December 27, 2009

Let’s give away big two banks

Posted in Banks · 113 comments ·

This time last year, this column predicted that Anglo Irish Bank would be nationalised within weeks. That came to pass in late January. At the time, the mainstream view was that Anglo could limp on, but this was codswallop.

The reason for the nationalisation was simple: no one was paying big depositors to stay with Anglo. They simply were not being paid for the reputational risk of being associated with such an outfit.

My argument on the eve of 2009went as follows: ‘‘Despite capital injections and much hot air about the ‘culture of Anglo’, the bank will still go bust and will be nationalised. This is likely to happen in the next few weeks. To save you listening to the usual hindsight in February, here’s a bit of foresight and this is what is likely to happen in the next few weeks.

Corporate depositors – institutions that had kept large deposits with Anglo – will, in the new year, decide that there is no point in keeping money with this bank when they can, just as easily, keep their cash with one of the two big banks. The question they’ll ask themselves is ‘why should I keep my cash in Anglo?’ They are not being paid for specific Anglo risk.”

Anglo was nationalised on January 16.

Now the question for the next few months is whether our big two banks will face a similar crisis of confidence. How will the big hole in their capital bases be addressed, a hole which will widen due to a new wave of mortgage default in 2010?

Will big corporate depositors start to ask why they should keep their money in Bank of Ireland and AIB?

The risk that the banks will have to be nationalised – or something close to it – is now very real. The government draws a distinction between 100 per cent nationalisation and holding a majority stake, but either way we, the taxpayers, are taking control. Let’s put a date on it.

February is my guess. What’s yours? The underlying logic for this is primarily because no one will touch the Irish banks with a bargepole.

Regular readers will know that this column has argued time and again that the scam that is the National Asset Management Agency (Nama) deals only with €90 billion of the €400 billion total loan book the Irish banks have. This rest of their loan books will atrophy in the months and year ahead.

Last Wednesday, the head of AIB declared to shareholders that he had no idea how much capital the bank would need. This would hardly inspire confidence. But it is clear when you examine how this bank blew its balance sheet that the non-developer proportion of its loan book will be negatively affected by increased levels of unemployment, lower incomes, a falling population and ongoing negative equity.

It is clear now that the state is likely to have to introduce a ‘Nama 2’ to deal with mortgage defaults. Anyone with a passing knowledge of economics knows that the bad debt cycle lags behind the economic cycle and becomes apparent only when the banks stop rolling up interest and when people realise they can’t pay now and have no real prospect of paying in the future.

Against this background, the state has to decide whether it can – or would want to – back all these debts by injecting capital and raising the national debt. A more sensible course of action is to realise how bad the situation is and get an accurate figure from the banks about how serious the bad debts will be.

If our debts are 10 per cent of the loan book, the banks need to find €40 billion. If debts are worse – say,15 per cent of the book – the figure goes to €60 billion. The state simply can’t afford this, nor should it have any business worrying about it.

A smarter approach would be to do a deal with the major creditors of the bank – the big bondholders who have billions of euro invested in the banks. Tell them how much we can afford to pay and suggest they should get their acts together now because the guarantee runs out in ten months. In ten months, they will get nothing because the banks will be bust, so do they want to do a deal?

Nothing focuses the mind of a creditor more than the sight of a debtor refusing to pay. The depositors would, of course, be protected, but the bondholders – who got a better return on the basis of taking a risk – should not be.

Even if we did a deal with the creditors, would we be out of the woods? No, because there remains the huge problem of deleveraging, which itself drives the bad debt cycle. Over the past year, with the aid of huge extensions of credit from the European Central Bank (ECB), the banks have managed to avoid the massive deleveraging which has to happen here.

The contraction of credit in the bust is the counterpoint of the expansion of credit in the boom. Put simply, in the boom, our banks borrowed from whoever they could to force credit into the economy. So, in banking parlance, they borrowed ‘short’ (in the short term, from three months out to five years) to lend ‘long’ (lending this money out for 30-year mortgages).

When the market shut down last year, they had to go to the ECB to make up the shortfall – and the shortfall was enormous. The banks’ loans-to-deposit ratios hit 160 per cent in 2008.

Therefore, we will see a huge fall in the amount of credit in the Irish system over the coming years. This could be as big as €100 billion, unless someone else comes in and plugs the gap. Think about the scale of defaults when this comes to pass.

The market knows all this, which is why no one will lend money to the Irish banks on a normal basis until they know everything. The problem is that, once things become apparent, large depositors might just start to take their cash out as they did with Anglo a year ago.

In this scenario, the government would have to nationalise. But it doesn’t have to get that bad for the government to be compelled to nationalise. Further downward movements in the bad debt outlook will require new capital and, if it won’t come from the market, it will have to come from the government .This is likely before St Patrick’s Day.

But does it have to be like this? No, obviously not. The best course of action now would be to give away both main banks free to a European bank, which would deal with the big creditors. This, in a sense, would allow the banks to ‘go bust’ by admitting they were worthless, and by giving the new owners the deposit bases and the branch network free. In return, the new owner would issue its own paper to pay the old creditors at some deep discount, maybe 90 per cent. Problem solved, and we start again. This is what would happen in normal business.

It is called capitalism, and it is our only way out. Otherwise, we will tie ourselves in knots trying to borrow from tomorrow to pay for yesterday.

Better to come clean now, face the music and start again. This is what we would do if a sweet shop went bust; banks are no different.

  1. Malcolm McClure

    Well said David. But is the loans to deposit ratio only 160%? Is it not more like 1600%? FDIC mandates a asset to capital ratio of 6% to 8%. Is that the reciprocal of the same thing?

  2. Many things went through my mind reading this-

    1 We are all eating Roses (sweets ) this Christmas and many don’t remember that once upon a time these were known as Irish Roses .They changed the name and the shareholders and expanded their markets and now they are a big success than before .Something on the line David is talking about to change the bank shareholders with bondholders ;

    2 I think David is optimistic believing that close to St. Patricks Day the great change will occur.It will be a lot sooner and we better get use to it .Next week from the 3rd the first MOON WOBBLe arrives and peaks on the 11th ( mark it ). Hold tight and breath deep;

    3The Real Retail ( Survival of the fittest Sales) begin in February .Ignore the existing one – save more money ; and

    4 Buy to Let Property will SINK ;

    5 ALL INCOME will be decimated ; and

    6 IMF arrive at Bunratty Castle for a banquet.

  3. wills


    The banks were seized by a gang of crooks and used too loot ‘our’ community.

    The POnzi looting ‘well’ ran dry and the banking crooks and cohorts then, switched the looting stratagem and through their hired hands in the government they are all now looting the public purse.

    The taxpayers monies, right this second, is been looted. Every penny possible to loot is been looted.

    The hidden power elites who control and run the banks, in liason with criminal syndicates are driving the looting scam tp its end point which will be bank nationalisation and inevitable liquidation cos the truth on the crony corruption is so bad when the can of worms is opened the main banks reputation will be destroyed.

    The main banks and circles of power around the ‘magic money making machine’ know its over. They know the banks are doomed.

    NAMA is a POnzi scam. It is the same POnzi speculatory scamming on the population except in NAMAs case it is merely a ‘get away’ POnzi scam.

    The banks are all finished. Its over.

    Whats going on now is the bank robber s are all making their getaway.

    Stashing the smash and grab POnzi property bubble booty into tax haven accounts in the cayman islands.

    The taxpayers monies going into the banks is also been looted. Why?

    Because, the taxpayers money is been used to pay back depositers their deposits which were looted by the banksters criminal POnzi scam.,, so by definition the looting still continues..

    The truth is so spectacular in its scope its rendered people stunned in astonishment.

    • For reasons clearly outlined in D’s article our banks are now completely rudderless.

      Imho the ECB needs to throw us a some innovative tow line and do it soon. Otherwise, we need asap to drop out of the euro before we’re completely banjaxed!

      One of the unknown parameters in all of this is the relationship of our incompetent government with the ECB and bondholders of our banks.

      I suspect ECB is flagging Ireland as a potential flare point important for the euro and European banking.

      If we default or renegotiate this may have ramifications for euro friendly bondholders. ECB might fear a domino effect.

      Brilliant if our banks could be taken over and previous management routed following public inquiry followed by Garda inquiry.

      Brian Lenihan TD has distinguished himself as an admirable, brave and staunch leader of policies I personally disagree with.

      Our thoughts should be with him and his family at this trying time and he should have our greatest respect and best wishes.

      I wish him a speedy recovery.

      • wills

        Its up to each person too decide pick and choose where too outlay their thoughts.

        Regarding me, i have nowhere wrote anything to the contrary on sympathies and accord for anyone sick with illness.

        So, any implication in this post is erroneous along these lines.

        • Sorry wills, in case you think otherwise, my reference to Brian Lenihan TD had nothing to do with your post.

          It was an off topic comment to square up criticism of his views/policies I continue to make; and to wish him a speedy recovery.

          Let me take the opportunity to wish you and fellow posters who care enough about these matters a Happy New Year!

          • wills

            Okedoks cbweb. I just felt important too just clarify that just in case cos and, if anything, its my doing due to a post i posted on NAMA and it went a bit too close too other areas of a ‘sensitive’ nature.

            Good new year to you too.

    • Malcolm McClure

      It’s certainly not the smell of victory. Time to regroup, lie low, and wait until the smoke clears. Rushing forward out of the trenches will get too many people hurt unnecessarily. I agree the next few weeks will make or break. Let the enemy make the next move, then catch them by surprise.

  4. its easier to put a camel through a needle than translate from anger to action

    • wills

      John ALLEN -

      Translating anger to action (positive action) is an art form in of itself.

      One must channel agression buoyantly too secure positive action.

      p.s. Mark littles article in indo most informative..

  5. the people waited in the shannon flood plains until they could no more and now they are gone

  6. All very sensible and businesslike but it won’t happen voluntarily. The “sweetshop” wouldn’t like it known that the real profit was, figuratively speaking, in soaking the allsorts in crystal meth.
    Taking this article one step further(What an ego I’m developing) if the DOF persist in protecting the banks to the point of damaging Irelands sovereign bond raising capabilities, are we not in serious trouble towards the latter end of 2010? What I’m saying is that, if the billions borrowed last year aren’t enough to tide us over, won’t we run out of cash later on?
    The ECB has told Greece to get on with it so are we next?
    And another question about the available cash in our banks. Have they been messing about in the carry trade because thats about to fall flat on its face.
    Damn shame you don’t publish your own magazine David. You’d be able to expand so much more.
    Heres to 2010 and a White Swan.

