about “conflict of interest”?

    How many elected representatives with property portfolios and collapsed shares would be declared bankrupt if called upon to maintain loan repayments? A bankrupt is constitutionally barred from holding a seat.

    Then again, since A45 is not adhered to, why should we hope that this provision would be?

    Where is our President in all of this? The “Guardian of our Constitution”?

    There is that “democratic deficit” again!

    • Robert


      I like your use of the term “Oireachtas Members” when clearly you are aware that the only members of the Oireachtas definitely voting for NAMA are Fianna Fail.

      As Chairman of a FF cumann – Have your cumann wrote to the “leadership” of FF expressing your concerns over of God only knows how much debt is to be passed on to the children of the nation so as to ensure that FF bankers, builders & developers are bailed out?

    • G


      do you still believe in these absolutely discredited titles of Orieachtas Members, Taoiseach, President, I mean really, do you truly believe in this game?

      This is the greatest financial swindle in living memory and proportionately, arguably the greatest financial swindle in history……………..

      You call on the President like she is some kind of benevolent being who actually gives a s**t? She may turn up for the All-Ireland but she ain’t turning up to rescue you or any other wandering soul.

      • Deco

        The President is completely two faced. Just look at the pretenscious smile. She is at hurling finals because it is her job. She is obsessed with social status. I know this from rumours about her before she became President. There is a lot of social arrogance there.

    • Deco

      Tim – thanks for reminding me about Article 45.

  5. goinghome

    An article entitled ‘A global financial detox’ written by Saskia Sassen, appeared in the open website on 3 – 09 – 2009 .

    – “The world’s major economies are shackled by their financial addiction. A tax on financial transactions could be the route to a cure, says Saskia Sassen…

    …By September 2008, finance had run out of grist and was reduced to scraping the bottom of the barrel – taxpayers’ bailouts and (in the US) over 15 million sub-prime mortgages to modest and low-income households (most of which have or will wind up in foreclosures long after many investors had made their profits).

    The relentless finance-mill found a respite in taxpayers’ bailouts. But it is still in trouble. The major economies face a critical choice: do they really want to rescue a system with such a high level of financialisation – especially when there are other ways for the average firm and household to secure credit?…

    …The time has come to definancialise major economies to a reasonable level. This would be an act of strength not weakness; for Britain to reduce its financial sector to the levels of Germany and France would represent a great advance in its overall position. It won’t be easy, but the proposal of Adair Turner (of Britain’s Financial Services Authority [FSA]) to tax financial transactions is the little tool that could begin the process (see Gillian Tett, “Could ‘Tobin tax’ reshape financial sector DNA?”, 27 August 2009).

    If it were implemented, quite a few banks would (at least for a while) leave London. That would be good, for a smaller core of high-finance institutions may well suffice if that economy had a lower level of financialisation than Britain has now. True, there would also be accompanying losses. But the landscape of losses that this financial debacle has produced is so much deeper, and far more widely wired into all economic sectors, than any loss of financial pre-eminence. It is time for policy-makers too to show boldness and imagination. ”

    – from

    It’s an alternative idea, but tax is still tax. The details of buoying up the banking system to serve a recovering economony is the stuff of headaches. The trouble with leaders having to choose a particular course of action under time pressure might start like this, in the words of Macbeth:
    ” I am in blood
    Stepp’d in so far that, should I wade no more,
    Returning were as tedious as go o’er”.

  6. daithiosuill


    Your article from February 22 2009 “my plan to save the country” proposes the NAMA plan.

    Now you write against this plan.

    This is an enormous contradiction at the heart of your writing. Please explain.

    • Tim

      daithiosuill, I think that the dichotomy arises from the manner in which DMcW’s proposed “financial skip” should operate, versus the manner in which the proposed NAMA will operate; especially in terms of point number 2 of the article you cite, where DMcW clearly states that the “assets” should be bought at a very deep discount – even as low as 20%.

      NAMA, as currently proposed, would buy at a much higher price than this; almost 60%, from what we are being told (and we are not being told very much).

      This purchase-price differential is critical to success or failure. I do not want the NAMA bill passed into law (and will march against in next Saturday 12th at 14:00hrs from the Garden of Remembrance to Dail Eireann), btu if it IS to be passed into law, it must be so with the right parameters for the taxpayer and NOT for the elite gamblers.

    • Robert

      Obviously the jokers and idiots working in the Civil Service-Dept of Finance are scowering the internet looking to discredit anyone disagreeing with their NAMA FF bail out plan

      • Puschkin the Black and White Cat

        March against NAMA next Saturday 12th at 14:00hrs from the Garden of Remembrance to Dail Eireann , No Pasaran !

      • daithiosuill

        You are right, the dichotomy is the level of the discount – 20% or 60%. It seems to me therefore that DMcW should be supporting NAMA but with a big discount (as per February 22nd article) and associated bank nationalisation \ failure. However last weeks title and the content of this weeks article seem to have taken on a more critical tone. I am finding this difficult to understand given it is more or less identical to his idea to save the country of February 22nd.

        Sorry, but you are paranoid and deluded, I am an engineer. I have been an avid reader of David’s articles since the Popes Children series. Having returned to Ireland in 2006, I could not have agreed more with his critique of Irish society. I also fully agreed with his commentary on our obsession with illusions of richness, our smug self satisfaction, the weakness of Bertie and Cowen and the loss of competitiveness in our economy. However, having read every article since 2006, I have noticed a contradiction between his recent articles and the February 22nd article and therefore asked the question. If you want to be paranoid and one-eyed to opinions that are different to yours, then that is your perogative. You should recognise however that it is the same behavior that got us into this mess. We all need to be asking the hard questions of ourselves and others at this time of national importance.

        • Robert

          Apologies Daithiosuill – But my “paranoia” is not without foundation. Ireland is basically an extremely corrupt and immature democracy/society. Nothing has changed since Independence –

          It’s governance (mainly FF) for the rich and wealthy and the rest can go to hell.

        • wills

          daithiosuill,. I suspect David has lost all faith in NAMA directly because
          he has zero faith in the valuations been carried out faithfully,
          so he figures NAMA and what really goes on in the NAMA office
          will be dubious in the extreme favouring the banking
          oligarchs and gangsters in charge of POnzi rep.

          • daithiosuill

            Well wills, with due respect to DMcW, if this is the case, then he needs to say so simply and logically. As stated by DMcW now and before, NAMA will work as long as the discount is high.

            Lets stop the NAMA bashing for whatever reason. Lets stop acting like stereotypical Irishmen by fighting amongst ourselves at a time of crisis.

            If DMcW is looking for his next anecdotal stereotype, he could do worse than to look at Irish history and how we defeated ourselves time and again by infighting.

            We need to be more emotionally intelligent and logical.NAMA can work if the discount is high. Any negative sentiment towards NAMA should be focussed on the level of the discount.

            Writing emotional articles that are off the point run the risk of causing us to implode with internal strife to the detriment of all.

          • Tim

            daithiosuill, you make reasonable points. However, we are not dealing with reasonable people. We are dealing with people who are desperate because they have lost alot of money – which they consider to be the most important thing in life. NAMA is to retrieve it for them, by taking the money from the rest of us.

            I suggest that you read back over wills’ posts. Though unorthodox in his presentation, he is totally relevant.

          • wills

            daithiosuill,. let me re – assure my posts are not assertions on the back of emotion. Now, you can stick with your judgement on the nature of my posts but if you are of objective mind you will give way to my honorable clarification and return to looking at the info in the posts and not the style,.

        • liam

          Nice to see another engineer here.

