January 24, 2010

Party is over and we're tidying up

Posted in Debt · 270 comments ·
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Do you remember the concept of the ‘free house’? When I was a teenager, one of the greatest gifts a parent could give a child was a ‘free-er’. Parents who went out on a Saturday night and left their 16-year-old son or daughter in charge had no one to blame but themselves for the state of the place when they came home.

In Dun Laoghaire in the 1980s,the news of a free house could travel miles, with all sorts turning up at the doorstep to be let into someone’s house to drink Stag or flagons of whatever was going.

The free house was a mystical place. It was much better than hanging around with nowhere to go, and infinitely better than going to Wesley, where you would have to run the gauntlet of the bouncers – and then figure out how to get home.

Most of the time, there were enough sensible people – mainly teenage girls and a keen bloke waiting for favours based on good behaviour – who cleaned up the freer after everyone was gone. They made the place look as if only the daughter herself was there all night doing her French homework.

Anyway, for many of us, the free house was a rite of passage, a wonderfully chaotic place where all sorts of carry-on passed for normal teenage behaviour. The golden rule was that, if you were snared or if things got out of hand, the free house wouldn’t happen again. Parents who rumbled a melee made sure that was the last. A kind way to look at our delinquent Irish banks and the mess they have left us with, is to regard them as the equivalent of out-of-control teenagers who were mistakenly treated as adults and acted like little children. Over the past ten years, the government gave them the equivalent of a financial ‘free house’, and they made a hames of it.

Worse still, they gave us the bill. Like dumb teenagers who couldn’t see that if they just kept the lid on things, they could have free houses every week, they blew it – and their chance of ever being left on their own again.

Last Friday, US President Barack Obama closed down the ‘Wall Street free house’. What will our toothless government do to penalise and rein in our economic adolescents?

‘‘Never again will the American taxpayer be held hostage by a bank that is too big to fail.” With these words, Obama did what almost everyone outside Wall Street had been hoping he would do for at least a year. Obama has pulled American – and by extension global – investment banking back to the 1930s.Like errant children, they were given the run of the house when the parents were away, and they messed up.

He has told banks that they must get back to the knitting and stop running their own private trading desks, investing or owning hedge funds or private equity firms.

At the stroke of a pen, he has taken a huge amount of the risk off the balance sheets of the banks so that, in the future, if there is a market meltdown like last year, it will not threaten the banking system. It is not that there won’t be the same trading and risk-taking; it is just that the traders will not be risking ordinary depositors’ cash, and therefore there will not be a risk for the taxpayer. By taking this risky stuff off the balance sheet, the US government hopes that the risky speculation of the few will not be paid for by the many – which is now the case in Ireland with Nama.

Before we get back to our own case, let’s examine what Obama is trying to do by explaining these shadowy-sounding entities like proprietary trading desks, private equity outfits and hedge funds – and how the banks ended up owning them.

Many years ago, I worked on one of these proprietary trading desks at French bank BNP. We traded the government debt of emerging market countries, such as Russia, Brazil and the Asian tigers. We also traded debts that had defaulted, such as those of Argentina, Venezuela and Brazil.

The idea was that we would bet on these risky but very high return markets, using the bank’s (depositors’) money. By doing this, we would drive the profits of the bank through the roof and everyone would be happy.

Over the next ten years, international banks extended these types of operations to include hedge funds. These were again trading operations taking risky bets on listed stocks and bonds to make more money than the average stock. In later years, private equity operations emerged which took large positions in existing private companies and then sold them either to competitors or to the market by way of a flotation. In many cases, the banks themselves financed the acquisition of their own companies by lending to the potential buyer. All the while, profits increased.

Then, of course, the hedge funds started buying all sorts of property-related derivative products, as did the proprietary trading desks, taking bigger and bigger and riskier and riskier bets to make the more elusive ‘home run’.

When the market collapsed, so did these bets, and the depositors of the banks had to make up the shortfall. But they couldn’t, as the banks had been borrowing many times the deposits on the books due to deregulation. The free house was out of control.

So Obama had to come in and buy all this stuff that was on the banks’ balance sheets to make sure the banking system didn’t collapse, even before the traditional runs on the banks occurred. These schemes, where the Treasury paid good taxpayers’ money for rotten derivative products, were nicknamed ‘cash for trash’.

In Ireland, we have our own ‘cash for trash’ deal. It is called Nama. Here our government will buy trash from developers to keep the banks afloat and try to tell us this crud is worth something.

Imagine the government went one step further and, like Obama, vowed ‘‘never again’’. What could it do? Well, it could prevent banks from ever again getting involved in property and move back to a building society model. Remember: our ‘derivatives’ equivalent was commercial property,100 per cent mortgages and speculative development land deals. If we were to follow the US, the next move after Nama would be to ban the banks from getting involved in property again.

We could also change the rules associated with how much collateral we extend against property. In order to make sure that a property boom never happens again, we could restrict the collateral given against property to the ‘average’ price of the property for the last 30 years. We would never have a property boom again.

But such moves would imply learning from our mistakes. Is this something we do in Ireland? Or, putting it another way, are we, the parents, prepared to make the out of control teenagers pay for their mess? Nah, never, that would be too sensible.

The lesson from the Irish financial free house is: don’t worry, you can do whatever you want. These parents are a walkover.


  1. Malcolm McClure

    David says: “In order to make sure that a property boom never happens again, we could restrict the collateral given against property to the ‘average’ price of the property for the last 30 years.”
    That makes a lot of sense, so long as the collateral property wasn’t built within the past 10 years.

    • fiat

      Given that there is no legal money in circulation backed by anything of value , every country in the world is technically bankrupt. The banks are also allowed to lend out at 10 to one they have on deposit the only way to describe this is an episode of monty pyton. all these inteligent analysis posted here are pointless . money is a complete illusion , This bank practice will continue in to the future , i had a debt cleared by a bank upon legally challenging on this principle in short banking is an unlawful practice

      • Jonathan Hannon

        This is an interesting argument. I work in a tourist shop on the weekends ad have legions of really dumb yanks coming in giving out about their government. On one hand its kinda scary how little they know about just about everything. If america has the best universities how come they produce people that know nothing. Anyway they give about american debt, its a pointless argument as they print their own money anyway and if they default on the debt who’s it owed to anyway, themselves. Thats not unless you believe the conspiracy theories about 10 families owning the fed. Anyway would love to know a little about how you beat he debt with the bank… sounds interesting and i would love to investigate anything that beats those scumbags

        • Eireannach

          A small number of people own the Federal Reserve.
          A conspiracy is defined as a ‘group of more than 2 people acting secretively and unlawfully against the interests of outsiders’. Since the Federal Reserve Act passed congress, the FED can’t be described as a criminal conspiracy. But the FED is highly, highly secretive and resists all attempts to audit it. Ron Paul is pushing a Bill to audit the FED at the moment, he’s having a hard time getting the support he needs. Congress is afraid to challenge the FED.

        • Colin_in_exile

          Jonathan,

          The “dumb yanks” who frequent your tourist trap are not the same people who sent a man to the moon, created the internet, the microprocessor or the jet engine. Those hard working geniuses would be “mindfucked” if the stayed here for more than 1 day. The people who do visit are in general ordinary lower middle class / working class, Irish / part Irish heritage, middle aged / elderly and not ivy league educated.

          • wills

            Fiat.

            I posted on this legal loophole 10 months ago.
            Also, the banks can be sued by account holder on the basis of their deposit put to use illegally over the capital ratio’s limits.
            Any takers…???!!!

          • Jonathan Hannon

            Yes I take you point whole-heartedly. Some members of my own family have been fortunate to attend Harvard. They are hard working middle class americans and the only reason he got in there was an ice hockey scholarship. But there are only 7 Ivy league schools and add in MIT for good luck. These institutions are the best because they have huge funds and there only for the chosen few. In these institutions google, facebook, the internet can be nutured. The vast majority of americans have a slightly skewed view of the world. Last summer I met an american college professor form Rhode Island. So he would appear to an american “liberal”. he asked me about lynch’s castle on Shop street and I told him it was the seat of the Lynch family, the same family that Che Guevara decended from. His reaction was comical. The usual bile about Guevara been a murderer and the destroyer of capitialism blah blah blah. I met another who had a masters in media and had never heard of Gore Vidal or Chomsky. And these were educated. Great things do come form american, mainly music though. They dont make things anymore so its all intellectual property. So much of our economic direction comes form them, the strenght of our economy comes form them. And god bless them, they walk around in this haze of ignorance believing all this crap about liberty, freedom and their the greatest country in the world. But the truth is there a hugley racially and socially divided country and their idea of sucess as a person is based on how much stuff you can own. The american dream is based on big houses, cars and blind consumerism. The disturbing thing about them now is they’ve gone so far right. Irish american retiree’s comin buying big gaudy crosses for 5 year olds starting catholic school. Watch enought network news and you’ll get an idea of their narrow view of the world. Their overt jingoism becomes tiresome after you realise that they know nothing about the history of the rest of the world. Gore Vidal said that the forst pilgrems didnt come to ameria for flee persecution but to be free to persecute..These are all just observations of a wide range of people that I meet while working in a tourist trap. I’m not anti american but I resent their will been passed onto the world. I also separate americans from the complex in which they live. Its not there fault, there just highly manipulated by the goverment and a right wing media. On an individual basis the vast majority are really nice people and we here in Ireland could learn a thing or two form their basic manners. Its a complicated issue.

          • G

            @ Jonathan Hannon

            Interesting comments and most welcome.

            I have great time for the United States, great people by and large, highly manipulated and government pursing dreadful domestic and international policies. Your points are well made and I would concur with many having lived there and been involved with an American for 5 years.

            Don’t be too surprised by the ‘failures’ of Ivy league schools, they are designed to repress, Chomsky would not be surprised by being unknown to that particular individual. Universities he maintains are obsequious servants of power, lazy academics, high priests of ideology etc etc – he has written quite a lot on this.

            The Fate of an Honest Intellectual
            http://www.chomsky.info/books/power01.htm

            School is training for Stupidity and Conformity
            http://www.youtube.com/watch?v=hpbGHZuVsw0

            US has produced some great minds, great writers, critics, Vidal being among that number – many more, large movements of people too campaigning for social justice, so not just about the individual, which Chomsky rejects totally, he sees hope in the masses of people agitating.

        • Deco

          Jonathan – I don’t care about Dumb Yanks. I am concerned about Dumb Irish. And since the early 1990s people in Ireland have been getting dumber and dumber. Listening to all sorts of excuses from Ahern and still voting for him. And in my mind the younger people are dumber than the older people. Ahern would have had his overall majority were it not for the fact that the older constituencies on the Atlantic seaboard voted against him. In contrast in the yuppie areas, Ahern romped home every time. Were it not for the recession, the same would apply to Clowen.

          We need to fix the stupidity level in our own country, before we start making judgements of others. There are a lot of people in this country who have their heads filled with minutae as a result of wall to wall coverage of the English Premiership or endless “talent” shows. The same people who believed a decade of BS from the leadership of this country, and proudly with great enthusiasm ran like lemmings over the cliff. And they still have not realised what has happened.

          Look around you, Ireland is full of idiots !!! Our property ponzi scheme was much worse than that of the US.

          • Bamboo

            Did you notice how Ahern managed to get RTE to promote his book? He received a lot of RTE attention there.

          • Jonathan Hannon

            Don’t get me started on Bertie. It gets me angry just to think about him. I worked in finance for nearly 10 years. Lots of Fianna fail supporters around me. I argued against Bertie for years just to be called a blue shirt of a pinko. People just laughed at me. Now who’s laughing. I had everything during the tiger years and then I lost it all. Its the best thing ever to happen to me. Your right Ireland is full of idiots. Hang out on quay st in galway on a saturday and see al the weekenders with midd atlantic accents bull shitting their way around the city full of bravado, arrogance and mindlessness. But there are many smart people around. We just have to learn to value a different type of intelligence. Remember the previous generations to now didn’t get a free education and didn’t have a chance to attend college. This is passed onto some children. People admire peter sutherland because he is so respected on the international front and is so educated. But lets look at him from another point of view, he’s the father of globalization, founded the WTO, chairman of goldman sachs and BP, head of vatican bank and received his MBA from a university founded and ran by opus dei. Now analyze all these companies and what evil they have unleashed on the world. He’s also a bilderberger and a member of the trilateral commission. More subversive and secretive groups. And sutherland is held up on a pedestal in Ireland. The twat Sindo social columnist barry egan calls him “Irelands favorite banker”. But the point is that we lack confidence in ourselves in this country and look to “respectable” people to guide us, so yes a lot of idiots here. HELP

      • mcsean2163

        Hi Fiat,

        Could you publish some more details on how you managed to get a bank to cancel your loan. I’d like a new €20 car and it’d be handy if I could cancel the loan rather than make repayments.

        I look forward to the details of loan cancelling.

        Rgds,
        Sean

        • mcsean2163

          Please read €20k car!

          • Eireannach

            So McSean, you’d like something for nothing. Are you Irish by any chance?

          • mcsean2163

            Eireannach,

            Indeed and I am! begorrah!

          • fiat

            sean
            its astonishing that Dmcw has never touched on this subject people have written off loans of 40 k on this principle not in this country as far as i know , theres a legal process involved only a few letters ,if this information gets out the game is over for the banks why 20k on a car i do 700 mile /week in a 600e car running on green diesel @ 70c / litre

        • fiat

          yes it is indeed true loans can be cancelled as you are simply revealing the unlawful practice .the principle being if you go and seek a 20 k loan you are actually creating that money the minute you ask for it as it never existed until you signed for it ,the bank will then come and charge you interest on this money which is in effect ones and zeros on some computer somewhere its pure fiction .yes you may say that this cannot be true

    • fiat

      i want less corruption or more of a chance to participate in it

  2. Full Public National Banking Investigation NOW

  3. Bamboo

    Thanks David.
    Great article and personally I think I am beginning to understand things better, thanks to your latest article. I am lost for words and guess many of us will be.
    I just have one ignorant question: So many are against NAMA and if there is an unlikely event of a general election in the next couple of months that brings a new government; can this new government undo NAMA. What does it take to undo NAMA? Maybe we can open this discussion.

    • paddythepig

      Hi Bamboo,

      NAMA is not our biggest problem, though it seems to be the thing people are getting most upset about. I understand that ; it is galling to see the bankers getting away pretty much scott free having driven the country into ruin.