    • Tim

      Furrylugs, DMcW can publish his “own magazine” any time he likes; he owns the web site.

      He is not limited by anyone but himself, in terms of what he publishes here.

      I am not privy to his contract with the INDO or the SBPOST, but I am sure that it does not preclude publishing whatever he wants on his own site (if it does, his solicitor deserves a good slap).

      Mind you, I expect that the thought, research and actual writing required for two articles per week, every week, constitutes alot of pressure – not to mention the odd book and TV documentary. I think all of that would keep one person pretty busy – especially while trying to raise a family.

      I do not think that DMcW needs to publish a magazine; I think that we, the Irish people to read the one that he might produce. So you are right, in a way and, maybe, someday, he will do it.

      In the meantime, I hope that the “crowd-sourcing” model continues to work in his favour, here.

  7. severelyltd

    Save Linehan and Bubblestiltskin finding a €400 billion pot of Gold under a rainbow in the next two weeks we are in for a very rough time. The powers of darkness which have been gathering withdrew their forces for the Christmas period. The brakes have now been released and we are gathering speed freewheeling down the hill. NAMA and the bank guarantees with the ECB support was the equivalent of throwing moneybags on a dyke with a leak. The leak however is about to blow. I was monitoring the activity of Irish bank shares over the last few weeks and it looked like there was a buyer trying to create runs. Could it possibly be that the Government was buying stock though a back door channel to keep the ship afloat until after Christmas and as a path towards the inevitable nationalisation of BOI/AIB. Regardless the numbers don’t add up. The next few months will be an exercise in shock doctrine. Rents will collapse as will property prices. The receding financial tide will leave all ships high and dry left to the forces of nature. Our finance minster will resign over ill health and his boss will do his utmost to stop any enquiry into the criminal activity which he oversaw during his reign as finance minister. Any confidence that existed in our political our financial system has now completely evaporated. It is now a free for all. Every politician and banker for himself. What comes next is anybodies guess but what is certain is that the events will take place in quick succession. The country is now on the crest of a roller coaster.

    • Rather than giving them away as David proposes, severelyltd, we may be drawing them closer to the Old Sows bosom sooner than we think;

      Since the Irish market will be substantially owned (distorted??) by the Government owning Banks, Property and the Semi-state utility sector(by proxy), what business venture in it’s right mind would establish here now?

      2010 will be less of a level playing field and rather more of a Circus Maximus with the podgy thumbs of The Tubby Triumvirate ruling what remains of Irish democracy.

    • G

      my gut tends to agress with your analysis severelyltd & i don’t think this is a negative ‘love in’ – the kind the Irish love.

      The figures just don’t add up to something pretty. Unemployment set to rise by 75,000 (conservative estimate) to close to 500,000 next year, pay packets cut (I’ve lost 15% which could have been spent in the real economy – now I intend on saving every single penny I can and I am not alone), higher taxes, cuts in public services and total lack of confidence in the air.

      Banks will be nationalised in the first quarter of 2010.

      House prices will continue to fall, consumption will slow, ‘business’ people are still holding out for high rents but I believe most are unsustainable and they have to drop or businesses will close.

      The point on mortgage defaults is a real one, I feel it is only beginning to kick in now as family support, savings and other tricks have been used up, that is going to be a major hurdle in 2010, banks will probably seize and rent back to people thereby keeping the issue out of the media – the silently indebted, mortagees without a home will grow substantially, more unemployment and the vicious cycle continues. Don’t see any invention on the employment side by government, nor major stimulus package, both of which are essential to ending any depression (which is what we have, indeed, what we have is a lot worse), so people will either emigrate or eek out a meagre existence on social welfare while the remainder try to hold onto their jobs.

      With Lenihan almost out of the game, and a well cushioned/out of touch political elite, we could be looking at some game changing societal moves moving into the early part of Q2.

      €400 billion on the books, what were these guys thinking, NAMA seems like a drop in the financial ocean, a desperate act or con job as McWilliams feels.

      Who was it that said the Irish banks were well capitalised? hmmmmmm

      The city here was extremely quiet over the weekend, it surprised me somewhat, real retraction out there, shops with 50% to 70% off, desperately trying to stimulate, other shop spaces to let, but few takers – all well documented by Stiglitz and others. Major macroeconomic retraction, fiscal and employment crisis with inept political leadership the icing on the cake. Where is it leading?

  8. Philip

    If I was a farmer who made 1.5 mil (say) selling land to a looney developer I must be looking at this with glee. Right now, the receivers for the half built development of 50 houses will be looking for a few bob and I’d be looking just to pay for the mortar that stuck the blocks together. I’ll offer half a mil for the lot (after the poor greedy sods invested 4 mil so far). Then I might finished off one or 2 houses and make the rest dafe with a few lads I know in the trade. In 5-10 years I have spent less than 1million finishing them all off and selling them off cheap at a very very tidy and honest? profit.

    Welcome to capitalism. Nama is on its last feet and this is where money goes back to its rightful owners. Just hope that too many of them are ex FFers.

  9. Philip

    This giving away of our retail banking to a foreign entity should be welcomed for the acknowledgement of Ireland being truly globalised. Too often we use hi tech to support old ways rather like the paperless office (ha ha!). David, this article is a recognition of the death of oldfashioned nationhood in an increasingly virtualised world. Bout time the paddies started to embrace the full implications of the what is actually becoming the new world order – the nation of global man/maness.

  10. Tim

    Uh-oh! Clearly, I was snoozing (reading) and put this up on the last article without realising this new one was here, so here it is again, for those who, ironically, missed it because you were NOT snoozing:

    Folks, the Senior Civil Servants get a Christmas (”news-dump”) Present, of having certain pay-cuts reversed, while we lower-orders take the full-brunt of our cuts.

    Karl Whelan explains:

    This is how those at the top look after one-another’s interests behind-the-scenes.

  11. Tim

    David, of course we should let them go. However, we have had “too big to fail”, “too connected to fail” – both of which are true.

    However, the real problem is the egos involved.

    You see, in their post-colonial-popular-consciousness, both the owners of the sweet shop and its preferential customers have assumed the position of the former colonial oppressor; they are the new aristocracy; the new landlords.

    They cannot fail.

    Failure is not an option.

    They are above the rest of us; above “human”.

    They are so divorced from reality that even their own “reality” (capitalism) no longer fulfills their needs and is abandonned. They are so divorced from reality that they deny their own humanity, these “Masters of the Universe” – they are above us, above our reality.

    They are “too precious to fail”.

  12. Alan42

    I don’ t wish to alarm anybody , but the world has moved on and a banking crisis is so last year .

    I have been in Dublin now for six days and it this country is not in a recession , it is in a depression !
    The shops are empty and nobody is spending .Unless we have changed everything around and its now perfectly normal to have sales before xmas , we are in the shit .

    I bought a last minute xmas present of a digital camera on a whim . High end shop at the back of Grafton Street . There was something really different about the salesman . Not pushy but really desperate for the cash and very willing to bargain . We started at 800 Euro and then I haggled for a case and all sorts of extras for 600 Euro , deal was more or less done and then I went for a further discount of 50 Euro . Done deal . Could have got more if I really tried .
    I have haggled with the best in Aisa and do business with the Chinese in Oz .
    I never expected to come across that in a high end shop around Grafton Street let alone Ireland .

    I went in the local branch of BOI and it had the atmosphere and the tatty look of a betting shop .

    This country is broken , its people are miserable and something needs to be done now .

    Something has to happen with the banks , they are bust and are on life support from the ECB .

    Even with healthy banks we are in trouble . The property bubble has left us with massive personal debts , negitive equity and as we don’ t make anything we have little future .

    The guarantee was meant to buy us time . I don’t think it was meant to buy us this much time where we just sat around and did nothing but hoping for the best . The world is recovering but as we were hardest hit we should be doing a lot more than sitting around trying to balance the books to impress international markets . There is the small matter of putting 400,000 odd people back to work and building an economy that does not involve property . If I hear one more person linking a recovery in property to economic recovery , I will go mad . Property is heading to where it should be . Property is recovering .

    • Philip

      You’re alarming no one on this chat. It’s worse than a depression. We are moving to a position of being ungovernable. Developers/ Bankers/Senior Civil Servants are out of control because they cannot be controlled.

      The most worrying aspect of this mess is that Cowen and the lads are still in power and surviving well. So from their perspective, they are probably taking the position that what they are doing is right. There is a feeling that opposition are certainly not making serious waves. So we have a government that seems to have stalled while the bankers/ developers and senior PS proceed as though nothing has happened.

      Personally, I believe the country is in a state of complete shock. It is the national equivalent of a heart attack. I mean – can anyone imagine what else can go wrong?

      We are entering messianic times lads & ladies.

      • G

        I think sooner or later all of this is going to have to come to a head, Lenihan’s sad personal situation is precisely the kind of unknown/left of field incident that introduces a new factor into the equation producing unforeseen results, a couple more of those and things could change very quickly indeed, the world is indeed on its head, we are moving into interesting times.

      • tony_murphy

        There is no opposition – Joe Higgins was the opposition – agree with him or not.

        Fine gael, Labour – they are all just Fianna Fail drinking buddies in the Dail bar if I’m right. Some pretence at handbags in Dail chamber. Toothless lot

        • G

          Joe Higgins is an interesting one, in 2005 he said his party just needed the inevitable crisis that comes around and his party would come to the fore, but nothing of the sort has happened. I respect the work he did, Gama, speaking up for the disadvantaged, and getting the MEP seat was a major political achievement but it has been largely silence since.

          You couldn’t get a worse situation in Ireland and yet there is very little from his quarter, no visit to flood stricken zones, no other prominent members, it just seems at times like the ‘Joe Higgins’ show. Welcome other opinions on this because I am perplexed, one would expect them to have ceased this ‘opportunity’ but they have not emerged, no pan-left movement, just a few individuals making a few noises, at least that is the perception.

