April 26, 2010

Forgive debt, sayeth the Lord

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What would God do in this economic crisis? It is a serious question, and one we will come back to later, because it has significant resonance in relation to what is going on in Europe this weekend. Before we come back to God, let’s examine the crisis and its implications for us.

Put simply, the question is, if Greece is Europe’s Anglo, could Ireland be its Nationwide? Like Anglo and Nationwide, are Greece and Ireland so umbilically tied through the euro that what happens in one has severe ramifications for the other?

Financial markets behave like a herd so, if Greece goes, it will affect us.

This shouldn’t come as a surprise to anyone because, in terms of overall debt, our position is actually much worse than Greece’s. For example, if we calculate total private and public debt together, we can assess the debt prospects of a child born in Dublin vis-a-vis a child born in Athens.

If we divide the total debt of the Irish people by the birthrate, we see that the child born in Dublin today will owe €46,641.This is before the baby takes its first breath. Contrast this with the situation in Greece. The newborn Greek baby will owe about half as much as the newborn Irish baby. The figure is still huge at €26,300, but it is €20,300 less than the Irish child.

The financial markets know this. And the way the government is throwing past banking mistakes into the big skip called the Irish government debt market, the outside financiers won’t remain sanguine for long.

Have a look at Chart 1 to see how this pans out. Now that the government has ’fessed up about the fact that the Anglo ‘investment’ is not an investment at all but current expenditure, we need to calculate the government deficit with the bank bailouts as current expenditure.

This drives the Irish deficit – if we put €20-odd billion for Anglo in the 2010 figures – above €40 billion, or 32 per cent of GNP. Need I say more?

Even if this can be explained a way as a ‘technicality’, we still need to borrow the cash, and it will therefore end up in the national debt, so the national debt (Chart 2) will explode.

As discussed two weeks ago in this column, history argues that the bailout will be unsuccessful, Greece will implode anyway and the bailout money will be wasted. The reason for this is that the financial markets need to believe that Greece has changed fundamentally.

This means that it is not good enough to stump up sufficient to stem this crisis; the EU has to stump up enough money so that Greece never flirts with bankruptcy again – or at least in the foreseeable future.

Recapitalising a country is a bit like recapitalising a bank. You need to make sure that you inject enough money into the bank – not so much to ensure that it doesn’t go bust now, but that it never goes bust again.

Another issue spooking the markets is that the International Monetary Fund (IMF) will go into Greece and tell them to cut right, left and centre – which is the normal IMF medicine.

However, there has never been an IMF austerity programme which has not relied on a huge currency devaluation to get the export sector going.

So the Greeks will be asked to bear all the brunt of austerity without the cushioning effects of a cheaper exchange rate; this is a first in economic history and militates against a successful adjustment.

As a result, Greece is likely to embark on a series of unsuccessful efforts to stabilise. The limping-along scenario will beget more instability, which will prompt capital flight and beget more financial crises, until one day the whole thing blows completely.

In the process, the Greek/EU strategy will destabilise all the weak countries – including Ireland – leading to a prolonged credit crunch rather than a short sharp shock. So the creditors destabilise the debtors so much and everyone loses. The EU strategy is to lend more money to Greece in order that the Greeks can repay even more debt in the future.

At its root, the EU is trying to solve a problem of debt with more debt, and the omens are not good.

Interestingly, this outcome is not new. In fact, the Bible predicted all this and, as it is Sunday, let’s get religious. In the Book of Deuteronomy, chapter 14,God calls for mass debt forgiveness.

Addressing creditors, God says: ‘‘At the end of every seven years, thou shalt make a release and this is the manner of that release: every creditor that lendeth aught unto his neighbour shall release it; he shall not exact it of his neighbour; or of his brother; because it is called the Lord’s release.”

It couldn’t be clearer. The Old Testament lads knew what happens to a community where one member keeps another member in debt slavery. It leads to resentment, chaos and the breakdown of the community.

Ironically, the main argument that the Greeks, Germans and French have put up against the Turks joining the EU is that the EU is essentially Christian and we share common Christian values. If this is the case, why are we not adhering to essential Christian teachings on debt?

In biblical times, enforcing debts that couldn’t be paid led to all sorts of strife.

What would God – an advocate of debt forgiveness – think of a Christian club where the solution to too much debt was forcing the poor debtor to take on more debt to pay even more interest to the creditors in the future? This is what the Bible was warning against.