      NAMA will most likely make a loss, how much is anyone’s guess, but even if not even a single cent was ever collected into NAMA – barring the overhead of administration and funding costs – it’s losses are limited to the amount being paid to the banks for the loans.

      The bigger problem, in my opinion, is the borrowing level of the state, 24 billion borrowed in 2009 ; borrowing projected to be 20 billion, 18 billion, 16 billion, 12 billion, 9 billion in each successive upcoming year. How much of this is productive borrowing? Barring the NDP portion and the bank recap portion, all of this is to fund the overspending of a state out of control.

      It will someday have to be paid back, with a cherry on top – the compound interest.

      Personally, important and all as NAMA is, I’d like to see the debate switch to this topic.

      Paddy

      • wills

        Paddy -

        Check my link back at other article for deco on debt servicing.

        NAMA will tip Ireland over the edge in debt servicing and see us into a ‘debt spiral’ so here my NAMA number one concern converges with your debt servicing meltdown concern, paddy will you dance….!!!

      • Deco

        We need neither NAMA or the massive state borrowing which is doing nothing but propping up insiders. Clowen, McUseless and Gerry uRyan are still paid more than Obama.

      • paulmcd

        Paddy, If we are to achieve anything, we have to deal with the reality of the Government we have; and I suggest we play by their rules: Agree with them that NAMA will succeed and may even make a profit, and then insist that they bite the bullet of the kind of solution which I proposed under Post No 50 on Page 2 of “Our cupboard is bare, so we must sell family silver.” This proposal will protect middle and lower-income groups. Compound interest will be “rolled up” and the bonds referred to will be exchanged by the high-income holders for the equivalent in assets at their “LTEV” if these assets should fail to sell at such values within the 10-year time scale.

        • paulmcd

          A main reason for the heavy borrowing is the billions being dumped into the banking black hole. This must not be allowed to continue. Billions continue to be lost also in granting tax allowances to the very rich for pension contributions etc. Joan Burton mentioned a figure of 2 bn euros in respect of pensions. Perhaps such an allowance could be considered for anyone buying an asset outright from the NAMA portfolio.

          • mcsean2163

            Hi Paulmcd,

            National debt went from 38 Q4 2007 to 75 billion Q4 2009.

            None of this was asscoiated with the banks. The bank money was taken from the NPRF.

            In fact even with the high comparative level of our borrowing, the rates we are borrowing at are still exceptionally low. The democratically government is spending our future at a phenomeonal rate.

          • paulmcd

            Hello McS, As far as I recollect the funds received from the privatisation of Telecom Eireann were used to set up the Fund. You are correct in what you say but this money was never intended to be used for a banking bailout and the fund will have to be replenished:

            http://www.nprf.ie/home.html

            The public service unions should be particularly concerned about this misuse of funds. It is conceivable that public servants today or at a future date within today’s public servants’ lifetimes will be without their supposed “guaranteed pensions”. In my post on David’s last article, mentioned above, I highlighted how senior politicians and higher public servants who are on 6-figure salaries should be held accountable, show responsibility and belief in the solutions they advocate by putting substantial “skin in the game”.

        • Jonathan Hannon

          The pensions board is headed by Tiarnan O’Mahoney. The protege of the great Seanie Fitzpatrick. A man who lost 800 odd million on the ISTC debacle. A man who invested in sub-prime packages. He advices the government on pension policy. Only in Ireland. I would give my right hand to know what these bankers have on the government. If only we knew. Maybe we no longer live in a democracy, maybe its a plutocracy..

      • mcsean2163

        Agreed. I’ve been saying this to friends for a while. Just say NAMA losses 15 billion, which is unlikely, big deal!

        National debt has doubled in two years. http://www.ntma.ie/NationalDebt/natDebtIntro.php

        End 2007 €38 billion
        End 2009 €75.1 billion

        Who gives a **** about NAMA. I don’t. It was a bad solution but there wasn’t much out there given Lenihan gauranteed the banks as recommended by DMcW.

        As you say Paddy, national debt is the issue and it’s all rolling on to the shoulders of the generations to come……

        • wills

          you are missing the point.
          NAMA is not about numbers it is all about impoverishing the vulnerable and weak in our country.

          • G

            crushing the vulnerable and weak, driving the old into retirement, paying the young subsistence wages.

            I think the response of the ‘auctioneer’ last night on Frontline said it all, they don’t want ‘affordable housing people’ living next to people who bought apartments for 700k.

            People has lost their values, sickly concentrating on people’s monetary value and economic utility, it has become a VERY twisted society. Shame, Shame, Shame!

            If that guy, like my father once, was crushed in his car bleeding to death would he say to the travellers there to resuce him, sorry, you’re not my kind of people, I’d prefer to be rescued by Brad Pitt.

            Idioten.

  4. Alf

    Hi David,

    NAMA is an attempt to recreate bubble prices. The Irish government couldnt exactly come out and say – you can’t do that again.

    Property alone is not the problem or even banks betting on it. Its a government whose single idea for the economy is house prices.

    Similarly for the US. House prices cannot fix the economy. The problem with US and Irish banks have always been symptoms, not the cause. The US needs to stop undermining its home grown industries.

    Real wealth is always kicked off from innovation.

    So where is the new growth going to come from?

  5. Fergal73

    Nobody learns, everything is done ‘according to process’ and where the misdeed is blatent, there is no punishment.

    10 years on, we just had the inspectors report on one of the biggest cases of insider trading in Ireland. (It took 10 years, think about it.) Mr Flavin had a case of ‘bad judgement’ resulting in a profit of EUR 85M.

    http://www.independent.ie/business/irish/after-years-of-digging-jim-flavin-makes-a-great-escape-2029293.html

    In the paper today, there’s also a story about the president of UL appointing his wife to senior position in the university without appropriate interviewing or consideration of other potential candidates (why bother when you know who you’re going to appoint with tax-payers money anyway?).

    http://www.independent.ie/national-news/university-denies-nepotism-allegations-after-president-appoints-wife-to-top-post-2029320.html

    Ireland is a permanent free house – the parents live at home, but they join in on the party. When the morning comes and it’s time to clean up, they go to social services (the EU) and ask for help.

    As I’ve said before – the logical way out, for those of you with an option is to emigrate. It is a (unofficial) key part of Irish government (FF in the main) planning, and has been since the foundation of the state.

    http://www.independent.ie/opinion/letters/get-real-on-crisis-2029297.html

    • Deco

      Flavin – a prime example of the sumbags that run the ISEQ listed companies. As Shane Ross stated the directorships are divvied out amongst mates who play golf with each other in Portmarnock and the K-Club. In the centre of this web is the Duopoly – AIB-BOI. They own 5-10% of most companies in the ISEQ. Tullow Oil left the ISEQ to get away from them and Tullow Oil is the best run Irish managed publicly listed stock. But they knew that the cabal in the leafy suburbs in Ballsbridge would make a balls of everything unless they could get free of them.

      {

      Ireland is a permanent free house — the parents live at home, but they join in on the party. When the morning comes and it’s time to clean up, they go to social services (the EU) and ask for help.

      }

      I agree 100%. And if you call it this, you are seen as a party pooper.

      Ireland is Bankrupt. Ireland is banjaxed. And Ireland is bonkers.

      And the only way out is not to emigrate. We need our own saucepan revolution, like the Icelanders did. We need to ridicule the scoundrels who caused this mess and make them pay for NAMA.

      • Fergal73

        I’m not saying the way out for Ireland is for people to emigrate. I’m saying the best thing people can do for themselves is to emigrate. They owe the country that mortgaged their future nothing.
        Staying damns their children to paying off the debt of NAMA and the wild overspending on the public sector. The unborn children of the 2010′s will be the financial equivalent of crack babies – except they will be suffering for their grandparents’ generations party.

        • Deco

          Fergal – the most efficient way of dealing with the problem, probably is to emigrate. I just wish that people would be more stubborn and more independent minded, and stop acquesing to the cliques continually.

          There are legions of young men signing songs about sport and ‘stand up and fight’. And this male bravado arrogance BS. And then as soon as the going gets tough, they run as far away as possible. The whole thing, like so many aspects of contemporary Irish “culture” is superficial and phony. At least the Icelanders made a stand. We seem to prefer to run away.

          Also I have noticed that in the current young generation their number 1 loyalty is to lifestyle. This is the ultimate victory of the consumer lifestyle segmentation technique of consumerism.

          Culturally, at least we have followed the Harney dictum and become closer to Hollywood than Hamburg.

    • Deco

      If you do not like what was going on in DCC etc.. you can find out the names of the various businesses owned by the DCC conglomerate and steer your custom well clear of them. A list of the most common businesses is available in the edition of Phoenix Magazine from last October 2009 I think. That way you will be punishing this sort of cronyist cabals, and a judicial system that says that everybody is innocent and cannot ever be proven guilty if they are suitably connected.

    • Deco

      Fergal – not only are university presidents playing the system…..but now we are seeing blatent cronyism in the Revenue Commisioners.

      I expect that your local corner shop is expected to keep everything 110% correct. Meanwhile scoundrels with a history of funny finances, are getting tax exemptions.

      http://www.tribune.ie/news/article/2010/jan/24/ahern-book-got-tax-exemption-while-14-refused/

      Bring on the saucepan revolution.

    • Jonathan Hannon

      When you apply for a green card they want a reference from either a priest, a politician or a bank manager. All pillars of our crooked society. We take morality form the institutions that define it. We have seen all these pillars decend to dust in the last two years. No wonder the country has little or no direction.

      • Deco

        Jonathan – is this really true ?

        I thought the references were from a previous employer, one of their citizens, or an academic reference. Failing that a state official of some ranking like in the police force.

  6. Bamboo

    Fergal73,
    Leaving the country and quitting is the first thing on the agenda for these perpetrator when things get too hot. Or maybe most of the year they won’t show their faces anywhere. They will only be here to see their aunts and uncles and off they go again.
    Many don’t have that luxury to quit. Believe me, I reluctantly came to Ireland in the early 90s due to family circumstances. It took about 5 years for my children to climitise as we have to take 10 steps back in living standards, social life and education. We often think of going back but the children didn’t want another trauma and by now they are well settled. For me? No, I never settled in but survived and I am not a quitter.

    • Fergal73

      I know emigration is not an option for many, but I think it’s clear that it will be a long road and multi-generational effort to try to clean up Ireland.
      For individuals who can, they’d be doing themselves a favour by getting out. It is clear that citizens hold no allegiance to a country that has literally mortgaged their future.

      If you have stay, I hope the problem can be fixed, but I think that as long as people think it is acceptable to support FF in any way, Ireland’s future remains bleak. The collapse of FF is the first of many steps needed.

  7. Good article David and as always it was an enjoyable and colourful read.

    The banks could be reigned in and put in a straight jacket. It could be done if the
    political will was there but I wont be holding my breath because there are too many money maniacs in influential positions and the politicians and a large percentage of the Irish public have the let themselves be programmed into the money, money, money mindset.

    Are there any people left in this country who are incorruptable?
    Where is the fighting Irish spirit now that the country is being held to ransom by a few
    hundred intellectually backward gombeens who should now be in jail?

    It is time to get back to the very basics and attempt to create a fairer society which works for the benefit of the majority and not the few. Unfortunatley all the political parties currently in existence are incapable of grasping that simple concept and as a result they are defective by design and unfit for the purpose which they purport to serve. That is why this is a good time to create a new politics based on radical ideas which could bring about a quiet revolution in Ireland. All we would need to implement it is people with balls who are not insiders and who can not and will not be bought.

    What we have now is not capitalism but anti-capitalism because the state is paying for the greed of those speculators who were happy to screw their neighbours. These people projected the philosophy that it was
    acceptable to expect a worker to pay €400k for a pokey house in the capital when the average working wage was less that one tenth of that figure. Even a delinquent teenager could have told you that the maths do not add up.

    Everyone swallowed this lie hook,line and sinker and never complained at the time – that is why Cowan and Lenihan are now saying that we are all in this together and they are right to a certain extent because if you if fly with the crows then you get shot with the crows.

    Thankfully my parents were prudent working class Scots who educated me that if you spend more than you earn then you are sure to come to grief. They would also have thrashed the life out of me had I trashed their
    house when they went on a Saturday evening.

    • wills

      Great comment, but just one thing, i can only speak for myself but, i did not swallow the POnzi property bubble free money train. Nope i saw what was up back in 1999.

    • Tim

      Pauldiv, like wills above, I also was not one who “swallowed this lie hook,line and sinker and never complained at the time”.

      Indeed, I did complain, when I witnessed a colleague borrowing 7 times her gross income to buy a 2.5 bedroom house. I said that it was crazy-money for a dog-box and that she was crazy to do it and I queried why the banks had changed the rule under which I had purchased my house in 1995, which stated that one could borrow up to 2.5 times one’s gross annual income, or 90% of the house-price, whichever was the lowest figure.

      That rule should be re-introduced and enforced on a statutory basis.

      That alone will reign-in the banks to a ceartain degree, as David recommends.

    • Deco

      What we have now is not capitalism.Because there is massive intervention in the market.

      Instead we have socialism for the rich, with profits gauranteed and low tax, and losses covered up and bailed out.

      The poor compete with their labour, and they few resources they have for profit in the system.

      Capitalism is dead. The children of the 1967 revolution have succeed introducing Marxist style interventions to keep new careerist aristocracies running the new estates (oligopolistic concerns) in power.

    • G

      It’s hardly anti-capitalism when the State is funding and backing the institutions and individuals who created this crisis.

      It is State capitalism – privitisation of profit, socialisation of risk and debt. And if you took on a hefty mortgage then tough, no bailout for you just repossession.

      Not true that people all bought it and also not true that no one spoke out – writers, commentators and honest economist in Ireland and US spoke out, but they were sidelined, marginalised etc

      The ultimate test is for the Irish public come election time, will they decimate or forgive FF, that will really determine who and what we are as a people.

  8. wills

    David.

    Good read. There is a problem though with the solutions article puts forward.

    In Irish society there exists a mindset, a mindset we term gombeenism. It is a contagion and many suffer from its creepy symptoms. Symptoms such as the following:

    - if you work in a position of power or influence you can hide from any dereliction of duty through your crony networl contacts accrued from childhood, university and family.

    - If you find yourself with an opportunity to make a quick buck and it is bad news long term wise you merely just stick your fingers in your ears and count to 10.

    - If you do scam and hit the swag bag jack pot you merely pretend you are a wide eyed innocent and bat your eyelids and kinda do a creepy smile and this indicates you are a gombeen and this gets you out of jail free cause this gombeen card is shared by a wide variety of gombeens across all sectors of irosh society………….