    • wills

      alan42 -

      You are bearing witness to a country looted by its own, albeit, insiders.

  13. I was trying to read the comments made on this site this time last year and could not open the comments section.I wanted to compare the various predictions then with now.Can someone help me?

  14. paddythepig

    Who would want our banks, even for free? Anyone taking on the risk would need to be paid for it. Even if given for free, if the discount negotiated with the bondholders is not big enough, the new owners would make a loss.

    And. Who is to say the depositors would be guaranteed with a foreign owner? It would fall outside the current guarantee, after that it’s anyone’s guess what could be negotiated on depositor’s behalf.


  15. This was Niall Fergusons prediction (prophesy??) for 2009 from the Ides of lat January.

    Al Queda didn’t try to assassinate Obama (as far as we know) nor did he fly to Tehran but he did reassert Americas influence (“The one Eyed Man”).

    For the want of a better idea, we should park Michael Martin in Capitol Hill since we’ve lost Ted Kennedy.
    He’s the best shot we’ve got to retain US FDI at the moment.

  16. Furrylugs – thanks but I cannot open ‘comments’ !

  17. furrylugs – Ronan must have wraped last years comments in turkey grease paper.I cannot refresh encased mummyfied memories .

  18. paulmcd


    In the coming year massive amounts of our taxes are going to be used in furthering the bailout process and the NAMA (mis)adventure. CG, the Trinity economist, estimates: “The total bill for this bogus ‘rescuing’ of the Irish banking system is likely to be in the neighbourhood of €29-40 billion”.

    In other words he is projecting A MINIMUM LOSS OF 29,000 EUROS AND UP TO 40,000 EUROS FOR EVERY IRISH HOUSEHOLD.

    The Department of the Taoiseach and the Department of Finance have each their own academic economist to give advice and these 2 economists are together costing the State c. 350,000 euros. Peter Clinch and Alan Aherne, as economic advisors to the Government, should be brought before an enquiry to determine their exact position as I for one find it impossible to believe that these “advisers”, with their academic backgrounds and training, truly believe in NAMA.

    I am suggesting an IMMEDIATE ENQUIRY on the likely SHAPE OF EVENTS WHICH WILL BE SHAPED BY DECISIONS TO BE TAKEN IN THE NEAR FUTURE, before we haul the likes of “Two-Fingers” Fingleton before courts of law. Ideally such an enquiry would be conducted by a combination of ECB and IMF officials who would look at evidence produced by well-known independent economists, including David, and compare with their adversaries, who support NAMA and seem to speak solely for vested interests. No use in having this enquiry in 10 years’ time to explain why it all went wrong.

    If the ECB, in particular, is going to facilitate the creation of NAMA, then surely they must understand ALL the risks involved, including the workings of our corrupt political system. If they choose to support the case of the PRO-NAMA LOBBY and its “profit” forecast, then they should be prepared to compensate us for projected losses which BETTER-QUALIFIED ECONOMISTS believe to be inevitable. We were walked into the present fiasco with our eyes closed by a bunch of incompetents; now we have awoken; but, Dear ECB, let us proceed with YOUR eyes wide open.

  19. wills

    Posters -

    Expanding on ‘sweetshop’ simile.

    One could add, the ‘sweetshop’ takeover crooks started too keep all the chocolate for themselves and, to expand tims point, they got gaga on the sugar from the chocolate, they ate too much and got greedier and greedier for more.

  20. AndrewGMooney

    The Guarantee lasts till October 2010.

    Ten months is a long time given the current situation, and it’s hard to see how the Irish bank-owned state / state-owned banks have much negotiation power.

    Is there a healthy bank within the Eurozone capable of accepting these ‘freebies’?

    Would any national regulator allow them to? I doubt it very much. DMcW’s:

    ‘It is called capitalism, and it is our only way out…. Better to come clean now, face the music and start again. This is what we would do if a sweet shop went bust; banks are no different.’

    The problem is these banks ARE different. Because they are (and always have-been) back-stopped / underwritten / underpinned by a conjoined-Sovereign. It’s just that it only became explicit during a financial crisis.

    Never mind State-Owned Banks.
    Ireland is now a Bank-Owned State.

    And Mr Market knows this, even if he can scarely believe the potential upside to this unprecedented situation.
    Events will unfold to a seemingly inevitable denouement, and then the real ‘capitalists’ will swoop…..

    I was aghast the the way TV3 invaded the sanctuary of Lenihan’s family Christmas. They couldn’t even let him see in the New Year with his folks before he broke the news. Both shameless and heartless. A disgrace.

  21. Tim

    AndrewGMooney, I am afraid the Bank guarantee will not expire in October 2010; It was extended by a Dáil vote on the 3rd of this month; also, the EU Commission agreed to it.

    Subordinate bonds will no longer be covered after October 2010, however.

    I think it was extended to 2015, but I cannot find the link right now.

    • Tim

      Here is the link to the Dáil debate on the extension of the guarantee (it was passed by 73 votes to 65):

      • AndrewGMooney

        Tim, I agree with Philip’s opening sentence at 24 below.

        DMcW’s article implies Ireland still has the power to again act unilaterally, rather than await a strategic ECB responses to the troubled periphery. Greece. Spain. Ireland, etc.

        Ireland has no free-reign to do anything now without ECB approval. The ECB won’t tolerate the risk of contagion from any further maverick solutions. I suspect they have already factored in the ‘sacrifice’ of one or two minor regions / ex-nations to teach a lesson about ‘fiscal sobriety’. A lesson that will echo over decades to come.

        The bondholders know they are now playing poker with the ECB, no longer with the Irish Government. Re-jigging The Guarantee to exclude subordinated debt only re-focussed forensic attention on to why it was ever included in the first place….

  22. Philip

    This “extension” and indeed the existing arrangement is not worth the paper it is written on were it not for the ultimate underwriter – the ECB. And you have to ask why they are so prepared?

    Is it Wills’ assertion that the ponzi global movement is preventing capitalism to do its cleansing work or is it (probably in the same context) to keep the gloss on the increasingly undermined Euro?

    Really, for me what really matters is how we can preserve some semblance of dignity in the majority of our communities while many loose their livelihoods in the midst of the worst combination of cockups, weather events and global economic rectitude.

    For the average FDI prospect, we are still a very high cost economy. It is not just NAMA keeping property costs elevated artificially, we have a whole infrastructure and PS nailing communities to the floor of hopelessness. We have headlines like…bikes with flashing lights are being legalised….for f%$k’s sake – is it just me??

    • wills

      Philip -

      Let me finely tune ‘the ponzi global movement’ with the following idea that it’s bubble making gone global and it reveals a world whereupon we have come to a moment in time which gives us a

      ‘Paganism erected into a system, taking on a full shape and proceeding to positive action and must necessarily become a formidable and increasingly direct opponent of the ‘just price’ free market system.

      And so, only one version of a system in place to allocate resources etc can be left standing when the virtuous system and the anti virtuous system can no longer evolve without eliminating its opposite, which is now in my p.o.v.

  23. We are now
    The Lost Atlantis

    some of us will morph to Lepracauns and others into Dolphins and the rest will scatter to foreign lands until we meet again in thousands years more time.

  24. Big Willie

    With all this mania going on with the banks etc, are the banks seperated from bad loans capable of living or are they like a quadraplegic in need of life support.
    If the banks were to be nationalised into one bank, with a slimed down network, would RBS hang around.
    Do the banks make an opperating profit or are they depending on customer payback.
    If i we cast the banks to the wolves and let someone else take the grief is there a bank in europe that would take on AIB/BOI, then what about Natoinwide and EBS. Probably, morethanlikely, the network would be decimated, small towns would loose a buisness link and a local knoledge(part of the problem with unsustainable mortgages which were given from above, local managers knowing that the client was a risk.
    In the gobalised world we are part of an cant exsist without (not our fault) we are a small player, a small economy, small minds, parochial.lost my train of thought.

  25. An interesting idea David, but with the way things are going now , who knows what will happen here over the next twelve months.
    With the news story on TV 3 on Brian Lenihan’s health , the question now is for how long will he stay in his position.
    Here we have a dilemma , who will Biffo bring in as in the political game within F.F. Biffo is aware he was there to challenge for Biffo’s job, so will he do a reshuffle and bring in another clown ?
    F.F live in their own Ireland with their own Banking Friends ( Fingers and Co. ) and they are not a bit worried about 500,000 been unemployed or vacant houses, units , apartments or hotel beds.
    I was on FACEBook today and got sent a link to join a page to send wishes to Brian Lenihan , while cancer is not a disease I would wish on anyone, the site does not allow any comments on his Political life and duly remove my comment when I wrote he has no worries about getting treatment or a bed or he won’t share a room, nor when he gives up work will he survive on welfare. The Post was taken down, this is the same man who has cut the christmas bonus, and the most vulnerable within our society ,..and yet he’s praised as a Great Fella ! what a bunch of hypocritical spineless fickle bunch we really are !
    While in today’s Indo I’m looking at photo’s of Brian’s brother from the same family political dynasty , while I drove last night threw a working class estate and it was scary on few lights were lit on the Christmas tree’s in their front rooms.
    So what if TV3 broke the story , this is what the Media do, they break stories.
    Sure the timing was bad been a family time of year , but They don’y get funding from his department and all year have to sit with his press people before they interview him or his dumb wit of a brother.
    This Country is in a right mess.
    Yes let a European Bank take over our lot, the Government’s plan over the next period is to stop cash floating within the economy and wants to go like the Scandinavians ( Sunday Indo )
    Nothing will happen in January since our Lads will be only back from the Holidays ,
    The reason I brought up Facebook is I believe it will be from Social Networks that we will develop New Political Parties , these networks are the New Pubs for a lot of Irish , and considering how we are still a few years behind the USA , we should be studying How Obama used the Web to grow his base.
    The Last thing Ireland needs if Brian Lenihan does retire his seat or pass away over the next year , the last thing we need is to then just elect his Son !…..
    Oh Roll on 2010

  26. Floating Vocals

    Interesting comment comparisons with this blog last year and this year :
    2009 2008
    5th Jan 2010 n/a 361
    31st Dec n/a 34
    24th Dec 48 418
    21st Dec 101 153
    17th Dec 89 155

    Is the paradigm shifting , are we sucked up already?, have we lost hope? , lost ideas? , dont care? , do we need comments in polish and other new tongues instead? , are we fed up repeating ourselves? , etc does it matter ?

