September 30, 2009

Why economic recovery can be bad for business

Posted in Debt · 340 comments ·
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NAMA YieldOne thing the Lisbon debate has done is distract us from the juggernaut that is NAMA. In Laois today, speaking to a large group of retailers — who can sense the credit crunch in their bottom lines — the only topic was the banks, the bailout and what is going to be left after NAMA.

The feeling in the room was one of outrage, bordering on disgust, and a palpable sense of powerlessness.

One woman, a big retailer from a decent-sized town, told me that watching events unfold was like watching a drama from prison. Because the electoral cycle is five years long, she felt there was nothing she could do to register her dismay at NAMA. There was just no way of signalling her opposition. She told me she wanted to scream “not in my name” but had lost her voice.

As far as she and others were concerned, Lisbon can come and go, but NAMA is where the big mistake is likely to be made. The retailer said she knew the builders in the town that would be bailed out and the bankers who lent to them and were still taking home good salaries and playing golf in the local club as if nothing happened. All the while, she feared her business would really feel the pinch when interest rates turn. Whatever about having precious little credit now she feared that, once rates began to rise, the position of her and many on the main street like her would become impossible.

Others shared her concern. They were worried about their outstanding loans. Many of these are “interest only” affairs, taken out when times were good and provincial towns were booming. Many retailers expanded their shops dramatically not only to respond to demand and the insatiable appetite of my old friend Breakfast Roll man, but also to try and stave off competition from big multiples like Tesco. This expansion leaves them very exposed to interest-rate moves.

With that in mind, let us have a look at the interest-rate cycle in Europe because, Lisbon or no Lisbon, interest rates in Europe will rise progressively over the next year or two. And this could be enough to push many Irish businesses over the edge.

Before we look at the likely trajectory of rates, let us examine how interest rates work differently in different countries in Europe. In Ireland and in the UK, we finance more or less everything at variable and short-term rates. In Germany, they finance at fixed and long-term rates. This means changes in interest rates have much smaller impacts on consumer demand in Germany than they have in Ireland.

When rates are decreased, we party here and when rates rise fast we suffer dramatically. So, in the past year, as the ECB cut rates significantly, we have have been given a significant breather. Many highly indebted companies are just holding on at the moment because rates are so low.

When the rates turn, however, the precarious position of many of us and our companies will become apparent. And the financial markets will factor this in to their equations.

To understand what is likely to happen, take a look at the chart above. It shows the reaction of the US financial markets in the past 12 months to companies that had lots of debt.

Traditionally, these risky companies are asked to pay a premium to investors of about 2pc over US government bonds. This is to cover the investor for the risk that these companies will default. In other words, because they are more risky than government bonds, indebted companies pay more for their borrowings.

Now look what happened last year. When the liquidity crisis broke, companies dependent on short-term financing looked far weaker than they already were. The graph shows the difference between the interest rate on their borrowings and that paid by the US government. At the peak of the crisis, indebted businesses had to pay 5pc more in interest than was paid on government bonds.

We see a dramatically amplified effect on the interest rates weaker companies had to pay in the graph, which caused many of them to go to the wall. But it is the taking over of the banks rather than the trials of indebted businesses that will worry the markets the most.

Investors will be afraid that the capital position of our banks will be eroded, once more, by new bad debts as interest rates rise — but this time from companies and retailers rather than builders. Crucially, this debt will not be in NAMA. Share prices will fall as bad debts mount, and the State may be compelled to act again. In this scenario, it could nationalise the banks — by injecting more capital — or it could preside over zombie banks with neither confident management or shareholders.

This is the vista we face, Lisbon or no Lisbon, and that worry was written on the faces of the people I met yesterday — who sell us our milk and butter late at night, or are there when we’ve forgotten to make the children’s lunch.


  1. gquinn

    I absolutly agree with the above article and very well written.

    In the short term we are going to have deflation when all asset prices fall in value but in the medium and long term we will come into a lot of inflation due to the World Stimulus measures.

    It’s well known that government act to late. With interest rates at an all time low and with maybe double digit inflation to come then interest rates will have a long way to climb.

    If inflation reaches 6% then interest rates need to be at a minimum of 7% in order to tame inflation (Look what happened in 1980 – 1981).

    • brendan007

      What I presume will happen is as follows.
      The developers and builders are all obviously sitting on personnal wealth sitting in swiss bank accounts. They will be the 1st to buy back their own land and developements at knock down prices. And the Tax payers will fill in the gap….

  2. A welcome reminder of underlying realities. Those local shops that have improved their premises in expectation of continuing business are vital to our local communities. When they close they leave a huge hole behind.
    People who’ve gained from falling mortgage rates, who’ve put up with increasing government confiscation of disposable income, who’ve not yet felt the full pinch – we are about to suffer, bigtime it seems.
    It’s good to have your explanation because it removes some of the confusion.

  3. wills

    David, the vista of ‘collectivism’ open’s up further and further and further, and in this scenario, outlined above on your article, the vista on central banking gone bezerk is on show.

    We have, credit provision run by a hidden crony capitalist elite now exposed, curtain pulled back, wizard of oz like, the shopkeeper woman now waking up too how the economic system is run and she is discovering the truth and the awesome realisation that perhaps it always has been so.

    We have, the local economy, seduced into extending credit to keep up with demand and wham bam thank you mam crooked bankers blow the boom and shut the counter for credit and look out at the needy debtor and swing a noose from their hand and point at the i rate on the graph and smile and look on in contempt for the ‘outsider’.

    We have, the banking oligarchy run feudal system on show for all too see. The local economy held in the palm of their hand while they wave their hand over the interest rate lever.

    We have, i rates as low as they can go, so everyone know’s the only way is up, so, the local economy’s nut’s are in a vice grip with controlled by a private central banking oligarchy owned by the hidden vested interests who can make a call to the gov and over night get a bank guarantee that see’s in a complete use of of the nations wealth to secure their apparatus they own and use to preserve their power and dictatorial control over the free market , the banking system.

    We have, the NAMA chess move, once played will sink the local economy deeper into the shadow elites neo – feudal system all set ready to go which involves slyly fiddling around with a few levers and nobs to cajole us all into a replacement for the now failing fiat money system, on it’s last legs.

    And you run the economys into so much debt they are just relieved too come on board with something that promises something better.

    NAMA is part of a bigger story as is the i rate noose around everyones neck.

  4. DH

    Anyone else feel like Michael Moore could be making a documentary on Ireland in a few years, chasing down Bertie, Cowen and Lenihan asking them why they ruined their own country? Cut to a clip of him walking in to the NAMA office and walking out with the deeds to half of Ireland bought for 1$

  5. SLICKMICK

    Eugene Sheehy is still chief exec of AIB, one year on from obtaining a bailout from Joe Public!.Policy is built around trying to kickstart the housing market and suckering people into buying the most expensive land on the planet..Unemployment has stabilised because emigration has resumed!.FF will be in decent shape if they hold out until 2012.Some things never change.

  6. mediator

    Lisbon isn’t a sideshow – its going to have longer consequences than NAMA – bad as Nama is we don’t get to vote on it.

    The only way we can communicate with politicians is through the ballot box.

    Check out this link on the referendum commissions shenanigans if anyone is doubtful about the real issues at stage in Lisbon

    http://www.nationalplatform.org/

  7. I concur with the Minister for Finance when he says that he’s frustrated with fhe fact that no banker is in jail…yet. The reality is that all the bankers who got us into this mess are living the high life on pensions and one off payments etc that would shame the lottery.
    When one bank ceo spoke about his ‘compensation’ last year, he said that he made around €3m last year while he expressed concern that he might not make that much this year. The same fellow resigned earlier this year and made as much or more even though he hadn’t worked the full year.
    The same applies to politicians who, in time, will be retiring or retired from the public stage – not soon enough – and will leave with the fine fat golden handshake in their back pocket. Sure politics is a risky game but the ex gratia payment and lavish pension should not be paid until they answer for themselves for the reckless manner of their government. – or misgovernment.

  8. Malcolm McClure

    It;s not surprizing that many small businesses are complaining about NAMA as it is always easier to balme external forces than one’s own flawed business model. How many boutiques opened in recent years were simply loss-making tax dodges to get the spouse out of the house? How can any bank justify making loans to establish the sixth glorified minimarket in a village of 1000 people? Or the fifth fast food outlet in a small agricultural community?
    David ignores the lessons of Japan, where consumer prices tumbled at a record pace in August according to fresh government data, raising fears that a prolonged downward spiral of deflation could undermine the country’s fragile economic recovery.
    Perhaps there will be inflation in Europe, but NAMA or no NAMA its unlikely to occur for a few years yet. Instead, I foresee a return to the days when an exotic tanned gentleman in a turban knocked at your door and invited you politely to inspect the contents of his suitcase.

    • Malcolm McClure

      Reuters reports that Eurozone consumer prices fell this month by more than economists had expected, reinforcing expectations the European Central Bank will not raise interest rates yet in spite of a nascent economic recovery. Seems inflation fears are groundless for the time being.