    ……………………… and here is really the essence of the ‘free gaff’ quandry, particularly in Ireland.

    There remains in place in centers of power gombeen men and women manning the ramparts across all sectors of society, winking and nodding that gombeen smirk which indicates you are an insider and so free from having to play by the rules.

    So, if we, set the rules, rules which in theory would if followed protect the system from epidemic fraud, the rules you highlight above, it still does not alter the fact that we live amongst gombeens who will do a dennis the menace beano comic number and continue on their way smashing and grabbing and smashing and grabbing and smashing and grabbing us all over the cliff wiley keyote style.

    Which actually they’ve done already…………..!!!!!!!!!!!!

  9. AndrewGMooney

    Serious Berroca ‘hangover’ piece of writing. I read a similar, though ‘high brow’, article earlier today by Joseph Stiglitz which seems to apply as much to Ireland as it does to the USA / UK:

    http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7061058/Joseph-Stiglitz-Why-we-have-to-change-capitalism.html

    The ‘what happens in the IFSC, stays in the IFSC’ party days and nights are over. Unless future generations of Irish citizens are ready to back-stop the Casino and the ‘golf’ enclave in the Algarve. But shouldn’t they be asked formally before the roulette wheel starts spinning again? Explicitly. Via an election / referendum?

    The ‘Volcker Rule’ is genius in that it brings the sobriety and gravitas of 83 year old no-nonsense experience to the table. It’s an excellent step on the ‘long road back to boredom’ as Mervyn King, head of the BOE, called it. It’s a step towards ‘robustifying’ society against absolute catastrophic financial Armageddon via derivate WMD’s, as espoused by the recently hermetic Nicholas Nassim Taleb. There’s really too much at stake to allow the frat party to restart. In Dublin, London or NYC.

    It’s quite instructive to think of the money applied to rescue the Casino versus the monies applied to Haiti. The World Bank has given a moratorium on Haiti’s debts for 5 years. Is that the best that can be done? DMcW’s recollection of trading debt makes me think: Is there no constructive way forward?

    Ireland has the human capital and cultural capacity to re-invent itself, but to do so, IMHO, it needs to shed some historical baggage, such as the Jesuitic / Gombeen tendency towards ‘mental reservation’ which needs to be cornered and faced down:

    ‘But let’s move away from Ireland’s Catholic clergy for a moment and look at the idea of mental reservation for a little while longer. Let’s stand back and admire it, because it has bled into secular life. Come on, mental reservation covers everything from adultery to tax avoidance. It is a liars’ charter.’

    http://www.irishtimes.com/newspaper/opinion/2009/1130/1224259708100.html

    I am not without sin, casting stones, etc. But if I can change my errant ways: Anyone can. I do hope that Brians x 2 are on top of this emerging meme about the Vartry Tunnel collapsnik scenario. I was already waaay freaked by the Peak Water debate without considering the possibility of Dublin losing it’s water supply because of infrastructural neglect of the acqueduct. Never mind NAMA, time to issue some bonds to make sure the taps stay on, toilets get flushed,etc. Forget the Casino. Invest in real future wealth generating capacity. Invest in future generations of Irish people. Don’t chain them to any more unproductive gambler’s debts. They’ll thank you both.

    • wills

      Andrew,

      ‘Ireland has the human capital and cultural capacity to re-invent itself, but to do so, IMHO, it needs to shed some historical baggage, such as the Jesuitic / Gombeen tendency towards ‘mental reservation’ which needs to be cornered and faced down:’

      Agreed.

    • Deco

      The Volcker dictum would have prevented the crisis. And it is the only hope we have of restoring the system to stability. Unfortunately it will result in a short sharp shock to the system. Share prices everywhere will plummet. And Goldman Sucks will never give a penny to Obama again. In fact I think that you can expect the Clintons and the other Dons in the US Democratic Party to be annoyed – considering that they have been trying to marginalise Volcker.

    • Malcolm McClure

      AndrewGMooney says: “the Jesuitic / Gombeen tendency towards ‘mental reservation’ … needs to be cornered and faced down: “.
      In commercial dealings with the outside world that is a key caveat. Of course, another defining Irish characteristic forms the other side of the same coin. That is our inherent compulsion to embellish the truth for literary or emotional effect.

      This tendency is nurtured and applauded here as key to our Irish genius, but is labelled Blarney by others. It goes down well in pub culture everywhere, where Brendan Behan was a prime exponent of the genre. But in the commercial world it makes negotiators from staid northern countries feel very uncomfortable, as they suspect we are trying to pull the wool over their eyes. Therefore, at all costs it should be avoided in that context.

      In the commercial world let’s all try to stick to dull, cold reality and save the behanising for when the deal is sealed and delivered.

  10. paddythepig

    Folks, here is the announcement of the ‘Volcker Rule’ by Barack Obama. It gives notice of the reforms David refers to in his article. This is worthy of real discussion.

    http://www.youtube.com/watch?v=NfiD3N267ok

    Is this real reform, or window dressing? Personally, I think it’s the former. How will this ‘financial climate change’ effect the world, and little old Oirland?

    Paddy

    • Alf

      Paddy

      For Obama to say that bad practices of banks caused the recession is a tiny part of the picture. The property bonanza postponed and masked the true state of the US economy for some time. The repeal of the Glass—Steagall Act was just one step but the underlying causes of this recession started a long time ago.

      If you look back far enough the buck always stops with short sighted politicians who refuse to do the hard work of stimulating investment, rewarding innovation. Wealth continues to seep from the country as they just consume more and more foreign goods in the the vain hope that growth will manifest.

      There is no easy money and there is no quick fix.

  11. Deco

    There was not just one adolescent house party in the last ten years. The entire decade was a house party. It was full of illusionary coolness and the sophistication that comes from selfishness and arrogance. It was a revolting amount of nonsense. Of course if you were not there, involved, there just had to have been something wrong with you. It was the epitome of cool to take part in Ireland’s house party. Those who opted out were traitors to the new Ireland, a new society that congratulated itself repeatedly on it’s “achivements”. I don’t even know what they are now. I think one of them was that we were the richest country in Europe (I think the BoI came up with that one – we know how good they are in economic assessments).

    This board is full of those who had to live next door to racket, while they tried to get on with their lives in peace. And now the “I told this would happen” moment has occurred. And the mess has to be cleaned up.

    But for some people the party is continuing. In fact the party is no longer in Ireland. It is in the exiles bar in Denis O’Brien’s resort in Portugal, with drunken property tycoons in rugger jerseys singing NAMA-NAMA-NAMA.

  12. “Last Friday, US President Barack Obama closed down the ‘Wall Street free house’.”

    No he didn’t. He said he wanted to. Given the bizarre nature of the United States Congress, we are a long way from here to there, especially now we have to factor for the effects of the Supreme Court decision in Citizens United vs. FEC. Those banks ain’t going to give up that revenue without a fight and their way of fighting will be to bolster Republicans and dissuade Democrats up for mid-term election in November. If he wanted a ban, the time to do it was before the TARP payback when he had them over a barrel.

    • Deco

      One of the result of the defeat of McCain, and the whimpering exit of Bush, Cheney, Paulson etc…was that the Wall Street element in the Republican Party lost infleunce.

      At the same time the Dons in the Democratic Party went back to their mates in the US Financial sector like as if it was the Clinton years again.

      The Republicans are succeeding at the moment because Republican candidates who are critics of Wall Street are gaining the nominations.

      Obama has realised this, and realises now that the electorate is strongly against more bailouts.

      The US banks do not need the Republican Party to help them get their way. They have Timothy Geithner who is a Democrat to get them whatever they want. Geithner was in the US Federal Reserve in New York, when all the subprime debt was being graded as AAA investment grade. Geithner did a Patrick Neary on the whole episode. And worse than Neary, Geithner got promoted to the biggest job in the US economy.

      • G

        Interestingly, the Daily Show had a segment on Geithner’s attempts to sell his house during the downturn.

        The house was originally worth $1.3 million, the journalist asked about the new price thinking Geithner would have dropped it given recessionary times.

        The new price tag he was surprised to learn was $1.6 million……….

      • G

        Geithner Must Go–And the Future of the Fed

        “The first casualty of the president’s political debacle will likely be Timothy Geithner, the severely over-confident treasury secretary well known as a lapdog of Wall Street.”

        http://www.thenation.com/doc/20100208/greider

  13. Dilly

    With regards to servicing debt, here is something to watch on a Sunday evening. It is about New York in the 70′s. Interesting comment at the start “New York is where the future comes to rehearse”

    http://www.youtube.com/watch?v=Ex-iMzSNcrE

    • G

      30-40% of New Yorkers live in poverty, you won’t hear that on Sex and the City.

      You won’t hear of the City efforts (colluding with developers) to gentrify Harlem through raising rents on African-Americans – banishing them to distant suburbs, the multitude of programmes on American cities (CSI Miami, CSI New York) which trumphet violent, over-populated urban dumbs for the majority, play grounds for the fabulously rich & famous……………breakfast at tiffany’s, all is not what it seems.

  14. I have a slightly different read on David’s analogy.

    We sold off our family silver (our competiveness); we had a massive party on the proceeds (property boom) trying to emulate the World Party Players (USA and UK). Party got out of control as intoxicating substances we didnt understand became the norm. Somebody died (Celtic Tiger); We were left with a massive bill for damages (NAMA).

    The more I follow this crisis the more I see that a sustainable strong property market is key to our future; and that Government interference in the 00′ies property market altho for good intentions (to readdress the lack of housing supply) was extremely damaging.

    I fully agree with David that bank loans secured on property collaterals should be tied to a property index rather than Market Value.

    Obama is embarking on populist measures – not always the wisest reason for implementing change.

    Its too easy to keep bashing the bankers. There is a question mark over Banking Executive’s competence (particularly considering their levels of pay) as there is with our politicians.

    Solutions (bit less knocking bit more solving): What about lobbying for a University of Europe to be based in Dublin. 10000 students – fantastic for the local economy – and we have the accommodation already built. Plus the expanded IFSC cashing in on Obama’s crusade – thats getting people into the country and fixing our hole.

    • Dilly

      We lost our competativeness when everyone moved into the property game, cheered on by Fianna Fail. So, heading back to prop up the property market is laughable and pure gombeenism.

      • Distinction between strong sustainable property market and over inflated; unregulated market.

        Same question as I have been asking lately – where are we with financial regulation in Ireland?

    • Colin_in_exile

      PhilRuss1,

      Your first 3 “we” should be corrected to “some of us”.

      Celtic tiger was not an entity, so what never lives can never die. Celtic tiger was a description of this country getting drunk on money that belonged to another country (Germany).

      Your fourth “we” should be corrected to “the rest of us”.

      • Hi Colin

        Having witnessed trade unionism in its full flight last monday on Frontline – I think those who sought to push up wages are far from squeaky clean.

        Trade Unions are no better than the bankers – thats the cold light of the day reality,.

        • wills

          drop the ‘we’ though please, your not a group leader.

        • Colin_in_exile

          Hi PhilRuss1,

          I’m not defending the unions, I’m not a member of one, and if you read what i wrote last week about air traffic controllers, you’d know I don’t support them.

          However, my understnading is that wages were pushed up because employees needed to cover the increase in their rent or mortgage / gas bill / electricity bill / night out on the tiles etc…….. and not the reverse.

          As for equating unions to bankers, you must be inside the artic circle at present where there is very little daylight to make such a comparison. The cold reality is that bankers only care about pulling enormous salaries and bonuses and hanging onto status and priviledged lifestyle. At least one could argue that trade unions are benevolent institutions whose birth contributed to the betterment of all of mankind including the poor.

    • StephenKenny

      The university is a brilliant idea; I fear that it would be located in France – they always seem to end up with these things – but well worth a go.

      Without regulatory changes, I agree that bashing the bankers is pointless, and even possibly counter-productive. But with the necessary regulatory changes, bashing the bankers is necessary: We have to make it clear, to ourselves, that much of what they did was ‘morally wrong’, as well as much that was illegal, and banks should remember that they are not just any other company, but are in a special position of trust, thus the taxpayer backing.

  15. Aoulde Dublin : Oh those memories I remember them well when a pint of plain was your only man.

    Smoking might have to be re-introduced to preserve the sanity of the good olde tymes .No money woes then as long as you had the price of the fags and your plain the world was perfect .Re-introduce laughter and expand musicals and more symphony and learn to forget what you can and remember what you want .

    • Tull McAdoo

      Sorry John, but the smoking ban stays, health costs and all that you know what I mean, taxpayers money, best practice and all that good stuff. HOWEVER (jasus there’s always a big however) were doing a great line in “Bread and Circus’s” that you might find amusing if your interested……now where did I leave that link for FF and Merrion st.

      • Colin_in_exile

        Tull,

        Think about it, pensions are currently unsustainable, problem solved by getting the sheeple to die earlier, promote the fags, more money coming in to taxman, publican kept happy – its the FF wet dream.

  16. Philip

    My take on David’s article is that we were like the neglected children of wealthy parents who could lavish other people’s money on them to keep them out of sight. Such kids are spoilt and never develop a sense of responsibility. All come crying to mammy when things do not work to their tantrum filled satisfaction.

    The recent flooding and freeze up together with unions whose wealthy members are all too ready to commit economic harm highlight a malaise eqivalent of unruly overweight youngsters who never got the wooden spoon (yes I am a great supporter of the flagrant use of the baseball bat for crimes relating to chewing gum). We are a mess and the need for boot camp is urgent.

    As a nation, our lack of respect for one another is an aspect of our inability to listen. Like the little scoundrels lost in their PS3s, Wiis, XBoxes We are “zoned out” on GAA, Racing, Property speculation, drinking and eating what must be one of the worst diets in the world. One should not be surprised at all the water outages and substandard unusable roads, poor planning and crappy public services.

    Since the 2 Brians are refusing to deploy a boot camp, our weather might do it for them. Maybe a dose of extended sub zero temps combined with mega floods is what’s needed here to flush this nonsense out. Let the unions bring it on. Let the games really start. Maybe a bit of tough love is in order. And as peoples’ diversions start to crumble…matches get cancelled, race meetings called off maybe then it’ll be quiet enough to listen and maybe look around for the first time at the quagmire they call home and where they see they have only themselves to blame.

    Lads, the barbarians are at the gate. It wont just be Chewing Gum that’ll get you in trouble.

