September 14, 2009

Time to wind down the banks

Posted in Banks · 117 comments ·
Share 

Last Thursday, the share price of Bank of Ireland rose by 10 per cent following the announcement by the Green Party that it had secured amendments to the Nama bill, which might allow the party to support it.

The shares rose again by 9per cent last Friday. What other evidence do we need that this travesty will result in a direct transfer of wealth from the taxpayers of Ireland to the shareholders of the Bank of Ireland?

The financial markets are telling us exactly what is happening. The taxpayer will bail out the shareholders of our big banks who would have been wiped out if it weren’t for Nama. Why should a democratic government broker a deal which bails out stockholders and unsecured bond holders, both of whom have no right to be treated with such generosity?

Your guess is as good as mine. The markets realise that Nama is going to pay over the odds for the loans and then through a rather clumsy use of the ECB’s discount window, the banks get financed.

My fear is not what has already been said about the transfer of wealth from us to them, but the extent of it.

Now that the banks realise that they don’t have to worry about the bad loans they made in their relentless pursuit of profit, where will they stop? What is to stop them putting every bad loan into Nama?

In fact, how can we be sure that, in future, the banks will not use Nama as a large skip for their bad loans, from today’s developer loans to defaults on mortgages, car loans, credit cards and kitchen extension loans? Why wouldn’t they?

Every time they repackage and roll up their ‘‘across the board’’ defaults into one large digestible block, they will simply drop it into Nama and – guess what? – their share price will rise again. Because the new bank bosses, like the old bank bosses, will be paid bonuses related to the share price of their companies, they will have a personal and institutional incentive to continue hurling their rubbish into the skip.

So the banks have engineered yet another one-way bet. In the boom, there was the ‘‘property can only go up’’ bet. They borrowed all they could from other European banks, safe in the knowledge that they were becoming ‘‘too big to fail’’ but were assured that they would never be ‘‘too big to bail’’. The reason they were assured of this is that is how Ireland works.

We use our bond market not as an innovative way to finance development, but as a tip where we hide the mistakes of the present and lumber the next generation with the bill. This is what we are now doing and it is despicable.

And who will be the real beneficiaries of all this? Some Canadian bank or other foreign bank? Foreign banks will come in and buy our banking system when the Irish taxpayer has absorbed all of the mistakes of the past five years. They will get banks in a first world country at third world prices, with the added insurance that all the debts have been taken off their books by a pliant and shell-shocked population.

And do you know who will make sure this happens? The very investment banks which are advising the government now. The investment banks make their fees on arranging deals and they will lead the government up the Nama garden path with both eyes firmly on their exit strategy of a sale to some other investment bank.

Then what will happen is the old banks will charge way over the odds for banking in Ireland, so that they can pay the state back the levy the state imposes on them at the end. But who pays the banking levy?

We do – the poor bloody customers. So we will get taxed twice. We will get taxed on the proportion of the Nama rubbish which is tossed onto the national debt and we’ll be taxed again to pay for the levy. That’s if we get that far before a public debt crisis in Ireland.

The Carroll decision in the High Court last week will be important because the Dutch farmers’ bank that owns ACC may yet decide to opt for a fire sale of some assets in Ireland. The reason they will do this is (a) to get out of Ireland as quickly as possible and (b) to preserve their AAA status and not risk contamination from their association with Ireland.

Any sale will prove that the mantra ‘‘there is no market’’ is a lie. There is a market; it is just a very cheap one. This will give us an idea of the extent of the overpayment and, by the unforgiving logic of finance, the extent of our wealth transfer to shareholders.

You couldn’t make this stuff up. A much cleaner and fairer idea would be to wind down the banks now. Before we do this, we’d have to go to the ECB and argue that Nama is the wrong way of going about things. We value the ECB’s liquidity and believe there is amore productive way of using it.

When the guarantee goes next October, or when we announce that we will not continue it, the foreign banks that have provided liquidity to our domestic banking system will run for the door. To prevent the system seizing up, we need liquidity from somewhere else.

So why not say to the ECB: forget the Nama bonds, just replace the short-term liquidity that will flee the country. This way we can negotiate with the bank creditors in an orderly fashion and create a new banking system out of the old one. The shareholders, unsecured, and senior bond holders would take the hit.

The ECB injects liquidity into the system so that the system doesn’t freeze up and, in return, it is off the hook from the nonsense that is the Nama bonds. We institute a deposits guarantee and begin to wind up our banks.

It is at this stage that we go to the foreign banks and ask them would they like to be partners in a new bank. The government is therefore a broker in the deal, rather than a principal.

We sell the banks’ branch network and some other assets. The creditors get this cash. Then we start again. The developers are declared bankrupt and off we go.

No Nama, no old banks, no debts, no problem. By the way, it’s not radical, it’s called capitalism.


  1. Alan42

    So it looks like we will over pay for the loans . Lets say it works and the banks are back in business . FF are going to control the largest property portfolio in the world . To turn a profit they are going to do everything in their power to boost the price of property over the next 10 years to try and break even with NAMA . Everyone moans about estate agents talking up property . But that is there job . They are sales people . Basically the government are going into the sales business . If we are losing jobs because of our high cost of doing business , wages ,etc . How are we going to reduce costs while at the same time trying to boost the price of property ? The cost of housing is one of the biggest demands on wages . Reduce costs but increase expenses ?
    Who will the banks lend to ? A business that is in trouble because of a lack of credit is a bad business anyway . We have experiened a credit binge . But it was not only consumers , business was existing on excessive credit . The banks have been badly burnt by to much credit and I can’t see them throwing money at risky businesses again .

    • Would it not be true to say that FF will only control NAMA for the next 10 years if the electorate votes them in? I would be interested to hear what the possible costs and negative implications of letting the banks fail would be – would it increase the cost of our borrowing on international markets? My understanding is that the low return on the NAMA bonds will act as an incentive for the banks to lend at higher rates of interest to turn a profit. And that banks are not lending now due to lack of credit and uncertainty about their balance sheets. When those issues are dealt with the idea is that banks will return to more normal lending practices. best wishes to all who are debating this issue. I don’t have any set views on the whole issue of NAMA I’m still trying to tease out the issues.
      Holbrook

      • liam

        Hello Holbrook,

        Good questions, not sure if I can help you other than to reiterate that the risks to the taxpayer are huge regardless of who is at the helm, a product of the Governments promise to cover all bets with your money.

        re default: I would guess the worst case scenario is that the state would be required to guarantee all depositors, which is already does with the banking guarantee, and honour all the banks debts, which is it also going to do with NAMA. It would probably hurt Ireland’s ratings in the short term. but the bank(s) that survive would at least would be clean on the other side.

        I would also guess that the economic consequences of a bank failure, state default, and rejection of Lisbon combined would pale in to insignificance compared to the long-term economic damage NAMA is likely to cause.

  2. MK1

    Hi David,

    Your call to wind down our ill banks is a correct one. As you say, its called capitalism. We (the government on our behalf) are short on money as it is and all we’ve done since the credit bubble burst over a year ago has been to pour billions (directly and indirectly due to basis point spread). Your call to LANCE THE BOIL is correct although a year late!

    > Then what will happen is the old banks will charge way over the odds for banking in Ireland, so that they can pay the state back the levy the state imposes on them at the end. But who pays the banking levy?

    Correct. This needs to be called out loud and clear and re-iterated. Note that we had a banking problem BEFORE the credit bubble left them naked when the tide went out. They have by ogilopoloistic practices been leaching money OUT of Irish businesses and joe public for decades. The banking levy would be yet another example of how operational profits would be used. The only way banks can make money is by taking profits from their customers. They are a licencesed conduit. They do not make anything or aid in anyway our economy. Indeed, the lower the profit our banks make, the BETTER for our economy. The level the banks made in the past was criminal.

    Alan42, you are right, bad businesses (as well as property) were supported by the credit bubble. But due to the credit bubble bursting, the banks losing money and their need to shore up their balance sheet, they ARE taking credit money out of the flow that good companies would be using.

    Holbrook, NAMA is NOT the way to get credit flowing at a better rate. It is a way, but far from the best way. As an example, yes, I could crawl to Killarney from Dublin, it is possible. Indeed, a minsiter may say that crwaling to Killarney is “the only game in town”. Some people may even believe that if they know no better. But there are more sensible alternatives, wouldnt you agree?

    > banks are not lending now due to lack of credit and uncertainty about their balance sheets.