          There is enough wiggle room in David’s original Bad Bank plan to suggest that it need not have been state-run enterprise, as NAMA will be. Perhaps also at 40B, there was a chance of the banks becoming economically productive, and at 90B, no chance at all. But I’m making a lot of assumptions here and some clarity from our host would be helpful. But, both solutions to have one attribute in common: the absolute minimisation of risk to the taxpayer.

          I’d be interested to hear what is meant by a “guarantee insurance product”.

          • paddythepig

            I’d be interested to hear what is meant by a “guarantee insurance product”.

            Liam, so would I. Who would provide such a product, and at what cost?


  7. econarchist

    One of the main reasons given for supporting the Lisbon Treaty is that the EU has saved us from economic ruin in the past and will do so again if necessary.

    Well they didn’t stop either the current recession nor the one in the eighties. In fact they contributed to the boom (and therefore the
    inevitable consequent crash) by providing cheap credit. And now they appear to be continuing the problems for many years to come by funding NAMA with money (through the ECB) that no sane investor would provide, as the article suggests.

    It would be rediculous to claim that the blame for Ireland’s economic woes lies with the the EU instead of the Irish (they didn’t force anyone to borrow huge amounts of money for overpriced property).
    But it would be just just as rediculous to claim they they are our saviours when they continue to be a large part of the problem.

    • Puschkin the Black and White Cat

      I do not want the NAMA bill passed into law (and will march against in next Saturday 12th at 14:00hrs from the Garden of Remembrance to Dail Eireann)

    • Deco

      There is inescapable irony, in Cowen bringing us into an economic cataclysm and telling us to what to do in order to facilitate a bailout of the corrupt elements that profitted the most from the entire boom-bust scenario.

      The ECB, by law is not supposed to be political. Therefore the ECB can do nothing to help Cowen – and any promises either for Cowen, or threats against him are invalid in the ECB’s charter. This means that Cowen is once again talking out the wrong end of his considerable body mass.

  8. The Dude

    David is right again we need land, housing costs, and rents to fall to a competive level, Irish houses are still far too high but the ruling class want them to stay that way in fact they want them to rise

    the scam that is nama can only work with high land and house prices but what the real enonomy needs is lower prices we can not have both

    the landbankers, property developers/investers, produse very little that is useful or inovative, in fact the only innovation seems to be ever smaller houses for ever larger prices ALL THESE PEOPLE ARE VAMPIRES

    The ruling class and landbankers bet everything on the premise that house and land prices can only go up, in the last 2 years we have seen that prices can and will fall.
    And now they want to bet 90billion on the fact that prices can only go up

    we can have an economy or we can have nama, it is not possible to have both

    I wished I lived in Iceland at least the people who caused their problems are no longer running the show

  9. Hi David , since it is old news now ( sunday Indo ) and what Michael O Leary says about your up coming event at the Big House. I will make one suggestion on our stock pile of built houses. We could offer these to our ex pats as ‘retirement/holiday’ homes rent free for the first year they open a branch or business here and after 5 years they can purchase the house at 2009 prices …
    As for Biffo been up set with Ryan T on the Late Late , it wasn’t a Frost and Nixon moment that’s for sure . You should next suggest they take 50% pay cuts and made work out the mess they have landed us in , or else We should with the all ready released tribunals , start putting a lot more of them behind bars…
    We need more laws to Mr Desmond should not be allowed for simply investing back in Feb. be allowed with draw millions now after not even been there one financial year , our laws are crazy .

    We need marches in every town across the country , be it the 12th of September ,…It has to stop before it’s ,…oh need I go On !!

  10. David, I made this outline, last week where I suggested a government support bank (30%) and the rest Private. It does not matter whether it is a Bond holder conversion to equity or a new investment institution taking on the mantel, but it still remains a private institution.

    As you point out the bond holders have until the 1st of October to negotiate 2010 until the guarantee runs out to strike a decent enough deal. You can already see that there are cleverer bond holders who are not secured who are taking the haircut and selling for a lesser amount.

    The very reason the more secure bond holders are saying nothing is because they are happily sitting on a guarantee. Why throw away money when the government are quite happy to throw it to them in the first place.

    The world does not fall apart because of default. There are thousands of defaulters on mortgages and loans all over the world who will resurrect. What about GM, Chrysler the bastions of the American car industry. The sky did not fall in when they declared bankruptcy and went into Chapter 11 (our examinership) and the same with the American airlines before them.

    As you said the world is full of money, there is plenty on the sidelines waiting for a good opportunity, but who wants to invest into a bankrupt state, high cost of living and land values artificially supported by the debt of the citizens who will always be running short of disposable income.

    • Tim

      Gerard Brandon, This is the most important post I have seen in a long, long time.

      Thank you, Gerard.

      Paragraphs 4 and 5 of your post are of particular interest.

      • G

        Concur, nice summation in final two paragraphs……….don’t know how people can pull through this with more demands being made on them by this f**k-up of a government, people faked mortgage applications, inflated earnings, where are they going to find all this extra money for 1000 euro tax on homes, increased taxes, proposed increases in bin and water charges, increased levies, we are being taxed out of existence, I have almost nothing to lose at this stage the pressure is so intense, they are sucking the hope out of the country with their 1980s strategies, NOT A SINGLE progressive suggestion in the year since this crisis broke, most of these guys are still on holidays, meanwhile the Tanaiste has been told to stay away from the cameras, at least it spares us the hideous sight of her latest ridiculous outfit, off to Europe with ye Mary!!!

        The stress being put on the system must lead to a crash this time next year, it is simple unsustainable, especially with staggering unemployment and no end in sight, by then people’s nest eggs and savings will have been worn out, this is truly economics off a cliff stuff………….

  11. HeavyEnlightenedOne

    Good Man,
    Convinced that you’re right in principle.
    That’s not enough though.
    How to express it (partially done), and impress it (impossible almost without immersion in politics)?
    We’ll see.

  12. Tim

    “He [Alan Dukes] has a feduciary duty to his bank [ANGLO], to look after their (sic) interests”,
    … thus spake Richard Bruton TD (FG) this morning on Newstalk radio.

    And there I was, thinking that Mr Dukes had been appointed to the Board of Directors at ANGLO to look after the taxpayers’ interests……… well, silly me.

  13. Riggs

    Is it not even more apparent a week after “Stalingrad” that NAMA can be the vehicle to incorporate all aspects of the argument?

    Apologies in advance but I feel I must repeat my posting from last week.


    Despite all of the intelligent (and not-so) contributions above, If not NAMA as a framework to go forward, what? NAMA is not written in stone yet and it is clear that Brian Lenihan is very open on its final draft.

    Disputing NAMA is futile without a better altenative. Fine Gael or Labour have not produced an alternative, but a blur. Failure to act now with the best possible parameters embedded in NAMA for us the tax payer, would be catastrophic.

    There are no shortage of figures and stats, however pure logic seems to be absent from the debate.

    • gadfly55

      We are a year away from the guarantee, and the sky has not fallen. Where is the catastrophe? The 1600 billion debt in the country described by Morgan Kelly has not been relieved, yet we continue to survive. The stimulus should be directed to the real economy and the banks sold. The obsession here is keeping the Irish in control of the banks. Apart from directly controlled banks with headquarters out of this fraction of an island responsible for one third of the banking, the Irish banks depended on the wholesale money market and consequently sunk when these funds dried up before Lehman Brothers went down. The appalling failure of efficient market analysis, and the basic failure to link property values to earnings in a competitive economy led to the bubble of debt which will take ten years to pay, unless the big bondholders take the consequences and use the credit default insurance on these bonds. The only catastrophe observable has been the collapse of the Fianna Fool party, and that depends upon you being a Fianna Fool.