    • ToddH1

      David’s article is somewhat how I felt while in Ireland this past summer but with a slight twist. While I agree with the “free house” analogy, to me the country, during the Celtic Tiger was a collective of teenagers with their first job. They are most likely still living at home and so the majority of the money is disposable for all the fun stuff. As with most teenagers, the first real job is a sense that you are making real money and like most can use the money for fun things like a night out with friends or clothes. They have this sense they are rich now, well it appears that way to them. They still live under the roof with Ma and Da, no bills to pay but try to tell that to a teenager!!! Then like most teenagers that then go to live on their own and have to pay rent, transport, utilities suddenly realize they are not as rich after all. This is where I see Ireland today, the teenager who is now had the realization they don’t have it as easy as it looked. The unfortunate reality is that while living at home with their first job, they were also given credit to go and have even more fun!!! So they are now conscious of the reality and will have to hunker down and grind out the day-to-day to get by. I could see that understanding with most people I talked to who where over 35 but for the folks under 35 who knew nothing but the Celtic Tiger, well they will have the hard time with the new-old Ireland.

    • Philip

      I am convinced that climate has a role to play in our devil may care culture. It has been too clement. Where it has been cold and where people need to make the right decisions to survive, you see work ethic cultures – like Sweden etc and indeed over in Poland and Canada. Well built shelters need a culture which respects good design and robustness.

      • coldblow

        I’m sure you mentioned this before, Philip, a good while ago. And I think I agreed with you for the following reason, that the continentals had to use draught animals to grow crops in cold climates (which you don’t need to do, say, in the tropics) and make provision for winter fodder. This was the genesis of capitalism, in the forest clearings of western Europe, and it developed slowly over the millenia with appropriate political institutions. Climate-wise England was on the border, Ireland was ‘beyond the Pale’. The climate was suited to the above, especially the wet mild winters. The Norman attempt to introduce new practices failed on this rock and they gave up the struggle becoming hiberniores ipsis hibernis.

        England’s ambivalent position climatically speaking (as I think I remember Crotty explaining but I might be getting this muddled up) seemed to allow a lot of flexibility between arable and pasture (ie sheep), the upshot being the appropriation of land for rearing sheep to get onto the lucrative wool trade gravy train in the early Tudor period. This led to the Tudor conquest of Ireland in pursuit of land as a valuable capital resource, which was the real turning point.

        The absence of a long evolutionary period of capitalism and capitalist institutions doesn’t seem to have prevented the successful adaption of capitalism by various countries of different backgrounds throughout the world, however. Just so long they were not capitalist colonialized. This is why Crotty would argue that we have more in common with, say, Haiti, than with Denmark. It might also help explain why there is a failure of leadership (Stephen Kenny) or why we can’t just sit down all together and work this out rationally (Malcolm). Crotty himself couldn’t see how the mould could be broken but didn’t rule it out theoretically. DMcW seems to place hope in those who have returned from abroad with wider knowledge and experience and you’d have to agree he has a point.

        I have a long Crotty quote ready to paste, just to show that he seems to have identified more or less the same issues that have been identified on this forum (although he had his own theories as to how we have reached this situation which others probably won’t agree with) just to add some comfort that we are not drifting off in a bubble of our own cranky thoughts. But I’ll give ye a chance to say “No”, in particular to David as this is his site, before I do so, and that will be fair enough by me.

        • G

          Paste it, don’t wait for approval, exercise your freedom, which is restricted enough by the system.

          • coldblow

            Thanks G, that’ll do for me.
            By the way, I read your Chomsky links which were very interesting. I am still in two minds about him, though. It’s hard in all the cacophony to hold onto anything really solid and reliable, harder still to fish out from the murky soup, as it were, other pieces to add to it to arrive at a meaningful picture…

    • Tull McAdoo

      @ Philip..”Lads, the barbarians are at the gate”….. maybe its time we let them out and let them off to thrash someone elses house. I know some of them have taken flight already, so why not have an inquiry , round up the rest of them and send them on their way….Just like migrating birds, I’m sure most of them will gravitate towards Zimbabwe……Birds of a feather and all that if you pardon the anger.

    • Deco

      Actually the GAA season and the horse racing season are short enough – and are ineffective enough at providing 24*365 ‘bread and circuses’ distraction. Something longer lasting is needed.

      The coverage of England’s Premiership in Ireland is almost at the same level of saturation that you get in England itself. Effectively in some respects a significant proportion of the male population is already more coach potatoe English than the English coach potatoes themselves. This is useful for the cliques running Ireland, as the same model of sports distraction keeps the working classes in England mesmerised in nonsense watching a ball of air get kicked around a field for an hour – punctuated by advertising blitzes. Ireland is becomming dumbed down in a manner similar to the way England is being dumbed down. In fact sitting on a couch and having a head full of irrelevant minutae has become an outward identification of manhood in both England and Ireland.

  17. TYME – in my days there was no such thing as allowing the house become free in fact if my parents went out so did I – with them .So there were never parties unless family get togethers etc .
    I like the term David uses ‘ tidying up’ .I believe this is the key to what we need to reform in our understanding and mindsets .If you think about it Money is not about money .Money is about Time . Time and money do coexist but thats all .Life is about Time .The more Time you give the more happy you are with whoever you give it to.The Family was built on Time .The Celtic Tiger took that away .Now that it has become a cub we can now begin to give time to Life as we remembered as in Family etc. When with Family we feel the time go fast because we are connected just like a fuse box .When we disconnect we are pushing fast but the time is not and we become exausted .This is like the Moon Pull slow down reconnect and be yourself begin your dreams again and re-connect .This is what real tidying is.

  18. SLICKMICK

    Teenagers earn or receive pocket money, try this with bank staff, many of whom are a lot more culpabable than we have been wrongly led to believe.Same goes for staff @ the central bank and dept of finance.

  19. Hopscotch – is a tyme machine when you could run and jump in the middle of a main road in your city and sometimes only to have to stand aside to allow a car pass by .Our Tyme was measured by the distance you walked ,jumped or hopscotched.We had our own celestial clock and watches were only for grandads .

  20. Tidying Up is about ‘Empowerment ‘ and belief in yourself and those around you. And thats the beginning.

  21. Original-Ed

    What I find pathetic about this work to rule by the public service is their lack of analysis of our deficit problem. It’s some knowledge economy when our teachers and administrators can’t add and subtract.
    There’s no tidying up, it’s only more chaos until we reach the bottom and that could be sooner than we think.

  22. Bamboo

    Let’s not get ourself into believing too much that the Celtic Tiger is such a big decadent time.
    The Celtic Tiger happened all over the EU countries and not only Ireland. Ireland has the ability to make this phenomena unique due to high levels of narcism in the country. We all believe that Ireland became a mag-rich state because of the property prices people are foolish enough and willing to pay for.
    Tourists are allured by the so called “friendly Irish” and the “green island”. We make out that the Irish are so friendly because we live on this so called “green” island. In fact Irish people are as friendly as anywhere else in the world. There is absolutely no ground in saying that the Irish are friendlier than other nationality or society. Regarding the so called “green Island”. What makes Ireland green? The trees? There are only little pockets of trees and most of these pockets are in the mountains and hills. Look at the cities and town. All treeless. The only thing that makes it green is the grass and the boys in green, and all sort of tourist paraphernalia.
    Ireland is not as wealthy as we make out it is. Just look at the shabby estates and houses that are build all over the country. The poor infrastructure, education, public transport (yes, excellent pub transport to bring us from and to the pub), health care, elderly care, the state of our roads, etc. Is that so much better than the rest of EUrope?
    If Ireland is such a great country to live in and offers so much more superior living conditions. Why do people not come in bus loads to live here. Why do we have such a small population and are there so many living abroad?

    The so called Celtic tiger is just a nice dream fabricated by the big players to boost confidence so that we can spend, spend and spend. All the international appraisal we received of Ireland as the “economic wonder child” is only fabricated by the government and the media. The fact is that foreigners who are curious to see it with their own eyes what is actually so wonderful and miraculous in Ireland is that they can not see it. It is just as wonderful and miraculous as ANY other country. There is nothing special or exceptional to see. In fact what they see is the high prices they paid for their hotels and the bad roads they travel on. The restaurant food (and availability of it in shops) is indeed better than before the booming years. But that availability of food has always by default anywhere else in Europe.

    So let’s not fool ourselves and go into this indulgence of psychotic narcism. Let’s get that reality check once and for all. Once that is done then we can discuss further.

  23. Bamboo

    We are still in the mode or led to believe that property prices will come back up again. Just look at who actually gives the impression/illusion that it will come back and rise again some time.
    Property market as we knew it is dead. Most of us can’t come to terms with death.
    We all have lost a loved one in our family. Just ask yourself how long it actually takes to come to terms with it. That the person is not coming back. Some of us have visions of the deceased loved one, some of us still communicate with them, some are sure that the deceased loved one is looking after us. In these sad and difficult times we must come to terms with the actual meaning of death.
    Same with the death of property market. Some of us still have visions (delusions) of it being alive, some of us still believe that they can fetch the high prices they purchased it for,
    The reality is that It is not coming back.

  24. StephenKenny

    Dad’s Army
    I was reading the new Obama/Volcker proposals, and it reminded me that Great Depression changes came out of the 3rd effort the US Congress made – the Pecora Commission – that was 4 years after the 1929 crash.
    It also made me think of the BBC comedy series Dad’s Army.
    For those who don’t remember, or never saw it, look at http://en.wikipedia.org/wiki/Dad's_Army.
    One way of looking at the last 15-30 years is that Captain Mainwaring is now a ‘Customer Services Associate’ at the Tescos, and Private Walker now runs the bank.

    • wills

      More cronyism ……!! one would never have guessed.
      No shame.

    • Deco

      what exactly does Phony Tony know about hedge funds, that people dealing with hedge funds every day do not already know ?

      • G

        He doesn’t know anything, just like he doesn’t know anything about the suffering he has inflicted on millions of people.

        He is a hired gun to give ‘talks’ but primarily to use his world contacts to further business interests.

  25. Tim

    Well, well, well!

    Look at the man who rewarded ACTUAL incompetence in his private bank with taxpayers’ millions, now pontificating to us on punishing ALLEGED incompetence in public sector education! Ladies and Gentlemen, I give you Mr Peter Sutherland, of Goldman Sachs:

    http://bit.ly/6eACyC

    • G

      While the thrust of your point (hypocrisy) is accurate, and I thought I would never in my life say it, he actually has a point on academics and universities. The inept and worse, those with absolutely no interest, have it made for life, and they know it.

    • liam

      Hmm…Third level education is another bit of the public sector that got far too much money randomly thrown at it in the boom. I’m not sure its as easy as he (or the reporter at any rate) makes out to fire people in UK or US universities, but Sud’s does make an excellent point about research funding.

      • G

        Indeed, blank cheque, with universities not compelled to publish accounts, a rather remarkable situation, and now they are running debts in the millions, who will pay for all that, good old taxpayer once again, with University Presidents on massive salaries and pensions because, you guessed it, they are worth it (or entitled – interchangable depending on circumstances)

    • Deco

      “suds”. As in the useless foam you get in soapy water. Contains lots of air. Bursts on contact. And when it bursts you find out there was nothing there.

      Suds was before the tribunal – but because his wife was Spanish – he was able to claim that money in an offshore account in Ireland was held by a non-resident. So there you go, that is Suds and paying taxes. Before that Suds was on state pay as Attorney General. And Suds also served on our number one bank for creating controversy, AIB. (There are some things which even Anglo would not do).

      Suds also managed to get a term in as Managing Director of Gold man Sucks. And he pocketted a lot of money from that also.

      Every now and then Suds pops up to tell working people who are trying to provide for their families, what a selfish, ignorant, backward shower of wasters they are. And the media presents this as enlightened and forward thinking.

  26. ToddH1

    An example of what is happening here in the States with rental property…

    http://online.wsj.com/article/SB10001424052748703415804575023483097973538.html

    Key take-away…”The venture had been struggling for months to restructure the debt but capitulated facing a massive debt load and a weak New York City economy that has undercut rents and demand for high-priced apartments. ”

    And

    By some accounts, Stuyvesant Town is only valued at $1.8 billion now, less than half the purchase price. By that measure, all the equity investors–including the California Public Employees’ Retirement System, a Florida pension fund and the Church of England–and many of the debtholders, including Government of Singapore Investment Corp., or GIC, and Hartford Financial Services Group, are in danger of seeing most, if not all, of their investments wiped out.

    • wills

      Interesting link alright, but, in its relation to Ireland the banks have become the property developers so they cannot give the keys of the property back to themselves as far as i know.

      • It’s worse.
        They’re giving the keys to the Govt (NAMA) in exchange for a lump sum risk free get out of jail bung.
        Then they’ll use that money to fund mortgages for folks to buy same properties, a portion of which will revert to the Govt in stamp duty.
        Tis all circular and I’m getting dizzy.

  27. Deco

    More taxes.
    http://www.breakingnews.ie/ireland/water-charges-could-raise-1bn-for-govt-443421.html

    We are currently getting the shock doctrine on water. It is bucketing down in this country, and the Minister for Environment wants to make a water quango, and appoint GP activists into plum state jobs.

    What is really amazing is that Gormless is able to quantify this water supply issue not in terms of metres of pipe, or litres of water – but only in terms of cash retrieved from ordinary citizens.

    And it is being presented as some sort of Keynesian stimulus package. Like as if the one thing that Ireland needs more of, is water. I think that this shock doctrine is a bit much, Gormless. Gormless and his pals in the EPA were responsible for the mess in Sallins and in Ballinsloe. Effectively they would not permit any proper drainage of the relevant water courses.

    And now they want to use this farce to provide a rational for a big government project with loads of jobs for the GP activists. Is this new ? No, Whine introduced the same thing already with respect to the ESB, and plug in stations for electric cars – while continuing to push the most expensive electricity prices in Europe on the consumers. And at the same time the ESB and Eirgrid manage to enforce oligopolistic control of the electricity generation market. If I build a windmill and sell power to the ESB I get 40% of the price that the end consumer pays – and I have to pay a large sum of money to connect to the grid. Much more than the sum of money to connect to the grid as a customer of the ESB.

    Patricia McKenna was right – Gormless and the GP are a collection of hypocrites.

    • wills

      Deco.
      The ‘tap’ turn offs over the cold snap seemed highly suspicious.

      Now it all makes sense. Deny the sheeple their water for a week and then shunt in solution – water charges.