Byde faulting now, the Greeks can simply say they are going back to the morality of the Bible and save themselves and everyone else the hassle of the next few years.

If Germany and France want to keep the euro together, they could do worse than taking on board the wisdom of the Bible.

Who says the Good Book is no longer relevant?


  1. But money is the new god. Its what we all worship now and its greed that’s got us into all this mess! Us Irish are a seriously greedy bunch!

    • 20yearsagrowin

      Spot on Red. I always had that suspicion but never voiced it. We seem unable to do anything for ourselves on a large scale. It seems everyone in Ireland thinks they should be living on NY or London Investment banker salaries while living in Tubber or Nobber or Turmafeckin or whatever other godforsaken two horse town you can name….its insane really. I dont get it.

      We are greedy greedy greedy and incapable of making the directional changes required to build a proper society based on the capabilities of the country. We do not have the capacity to increment ourselves to a new model of country.

      I cannot stand the politicans of this country, as much as the next person I would export them all out of the way…..but they are not the only problem here….we have to face it….the country is in big trouble, and not just finaincially

      • Deco

        Well even if Irish people are not living on Investment banker salaries….that should not be a restriction preventing them from living a lifetyle that befits an investment banker.

        We feel in love with a lifestyle, and we destroyed our finances. We wanted an experience that we would never forget, and have been give one that we may never end up paying off.

    • Colin_in_exile

      Redbrowne,

      Many Irish people swopped the church for the shopping centre. Others swopped the church for the happy-clappy, right-on, multiculturism-is-wonderful mantra.

      But not all of us got taken along on the greedy highway. I never owned shares, I never owned property, I just wanted a fair wage for a day’s work. Am I asking too much? Apparantly yes, its been suggested to me that I should work for no wage at all.

      Sunday shopping should be outlawed. Retailers should remain open until 9pm Mon – Sat, and that should include service providers such as GPs, Dentists, Barbers, etc…. It would breather life into our town centres and High Streets and allow people who work during the day to avail of services after work.

      • 20yearsagrowin

        Completely agree. A haircut should cost 10 t0 12 euro, a cup of coffee or tea should be a euro fifty. I should be able to get my daily paper for a euro. I should be able to have a glass of beer for 2 euros or so…..a meal out for two with wine should be 30 euros…I should be able to do my gorcery shopping for less that 100 euro……a taxi around town should be the cheapest option available to get rid of all the cars….the bus should be a flat fare of 1 euro in whichever city for whatever distance – one stop or 10 stops…..the luas should not be more than 2 euro ever…..my solicitor should not think 300 euro an hour is normal….my banker should not try to rope me into derivatives….mortgage interest rates should be pegged to the Euribor with annual review….if I rent an apartment I should be able to get a 5 year lease if I want the option, with rent increases in line with inflation…

        This may sound stupid….but this is the norm for a lot of people on the continent….what you get in return is stability….trust me, its not a bad thing….maybe not so many people going to race day in helicoptors, but who would miss all that rubbish anyway…

      • G

        The system is following the American model, with shopping malls taking life from the high streets, more social control……….a lot of shops closing in town as rents are way too high and sales are low. I heard of one store on Patrick street in Cork where rent is over 700,000 per year, sales have died a death, but no flexibility from rent man, got to pay for the pad in the sun, mo’fo’s!

        • paulmcd

          . . . and new shopping malls are sucking the life out of old shopping malls.

          Dundalk is a retail black-spot for a number of reasons. You would be shocked by the number of units which are unoccupied/for sale/to let/ on the main street and in adjacent shopping centres. For every billboard you see driving through town there is another one in the window of a nearby premises.

          Hughes & Hughes is gone from a town which has an Institute of Technology. If want to browse material which is third level you need to travel to Waterstone’s in Newry.

          “Superquinn closed down their supermarket in “Carrolls Village”, so, if you want to buy fish at a supermarket fish counter you may have to go to one of the 2 Tesco’s, or to Dunnes, where you will be treated as the invisible man. With the Superquinn anchor gone, only 4 of the 25 units in Carrolls Village are now occupied.

          DUNDALK’S SOLUTION: Believe it or Not – Build and/or extend on sites designated “commercial”. Developers seem to be in competition with one another to monopolise space available for commercial development. On the north side of town there is talk of building a leisure complex called ALTITUDE which will include a Casino among other “facilities”. Local FF justice minister, Aherne, is making big push on behalf of FF developer. No wonder he cannot find time for legal REFORMS which we really need. The developers claim that they will not need to have recourse to bank lending.