      • wills

        inflation is inexistent presently seems like ‘cos the printed monies remain in the banks vaults beefing up their reserves or being stolen away, like the gold was stolen outta fort knox in USA,

  9. Ah , the small shop keepers who opened or extended their premises to try compete with the Dundrum’s and Liffey Valley out fits’ of course they are in trouble now. We are after all in the coming to the middle of a perfect financial economic storm. With all the cracks now showing every where , the units these business people rent some are badly built others paid too much for the land and as tax free areas they have been asking for too high a rent.
    I know back in my south east down there are commercial units below un lived in small apartments that have been idle now for five years !
    Lisbon is only a side show but also part of the equation.
    Ireland needs Europe more than even before as we are not clever enough to survive on our own.
    Yes we have an elite , every society has this structure , what we need is within this system a new political party if the Germans , Dutch , Italians all other European countries have a choice of more than 4 parties , why should we stay voting in F.F. or even F.G. we need real leadership and not the propaganda machine we have now…..just heard on RTE radio signing on has slowed down to just 600 in September ….Bull shit , I know of several who have signed and since they are taking months to process , they are not yet counting these people.
    Ireland Inc is morally bankrupt .
    SO I’m now wondering what will be the first Business Launched after Farmleigh in another five weeks time ?

    • wills

      This link here, (thk’s tim), tin tin ‘o toole, finally the pennies dropping that Ireland is not a functioning democratic republic, and never has functioned as such.

      BrendanW, the ‘elite’ ruling this country are the explanation for all the aberrations plaguing POnzi Rep. Ireland is a centrally planned controlled dictatorship and until this ‘elephant in the room’ is taking on in totality by as many of our pop all the other perversities will continue. And if the setting up of a new political party takes on this challenge then yep, go for it.

  10. Calendar – This article touches the matrix of conventional Irish business throughout the country .Denial is over , so is shock and now the advent of Anger lands beside O’Leary’s Bull in the middle of the country.

    • gquinn

      I absolutly agree.

      The government should be issuing long term bonds for Nama (I do not agree with the setting up of NAMA but thats for another discussion) that way they will be able to fix the interest rate for a 20 – 30 year bond since interest rates are at historic lows and that interest rates can only go in one direction now, up.

      The time of talking nicely is over as we did not get results this way and lets call a spade a spade.

      Why do we have idiots governing Ireland?

      Ps: Lets also get rid of heireditry politics.

      • wills

        precisely gquinn, now is the time to call a spade a spade, the time has arrived, we may not like it, it may involve significant personal cost, But, tyranny is about too unleash itself across this isle if NAMA goes through. It will set a precedence and the elites will decide that they now can do anything and get away with it.

      • Philip

        We have idiots running the place becasue we elected them. Maybe the notion of what citizenship is all about will take centre stage for a change.

  11. Garry

    I think the government has made a massive bet that Ireland will recover from this depression far earlier than France/Germany. But they probably are too stupid to realise this.

    Look at the NAMA funding approach, borrowing short term to meet long term debt with rollovers, crazy given recent ECB statements on their ‘exit strategy’. Ireland must be ahead of the game in recovery; or else we get higher rates and that is assuming the ECB will rollover…

    The gobshites seem obsessed with betting the future of the country on grand gestures, first the guarantee, now NAMA etc. All to hide the sins of corrupt politicians and banksters.

    They are out of control, a bunch of fat drunken desperate gamblers calling for another round of double or quits.

  12. wills

    NAMA is all about a controlling group of elites testing the waters too see how far they can stretch the credulity and acceptance of the populace in taking their regime forward into a new economic paradigm.

    • Alan42

      There is no controlling group of elites testing the water to see how far they can stretch anything . They are just doing it . NAMA is a Juggernaut ( as David says ) with size 13 hobnail boots on screaming ” give me all your money , I ‘ve got me some bailouts happening ”

      FF have no choice , they have to bail out the builders , developers and the bankers . They know where the bodies are buried . Here is what will happen . NAMA will go after the developers for repayment . The developers and NAMA will agree for a repayment of say 15 cents in the Euro . NAMA will be in the development game but with no experience so it will turn to the same developers and say ” We would like to hire you for your expertise ” The developers will say ” OK , we will charge you x amount for our expertise . Developers will then buy land banks and prime developments from NAMA for a song in order to turn a massive profit . But how will they turn a massive profit ? I hear you say . Well the government , be it FF , FG or Labour will need to break even on NAMA and will have in place tax breaks all over the place . The money will come from the ECB . They will give it to us so that we don’t destabilise the Euro . All we have to do is mention the IMF once or twice in some easily deniable leak . At some stage we will run out of money or the ECB will finally discover that we are property junkies and turn off the tap . But by then all the vested interests will be well compensated .

      If the ‘ elite ‘ are so cunning why then has this happened ? Pyrite .
      Your a person of a certain age and income with everybody screaming at you to get on the property ladder . You lie to the bank and yourself and buy a house somewhere that you never ever thought that you would consider living . But you are on the ladder . Safe at last . Big mortgage but with a steady income . The nights out are limited but at least you are not a social and economic fool anymore . After a year or two cracks start to appear and you discover that your foundation is made up of pyrite . ” This is outragous , I will sue ” you shout . After all most of us think that a sense of fair play is operating in the world . Well maybe not in the third world ,but this is the first world . Anyway you are soon told that court action is to expensive or if it does go to court neither the buider or the people who own the quarry are responsable and it is also held up for years over legal technicalities . You can never sell that property , Not even in a booming property market as it is built on pyrite . That is real , it is before the courts and is a direct result of the Galway tent and brown envelopes . FF don’t have to dress it up , hide it or hope that some conspiracy theorist uncovers it . They do it very openly .
      With NAMA they will get away with it with ‘ long term economic value ‘ Thats their masterstkoke of spin . Nobody wants to be in negitive equity and everybody wants to believe in ‘ long term economic value ‘ even if they fully think that NAMA is just a bailout for bankers and developers .

      ‘ Oh but the Greens will stop it , after all they are the Greens and a party of high principle ‘
      I am in Australia and the Aussie Greens would rather see the whole of Tasmania unemployed than build a pulp mill there . They would shut down our number one export , mining . Thats what Greens are supposed to be like . You elect a couple of them to give the government a hard time over green issues . Minister Ryan has actually become a mouth piece for FF because he is is one of the few in government who can actually string a sentence together . He is about as Green as the guy who built Chernobyl .

      • Alan42

        Or even that some some conspiracy theorist never uncovers it .

      • wills

        Alan42, agreed, except on…

        First, “long term economic value’ a masterstroke of spin. Wouldn’t agree. I think the long term value stroke is born out of the mind of a kranky baby.

        Secondly, the greens are made up of a group of people and they require two thirds of party vote support fro NAMA to fly so, i reckon based on the law of averages and due to the scale of the NAMA crime the statistical probability of at least 33% of the members putting aside concern for their own house value drop and voting with a some moral code are rather high.

        Thirdly, people who post about elites are not necessarily conspiracy nut’s, but, elites do convene in secret and plan clandestinely, which is conspiring, technically speaking.

        • Alan42

          Explain more about the cranky baby theory .

          The Greens will back NAMA .

          I was not having a go at you for posting about elites . I was trying to make the point that FF don’t have to conspire in secret . We the Irish people are addicted to property and extremly bad government and would just about accept anything .
          Its somehow perfectly normal in Ireland for the media to openly ask An Taoiseach about his rumoured alcoholism . That would be stunning in any other country in the world where the government don’t wear uniforms .
          During the Oz election campaign it was revealed that the leader of the opposition had once had a heart operation . The opposition party were all over it . ‘ Was he fit for office ? ‘ ‘ Could he die in office ‘ ‘ Release all medical records now as the electorate have a right to know ‘

          • wills

            okedok Alan42. Got it on the elites. We’ll soon see on greens.

            kranky baby theory goes as follows. The ‘gombeenism / cute hoorism mindset, which is kranky babylike nonsense comes from the mentality of an island race moribound in stage II of sexual development – anal stage.

  13. Philip

    There is increasing desperation and well done to David for highlighting the matter. What worries me is that reason behind this is now becoming irrelevant as people will be looking for a scapegoat.

    Yes NAMA, stupid business models, people’s idiotic voting styles etc etc are all coming back to bite – but the fact is, you will see a lot looking for succour. Anger is starting to become apparent. We had the petrol bomb into the windows in the Dept of Finance the other day. Who know’s what’ll happen next. And if you think we are not capable of it, just witness what happens to a referee when he makes the wrong call in an intercounty hurling match.

    We will not have to wait for an interest rate rise to kick it off. Did anyone see Frontline this week…the Public Service and Private Sector were irreconcilable. There is terrible division in this community and it needs to be recognised fast before it gets nasty. The economy is broken and we need to ensure social cohesion does not do a wobbly as well.

    • liam

      Philip, I hear that Cowan’s approval rating is on the up and the FF are recovering lost ground in the opinion polls. Still crap, but an uptick! You can add that to the breakdown of reality.

  14. VincentH

    Surely, another headache is that these people have leveraged their income in the base business to finance questionable investment elsewhere. If, as you write that investment is in expansion, then there may have some hope as coupled with interest rate there is likely to be a rise in inflation.

  15. liam

    Business that were based on the insatiable appetite for consumption of Breakfast Roll Man or DIY Decklanders are surely not worth saving? The economic reality has changed and if they are up to their eyeballs, its most likely because they drank the same cool-aid as the ten-times salary mortgage chancers. If you go in to business these are the things you must accept as risks, something the Irish seemed to forget about in the last ten years.

    One of my memories of Ireland is that most small business owners think they deserve a living just for showing up in the morning. The level of customer service I have experienced outside of Ireland, especially in struggling Japan, is staggering by contrast.