      And ………. bingo ……….. ‘you got yourself a cash bonanza’,

      More Ponzi scams, here, its, charging at the bottom forever more and creaming it of the top forever more by the gombeens closest to the water charges incoming revenues.

  28. Deco

    For some strange reason I am reminded of the staff party of Anglo Irish Bank – with them all wandering out of the Four Seasons hotel in Ballsbridge and passers by – taking photos of them. And this was just after Lenihan decided to take over Anglo Irish bank.

    Why have a house party, when the state will put you up in the top hotel in D4 ?

    I just wonder – who invited Patrick Neary to the house party, and how much booze did he bring ??

  29. paddyjones

    I would like to know where all the money to repay debt is going to come from. The Government keep replacing debt due with more debt, hoping the economy will start to emerge from recession. Or perhaps they just don’t care anymore, they are fly-by-nights only worrying about getting elected for another term.
    This tidy up will last decades, it is a downward spiral. What is the exit strategy for NAMA who will buy the assets from NAMA ……more developers ……with more borrowed money. I bet NAMA will still have these toxic assets in 20 years time.
    Until the Germans stop lending to Ireland the party is not quite over , the party will be over when they stop lending to us.
    This is a dreadful mess I think for me the only option is to emigrate.

  30. Tull McAdoo

    To extort the maximum value from a population, when one has control of monetary system, leverage the laws of supply and demand. Use deflation, inflation, and hyperinflation all as tools to transfer wealth. All have a place and a purpose.
    1. Become majority lender in an economy of people with assets you want.
    2. Encourage indebtedness by loaning generously while securing on assets of interest.
    3. Loosen lending standards until the assets you seek to capture are attached.
    ( this makes the economy debt dependent)
    4. Once debts are significant for the bulk of the population, sharply tighten lending standards.
    5. Backstop losses with public guarantees if possible. This is gravy if one can get it.
    6. Permit default ‘without risk’ on the assets you wish to sieze to maximize wealth transfer.
    ( stall foreclosure, stay repossession orders etc)
    7. Stall the economy to maximize default positions and deplete private liquidity.
    8. Successively ratchet the economy downhill, while bettering secured positions.
    9. In a series of large actions, sieze all security for default. Target the assets of greatest interest first.
    (This deals a heavy economic blow and can help cause the ratcheting required for step 8.)
    10. Transfer asset ownership, but retain prior owners as renters where possible.
    (This reduces public lashback and helps maintain the asset for resale)
    11. Once the bulk of assets of transferred, write them down to leverage the public financial backstop.
    12. Buy up as many remaining assets on the cheap as possible. Hide this action.
    13. Hyperinflate to destroy the external claims on wealth.
    (This destroys treasuries, gov’t bonds, currency. Ensures free title on new assets. May cause war.)
    14. Stabilize the currency or devise a new one, resume lending at a reasonable pace. Sell the assets back, secured of course, at your chosen price in new currency.

    Hyperinflation is only a risk to the wealthy if the population has the assets.
    Make note of that statement. It is key to timing the shift from deflation to hyperinflation.

    • wills

      Great comment.
      Also, how about,..
      Always ensure the money claim on the future / debt now, remains a viable option.

    • coldblow

      Tull
      Yes, great comment. I was trying to work out something in my head like that. Any concrete examples of how this has worked out before, or are we in new territory here in your view?

      Oh, just one other thing I’ve been meaning to say. Why is it 25 they do be playing in your establishment and not 31 as elsewhere in “South Kerry”?!

  31. AndrewGMooney

    This is a detailed reply to StephenKenny. It’s lengthy because I’m waiting for the car, the flight to Davos for a couple of days on the piste before pressing the flesh, etc. Everyone else just press ‘page down’ a few times. Stephen, just read wot u wrote on a previous article about the ‘family silver’ as follows:

    ‘Perhaps we should simply ask what kind of leader should we look for, and is there one available? Few offer from the current ranks of FF or FG; AndrewGMooney seems to bang the drum for a Alistair Darling/Barrack Obama model. Anyone else? It seems to me that Barrack Obama and Alistair Darling provide, possibly, the ultimate cautionary tale, when looking at this question. What we have been watching, in both countries, is no more than a ‘fight’ between state and financial services that is more akin to the drama of World Wrestling Federation event’

    http://www.davidmcwilliams.ie/2010/01/20/our-cupboard-is-bare-so-we-must-sell-family-silver/comment-page-2#comments

    I think it’s a bit more serious than that. What we have is a game of poker between The Nation State (UK/US/Ireland) and The Financial Corporation. Footloose and ready to up sticks to some less ‘regulated’ state if their petulant demands aren’t given in to. The fact that the economies behind Hong Kong, Dubai, Shanghai, Zurich, Reykjavik and Dublin simply cannot back-stop/underwrite The Casino doesn’t stop the peddling of this meretricious drivel. Nor do the bizarre legal and legal and contractual ‘eccentricities’ found in the UAE or China. Is Dubai ‘restructured’ yet? *rollseyes*

    Capitalism around the world always comes in various forms of State Management. There is no such thing as a ‘free market’. All markets have rules made by market makers who are never value neutral, political or ethically. There’s the American pseudo ‘free market’, the Nordic, British and EU Welfare State versions. And, of course, there’s the ‘wild west’ hybrid Irish model of the I.F.S.C. Which was so attractive to the Yankee Vegas cowboys and upright puritans of Mittel-Europa: Until they were asked to accept their lost bets, pay the drinks tab at Party Central in Dublin. Somehow, via NAMA, the average Irish citizen decided to refund their bets, pay for the drinks and pay for new carpets for the trash frat brats.

    It seems to me that the very future of the Nation State Project is under threat from the incubus / succubus, parasitic / symbiotic dilemmas of international finance. I’m on the side of the democratically elected nation state, rather than hedgies, private equity and proprietary gamblers of trans-national capital. Corporations use whatever resources they can, then when they’re exhausted, they move on to another credulous state, promising ‘wealth’ and ‘economic growth’. But is it sustainable or is it cancerous? The corporations of capitalism are legally obligated to maximise profit regardless of the consequences for the host nation / populace. Ireland got off lightly in terms of pollution, unlike China, but faces financial oblivion after trusting this current iteration of The Casino.

    Vampire sucking squid monster banks like Goldman Sachs or Barclays won’t leave NYC or The City of London without a Tax-Payer guaranteed underwriting of their nefarious activities. No other economy other than the Great Satan America and its’ co-conspirator Little Devil Britain is currently large enough to ‘host’ the trading entity known as ‘Wall Street & The City Of London’. Personally, I regard banks like Goldman, Barclays and ANIB as traitors to the American, British and Irish people and would deal with them accordingly. Whilst they may have generated some innovative and creative products and services: The risks of hosting these toxic entities without firm restraints has now become so unwise that only the delusional would let them spin the roulette wheel again. NAMA is delusional. So is The Guarantee.

    I expect Obama and Darling to tell these institutuions to ‘Drop Dead!’. I expect them to defend the integrity of the Nation State. If we are going to have Tax-Payer Funded Capitalism, this needs to be made explicit and no more Jesuitic / Gombeen sleveen nonsenses about the ‘free market’.

    http://www.bbc.co.uk/blogs/thereporters/robertpeston/16_12_09_new_capitalism1.pdf

    When the bankers have repaid every last dime, penny and cent of bailout money: I’ll listen to their ‘arguments’ about the extravagances of the public services which are funded by the very same taxpayers which have rescued their Casino. In earlier epochs, these events were labelled ‘panics’, and various versions of the Austrian approach allowed complete societal collapse for the poor on a routine basis. Whilst the rich hoarded their barbaric relic Gold as ‘real money’. However, Gold, as Willem Buiter correctly argues, is merely another form of fiat currencey whose value only exists because of a collective act of belief / delusion. Just like every paper currency. Actually, credit is the only real ‘money’.
    ‘My word is my bond’. Credit. Credere. All trade is based on trust or it becomes too contractually expensive to make it profitable. Bollocks to the Quant wizards and their ‘master of the universe’ algorithmns which have crashed us to this dismal state. These limp Big Swinging Dicks need to get with The Project 2.0 and shut the fuck up. Before Darling castrates the lot of them on my orders.

    I notice Google are ‘getting the message’ about China. They’ll get the message about their presence in Ireland too. Or they’ll be vaporized. “Don’t be evil” says Eric Schmidt. “Don’t fc-uk with me on advertising taxes, bitch” says Alistair. Never mind the ineffectualities of the ECB / EU: The real gangta playas will bring the roving wolves to heel. Otherwise, there’ll be a re-run of economic natonalism leading to war. Trade, of course, being war by subtler methods. Sun Tzu, etc.

    http://www.independent.co.uk/news/business/comment/hamish-mcrae/hamish-mcrae-the-presidents-plan-should-be-global-and-belie-its-naive-rhetoric-1876931.html

    Stephen, you write: ‘We go round and round and round, and we always return to the same solution: What is necessary, is good leadership.’ In Ireland’s case, I have struggled to find leadership or even authority, prior to the recents comments from Dr Patrick Honohan. I’m not a fan of the 2 Brians, to put it mildly. I think FF/FG are a twin-headed hydra, changing one for the other never changes much as far as I can see. However, Brian Lenihan is on a wing and a prayer so perhaps he can drop all the Jesuitic / Gombeen ‘mental reservaton’ nonsense and reform Ireland from top to bottom. Put the banks in their proper place. Tails. Not top dogs. I wish him well on all levels. He appears to take Honohan seriously. Maybe Honohan can be the Volcker for Lenihan?

    “Professor Patrick Honohan is highly regarded internationally as an expert on banking and financial ystems….Throughout this financial crisis I have sought the views of Professor Honohan and he has consistently provided valuable advice. I look forward to working with him in his new role.” Brian Lenihan.

    Gordon Brown is toast. Irrevocably damaged by the Iraq dossier enquries and his links to Tony B.Liar. Darling is the next Labour leader and British Prime Minister after a brief vacillating voyage of The Tory Titanic. Obama has found his balls just in time. Brian Cowen is toast. Irrevocably damaged by his ‘stewardship’ of the Irish economy as Finance Minister. I hope that Brian Lenihan survives his personal ‘dynamic healing crisis’ to effect a wider one within the body-politic of Ireland. People can change, so can cultures and countries. I hope Lenihan rises to his many challenges, survives, and wins the right to be the next Taoiseach. At the head of a new party that finally puts to bed the histrionic nonsenses of the FF/FG conjoined monster. Otherwise, I’ll have to do it myself…..

    “I’ve been dreaming of a time when, the Irish – are sick to death of Fianna Fail and Fine Gael, and spit upon their names, alongside Cromwells’. And denounce the Tribal Mind that still salutes them: Will they salute them forever?”

    Best wishes
    AndrewGMooney
    ‘lyrical-satirical-surrealist-art-terrorist-arch-memeticist’, etc.

    • Colin_in_exile

      Can you not see that Lenny belongs to a political dynasty that has never put this country’s interests first?

      How’s about a decent burial for FF?

      • AndrewGMooney

        ‘How about a decent burial for FF?’

        Isn’t that exactly what I said?

        ‘I hope Lenihan rises to his many challenges, survives, and wins the right to be the next Taoiseach. At the head of a new party that finally puts to bed the histrionic nonsenses of the FF/FG conjoined monster.’

        • Colin_in_exile

          My interpretation would be somewhat different to yours Andrew. I’d like to see all individual FF politicians’ careers thrown into the grave too, and not be allowed to jump ship to continue their gombeen ways in other parties or new ones for that matter.

  32. tony_murphy

    Some ramblings…

    Anyone heard of Boston Tea Party, apparently some Americans are waking up?..

    As for here in the UK, interesting development

    http://www.dailymail.co.uk/news/article-1245599/David-Kelly-post-mortem-kept-secret-70-years-doctors-accuse-Lord-Hutton-concealing-vital-information.html

    I’ve being reading newspeak in 21st century from media lens, some useful analysis of corporate media.

    Was back in Ireland over weekend, seen the opinion poll, Fianna Fail still doing ok. It got me thinking about who in there right mind would vote for them, then I said to myself that a certain percentage of the population smoke – even though the know it will kill them, more drink themselves into an early grave, a percentage suffer mental illness etc.. so I guess it could be some people have a sort of illness which has them voting for Fianna Fail.

    Someone linked to an Irish Times article about ‘mental reservation’ earlier, kind of related

    • AndrewGMooney

      ref: Dr David Kelly.

      http://en.wikipedia.org/wiki/Harrowdown_Hill

      “don’t walk the plank like i did. you will be dispensed with…did i fall or was i pushed? and where’s the blood?…we think the same things at the same time. we just can’t do anything about it…so don’t ask me, ask the ministry.don’t ask me, ask the ministry”
      Thom Yorke.

      I linked to the Irish Times article about ‘mental reservation’. But when Tony B.Liar, closet-case Catholic Prime Minister for Augustinian ‘Just War’ faces the Chilcot enquiry: The world will see that Paddy is no match for the master of dissembling, sophistry and Jesuitic ‘mental reservation’. Although Bertie Ahern runs a close second:

      ‘And he said he had checked at the highest level: “I looked,em, at the great President Bush and I said to him, you know, and I said to him I want to be sure, to be sure. And he assured me…..I couldn’t do any more than that….”

      http://www.youtube.com/watch?v=nrmbojN3lbU

      ‘Since the end of 2001, Shannon Airport in the west of Ireland has come to be used as a military base of key strategic significance for the United States in its prosecution of its wars in Afghanistan and Iraq.’

      http://www.pana.ie/idn/200406.html

      ‘ ‘Ethnic identity’ ususally refers to the symbolic identity of a group sharing a common genetic and / or national, cultural, linguistic, religious or social background: In Leopold Bloom’s phrase, ‘the same people in the same place’. Components of this identity are defined by both members and non-members. The ‘madness’ of the Irish may be seen as one such component, held for over a century by Irish and non-Irish alike.’

      quoted from ‘Stereotypes and Irish Identity: Mental Illness as a Cultural Frame’ by Eileen Kane, head of Dept of Anthropology, St Patrick’s College, Maynooth. [1986]

      I think she’s describing the ‘Tribal Mind’ I refer to.

      Regards
      ‘Mad’ ‘Paddy’ From Brum….

    • Colin_in_exile

      And the moral of the story is don’t take high profile highly sensitive government positions if you feel that you have a disposition for leaking highly sensitive government secrets to the press.