    There is no lack of general credit, the ECB has been pumping out more credit now than ever before! The uncertainty in our sick bank balance sheets is due to the risks they took and failed on. eg: a 1 billion loan which is now not being paid back. An impaired loan or two or several thousand of them! Its not uncertainty, its just that they are certainly below the water, too many bad loans for their tier one capital.

    As Colm McCarthy rightly said, they are bust. They are only on solvent on paper and “accountancy-alive” because the bad debts have not been written down yet.

    MK1

    • coldblow

      “They have been leeching money out of Irish businesses and Joe Public for decades”.

      More than a few decades if you accept the following from Raymond Crotty:

      “Profits, which comprised an exceptionally high proportion of the small total output from Irish grassland, were, in contrast to the profits from English landed property, used for the most part in ways that reduced rather than increased Irish national product. Much of the profits were ploughed back in order to expand livestock numbers… The rest of the profits from Irish grass farming werre transferred to London; as rent to absentee landowners… or as the savings of Irish grazier farmers. These savings, first deposited with the burgeoning Irish branch-banking system of hte 19th century, were drawn to London as lesser bodies are attracted by gravity to larger ones. In London, the Irish funds were used to help the financing of English factory capitalism, which was playing havoc with the Irish cottage and craft industries…

      The process of transferring Irish ssvings to London gave rise t one of the few ‘successes’ in the Irish economy since the emergence of factory capitalism in England around 1820. A list of the hundred oldest, and therefore by definition most successful, banks in the world in 1962 showed that the USA had the most, 35; Britain was next with 15; and Ireland came third with six banks, including the banks now incorporated into the Bank of Ireland group and Allied Irish Banks. The foundations of this grotesquely disproportionate banking prosperity were set in the safe and lucrative task of transferring to the London money markets the proceeds of ‘rackrenting slum landlords… etc’.

      … There emerged out of that destruction four outstanding ‘successes’, which tower dramatically above the socio-economic decay upon which they flourished. Consideration of their successful, fungus-like growth on the putrefying mass of Irish society throws light on their role in the process of social decay. Reference has already been made to one of these ‘successes’, the Irish branch-banking system. The others were Guinness’ Brewery in Dublin, which emerged as the largest brewery in the world in 1900; Harland and Wolfe’s shipyard in Belfast, which again was th largest in the world in 1900; and the Catholic Church.”

      • wills

        coldblow, this crotty quote is stupendous. The precise clear execution of his spectacular de construction on the yoke of tyranny hidden from view, but ,24 / 7 meddling away at an intensity, in nefarious glee, is, pure lightening!

      • G

        @ coldblow

        could you give the source for Crotty’s quote (who seems to becoming more of an Irish legend the more I hear of him) – more a prophet unwelcome in his own land (RIP)

        I want more Irish commentators to speak up about how the Mo Fo’s (= politicans) in the Dail do their dirty business and more exposure of the Banksters and all those on the greasy pole, economists, lawyers and ‘experts’ of all kinds (= professional thieves), the same people ‘who never saw it coming but yet now tell us we must ‘all share the pain’ (altogether now, you at the back!!!)

        • coldblow

          Hi G

          It’s in Ireland in Crisis, 1986. It’s in lots of libraries and can also be ordered via borrowbooks.ie if you are a member of a branch which doesn’t have it. A Radical’s Response is another of his books the first half being a short autobiography (centring on his efforts to run labour intensive agriculture) and ending with the ins and outs of the 86 SEA referendum. Ireland in Crisis is also a short book and has a fascinating, condensed account of Irish economic history (100 pp) with another hundred pages of appendices mainly concerned with putting Ireland in its international third world setting. I am sure you would find the latter interesting in the light of earlier comments you made about poverty in S. America.

          His experience as a self-taught farmer gave him his Big Idea (why was it uneconomic to farm intensively in Ireland) and spurred him to learn all he could about economics and related areas. He became an agricultural advisor abroad and this widened his view. In particular he was unusual in this role in that he had a practical farming grounding (like Tom Parlon (!)), which on reflection would be a help if you’re telling your average African or Asian small farmer what to do, and unique among his colleagues in that he understood livestock.

          In the boom years Ireland in Crisis appeared an idiosyncracy, I mean “Ireland in Crisis” – what crisis? A bit like David’s books will be comedy classics when the Great Irish Economic Revival kicks in after Nama. (He still has time to ‘reconsider’ and recant.)

          I’m sure Crotty got it wrong, like everyone does in the end, but he did it on his own and had some startling insights. Maybe someone who knows more about these matters (not being ironic here) could point out the flaws but till then I’ll continue to have a Crotty bee in my bonnet (as regular readers are only too aware).

          I like to look at the history books (Joe Lee is another and his passage in his History of Modern Ireland about Ireland’s saintly rustic self image, largely buttressed by some famous Scandinavian sociological study of Co. Clare or wherever, is indeed classic comedy.) I didn’t finish that sentence. I like to look at the history books just to remind myself that we are not running away with our imagination here.

          • G

            Hi Coldblow, funny you mentioned J J Lee, just picked up a copy of his 1912-1985 book…….but think a revised edition with the last 20+ years is needed given events.

            Need to explore Crotty, but he does strike me as a man with ideas, an independent mind and the balls to back things up………something we need more of………….appreciate your response and insights, will pursue this

  3. walnut

    Spot on David. Capitalism is the solution, otherwise we will have anarchy!

  4. Malcolm McClure

    Banks used to be about savings. Thus we had the Post Office Savings Bank, the Trustee Savings Bank and even a Piggy Bank for our childhood pennies. That entire rationale is now defunct. To prevent deflation, the government now wants us all to go out and spend, spend, spend, to boost production and employment. Thus they have gone into conveyancing money that is being printed on a large scale for the ECB.
    The US and UK are at exactly the same game, in unison, so that their exchange rates stay in perfect harmony, all to delude the taxpayer that we are not getting suckered by life insurance, pension funds and personal savings etc as wage and commodity price inflation eventually catches up with existing house price and debt balloon.
    When we eventually wake up to find that mortgages on houses bought at the height of the boom are “affordable” again we will discover that cash savings made in the meantime are not worth jack s…

  5. Colin_in_exile

    David,

    Great article as per usual.

    However, I think you are p1ssing against the wind. Both Fianna Fail and the me feiners (owners of property) want house prices to remain as high as possible for as long as possible. They don’t care about the consequences (as long as they don’t lose their jobs, they’re fine) resulting in lack of competitiveness, leding to job losses etc….

    Ireland has unfortunately become a nation of “I’m alright Jack” types. Very few care about the greater good, as can be concluded by the poor turnout last saturday for the anti NAMA march.

    We now need foreigners to tell us how they view us, and embarrass us. We need the ECB to tell us property prices here are just crazy and unsustainable.

    • G

      precisely! If you are on a famine ship and you have found a relatively comfortable corner of the boat, you think, I’m fine but your f**ked! Evolution seems to have paused for the moment in this country – what a f**king joke of a place!

      Last night, we found out Turbidy was related to the King of England (explains a few things), we also heard of FF dynasties – a perfect guy to host the Late Late then from RTE’s perspective – one of our own, completely impartial (Uncle David Andrews (former FF Foreign Minister I’m sure can confrim all) – when will this farce come to an end?

  6. “you could not make it up”
    Indeed David , spot on as usual,but they always killed the prophets-even in biblical times.
    Yes it is going to happen before our very eyes and we citizens are powerless to stop it. Some of us older contributors may not be alive to see the full injustice of it all during the coming decades.The Greens will probably go down in history for their brief consort with the Soldiers of Destiny. Day of infamy.
    Their decimation at the hands of the electorate (5 votes from my own family)during the next election is not open to argument and they surely know it.
    Their infamy though, for participating in this Faustian Pact to keep them on life support for a little longer, will never be forgotten.
    Alas they know that when the “Soldiers” are gone-they too will be gone-but forever.
    “Windfall taxes on development land” achievement.
    What a joke, now that the Soldiers local councillors and landowners countrywide have already re-zoned every field and bog in the country!
    Fianna Fail’s main task now is to take the developers under their wing and nurture them until such time as Larry Goodman like-the resurrect from their own ashes.
    And the Greens stood idly by and let them do it, while ranting about so called “windfall taxes” that have no relevance to any citizen now and may never have- in our lifetime!
    Your carbon taxes will be warmly welcomed and embraced of course by your consorts in power,to add further hardship to people facing the worst recession in irish history.Anything that remotely smells of some kind of a “justifiable” tax is up Fianna Fail’s alley.
    They were right all along you are a Don Quijote like bunch of tree huggers.
    Save the planet.
    My ar*e!
    Save yourselves boys, your time will not be long.
    Todays latest propaganda blitz in the media could be straight out of Ripley`s “believe it or not”.