          • Deco

            ….But hold on, are you being sceptical of the potential of a Dubai style indoor ski slope to make money in Dundalk ? Maybe we can call Dundalk mini-Dubai, instead of being called mini El Paso ?

            I am really astounded by the gigantic size arrogance of the entire scheme. It really is super size ridiculous. And now we have the main proponent claiming that people were being paid to sign the letter of objection to the entire proeject. The people who gave money to get people to sign the objection letter, were probably planted by the backer so as to completely invalidate the entire project.

            If the developers in Ireland are all bankrupt, where does the money come from for this project ? The banks have no money to lend….or at least not to these stupid projects. Maybe somebody should convert part of an existing complex into a ski-slope.

            We are getting close to realising that building another pointless shopping mall does not equate to long term sustainable employment. But we are not yet there yet. If this project gets poleaxed, then we might be at that point.

    • Freethinker123

      Stubborn and often naive if I might add too!

  2. David, without being too critical of your writings I think it is important to explore the consequences of mass debt forgiveness. This is a capitalist solution to problem that is creditism. A mass write-off or write-down of debt would lead to a spiral down of the money supply. This is exactly the reason that Governments and the ECB are so supportive of bailouts. Creditism can’t allow deflations (a contraction in money supply). It can only work when the money supply is ever expanding. If you are recommending debt write-offs which sounds good to the masses you may need to explain to them some of the outcomes

    A reduction in the amount and probably the velocity of money making it more difficult each month for people to earn the money to pay off their debts. An increase in interest rates. Downward pressure on prices and wages. A realisation by the masses that this monetary system is legal fraud.

    The smart people in Governments and at Central Banks know these outcome and will try their best to get credit flowing. It may work this time, it may not but you hardly expect them to roll over and let the system collapse without a fight.

    • Malcolm McClure

      Irish Sovereignty: Thank you for reminding us of the consequences of debt forgiveness. I am in a real quandry about that possible solution to the ludicrous mess we have achieved thanks to the Euro.

      I would agree that forgiveness would be bad economics if the Euro had any real value in the first place and was backed by something useful like gold, diesel, timber or even frozen peas. But paper currency has always been merely a lucrative scam foisted upon us by the Fed, BoE, Eurocrats, etc. etc.
      It took a while, but that scam has been seen through and all bets are off.

      The world needs a new economics based on barter value. Using a combination of bar codes and widely acknowledged relative values, negotiated daily on the market place, and posted on the internet in each country, it should be possible to establish a new economic regime based on current relative values.
      Capital for investment in industrial, commercial and housing would be raised by selling shares in the market place that would be purchased with promissory notes for articles of real value.
      Banks would thus be replaced with warehouses containing goods.

  3. DH

    Reminds me of the poker game in Lock Stock and Two Smoking Barrels… ‘Good Guy’ plays the game with all the cash he can muster but the money gets cheated off him by the nasty bad-guy player who then insists on lending the good-guy money to keep playing (and loosing). The game ends with the good-guy oweing the bad-guy tonnes of cash, little time to pay it back, and nowhere to run because he already borrowed shed loads just to get in to the game…

  4. [...] April 26, 2010 tags: bonds, debt, gurdgiev, McWilliams by John P. Muldoon Waxing biblical, David McWilliams suggests Greece, and by extension Ireland, invoke the Bible as a reason for working  out of the mountain of debt [...]

  5. Good article, even if it had reference to religion. Shows the bible actually has some use other than brainwashing the masses.

    Face it David, the Euro can’t last. Greece will be bailed out and it won’t work. Fixing a problem of huge debt and consumption with more debt and more consumption is insane and suicide.

    I’m bailing out of here if I can. The writing is on the wall.

  6. G

    “Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.”

    Why Socialism?, Albert Einstein, Monthly Review, May, 1949.

    Full article here (worth reading): http://www.monthlyreview.org/598einstein.php

  7. G

    Well France and Germany are largely soulless places, they look at numbers dispassionately.

    God/Christ also condemned usury.

    In any case, maybe the West’s unwillingness to forgive the debts of developing countries (often their former colonies) has instigated a kharmadic reaction – maybe John Allen can shed more light.