    • Colin_in_exile

      Good point John.

      Speaking for myself only, I’m running out of material for comments. I know what needs to happen though, we need this government to collapse, nama to be stopped, public works to begin, VAT to be lowered, income tax on over 100k to be raised, quangos abolished, tribunals closed, schools rebuilt, commercial & residential rents lowered……

      I’m getting fed up with government intransigence. I’m getting fed up with people defending FF. I wish Lenny well, but also wish he’d resign his seat since he cannot represent his constituents well if he is ill.

      Is anything going to change?

  27. Deco

    “Last Wednesday, the head of AIB declared to shareholders that he had no idea how much capital the bank would need.”

    I am not sure how to read this.
    We could read it as classic CYA from the head of AIB. Maybe he does know and the real requirement is massive. AIB have been strangely silent over the last few months.

    We have wasted billions money bailing out ANIB and INBS. Both had rotten corporate cultures. Both were linked to FF politicians or party backers. Both had the same high risk business model and lived close to the property tycoons. Neither ANIB or INBS were of any systemic importance. They should have been flushed down the drain. They might have been “too well connected to fail”. It did not serve the taxpayer interest in bailing them out. They represented a very poor return for the taxpayer.

    But concerning the big two, we are in the territory of “too big to fail”.

    And by the way, TV3 were right to tell the people if the Minister for Finance is getting treatment for cancer. We are paying for our politicians to work for us. We should know if they are liable to need time off for treatment. Basic accountability.

  28. Deco :
    In Switzerland it is a crime to reveal a bank secret and otherwise elsewhere the saying goes ‘ silence is golden’.

  29. LeoCorcoran

    Morgan Kelly states in his report “The Irish Credit Bubble” of 21th December 2009
    “The Irish government was therefore poorly equipped to understand the crisis when it finally occurred in late September 2008. Instead of recognising the borrowing difficulties of Irish banks as the result of well grounded market apprehension about their solvency, the Irish government responded to the crisis as if it were a temporary problem of liquidity in the aftermath of the Lehman collapse.”
    In trying to identify the failure of the Irish banks, the regulatory function and Government oversight we should also look at the psychological causes which led to this failure.
    “Escalation of Commitment” is a well known condition frequent quoted in the literature
    where managers ignore factual and obvious reasons to change the current strategy and are motivated instead to continue with a failed course of action.
    The seminal case study on escalation of commitment was written in 1976
    by Barry Straw. “Knee-Deep in Big Muddy: A Case of Escalating Commitment Toward a Chosen Course of Action ”
    In this study he quotes from a memo sent from George Ball The US Secretary of State under Lyndon Johnson in an early observation of the US involvement in Vietnam.

    “once large number of US troops are committed to take direct combat,
    they will begin to take heavy casualties in a war they are
    ill-equipped to fight in a non-cooperative if not downright hostile
    countryside. Once we suffer large casualties we will have started a
    well-high irreversible process. Our involvement will be so great
    that we cannot — without national humiliation – stop short of
    achieving our objectives. Of the two possibilities, I think
    humiliation would be the most likely than the achievement of our
    objectives — even after we have paid terrible costs.” July 1965

    Since then numerous case studies have been written which illustrate the dangers of allowing managers and policy makers to persist with failed projects in their efforts to avoid humiliation.

    If we are to chart a course to a successful outcome from our current difficulties it is important that we recognise and correctly identify past failings. The inquiry proposed by Patrick Honohan is an essential step in this process.

    • wills

      LeoCorcoran -

      What you are witnessing and reporting in post is a crony system doing whatever necessary to preserve power. So, one see’s denial, magical thinking and what appears to not make sense to you makes complete sense to the power elites who are pursuing an agenda and an objective that has nothing to do with the common good.

      The ‘superclass’ are merely working together to preserve their power base, real wealth and optimal position going forward for the next phase in transferring wealth from the masses into their pockets.

    • tony_murphy

      Admitting mistakes, accepting responsibility. Telling the truth. That is what was required then and what is required now.

      Cowen continues to try and manage the situation – instead of just coming clean.

      • Tony;
        A bit like Columbo trying to expose a sophisticated criminal who’s convinced Columbos lower social class will save him from inevitable retribution.
        If money was the driver of power up to the 20th century, the Internet and knowledge is the driver for the 21st onwards.
        We’ll never know everything but we know a hell of a lot more now than before. All we can do is keep chipping away with the expose.
        Happy New All-Knowing Year to all.

    • Dilly

      Interesting quote from a Dallas based economists Kevin Duffy, with regards to all these so called “bailouts”.

      “Any healthy system needs a way to correct error and remove waste. Nature has extinction, the economy has loss, bankruptcy, liquidation. Interfering in this process lengthens feedback loops. Error and waste are allowed to accumulate, and you ultimately get a massive collapse.

      Capitalism is primarily attacked by two groups: utopians who wish to impose a more “compassionate” system, and political capitalists who want to enjoy the fruits of success without bearing the pain of failure. They use the coercion of the state to gain privileges, at the expense of everyone else. As a country we’ve become less tolerant of economic failure. The result has been a series of interventions, such as meddling in the credit markets, promoting homeownership and creating a variety of safety nets for investors. Each crisis leads to an even greater crisis. The solution is always greater doses of intervention. So the system becomes increasingly unstable. The interventionists never see the bust coming, then blame it on “capitalism.” “

      • tony_murphy

        Agree Dilly, it is an interestingq quote

        Basic control systems from my science/engineering days.

        Cowen’s control systems won’t work.

    • Deco



      A policy quagmire. The idiots in charge are clueless as to the situation on the ground. The curse of a generation. The disintegration of the social system. The propping up of vested interests. National pride. Authority. Spoil brats.

  30. Is the big question for 2010;

    Are NAMA / Govt Bonds classed as Junk or High Yield?

    Wish I knew enough to comment but from articles around on the web, it seems to be a question the smart money is asking?
    Anyone venture a prediction?

  31. Stiofan

    Ireland manufacturers no cars, and yet the roads are filled with traffic. There are no oil wells and yet fuel is available in every town and village. The money we use daily is no longer denominated in Dublin.

    I see no greater logic in banking with BOI / AIB that in driving an O’Toyota filled with O’Shell paid for in O’Euros.

    Bail them and then divest them. It’s the only way to remove their management.

  32. Forget’ the causes’ we must move on and ‘Reform’………NOW.

  33. Deco

    A present for our bankers, and the idiots running the country(politicians, D2, IBEC, ICTU, D4, ISEQ, K-Club clique).
    The lessons to be learned from the last decade.

    Number 11. Humility is a great virtue !!!

  34. stand up …walk ….run……and …stop dithering

  35. Tim……assume the mantle of Howard Beale from 1976 movie ‘Network’.

  36. Tim

    John ALLEN, by the end of the second week in January, there will be a groundswell from the ordinary members of the trade unions that the leadership will attempt to quell; I am hoping that they will not be able to silence the ordinary working people. Those who have lost their jobs deserve to have us all stand up for them in solidarity. They should stand together with their (for now) still-working brethren: the private-sector workers and the public-sector workers.

    There are about 1,500,000 private-sector workers, over 800,000 of whom are unionised; there are about 320,000 public-sector workers, almost all of whom are unionised. They pay the salaries and expenses of their officials.

    By the end of week two, 2010, the 320,000 will have received their first pay-slip incorporating the aggregate pay cuts and levies. They will be shocked by the extent of their losses, frightened by their difficulty in paying bills and angered by the betrayal of their union officials in the “news-dump” item I referred to earlier whereby the senior civil servants’ announced cuts have been diminished.

    Since the trade union officials’ salaries are linked in relativity to those of the senior civil servants, those officials’ salaries will also be protected by the change. So, the ordinary workers will have to continue to pay the high salaries of their leaders, but out of much lower wages of their own.

    This betrayal suggests that the private-sector workers will not be protected by their union officials when IBEC and ISME (leaders also tied into relativity with senior civil servants) call for a reduction across-the-board in private-sector pay.

    How far the groundswell will take us depends on how many workers wise-up and are prepared to stand together against the elite that is pounding them into the ground.

    I hope that all 1.8 million workers and all 220,000 laid-off workers will stand together.

    We should.

    • Malcolm McClure

      Tim: You obviously want to change fundamentals. It’s comforting to suppose that you can get a couple of hundred thousand angry people onto the streets in mid-Jan for a day of protest. It might even happen. But as I opined in these pages months ago, the Irish are great at parades but poor at serious demonstrations. Like the last demo, a mere day of protest will be accommodated, noticed briefly, but soon forgotten. A contingent of Garda might even take part, ostensibly to show solidarity but ready for any trouble.

      For a demonstration to have an impact like the Jarrow March, it needs to begin well away from Dublin and build up popular support over several days, converging by foot from several directions. I think if your demonstration were postponed, the success of an alternative convergent march would be assured. That would require careful planning and would mean waiting until Easter. It would also give time to decide on your manifesto for change, which is unclear, at least to me.

    • paddythepig

      Shouldn’t union members now cancel their subs to save money? Makes sense to me.

      We need reverse benchmarking 2.0 asap, a cull in unnecessary labour in the public service, and the imposition of the more efficient work practices discussed in the recent talks. The lower tiers should be protected as much as possible. The higher tiers should be hit hard. Lenny’s argument that people will be paying over 50% at the marginal rate is not valid ; we’re in a crisis, ideology has to take a back seat to pragmatism.

      Foreign aid needs to be cut drastically. Stop trying to save the universe, when we can’t even save ourselves.


  37. johninmunich


    Striking how the below quotes remind me of Ireland.

    “For years, the conservatives and socialists who took turns running the country borrowed as if there were no tomorrow. Through mismanagement and nepotism, they drove their country to the brink of bankruptcy. Citizens, for their part, reacted by engaging in corruption and fraud.”

    “Conservatives and socialists continued to inflate the government administration to provide jobs to their supporters.”