    Believe it or not: Dublin City Council launched its new bicycle hire scheme in mid September 2009. There has been much speculation as to how the robust unisex bicycles will fare in the face of vandalism and theft. Since a similar public bike hire scheme was launched in Paris in 2007, 16,000 bikes have been vandalised and 8,000 stolen.As Dublin has probably the worst cycle lane facilities (often sharing with taxi & bus lanes) of any european capital prospective customers of the new scheme would be well advised to wear sturdy body armour and enhance their life assurance,and personal accident policies fortwith.
    Meanwhile the new Luas Dublin Docklands Extension opening, has been heralded in all the newspapers as a great advance on transport infrastructure.
    Problem is ,it was supposed to be a taxpayers support for Fianna Fail sponsored developers who bought vast tracts of land there and also own numerous finished and unfinished apartment projects in the area.
    It is now an enormous White Elephant
    it will be useful half a dozen times a year to whisk gig goers from Heuston Station down to the 02 arena (if the ticket prices come down) and the Point Depot, otherwise its main popularity will be among foreign tourists.
    A trip to Dublin Docklands will in time be as mandatory for tourists as a visit to the Guinness Brewery .
    They will gape in great comfort at the abandoned cranes; half finished developments; and open spaces of deserted wasteland located virtually in the centre of a large capital city.
    Perhaps it will become known as “The NAMA tour”?

  7. The Eye

    “Never have so many owed so much to so few!”

  8. Philip

    We may have to face the fact that the Irish are still some distance away from loosing faith in the “old” way. Last weekend was beautiful – all was right wth the world and doomsayers of any sort are just pains in the Ar$£. That is psychology faced by this country and until it gets properly battered by unassailable fact, nothing much will change.

    Since the 60s, 70s and 80s the Irish are a set of generations where the only change has been genrally positive for most of us with little effort. Where morals were bent slightly and white lies were forgotten. We celebrate and shout down begrudgers. We have no record to show we can handle news that requires us to make fundamental change.

    All the lads in governement are doing is selling “business as usual” as being just around the corner. And the Lisbon vote is the same (nothing about the treaty note) say Yes for “business as usual” and then the impending nightmare will desist

    It is sad that people have to go through this the hard way before they see the light. Maybe this is not just an Irish thing.

  9. There are two “Irelands” as many of you will know from recent newspaper articles. one of them is located on the periphery of western Europe.The other is somewhere in the arabian sea (in the kingdom of Dubai!)
    What have they both got in common? well let us see..both were owned by irish developers; both are on their way to becoming a waste land; both are bankrupt; and it is more than a probability that both will be ruled over for the coming years by the Soldiers Of Destiny.
    Perhaps Brian Lenehan their generalissimo, will off the shores of Dubai, there :
    “A stately pleasure dome decree”
    (with NAMA funds)
    “Offshore Dubai Ireland” could be transformed (with NAMA funds). For a billion or two (whats a billion or two in ninety, for gods sake) it could become a sunny retreat; a place of exile for the developers; a paradise dotted with golf courses and jacuzzis and palm trees where they can await their (dreadful?) fate..as the Soldiers ruthlessly extort taxes from the remaining inhabitants of the other Ireland,until the green shoots grow again in their native land and the crony developers return home to rebuild the nation once more.

    • If my memory serves me one of the Irish Dubai developers has already taken his own life ( some where over in west Galway ) the clever Lads have just the last year been signing over their pads to the lovely wife’s and girlfriends they aren’t bothered now that their political friends who they threw a few Euro at along the line are now coming to their rescue and getting us fools the tax payers to pay for their lavish lifestyles ….

      • G

        heard that, but have been unable to track the story online (?) – what good is it for a man to accumulate a few pieces of silver only to lose his life?

    • coldblow

      Tirnanog, I think you should edit a selection of your wit and wisdom into a book. It would be a big hit on the future Irish samizdat scene.

  10. DH

    All of us singing from the same spread sheet here :-)

    There are thousands of properties on sale out there and thousands of would be buyers but the sellers are still have make believe prices on their minds.

    The government should be stimulating the frozen market by using Nama to reset the values of property and land in Ireland at sustainable affordable levels by taking the bad debts off the banks at a price that guarantees Namas success.

    Nama will fail, banks will go on, FF will always act in their own interest, and the average person will be burdened with the cost of bad government for some time to come.

    Saying No to Lisbon2 is a way to protest against this government and respect the democratic result obtained in the original vote. If they wont step down, the people need to step up.

    • G

      I’m one of those would be buyers, but I’ll be damned if I am buying at these prices!! Another year will knock out a bit, once the old savings have depleted and ther peroxide wife starts giving sh**t.

      Got a call from a bank the other day, the first in 17 years since I opened the account, it went a bit like this:

      Bankster: “Good morning, we’re just giving you a call to say its business as usual”

      G: ” Is that right?”

      Bankster: “Yeah, just a courtesy call, you know, to discuss any issues given the media hype etc”

      G: Hmmmmmmm

      Bankster: “We see from your account that you are a permanent employee in the Public service……..and that you are renting”

      G: Mhmmmm

      Bankster: “We were just wondering if you’d ever considered picking up a place of your own, you know, to get yourself on the ladder, renting must be a bit of pain at your age”

      G: Come again?

      Bankster: Well, you know, we just…………

      G: Look buddy, the day I sign the shirt on my back over to you guys is the same day I’ll be signing on for the local looney bin!

      Bankster: “We were……………….just………….its business as usual”

      G: “I am sure it is!”

  11. wills

    David, cool clinical dissection of a criminal syndicate seizing control of our society and its resources. BRAVO

    • wills

      David, your solution to the credit freeze was, is and always will be, the most efficient, effective and egalitarian solution available. Amazing in it’s simplicity and common sense and yet never, so far anyway, floated, by the people in charge,. which means the people in charge are either incompetent or, engaged in deception on a mega scale.

  12. Tim

    wills, it is a deception on a mega scale.

    MK1, I think that the article may be a year late, as you say, yet I think it is not too late to Lance the Boil – assuming we can stop the freight-train that is NAMA. As I suggested yesterday, let arch-capitalists deal with this problem of capitalism run-riot. The government should not be meddling with a broken system that would, left to its own devices, fix itself for the time being, by allowing the gamblers to suffer their own losses.

    It is cronyism at its very worst.

  13. DarraghD

    Not since the days of Sir Edward Charles Trevelyan, have the Irish people had suffering and hardship of this order, brought down onto them by so few.

    http://en.wikipedia.org/wiki/Sir_Charles_Trevelyan,_1st_Baronet

    As for David’s most recent article, I fully agree with him… This notion that we can or even should change the rules so that failure, regardless of the scale, results not just in rescue, but also in reward, and the taxpayer pays for this, is sheer and utter insanity in my view.

    Failure must mean failure, all capitalism depends upon it…

  14. liam

    David,

    How do you square the optimism of Farmleigh with the reality in which you live? I think its great that you do, but I remain amazed. Is there any chance a few of the more influential guests there will pull the Brians to one side and explain to them the error of their reasoning?

  15. Lowering Chords:
    What is being Irish today for all of us ? Has it changed so much that we act carelessly and irresponsibly.Have we lost the will to govern and to be governed among urselves ? Can we not feel our own blood vessels carry the life we once shared anymore?
    If our intentions to be a great nation again are gone then this act is more dangerous …..before NAMA ….before Lisbon 2 can ever be resolved.
    Then there is only one last choice left to redeem us all – Join The Seniors Party ( over 70′s )

  16. Philip

    I fail to see how NAMA will get off the ground even it is passed in the legislation. Unless tax take can be increased without damaging the economic fabric any further, NAMA will simply not work. We are simply killing off current business by overpriced public services. And let’s not get started on enforced brain leakage out of the country. The Tax take vs Spend gap is huge. Even a 100% increase in tax take will not work.