      • AndrewGMooney

        The moral of the story is rather more complex and layered, including:

        The failure of the state security apparatus to adequately vet and then supervise it’s agents. If an agent is leaking highly sensitive government secrets to the press, I don’t see how allowing a nervous breakdown and suicide improves matters. I can’t see any

        The role of the press in this matter is equally dubious: ‘Gilligan emailed several members of the Committee to tell them that Susan Watts’ unattributed Newsnight source was David Kelly, thereby implicitly revealing Kelly as his own source. Though Gilligan supported his own case by doing this, it unnerved Kelly – who was forced to deny making the comments which were quoted verbatim in the committee. Susan Watts’ tape of the conversation would prove this a lie, placing Kelly in jeopardy. Gilligan’s actions in identifying another journalist’s source went against a principle of investigative journalism: protect the source.’

        http://en.wikipedia.org/wiki/Andrew_Gilligan#The_.22sexing_up.22_Iraqi_capabilities_allegations

        Ireland was not ‘neutral’ in the Iraq war. Bertie was in bed with Bush and Blair, What an image that presents to the mind…..barf!

        ‘Blockade of Shannon warport’

        http://flag.blackened.net/revolt/wsm/news/2003/shannonDEC.html

        • Colin_in_exile

          Andrew,

          Kelly joined the game, and then broke the rules of the game. Are you telling me journalists’ ethics trumps government secrets?

          Kelly made a big boo-boo, he knew it, he must have later felt awful about it, he surely had options other than suicide (Cuba is warm this time of year I believe), but chose suicide because he was mentally unstable at the time and a recent convert to the Bahai faith.

          As regards Shannon Airport, I wish we would come out and be open and honest that we support the USA in almost everything they do, and make no apologies for that.

          • tony_murphy

            Colin,

            You need to read John Pilger “New Rulers of the World”. G posted a link to YouTube version of film a few articles ago. I read book while commuting, it is truly shocking..

            We need to apologize

          • Colin_in_exile

            Tony,

            Apologise to whom? Osama bin Laden? You sound like the perfect dhimmi.

          • wills

            VEry bizarre way ‘kelly killed himself’.

          • AndrewGMooney

            The British Government and the Fifth Estate are both cupable and responsible for his death. If there’s a ‘game’ with ‘rules’, then there’s a ref watching / blowing the whistle. You don’t get to join the security apparatus without accepting constant supervision by peers and superiors. Just like you don’t join Shell or Goldman Sachs without accepting ‘extreme team-sterism’. I was not a ‘team player’. I was a ‘maverick’. Soon spotted and expelled: Thank God!

            I say Dr Kelly’s demise was a layered morality tale not a hierarchy of blame, therefore I don’t go the ‘journalists’ ethics trumps government secrets’ route. Responsibility for Dr Kelly lies in many areas. Dr Kelly could have been ‘offered’ medical retirment once his erratic behaviour was apparent. ‘Mental instability’ should have been picked up by the ‘employee care programme’ or whatever euphemism applies for surveillance.

            Changing one’s ‘religion’ is not reliably indicative of mental stability. There are many, apparently sane, Austrian Economists who espouse Faith-based Financial Fundamentalism. No one suggested George Bush and Hank Paulson had gone insane when they dropped the re-run of a C19th flight – to- gold ‘Panic’: Once Gordon Brown and Alistair Darling explained what that would actually mean for the American and World Economy. Suddenly, everyone ‘got religion’. Even Goldman Sachs knelt at the altar of Keynesian stimulus, in a startling, albeit brief conversion experience.

            Yes, Ireland needs to become an open and honest society in all areas. It colludes with Great Satan and Little Devil to advance the UK / US hegemonic empire, whether by Shannon renditions or by I.F.S.C derivatives destabilisation. Yet it postures as part of the neutrality bloc. Ireland has been as neutral as German in Af-Pak *rollseyes* LOL!

            http://www.nytimes.com/2010/01/21/world/europe/21iht-germany.html

            Like Ireland, Germany needs to come out of the closet, stop its’ ‘mental reservation’ and bogus dissembling, whether on Af-Pak or ‘decadent’ Keynsian stimulus spending. Sadly, Ireland fell for the ‘official’ German spiel, sold itself into debt peonage by protecting foreign malinvestments via NAMA. Germany reflates the Euro-Core whilst deflating the Periphery. And it’s all presented as a simplistic ‘debt bad / savings good’ morality tale. You couldn’t make it up!

          • Colin_in_exile

            Wills,

            Some people check into a hotel and overdose on pills, others choose to hang themselves in their own home where their family are left to discover them, and then you have people who drive off a pier into the sea. Going to the woods and slitting your wrists is no more bizarre than any other method, except of course breaking into a cockpit, taking the controls of the plane and burying it in a manhattan skyscraper or stuffing your jocks with explosives and hopping on a plane and attempt to detonate in the air because these guys believe they are moments away from having 72 virgins all over them.

          • Colin_in_exile

            Andrew,

            The only person responsible for meeting an unnatural death is yourself. Blaming someone else for Kelly’s suicide is like Seanie Fitz blaming Lehman Brothers for all that happened in Anglo.

    • Deco

      People vote for FF because the alternatives are awful, and the Tamanny Hall system of patronage, and cronyism is highly effective. Not just an Irish problem.

      But you are correct concerning the level of alcohol abuse in Ireland, and the knowledge that it is putting people in an early grave. This is an issue that is completely swept under the carpet. When somebody dies as a result of alcohol consumption, or alcohol fuelled misadventure – this is completely covered up. However, if we were more honest about this, there would be less deaths from alcohol – and much less serious injuries.

      I suppose you could say that there is a thread of personal irresponsibility in all these reckless behaviours. It is part of our culture to be reckless as to consequence, and to enforce this on others.

  33. cautious-optimist

    Good evening all,
    First post here, I’m interested in how we might get out of this mess. Have a look at Niall ferguson’a rticle from Feb 2009 suggesting what i might call a little nama for the USA, or how to give the ordinary indebted mortgage holder some relief. See http://www.niallferguson.com/site/FERG/Templates/ArticleItem.aspx?pageid=203
    One section is worth quoting in full and echoes some of what David is saying:
    “The second step we need to take is a generalized conversion of American mortgages to lower-interest rates and longer maturities. Currently around 2.3 million U.S. households face foreclosure. That number is certain to rise. For example, $97 billion of $200 billion of option adjustable-rate mortgages will reset in the next two years. The average monthly payment will increase by more than 60 per cent. As a result, up to 8 million households could be driven into foreclosure, driving down home prices even further. Few of those affected have any realistic prospect of refinancing at more affordable rates. So, once again, what is needed is state intervention.

    The idea of modifying mortgages appalls legal purists as a violation of the sanctity of contract. But, as with the principle of eminent domain, there are times when the public interest requires us to honor the rule of law in the breach. Repeatedly in the course of the nineteenth century, governments changed the terms of bonds that they issued through a process known as “conversion”. A bond with a five per cent coupon would simply be exchanged for one with a three per cent coupon, to take account of falling market rates and prices. Such procedures were seldom stigmatized as default. Today, in the same way, we need an orderly conversion of adjustable rate mortgages to take account of the fundamentally altered financial environment.

    Another objection to such a procedure is that it would reward the imprudent. But moral hazard only really matters if bad behaviour is likely to be repeated. I do not foresee anyone asking for or being given an option adjustable-rate mortgage for many, many years. The issue, then, is simply one of fairness. One solution would be for the government-controlled mortgage lenders and guarantors, Fannie Mae and Freddie Mac, to offer all borrowers–including those on fixed rates–the same deal. Permanently lower monthly payments for a majority of U.S. households would almost certainly do more to stimulate consumer confidence than all the provisions of the stimulus package, including the tax cuts.

    Ever since the New Deal, American politicians have proclaimed their faith in the “property-owning democracy” and the “American dream of home-ownership”. For years they have actively encouraged the expansion of the sub-prime market. But the result has been an American nightmare. With housing prices still falling precipitously–the latest Case-Shiller index put the annual rate of decline at minus 18 per cent–there is an urgent need for action.

    No doubt those who lose by such measures will not suffer in silence. But the benefits of macroeconomic stabilization will surely outweigh the costs to bank shareholders, bank bondholders and the owners of mortgage-backed securities.

    Americans, Churchill once remarked, will always do the right thing–after they have exhausted all the other alternatives. But if we are still waiting for Keynes to save us when Davos comes around next year, it may well be too late. Only a Great Restructuring can end the Great Repression. It needs to happen soon.”

    I don’t know who Niall Ferguson is but no doubt he’ll meet David at Davos this year!

    • Malcolm McClure

      Cautious Optimist: A welcome breath of fresh air here. As you say, the key to a resumption of confidence is a believable guarantee of future fairness. Everybody gains if the price of fairness is an evenly spread downgrading of contractual terms. Those who hold shares in companies that are exposed to losses because of your proposed “conversion” will regain their equity as soon as confidence has been properly restored. Thanks for that insight.

    • wills

      what’s your point,………………!!!?

    • G

      @ cautious optimist

      according to Congressman, Dennis Kucinich, 10 million Americans are facing house repossession this year.

      15 million Americans are unemployed – real figure taking in immigrants is probably more than double that, 35 million one suspects.

      47 million went hungry last year.

      47 million Americans without health insurance.

      Posted before, but worth checking our interview: http://www.democracynow.org/2009/12/2/rep_kucinich_on_afghanistan_war_were

      Niall Ferguson strikes me as a champion of the system, apologist for Empire.

      • Kucinich means well but he is a socialist and socialism doesn’t work. It has never worked anywhere in the world.

        • G

          ‘socialism’, ‘capitalism’ are kind of empty terms in a way.

          If you believe that the current system is the one that is the best, or is the best of the worst options, then I think you are sadly mistaken.

          I still believe people can work as a community/society for the good of same, fair distribution of resources, in step with the environment, which no longer sees a few enrich themselves off the backs of the many etc etc

          The current economic/social/political system is characterised by the worst aspects of humanity – greed, recklessness, aggressive competitiveness, violence……………….it is a terrible point in human development in the broad, mainstream sense.

          But there is hope among the social justice movements, among civil society (where change has always come from – the streets), among the innumerable seeking to build fair and equal societies – it is not a lofty dream but a realistic, attainable goal.

          We have a chance to consign the last 500 hundred years of exploitation, explosion in the centralisation of the means of production, speculative capital and trans-national corporations to the dustbin of history and emerge with a new form of society.

          • If you think capitalism is wrong for you, why don’t you go live in North Korea or Cuba.

            The problem with capitalism is that we are treating the Earth like a company in liquidation. One example is over fishing, rather than sustainable fishing. Also, the damage fossil fuels cause to the planet and also financially isn’t taken into account and seen as an expense. A solution to this problem is cap and trade.

            Do you think people are going to be driven to start businesses from the goodness of their heart? One that is nonprofitable, because the employer hires too many people and pays them amazing wages? Dream on! This is only possible if we all had the morals of the late Mother Theresa. And besides, it would cause inflations and excess waste.

            Capitalism creates jobs and improves standards of living. The only major flaw is damages caused aren’t taken into account financially and should be.

          • G

            @ Sean_Kelly

            It is not a question of extremes, one way or another, it is about navigating a sustainable path of economic and social development.

            Your response is entirely predictable, a common/unoriginal sequence of inappropriate parallels and personalisation, more emotionally than logical.

  34. cautious-optimist

    Wills,
    I’ve no background in Finance but following the comments on this site over the past few weeks it seems to me that Govt policy can’t be changed regarding Nama. However, it could be seen as part of a solution if the ordinary mortgage holder could see some personal relief from the debts that they were encouraged to buy into during the boom if a “little nama” was put in place to take their repayments down by 10-20%. The banks won’t do this off their own bats, but nationalistaion of two of them is virtually inevitable and that is a pre-requisite for a little nama. I envisage it being extended to all mortgage holders for their primary residence only- not for speculative purchases of rental property or holiday homes.

    • Colin_in_exile

      So you paid, say €300,000, for your house say 4 years ago, and now, you’re saying you wished you had only paid €240,000 for it? So now in these foggy financial times we live in, you hope there’s some way you can end up with more money in your pocket by paying less every month?

    • Alf

      Cautious-optimist

      If you take the nationalization route then the tax payer will be liable for the banks debts. Any adjustment in mortgage contracts will mean the banks make less money and the tax payer will have to make up the shortfall. The net effect is bank debt becomes sovereign debt.

      It would be much better if the Irish government did its duty and forced the creditors to the negotiation table over these banks. Demanding that the creditors take some pain is what should be expected of any democratically elected government. Once the debt is handled mortgage contracts could be looked at as a wider part of the deal.

    • AndrewGMooney

      cautious-optimist:

      The reason why Niall endorses mortgage modifications in the U.S is because there’s no other choice. Many states have fully non-recourse mortgages so ‘upside-down’ negative equity borrowers can just walk away. Bush may have screwed down the credit card delinquency laws for Wall St but the US mortgage markets couldn’t be dealt with in time:

      http://globaleconomicanalysis.blogspot.com/2008/04/walking-away-next-mortgage-crisis.html

      In Ireland, no one can walk away, send the jingle mail, because of the Victorian bankruptcy laws which may turn areas of Ireland into an open prison. A debtor’s prison where the only solution is to ‘walk away’ from the country itself, declare bankruptcy elsewhere in the E.U and get a new life. I get that’s part of the plan, “sure not everyone can live on this small island” as Lenihan’s Dad said. There’ll be no ‘mini-NAMA’ for the ‘little people who pay taxes’ in Ireland. The bond holders who have taken Ireland hostage would have a right hissy fit.

      Ferguson is a good writer but he’s in thrall to historic delusions about money and power, in my not so humble opinion. As an in-yer-face unreconstructed Keynesian, I’m with Krugman. I really enjoyed their bitch-fest. One day Ferguson will have to face me and Ann Pettifor. That will be fun. For us. Not him. We’ll see how he explains the fact that after WW2 the British Goverment ramped up it’s 250% debt to GDP ratio and told the bond markets to take a hike. The following graph shows just what mertetricious nonsense this British ‘don’ is spinning about debt in the article you link to:

      http://www.ukpublicspending.co.uk/downchart_ukgs.php?year=1900_2010&view=1&expand=&units=p&fy=2009&chart=G0-total&bar=0&stack=1&size=l&color=c&title=UK%20National%20Debt%20As%20Percent%20Of%20GDP

      Not a word about bankers paying back their debts before they screw taxpayers for more bonuses. Not a word. The ‘public debt crisis’ has been caused by bailing out the private banking crisis. Wittering on about unfunded liabilities without once mentioning the scandalous barbarity of American health care costs. Like Mary Harney, he’s a shill for Big Capital. It’s a living, I guess.