    • wills

      TIME FOR A REALITY CHECK >>>>>>>>>>>> NAMA is A CON to rob the taxpayers of future earnings.

      TIME FOR A REALITY CHECK >>>>>>>>>>>> NAMA is a 3 card trick to PUNK the lower downer taxpayers.

      TIME FOR A REALITY CHECK >>>>>>>>>>>> NAMA is the proof of a money grabbing dictatorial regime in control of the government.

      TIME FOR A REALITY CHECK >>>>>>>>>>>> NAMA is a defilement of our constitution.

      *riggs, please don’t percieve my comments other than a deconstruction of the fraud and mind control that is NAMA, and
      keep the ‘s’ at the end of ‘will’ if you use my name.

      • Riggs


        Your mantra is entertaining but not constructive.

        NAMA is the only show in town and its final draft is what concerns me. You and your ilk have an opportunity to impact but not with the rhetoric and stabbing prose that seems to be in constant flow.

        Where will that get any of us?

        • wills

          first of appreciate your returning the s to the rightful spot at the end of “will”.

          Riggs, on your upfront appraisal let me say this,..

          My logic on my approach is what it is for the simlple reason on how
          serious i percieve NAMA to be.

          My ‘unorthodox’ approach in use of direct ideas is to realise the truth of
          what is happening and to splice the mind programming propaganda
          the spivs and treasonous gougers in power are pumping
          out across the meeja and i pray to god they
          are reading this blog, which i’m pretty sure they are based on
          my contacts, and been put on notice that there are
          citizens of this country out there repulsed and sickened and
          calling truth too regime control power, we
          all in this country now live under.

          • wills

            Riggs, if you turn on newstalk right now they are talking about
            ‘carbon’ tax and water tax for god sakes. This is pure orwellian control.
            Before long we will be chipped and living under a sceintific
            security control grid under 24 hr surveillance.

            NAMA is merely one more move forward on all of this collectivist
            centralisation. And we all need to wake up to what is really happening.

            Our gov is now moving toward taxing carbon,.. if they get away with NAMA
            these lunatics will think they can get away with anything.

            Nevermind ;moral hazard for the banks.

            Riggs, we are entering into full and total tyranny with NAMA and then Lisbon,.. im not political, im not scaremongering , this stuff
            must be called out for what it is.

          • Josey

            A tax on breathing???? Carbon tax, what’s next, oops that is next.

            CCTV is for them to watch us but who watches the watchers???

        • Deco

          NAMA is the only show in town. No incorrect. Allowing the banks to fail is also an option.

          But Brussels has already decided that that this is not an option. And the British government has said that Cowen go the official route. Namely no East Asian type bank failures are allowed. It would expose other corrupt dodgy banks. This argument is baed on the Great Depression argument. It is a load of nonsense – because the real objective is to prevent any form of meaningful correction penalizing the rich.

          Therefore the poor will bail out the rich. Again.

          It is called socialism for the rich and capitalism for the poor.

    • wills

      Whoops, another high lord of great wisdom deciding from un high whose
      post is intelligent and whose is not,. oh dear..!!

    • wills

      you are looking for pure logic,,,,,,,,,,,,,,,,,,,

      ok, econ 101 pure logic is, let the market decide. Simple, pure and true.

      Alas, in the real world econ 101 pure logic is quietly discarded and the money grabbing greedy pigs
      at the trough gobbling up more than their
      fair share crush pure logic under their piggy trotter.

    • liam

      Hello Riggs,

      I can see that you are convinced of your opinion, as is you right, so I’m not going to argue with you.

      I will just say that it is the responsibility of the leadership of Ireland to propose a solution to the problem, not the rest of us. However, once proposed, everybody is entitled to critique the solution. It is incumbent upon the “Government” to argue its case, and do so more robustly than simply attacking everyone who criticises them.

      “… pure logic seems to be absent from the debate.”

      I am in full agreement with you that this is generally true (last week’s Late Late Show theatre being a fine example), and it can in particular be said of the “Government’s” mantra that “there is no alternative”. That is an unconvincing (and factually incorrect) defence. It is undeniable truth that the general perception of NAMA amongst the population of Ireland is that it is a very bad idea. I agree that Ireland now must act soon, the Irish “Government” has delayed definitive action for too long, but the Irish taxpayer may spend the next thirty years paying for decisions made in the next three months, and in such circumstances, there is always time to debate and persuade.

  14. gadfly55

    David, I will never forget llast year’s Saturday afternoon radio programme where Brendan Keenan was also in attendance and at 1:55 you finally made a statement regarding the banks which was shouted down by everyone present, and perhaps beyond the listener’s perception. They would not let you question the viability of the banks. Once again, you are making sense, but of course, the establishment has already maginalised you as some sort of clown. How does it feel to be pissing into a hurricane? George Lee is similarly placed in their estimation, but the pressure is building up in the public consciousness, and the Fianna Fool party will be consigned to oblivion. The bad news of course is the parade of FG luminaries caving in to the conspiracy to save the inner circle of the financial elite for the purpose of saving “Irish” banks. Already Rabobank, owners of ACC have shown how dangerous bankers can be when they are outside of the inner circle. Face it, without a popular uprising at the polls in favour of a clear agenda for change from business as usual, the same old, same old gang of golden oldies will pull the strings. We are only muppets in the pits to their spectacle of vanities. Things have to get alot worse before they can get better.

    • Dilly

      It is amazing to watch, with Fine Gael starting to flip-flop, now that they realise it is not about Ireland, or the people. They now realise that Fianna Fail are trying to save the golden circle of cronyism. The penny has dropped, and the so called opposition are starting to switch. But, the public are starting to realise that we never really had an opposition, it was all a game. Look at the PD’s, they disbanded, once they had given thelmselves cushy public sector jobs and large pensions.

  15. wills

    GAdfly55, brings to mind what von hayek once said,,

    ‘Emergencies have always been the pretext
    on which the safeguards of individual liberty
    have been eroded’.

    • wills

      for example,, commission on taxation using the ‘credit bubble’ sham to introduce a sshlew of new taxes,,,, how predictable,, talk about
      bad criminals,, straight out of the BEANO.

  16. G

    Noam Chomsky will be speaking in Dublin on November 2nd, see, worth attending!

  17. G

    Banksters as FDR called them!!!!

    • Deco

      Of course this is a proxy war between the corrupt business culture of the gombeens running IBEC(insider clique) and a foreign competitor(outsider).

      We should not expect fair play, an open fight, morality, decency, or transparency from the insider clique. In the end the foreign competitor will realise that this is a crooked little country,and will leave. So that the clique can continue grinding and using the peasants.

  18. Saturday 12th September 2009 @2pm ………Berti Ahern will be 58 years old.

  19. Tim

    Folks, Prof. Brian Lucy in today’s Irish Times:

    Check the self-contradictions uttered by both Alan Ahearne and Brian Lenihan near the end of the article.

    We are being lied to, blatently, and it is coming to light in drips. Eamonn Keane promises to deal with what Richard Bruton said (that Alan Dukes has a feduciary duty to look after the interests of ANGLO – rather than those of the taxpayer) on his lunchtime show tomorrow.

    Let’s keep at it!

  20. daithiosuill


    In paragraph 3 Brian Lucey implies that developers are being directly paid more than the value of their assets. This is utter rubbish and another example of emotive writing without foundation on fact. My understanding is that the developers will be liable to NAMA for the full amount of their debts.

    I think Brian needs to be more responsible than this. Check out this article by Brian Lucey in 2006?

    Some of our economic journalists seem to be engaged in, at best flip-flopping and at worst, populist rabble rousing

    We need to demand more from our government. We also however need to demand more from our economic journalists and ourselves.