  17. Tim and Gang sad to read on Sunday how few had turned out on Saturday but it again confirms to me how far Ireland has to go, when you consider on The No To NAMA face book they had over 8,000 signed up , so how come the Media put the attendance at under 500 ?, these figures like every thing else in Ireland don’t add up.
    This weekend I had the pleasure of playing a round of golf with one of Earnest and Young’s gang ( Anglo’s auditor ! ) and to his credit admitted the whole lot stinks , a junior accountant would spot these flows and yet the senior boy’s never saw these funny numbers, they are now all taking a 7.5% pay cut , a few have been sent p45′s but the Institution that it is still goes on.
    White collar crime is the hardest to challenge as these people control at the very top , this morning on line I listened to rte radio one and heard how the ‘police’ closed down the hotel where F.F are for their back to work party because of 200 farmers protesting . What has me really worried here is the words used . Do we not call our law enforcers in Ireland ‘The Garda’ ?,…why were so many private security firms also at this hotel ?….Could the ‘police’ not handle the protesters?….It’s very scary what is now happening in Ireland , we will not have a coup as Bertie has made sure the top rank Army and Garda are paid well so they quieten descent.
    I hope a few of you met though on Saturday as more groups have to be formed to fight the Machine , just look at Mary Coughlan when questioned on the FAS expenditure her reply , sure what can I do about it !!

    • Josey

      In fairness I think the 500 estimate is accurate.

    • Tim

      BrendanW, I went on the march on Saturday; I did what I said I would do: I wore a dark suit with a striped pink tie; I stood at the entrance to the Garden of Remembrance before the march; It was sunny – so I wore the blue shades.

      wills introduced himself to me; he then introduced his partner and son to me. We marched; I made the sacrifice of leaving the company of wills and his lovely family, in order to fulfill my promise: I stood outside the entrance of Bruxsells hotel for nearly an hour and then went to the Shelbourne bar for another hour, or so.

      Although an associate from my trade union came to meet me there, no-one else from this site identified themselves to me on Saturday.

      That is, of course, their perogative; but I stepped-up-to-the-plate and so did wills.

      In fact, it is more to his credit than to mine; he was the one who was in the position of approaching a “stranger”.

      He did it.

      wills has balls.

      He is a good man.

      I wish that you had been able to be there, BrendanW; you seem as though you have the courage of your convictions, too.

  18. Agree with you here David , hope you can get this across before you guys hit the all Ireland Football Final

  19. Darragh D. – East India Company is a good comparison to todays events .It was during this period that one of the worlds greatest famines occured (and almost unreported ) in India due to various local conflicts and many many millions starved and died.Following that Queen Vic invited the Sigh leader Duleep Singh to acquire Elveden Hall ( now owned by Guinness family ) to quell the infighting then .
    I am wondering if Cowen is our modern day Travelyan.

    • G

      Simon Schama does an excellent account of this in his History of Britain series (a must buy for anyone with a brain and remotely interested in anything), he juxtaposes the Indian and Irish famines, the growing influence of market ideology (the market as the sacred system that will resolve all – not for those in the South and West of Ireland or India), he highlights the role of Travelyan and others who embraced the capitalist/growing corporate ideology which was taking hold in the ‘City’ and government circles and was later awarded for his services to the Empire, some of Schama’s early programmes from ther series are available on youtube, but I found he really got going from the 18th to 20th centuries, arguably the most interesing period in British Imperial expansion and eventual decline

  20. David,

    I’d be very grateful if you could please strongly express the Irish peoples opposition to NAMA to the Government this weekend. I, and many other Irish people are completely disillusioned with what is going out. The reason few people turned out for the NAMA protest is that we do not feel there is any point protesting. The opposition parties ideas and credentials are so poor. It’s really a horrible horrible time for many Irish people watching a train crash in slow motion.

    Please do your best and use this weekends opportunity at the Global Irish Forum to have powerful Irish people voice their opinions on NAMA.

    Thanks for you wonderful articles and honesty. I appreciate that you care for your country as do I.

    • Tim

      Adrian, It is ALWAYS worthwhile protesting/having your say/making your point to YOUR government! Always. What can they do, but what we tell them? Problem is….. not enough of people tell them.

      • Tim were you there at the NAMA protest? In principle I agree with you to be honest. In fact, after spending ALL my 35 years so far as “apolitical” it’s only in the last 1 year I am growing strong political opinions…due to obvious reasons!! I’m sure that many people in Ireland are awakening their dormant propensity to protest…the clip on TV3 last night showing the farmers in full flow was both funny and inspiring. Next NAMA protest I will be there…

  21. coldblow

    I think the key point in the article is to try to persuade the ECB to allow us liquidity on an interim basis until the banks can be sorted out,. Would his mean breaking their rules and lending us the cash without the need for collateral (which is the role the Nama bonds would play)? Most here are agreed that Nama is crazy As to why it’s being foisted on us is a matter for specuilation. Lenihan certainly seems genuinely convinced that the b*nks have a special importance. His justification for overpayment for the toxic waste in an earlier interview (that this was based on prevailing b*nk share values, failing to understand that these reflected market expectations taking account of Nama) was enough to convince some economists that contrary to appearances he was out of his depth. Most economists seem to want some kind of Nama solution even if not the present one.

    On Vincent Brown last week the host made the reasonable layman’s point that the b*nks should be let fail. The pro-Nama talking head responded along the lines that this was unthinkable. When presssed he just repeated this. The anti-Nama head, Prof. Lucey, said nothing so presumably he agreed with him. Mind you, he has learnt that he has to be careful, put one single foot wrong as he may have done in an aside in the ’46 letter’ about the probable size of the deficit, and you have Fitzgerald at the head of a lynch mob.

    Tbe trouble with any attempt to question or challenge the current orthodoxy is that there is no shortage of experts who can give a million and one reasons to the contrary. Most of these seem to be close to b*nking or finance and so have a vested interest in maintaining the status quo. By definition very few are able to challegne them as they don’t have the hands-on knowledge to do so. It’s like the Mafia: you’d need to “turn” a few of them to testify against the rest. Mainstream economists are content to work within the existing paradigms and merely pick at the edges. The public is either ignorant or feel they have a stake, an ‘interest’, in the current system (in the ‘outer circle’ of the ‘insiders’) and are prepared to sit tight and see what happens, preferring a small slice of a shrinking pie to the uncertainty of a complete overhaul for the benefit of all. Even if their children are on the ‘outside’.

    And to put the tin hat on it the Irish govt. is not alone in being in thrall to the b*nkers:

    http://www.guardian.co.uk/business/2009/sep/13/banking-recession-william-keegan-g20-darling

    Is there any wasy to appeal directly to the EC? Even if they are not motivated to interfere over the heads of our elected reps (imagine the outcry) it is surely in their interests to attempt some action over the Sick Man of Europe. If they don’t speak out what’s the point in voting for Lisbon?

  22. AndrewGMooney

    There seems to be a typo in this otherwise excellent piece. Surely it was meant to be called ‘TIME TO WIND DOWN THE GOVERNMENT’? The ‘shared interests’ of the banks and government have become so entwined that we need Ann Pettifor to declare an official fatwah declaring Ireland a ‘bank-owned state’.

    http://debtonation.org/2009/04/america-the-bank-owned-state/

    This transfer of wealth from taxpayers to corrupt oligarchs /bankster klepto-corporatocracies is happening all over the world.

    DMcW. Q: ‘Why should a democratic government broker a deal which bails out stockholders and unsecured bond holders, both of whom have no right to be treated with such generosity?’

    A: Because there is, to put it mildly, a bit of a ‘democratic deficit’ in Ireland at the moment, exemplified by the bizarre BanaNAMArama Republic media cheerleadering. Even if it has been comprehensively debunked by ‘oddballs’ like DMcW’s, Vincent Browne, Kerrigan and other ‘bat-shit crazy’ commentators: The group-think ‘realpolitik’ seems to overwhelms all.

    Now we have the resurgent Siren chorus of Mr Declan Ganley beaming out on TV3 and farmers storming the barricades of FF in Athlone!

    NAMA is just as epochal an event for the Irish State as Lisbon v2. Where was the ‘democratic debate’ in September 2008 when Ireland was taken hostage by the banksters? The debate happened after the event, as Dr Garrett Fitzgerald now egregiously suggests is appropriate for both NAMA and Lisbon 2. By all means have ‘democracy’, but not if it stops the Important People making the decisions on behalf of the Silly Little People who pay the taxes. Leona Helmsley, etc. Perhaps the anti-NAMA demo on Saturday should have stormed some appropriate citadel of banking or commerce. I’d suggest a prime Greystones golf course as a suitable demo venue. Hit those banksters where it hurts!