    “We have always been a society built on favors,”

    “I would like to see someone finally end up in prison.” If society doesn’t change, he adds, “we are truly lost.”,1518,669235-2,00.html

  38. johninmunich

    Irelands problems are in the most part Irish made. It`s been over a year since the bank guarantee and still there is no sign of a new political party coming to the fore. Why is this? Because the majority don’t care. Will we have Lenihans and Cowens and Kennys and Brutons in the Dail in 30 years time? Probably. Last one out of Leitrim turn out the lights.

  39. finbarr

    “I am hoping that they will not be able to silence the ordinary working people. Those who have lost their jobs deserve to have us all stand up for them in solidarity. ”

    Read the above, above. Utter tosh Union mantra. The trade unions are pushing solely for the conditions of their members even though it would bankrupt the country in a hearthbeat. The dont give a fiddlers. This is berties and cowans legacy where these crowd believe they should have a say in the running of the country. In my view they along with the politicians and bankers should be strung up. Everyone is wise after the fact, so less whinging/blaming and more ideas properly lobbied to those who (like it or not) are in power please..

  40. Philip

    Woe to this and that…and woe to us all and so on. All the marches in the world will do nothing unless some messianic type comes to the fore. And frankly, that’s not something we want either.

    JohninMunich’s link is an interesting one. Clearly, the government and its civil servants are not disappearing soon. And for other reasons described elsewhere above, forces will build to maintain the status quo and prevent capitalism doing its cleansing best. So, the Euro is in for it and it will drop and drop until we become cost effective. The Euro not only makes everyone expensive., it also makes everyone as efficient as the most useless in the Europack – unless Germany decides it has had enough. This is like East Germany Mark 2 only 20 times worse.

    There will be no IMF for ireland…not unless we get the dasboot in the liahroidi in which case we have our currency and we are away in a hack.

    You see, this mess is impossible to contain. Like handling an armful of giblets without any real meat…some of the smellys will slither away no matter how tightly you cling on…

  41. Leadership is Needed someone with a Fire element eg Leo or Aries
    would suit us best …….anyone interested apply to this Forum c/o Tim & Malcolm

  42. paddythepig

    Who really cares about the unemployed (the real unemployed, the folks trying their hardest against the odds, not the dole spongers) ?

    Virtually no-one.

    Well, to care for the unemployed in Ireland seems to equate to maintaining the dole payments as high as possible, or fobbing them off on a FAS course to keep them off the live register. This is all well and good, but what an unemployed person really needs is a job. And to maximise the chances of getting a sustainable job, the economy must be as competitive and innovative as possible. Ireland is neither, and shows no intention of improving in either area. This is the biggest problem facing someone on the dole.

    The other thing is that those who have jobs are greedy for more. An example. It strikes me as ironic that Mr Shane Ross is sometimes eulogised on this board. He is a paid senator, yet publishes a book on bank fraud, and writes for the Independent. That’s one State job, and two side numbers. Isn’t it ironic that an unemployed person has to go to Easons to pay 15 squids for Shane’s book, when he could have published it for free as part of his public duties as a senator. And he’s supposedly one of the good guys.

    Another example. It’s interesting to see Matt Cooper have a radio show, doing Champions League soccer, and presenting GAA on TV3. Are we saying there is no-one on the dole in Ireland who could not be a good sports presenter? Instead, we have someone with 3 jobs. Remember, we are in a crisis. We need to give people on the dole opportunity. They have the talent to succeed, given the chance.

    I use these two examples to illustrate a point. I am sure there are thousands of other similar but less public examples, all over Ireland.

    Regrettably, you’re either in the club or you’re not.

    I made a comment during the Lisbon 2 vote about going to my local school to vote, only to find the local teachers manning the polling stations for the day. For a fee. That comment was ignored here. It never crossed the minds of the great and the good to get some unemployed folk involved in manning the booths. Why not? They’d appreciate the money, and more importantly that they were not forgotton by society.

    But they are forgotton. People don’t really care. That’s the reality.


    • G

      Paddy – think you make some outstanding points.

      I was a bit suspicious when I heard of the travelling circus known as the 4 angry men, pushing their books, I think your point on those with several jobs is well made, and one not often discussed. There are many other examples, Matt Cooper also writes for several newspapers, including a column in the Sunday Times, the media thing tends to lock in. Ross could have published online, no problem, but so few who have it are prepared to give.

      I was in Cuba, I have given talks on US-Cuban relations and written articles. I gave a talk recently but waived my fee because I did not what to benefit from the misery of that situation, the dreadful US economic embargo etc, instead the money went to a landmine charity I support (assiting the disabled from mines laid by the West) I am not a well off, but I felt it totally inappropriate to take a cheque like that, I was fortunate to get to college and wanted to give back, free transfer of knowledge etc.

      In a country which has increasingly been reduced to ‘Ireland Inc’, which has bought into FDI, MNC’s, speculative capital, financial services, assists with illegal wars and all the rest, where increasingly people are only seen for their economic utility, to be lumped on the dole/unemployed is an embarrassement for the ‘miracle system’, these people, like the hundreds of thousands of low paid workers must now become invisible.

      The focus turns to the entrepreneur, the ‘incredible’ businessman (normally men) with the ‘work ethic’, ‘drive & ambition’, the individual as oppose to the collective or any mention of society and the benefits that same individual got from family, education, prior wealth, societal breaks – this is never mentioned, the focus is on the mytical, the all knowing genius, we should seek to emulate. If we all behaved like most of these guys there would be chaos in the streets with everyone out for themselves, and the environment would be on its knees (already is if we are to believe the most recent reports out of Copenhagen).

      In an ethical, sustainable economy individuals like that would be an aberration, a danger to the well being of the community and planet, in our current world they are lionised, there fanatical, socio-pathic characteristics are held up as virtues we should emulate, people set against one another, competing for the single position, worked to bring in 3-4 times their income, no job security, dictated to like a wage slave, berated if they don’t meet unrealistic targets, and fired if ‘they don’t make the cut’ and yet people as demonstrated, are brought to tears when they are ‘awarded’ the job, so desperate are for the 100k that they are prepared to sacrifice all human dignity, others queue for the lotto three times a week, hoping their numbers come up so they can escape the ‘working world’ and live the ‘life of their dreams’…… far our society is from one in which we all play a meaningful role, we all contribute to the greater good, we all have access to health systems, education and housing without having to sell our labour like prostitutes or wage slaves, is such a country possible or is it like an oasis in the desert? I believe it is possible but not under the current regime.

      The mask of this so called ‘great society’ is slipping, the unemployed (berated as ‘being idle’ or for failing to ‘get up off their asses’) are testament to a failed model and a failed system, which in some cases brings only short term benefits, enriches a small minority, creates brutal economies not caring societies.

      Let us hope 2010 does not lead to 40,000 of our compatriots leaving (as reported by today’s Irish Times) but instead they stay and make a stand and turn around this ‘ship of fools’. We have a great opportunity to create a New Republic, the kind of Ireland that Michael Davitt and many others fought so hard for.

    • Tim


      “Who really cares about the unemployed (the real unemployed, the folks trying their hardest against the odds, not the dole spongers) ?”

      Many hundreds of thousands of us, their fellow-citizens, care. They are our brothers/sisters/sons/daughters/friends/neighbours.

      We do care. We help, in unreported ways.

      The “people” you mention who “don’t really care” are the government, the former employers, the elite and the gamblers who have wrecked the economy.

      Most of the rest of the people in Ireland care.

      If you do not believe that, just look at the support that people gave one-another in the west, south and midlands during the recent flood crisis. Though the government did virtually nothing to help the people, their neighbours did. The farmers who has all their winter-fodder washed away got so much winter-feed donated to them from all over the country that they had to appeal to people to stop sending it, for a while, as they had no place dry to store it.

      People with vans and some free time offered their services for free to deliver aid; food, clothing, furniture and bedding, etc..

      Look at the statements from the St Vincent de Paul about how they are overwhelmed by the increase in contributions and volunteers they are receiving in response to the economic crisis.

      Those people in crisis are not forgotten, Paddy. People do really care. (Those in control do not.) That is the reality.

      • paddythepig

        Sorry Tim, but I don’t agree. Charity will not help the unemployed find a job, structural reform of the economy will.

        People may well donate tins of beans and blankets, but ask them to make a real contribution to restoring the economy’s competitiveness, and they take to the streets.

        And the farmers? Well, its interesting to see them mobilise in order to bail out their own. But as we know, as long as the farmers are ok, everyone else can go swing. Ask a farmer for a site and you pay top dollar, try and grab for a few square yards of soil to plant a few spuds, and suddenly a shotgun will appear in your face.


    • Colin_in_exile


      Excellent points. You opened my eyes.

      You can add George Hook (Newstalk, RTE & Sunday Independent), Brendan O’Connor (TV3, RTE & Sunday Independent) & Marc Coleman (Newstalk & Sunday Independent) to your list. I’m sure there are many more.

  43. ThePatriot

    Hi David,

    I’m not sure if you read through all of these posts but I have a crackpot theory for you.

    Imagine this for a headline?
    June 2012…. Ireland, after the 6th budget in 4 years, Ireland’s NAMA is about to have a fire sale of debt.

    The international debt markets are awash with all classifications of cross securitized debt (because the capital markets still have not learned any lessons).

    Ireland is struggling after the 5 sucessive quarters of ECB rate rises, credit has tigtened even further. The nationalised banks AIB and BOI, having already cost 30 billion to nationalise are having further issues with raising capital through the market and Ireland’s soverign rating is making bond issuance a non-starter.

    In an efort to raise another 15billion in capital. NAMA is prepared to have a fire sale of it’s property boom debt. This debt is being sold for 22c on the euro of it’s original worth.

    This is where the real hole appears its the wiley coyote moment when he realizes he’s standing under the anvil…. he’s buggered…….our little country is now really scr3wed.

    Could this really happen? I hope not!

    There was a time in this country when disagreeing with someone meant you had conviction. In 15 years of property panic, disagreeing with the ivory towers meant you were thick, ignorant and even unpatriotic.

    I see no value is saving any business that is criminal… let one of them go, restructure, build a new paradigm of banking in Ireland, an agile, robust financial sector which supports enterprise and industry not an omni-present sector that brings a nation to its knees.