    In the good days we flocked as a nation in search of illusory riches. Now we are flocking in the opposite direction in an equally extreme measure.

    Maybe as a nation we are incapable of objective reasoning. Where is the middle ground and balance?

    • wills

      prescribing a psychological diagnoses on a population puts one in the area of cultism.

      Secondly, it is not amoral to change ones mind for god sakes.

      Thirdly, your understanding that developers liable to NAMA for the full amount of their debts means absolutely zero in the real politic of
      NAMA. Why.? /cos developers assets are kaput in value and their
      real wealth is stashed away from the arms of
      NAMA legal jurisdiction.

      Try not too be so taken in by the ‘lord of the flies’ gangsters
      orchestrating as we type the downfall of Rep of Ireland.

    • liam

      “In paragraph 3 Brian Lucey implies that developers are being directly paid more than the value of their assets. This is utter rubbish and another example of emotive writing without foundation on fact. My understanding is that the developers will be liable to NAMA for the full amount of their debts.”

      Then you need to re-examine your reasoning. If the developers had a chance of repaying their debts they would not be, by definition, ‘bad’ debts. Once NAMA steps in, the developers and the banks, and the banks that lent to our banks are out of the picture. The moral hazard inherent in NAMA is that the banks and the developers by proxy are rewarded for bad behaviour unless the assets are bought by NAMA at a deep discount. The Government is talking about a 20% discount when in reality the likely fall in property prices in real terms could easily be 50%, maybe as high as 70%. , and subsequentially,

      The taxpayer will then pick up the difference. In other words, the taxpayer compensates the banks and the developers for their stupidity.

      • daithiosuill


        I think my reasoning is sound. Cliff Taylor agrees in his article in yesterdays sbpost (See fifth question)

        I stand by my statement that the developers will be liable for the full amount.

        As I say, a bit more objective analysis would help.

        • liam

          Ok, I will try to make it as clear and objective as I can: the reason the debts are being bought is because the developers cannot sell their properties and therefore cannot afford to repay the banks. If I borrow £1000 from you today and find that I cannot pay it back tomorrow, it does not matter what you do, you will not get that money back. It is gone forever. Your main assumption is simply incorrect.

          The only money that will be recovered from those loans is whatever that properties built with them can be sold for. If you read the same paragraph you mention, it says that a central assumption of NAMA is that the market will recover, which according to every analysis that I have seen, is highly improbable. (I linked to Morgan Kellys article as he as conducted an analysis of major property crashes in other developed economies and finds some interesting similarities which should inform the Irish Governments thinking.) The argument presented in that SBP article over NAMA is over the valuation of properties and the consequent risk to the banks, when the argument is in fact over the taxpayers risk.

          The article fails to mention that not only were the loans collateralised against the projected sale price of the assets the loan was borrowed for, they were in some cases secured against projected equity in other assets, which has now evaporated. The extent to which this practise was carried out is another unknown (but it was at the heart of the Ponzi scheme that was the Irish property market) and further increases the taxpayers risk. Its therefore hard to believe that a 20% discount represents a 50% discount in real terms.

          The article also fails to mention that the very existence of a NAMA proposal artificially inflates the market, since developers will be less keen to try their luck on the open market (and the banks will be disinclined to encourage them to do so by pursuing the debts) when the state is prepared to cough up a substantial proportion of the original costs, thereby ensuring that Irish house prices remain inflated, the banks get recapitalised, and the developers recover most of the original costs, minus a small loss which they can probably live with, given the substantial profits they made in the last ten years. This is why the ACC Bank vs Zoe case is so critical. Since ACC is not going to be covered by NAMA they are pursuing their debts with vigour. The outcome of this case may reveal gross over-estimations of current and future asset values which will profoundly affect the implementation of NAMA

          The third item that the article fails to highlight is that the banks debt obligations are to non-Irish entities, who will be equally glad of a Government hand-out should it come. This is the core of the Government’s argument in favour of NAMA: Ireland’s international reputation. I cannot think of anything more unattractive to an investor that a country that destroys its economy to save its zombie banks.

          You will be aware as an engineer of FMEA. A similar risk analysis and mitigation approach would be far more useful than the current guesswork and vague promises/threats that seem to inform thinking on NAMA.

          • wills

            Liam, this propaganda tripe “the market will recover’ is sick. This market recovery for them is in fact a f’n bubble.

            The market will only recover when the price discovery mechanism is allowed to do it’s job, and this will see property price fall back in line with mean averages in harmony with the last 100 years as explained by robert schiller a 100 times over.

            keep up the excellent comments.

          • liam

            I realised my link to the first article is broken. Here is the full paper on the ESRI web pages:


          • daithiosuill


            I agree with much of what you say but still don’t understand what you are proposing.

            I say let’s do NAMA with a steep discount and resulting nationalisation / failure. Let’s stop opposing NAMA for the hell of it. NAMA will work if the discount is high.

            What do you propose?

          • Colin_in_exile


            I propose the Government do what they normally do – Nothing.
            Think about it. Its their favourite option and their default option.

            What does the Government do about parlimentry over-representation? Nothing.
            What does the Government do about costly tribunals continuing? Nothing.
            What does the Government do about axing the travel tax which is now wrecking the tourist industry? Nothing.
            I could go on and on, but you get the jist of it now, don’t you?

            Its a pity the great ditherer himself isn’t around to dither over this matter.

            I propose a new Quango is to be set up, which reports back in July 2011, just as the Dail breaks for the Summer holidays. At least by then, house prices would have reverted to 1998 values, and the valuers can’t have us over a barrel.

          • liam

            That’s the problem, NAMA won’t operate with a deep discount as its a construct intended to maintain the status quo, save the banks, bail out the builders. The state has no business running NAMA because it simply cannot be trusted to act in the best interests of the taxpayer. Isn’t the whole ACC-Zoe thing evidence enough of this?

            The only way the asset management approach works is if its an independent commercial entity running it with private shareholders, in other words a bank, with the same sovereign guarantees that the current lot have. It sole purpose is to handle the banks bad debts, either buying them at a massive discount for public use, or selling them back to the banks creditors or other investors. It would have a finite time horizon for asset disposal/utilisation of say, ten years(unless a compelling case can be made on an individual basis) and a strict mandate to return a profit. It goes without saying that it would be required to operate with total transparency.

            Right now, the Government is setting up a quango in to which the over priced bad debts will be parked at the taxpayers expense. NAMA isn’t even required to manage the debts, they will still be managed by the banks themselves. NAMA’s main role is to facilitate the transfer of wealth from the exchequer to private business, and little else.

            There are so many practical risks with this thing, the main ones I have outlined in previous posts, that it is simply not worth pursuing.

            As Colin says, doing nothing would be preferable. But in fact we are stuffed with this bank guarantee in place, so it should simply be rescinded, or made clear that it will not be renewed. Let the banks fight it out with their creditors and the rest of us get on with our lives. In the mean time, the Government introduces Sarbannes-Oxley with teeth and the next time this happens, the shareholders can put the directors of companies that behaved like Ireland’s banks in jail.

          • Tim

            Liam, Thank you. This really is excellent and should be required reading. “Diplomacy and patience”? Sir, you have surpassed yourself!

          • liam

            Tim I think Daithi asks fair questions that deserve answers.

    • Tim

      I am afraid that you are incorrect. Now, let’s see…. where to start……?

      • daithiosuill


        Your proposal wouldn’t work on so many levels.

        To pick but one, you want to set up a body with private shareholders that returns a profit to the public? Could you tell me what kind if shareholder would put their money into that?