    The financial plight of the farmers (who used to be the largest Social Welfare recipients in the State before their ‘special status’ was hijacked by banksters and developers) is indeed a serious matter and perhaps Tesco should be driven into the sea like Satanic snakes, etc. But it’s incredible that the farmers don’t seem to realise their ‘friends’ in The Bank of FF have other more important matters weighing on their minds:

    http://www.ifa.ie/default.asp?com=ifa&org=&id=1&ACT=5&content=81&mnu=1

    Padraig Walsh will soon wake up and smell the silage. Farmers mean nothing to banksters other than as a potential land-bank rezoning cash-cow. And that game’s over for the foreseeable future. Or is it…? Isn’t that what NAMA’s really all about? Avoiding the vexed issue of exponentially more expensive residential development land price in one of Europe’s least densley populated areas?

    NAMA is a cute hoor acronym for the latest FF rentier ‘National Anti-Markets Arrangements’ plan/scam. Ireland is NOT a Market-Democratic Economy. It never has been since the foundation of the State. It shows no signs of moving in that direction. In fact, it appears to be moving towards a putsch by discredited creditarist / monetarist / financialist interests intent on ensuring they keep their ‘slice of the pie’ at the expense of future generations of citizens.I’ll leave the bulk of that explosive revisionism debate to Kevin Myers, Mary Kenny and other such firebrands. For now…. Except to note the FF/D4 Generation Game’ is, once again, indeed playing out, but not as the ‘insiders/winners’ originally intended.

    DMcW: ‘ The reason they were assured of this is that is how Ireland works.’

    Exactly. Still, it’s a game of two halves…NAMA & Lisbon 2. If Lenihan sells Ireland’s future for a song, then the Citizens can kick Lisbon into touch in revenge. Lisbon v2 will become a de-facto referendum on NAMA as well as Lisbon v2, no matter how illogical or ill-advised that may also be. It will be one more nonsensical conflagration/conflict of strategic interests heaped onto the bonfire that began with the Sept 08 Guarantee. The resurfacing ‘Security/Sovereignty’ issues further North, the ‘viable devices’ found in Forkhill and Donegal, complete the grim all round overview.

    DMcW: ‘They will get banks in a first world country at third world prices, with the added insurance that all the debts have been taken off their books by a pliant and shell-shocked population.’

    The same thing is being attempted in Iceland, yet they at least are tethering their debt burden to GDP growth by parliamentary laws. Unlike Ireland which is assuming an optimistic ‘long-term economic value’ on its’ debts which singularly failed to impress Mr Justice Frank Clark. The Zoe sums (factually) don’t add up. Neither, I suspect, will the fantasty Monopoly NAMA ones.

    @Alan42. Spot on. You can’t square the circle whereby deflationary ‘cuts, cuts,cuts’ have to be remorselessly imposed to bring down costs to ‘competitive’ levels; yet simultaneously claim that there can be a reflation of land values/house prices. How? Who will have the rising incomes to reflate prices to boom levels whilst also paying NAMA’s stealth disguised ‘Residential’ and ‘Banking’ taxes? Are they expecting the ECB to allow a little decadent Keynesianist Inflation into the system? ROFLOL!

    The UK/US Q.E is open(ish). The ECB are playing with serious fire by covert money conjuring behind the backs of the German public. It could so easily explode. In Austria, by the looks of it.

    It’s not just about credit to businesses, it’s about mortgage and consumer lending rates till 2021. Are the ‘saved’ Irish banks likely to be reasonable about their margins on such products if they are allowed to survive without outside competition? And what’s to fear with Canadian banks setting up in Ireland? Wouldn’t that be real Free-Market Capitalism?

    NAMA appears to be bogus nonsense. Unless Lenihan stands up on Wednesday and suggests a ‘realistic’ figure delicately poised between Bust [ACC] and Bubble [Zoe] prices. I think that’s unlikely, but you never know. Events in the High Court may have influence. Maybe there’s some ‘patriotism’ still in the embers of this bonfire of vanities.

    When Eva Joly’s finished finding the Madoff figures in Reykjavik, she can descend on Dublin and do a similar service and root to the bottom of this. Even if by then it may be too late, as in Iceland. Prof Michael Hudson would also seem to be needed.

    Best wishes
    Mad Paddy from Brum.

    • adamabyss

      Time to wind down the COUNTRY more like. My advice – get out before it’s too late.

    • AndrewGMooney

      As well as David’s new opus, I’m looking forward to reading ‘Banana Republic: The Failure of the Irish State and How to Fix It’ by Anthony Sweeney:

      ‘Whilst the government may blame all this on a financial tsunami that began in America, Banana Republic argues otherwise. Ireland’s governments have, since the inception of the state, staggered between economic famine and economic feast without ever providing the foundation for sustainable growth. The failure of the state results from decades of broad mismanagement of the economy by the political classes – their incompetence has only competed with their corruption to see which could do the most damage. The taxpayers pay first-class prices but get third-class leaders.’

      http://www.gillmacmillan.ie/Ecom/Library3.nsf/CatalogByCategory/AA95B958B1102E1F802575F4005503E8?OpenDocument#availability

      Sweeney was also summarily dismissed as a Cassandra, the epitome of begrudgery, for his prescience in calling time when everyone was partying like it would always be 1999:

      ‘Some Irish people refuse to believe the economy has changed in any meaningful way, and think the current boom must therefore be a kind of collective delusion. In ‘Irrational Exuberance: The Myth of the Celtic Tiger’, Anthony Sweeney, a business consultant, argues that the whole thing is a bubble that’s about to burst. At best, Sweeney thinks Ireland is headed for a nasty one-to-two-year recession; at worst, a recession so severe that he shudders to describe it: “Suffice it to say that it would be bloody.”‘

      http://money.cnn.com/magazines/fortune/fortune_archive/1999/10/25/267793/index.htm

      But Bertie wasn’t even listening to the sideline rodomontade ‘cribbers’ then, he was so busy replenishing the punch-bowl with champagne ‘bubbles’ bought on the never-never. Now it’s payback time and Bertie’s ……writing a sport column! Go figure.LOL! WTF? etc.

      ‘Electocracy is not Democracy’.

  23. gadfly55

    Bravo, bravo, David, call it as it is, the Barons of money are carving up the peasants of Ireland and the bankers are their agents. Where is the democratically elected government in this picture? Selling out the people, pure and simple.

  24. Riggs

    NAMA by its very nature is capitalism at work.

    The principle involved could only exist in an utterly capitalistic society.

    NAMA is still the only viable option in town and virtually all of DMcW’s wishes will eventually come to pass but in an ordered time frame. This will allow Ireland Inc to address each unfolding mess as it occurs. We do not want the Iceland scenario which will undoubtedly occur if we go the “big bang” route being purported by virtually all contributors to this site.

    Have a look at almost every post on NAMA to date and you will see it reads like a love-in. All appear to be struggling for oneupmanship reasons in an effort to improve on the anarchistic verbosity of the previous contributor.

    Accept the concept of NAMA but not in its current state. Still many critical changes to occur to protect all of the beleaguered citizens of Ireland.

    There is no idyllic solution to this immense problem of ours, so why not expend your energies suggesting how NAMA should operate.

    • wills

      problem is riggs you have not defined your version of capitalism which seems to be CASINO CAPITALISM, which is not the capitalism adam smith dreamed about.

    • wills

      “NAMA is still the only viable option in town”
      So, you are not reading Davids article then i take it, which is rather disrespectful to come on here and cr@p on about there been no option when in fact David just presented the REAL only option available. But, as i’ve posted already, anyone who supports NAMA is

      1; Brainwashed

      2; up to dubious activity

      3: taking the p1ss

      4: too laizy too read up on it fully

      5: owns property and wants their comfy womfy bubble back to get going again living the ‘who wants to be a millionaire’ fantasy.

      6; desperate and freaked the wife will call it a day due too lack of funds.

    • Tim

      Riggs,

      “Nama is Capitalism at work”???????

      “Antithesis” mean anything to you, Riggs?

    • Tim

      Riggs, NAMA is the antithesis of “Capitalism”.

  25. wills

    So far, 32 posts, all of which in bullet proof agreement with davids central point.

    • Tim

      wills, “Bullseye”!

      (I know, I know….. but, let me have my shot, ok?)