    The sin of NAMA is that it will probably destroy consumer spending, which makes things harder for all businesses.

    • wills

      agreed , but, just because people are greedy or lack savy in business cannot takeaway from the fact that the centralised banking system is used in a corrupt and extreme immoral fashion to steal and destroy the free market system and preserve a totalitarian system kept invisible.

  16. wills

    Bloggers, fantastic debate on GLOBAL WARMING HOAX, with malcolm and liam over on ChINESE TAKEAWAY article.

  17. MaxKeiser

    For one moment kindly consider the following as an alternative framework through which to view NAMA (rather than a kidnapping):

    Now, the primary rules are:

    - Never allow the public to cool off

    - Never admit a fault or wrong; (never concede that there may be some good in your enemy)

    - Never leave room for alternatives

    - Never accept blame

    - Concentrate on one enemy at a time and blame him for everything that goes wrong

    - People will believe a big lie sooner than a little one; and if you repeat it frequently enough people will sooner or later believe it [or get worn down].

    It sounds too familiar.

    David McWillliams really hit on something when previously describing NAMA as our Economic Stalingrad.

    These primary rules are not my words but those of United States Office of Strategic Services when analyzing the psychological profile of Adolf Hitler’s.

    With Lisbon, Lisbon II, NAMA, Budget, Strikes, Civil Unrest… what comes after that?

    Plus this is without mentioning the scandals that just run & run: Fás, (Sexual) Abuse, Expenses etc..

    “Never allow the public to cool off… never accept blame …never leave room for alternatives…” is what David McWilliams & Tim (in his link) describe above.

  18. jim

    Gavin Sherdian has been doing a bit of drilling down into Anglo Irish Bank and some of its subsidiary’s and uncovered a veritable who’s who of Irish Buisness connections……”.Well I never met de bate out of it ” as they say in Ireland….worth a read http://www.gavinsblog.com/2009/09/29/anglo-irish-bank-part-1/

  19. Alan42

    I am just waiting for Tim to come on and tell us how anybody in FF who has any morals has been sidelined
    I have been away for a while Tim and I have not been able to follow up on why you a member of a party but don’t seem to support any of its policies .
    So why are you a member of FF ?
    Is it a family thing ?

    • wills

      I’m not tim, but, ‘the family’ quib is a bit ungracious surely. And, are you saying tim is required by you to agree with FF policy.?!

      • Alan42

        Not at all Wills . But is Tim not a member of FF ? Maybe I got the names mixed up but I am pretty sure that Tim is a member of FF . If he is I would like to know why he does not support FF policy , re NAMA etc . He even quotes Joe Higgins . Its not personal , I am not trying to score points . I am not hiding behind the internet and poking fun . I simply want to know how somebody can be a member of a party and yet not support its policies . NAMA is the biggest gamble in the history of the state and I wish to know why he does not support it and what FF policies he does support ..

        • wills

          Alan42. I’m not sticking up for tim here, and he is well able to do that for himself, but, maybe he doesn’t agree with FF NAMA policy and some others too ‘cos he is appalled. i’m not too much of a politico type but it makes sense too me that a person can be a member of a political party and not agree with the parties concurrent policies, one can be active on the basis of ones committal on the parties credo, or, hope for renewal, or a return to true FF modus vivendii as tim deems it to be…,, !!

          How’s the weather down there, anyhow’s, and, is NAMA receiving any coverage media wise.

          • Alan42

            Moving into summer now so I will be in shorts soon enough . NAMA and the Irish economy has recieved a lot of coverage here . One full page article here in a broadsheet was titled ‘ A Tiger Tamed ‘ it had 2 photographs . One of the famine sculpture down the Dublin docks and the other of a soup kitchen in Dublin . Lots of talk of bail outs for developers .

        • Alan42

          I have gone back over the site and checked and yes Tim is a member of FF . I asked about his family only in relation to his membership of FF . Is is a family tradition ? You know the old civil war politics etc ? Blue shirts etc . I simply wish to know .

          • wills

            Alan42. ‘a tiger tamed’ piece sounds just, how can i say this, dreadful, this banker / construction / speculator chapter is going to require something more than a riverdance or u2 to sort out for us all abroad.

          • Colin_in_exile

            Alan,

            I think Tim defines his FF membership as “anything but the blueshirts”. We don’t bother with it here anymore, we just accept it and move on. Tim thinks farmers are the salt of the earth. I think farmers are the cause of our problems (along with bankers and developers), land owners selling land for profit to developers, land owners getting hugely compensated for facilitating required installation of national infrastructure, etc….

            Tim has followed in the same footsteps as Dev, born in USA, raised in Rural Limerick. He can’t help it. Its not his fault, he probably was indoctrinated at a very early age. He might be in line for inheriting a farm there too. He can’t be sacked from his job unless he sexually abuses one of his pupils, so everything is hunky dorey for our friend Tim. Tim considers people who leave Ireland to be quiters – I wish he’d walk down the Holloway Road in London and tell the elderly Irish that to their faces. Its the Pee Flynn School of Cute Hoorism, the Charlie Haughey Dept. of Ethics, the Bart Ahern College of International Finance.

            But I like Tim, its not personal, he represents many many Irish people. I wish he’d rattle a few cages in his local Cummann, I want to see his name in the paper as a FF internal reformer, demanding better representation.

  20. wills

    David, webmaster. Really appreciate the new format.

  21. Deco

    Well this is an interesting article – as it in in the underbelly of the Taoiseach’s constituency.

    Retail has peaked in Ireland. It might not look like that as you fly around D2/D4/D6 and listen to teens babble away talking nonsense. But outside of the affleunza belt, in the core production belt as such, West Dublin, the Midlands, the provincial town centres, retail is on it’s knees.

    A big issue for retail is rates. Quite simply rates penalise everybody, and ensure that the multibranch operators with a centralized warehouse and centralized buying can cover the fixed overhead much easier. Various politicians decide that they will increase commercial rates, and all it does is push small businesses over the edge. But there is no other was of funding local govenment. Local government is incorrectly funded, and local businesses carry the cost. And then on top of everything else, there is corruption in planning, and policy decisions coming from Brussels and Kildare that end up bankrupting local government. In think Meath Council holds the biggest debt level at 90 Million Euro – and is directed by government policy to keep pushing it upwards – but is getting no government bailout to fix this.

    In fact it would seem that the government is more interested in bailing out incompetent bankers, and stupid gambler-developers, before thinking about either social services, or local councils who get the bill for providing such services.

    Ireland is finished because that is the only political achievable consensus that the various elements of the establishment can agree up upon. As Cowen keeps saying “going forward” or more recently has changed it abit to “moving forward”.

    Moving forward – like lemmings – all over the cliff of financial collapse, into an abyss of debt.

  22. wills

    On NAMA. Here’s further analysis on it’s nut’s and bolt’s, i’ve uncovered which is worth typing out for perusal.

    ‘the crisis in irish banking wasn’t caused by mortgage defaults and mortgage debt right offs. The mortgage loans were very much on the books. The problem instead lay within the complex world of property loans for speculative purposes, which amount to ten’s of billions of euro(50 – 90 billion), which were funded through credit purchases on the international money markets, dodgy share deals, and creative accounting through the temporary transfer of billions of euro from one irish bank to another.

    With regard to this time last year it was the decision of the irish gov to protect ANIB, it’s property speculator customers, and it’s shareholders at any cost which tipped the balance from the crisis to meltdown. Anglo Irish does not even sell mortgages, at least not to ordinary householders. the gov could have let the Anglo Irish go as a failed bank, and put all it’s financial weight behind AIB and the Bank of Ireland. The policy straitjacket the irish gov now find’s itself in was not imposed on them from outside forces. It binds were tied through decades of corrupt financial practices involving FF and Irelands financial and construction worlds (allegedly}.

    The speculators and bankers play the tune, and it was time for the’ FF monkeys to dance.’

    • Tim

      wills, your analysis here is reasonably accurate.

      My “reasonably” caveat arises from the inherent assumption in this post that “FF member”, “speculator” and “developor” and “banker” are all seperate people.

      Would it change your analysis, if I presented you with a person who is all of these, at once?

      A FF member who is a top banker who also happens to be a property “developer” who speculated on the property-market?

      Shakespeare was right about human nature (about 500 years ago): “Oh, what a tangled web we weave, when first we practise to deceive.”

      [note: "practise"]

  23. VincentH

    The Rate is not really the issue, I thought it was, but really it is a drop in the ocean of idiotic policy that washes round every county town. But the biggest issue is the rents, for even with those who own the shop have established a tax efficient system that has the retail renting from a separate company that owns the building.