        Noone has proposed a workable solution besides NAMA. Let’s face it, it’s the best of a bad lot so we have to choose it.

        • liam

          In the example I proposed, which is one of many far better than NAMA, it returns a profit to the private shareholders, and those shareholders may or may not include the exchequer. I thought I made that very clear when I said it was a commercial entity with “private shareholders”.

          Having private shareholders with rights under the law compels it to act in their best interests, which means buying the assets at a price that will return a profit in the future. NAMA is under no such obligation.

          The bank I propose will have to compete with every other commercial entity on the open market for these assets, and the banks will be forced to lower their prices to meet the market due to its compelling need to deal with its own creditors. Surely this is better than giving away free money based on hope and guesswork?

        • liam

          “it’s the best of a bad lot “
          So you acknowledge that there are other solutions, and that NAMA is essentially a bad idea? :)

  21. wills


    TAX COMMISSION is too divert peoples attention away from the issues of NAMA and LISBON TREATY.

  22. MK1

    Hi David,

    I agree with your article.

    Dissenters can at times call it right. I, like many, saw the property bubble and the level of attention property got (and still gets). That fever and frenzy has still not gone away, as the report on Tax shows where property gets a lot of attention and focus. Everyone in the country is still talking property, property, property. Property (H1N2) flu is what we have. We need a good bout of realism.

    One problem with dissention, and I have been a sole “dissenter” on several company managements, is to try and bring the rest along. Its hard when there are ‘yes people’ (or sheeple as some people label them) and when facts are ignored. Also few can stand up to authority and no-one wants to stick their next out. I have often been outvoted by 7 to 1 at a meeting only for it to play out correctly as I predicted in time. Although I may not have then been around to see the results! There is no easy answer to it.

    You are correct. Somehow FF/GP and Brian Lenihan are of the belief that Nama is the only game in town, that the banks must be saved at all costs, and that we the taxpayer will be picking up the costs. Investors are staying away from Ireland in droves and we are paying the price for it (with our euro loan premiums over average rate).

    We need to let sick banks die, better banks will evolve form the ashes, thats what free markets are for.

    Plus we need a change in the political stucture. As we are making cuts, any government worth its salt will demand in its manifesto:
    – a reduction in public sector spending and lead by example, eg: 100 TD’s, 25% salary cut for TD’s, cuts, cuts, cuts

    > Remember: the world is full of money.

    Just as long as we remember that the globe in total is in debt so it might be more accurate to say the world is sunk in debt rather than awash with produced cash gains! Our children will pay for the debt and loan it to the next layer of children, and so on. Debt, debt, debt, where will it all end? 2050? 20,050 ? 200,050 AD? Our generation doesnt have to worry about it. Lets party!


  23. wills



  24. The Eye

    I’m Planning to go on the No to Nama march and I’m dragging everyone I know to do the same, the future of our country is at stake.
    We cannot allow these idiots to screw up again.
    Really hope you all do the same and lets start taking action.

  25. wills

    NAMA >>>>>>>>>>>>>>>>>>>>>>>>>>>>>> IS A CRONY CAPITALIST IN YOUR FACE SWINDLE.

    NAMA >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> IS A WOLVE IN SHEEPS CLOTHING





  26. Philip

    All you pro-NAMA-ites – please face some simple facts and try not be too befuddled by the machinations of so called high finance.

    1) There is no money to finance NAMA. The tax take curve is on a negative slope. NAMA merely makes this worse. Even if NAMA is ramped up, Banks will not be able to give the cash to business on a competitive basis and worse -far far so really, the input costs for doing business here will be thro’ the roof. Non one internationally will want to play in this game. Remember who we are competing with guys!

    2) The ECB are getting worried. Just how long more are they going to pump funny money (quantitative easing) into the system just so banks can service existing loans. And remember, NAMA will not stop this – from 1) above, it’ll get worse.

    3) As a few above have said, the world has not ended simply because we are 1.6Tln in debt. The current mounting mess is correctly due to a financial engine freeze up becasue the banks are not allowed to fail along with their shareholders etc.

    Anyway, it matters not NAMA or no NAMA. IMF are coming and the panic you see says it all. The game is up.

    • liam

      I fear it may be much worse than that. When the dust finally settles on this mess, Ireland will go back to one of its most consistent and traditional export commodities: it’s people.

      • wills

        some of it’s people,. alot of Irish are full of it with the lame be jasus crap.

      • G

        The Irish will be coming with a health warning higher than the Swine Flu virus given a) what they have directly participated in and b) what the rest have put up with and sheepishly accepted.

        Shameful – where is the fighting spirit that they like to boast about in songs and over one drink too many? The Irish are exposed for what they are, a country of talkers, no wonder the English lasted so long, we thought we could talk them to death!

  27. Wills, Tim , Deco, Furrylugs et al :

    If we do not have a democratic government Now….what are we ruled

    by and how will History write it down as?

    • wills

      John ALLEN, i will make a go at that question, not just now.

    • Deco

      My theory is like this. Big business loves to have oligopolistic market rigging. It gives them what James Howard Kunstler calls “something for nothing” on a systematic basis.

      And they love to see the political system operating in the same way. Just as your choices as a consumer a limited to one expensive, heavily indebted, slavish empty lifestyle – you are also to be given one heavily taxed, bureacratic, series of electoral choices which are immaterial because big business infleunces the political establisment most of the time. It is is not a corporate state Mussolini style – that would be too obvious. It is a corporate state, and everybody is too busily distracted, led, and misled to ever notice the difference.

      The answer is intellectual self-discovery and andvancement. One citizen at a time.

    • Tim

      John ALLEN, I think that we are ruled by those who manage the ownership of land and history will record that we are ruled “by the people”; the former is the truth that ensures the latter is propagated, though a lie.

    • liam

      Ireland is undoubtedly a democracy John.

      The problem is that for too long people have held the view that the only tool in the box is the popular vote, and anything beyond that, particularly anybody using the media to influence matters is treated with a mixture of cynicism and contempt.

      It amused me considerably to see so many of the Irish online community getting in to a lather about the Iranian elections, yet when it comes to putting pressure on their own Government there is virtually nothing (no pun intended).

      A democracy requires active participation and not just the traditional marching on the Government etc, game changers like the internet are particularly under-utilised as far as I can see. is a great example of what can be achieved.

      “The answer is intellectual self-discovery and advancement. One citizen at a time.”

      I completely agree. We have here a choice: direct our finite energies in to adversarial shouting and complaining, or try to bring as many people as we can with in a true coalition of the willing.

      • liam

        btw this is very general, Sep12th worth the effort, no doubt. It would be great if it cold be somehow built on in a practical way. Getting all of these people physically in the same place at the same time is a rare opportunity. At least it might be worth somebody here organising a meet-up for those who contribute and read here, on the same day.

  28. MaxKeiser

    Dear Puschkin the Black and White Cat,

    When & where is the NAMA protest march on again?

  29. wills

    Isn’t this rather strange the UN making it official dropping the dollar as a reserve currency is needed.

    The dollar printing presses were set in motion to deliberately de base the dollar into oblivion.

    NAMA is tied in with the wholesale money markets and these markets were funded by the federal reserve channeling dollars into
    city of london and ECB in a orchestrated programme of literally
    looting the dollar.

    This is why credit bubble kicked off.

    A controlled demolition of the dollar with under the collusion of the
    worlds central banking system through BASEL.

    Now that the dollar is utterly printed out of existence the UN is slipping in with it’s subtle announcements too
    set the ball rolling on putting in the new reserve currency to
    take it’s place.

    Irelands credit binge is courtesy of the deliberate looting of the dollar over the last 15 years in a central banking system
    controlled demolition.