      Bullseye!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1

  26. DarraghD

    We do need to start looking at the farmers I think and take a leaf from their book when it comes to holding a protest. They are consistently the only sector of society that are rattling the government…

  27. I am here in Salzburg Austria on holidays and I have already described the unbelievable low prices in the local Alid/Lidl/Pennymarkt supermarket chains.
    i have checked out real estate stuff here today and although Salzburg has the reputation of a very fashionable and desireable location for high flyers to own property, the price range for good size apartments (60-120 sq metres) .
    One two and three bedroom apts ranges from 60,000 to 190,000 Euros at the top for a really nice 3 bedroom apartment with garage space etc.
    Ireland has left the real world and despite the NAMA scam will never return to it.
    Even the low corporation tax attraction is now wearing thin for american multinationals.God help Ireland.It was ruled for three terms by totally venal cute strokers whose expertise was in vote buying and holidaying the globe-and nothing else.
    Even the consultants they employed must have been all cronies..and even if the odd one gave them good advice it was always politically unsound and therefore went unheeded.Just one example:Look at Aer Lingus lurching towards bankruptcy.
    Buying off the electorate is getting harder by the day. Worse still is asking that portion of electorate they bought (farmers/public service unions etc) for the money back.!( because nobody else has any left )
    Such lovely irony in it all though.
    Great to see the farmers getting a billion in taxpayers money to clean up the rivers and lakes though.At least all of the taxpayers cash is not being wasted.
    Less hospitalized Cryptosporidium victims in Galway city and elsewhere during the coming years and no more fines from Brussels for nitrates pollution.Then again somebody said that Brussels was going to stop the support payments if it didnt happen.Hence the sufferin taxpayer down another billion.

  28. ThrashTheNews

    I am just reading that article “time to wind down the banks”.. I was fascinated too when I heard the Canadian Banks were circling our banks. The article I read stated they were only interested once the “Bad Bank” had been set up and all the bad loans/assets had been taken off the books.. It made me laugh, it read as if this was a positive for Ireland. It’s been three weeks since that article broke and this is the first time I have heard anyone in the media highlight how wrong this would be.. ( I get a strong feeling that this Dodi at Merrill Lynch is originating a super deal for themselves, by manipulating our very naive leaders!! ….. That is almost as good or better than the deal Barclays got with Lehman!! Oh my.. these guys are effectively setting up a massive distressed asset fund on behalf of the Taxpayer by buying 90BN worth of crap in a falling market.. This kind of thing in my experience is incredibly difficult to administer and trade on the market. There is some complicated structuring and management of the assets over time( Do we have the people to do this??? Also when the Swedes set up a Bad Bank in the 90s they had 450 people working on it. I have heard that 45 will be looking after NAMA?? Are they also taking on derivatives and risky commercial loans? This is the problem I have had with this idea from the start ..1) the risks associated with these assets and the price being paid as well as the understanding and details associated with it’s administration 2) overpaying for the assets , purely because the Finance minister has no idea how else to re-capitalise them!! You are also correct in stating the perception of the Bond market will change towards Ireland in a very negative way, once these assets start to underperform and they will!!! In the meantime shareholders of the banks are pinching themselves and our increasing public debt becomes impossible to fund when the markets turn on us again!!

  29. DarraghD

    My brother works as a cameraman for RTE and has just leaked me the following, fairly unsurprising video footage, live from the Fianna Fail “think-in” from the Hudson Bay Hotel in Athlone….

    http://www.youtube.com/watch?v=go9hAPGmfLY

  30. Robert

    I know this article is about NAMA and the banks but I hope no-one minds me talking of Government waste

    Now that Ceann Comhairle has justified his 500,000 expenses over the past 5 years it got me thinking about the present Government (1997 – present) and, in particlular, the manner in which they routinely waste our money as if it’s growing on trees in the Phoenix Park.

    On day 1 (26 June 1997) of the Ahern Era (**shudders**) it was apparent what we were in for when Bertie decided that 11 out of the Government Departments of state should undergo a name change.

    Sure what’s in a name change you say – Well a lot in fact. The cost of needlessly changing plaques, stationary etc . . . would have, at the very least, run into hundreds of thousands of punts – no question about that.

    For the record:

    Agriculture, Food and Forestry became Agriculture and Food.

    Tourism and Trade became Tourism, Sport and Recreation.

    Marine became Marine and Natural Resources.

    Arts, Culture and the Gaeltacht became Arts, Heritage, Gaeltacht and the Islands.

    Education became Education & Science

    Enterprise and Employment became Enterprise, Trade and Employment.

    Environment became Environment and Local Government.

    Health became Health and Children.

    Justice became Justice, Equality and Law Reform.

    Social Welfare became Social, Community and Family Affairs.

    Transport, Energy and Communication became Public Enterprise .

  31. kissane

    Excellent.
    May I suggest to you the recent Vanity Fair article by Bartlett and Steele “Good Billions after Bad.
    You can also find it on video.
    http://www.democracynow.org/2009/9/10/good_billions_after_bad_one_year
    You have mostly been on the ‘money’ and I know you have your eye on “The Perfect Crash” the clouds of which are gathering just over the hill, just when we think it is business as usual. But it wont take as long as your Pope’s People Prediction took!
    Kissane

  32. joxer

    Why don’t we see you on tv anymore David?
    In my lay mans opinion this republic is finished,if the sheep follow their masters they will vote in lisbon 2 and from then on we will be governed by europe,our dail will be as much use as our county councils etc are now.
    What,s the point talking about it,if we’d any sense we’d get the hell out of here,htis country is totaly corrupt from the top down,we are currently governed by a shower of tramps who are hardly worth the bullet that would shoot them

    • Tim

      joxer. I am here to learn.

    • Joxer you don’t see David on TV as he has been off making more docs. and also writing another book keep up to date young man and stay off the beer for a week . Only cowards run away what we need to do is sober up and stand up demand the polish unemployed been sent home , protest about education wastage , ring or visit our TD’s weekly if not daily , tell news paper editors , your extended Family will also stop purchasing their works unless they Come Out against the Government and stop knocking Declan Ganley and Enda Kenny as until the groups been developed now are ready to stand we have to elect out and hurt FF with the ballot then with the judges mallet. We have been taken by the Gaul and unlike the French or Mediterraneans we will not cause burnings on the payments. Voting Yes or No is not our biggest problem , it’s the attitude that they believe they are entitled to such lavish expensive life styles. What David walks away with from Farmleigh House is what i am more concerned about !

    • walnut

      Being governed by Europe is exactly why I’ll be voting YES to Lisbon 2!

  33. Here is a clip RTE should have shown last week http://www.youtube.com/watch?v=KKqEeiMn6FI&feature=related
    Been chatting to a Green today who even thinks they got their pensions last October when i questioned her as to why they were waiting till then to vote on NAMA , they simply don’t have a clue what is going on …

  34. jim

    So now were getting there eventually.We have 2 High Court Judges and 1 from the Supreme Court telling Us that Liam Carroll and His property Buisness are insolvent and dont appear to have a future,inspite of the submissions from His valuers and some of His main Creditors etc.etc. Now I know Liam Carroll was a cute enough bloke who bought a lot of property around Dublin and generated alot of Money for His buisness down through the years,but the Judges dont see any “long term Economic value” in what He now holds.Given that were talking about a Developer who was mainly Dublin City based and with what you might presume to be, a good judge of what was viable in the Dublin property Market,well all I can say is that this case must set the alarm bells ringing all over the Country for all Developers.

    • Dilly

      The property junkies refuse to realise that property and development land in Ireland is finished for upto 20 years. It is done, the cash cow has been sucked dry. I used to be in the bulding game in the 80′s, as a steel fixer. I got out and went back to College. My reasons were simple, I no longer wanted to chase the work. And that is what the building game is all about. You follow the work, whether it is in Germany, Canada or Castlerea, you pick up your tools and you go. I did this in the 80′s and I decided I no longer wanted to follow the work, so I reeducated myself and chose another career. But, people have gotten lazy, in Ireland’s version of the “ME ME” decade. People are digging their heels in, and trying to reinflate a property and land bubble. They are calling in favours, and asking for strokes to be pulled. And the idiots in power are happily obliging. How long will it take for these lads to realise the the game is up, time to pick up your tools and move on, or, find a different profession. They are killing this nation in an attempt to keep their property and building empires afloat. They are killing Ireland with this price fixing scam, while also going against the natural cycle of boom and bust in the building game.

      • Garry

        Nobody at cabinet level has ever had to shut down a business, or gone looking for the dole after their employer went belly up. If they had, they would be throwing chairs at cabinet meetings.
        I think everyone who has faced redundancy or worked in a company that failed… we all recognize the signs, and can see the writing on the wall…. sales slow down, money doesn’t come in as quickly as before, business goes elsewhere, and those managing are delusional. (Or just flogging the horse till it drops)

        The govt and departments have ‘managed’ crises before; there is a proven methodology for doing that in the PS, the mistake can be covered up because the budgets are big enough to cope with run of the mill overspending. and failure can be branded as success and everybody is happy.