  44. Tim

    Folks, I found “The 5s” from last March. It is a long post, I’m afraid, but here it is:

    Folks, here is the full set of “5s” posted by everyone thus far (sorry about falling asleep before doing this last night — oops!).
    For some reason, the latest posts would not paste onto “Crisis into Opportunity”, so I have been putting them together in a “Word” document that I made earlier.

    Ruairi’s 5:
    1. a re-appraisal of the tax status of any once-off multi-million gains made in the property boom. This would balance societal expectations and hearten true entrepreneurs in this country also. Property speculation is not entrepreneurship in my book. It must enrich a society also, ala Henry Ford.
    2. The wholesale adaptation of wind, microhydro and wave power. Its not THE solution, no. But its commonsense. Why wait til oil explodes in price again, via Chinese recovered demand or the pressure of falling taxes from oil producers. This widespread uptake of wind and microhydro inland must be driven by local cooperatives who are guided financially and technically by a TEAM Ireland who advise the best solutions, financial models etc. Why cooperatives? Our economy is a multi-faceted thing. There is no magic pill that helps all. But give local communities their power. Give them free power, jobs to build and maintain it, ecotourism from it, a source of power for our farms and SMEs as a risk offset to oil shocks/instability that are more likely in a worldwide depression. Reduce our balance of payments. Aim for input self-sufficiency while striving to remain an SOE.
    3. Build a world-class oil refinery. Dermot Desmond had mooted this before (I think?) and now is the time to push this. Oil will recover as the economy picks up. Build the most advance one the world has seen (none has been built for 30 years) and Money and Markets reckons that with the Alberta tarsands, such a refinery would be an ATM.
    4. Introduce money skills to the primary curriculum. Its really as simple as ‘The Riches Man in Babylon’ or Charles Dickens character’s advice about staying in the black. We must now change our money consciousness in our kids, especially seeing as we are potentially leaving them a large pile of SH1T to shovel. Think of the evolution of the Irish wealth consciousness over the last 40 years. This confidence needs to be controlled if its not to be turned to arrogance and self-procalamation.
    5. Take a risk. Vote for people with good hearts. We can all prosper together and indeed, I have no problem with a wealthy banker (I’m not ready for Islamic banking yet! Although its admirable) but if a man’s going to piggyback me, that’s all he should be doing, not controlling my every movement. Banking needs to be relegated to a function in our society. Not leaders of commerce. They know as much about real business workings as an accountant does. Hindsight is a great thing, but not worht paying multimillion yoyos for.
    Malcolm Mclure’s 5&5:
    Offset Depression:
    1) Re-establish the Irish Cooperative Wholesale Society to bulk purchase goods at prices equally favorable to the producer and the consumer.
    2) Employ our laid-up deep-water fishing boats to bring cheap groceries from the UK and continent to the new ICWS.
    3) Develop the work token suggestion for sharing the labour of the unemployed that I suggested in an earlier thread.
    4) Abolish laws that allow people to sue other parties accused of being liable for injuries suffered in accidents. If everybody were responsible for their own personal insurance it would eliminate a lot of insurance claims and reduce premiums. It would also restore the Right to Roam.
    5) All car and fuel taxes to be spent locally by each county on their roads.
    PaulOMahonyCork’s 5&5:
    Promote Recovery–Cheap energy is key to economic success:
    1) Micro-hydro plants combined with micro-pumped storage schemes.
    2) Hydrogen fuel cells. –Do deal with Iceland to electrolyse hydrogen from water using their hydrothermal energy.
    3) Unconventional battery research.
    4) Woodchip power plants using sustainable willow plantations, as in Ballymena.
    5) Wave and tidal energy research.
    (1) Political and public service resignations
    (2) Dramatic cuts in all perks for political & public servants
    (3) Immunity from prosecution in return for total cooperation with parliamentary scrutiny and no legal foot dragging
    (4) Every penny saved to be earmarked for literacy & numeracy education
    (5) no repossessions of occupied houses in return for the taxpayer owing a share of equity.
    This might get us to square one…
    Next, to build up a fund of skills for the recovery
    (1) Huge programme of activities designed to cultivate entrepreneurial skills
    (2) Massive humility by member of the old ruling class who actively encourage new thinkers to come up with ideas that challenge the status quo, with a new honour system set up to be at least as impressive as the British one
    (3) An entrepreneurial investment fund with publicly televised Dragon’s Den format
    (4) Huge propaganda campaign designed to identify waste in public and private business organisations, with Irish Presidential Awards like Duke of Edinburgh Awards
    (5) Rapid broadband expansion to facilitate an incredibly innovative social networking project for all the electorate.
    Tim’s 5:
    Ruairi, You want 5, you get 5:
    1) Change the PS pension levy to make it more equitable or scrap it, altogether, and apply a fair and equitable tax levy across all sectors, instead of the one in place.
    2) Take the €7bn back from the banks and give government bank drafts, made out to the respective lenders, to all of the people in default. (Homes only, not developments of holiday homes). They then pay the banks, get out of trouble and the banks get their money anyway. The markets then see less risk in the bank of toxicity.
    3) Cap all salaries at €100k and divert anything over that to the exchequer for community and social improvement, including education and health, care of the elderly, transport infrastructure and green technologies.
    4) Remove the administration of expenses from the control of the Oireachtas members and their civil servants. They cannot continue to decide their own incomes. Alter the Constitution to place this under the aegis of the President, who would preside over a special body to avouch these expenses.
    5) Remove the Tax-Exile provision ENTIRELY and also the stud-fees exemption from the equestrian industry and Artist earning over €1m pa.
    Garry’s 5:
    1) Food Security. Lobby with our EU partners to show what would be the effect on the continent should the food industry collapse like the financial industry has. Take whatever steps are necessary to ensure it doesn’t with or without EU support.
    2) Energy Security. Build a nuclear power plant, this will take over a decade. We need a new energy backbone to reduce dependence on oil/gas. Run it separately from ESB but state owned, with simple rules for all to access the grid. If any money left over spare money look at wave. Let wind compete or die; it will be useful for small scale local production and may create some jobs but let it compete… Cheap reliable energy is most important.
    3) Finance&Public Service/Health/Education. Halve the public sector budget while keeping the same numbers employed. By outsourcing all bullshit functions (standards setting, quangos, think tanks) to Brussels and then ignoring it (like the French do with food regulations). Introduce the maximum wage across the public sector. The HSE managers can become cleaners or be sacked. Introduce an “Eat your own dogfood” law Basically public servants should be almost forced to use the public health and education systems. Indeed this should be virtually mandatory everywhere… Absolutely no subsidization of the private systems by the public purse so the effect is these systems are then the preserve of the super rich who pay super money for them. Making this happen is key to getting value for money. The minister for health doesnt give a f*** about it, she might if she knew she will one day end up on a trolley in casualty in Beaumont instead of a private room in Blackrock, the same with every other person whos being paid by the HSE.
    4) Housing. Reintroduce a squatters law. Basically, nobody should be sleeping rough if we have a few hundred thousand empties, if nobody is living there, what’s the problem? Shutdown all developer bailouts, Wakeup… the houses are already built!!!!
    5) Enterprise. Provide small practical help and get out of the way. e.g. office space, zero tax for startups for first X years ….. whatever is low cost doesn’t get in the way. Dont provide grants (or bureaucracy to award them) focus on letting others do this efficiently and rewarding success via tax breaks.
    Leave FDI as is we seem to have ability in attracting this.
    Johnny Dunne’s 5:
    1. As part of the ‘scheme’ for the 6 Irish banks set up a new fund managed by the banks which would invest in 2009 over €500 million in export oriented businesses with HQ in Ireland.
    Impact : Ireland will be the ‘mecca’ for companies all over Europe and the world setting up and developing emerging knowledge intensive businesses
    2. Companies certified by Enterprise Ireland (and Country Enterprise Boards) who have not made a profit due to investment in developing an internationally provide a rebate on ‘Income’ Tax.
    Impact : This would allow these companies survive longer especially where they are finding it difficult to raise funds to develop into a profitable sustainable enterprise with employees.
    3. Reduce Capital gains on Capital gains for Venture Capital Investment funds where they have a significant operation in Ireland.
    Impact : The worldwide expertise in venture capital investment relocates and therefore Ireland is a centre for investment ie ‘Silicon Isle’
    4. Introduce the Remittance tax scheme
    Impact : The best talents will have a tax incentive to reside in Ireland.
    5. Reduce corporation tax to 11% from 12.5% sending a message out to set up business in Ireland by using the quote below to advertise worldwide why Ireland is the best place for businesses.
    Impact : Instead of less than 50 new companies adding to the 1,000 MNC’s in Ireland. There would be the potential to add 100’s maybe as many as 1,000 new MNC’s to the list of IDA clients.
    Paul Lee’s 5&3:
    1. Set up an online building materials and general contractors costs comparison website. Just crying out to be done. Capital costs? Laptop, broadband, a bit of consultation with local enterprise board to get low cost or free advice from experts, and then a lot of legwork and patience. Get sponsorship.
    2. Teach people how to use free Google software: schools, VECs evening courses or to people who want to set themselves up as hotdesk assistants for struggling startups or SMEs. Show people about all of the great free stuff thats available online. FAS might help… Worth a shot.
    3. Team up with local hotels to offer training venues. Team up with training companies to deliver the product or deliver it yourself. Get the hotels to do the marketing! Costs? Laptop, broadband and Projector/ screen.
    4. Teach people how to use the internet. Cost? Laptop, broadband and Projector/ screen, time, shoeleather and patience. Show people how to hunt for shopping bargains, set up facebook profiles, linkedin profiles.
    5. Start online business networks. Ask businesses what they want. Set up their linkedin profiles, facebook.
    The basic things to think about at the moment:
    1. There are a lot of businesses/ people looking to utilise their buildings that are lying idle and will do very reasonable rental deals.
    2. There is a lot of extremely cheap or free technology available to download or use online, and businesses/ people who would maybe kill for it don’t know (a) about its existence, (b) how to use it or (c) how to access it.
    3. In 1929 there was no internet. Big difference.
    BrendanW’s 6:
    GREETINGS from Malaga , so you are looking for five principles to get us moving again, why not wait till the Ten principle men within the 300 million insider share dealing names are released then watch the flood gates open . Five points. 1. Cap Bankers and ALL SEMI STATE salaries. 2. No tax on new companies or on new posts created for year one with reduced tax in year two. 3. Ex Pats be allowed buy holiday home at 20% above cost value, on registering House first four years holiday lettings tax free. 4.Indexed pensions to be taken from all civil and public servants 5. Renewable energy material and products to be promoted . 6 Develop our Farming to intense levels for expanding Middle Eastern markets .
    We have several methods for moving forward . Firstly we have to learn the principle of Honesty .
    1. Create a ‘financial skip’ and throw all the bad debts of all the banks into it. This bank will be given the mandate to work out the bad debts over ten years. It should be staffed by the best liquidators and recovery experts in the country. These are people who know how to get value out of an asset. They know, not how to lend, but how to sell. Today, everyone is talking about debts, but there are real assets in this financial skip and, over time, these assets -if managed properly – will become valuable. In effect, the new bank will be the Irish property market. It will control the price and control development.
    2.The skip has to buy the assets from the banks. It must do this at a deep, deep discount. In reality, this figure could be as low as 20 per cent of the original price. Let us assume the bad bank needs a huge whack of cash; where are we going to get the stuff? Where could we get €40 billion?
    3. Here’s where we play the EMU card. We go to the European Central Bank (ECB) and say: ‘‘You lend us the cash. We, after all, gave up our interest rate and exchange rate policy to join the euro, now you have to help us out. You have to prove that the EU is a community of nations, in reality. Show us some practical solidarity.
    Otherwise we default and undermine the euro.”
    In addition, the ECB is already committed to the Irish financial system. It is drip-feeding money into our contaminated banks every day, keeping them alive. We should suggest they lend us the money at 4 per cent for ten years. This is money that the ECB is spending on the financing of our banks anyway as the lender of last resort, so it should not matter to it. In fact, lending to the solution should be much smarter than lending to the problem.
    The ECB would be crazy not to go for this. We then have money for ten years at 4 per cent with which to work out bad loans.
    4.The old banks are now clean. They are free of contamination and they can go about raising money from the market, such as our own pension funds, through the normal channels, like rights issues. This means that they can start lending again to good businesses.
    The old banks pay the new bad bank a fee for managing their old debts and dealing with their old clients. If the new bank charges 7 per cent for the service, the old banks need to provision for this charge over the next ten years. This means that their profits will be affected, and they must adjust their costs at the beginning of every year to account for the charge. But 7 per cent of €40 billion is manageable. It could operate like a bank tax.
    The state then makes money on this plan -a s it would be getting the difference between what the bad bank charges and what the old, forgiven banks pay. So it gets tax revenue of 3 per cent of €40 billion every year -or €1.2 billion. You can build a lot of schools with that sort of bread. 5. Obviously all senior management of the banks must be fired right now to facilitate this financial renaissance.
    Pera’s 5:
    1: Ireland has to make up its mind. Does it want to go the european way or the american way (with added corruption ofcourse) But either way, always keep in mind that it is never a government tasks to make its employees rich. Now it seems to be a very strange mix of everything as partially seen in the heath system
    2: slash all cyclical taxes and start phasing in sustainable taxes. Now is the time to do it.
    3: With the assumption that the government spend all goes to fixed non-stimulating costs as mentioned above. Increase taxes as suggested in vincent brownes article today. With this you can achieve 2 things. One, the government will be able to recoup part of the stimulus package and re-prioritze its use, in infrastructure projects etc. Two, alternatively the government can include phased tax breaks to stimulate people to invest money in energy efficiency, invest in companies, rescue bonds etc.
    4: Depending on what people want (european way or american way) Ireland needs to make up its mind on how it runs it health system. No point in having a hybrid health system, where it seems as if private hospitals are directly or indirectly funded by the public.
    5: The government needs to communicate more. Give us an idea of what to expect, so that we can start planning, even if they cant
    I seem to be a bit incoherent in my writing style today, but hopefully some of my points came across, but I will add more and try to clarify later. But these are some of the points that I can see be done even with the huge constraint I put on myself, Institutional reform is not going to happen this time around either