      ‘Professor Paul Krugman at war with Niall Ferguson over inflation. America’s top liberal pundit is at loggerheads with a British don over how to save the world economy’

      http://business.timesonline.co.uk/tol/business/economics/article6806419.ece

    • wills

      Cautious-optimist,,
      Okedokes. The problem is though that better solutions exist. PAulmcd above posted one, and DmCW posted one as did i, so NAMA may do what you cogently state but why not implement the best solution for everyone and not just POnzi property merchants.

  35. wills

    Cautious-optimist.,
    I reckon ferguson know’s his stuff, but, if one traces back his literary projects back to a fascinating book of his titled ‘cash nexus’, an excellent read on the origin of the ‘central banking’ system which now runs the world of course, one will discover ferguson s scholarly leanings weigh too far over toward the idea that the economy can only really get going on the back of financing war.

    Where as my assertions come from a hope for an economy which can be agreed upon and organized at least where all citizens have right of ownership on a roof over their head before buying and selling houses as a profit for profit sake childishness kicks in.

  36. wills – I think the Borneo Jungle tells us more what will happen.Its survival of the fittest .That usually means War of The Jungle.

  37. @David: I think your missing the true cause of the economy crisis to begin with. Interest rates were set far too low (now they are set lower and that will lead to far more serious problems further down the road) and governments offered many forms of grants to encourage a construction bubble.

    There has always been speculators and greedy bankers. The only difference is excess borrowing was encouraged and saving discouraged, this is still the case. Our Government are clueless and so are the general public, as well as the opposition. They are trying to get us to keep spending on worthless crap in shops to keep the service sector in non-productive jobs. We need to make more products to sell to the world. When will this nation stop pissing and moaning and grow up? We have wind, wave, gas, oil, zinc, gold, water, great land and educated young people on the dole. Prices need to fall, including wages, the dole and the minimum wage. Its the only way to make use competitive again. It makes more sent to have a lower paid job than no job at all and a massive trade deficit.

    Saving and falling house prices is the solution, not the problem. Its unfortunate for those in negative equity, but who ever said that a house was a form of investment that magically kept rising in value to begin with? A house is a home and should be nothing more.

    One more point, capitalism wasn’t the problem. It amazes me that people don’t understand was capitalism actually is. True capitalism allowed the incompetent to fail and the competent to prosper. That is not happening thanks to NAMA.

    • Deco

      We need to accept deflation. The biggest opponents of deflation are those in the more protected sectors of the economy. Deflation is unavoidable. And we need to stop fluting around, imagining that it is not needed.

      • Governments dread deflation most of all. It would mean they wouldn’t get reelected and they would have to actually work for a living.

      • AndrewGMooney

        Deflation is not unavoidable in a fiat currency. In fact, it has to be a deliberate decision, just like hyperinflation. You can’t have hyperinflation without a political apparatus instigating it. ‘Zimbabwe + Mugabe = 1 Quadrillion Zimbabwe Dollar’ etc. Otherwise it can’t happen. Always political decision.

        The Core-Euro will reflate at any cost, whilst allowing the Periphery to deflate into penury. Then the Core will buy everything up. Dirt cheap. Ireland doesn’t need to ‘accept deflation’: It is being imposed on it for the benefit of others. Be careful what you wish for, Deco. We have a cultural example of hyper-inflation, but none of a debt-deflation catastrophe that will make Japan’s export-led survival over the last 2 decades seem like a boom. Just because it hasn’t happened, doesn’t mean it can’t. But if The Implosion happens, it will be as a result of deliberately ‘chosen’ policies of the Irish government.

        Deco, do you think Ireland should stabilise The Vartry Tunnel or run the risk of a collapsnik episode because the costs of repair would be ‘inflationary’? The following article is instructive, in particular the first comment after it by ‘Chris’: ‘Recent rain has drowned out the true cost of water’

        http://www.irishtimes.com/newspaper/opinion/2010/0122/1224262840238.html

        Ireland cannot afford to avoid major infrastructure works. Given the number of unemployed skilled construction workers, it’s hard to see how a ‘business case’ can’t be put to the ECB / EU / IMF. Unless, of course, collapse has been priced into the New Europa Model of Core vs Periphery? Ireland is suffering a ‘private sector investment strike’. And a public sector one too. Not a good combo, in my not so humble opinion.

        Serious ‘experts’ assure me that India is undergoing an ‘economic miracle’. Tell that to the folks who live in a different ‘square mile’ called Dharavi in central Mumbai.
        Will the people of Dublin also be expected to put up with ‘slumming it’ for fresh water. Medb Ruane will not be patient for much longer. *rollseyes*.

        http://www.independent.ie/opinion/columnists/medb-ruane/medb-ruane-dear-mr-gormley-i-promise-to-conserve-water–when-i-can-actually-find-some-2028440.html

        Anyone watching the following programme can see that extreme racist / caste poverty can exist alongside opulent wealth. Mumbai has a core and a periphery. Different rules apply. No money for public water and sanitation but money for nuclear warheads. That’s ‘economic rationality’ for you:

        http://www.youtube.com/show/kevinmccloudslummingit

        • AndrewGMooney

          Further to my reply to Deco: ‘No Deflation! Disinflation then Lots of Inflation’ by Eric Janszen

          http://www.itulip.com/forums/showthread.php?t=417

          Just as states like Florida and California can go bust: Ireland can deflate towards oblivion whilst the Core Euro survives. Irish costs can’t be brought down to Core Euro levels without creating a debt overhang that will eviscerate homeowners, businesses and banks. NAMA debt denominated in Euros. Which, I guess, is part of the reason DMcW’s is getting more vocal about divorce. ….

    • G

      @ Sean_Kelly – “True capitalism allowed the incompetent to fail and the competent to prosper.”

      The reality could not be further from the truth.

      • Got any proof to back up that claim?

      • wills

        G.
        True capitalism is an efficient and equitable allocator of resources and wealth.

        • Exactly!! Its a reward and incentive to work hard and improve.

        • G

          ‘True capitalism’, ‘free markets’, ‘trickle down economics’, ‘a rising tide lifts all boats’ are all mere concepts if even that.

          Adam Smith in Wealth of Nations, talked of perfect market equlibirum, where markets in a utopian manner would do as you say, “efficient and equitable allocator of resources and wealth” but he was too smart to know that no such system existed, he knew well the self-interest and greed of merchants and wrote of the dangers of the ‘market’ and the undue influence of these same people on government decisions. Smith could not have foreseen just how accurate his writings would come to be.

          The Irish famine was exasporated by the same prevailing ideology, mirrored in your comment,in the British government – the primacy of the new God – ‘the market’ – leave it to market forces, let the market even things out – 2-3 million dead so be it.

          Smith also wrote of ‘Primum non nocere’ – first do no harm – could this be said of international financial institutions, of multinationals and all the other vicious aspects of the corporate economy.

          People say ‘regulation is the key to capitalism’ regulating the beast, the great Frankenstein, we certainly know de-regulation was never the answer, but the high priests, the Chicago boys got their way, profits were made, and now we have speeches from the CEO of America about the need for to re-regulate (with little in sight).

          So they may ‘regulate’ to keep the barbarian hoardes from the gates (and for re-election), but regulation only shaves an insignificant fraction off the sharp edges of a very brutal and inhumane system.

          1st year economics students learn about cycles of boom in bust inherent in the capitalist system, such nonsense is accepted as the modus operandi of the great beast, few students are thought to think critically, to think about creating a new model of economic development.

          Instead of accepting the ‘consensus’, the ‘prevailing orthodoxy, we need to challenge and replace them with humanity placed at the centre and not at the periphery, if at all, as in the current economic order. You’re sick, tough, you’ve got intellectually disabled brothers, tough, you’ve lost your job (house, 3 kids) tough, we relocate to Poland, tough, you’re in negative equity and marriage on the rocks, tough – is that what we want? is that efficient, to use your market parlance, I say: is that human?

          I often think of the woman in Michael Moore’s Farenheit 9-11 who was a ‘true American patriot’ (whatever that means), she would put our her star spangled banner every day, came from a military family etc

          She was asked about her son going off to fight in Iraq and she supported it, thought it was a good thing that was until her son got killed, then everything changed.

          Fast forward 6 months to a year later, Bush attends the annual Press Association/White House dinner, where all the obsequious gather in their finery and laugh at Bush’s jokes about WMD, with photos of him goofing around the Oval office, looking under his desk saying ‘they must be here, or here!’.

          WMD was after all the principle justification for the war but here the ‘Texan’, the person who started wars but never finished them, was showing his usual open contempt for the sacrifice of other men, far braver than he.

          The woman was eventually brought to her knees which a mother’s anguish has the capacity to do, literally screaming at the indifferent walls of the White House, why? why? why?

          To those who say capitalism is the way forward, the best system and in quick step denigrate democractic socialism, I hope you don’t experience a wake up call like that woman from Moore’s documentary. But if you are interested in the ‘truth’ hop on a plane and travel to South America, Sub-saharan Africa, South East Asia or even call to a neighbour who has lost a job, watch and listen, I think you’ll be enlightened by what you here.

          You ask me for proof, I say to you, venture out and you will find, that proof and it will have far more force than anything I can say here.

          • Your confusing a monarchical, feudal system to a republican, capitalistic system. There is no comparison. If anything, in true capitalistic democratic and/or republic societies have the opposite problem to famine. People die from eating too much.

            The reason why South American nations had massive debt problems wasn’t no because of capitalism at all. It was caused by corrupt governments allowed to print more and more money, debasing their currency. They brought in price controls then after, which only made things worse and because the fundamental problems weren’t solved, rather more and more borrowing and printing of fiat money was done instead, those nations became poorer and poorer. They were brought into a debt spiral, the exact same we are in today and governments blamed it on capitalism and the freemarket rather than on themselves and their policies. During election the told the people what they wanted to hear and then only did what was needed to get them reelected, rather than making the hard decisions, such as cutting down on spending. Eventually, nobody wanted to give them any money and interest rates rose to extremely high percentages.

            That is why a capitalistic society needs to have a gold or silver standard like the United Stated had up until the early 1970s, so people really know how much debt they are truly in and take actions to address this. Just look how strong the US dollar was back then. Do you think they would have brought men onto the Moon back in 1969 without capitalism, a republic and a gold standard? Nope, because they can’t even afford to do that today 40 years later. They enjoyed a standard of living the rest of the world only dreamed of and everybody wanted to live there. When they dropped the gold standard everything has gone down hill for that nation. The next nation to adopt a gold or silver standard will have world reserve currency status and prosper greatly from it. I’m betting it won’t happen for another 15 years and it’ll be the Yuan.

            If you believe Michael Moore, I feel sorry for you. I read two of his books, the guy is a joke I’m sorry to say and he’s a liar.

          • G

            @ Sean_Kelly

            There are so many absurdities in your comment that I cannot possibly respond because I know it would be a complete and utter waste of my time.

          • G

            There you go Sean_Kelly – the very latest interview with Moore for you to chew over.

            http://www.democracynow.org/2010/1/26/michael_moore_on_haiti_the_supreme

          • There you go G, Schiff explains it better than I can why capitalism is good and not the cause and problem:

            http://www.youtube.com/watch?v=5qZSYWzPDdc&feature=related

      • wills

        Socialism closes down innovation.

        • G

          Is that why Cuba –

          is a world innovator in health care
          has the lowest incidence of aids in the ‘Americas’

          has created a world renowned reasearch and biotechnology industry

          An unequaled public health care system, especially in the area of preventative health care (1 physician per 120-160 families)

          Highest rates of treatment and control of hypertension in the world

          has lower infant mortality that Washington D.C.

          has developed leading expertise in the treatment of skin cancer

          eradicated common illnesses, often the first time for ANY country – including measles, rubella, mumps.

          has an internationally regarded centre outside Havana for the treatment of those from the Chernobyl disaster

          has the highest literacy levels in the developing world

          has some of the best gender equality levels

          And all this ‘innovation’ at a time when it has suffered the longest and harshest economic embargo at the hands of the world’s suppposed superpower.

          And still it trains thousands (6000 in fact) of medical students from developing countries for free and supports 34,000 health professionals in 54 of the poorest countries in the world.

          Indigenous biotechnology sector; producing the first human polysaccharide vaccine.

          There achievements in health and education put Western countries in the ha’penny place, especially when you factor in access to resources.

          I am surprised and disappointed at your comment will, think you buy the propaganda a little too easy.

          • If you want tolive on 9,500 USD a year and not be allowed vote then go live there.

            If its such a great place then why are so many living in Florida illegally? 20,000 of them each year get greencards in the US.

            Explain this one:

            http://www.powerlineblog.com/archives/2003/07/004042.php?format=print

          • AndrewGMooney

            G

            I hope that Cuban medical innovation and its’ experiences with organic agriculture begin a move to Haitian permaculture restoration:

            http://kjpermaculture.blogspot.com/2010/01/permaculture-relief-corps-forming-for.html

            Whilst American aid, after a troubled start, is now becoming miraculous in its’ efficiency: The fact is that American rice undercut local farmers till they stopped producing. Globalisation has not helped denuded Haiti. The catastrophic earthquate is just another layer of despair. The world has abandoned Haiti many times before. Cancel Haiti’s debts. ‘The Blackout On Cuban Aid To Haiti’:

            http://counterpunch.com/lindorff01192010.html

          • G

            My point was to challenge the ‘lack of innovation’ comment by wills. Cuba is supposedly a ‘socialist’ country, it is not in the strict sense, though it espouses socialist principles and has achieved remarkable results in health care in particular, as quoted above, surpassing in many instances the much trumpeted Scandinavian and Canadian health care models (the facts above are drawn from a academic journal written by Western academics by the way).

            But if you care to broaden it out then fine, I never said Cuba was a utopia (no country is), context, as I have said before is important, worth examining the context Cuba finds itself in.

            Once invaded, and for the last 50 years subject to the worse economic embargo in contemporary history coupled with unprecedented covert military actions – possibly without historical parallel.

            Under such an illegal onslaught (violations of so many international laws it would take all day to list), Cuba’s leadership has adopted an unfortunate ‘bunker style/seige mentality’ which has restricted the development of the society in the political, societal and media arenas.

            A cursory look at the history of that country would assist with any understanding of why things are the way they are, however unsatisfactory they may seem to the ‘neutral’ observer.