    Ireland plugged into this credit waterfall through ANGLO as a
    bridgehead back into the city of London.

  30. Malcolm McClure

    Since most of the banks bonds were likely covered by credit default swaps, how come that we should worry about total bank failure, since the government guarantee would only cover those bonds not covered by CDSs?
    It must be made incumbent on bond holders to prove that their bonds weren’t covered by such insurance before any guarantee is paid out on default. Simple principle says that you can’t claim twice on the same loss.
    Ergo let the Irish banks go bust and leave the CDSs guarantors to sort out any shortfall at no cost to us.

  31. kevin denny

    By mainstream economics profession you mean?
    a) There are people in the private sector who are paid to lie. No one with a brain should take them seriously.
    B) Academics
    C) Various others, ESRI, Central Bank, NESC etc
    I can speak of ( but not for) B. We have a day job: lecturing, writing nerdy papers for journals, grading scripts, filling-in forms (very important) etc . Most of us don’t work on housing or even Ireland and don’t have easy access to the media like you do. So I don’t feel too bad for not calling the bubble beyond some vague residual guilt. Also, we are human (no,really) and may to some extent have got caught up in the irrational exuberance.
    C) They need to answer for themselves.

    • Deco

      a) I have not heard anything from Dan McLaughlin in 18 months. What about Austin Hughes. Or anybody from Sherry Fitzgerald.
      b) forwarding some very interesting theories.
      c) did the Irish Financial Regulatory authority see this crisis coming, or the ESRI, or the Central Bank, or the ECB, or any of the big Accountancy practices…..
      There are 1000 people working for the IFRSA plus the CBoI together. What use are they ? The fools down in your local pub were talking about it being unsustainable, and the ‘experts’ were saying it would last forever. These organizations have a product called information. And is it useless information. It is at the behest of the FF/IBEC/ISEQ/ICTU establishment.

      Thank God for David McWilliams, Eddie Hobbs, Morgan Kelly, etc..

  32. Deco

    I didn’t get to make a post in a few days.
    I agree with David’s article today, and would even go further than he does. Shane Ross, David McW, Eddie Hobbs, and Morgan Kelly have been the consistent dissenters with regard to the government’s entire economic policy. Konstantin Gurdgiev also offered consistent critiques of the state and the government that pointed out the absurdity of the economic policy decisions that have been made. I read the links concerning Brian Lucey. Brian Lucey’s concerns are all valid. I do not know about his record. But his current reservations are valid. Saying TINA (There Is No Alternative) or engaging in name calling, changing the issue, or categorization, (like FF/Greens are at) does not constitute an adequate defense of NAMA. Neither does fear.

    The problem with dissenters is that they get shoved off the media -and coverage of what they say tends to be slanted by the media. Especially, now that the media is short of revenue.

    I am observing the media these days with a lot of scepticism. The sheeple are being prepared for several political agendas, which are being shoved through (TINA).

    Several observations concerning the last few days and media coverage.
    1) I did not see Tubridy’s interview of Cowen. I read the article in the Sindo(the FF paper) commenting that Tubridy went to far. This was on the basis that Tubridy never let Cowen answer the questions. But Cowen’s answers to the crisis has been inadequate. Cutting him short makes Cowen look good. In fact by depicting Tubridy as being hard on Cowen, two goals were attained. One, reassuring the licence payers that Tubridy was not biased towards FF, so as to dismiss all those rumours. Two, Cowen was depicted as getting unfair media treatment. Three, Cowen did not get long hard silence moments or questions for which he was not prepared. [What will you do next with ANIB ? Did you get treatment for alcohol addiction recently ? should John O'Donoghue resign ?]
    2) I did listen to the Mark Little interview of Lenihan. I thought it was a bit predictable. Lenihan was on a oll – and had mantras prepared for every question. It looked tough, but really it wasn’t because – there were no questions about issues that Lenihan was not prepared. The Sindo ‘reported’ that it was too hard on Lenihan. Awwww.

    -> in both cases we are seeing a closing of the ranks.
    RTE / FF leadership / Indo News Group all trying to tell us that the media is doing a good job. This reminds me of peak tiger BS era. And I am suspicious. In fact this is almost Soviet-era like.

    3) Denis O’Brien is getting really eager to take over Indo News Media. The last time somebody was this eager to takeover an ISEQ listed company it was Liam Carroll trying to takeover Irish Ferries. How did that one work out ?

    4) RTE cannot hide their pro-government stance anymore. RTE announced that the Europe minister was at the debate three times before mentioning his name. We were told what the Europe minister had said, and that he was accusing a critic ‘of bigotry’. In fact the objective from RTE was to get you to loath UKIP. And then to paint any scepticism of the contents of the Lisbon Treaty, as being pro-UKIP. This is a bit like trying to saying that anybody in favour, would be supporting AIB’s tax evasion, on the basis that a prominent AIB director, later Chairman from the tax dodging era, is now making a lot of noise on the issue. We were never told what Roche actually knows about the Lisbon Treaty. Oh, no…here we go again….he doesn’t know what is in it this time either, and is going to spend the next three weeks trading insults. The issue is not UKIP, or Roche. The issue is the contents of the Lisbon Treaty. In fact RTE’s coverage of the entire event was to throw muck in UKIP, and present Dick Roche somehow or other greatly enlightened. Sorry, but Dick Roche is a creep. As Pat Rabitte state, ‘Dick Roche is so slick, you have him run the national grid’. But this evening, RTE decided to tell us that Roche was doing a great service. No doubt some sheep out there believed it. But others can see right through it.

    5) Micheal O’Leary has stated publicly that he told Cowen that Micheal Martin was useless. [Why stop there ??, Cullen, Dempsey, Harney, etc, etc...]

    6) George Hook on the radio between 17:00 and 18:00. Tax, NAMA, the state finances, state policy etc… very honest, and very biting. Lenihan never appears on the George Hook show – for obvious reasons. Much safer appear on RTE across from Mark Little.

    7) At about 21:20, when the main evening news was almost over, we were told that Enda Kenny stated today that FG were ready to takeover, and that there should be a general election for the sake of the country. Given Kenny’s record of late, and the state of the country, this is big news. Effectively Kenny is serious about offering an alternative. The jury is out on whether or not it is up to the job of fixing this problem. But it would be an improvement. In fact Basil Fawlty would be an improvement. This is unbelievable bias from RTE.

    8) TV3 ran a documentary called “More money than sense”. It listed all the failings of the current government and the fact that the Irish state system has become a complete disaster. In fact the coverage was excellent. Covering such scandals as FAS, PPARS, Evoting, the bill for Luas, the bill for the M50.

    I just discovered that the M50 has already accumulated a costing of over 900Million Euro over budget. That is almost a billion in waste.

    Never mind the taxation commision. What about a commision into waste.

    I am realising a trend here. The newer private sector, pro-commuter belt media outlets are producing scathing criticism of state policy. The older more centralist, more established players are letting the government away far lighter.

    But the population are angry. George Hook fully gets it. The others are describing the public mood in a hundred different ways.

    There is an excellent film about the fall of the Berlin Wall. I recommend that you see it – it is called “GoodBye Lenin”. There are similarities concerning the main character of the film, and large sections of the Irish population. It is like as if reality is there, but the Irish are not ready for it.

    Dissenters project a glimpse of reality to those who are being fed a ‘manufactured’ version so as to engineer their consent. LET US ALL DISSENT :)))

    • Dilly

      Don’t forget the 800 odd quangos that were setup. Jobs for the boys, wasting tax payers money. They also wined and dined the builders, while at the same time treating the SME sector like they were lepers.