    Davi-Again | 19 Mar 2009 1:42 am
    My five points would be
    (1) Reform the government at all levels, becuase it is the ineptitude of government ministers that is causing our economy and society so many problems. Issues such as taxation, and a proper assessment of what should be centralised, or in other cases decentralised.
    (2) Using compulsary purchase of land, free up locked areas around urban areas so that the people can remain within the Dublin area, closers to work/ family/ entertainment etc. Also land purchased should have full ownership rights, but come with conditions- particulary if constucting a house for a family member or friend.
    (3) A complete review of Transport 21- and possibly new ideas such as the privatisation of busy routes currently run by Dublin Bus, Bus Eireann and Iarnroid Eireann, so the distribution of the transport infrastructure is done on a sound and practical basis, not becasue some so-and-so “wants this, because that fellas has that” and so on. For instance, with the exception of the lines constructed by the Congested Districts Board in the late 19th century in the West of the country- the majority of Irelands railways we’re constructed and run by private companies. Also the metro is a complete waste- 10 new luas lines could probably be constructed at the same expense, as well as connecting up the two existing ones.
    (4) Try and be a first in developing safe GM foods. We should pursue this because agriculture is still an important exporting factor in our economy, and thanks to land mismanagement and corruption, the crazy prices put on agricultural and can be put to better use. Also Ireland, in comparison to lets say America or France is very closed with no open lands, or rights of ways. More productive farmland will result in land been freed up for other purposes such as recreation, forests and other non-agricultural uses (similiar to Wicklow). I also support the largest planting of hedgerows in 200 years all over the country, hedgerows a lot of people don’t realise, are actually very important.
    (5) And more importantly find new ways of keeping US multinationals here, instead of moving to Eastern Europe. We are an English speaking country on the edge of Europe so I don’t know perhaps we’ll always have this advantage. Also whenever we see banks or copmanies collapsing in America, we should try and get those companies to move here, with the promise of low taxes, and an educated english speaking workforce. Also we should try and use the Corrib gas line to regenerate the west of Ireland- providing employment, and a vital natural resource (something Ireland has very little of), Also perhaps there is a way for some large companies to split into smaller groups, and having plants or offices in different towns and villages, keeping employment in rural areas. Also lift the rug from underneath land speculation- it is such a f*cking waste of our time, money and resources thats its sickening- it does absolutely nothing for anybody bar a few greedy sods, and anyways is nothing but land (or more to be point, grazing ground). If land is sorted out, people can live in Dublin again, full stop.
    Shane Dempsey’s 5:
    Short term list
    1 – Accept we’re near bankrupt. Many of the world’s dominant lending institutions are either not lending to Ireland or are issuing very short term credit believing we’ll be bankrupt within 6 months. Therefore we’re in an emergecy situation which will affect the lives of everyone living and working here. We need to stop pretending that budget band aids can fix this. It’s patent nonsense. We need to come clean on our financial situation as some builders are currently doing and start negotiating with our bankers to restructure our debt. We’ll also have to flog some of our assets, with all serious offers considered. To aid the flogging we need to end the legislated secrecy regarding house sale prices and start auctioning off unsold houses with no reserve.
    2 – Nationalise and consolidate our banking sector into a rebranded good and a nationalised bad bank. The state would maintain a significant interest in the ordinary equity of the good bank and appoint new management with assistance from some of the better members of the current management.
    3 – Create an all party government, taking the best of our current TD’s. If anything good could come out of this crisis it would be an interruption in the never-ending cycle of FF led and FG led coalitions. Appoint a council of our top economists and international financial experts with, perhaps, some prominent disapora figures to create policy for the dept. of finance and run the good and bad bank.
    4 – Call the ECB’s bluff. Demand a bailout from the ECB on the grounds our bankruptcy will set of a chain reaction that will implode the EMU. Greece seems to be in the same boat. Demand emergency legislation to achieve it. If/when they refuse pull out of the Eurozone and reconstitute a punt pegged against the dollar. Whatever we do, we shouldn’t vote for Lisbon unless the EMU is empowered to bail-out nations in trouble rather than take action against them for running deficits by imposing sanctions/fines. The current situation is farcical!!! Our government is telling us to vote for a treaty that copper fastens a collection of laws which are actively hindering us from dealing with this crisis. The EMU is a joke in it’s current form
    5 – Create the publicly traded recovery and innovation bonds I’ve described before. In a sense this is happening in an ad-hoc manner as we’re seeing consolidation in our research sector and we’ve already had a major national bond issue. The idea of this bond is that the coupon is redeemable as cash at a particular rate of as income or corporation tax relief at a more generous rate.
    Long term list (implement over 5 years).
    1- Reform our tax system. Reduce taxes on labour and employment. Eliminate employers’ PRSI. Remove all tax reliefs on property rental income, effective immediately. Don’t make this mistake again. Remove tax relief on house purchases for first time buyers. Lower stamp duty and VRT. All these taxes just contribute to individual debt and are bubble promoting. Use some of the recovery bond income to aid this transition if possible. Increase corporation tax to 15% but keep reliefs on patent income.
    2 – Identify wealthy diaspora figures to repatriate using our “ireland bond”. Using these, Create a tax haven for technology investors and investment, partnering with US VC firms. As part of this create research centres which are NOT directly associated with individual academic institutions. Take the largest and leading research groups in particular areas (Biotech, Pharma, IT, Telecoms, Alternative Energy) and give each 5 years of baseline funding for all staff. Consolidate groups from different colleges. Set hard commercialisation targets to gain future funding for another 5 years. These centres should then be separated from their current academic institutions (if applicable) with no budgetary overlap. Inter-college rivalries are mucking up research in Ireland IMHO. Ensure some decentralisation in this process.
    3 – Scrap the pension levy and the defined benefit (based on time-served) pension for anyone not in the scheme more than 25 years. Implement a version of the EU regulations regarding pension fund protection regardless of whether we’re in the EMU or even EU.
    4 – Reform the public sector. Introduce proper performance related pay. Delegate budgetary control and reward thrift with bonuses. Currently it’s nearly impossible for many PS workers to be thrifty as they don’t control their own budgets. This is a MASSIVE PROBLEM in the health service. Sack employees who get consistently poor reviews. No more jobs for life. Give many senior civil servants early retirement and replace them with new managers on perf-related pay.
    5 – Reform the political system. Reduce the number of dail seats by around 20%. Require all political donations exceeding 500 Euro to be on a publicly searchable database. Reward local government for saving money rather than punishing them by reducing budgets for the following year.
    Some Extras
    - Put more effort into weeding-out social welfare abusers. Impose fines or deport foreign abusers.
    - Cap mortgage size based on a multiple of disposable income. Around 10 times.
    - Introduce legislation to force lenders to accept a percentage of a property back as part settlement for debt, at the value they accepted at loan time. This would help dissuade lenders from bubble behavior.
    - Force some jail inmates to do community service. In the US they have inmates making cadillac limousines & RV’s.
    - I’d love to ban political parties in this state but (like some other points here) it will never happen :-)
    G says
    Posted it before but worth a shot given your statement Furrylugs
    * Elect a new Government
    * Create a new political party that actually represents the people — move away from centrist politics
    * An Independent Media (not subject to government licence fee and approval)
    * Investigate all those in the business and political elite who had any involvement in bringing the State to the abyss, end to tribunals as a means of investigating alleged corruption (should be carried out by Dail committees, with set deadlines, like successful DIRT enquiry).
    * Abolish the Senate
    * Abolish RTE (end of ’star salaries’)
    * Cut the salaries of all public servants i.e. President’s salary to be cut by 70%, Taoiseach 60%, TDs 30%, Senior academics 50% etc
    medical consultant pay by 50%, senior RTE presenters by 90%
    * Develop a greener economy
    * Develop Irish owned, worked controlled industries
    * Nationalise the banks
    * Greater distribution of State’s wealth targeting the disadvantaged
    * Universal education and health care
    * Affordable housing for all
    * End to profiteering off housing
    * Better infrastructure — every city should have an integrated bus and tram system, and massive use of cycle lanes based on continental model, affordable trains to all major cities (train from Cork to Dublin is ridiculously priced — I can fly to Berlin cheaper!!)
    * Creation of a TGV train to run between the four major cities Belfast, Dublin, Cork and Galway
    * Stronger relationships with Scandinavian countries, utilising their engineering and social expertise
    * Stronger relationships with developing countries
    * Creation of Irish peace corps (volunteers assisted by the government with expenses who would go out and work in developing countries — builders, teachers etc)
    * Worker democracy in the workplace — end of vertical management systems
    * End of use of Shannon airport by foreign military forces
    * End to Ireland’s involvement in the arms industry.
    * More educational and cultural programmes on the national broadcaster and a winding down with a view to removing all foreign soap operas and other low grade programming
    * Better treatment and resources for asylum seekers and immigrants
    * Greater accountability and transparency in Irish universities to do with tax payers money, time spent by lecturer’ researching and teaching, monitoring students progress both in and out of university
    * Creation of an Irish Open university, move away from bricks and mortar to online university!
    * Removing Irish as compulsory subject in primary and secondary school and offering Chinese, Portugese or Spanish (major languages of the future)
    * Greater financial regulation of all privately owned businesses
    * Creation of an innovation/entrepreneurial fund for those seeking to create new businesses and jobs especially in IT and construction sector — tangible products as opposed to the concentration on the ‘financial services sector’Creation of an innovation committee that analyses best practice in all industries abroad with a view to implementing in Ireland
    * Finanical education, communication and presentations skills classes and music and art classes to begin in primary school
    * Strict division of church and state, end of church involvement in education
    * Take full State control of all natural resources (Corrib gas and oil field)