        But that method will work against us right now. The instinct is to cover it up, ‘work with partners’, pass on the bill to the captive customer. And say NAMA will make a profit.

        But 120billion or 460billion or whatever the final cost of the property and bankster gambles is a completely different scale of problem. And requires a completely different approach. Covering it up will only make it worse.

        The govt are panicked and are partnering with the people they have been meeting with to resolve the crisis. They have developed Stockholm Syndrome, and think they and the banks are partners.

  35. jim

    So what of the Banks in all of this?. Well we know their holding out for whatever deal is proposed on Wednesday via the NAMA announcement etc.etc. But how do they value their own property loans?,what value of security do they hold with regard to these loans?,what loan to values are they relying on now?.What sort of due digilience did they carry out when giving out these loans? Well come with Me to the sunny south East for a brief glimpse at how property deals were financed by what David calls the “fanatics”.I give you exhibit A at the following link::::http://www.courts.ie/Judgments.nsf/09859e7a3f34669680256ef3004a27de/a0c24e7369dadcf98025762d004c7e69?OpenDocument

    • Well spotted Jim and this is one case of many I know a bib B & B down in county Wexford which has bought shops in dublin and a farm in north France , as our souped up money clerks rode their commissions on these leveraged loans , it’s an absolute mess , Christ’s knows what they will throw into NAMA ,……
      We need to start looking over seas , I’d start with Argentina or Brazil

      • jim

        As a side issue BrendanW I read where Nortern Rock had a “branch” trading as a seperate entity in Jersey or wherever.Turns out they had over 60 BILLION (sorry Im shouting again) stashed away in this locale for the rainy day.You see they were prudent after all wink wink.You dont suppose any of our Banks have offshoots anywhere You and I could hit up for a loan.Anglo sold their’s in Switzerland not sure about any Austrian connection.They were always good for a couple of mill.Jeez We’d kick up a right show in Spain, Tapas for the Tycoons.Ah well I might aswell dream here as in Bed.

  36. jim

    For those of ye who could’nt be ar.ed to read all the above Judgement I will summarise in long hand so dont quote Me…..Some people bought land in Wexford and owed some 2 million to our auld buddies in Anglo,they decided to Develope and re-finance with AIB.(change Bankers)…Valuation on property now given as over 3 million plus,no problem, give Anglo their 2 million and off ye go…3 mill transfered to clients (AIB took the valuers word for it) but but but the Client decided to use the 2million (that should have paid off Anglo) to buy into a 20 million property above in Dalkey in the fair City.Now the clients Solicitor claimed in Court that they were so busy with the Dalkey deal that they forgot to pay off Anglo their 2 million….hence the case refers to AIB versus Maguire etc.etc.aka the client ‘s Solicotors.To cut a long story short we now have a situation where the Dalkey deal has gone to examinership or whatever, the property in Wexford has 2x Mortgages on it, 1 from Anglo + 1 from AIB , it has been valued down by CBRE to 650k and just had its planning application thrown out by An Board Pleanala ( something to do with protecting our great Heritage from circa 1938 as opposed to some rare snail that can do backflips or whatever).Im sure the People involved in the above thought it would all work out ok but it all went wrong and now its the Banks,NAMA,Taxpayers problem…So get out yere pens and papers there people and work out (a) the haircut (b) the long term Economic value (c) what viable project ye will get past An Board Pleanala in this sunny south East location. (d) cash flow projections for future funding efghijklmnopqrsty and Uncle Tom Cobbly and all.Times a wasting Prople We have SME’S to save etc.etc. when yere finished with that little project….Wait until I throw ye the real curve balls with Zoe and there 25 interconnected Companies etc. Sure that thing in Wexford is only a pudding,a warm up for the Real quagmire that is about to unfold.I would suggest ye move yer seats to the upright position and brace for impact but thats just Me and what do I know.wink wink.

  37. MaxKeiser

    After World War II, Germany went through a de-Nazification process.
    By far the biggest problem that they faced in doing this was not the hardened Nazis as you might expect.

    What proved the to be the most difficult task were the ” Mitläufer”. Literally translated as people who would “Run Along” (with the Nazis).

    Ireland now faces this very same problem.

    Fianna Fáil are (literally) spent.

    But it is their “Mitläufer” present our most difficult task ~ ie the Green Party, NAMA, Banks, Developers, Vested Interests & Unions, market riggers, cartels & oligopolies, et al.

    • G

      Precisely, well put!

    • mick.dfarmer

      Very good comment Max, how do we get rid of our ffnazis? Starve them out by paying no taxes, no credit card repayments and no mortgage or bank repayments, just let a black economy develop with hyper inflation? The nazis got in because people had to use a barrow load of marks to buy a loaf of bread in the inter war period, same thing is happening in Zimbabwe today, there are no simple solutions to this problem, every action we take is going to have a reaction.

      • G

        Take to the streets, force the Mo’fo’s out!!

        The likes of John O’Donoghue who has disgraced himself and the country – these are not servants of the State! OUT, OUT, OUT!!! Investigate the Civil Service and county councils to see who allowed what, who took the envelopes!

        Take back Bertie’s office, freeze his pension, cut his salary in half and demand reparations!! Prevent the banksters from seizing a single home, block their bonuses, cut their salaries – make them accountable.

        Investigate the lot through Dail committees and bring charges where necessary…………take back the State!!

  38. adamabyss

    De-Bertie-fication is what’s needed – only problem – it’ll never happen – the people of Ireland are too THICK, GREEDY and IGNORANT – bend over and pick up the soap fickle sheeple – and good luck to you all, you reap what you sow, and you deserve what you are going to get – I for one will be watching the impending catastrophe with absolute glee from afar (where I worked my poor ass off to get and retained my modesty all the while – until these words – I admit) ; any of my dear friends and casual acquaintances who can get out in time – PLEASE DO – f*ck you Ireland, you are the biggest sham to ever exist on the face of the blessed earth. I’m making arrangements to imminently remove my elderly parents from your hellhole, for their final years. I’ll treat them as they treated me when I was a kid, except I was a kid in Ireland, they will die in a foreign land, not in the sh*th*le that is Arseland today. Also, I’m out of this forum, there are a lot of great minds here (although not much action, barring Tim and wills last Saturday) and you are all p*ssing against the primitive wind. Bye Bye – I don’t have time for this real-time tragedy anymore. Adam Byrne.

    • Thermus B. Airgetinin

      Could’nt agree with you more adam, problem is, I’m one of the many who have been fleeced penniless by these underhand thieving scumbag bastards. If I had been as wise as you, I would have been out of here like a rat out of a drainpipe. The gutless electorate do indeed deserve what they’ve voted for and If Lisbon 2 is voted in, all of christendom would be justified in a long and loud chorus of HELL RUB IT UP YA! The last time that a people were treated like this, they were lead like sheep into the gas chambers. Wake up you gutless gombeens and take you’re lives and you’re country back.

    • wills

      adam, still looking for some of that carribbean sunshine ..!!

  39. MK1

    Tim, the ‘Lance The Boil’ equivalent call by David may be a year later than mine, but its still not too late as more and more people come to realise what has gone on and is going on.

    But persuading people is difficult. There is a lack of knowledge out there and mantras such as “NAMA is the only game in town” are readily absorbed. The anti-NAMA march turnout was very poor. If 100,000 marchers against the Iraq war and the landing of US troops at Shannon cant “force” our government to even obey our own laws and allow Gardai/Our Army etc to randomly inspect US military flights to catch out so-called rendition flights, then 500 people is a mere midge on the windscreen, not even felt nor seen and will not dissuade NAMA creators. In fact such a turnout will delight them and give them further succour.

    I met with someone yesterday and they were pro-NAMA. It took about 15 mins or so but by the end of the “enlightenment” they could see how NAMA would save the banks, and partially save some developers, and would definitely cost us (him and me included) money. All in the name of saving “our” (not really) sick Irish banks. The realisation that our banks could be allowed to go and it would be ok. We dont need our ill banks any more than the local GAA teams needs the Catholic church to pick the team. Its a falicy.

    Ireland, wake up and grow up.

    In terms of protesting, it will take shutdowns and even threatened mayhem violence to get any attention. More anger. More action. If more people are unemployed for longer, there may be enough groundswell to feed that. People are still far too comfortable. Even 200 euro a week doing nothing is a cushy number.