          • G

            @ AndrewGMooney

            Indeed, Cuba has been active on the ground in Haiti for a long time, CNN mentioned it once in passing, think Al Jazeera interviewed a Cuban doctor who hadn’t slept in 72 hours and had hundreds of patients.

            Cuba has long stepped up to the plate in developing countries, not that you would know it in the West, people like Pat Kenny are too quick with quips such as ‘Fidel is a dictator’ etc – as I said it ain’t perfect and it is what it is for a reason, people fail to ask Why?

            I couldn’t imagine Pat Kenny giving up a lucartive career, hundreds of acres of land and taking to the the Mcgillycuddy Reeks to wage campaign against a brutal dicatator and a superior trained and armed force many times your number, something Fidel, Jesuit trained lawyer from a wealthy landowning family did.

    • Thankyou Sean – that sums it up nicely.

      It has worried me that the majority of the posters here tend to knock rather than be constructive; and that little acknowledgement is made of the fact that part of our problems arose from the Global Crisis – which was beyond our control.

      We have good things as well as bad things.

      This Country has more or less lanced itself of the influence of the Church; and the final de-tox program should be the eradication of the 20th Cent legacy of Fianna Fail and Fine Gael political parties; and emergence of “normal” political divides. When that happens the recovery will have begun in ernest……

      • wills

        phil -
        The ‘credit crunch’ was not beyond ‘our’ control.
        It was beyond the control of the ‘outsiders’ and within the control of the ‘insiders’.

      • Deco

        Phil Russ1 – the power in Ireland is no longer in Maynooth it is is in Straffan. As evidenced in Senator Shane Ross’ book “The bankers”.

        • Straffan House has never bought happiness to those who owned it – it has a sour history.

          No – I am not buying or reading any work by the Self Publicist brigade – because over the last 12 months I have become increasingly dis-llusioned with them as they all display an uncanny knack of promoting their books at every opportunity.

          If we were living in Spain 500 odd years ago – I have a vision of the Chief Inquistor dressed in vituous white looking remarkably like Shane Ross as he turns the rack in his ever widening witch hunt – innocence being no defence……

          • Deco

            PhilRuss – Senator Shane Ross has been attacking the banks and their corruption since the early 1990s. The Good Senator has been consistent for years. He has lambasted IBEC and the ISEQ crooks. Lambasted the cronyism, the nepotism, the incompetence, and the deceit.

            Senator Ross is not a “Johnny come lately”. There are a few of them around alright. One in particular (FOT) wanted the ILP to provide support to Bertie Ahern to form a “government of aligned interests” of the left. He wrote a public article in the Irish Times after the last general election telling about how much FF and the ILP had in common. And you know something – he was dead right. Jobs for the boys. Cosying up to union bosses. Stealth taxes. Quangos. And living the high life on public expenses.

            Since then FOT wrote a book about how evil FF are, about the crash and about property speculation. Even though his employer, the Irish Times fed the property and status frenzy to boiling point. That is a Johnny come lately.

          • G

            O’Toole’s book seemed light on detail (& rushed) and heavy on price (€14.99), I wasn’t intent on reading about the emptying of the State coffers while filling an individuals.

            It did strike me poor opportunism and stained a good reputation, he should have waited and produced a better researched and more detailed book, if I wanted an amalgam of articles I’d have bought Robert Fisk at least then I would be guaranteed 1000 pages.

  38. wills :
    Swinging in The Jungle :
    Tarzan found that the wheel did not work in the jungle so he adapted to the animal way of living .He was Inovative.His needs were to survive and not compromise . Tarzan went to War and had his followers .

  39. Deco

    The party in commercial real estate is also over. Even officially, it is over. And in contempary Ireland, something becomes official, long after it becomes blatantly and undeniably obvious. Davy, trying to re-establish credibility as an institution of economic forecast have come up with this….

    http://www.davydirect.ie/Generic?page=MorningNews1

    All of this further clarifies why Anglo Irish Bank cannot be saved, and why INBS should have been allowed to sink. But the doctrine of Marxist intervention to save the rich has condemed the work people to carrying this pup.

  40. Deco

    Coming around the corner – facing into a General Election, the figures from Britain in respect of the economy should be treated with suspicion.

    http://www.rte.ie/business/2010/0126/britain.html

    I would classify Britain’s “recovery” as something within the margin of error. It is tiny.But we should expect lots of boasting from Brown. And our politicos will sit up and take notice. In fact it is quite possible that Britian’s increased GDP figures are entirely related to the annual retail spend before Christmas.

    A country whose economy is expanding by 0.1% and which is devaluing it’s money by 10% per year – is not recovering. It is deluding itself. Even worse is the government of the country that believes in NAMA, the builders bailout, 800 quangos, and a 20 Billion Euro borrowing target per year.

  41. wills

    Central banks replicated through out the world.

    http://centralbank.monnaie.me/

  42. Bamboo

    Did anyone watch Frontline last night?
    Most speakers talked about the cause of the problem. Some mentioned bulldozing the houses. Who is paying for this? Can this be done by neighboring communities with the help of county counsel? What about the people who bought in these estates? I am wondering if there is a community spirit that can help these people by at least cleaning up the debris and building rubble or is it up to the authorities to sort this out. With so many unemployed and builders out of act, is there a way to use resources like labour and idle machines?
    Any suggestions?

    • My answer is tough luck. Those builders were a bunch of cowboys building as fast as the could before the bubble burst. Anyone who bought a house during the bubble I can only say hard luck. Most of them thought the house the bought would magically keep on going up in value.

      What was the name of the guy from TCD? He was the only one on the show talking sense.

      • Deco

        Was he Prof. Brian Lucey ? He headed the list of 40 economists who wrote an open letter to the government advising them against NAMA.

        Needless to say the economics geniuses on Kildare Street all signed up to NAMA. Afterall they know more about economics than economists.

    • wills

      Yes, saw it.

      BULLDOZING the houses idea proves our country is under the control of bizarre controlling interests.

      The fact that such a ‘pinky and the brain brain brain’ idea can be floated show’s irish society is gone crazzzzzzzzzzyy crazzzzzzzzzzzzyyyyyy……….!!!!!!!!!!

      • G

        As we know, Bulldozing = cutting supply, leads to increased ‘demand’. Pat Kenny primed/introduced the concept to the Irish public last night. Who’ll pay for the bulldozing, good old taxpayer, a lot who languish in rented apartments.

        Says a lot about the mentality, they would prefer to bulldoze than open up ‘units’ to the 58,000 on the affordable housing list and the many thousands in rented properties who seek a home and a peaceful life free of extraordinary debt burden (i.e. a mortgage)!

        Is this the efficient system that so many seem keen to praise.

        Or maybe these same people could point out the historical precendent where ‘True capitalism’ has appeared/operated?

        Is the current system the great efficient system which sees hundreds of thousands out of work, many more thousands facing the prospect of losing their jobs (75,000 gov. figure for 2010 – real figure a lot higher because these numbers are constantly massaged) while the working poor face job insecurity, declining wages and longer hours – is this the great system that we must prostitute ourselves to? With Chambers of Commerce/IBEC talking of humans as ‘workers’/ economic entities (euthanasia when you can no longer contribute to the ‘Holy Economy’)!

        It is a culture of death driven by economic exploitation and inequality.

        There is no humanity in any of this, no humanity in the decision of leading bankers to orchestrate policies designed soley to enslave people in debt.

        And economists, the high priest, the so called experts, played a leading and substantial role in maintaining the deception, in creating this crisis, but still they have the neck to appear on Prime Time or Vincent Browne, spouting their nonsense!

        http://www.independent.ie/national-news/nothing-is-certain-but-uncertainty-1602060.html

        • wills

          G.
          True capitalism exists everywhere on a day to day micro level amongst people on a local level but rarely if ever now translates into the top tier power centers which are under the control of monopolistic capitalism.

          • G

            No offence wills, but if that is a justification for our current travails then it is more suited to Barney O’Gill and the little people.

            People are generally nice on a day to day basis, you might go for a beer with Jack Welch if you were stuck on a very slow day, but the system is monstrous – just read Jack Welch’s autobiography where he virtually boasts about sacking (rationalisation, cost cutting and down sizing in the parlance) 20,000 plus to make GE more a financial company than manufacturing and now Americans complain about the destruction of the manufacturing base which ‘made things’ and these nebulous financial institutions that have brought the US to the brink of social implosion.

          • wills

            G.
            I agree. But welch is a top tier occupier.

          • G

            @ wills

            “I agree. But welch is a top tier occupier.”

            please expand, curious.

        • wills

          G.
          Agree with comments on killing the house supply to rig the Supply Demand dynamic and re inflate property prices.

          Will they get away with BULLDOZING houses already built is a big question here.

          Also, If they do BULLDOZE houses to re rig the property market and re ignite bubble to inflate debts into space one can only but see we are all living in an economic system which is gone insane.

          • If that happens I’m getting the hell out of this country, because it will be doomed financially.

          • G

            If they got away with building them at vastly inflated prices to begin with they can get away with knocking them for half nothing and wait for prices to rise (hoarding landbanks I believe it is called) and rebuild so all the madness can re-commence led by the off spring of the current lunatics (no doubt willing and even more determined having seen daddy ‘suffer)

            Anything is possible when you determine the rules of the game (Galway tent or no tent).

            Ireland is more kleptocracy than democracy, more oligarchy that meritocracy with a Sarah Palinesque ‘deputy leader’ thrown in to add insult to injury.

        • Deco

          What a way to end the housing boom….by bulldozing houses…because there is no longer a scenario of excess supply.

          Do we live in a societies dominated by oligopolies or what ? There are still people in Ireland who need homes. The danger is that the price might go so far down that they might not have to pay very much to buy them. That would make them free in a way that is dangerous to our commercial vested interests.

          • Colin_in_exile

            Its the latest attempt by our corrupt government to suck in the astute who chose not to buy during the bubble years, thus denying them their rightful justice of buying property at normal affordable prices.

          • G

            Colin_in_exile – could not have put it better.

  43. Frontline – yes I saw it and was glued to it .I found it frightening and I admired Pat Kenny for once for his assessment of the speakers .

    • Colin_in_exile

      John,

      Agreed, now in his twilight years of public broadcasting, Kenny realises he owes all those licence fee payers out there some quality professional broadcasting.

      • G

        @ Colin_in_exile

        As sharp and clear as an arrow through the cold morning air.

        Too little, too late however from Sir Kenny also known for the Late Late Show: ‘has the property meltdown bottomed out and is now a good time to buy?”

        In a card game, if a guy was playing both sides you’d become suspicious pretty quickly.

  44. Bamboo

    Sean_kelly, Tough Luck attitude is not coming anyway near an answer. But fair play to you it is good example of schadenfreude. Pat Kenny was very good and hopefully there will more of this to come and the lady Jen O’rourke was very brave as PK said to come on TV and explain her situation.

    G, Ok, we all know it is bad, very bad and gombeens were having a feast and so on. After watching last night’s addition I tried hard to put my “Save the world” thinking cap on but can’t come up with anything. I don’t know anybody in my circles in that type of situation so I am not able to talk to anyone and stuck here.

    Any Posters out there with an idea that can be discussed?

    • wills

      Yep. i HAve a stock pile of ideas and solutions to fix the broken system we are all in.

    • Those people took a rise buying homes at that price and they thought the value of their homes would keep on rising. It is unfortunate that has not happened, but they should have had the intelligence to figure out the housing market was a bubble. Bamboo, why don’t you part with your money and help them out if you are so concerned?

      • Bamboo

        Sean_Kelly, Like you, I also think it is madness to buy and think house prices will rise and rise. However, after buying a property in the early 90′s I decided never trade up or anything like that. For the simple reason that I can’t see or imagine anywhere/place in Ireland that I would like to live. It has always been far too expensive from the word go. Of course I would like to live in the sunshine but that is the way things are.
        BTW: Thanks for your suggestion for parting my money. One minor problem, if I had the money I wouldn’t be on this blog.

    • G

      Do we? When people continue propagating the myth that the very system that is crippling people (Coughlan said more cuts for public service workers, so they better shut up) is the most beneficial – it is lazy, inaccurate and deserves to be challenged at every possible turn.

      • The problem is the damage was done in the propping up of the housing bubble. This caused prices to rise, wages along with it, diminishing savings and inflation.

        Because of this, those who were innocent and did the right thing are made pay for the consequences. Unfortunately, this nations is broke and pay cuts is a reality. What Coughlan fails to point out is the true cause of the problem. Fianna Fail are to blame for helping to prop up the housing bubble, along with the Central bank for setting interest rates so low.

        Besides, Coughlan is another joke. She doesn’t know the difference between Albert Einstein and Charles Darwin. Unbelievable that dimwit is second in command of the sinking ship.

    • Your missing the point, housing prices need to fall and interest rates need to rise. That is the solution the problem we are in.

      We are like an alcoholic with a hangover and all the government want to do is give us more drink. Well that won’t work this time because interest rates are close to zero.

      What are they going to do next? Keep on building houses and then knowing them down constantly when they don’t sell? That’s insane!!

      This country has lost the plot

      • wills

        The elites have lost the plot trying to re inflate the POnzi property bubble.

        It made them so much dosh they have become addicted to its easy monies zero labour.

  45. Bamboo

    Looking forward to your ideas wills.

    • wills

      OKedok.

      Firstly, its vital for everyone to realize and see there are individuals whom opted out of bringing trust and goodwill into an exchange.

      This is key to all of this stuff.

  46. Deco

    The Irish banks are knocked down another notch. These credit ratings have a bit of a credibility problem themselves.

    http://www.rte.ie/business/2010/0126/banks.html

    Bear in mind – the PAYE taxpayer is the majority shareholder in all of these banks. Even if we detest their institutional cultures, their hierarchies, their nepotism, and their cronyism – we are for the most part – the owners.

  47. wills – I agree trust and goodwill need to be established as the bottom line before we can rise again. We had it is gaelic known as ‘meitheal’.
    Because we now find ourselves ‘without tradition’ because we threw it away how and where do we begin? Time is Vintage like Gold.

    • A Breton Woods style gold standard would bring about that confidence. A silver standard would be even better because it is ridiculously cheap right now

    • wills

      John ALLEN -

      I am in total agreement with the equation Time = Gold and money and time correlation.

      I reckon we start where people rediscover guts and quickness of step and begin with one step at a time making sure the missing link between thought and action is in place.

    • G

      It’s interesting how a graph can convey an economic picture and yet hide the human story and the million tears on pillows because of broken dreams or lives cut short.

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