      • It’s interesting G, that esteemed , reserved figures like Prof Kelly are increasingly and openly talking of corruption.
        Great link.
        It seems that Prof Kelly in his summing up, agrees with Davids article that the Banks should be “given” to their creditors.
        AIB has been bumbling along for the last few weeks with a market cap between 1.1 and .9 bn, a tsunami of private debt about to hit and the bond markets about to be tapped for another 20 odd bn to keep the LE Eireann afloat for next year.
        We just cannot keep borrowing and sinking money into this leper.
        Think of what a one bn investment in SME’s would achieve. Direct one off investment straight to where it will do most good since the banks cannot or will not do it.

        • G

          we live in extraordinary times furrylugs, people are showing their metal, on both sides of the barrier. The Guards have stood up to the government (virtually unprecedented), there is a rumour that the army don’t want to be used in a strike situation, this government could find itself very isolated, very quickly, while seeming immovable objects can vanish, we need a change of government if the State has any chance of redeeming itself, but that same FF bullneck that got us into this situation refuses to leave the stage, events may yet force them, noises from academia, Holohan and other quarters are letting the government know, that event the elites are not happy for they too are being sucked in, especially with unemployment across the social classes and a rise in crime a real possibility, we could yet see the convergence of self-interest into one big push ‘in the national interest’ of course :-)

    • Malcolm McClure

      Tim: Thank you for bringing this list of ideas back to our attention. There are a lot of practical suggestions there but it needs to be refined. Could you ask each participant to select the top 10 that they would support as priorities for a new government. Then the collective idea of the best five suggestions would become obvious. That could form one plank of a manifesto.
      That would also need fundamental reform to the constitution to ensure that no government can ever again get us into this predicament. Can we also seek priority items for constitutional reform to be submitted to an early referendum?
      My suggestion would be to return a directly elected two year term President whose main duty would be to dissolve parliament or individual quangos when there was clear evidence of mismanagement of public finances. The President would also appoint the Attorney General and the DPP in support of that objective.
      Ireland obviously needs a ‘gun-slinging’ super-sheriff to keep our public servants and government in order. We can’t afford a mere ceremonial figurehead.

      • Tim

        Malcolm McClure, I would be happy to collate the “top ten”, if people here want me to. I think that you have, now, already asked them to make their selection.

        With regard to constitutional reform, very little is needed: if Furrylugs’ championing of Article 45 were to brought to fruition, the element of it that vests its implementation in the Oirechtas-alone could be removed and it would then be active and workable, instead of the lip-service to socio-economic cohesion that it now is.

        Your two year term President would need independent checks-and-balances in order to prevent corruption; “that would be scanned”.

        I agree completely with everything else that you have said.

        • Malcolm McClure

          Tim: Here’s my selection of 10:

          No repossessions of occupied houses in return for the taxpayer owing a share of equity. PaulOMahonyCork

          Remove the administration of expenses from the control of the Oireachtas members and their civil servants. They cannot continue to decide their own incomes. Alter the Constitution to place this under the aegis of the President, who would preside over a special body to avouch these expenses. Ruairi

          Enterprise. Provide small practical help and get out of the way. e.g. office space, zero tax for startups for first X years ….. whatever is low cost doesn’t get in the way. Dont provide grants (or bureaucracy to award them) focus on letting others do this efficiently and rewarding success via tax breaks. Garry

          Reduce corporation tax to 11% from 12.5% sending a message out to set up business in Ireland by using the quote below to advertise worldwide why Ireland is the best place for businesses. Johnny Dunne

          No tax on new companies or on new posts created for year one with reduced tax in year two. BrendanW

          NAMA has to buy the assets from the banks. It must do this at a deep, deep discount. In reality, this figure could be as low as 20 per cent of the original price. BrendanW

          Nationalise and consolidate our banking sector into a rebranded good and a nationalised bad bank. The state would maintain a significant interest in the ordinary equity of the good bank and appoint new management with assistance from some of the better members of the current management. Shane Dempsey

          Reform the political system. Reduce the number of dail seats by around 20%. Require all political donations exceeding 500 Euro to be on a publicly searchable database. Reward local government for saving money rather than punishing them by reducing budgets for the following year. Shane Dempsey

          Abolish the Senate and abolish RTE. G

          Cut the salaries of all public servants i.e. President’s salary to be cut by 70%, Taoiseach 60%, TDs 30%, Senior academics 50% etc
          medical consultant pay by 50%, senior RTE presenters by 90% G

          • Tim

            Malcolm McClure, thanks for the effort.

            One slight correction: your 2 of 10 was, actually, my 4 of five; not Ruairi’s ;-)

          • Thanks for the vote of confidence Malcolm. Another pet topic of mine is reforming our bankruptcy legislation. However, we’re addicted to using the term “moral hazard” in this country even if the hazard of not reforming it is greater.

  45. I hope your posting of the 5′s again will encourage more contributions from those who read but stay remote from the site , Tim.
    The newer faces thus far have provided massively valuable comment and insight.
    Whenever the election comes, I’m going to use the 5′s, like I did with the local elections, to ask some hard policy questions of the candidates.
    If, as Malcolm suggests, the grouping was refined to mutual agreement, then I think they should be sent by letter to one of the broadsheets or maybe David might co-opt them into an article so thegeneral populace might have access to them?

  46. Tim – Good Morning – Malcolm is definately not a #Leo – both he and you could be ‘good vetters ‘ of potential candidates .If you can find a leo its a great start and becomes so easy afterwards to entertain crowds…eg Ganly – Obama , Clinton….Gay Byrne …Terry Wogan….Hector…..I think you have got the idea now.

  47. Tim – Fantastic Research you contributed – keep building on it.

  48. Spot on analysis. Irish banks credit from wholesale money markets will be on a quarterly basis (at best). The only chances of renewed credit in Q2 of 2010 (i.e. April) is if the situation isn’t as bleak as the markets believe. Our banks might “discover” currently unknown assets (which is possible given their cluelessness), find a buyer for their current assets (foreign subsidiaries) at a high price (why would any other bank do this?) or there’s some new deal with the ECB at close to 0% interest rate accompanied by emergency legislation in line with section 119 of the Treaty of Maastricht. .So, nationalisation looks likely but how bad will it get? The EU’s fund for dealing with national liquidity crises is far too small and we still don’t have an EMU wide bond leading to the euribor spread/mess we have right now. ( so it’s possible they’ll require the ECB to print money to increase this fund if a large national bailout is required. For Ireland, think of the deposit base of our banks and imagine them all wanting out on the same day. The terrifying “run” scenario. If there’s anything that will anger Germans it’s a vast bailout of Ireland with a resulting risk of inflation. Yet the Eurocracy can’t be both ponderous and maintain EMU given the perilous economic conditions in several member states. Correct me if I’ve gotten figures wrong or misunderstood the ECB’s constraints.

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