    Looking at the EBS results is a partial insight. A 14 billion loan book, with only a small amount in “development”, yet that is enough to require it to need a government guarantee and to use the saving net of offloading non-performing loans to NAMA. Nearly 50% of development loan book of 530m is non-performing (ie: not paying interest). They also are hinting that they will need 300m capital AFTER they offload the 530m of loans. Operational profits of 35m but loan write-downs of 44m. I have no doubt they could have written down more.

    MK1

    • Thermus B. Airgetinin

      I read over 2 years ago that provision was being made for the “civil unrest” and “social breakdown” that the powers that be knew was coming. This is a totally contrived situation whereby all the wealth accumulated by the working class population is being stolen from us and divvied up among the greedy bastards we trusted to look after it for us. The deviousness of the bastards is evident by the fact that they had “arrangements” in place so far in advance of any of us knowing what was coming. An added bonus for the political lapdogs of these scumbags is that the politics of fear (honed to perfection by the Bush 1&2 administrations and now the EU)) is going to force the Irish nation into perpetual serfdom with the lisbon 2 vote. Should that happen, I would be ashamed to call myself an Irish man. Is it not there for all see… Bush offside, Blair offside, Bertie offside… all those who could be held to account are nothing but rats deserting their respective sinking/sunken ships and all lauded for their “statesmanship” Makes you puke doesn’t it

  40. Thermus B. Airgetinin

    Just found this comment from Jan 09

    Luckily for the rulers of Europe, they have pooled their resources into the most fearsome, oppressive, undemocratic structure on earth: the EU. Democracy is all but finished here, unlike the USA, where State power is still strong (though declining) and many citizens bear arms. EU subjects may rail all they like against their supposed rulers, but the real power is centred in Brussels. National laws, national law enforcement, are increasingly subordinated to EU diktat. So what if the French got rid of Sarkozy? Whoever took his place would simply replace him on the EU Council, where his ultimate loyalty would lie. Never before in Europe’s history have their peoples been so utterly enfeebled, their rulers os utterly empowered to crush any hint of serious rebellion, as now. Worse, the people are fragmented, political activity is alien to most of them, there are no alternative ideological movements. The “war on terror” has enabled authority to vastly increase its power over the people, with laws that criminalise us all. We are all terrorists now, should authority implement such laws. For “terrorist” read political activist. Add to this the “global warming” propaganda, and you have an awesomr assembly of tools by which our rulers can utternyl subjugate us. “Terror” justifies their enforcement of a forthcoming police state, “global warming” justifies the forthcoming rationing of goods and services. Even the most well organised, mass political revolutionary movements of the past, would be hard pressed to threaten, let alone overthrow, the awesome power that now controls us. Today’s feeble murmerings of discontent will lead nowhere.

  41. wills

    The world of the ‘government criminal syndicates’ one of which is running the affairs of Ireland and pushing NAMA down the taxpayers throat is brilliantly explained
    at this link by MAX KEISER, i urge all to have a look.

    http://www.youtube.com/watch?v=d-UUBTASHHU&feature=player_embedded

  42. Just_a_foreigner

    I won’t apologize for my ignorance, I guess my user name says it all, am just a long term resident trying to keep afloat what is happening in my country of choice, please help me understand…
    My common sense agrees with what David is suggesting here, why would we be bailing out the ill-ran banks, so they can continue their bad practices…. But how would this suggestion really work: “We sell the banks’ branch network and some other assets. The creditors get this cash.” So all creditors would get all their cash, what’s that amount, where exactly would the money come for that? And how does that figure compare with the amount the government will be pumping into Nama once it takes over all the bad debt (regardless that we think it’s a bad idea to start with). Thanks, JAF 

  43. Tim

    Folks, this article on NAMA, from Morgan Kelly:

    http://www.irishtimes.com/newspaper/opinion/2009/0915/1224254555311.html

    How can the pro NAMA people ignore this man, who has a proven track record for accuracy?

    • Colin_in_exile

      Tim,

      Thanks for the link. Excellent piece.

      Pro NAMA sheeple like our friend Riggs are adopting a “see no evil, hear no evil” approach to challenging NAMA.

      Its ironic, the whole State run Religious Institutions Child abuse Scandal, which Bart Ahern apologised for, was allowed to happen because the good people working there adopted a “see no evil, hear no evil” approach also.

      Same can be said of the Good Germans in WW2 regarding ignoring Nazi atrocities.

      Are we going to learn from history, or repeat history (a la Japan post bubble)?

  44. nono

    From ThrashTheNews:
    “There is some complicated structuring and management of the assets over time( Do we have the people to do this??? Also when the Swedes set up a Bad Bank in the 90s they had 450 people working on it. I have heard that 45 will be looking after NAMA??”

    The bulk of the people who are going to look after the NAMA loans are bank employees. So all the banks will transfer a number of their staff to look after NAMA.

    ” Are they also taking on derivatives and risky commercial loans?”

    You bet they are! Every toxic debt held on their book will go to NAMA…

    The funniest thing is that the people working on the NAMA implementation don’t even realise that they are shooting themselves in the foot. OK, they think they will be able to keep their job if that thing comes out but for how long?? Do they know (or care) this will cripple them, their children and grandchildren with huge taxes? How can they be so short sighted?? It beggars belief really how people are like sheep, so docile being led to the slaughter…

  45. wills

    Rte1 six news,. cowen “ireland will be a dark place for years to come without NAMA”,,… and between that and j ‘ o ‘ dononghue red faced hiding behind his mate at the races in kerry to – day on rte1 ducking out of reporters question on expenses orgy, one really must consider the fact that these guys have lost their marbles.

    • Colin_in_exile

      But they haven’t lost their marbles, they must know what they are attempting is completely immoral and disgusting, but because this is Ireland and only 500 people protested last Saturday, they know they can get away with it.

      They are morally corrupt! Keeping the Ponzi scheme going at all costs. Lining the pockets of their corrupt friends on the board of FAS as they leave the boardroom.

      Ireland badly needs to wake up to what’s going on sooner.

  46. Malcolm McClure

    Olivia Newton John might have warned us about Ceann Comhairle in Grease:

    As for you, O’Donahue, I know what you wanna do
    You got your crust, now the banks are bust,
    Just keep your cool, the public’s no fool
    Keep your filthy paws off our pension drawers.
    (Or something like that.)

    The Clancy Brothers also had something to say about The Bold O’Donahue:
    Here I am from Paddy’s land, a land of high renown
    I broke the hearts of all TDs from miles of Dublin town
    And if they hear that I’m away’ they raise a hullabaloo
    When they talk about the odious lad they call O’Donahue
    Chorus:
    For I’m the boy to please them and I’m the boy to tease them
    And I’m the boy to squeeze the public purse and I’ll tell you what I’ll do
    I’ll fiddle expenses from the Irish Dail with me brogue and blarney too
    With me rollikin’, swollikin’, gollikin’, wollikin’, Bold O’Donahue
    (I might have some lapses in my recollection.)

  47. Tim

    Folks, things are not looking too good in the US; if our boyos are hoping for that economy to refloat ours, they have another thing coming:

    http://www.youtube.com/watch?v=VQwVvdQa0JM&NR=1

  48. gdunne

    well we find out the madness of the cost of NAMA tomorrow, I feel fustrated and helpless about the whole damn thing, I was at the march last Sat12th and I was gutted to see how few showed up.

    Its not that I think we have the power in this “democracy” to change the madness of Fina Fail/green decisions, but I just had to be able to say in the years to come that I tried along with a few others to make a differance, I will be out again next sat19th.

    I wonder how far Irish people will allow themselves to be pushed, do we have the stomach or commitment to stand up for ourselves?
    David its only for people like you we may have a chance, keep writing, keep high lighting the obscene economic mess that this government have gotten this country into.Maybe just maybe we can make a change.

    NAMA the biggest mistake we will ever make, God help us.

  49. “Believe it or not:
    Dublin City Council launched its new bicycle hire scheme in mid September 2009. There has been much speculation as to how the robust unisex bicycles will fare in the face of vandalism and theft.
    Since a similar public bike hire scheme was launched in Paris in 2007, 16,000 bikes have been vandalised and 8,000 stolen.
    As Dublin has probably the worst cycle lane facilities (often sharing with taxi & bus lanes) of any european capital prospective customers of the new scheme would be well advised to wear sturdy body armour and enhance their life assurance,and personal accident policies fortwith.”
    It is no pleasure to me, that later on the same day that I posted this caveat ,on this website, an unfortunate cyclist lost his life in the centre of Dublin.
    Point proven.

You must log in to post a comment.
× Hide comments