  24. djv

    david, on the frontline the other night a comment was made that developers should be taxed to filled the hole in the public finances , to which the reply was that they are all bust so whats the point. .The truth is that it is the landlord class in ireland (of which developers are a subset) that is bringing the country to its knees. all these arguments between public and private sectors miss the fact that the cost of doing business in the form of hugely expensive leases is crippling both sectors of the economy. For example people in the HSE have told me that there lease costs are so huge (with upward only rent reviews) that they are forced to cut costs wherever else they can due to the inflexibilty of there lease agreements. this is the same predicament experienced by the private sector. therefore it is imperative the country find a way to either reduce the cost of doing business(ie the leasing of buildings in ireland ) OR THEY IMPOSE A DRACONIAN TAX ON THE LANDLORDS OF BUSINESS PREMISES WHO ARE HOLDING THE WHOLE COUNTRY TO RANSOM.this is the primary weapon that should be used to plug the budget deficit EVERY MONTH ACROSS THE COUNTRY HUGE FUNDS ARE PAID IN LEASE FEES AND AN INCREASE IN TAX ON THIS INCOME WOULD PLUG SOME OF THE FINANCIAL GAP.ALSO THESE LANDLORDS SHOULD BE NAMED AND SHAMED. EG WHO ARE THE COMPANIES RENTING PREFABS TO SCHOOLS FOR EXORBOTANT RENTS. THIS SHOULD STOP IMMEDIATELY OR THE INCOME TAXED AT 80%. david your view in nama may be correct but it should be used as a vehicle to aggresively take into state control assets that can be used for the public good. I BELIEVE THAT IF YOU START A CAMPAIGN TO GET THE LANDLORD CLASS TO PLUG THE WHOLE IN THE COUNTRYS FINANCES IT WOULD RECEIVE GREAT SUPPORT . if this measure proved insufficient to raise the required funds then the public sector would at least see that the main beneificiaries from the boom had been targeted and would have more reason to accept any sacrifices they would have to make down the road. AS A BLOWIN I FEEL THAT I CAN MAKE THESE COMMENTS WITH NO BIAS AND HAVE MORE CHANCE OF BEING HEARD .

    • Colin_in_exile

      Excellent post djv.

      Landowners & landlords are screwing the country. But the FF Cowen response is that to do anything else is illegal. Why can’t Cowen bring in new laws forcing landlords to reduce rents? Isn’t that why we have a fcuking parliment in the first place? Its obvious he’s protecting the status quo and serving the interests of the powerful and mighty.

      • wills

        what if djv turns out to be in FF, and american irish..? will you extend the same courtesy..?

        • Colin_in_exile

          Yes I will.

          He’s clearly speaking the truth.

          Btw I’ve no problem with American Irish. I’m a big fan of Frank McCourt, less of a fan of Dev though.

          And If he’s a member of FF, I’d be first of all highly surprised, and second of all expecting great things of the grass roots in FF in rescueing this country.

          Maybe we can get to the bottom of why people like FF from this exercise?

          Do you like FF wills?

          • Tim

            Well, I like djv’s post. I also like your challenge to Cowen, Colin_in_exile, to alter the law accordingly.

            He is our chief-legislator, after all.

            “Paid to legislate and communicate the wishes of the people, the messenger to An Dail is.”, said Yoda.

          • Colin_in_exile

            Come on Tim, Get the ball rolling. Use your networks. Fight the good fight! Speak the truth and shame the devil.

          • wills

            Colin-in-exile, i’m only prepared to answer this question if you agree to stick to the debate on it’s merits and not veering into innuendo. Get back to me on whether you will or not.

          • Colin_in_exile

            Wills,

            You sound like Sean Ardagh on the Vincent Browne show! Perhaps that is you Sean, writing under the name Wills.

            Don’t worry, I can figure out from a scale of slyness what political party you follw.

      • liam

        Agreed on the screwing! Regardless of the Government motives however, it would be an illegal market distorting manipulation. That non-action protects landlords does not mean that action is less illegal.

        NAMA is also precisely that, a (most likely illegal) market manipulation and that is probably where the focus should be. Kick NAMA in to touch and many of the other problems sort themselves out.

    • liam

      Welcome djv

      Generally, there is always popular support for the idea of taxing the rich or those perceived to be rich, especially if the gains are painted as ill gotten. Trouble is, the additional costs will simply be passed on to the rent payers, not absorbed by the landowners. It would in fact reduce the general money supply in the country as it would simply replace spending paid for with borrowing with spending paid for by taxation. As a general principle one should seek to reduce taxation during a period of economic hardship to encourage spending or at least put the brakes on contraction. Unfortunately your leaders already threw away that particular level during the boom, resulting Ireland having one of the lowest overall tax burdens of the EU.

      An alternative would be to let the banks fail in a controlled manner, via examinership, the consequences of which would most likely be a collapse in property values and rents. This solves the problem you proposed and it also helps restore competitiveness of the economy. Ireland would still have to borrow heavily in the short term, but the NAMA noose would be removed from around the necks of the taxpayer.

      Just as an aside, all-caps is quite hard to read, I generally imagine somebody SHOUTING :) but I appreciate you are just highlighting your point.

  25. MK1

    Hi David,

    I dont agree with the title of your article that “Why economic recovery can be bad for business”. Economic recovery by definition can not be bad for businesses on average.

    I dont think problems in businesses are more acute in rural areas outside the metropolises. Sometimes cities can mask problems, but they are still there.

    Of course businesses should be segmented into many types of categories based on the amount of leverage they took out.

    Some will have been ‘caught with their pants down’ more by being in the wrong part of expansion when the so-called business cycle turned negative.

    Some will have been risk taking well above their element and were ‘false’ businesses only there due to the swathe of cheap credit available.

    And some will be those that didnt partake in any excessive borrowing but are now being squeezed as the banks themselves are reducing credit lines etc, forceably, in an attempt to build up their capital base.

    We could have 100′s of categories.

    But business has nothing to do with Lisbon, and Lisbon has nothing to do with NAMA. Ganley, Michael O’Leary and Vincent Brown recognise this, even Pat Kenny I think. You certainly do.

    Someone wrote> We have idiots running the place becasue we elected them.

    Exactly. People may huff and puff at these meetings but have 38-40% of them that voted in FF looked in the mirror and asked themselves what the hell have they done? In 1997, in 2002 and 2007. 2007 is sooooo recent.

    Someone hanging on a wooden cross once said “forgive them for they know not what they do”. I think that is being repeated every 5 years or so in the Dail elections, dont you???

    MK1

    • Colin_in_exile

      MK1,

      FF won the last election by telling the voters “we’re a safe pair of hands, the others have no experience”, and the 40% bought into it. I remember RTE presenters even putting this line to opposition candidates prior to the election. Now excuse me, but will they be saying this again in 2 years time when the next election comes around?

      Now I’d understand a surgeon being asked at an interview for a Chief Surgeon’s position about past experience, but in the world of politics, what in God’s name has experience got to do with it?

      Shouldn’t there be some kind of ethics test one needs to pass before putting themselves forward as a political candidate? Fail the test, you can’t govern!

    • Tim

      MK1,

      “But business has nothing to do with Lisbon,”

      Pedantic on semantics, perhaps, but Lisbon is ALL-about-business!

      That treaty institutionalises the free-market-globalisation-privatisation-business-model that has brought us to this morass.

      It iss too late. It promotes, in its articles (particularly 113-118) what is, now, PROVEN to be a FAILED capitalist, free-market system.

      It does not work.

      It crashes economies, allowing the few to profit, while plunging the many into poverty and serfdom.

      “Business” does not care, MK1.

      • MK1

        Hi Tim,

        Yes, I agree that Lisbon if passed could be used to further embed the “free-market-globalisation-privatisation-business-model”. However, if we vote NO we dont move to the diametric pole of that, we are still in that model. And if we vote NO we are still embedding globalised business models further in practice, albeit that the global credit crises has caused a hiccup.

        I think the general principle still applies though, that Lisbon is nothing to do with markets/business/economy per se.

        FG have posters that state vote Yes for Europe, Yes for Recovery. This is the largest party in the state according to latest opinion polls, yet, the Lisbon proposal is NOT about being a part of Europe and it is NOT about Recovery.

        Vote Wisely …… and Often if you have to! ;-)

        We reap what we sow.

        MK1

  26. jim

    So Seanie Fitz is not paying interest on the 100 million He borrowed from Anglo,400k per month it costs US the new owners.Would’nt it be ironic if He was lets say experiencing cashflow problems as a result of His investment in that Casino in Macau. Bye the bye when He was asked about it He said “I dont talk to the Media”.What a difference that makes from the time He had all sorts off opinions about things ,from Medical Cards to taxing Social Welfare etc. etc. Ahhh Well I suppose we’ll just have to struggle onn repairing the Economy without Seanies Pearls of Wisdom. Jasus if He had any heart He could have at least told us all to go and “eat cake”. p.s. Of course it does beg the question as to how all the other Employees of Anglo past and present are doing with their loans.I wonder was that 100 mill. of Seanies part of the 3.5 BILLION Anglo loaned out to “Private loans” re their recently illuminating published Accounts supplementary publication.I say supplementary as these matters were not quite ,lets say ,flushed out in their original Published Accounts of Sept.08.Then again the DOF were’nt paid for that particular punlication.

  27. Tim

    Folks, I have been struggling to keep up with your many worthwhile posts (as well as those, indicated by wills, from Liam and Malcolm McClure back on the “Chinese Takeaway” article.)

    The education cuts have meant that my work in an Irish Secondary School has increased dramatically, especially in attempting to “plater-over-the-cracks” and somehow sheild the students from the worst excesses of the cuts. Everyone is working harder, but it is taking it’s toll on energy levels/alertness.

    On my computer work, the recession is showing that people who, a year and a half ago, were throwing away their broken PCs and buying new ones, are now asking, “Tim, can you fix this, please?” – so that is doubly busy as well (its an ill-wind, they say…..).

    I’m sure that you have all noticed the flurry of “stuff” coming at us in the last few weeks to befuddle us: conflicting views on NAMA, on Lisbon2, on Job loss figures, on scandals, on morals, on DPP decisions, on numbers of people at protests, on Trade Unions, on Swine-flu, on governments, on oil, on gold, on little Tsunamis, on, on, on…….