    • MaxKeiser

      Well could RTE bias be anything to do with RTE’s massivly falling Ad revenue and TV lisence (increase) being used to controll same?

      • Deco

        RTE have a monoploy on the TV licence. This is nonsense. It is a form of subsidy. I am not allowed to select which of their stations actually best fits this remit as a citizen. This is absurd. (RTE are not much into democracy). My own choice would be TG4. They have the best documentaries.

        RTE are not into democracy, honesty, accountability, open disclosure, transparency, or free competition. But they can sometimes ask these characteristics of those who they view as threatening in any way.

  33. Deco

    Can somebody tell why the layoffs in Waterford last week were anavoidable tragedy, but the John O’Donoghue expense scandal, the M50 cost overrun, and the fact that we have government ministers in charge of entire department without even the most basic of knowledge of their core subject area – and this is seen as something that we are only allowed talk about on bulletin boards like this ???

  34. Josey

    As was hung on a window over looking Ground Zero in 2005;


  35. Tim

    What do you folks say about this?

    “He [Alan Dukes] has a feduciary duty to his bank [ANGLO], to look after their (sic) interests”,
    … thus spake Richard Bruton TD (FG) this morning on Newstalk radio.

    And there I was, thinking that Mr Dukes had been appointed to the Board of Directors at ANGLO to look after the taxpayers’ interests……… well, silly me.

  36. Robert

    The NAMA project was drawn up by Peter Bacon. This is the same Peter Bacon who in 1998 was writing policy documents on the Irish Property Market and who later became a Director at one of the biggest Property Developers in Ireland – Ballymore Properties.

    One of the largest shareholders of Ballymore Properties was Sean Mulryan – a regular at the FF Galway tent and a political “donor” to the now deceased and corrupt FF TD Liam Lawlor.

    In 2003 Bacon was appointed Director of ‘Clearstorm’ – a joint venture property company in which Ballymore joined forces with Michael Fingleton’s (Fingers) Irish Nationwide.

    It is clear that a deceitful triangle of FF, Corrupt Bankers and Property Developers are conspiring to ensure that the Irish Taxpayer are going to bail them out and there will be no limit to the cost they wish to place on future generations. They, quite simply, are putting the sovereignty of Ireland as an Independent state at risk.

    • Deco

      In Ireland, it seems that we have a desperate shortage of talent. For this reason a director in BoI might be a director in CRH, and also a director in smurfit. A director in ANIB might also have to be a director in Bord na Mona, and also be a director in CPL resources. And now we have an auctioneer, becomming property advisor to NAMA, and also being on hand to help the Dunner from time to time as well.

      But when the IDA tries to bring investment into the country they are forced to cover up this dearth of talent, and tell the investors that there is a massive oversupply of talent.

      The same cronies again and again.

  37. Tim

    Folks, have a look:

    “Members’ Interests”.

  38. David is absolutely right in the concept of making bondholders share substantial pain by allowing the clock to tick towards the ending of their guarantee. A no brainer. Anything else would be tantamount to criminality-not that the current hoodlums in government lack that particular trait.
    instead of taxing the poor ,the sick, and the handicapped.
    I wonder how much Fianna Fail would raise from their Frank Fahy type tD’s by imposing a modest “wealth tax” on everybody with property and cash assets?
    They have such a tax here in Spain. Also there are modest-but not insubstantial- death duties to be paid by all who have even modest wealth/assets etc.
    Why should wealthy wealthy irish landowners/farmers-for example- transfer their wealth intact and virtually tax free to their heirs?
    Why should wealth be perpetuated? in the hands of an irish oligarchy
    How much money would be raised by tackling the real elephant in the room-which still threatens the survival of the country- a third benchmarking exercise reducing all civil service wages and index linked wages by a modest 20%.?
    The government is currently burning our remaining borrowing capacity to pay their wages and pensions-just as Aer Lingus has burnt up their capital in the last two years by avoiding the unpalatable and continuing to overpay staff-and is now fast racing towards insolvency.

  39. Philip

    Tim, that YouTube on NAMA is very apt indeed. In fact, there’s a mundaneness about it I have seen in many a company collapse (of which I have been a witness to 3 – 3 too many).

    Stages of a company collapse (from my memory of it) –

    1) Margins are starting to get squeezed. The cultural shift from Cash is king to Revenue is king. (the start of the end of the Celtic Tiger)

    2) Consultants get pulled in to advise on a range of functions. Remember, there is loads of money in the kitty. (1st Stage disconnect with grassroots)

    4) Recommendations for R&D to be binned, Outsourcing etc etc is the order of the day as our competitors are doing to. Oddly there is now increased marketing spend.

    5) New guys from a completely unrelated sector start to occupy sales and marketing lead functions. Perception politics starts to play a lead role. Ego grooming, fish bowl politics and then the clincher…an aquarium gets installed in the new and flashy looking foyer.

    6) Many take great solace from gross margin increase…but net margins are annoying tighter. Cuts cuts cuts little by little. Then revenue shows signs of falling – no innovation, and increased competition, lower resources etc. Company wants to move to reliables e.g. maintenance…only place it can hoover up cash is with existing customers. Manufacturing gets dumped. If company has a foreign HQ, Irish branch gets closed or seriously culled. All upper level fired. If company is Irish, look for a sale or cull as many indians as possible & seek to keep local market closed. Meantime, the new hires into sales and marketing are now running the place and no one has a clue what the company is about…mission has devolved to “Survival” and “Exit Plan”.

    7) This whole thing has gone viral. Lots of companies in that and related sectors doing the same thing (well they all used the same outside advisors – what do you expect!?) – market implosion aided by the shortage of cash.

    Sound familiar?

    • Philip

      This is why I really do not take NAMA or any of the pointless efforts of this government very seriously. The problems are cultural and endemic and need a major reform. Foreign competition may be one of the cures.

      I take solace from the fact that the latest migration figures in and out of the country is right down. No one is moving. If we could somehow allow this population to flourish to do a national rebuild, we might be out of this hole very quickly. My fear is that the dynamics of Ireland versus the rest of the world is seriously out of step and that the high differentials in opportunity available will force a mass outflow.

  40. Deco

    What happens to somebody who presides over a long running farce, a Super Quango, thousands of mistakes, a unmentionable number of deaths, nepotism, incompetence, cronyism and waste. And all being carried by the PAYE taxpayer.–post-after-hse-1880553.html

    Maybe if we replace him with a cardboard cutout, things might get better in the HSE ?

  41. mcsean2163

    I don’t see how that will encourage lending into the economy. Isn’t that the point of NAMA. I love the idea of not taking the debts…. but how will it help the economy.

    Isn’t that why we’re paying 65billion for dubious debt, get the economy and employment rolling again? To prevent a lost generation a la Japan and zombie banksm etc…..

    More ridiculous rubbish from DMcW but entertaining as ever.

    How about this, we close all the banks, write off all the motgages, then our young are no longer saddled with debt and ask Canadian and Islamic capital to lend into the exconomy. The debt holders are given the land banks in exchange for their loans and the defaulting developers are stripped of all their assets and sent to jail for 6 months. Then we grow mars bar trees, live in the sky and fly to work on hangliders!

  42. Deco

    It seems as if the Chinese are not interested in buying anybody’s subprime bonds, bank shares, government bonds, or funny money any more…..

    This is going to push up real interest rates. The countries doing the most money printing (UK in particular) are going to see some very turbulent times. Obviouly the Chinese equivalent of Brian Lenihan never heard of “NAMA-nomics”…. The ‘socialism for the rich’ policy framework that Gordon Brown describes as ‘saving the world’ has become an even bigger headach than the problem it was supposed to solve….