    ….. Anything to distract us.

    We have been flooded with the NAMA issue – maybe in the hope that we would get bored with it and give up our interest in it?

    We have not.

    Cue the flood on Lisbon2……

    That’s over now: it is after 12am on the night preceding the ballot, so bradcast media will have to find something else to focus on from tomorrow and Friday.

    Will that be NAMA, or some “distraction”?

    We’ll see…..

    Saturday, Sunday and Monday will plaster the results of the referendum all over the place. (Will Kenny’s “Frontline” on Monday look forward to NAMA vote in the Dail, or will it look “back” at the result of Lisbon2, do you think? [I predict it will look back]).

    Then, Nama again; and the TRUTH about it has still not reached enough of people to cause sufficient civil action.

    Alan42, you are, indeed, correct: I am a member of Fianna Fail.

    You looked back and confirmed that from, I expect, one of my many posts about it.

    You must have stopped there, though, and not gone back through all of the many posts (over time) wherein I explained at length why I remain within that political organisation.

    I have (I hope) been as honest and truthful in my posts to this site as I can be; I am not hiding anything and I am confident about being myself and posting accordingly. The questions that you have asked about my membership of FF are legitimate questions. They require answers and, indeed, deserve them. However, I have already provided those answers/explanations, countless times.

    In fact, if I get a chance tomorrow, I will search and find a link to one such answer and re-post it for you. Please understand that I intend no disrespect towards you, Alan42, by not answering your questions directly, but, I must say that it has become rather tedious having to face the same questions, time-and-again, from almost every-single-person-who-decides-to-read-and-post-on-this-site.

    In the meantime (to be brief):

    Am I a member of FF? Yes. I am Chairman of my Cumann.
    Do I agree with what the Parliamentary Party FF has done? No.
    Do I have the right to challenge what is being done? Yes.
    Am I challenging it? Yes.
    Do I have support (from within) for my position? Yes.
    Do I believe it is good that I should cultivate this change? Yes.
    Is it still worth-my-while investing my time/effort/energy/money into promoting this change? Yes.

    wills’ assertion “he doesn’t agree with FF NAMA policy and some others too ‘cos he is appalled”, is hitting the nail on the head, pretty much. (wills is a pretty sharp tack).

    Let us not be distracted by my personal political status; let us, rather, dedicate ourselves to deconstructing the narratives before us and eek-out the truth (though I do accept that, for you and many others, there is a “trust-issue” to be overcome with me as a poster, perhaps, first. It is one reason why I have been OTT honest and up-front here; I know that people have “issues” with the bona-fides of FF members).

    Is there to be no progress?

    (You are correct about the “pyrite” issue, of course, and many other things).

    Oh, and by the way, Alan42….. The only person in FF that I canvassed for in the last General Election was Joe Behan TD; so, if you want to know who in FF who has morals and was “side-lined”, he is my first answer to your question (although, I know he sidelined himself by resigning from the party and government, according to his own principles, over the education cuts — he is a school Principal in Bray, after all).

    • Colin_in_exile

      Tim,

      How will Behan vote on NAMA? I’m asking cos I’m sure after all the hard work you’ve done for him, and if we are to believe you when you say he’s an honourable man, that he has informed you of where he stands on it.

    • Alan42

      Thanks Tim , Sorry that I should make your life tedius . The talking down to me made me feel right at home .

      Why are you a member FF ?

      What policies do you support ?

      Why have you sent my country bankrupt ?

      Why am I looking for jobs in Australia for stunned young Irish people who have been displaced from their homeland by your economic mismanagement ?

      Why did my Grandmother die in a hospital corridor for the want of basic medical care with the greatest boom raging outside the door ?

      Are you ok with the fact that your leader may be an alcoholic ?

      Are you happy with Mary Coughlan’s preformance ?

      Why do you make excuses about FF with talk of reform when FF was actually founded on corruption . Dev , the Sweepstakes , Irish Press etc etc etc etc etc

      How do feel about preparing your students for the life of an illegal immigrant in the US , Australia and elsewhere ?

      Any concerns about the fact that your party has put forward no plan for economic recovery ?

      You can answer these questions but only if its not to tedius . You can even speak down to me . I don’t mind as FF told me Ireland was to small for everybody in the 80 ‘s . I emigrated as I did not want to cause at concern at a Gandon mansion in North Dublin . I might have upset the horses or the 5000 grand bottles of wine may not have tasted the same with me hanging around with my unemployment .

      P.S , sorry about the bad spelling and grammer but the education cutbacks in the 80′s were just shocking .

      • wills

        Alan42,

        ireland is not bankrupt. It is dripping in wealth.

        How predictable, you go fishing for a ‘punch bag’ last night,. colin in exile directs too tim, and you come back on and go to your rant on tim, blaming him for bankrupting ireland.

        You’d do better than too get busy expending your energies researching this and getting to the bottom of the truth as it is.

        • Alan42

          Ok Wills . the gloves are off .
          I did not go fishing for anybody . Tim is all over this site and posts openly about his membership of FF . How he would like to reform it and how true FF’ers have been sidelined . He makes excuses for FF all the time . Yet he does not seem to support any of its policies . I simply asked him why he was a member of a party but does not seem to support any of its policies . Tim has the freedom to support any political party that he likes . He can support Stalinism or creationism if he likes . I actually don’t care what he supports or is a member of . But if he is to come onto a site that is mainly about the economy of Ireland and openly support a political party he should then be expected to be called on it . I am simply asking questions of him .

          Don’t tell me what I should be busy reserching or not reserching . I have my own mind . And before you tell me to mind my own business I hold an Australian passport and an Irish one . I also still pay tax in Ireland so I am entitled to ask questions .

          • wills

            alan42. Read tim’s response last nite to your ‘questions’.

            Are you on this site for some type of chilling effect on tim. If so, your wasting your time.

            Dmcw, does not just write articles on economy either.

            Plus, there is already one mediator, two is too many.

            Also, get over your FF fixation for god sakes.

          • Alan42

            Wills , what does a ‘ chilling effect ‘ mean ?

            I am on this site because I find the articles written by David to be very stimulating . There is a forum for discussion provided ( maybe not the right term , but hey I am in my 40′s and have just started thinking about moving from vinal to mp3 ) Tim and yourself are all over this site ( which if I was a conspiracy theorist would think were the same person , but surely not )
            So I am free to ask questions .

            My fixation with FF would stem from the fac that they have been in government for over 12 years in which Ireland has experienced a boom to bust . Resulting in a lot of poverty , unemployment , negitive equity and total dispair . As a tax payer I would simply like to ask a member of the ruling party just what excatly has he done with my money ( tax ) . Why I am spending over $ 40,000 AU to buy my parents a visa for Australia ( they are in the late 60′s , need a lot of medical care , are really concerned about FF getting their hands on their life savings .
            We then of couse have a close relative who is in need of 24 / 7 physiatric care who dispite me and my entire family paying tax for ,find that he is being cared for in third world conditions . And guess what ? I am paying for his private care from the other side of the world .
            So Wills if a member of the FF comes onto a site with lots of talk of his FF party and his membership of the same party I would think it is fair enough that I can at least ask questions of the same person .
            I would like to apologise to everybody for this serious sidetrack . I will now finish with this thread as it is not on topic .
            However you only get good government if you ask hard qustions and hold people to account .

          • wills

            alan, tim answered your questions last nite..

            regarding my own posting quota, i’ve just only started me bucko, wait till you see me in full flight.

          • Alan42

            What is my deal Wills ? I really want to know . I ask some questions and suddenly I have a deal ?

            I always found it hard to vote in Ireland . Never FF . I come from social housing in the 80′s , unemployment , crime , drugs , joy riding was the norm . The local shop was a shipping container on a piece of wasteland . FG were not us , more Southside rich Dublin , But gave them votes at times , Liked R Bruton , still do . SF never . The leader of the labour party once questioned my then Spanish girlfriend on her visa status in the 1990′s as she served him dinner in some restaurant in South Dublin . Spain being a member of the EU seemed to be lost on him . So no votes for them . Mainly independents and one for Bruton . Never met the man , I know nobody who has . I just like him .

        • Colin_in_exile

          Wills,

          What does “colin in exile directs too tim” mean? I can’t make sense of it, please explain.

          You never answered my question about FF membership after I obliged you by answering all yours. Any chance you can tell me where your political affilitations are?

          You are not the censor on this site so stop trying to act like one.

          Also, I’m sure Tim is big enough to fight his own corner, so maybe you should look after yourself.

          It seems to me Alan is raising valid points. Your attempt to gag Alan does not bode well for openness and transparency, qualities which I’m sure you’ll agree are severely lacking in Ireland, especially in political circles.

          • wills

            tim can fight his own battles colin. You must have missed my reply, have a look and get back too me.

            If i make clear to you ‘gaggin’ is not for me would you believe me.,,

            regarding openess and transparency in ireland,.. let me add this, you will find it in some quaters and not in others.

            regarding ALan42 it;s in plain site what the deal is,..

            by the way yourself and alan42 did not reveal your own political allegiance first, surely that is right thing to do before one goes off like a mad hatter round the farmyard barneeeeeeeoooooooooo,!!

          • Colin_in_exile

            Wills,

            Political Allegiances: I’m not a member of any political party. I’ve voted in past general elections like this:
            (1 FG, 2 Lab, 3 FF), (1 Green, 2 FG, 3 Lab), (1 Lab, 2 FG, 3 Ind) – I hope this is sufficient for you and your farmyard friends?

            I would appreciate simple answers to simple questions, not vague ones like “You must have missed my reply, have a look and get back too me.” Copy and paste the relevant text if you feel to lazy.

            Gaggin – we’ll see, actions speak louder than words.

            openess and transparency – very cryptic wills, just what we need here.

            regarding alan – tell me what’s the deal, I’d love to know, no cryptic explanations please

          • wills

            colin, never been lazy in my life, mentally or physically.

            I’m keeping my political persuasions to myself.

            You want too share your s with the world fair enough.

          • Colin_in_exile

            Yes wills, I oblige you by answering all your questions, and you still can’t answer my first question from yesterday.

            You have no right to rail against the cute hoorism endemic in Ireland because you are a cute hoor!

      • Tim

        Uh-oh! The game is up! I’m rumbled……………… again!

        By all means, come and “slap the cuffs” on me, Alan42; and as I take the “walk of shame”, we can both bow to Seanie, Goggin, Fingers, Neary, Connolly, et al, as we pass by.

        Sorry, Alan42……. That comment is probably unfair to you. But I said that I did not intend any offence towards you, last night. I was tired and cranky and I just could not face a full and reasonable and reasoned discussion.

        It was, certainly, not my intention to be arrogant in any way; to talk-down to you in any way. I think I intimated that, in my view, your grievances are legitimate and righteous, in my view. I would see you more as an ally than an enemy (though you may bauk at that, right now).

        Your post, above, lists many of the points that I have a huge problem with; I am, simply trying to get those points heard, listened to and actively addressed; The tac I am taking is that I may have a better chance of getting that done as a member inside the “tent”, than as a non-member, outside of it.

        Don’t get me started on education cutbacks….

        ….. its not pretty!

        • Alan42

          Tim , good to have you inside the tent , fighting the good fight . But answer the bleeding questions .
          Did you think that response would shut me up ? I am even more concerned now that I discover that you are a teacher . In Ireland that qualifies you to be minister for finance with several pensions .
          I don’t want you inside the tent or outside the tent . In a normal first world country there is no tents . If you feel the need for a tent , put a match to the tent and answer some questions .

          • Tim

            Alan42, I am willing to engage with you in debate; however, this post (above) has the appearance of “trolling”.

            You are angry; I get that – I accept that; moreover, I accept that you are directing your ire at me, even though I never had a whiff of your money, though you alleged, earlier that I had [to whit: "I would simply like to ask a member of the ruling party just what excatly has he done with my money ( tax ) ."].

            My allusion to the “tent” was a metaphorical one ( the saying about p***ing out, rather than P***ing in one), not any reference to a real “tent” – Galway, or anywhere else, that might have a match put to it, as you suggest.

            “But answer the bleeding questions .”

            To be honest, Alan42, I thought I had, here:

            “Am I a member of FF? Yes. I am Chairman of my Cumann.
            Do I agree with what the Parliamentary Party FF has done? No.
            Do I have the right to challenge what is being done? Yes.
            Am I challenging it? Yes.
            Do I have support (from within) for my position? Yes.
            Do I believe it is good that I should cultivate this change? Yes.
            Is it still worth-my-while investing my time/effort/energy/money into promoting this change? Yes.”

            “Did you think that response would shut me up ?”

            No, Alan42; I did, however, think that you might accept it as an answer, even if not the precise answer that you wanted.

            Being a teacher in no way “qualifies” me for being a minister for finance, as you say, though.

            I don’t understand your deliberations on the “tent”, I’m afraid, but I am not going to “put a match” to anything, just yet and I am, at all times, answering questions.

            Have I misunderstood yours?

          • Alan42

            I am not a troll or a goblin or the tooth fairy . I am not unemployed , in negitive equity ( in fact I gained big time from the housing bubble ) . I don’t even live in Ireland . I am in Australia and living ubder the rule of a normal government who had learned from a bank crisis in the 80′s and is untouched by the GFC . I am not even angry .
            You are a member of a party that had continuous rule for over 12 years of an economy that has gone from boom to bust with absolute dire consequennces for the people of Ireland . You are a member of that same party and I have asked you some questions .
            You can either .

            A . Ignore me and not answer the questions .

            B . Answer the questions .

            However I will not accept you talking down to me or patronizing me by teling me I am angry etc .
            I will also not accept you dismissing me by surgesting that I am a troll .

          • liam

            Lads, we’re all on the same side… this is just wasted energy. Now make nice and give each other a hug FFS :)

  28. jim

    So the credit crunch has arrived in Gombeensville,the FF heartland ( FF fared less well in the citys last Election).So now the “high rent takers” who had no problems with their extortionate mark-ups during the boom and bored the shit out of all their friends (away from customers earshot) with their latest buy to let in F.cking Bulgaria etc . are starting to realise that the Ear ot the local FF Chieftan will not be enough to save their asses.Well Im sure they were listening to you David ,even though they demonised you for years.What were they hoping for,someone to say “There There” all will be fine,just hold onn to yere Victorian value and Buisness systems,keep taking the pennys from the greasy till and stack them on the FF plates after Mass on Sunday’s and Brian’y will weather the storm for ye.Well I can tell ye this that the Governmental and Political structures that have been in Ireland since the foundation of the State are only usefull for the purpose that the British designed them for and that was to keep control of a colonised People. Thats why Europe is high on the Agenda,not for the opportunities it provides for the Citizens of Ireland,but for the shadow of Empire it casts,giving cover for a permanent Civil Service(thats anything but Civil) that is in itself TOTALLY bereft of even to most basic of original ideas.Just as the British provided the infrastructure in the past,now it seems that Europe will be responsible for the present and future.FF and the rest of the Politicians will plod onn with their usual “County Councillor” mentality,screwing,stroking,wink wink shit they use to pull with great skill over the British only now it will be the Germans ,French etc.,,, Ah sure its not our Money were spending, thats from a grant, subsidy yada yada. Jasus ye have nothing to do only listen to that fool Fahey with His bulshit remarks of ” Nama wont cost the Taxpayers anything, the ECB is paying all the money. God give Me patience with these Masters of the foolish phrase. I’ve said it before People “root and branch reform” ” root and branch” take no prisoner’s, dont be fobbed off any more ,ye have nothing to loose but yer chains.Goodnight Ireland .Sleep well.

    • Colin_in_exile

      Jim,

      Any chance you could give us a loan of your ex Prime Minister John Howard for a few years until the country is sorted out, if he’s not too busy?

      • Alan42

        We could send you Howard . But trust me , you would not like it . Neither would FF , the unions , civil rights groups , the unemployed and those with jobs . ireland would be screaming for a revoltion after about 5 minutes . But for some real action you should be looking at Peter Costello , our ex Minister for Finance . total shock and awe !

  29. djv

    I intend to keep posting the comment below on various websites until i feel it has hit the public domain.

    david, on the frontline the other night a comment was made that developers should be taxed to filled the hole in the public finances , to which the reply was that they are all bust so whats the point. .The truth is that it is the landlord class in ireland (of which developers are a subset) that is bringing the country to its knees. all these arguments between public and private sectors miss the fact that the cost of doing business in the form of hugely expensive leases is crippling both sectors of the economy. For example people in the HSE have told me that there lease costs are so huge (with upward only rent reviews) that they are forced to cut costs wherever else they can due to the inflexibilty of there lease agreements. this is the same predicament experienced by the private sector. therefore it is imperative the country find a way to either reduce the cost of doing business(ie the leasing of buildings in ireland ) OR THEY IMPOSE A DRACONIAN TAX ON THE LANDLORDS OF BUSINESS PREMISES WHO ARE HOLDING THE WHOLE COUNTRY TO RANSOM.this is the primary weapon that should be used to plug the budget deficit EVERY MONTH ACROSS THE COUNTRY HUGE FUNDS ARE PAID IN LEASE FEES AND AN INCREASE IN TAX ON THIS INCOME WOULD PLUG SOME OF THE FINANCIAL GAP.ALSO THESE LANDLORDS SHOULD BE NAMED AND SHAMED. EG WHO ARE THE COMPANIES RENTING PREFABS TO SCHOOLS FOR EXORBOTANT RENTS. THIS SHOULD STOP IMMEDIATELY OR THE INCOME TAXED AT 80%. david your view in nama may be correct but it should be used as a vehicle to aggresively take into state control assets that can be used for the public good. I BELIEVE THAT IF YOU START A CAMPAIGN TO GET THE LANDLORD CLASS TO PLUG THE WHOLE IN THE COUNTRYS FINANCES IT WOULD RECEIVE GREAT SUPPORT . if this measure proved insufficient to raise the required funds then the public sector would at least see that the main beneificiaries from the boom had been targeted and would have more reason to accept any sacrifices they would have to make down the road. AS A BLOWIN I FEEL THAT I CAN MAKE THESE COMMENTS WITH NO BIAS AND HAVE MORE CHANCE OF BEING HEARD .

  30. liam

    Good evening all,

    I was recently made aware of the following IT article which suggests that in the particularly exposed SME sector, loan rates by the Irish banks are proceeding a-pace:


    According to AIB and Bank of Ireland, there is no shortage of money available to SMEs at present. “We are sanctioning nine out of every 10 applications [for credit],” said Denis O’Callaghan, AIB’s general manager of retail and SME business, adding that the Mazars report backs up the bank’s figures.