    • Deco

      I just remembered that another dissenting voice, Eddie Hobbs told us that this would happen. Obviously Hobbs knows more than Dan McLaughlin or Austin Hughes (eh…remember them…a few years back they used to make a lot of noise….)

    • Philip

      This could be the final straw .

      Interest rates will climb as value of cash is higher than perceived future value of bonds and other nonsense. The ECB will pull the plug for sure. They need cash just like everyone else. The time for deep cuts has arrived. Cannot QE forever. The revenue side (tax take) will be sidelined by the higher input costs to businesses.

      Winter of discontent is coming. FF should just throw in the towel and run for it. God help the sucessors.

  43. Deco

    Everytime i listen to Lenihan talking it is always the same thing…”we must get the credit market flowing again”…In essence he wants ponzi asset bubbles.

    Lack of money in the local AIB branch did not close TEVA in Waterford. High ESB, high wages to compensate workers paying for overvalued property, costly cars, and the Irish concept of living closed down TEVA. And we need to fix these things. But the Greens want electricity to be expensive. Ahern’s cronies want overvalued property.The SIMI want overvalued cars. And the Irish way of life is not to be compromised (to paraphrase from Dick Cheney who made a similar statement about the US).

    The Irish attitudes to work, corruption, property, nepotism, and health are the flawed, and must be urgently re-engineered. This is why I say we need an intellectual revolution. The problem is that the people in control would lose out massively. Instead they prefer bailouts to preserve the existing order, and force the bill on the PAYE sector.

    I can’t see any form of intelligent progress as long as a clique of next generation CJH’s are in control of the political establishment, and a bunch of cronies are in control of the commercial life of the country, under the mask of IBEC/ICTU/ISEQ.

    • Deco , I will give you an example with my business two years back I was trying to bring a business from California to here but Our Medical Board ( who get advertising sponsorship from a pharma giant) would not give us the License even though we were going to after set up employ 150 people …. Just because we gave no brown envelopes and from Senator Jim Walsh to Sean Connick and Mary Harney not one saw the benefit of a start up building from 150 workers ….Madness , these chancers should not be in power

      • Deco

        Brendan it is the same old story again and again. Cronyism. If you were playing golf with the local bank manager, donating to the PDs, and appearing in the newspaper giving 2 grand to Bernardos, they would let you build a shopping centre right beside another one. They would be desperate to be in the photo shoot turning the sod.

        The leadership of this country is clueless in respect of economics. Except in so far as restricting competition, fixing prices, and pocketting all that they can. I remember over fifteen years ago being told by a college lecturer that the Medical Board were in the pocket of Pharma Multinationals, and that the selection of medicines did not have to be connected to suitability, with widespread usage of kickbacks, and monitoring of perscriptions at local paharmacies, to see if the kickbacks were sufficient/working.

        We need Eddie Hobbs in the Seanad where he can stand up and say what he likes and not worry about libelious actions from these crooks. We live in a parallel universe in this country. There is the official version of the truth which is deliberatly contructed to mislead people, and profit somebody somewhere. And there is reality as you encounter it, by direct experience or by the accounts from others who had direct experience.

        I know which to belive in. Most people find out the real version of what happens in Ireland, and end up leaving.

        To add insult to injury, we then see overpaid useless two faced g0b5h1t€s, like Micheal Martin organize events in posh pads like Farmleigh, and tell the Diaspora to throw their hard earned money back into Ireland, so as to support the gombeen mentality that drove their parents out of the country.

        • adamabyss

          Spot on Deco, you seem to be losing your previous optimism which is understandable under the deteriorating circumstances. Previously you were more positive (in my opinion). Personally I gave up on Ireland years ago, my interest in the situation, although intense, is also very vicarious. I don’t see any hope in the short to medium term and I wouldn’t put a red cent back into the place, nor any of my hard work for that matter, for it to be scammed and robbed by the ruling elite gangsters.

  44. Mc Sean – Actually after the passing of NAMA and when we all become Indentured slaves forever finding a hanglider would be a great dream to escape and if you are Indiana Jones I am sure you will show us how.

  45. Hello Tim, John Allen, Wills, Philip and all other Irish readers and bloggers . I HAVE GOOD NEWS , While we have all written about situations in Limerick a brave man has got off his arse and put together the possible alternative political solution with a mandate from energy to education.
    I am ( while some would say Mad ) returning again to live full time in Ireland given up Malaga , love the weather hate relationships! ,..
    Now I can see NAMA ( unless September , Bertie’s birthday turns out to be the BIGGEST Protest every seen in the country ! ) going through .
    If this happens , we need to have an election and after when they have been kicked out of positions brought back like the war criminals and made answer why they signed off on such high un vouched for expenses and building projects and consultations, as We just cannot pass on these cut backs to the next generation , just look at the old F.G. heads Fitz got his loan written off and Alan has been given a Director role . It’s really shame full that no one has not yet bunched a few of these wild cow boys

  46. Garry

    Welcome back David…. Finally some sense, your suggestion in the last paragraph is exactly what is needed. Dont set up NAMA or nationalise…. any change of ownership of these ‘assets’ will only be to the detriment of the taxpayer.

    NAMA as proposed is a framework for fraud. it will be the worlds largest property company with powers to issue debt, loan further moneys to developers or whoever it wants, trade in derivatives, buy and sell debt and other assets, pay over the odds, sell under cost. All subject to political interference. And all without having to pay taxes or even publish accounts; let alone be regulated.

    Lets assume there is one reasonably honest and solvent property development company left in Ireland. A big assumption I know, but bear with me…. As they are honest, they have not made sufficient political contributions; They will soon be competing with the NAMA monster which will be run on corruption, cronyism and taxpayer bailouts to the tune of tens of billions. An unequal struggle, end result is the entire industry will be run with a few sets of books, one normal, one based on long term prices and one based on corrupt politicians black books.

    The Zoe court case is instructive as to what is going on… NAMAs very presence is driving banks strategy; those who are inside NAMA are rolling up lending and even proposing further lending… All just to dump the corpse of Zoe and its debts into the laps of taxpayers via NAMA once it is up and running… You can see it already, the banks decision making processes are completely corrupted by the possibility of NAMA, the Paddy Last of Irish Property.

    Those who arent (ACC) are fighting to get their money back and are making commercial decisions.

    If we think that is bad, just wait till NAMA is running, and multiples of the total tax take are being spent by it on cronyistic projects. All with the NAMA employees immune from prosecution and even the need to disclose anything.

    No. Stop NAMA… Phase out the guarantee and let an orderly survival or windup of the banks take place and build from there. All based on existing commercial law… the same as any other company has to go through.

  47. adamabyss

    Why doesn’t everyone here just take their money out of the banks and put it elsewhere (credit unions or post offices etc.)? And then encourage all your families, friends, work-mates, employees, acquaintances, etc. to do the same. Voting with your money so to speak. They might collapse quicker (and good riddance) if they start losing all their deposits and depositors. Start a public campaign to close the banks by democratic means (mass scale withdrawals). I know if I had had an account with them, it would be closed by now.

    • this is a great suggestion I made the same last year since you don’t live here after last September Brian Len. had to go on the radio to plead with people to keep the money in the banks after a radio dj ( joe Duffy , RTE ) put the panic out ….it should be done again, but who will tell the Church going sheep ?

      • Josey

        All well and good lads, and I agree. But how do you convince people that letting the banks fail is a good thing, they’ll just say “what about all those people working for AIB, BOI etc. when they lose their jobs???”

        I’d like to know the answer so I can tell it to those unconvinced.

        • adamabyss

          They can easily get jobs with the new bank/s once they have passed some sort of integrity test – apart from the top level of bandits that is – no jobs for them.

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