    I have also been made aware informally that the banks BDM’s and account managers have been instructed to pre-screen loan applications and to discourage the more risky propositions from making formal applications. I suppose this is not a surprise and may be old news to some of you, But it was a depressing moment for me, and its related to the OP, so I though I’d bring it up.

    http://www.irishtimes.com/newspaper/finance/2009/0918/1224254802700.html

    • wills

      Liam, doesn’t surprise me in the slightest. I’ve always contened the banks are not in a credit feeeze in the real world and that the credit freeze is a scam hatched by the shadow banking elites to manipulate things forward into a replacement for the fiat money system now on the horizon. The ‘credit freeze’ is merely a production, and part of a greater overall narrative / masterplan afoot. (i’m not assuming you dont know this by the way).

      • liam

        Hi Wills,

        I think its probably simpler than that, at least in the case of the Irish banks. The are acting in the best interests of their shareholders (finally!) under the current conditions, by accumulating as much capital as possible. The banks have absolutely zero motivation to lend or take risks as they are fully aware that the economy is banjaxed, and will be for a long time if NAMA goes ahead. So long as the ECB is giving them free money, why bother being competitive?

        I’ve been thinking about what you have said here and in other posts and come to the following conclusions:

        In a philosophical sense, debt is slavery, and in this case and entire country is being enslaved. If you want to call this the hand of the shadow banking elites, that’s fair enough. I don’t think there is much that is shadowy or hidden about it. I’m certainly not endorsing them but I’m sure you will agree the behaviour and motivations of the ECB and Government are reasonably obvious to anybody that cares to take an interest. Unlike yourself, few have the inclination to do so.

        As you have probably guessed, I’m not quite yet ready to accept the concept of a secret conspiracy to rob us, in part because I’m not yet convinced it is so secret. I’m also acutely aware that the language that is used in describing these issues can sometimes be a weakness in constructing an argument, not because of any inherent inaccuracy, but because of what I can only describe as the psychology: if one is already ten steps ahead of the curve, there is a risk of bamboozling those behind the curve that you are trying to persuade. I, personally, find the language of conspiracy difficult. Its not a personal jab, I just felt the need to explain this, I hope you understand.

        Anyway, good luck and really, do please keep at it, your contributions are energising.

        • wills

          Liam, let me float this your way, see what you think.

          First. The irish banks are part of a banking system which is modeled on a centralized banking system concept. The banks therefore are plugged into the central banks which are privately owned and print the money. This is the primary motive force governing all banking from the top down. Any consideration for shareholder value or capital provision of credit comes after.

          Secondly. I’m not declaiming ‘secrecy’ is for the ‘vested interests’ a modus operandi. In fact on ‘secrecy’ my belief is the ‘vested interests’ are not too concerned on secrecy atall because they’ve covered their base on how people are conditioned into non – observance of the truth regarding central banking oligarchy rule over society hitherto.

          Thirdly.’ Conspiracy’ in of itself merely a word indicating an activity and this word has become imbued with spectral meaning to and so carries with it a degree of unreality.

          If one applies a rational / empirical approach, as you quite spectacularly did in debate with malcolm on global warming hoax, too the area of the mechanics of the central banking system and analysis it rationally the facts as they are through an elementary deductive process show a controlling interest as a manipulating force through culture organising society – engineering social control on a space time continuim with a specfic agenda in mind, not held secretly, in fact going on all around us all the time but kept from the populace consciousness through mind programming and conditioning and agression and sexually induced trauma and a tactical use of ultra violence under pinning everyday life’s social interaction.

          One is constantly confronted with the refusal to move from ones comfort zone when it comes to the notion that a vested interest is always on the ready to force its hand to have its way when the time’s arrived to further integrate society into the next level of neo – feudal control.

          On constructing argument, i reckon i’ve articulated a particular viewpoint to a degree, no doubt it could be more cogent and academic like but after all this is merely a blog, that said, i can back up every word i assert with incredible research and intelligence and the like but this is not my forum so,,,,,,..

          • liam

            Interesting.

            Maybe you should write a book on this stuff, I’d buy a copy.

          • wills

            liam, bookwise you may find clockwork orange a good guide, or, noam chompsky’s works i highly recommend bookwise, or, shock doctrine which is right up to date or, more closer to home raymond crotty’s book, google it for a link. And of course, all press on NAMA is good ‘ol read to bear witness how the elites use black propaganda and mind control to juggernaut NAMA through.

            or, check out
            mairead mcguinness at pat kenny’s arnotts shop window lisbon debate 2 days ago,. 5 times over 60 minutes she instructed the listeners to switch off the radio stop listening and go outside and just think on voting for NAMA . I think its a podcast.

          • wills

            ‘voting for NAMA’ should read ‘voting for Lisbon’.

  31. Bella Cogniteratti – Tim , I believe one way to impact on the positive energy remaining on our isle is that you in your official capacity in FF to call for an Extraordinary Meeting of only all the Cummann Presidents in the country for an ‘Assemble Extraordinaire Connoisseur de Politic ‘ and elect a new group of Trusting Consensus of no more than ten .Their agenda should embrace everything we now see in the public eye and their decisions should be absolute without restraint and in the interest of the public first and last . Democracy is eroding fast and soon we will have no time left.

  32. Deco

    One Day without any of the nonsense about U-Rowup.

    And guess what ? FAS and ANIB dominate the news. Gormless is making soundings that indicate that he is more committed to NAMA than FF. And the country continues on with the normal corruption, wheeler dealing, deciet, PR and extortion.

    Did you know that Deisel went up 1 c per litre last night ? I found out, and there I was sitting in front a newspaper telling me that Seanie Fitz will not be paying interest on a 100 Million Euro Loan. This is the way things are going in this country, and we are going to have to do something to put an end to it.

    • wills

      Deco, don’t forget the free flights on ear fungus (aer lingus) and, as it is, seanie’s missed more than one months rent / interest on the loan, 400,000 per month interest, and continues to live the life of a hollywood movie star. It’s reached the point now deco, where the blatancy of the vested interests contempt for the ‘outsiders’ is so not hidden anymore it makes one ponder the fact that perhaps these guy’s know they ahve it all sown up and we all live now in a captured state.

  33. Gamble- Social Trust – When Developers borrow they gamble and maybe they will win or maybe they will lose.
    When a family buy a house they do not gamble and they do not intend to make a profit as in a business profit.
    What NAMA does it inverts this social bond and implicates the family to have gambled and the business person to a safe haven.
    The result is Social distruction and disorder and poverty.
    It makes more sense to take on the family home mortgages instead and release more confidence into the economy.

  34. Wills Ducktion Hose – do I deduce that seanie is now an uncrowned king of Ireland if we are all captured?

  35. hmm maybe uncrowned king of ireland but that would not do justice for parnell……still pondering who the real king of ireland is and who is his emperor in uk or eu

  36. ….wobble wobble wobble ….well seanie has ‘hair’ and ‘curls’….and always the courtier emulates his king and emperor……so…….what king/ emperor has…lots of hair?

  37. G

    David,

    You spoke about how great Indian development is.

    Well Booker Prize-winning novelist, political essayist and global justice activist Arundhati Roy has somethin to say about it, which may inform yourself and readers. Her books include the Booker Prize-winning novel The God of Small Things and her latest essay collection, Field Notes on Democracy.

    Taken from Democracy Now:

    “So, when India opens its markets, you know, because it has opened its markets, and because it’s–you know, international finance is flooding in, and all of that is so attractive, it is allowed to commit genocide in Gujarat; it’s allowed to commit civil war in the center; it’s allowed to have a military occupation in Kashmir, where you have 700,000 soldiers, you know, patrolling that little valley; it’s allowed to have laws like the Armed Forces Special Powers Act in the northeast, which allows the army to just kill on suspicion. And yet, it’s celebrated. It’s allowed to displace millions of people, but yet it’s celebrated as this real success story, because it has all these institutions in place, even though they’ve been hollowed out.

    So you have, for example, a Supreme Court in which there are very erudite judges, and there are some very erudite judgments, but if you look at how it’s actually functioning, it has hollowed out. To criticize the court is a criminal offense. And yet, you have judgments where a judge openly says something like–you know, that–I’ve forgotten the exact words, but how corporate–you know, a corporate company cannot basically commit anything illegal, cannot commit an illegal act, you know? Or you have a judge in court openly talking about, let’s say, Vedanta, which is mining in Orissa for bauxite. And the Norwegian government had pulled out of that project because of the human rights violations and so on; and, you know, for a whole lot of ethical reasons, they pulled out. And in India, you know, the company was taken to court, and a judge openly, in an open court, says that, “OK, we won’t give this contract to Vedanta. We’ll give it to Sterlite, because Sterlite is a very good company. I have shares in it,” omitting to mention that Sterlite is a subsidiary of Vedanta.”

    For more see: http://www.democracynow.org/2009/9/28/author_arundhati_roy_on_conflicts_and

  38. Tim

    Folks, I love this quote from wills:

    “Are you on this site for some type of chilling effect on tim. If so, your wasting your time.”

    I will engage, fully (if allowed by him), with Alan42, as and when I have the opportunity.

    However, I am rather glad that you seem to have my “measure”, wills. Amusing.

    • Colin_in_exile

      What’s to love about it Tim? You’re not making any sense.

      • wills

        Let me answer that one colin, whats to luv about it..?

        It’s accuracy.

        • Tim

          wills, correct.

          Colin_in_exile, I am surprised at you.

          You have been here, posting, longer than wills. You know that he exploded onto this site with, shall we say, “a rather unorthodox style”?

          I take “chilling effect” to mean a frightening/threatening/negative “Shut-up” effect (sort of like calling someone a racist:”what you say/what you are is offensive, so shut-up”).

          We must all try to interpret one-another, Colin_in_Exile. (and try to see the positive contribution made).

          • Colin_in_exile

            Tim,

            That sounds like a defence of obfuscation. We should be striving for clarity when communicating our points. Simple plain english is what everyone understands. Anything else is a sign of someone not fully understanding their own argument, making it difficult for the opposition to fathom its meaning. Unorthodox cryptic meanderings convey anything but logical thought out processes.

      • Alan42

        Colin , ask a couple of questions and the whole place goes into a tailspin . It would seem that I am some FG / Lab / other , stooge in deep cover with an agenda and a deal . I simply want to know where my money has gone and why the party that these guys are members of have sent my country into economic ruin . Seems simple enough to me . Thanks for the support . I will keep on asking these guys questions . They are what is wrong with Ireland . Nobody ever holds these people to account or asks hard questions . ( although these guys won’t even answer easy questions ) . It is how the country operates . Take the 46 economists who signed that letter . The government , the opposition and the media went nuts on those guys . How dare they stick their noses in . One economist was told to commit suicide if he was not happy about how things were going .
        Anyway , where is my money ? I employed you to manage the country and you have failed .So account for it .

        • Tim

          Alan42….. we are getting closer to it now……

          I try to answer any question asked of me. Keep asking, if you wish; I will keep answering, if I can.

          You did not “employ” me, personally, as a member of a political party; I am a volunteer, unpaid. Trying to put things right, in my own way.

          What are you doing? Do you have a better way?

          Please tell…….

        • Tim

          “How dare they stick their noses in .”

          I stuck my nose in a long time ago, Alan42.

        • Colin_in_exile

          Alan,

          In my opinion, you’ve made an excellent contribution.

          Most of us here agree NAMA is a disaster for the country. That’s fine, it is David’s site afterall, and we’re here because we’ve been inspired by David’s arguments. In my opinion, its easy to get lost in a sea of consensus, that’s why I am not afraid to challenge anyone here, in order to keep it real in a way. Backslapping each other won’t achieve any great understandings. However I do have great respect for everyone who contributes here, including people I disagree with. Sometimes its passionate. Why? Because the stakes (the future of the country) are so high.

          We all have different backgrounds, so we have different viewpoints. And please don’t take this forum too seriously. I hope no one is killed over something said here.

    • Alan42

      Less amusing , is where has my money gone ?

  39. Tim

    John ALLEN, you know I’m working on it. Can I work fast enough, i wonder?

  40. Tim

    Alan42, your posts suggest that you have read on this site for quite some time, before posting.

    I did that, too.

    However, if that is true, I cannot understand how you can possibly assert that I do not answer questions about my membership of FF.

    I have been TOTALLY honest about it.

    Totally.

    I have accepted and addressed all questions asked that I am able to answer.

    Yours, too….. twice (I think).

    I have given my full name, address and phone numbers.

    What more do you want?

    Yet, you post this: “Alan42 says

    I am not a troll or a goblin or the tooth fairy . I am not unemployed , in negitive equity ( in fact I gained big time from the housing bubble ) . I don’t even live in Ireland . I am in Australia and living ubder the rule of a normal government who had learned from a bank crisis in the 80’s and is untouched by the GFC . I am not even angry .
    You are a member of a party that had continuous rule for over 12 years of an economy that has gone from boom to bust with absolute dire consequennces for the people of Ireland . You are a member of that same party and I have asked you some questions .
    You can either .

    A . Ignore me and not answer the questions .

    B . Answer the questions .

    However I will not accept you talking down to me or patronizing me by teling me I am angry etc .
    I will also not accept you dismissing me by surgesting that I am a troll .”

    …. again, suggesting that I refuse to answer, am hiding, or calling you a “troll” to dismiss you.

    I have not dismissed anyone. I have not dismissed you.

    If you ask further questions, I will try to answer them; But, not if you refuse to accept that I am, actually, attempting to answer them. I have more important things to do than answer the “air”.

    So, Please, engage.

  41. Tim

    Folks, not liking “Addicted to Money”, at all, yet.

    Seems a bit “revisionist” – don’t see the relevance.

    What am I missing, here? Please help?

  42. Tim

    Alan42, Yes; you have found the solution to all problems:

    I “have a problem with english” (you ask).

    I am a member of a political party named Fianna Fail (you know);

    .. and I have “taken your money” (you claim).

    Come to my house (address provided), murder me (get rid of Fianna Fail);

    Look under my bed (and retrieve your money).

  43. Tim

    Tim’s out of the way, folks, once Alan42 gets his wish.

    No more worries, then!

    NAMA is off.

    QED.

  44. Tim

    Liam, I am sorry; I forgot. (It’s kinda tempting, though….. in a way…..?)

  45. Tim

    Folks, Labour-party-man from Vb show says new Central Bank bosss, Honan , feels Nationalisation of banks is bad because that would “politicise” bank-lending; says that is bad ’cause “would be very difficult to foreclose on people who weren’t paying their mortgages, and so on”.

    There ya go….. make of that, what you will.

    • jim

      Tim I dont think Honohan is against Nationalisation per se, as He knows it is sometimes necessary.But the sub text of what He is saying is that Nationalising anything in Ireland brings with it a type of culture,from parish pump lobbying to career ending decisions which are not in the ruling parties interests etc. I will expand on this in the post below.

      • Tim

        jim, thanks;

        However, the subtext that I heard was:

        “We must recover the cost of this from the ordinary mortgage-holder/banking customer”.

        … in interest/fees… or whatever.

        I do not like that.

        But, it appears to be in keeping with the trend that is being followed by the govt and the meeja!

  46. Josey

    Guys,
    the arguing is taking us all off topic, as justified as it maybe, it’s taking up space on the “forum” and making valuable comments harder to find. So drop the personal insults or ignore them and debate the issues we raise here.

    Sorry I know I don’t contribute much but I read most everything :-)

    • Tim

      Josey, I apologise…… please see feeble attempt at true apology/explanation below, to Colin_in_Exile.

      …still think it might pay dividends……..

  47. Tim

    Colin_in_Exile,

    FFS

    You know better. I do, too; but I had an inkling that Alan42 had something worthwhile to say, so i excuse myself from the criticism many her will level at me, that I “fed the troll”.

    I do not think he is a troll.

    I think his questions are legitimate.

    I will take as much of his bile as I can before I drop him.

    I think he could be a valuable addition to the debate – he is forthright of expression and (crucially) he is looking-in from outside.
    Let’s see.

  48. Tim

    Colin_in_Exile, interesting post here:

    http://www.davidmcwilliams.ie/2009/09/30/why-economic-recovery-can-be-bad-for-business#comment-64216

    .. which supports my No. 49 above.

    Dunno what tac you are on for the last two days, but it’s gettin’ interestin’ to watch!

    • Colin_in_exile

      Tim,

      I’m not accusing you of feeding a troll, I think Alan is genuine.

      I’m sure you can understand the situation whereby someone new comes to site and reads your comments, sees you are anti NAMA etc… yet still a member of FF, and demands some clarification.

      Alan’s fears are that the greens will pass NAMA. The greens are faced with a huge decision. I hope they stop NAMA progressing. All this uncertainty is in one way fascinating.

      My tac, I’m an outsider, a survivor, who had to fight for everything I have. I want to come home to a country that can offer me a future.

      • Tim

        Colin_in_Exile, I think Alan42 is genuine, too. I hope he takes the initial “foray” and remains here – I expect good things, there.

        I am not sure that this is correct, though:
        “Alan’s fears are that the greens will pass NAMA. “.

        If Alan42 expressed that, I missed it; sorry. (I thought I was watching carefully – where is that post, please?).

        “My tac, I’m an outsider, a survivor, who had to fight for everything I have. I want to come home to a country that can offer me a future.”

        … in a way, that’s me: except I already came home to a country that promised me a future, has not delivered, and I want to do everything I can to try and make sure that it WILL deiver for my children, 11 and 8 yrs old.

        There MUST be progress.

        They MUST have better than we had.

        I started secondary school in 1979 – my son will start it next year – Sept (prob August!) 2010.

        I was educated under the same shitty education-cuts that Alan42 rails against (correctly), but the cuts NOW, initiated in April 2009, are MUCH deeper than the ones wreaked upon us in the late ’70s – ’80s.

        …and they are coming back for more, in the December budget.

        That is what I am working to off-set, if I can.

        • Colin_in_exile

          End of reply to comment 13

          “Oh but the Greens will stop it , after all they are the Greens and a party of high principle ‘
          I am in Australia and the Aussie Greens would rather see the whole of Tasmania unemployed than build a pulp mill there . They would shut down our number one export , mining . Thats what Greens are supposed to be like . You elect a couple of them to give the government a hard time over green issues . Minister Ryan has actually become a mouth piece for FF because he is is one of the few in government who can actually string a sentence together . He is about as Green as the guy who built Chernobyl .”

          I think he was using sarcasm there in the first sentence, or maybe I’m wrong

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