    $25,000 in debt repayment from Sub-Saharan Africa every minute!

    From new documentary ‘The End of Poverty?’:

    SUSAN GEORGE: Let me give you just one statistic, which I worked out in minutes, because otherwise it’s incomprehensible. Sub-Saharan Africa, which is the poorest part of the world, is paying $25,000 every minute to Northern creditors. Well, you could build a lot of schools, a lot of hospitals, a lot of job–you could make a lot of job creation, if you were using $25,000 a minute differently from debt repayment. So there’s this drain.

    And I think people don’t understand that it is actually the South that is financing the North. If you look at the flows of money from North to South and then from South to North, what you find is that the South is financing the North to the tune of about $200 billion every year.

    http://www.democracynow.org/2009/11/10/filmmaker_philippe_diaz_on_the_end

    ‘The End of Poverty?’
    http://www.theendofpoverty.com/

    Debt relief/forgiveness will never he heeded by men, they were even raping Haiti financially right up until the earthquake hit, arguably one the poorest countries in the world, the place with the first successful slave rebellion, but they paid for that insult to the French in ‘reparations for the inconvenience’ from 1815 to 1947.

    When President Aristide called for the French and US to pay back about $31 billion, he was overthrown in a coup 13 days later!

  8. Deco

    Hold on there a moment, didn’t Mama Harni declare, about ten years ago, that God was finished ?

    From then on, it was decreed that the Irish would worship the cult of lifestyle affluence. I spend therefore I am.
    ‘Ye shall know the Elect, by the brandnames that they display’.

  9. Philip

    A most compelling metaphor to use Anglo and INBS in place of Greece and Ireland. I think it is actually spot on.

    Also, there has to be something wrong with the notion of everlasting growth. So far growth seems to be making more people poorer and poorer across the world. We bail out Zorba and Kostas and they find out they have to take swingeing cuts? Reality check. You aint seen nuthing riot wise.

    I was reading a little note from Kieran Mulvey of the ILRC. He finds himself in the National evqivalent of the titanic in the terrible position of trying to negotiate/sell to lower paid going further downwards while rewards and bonuses are being racked up by our bankers etc.

    It’s a bloodbath out there in SME land. We need to fix it and bailouts are not the way for it.

    We are witnesses to a capitalism which is trying to save itself by borrowing from a future that cannot generate the productivity necessary to pay for the debts of today.

  10. roc

    There’s a lot of sense in what David’s saying here, though it’s unpalatable to many.

    This (very) old article here sets out very clearly the logic and economics of what David is putting forward.

    http://blogs.reuters.com/rolfe-winkler/2009/03/11/panics-and-booms-1897/

  11. The problem won’t be solved by debt forgiveness alone.

    In Ireland’s case those in charge of its financial instruments, those able to turn on the hose of cheap euro money, FF and developers and bankers and the financial services industry, spent it on a property bubble feeding frenzy.

    In Greece, Papandreou, I now christen PapandrIOU, spent the cheap euros on a social structure held together by lies, tax avoidance, bloated civil service run on nepotism and croneyism.

    In both cases, rescue money goes into the same corrupt hands that caused the problems in the first place. Once again, perhaps a little bit more moderately, the bailout will be siphoned and scammed away.

    Civil dissent in Greece is largely a function of the public realisation and protest at this corruption and the view that rescue money will go into the pockets of corrupt insider elites.

    Taxpayers and workers in the social/civil services of both countries are the ones through the IMF or otherwise who have to take the brunt of the austerity measures while the miserable authors of the devastation wrought on taxpayers get rewards and dig outs and get banked again e.g. for further property bubble support in Ireland through NAMA.

    Generic insider elites using corrupt insider powers to keep zombie banks alive, or stoking renewed property bubbles with crap investments in dead property bankrolled by the State is a bigger problem than debt renegotiation.

    Maybe even a bigger problem for the EU is its decision to fund bailouts for countries such as Greece and Ireland without proper conditions attached. Assume ECB backs support of the Government plan for Anglo next June, as it already has backed NAMA, this is the ECB pouring petrol on the fire of default.

    Just as the BOI investment plans of today http://bit.ly/ahapq1 represents a quick pyrrhic victory probly turning the bank into a dredger bank fit for hoovering up the remains of our crisis, the good General should not be lured into a false sense of security by this development.

    Seems to me the markets will realise the above problems sooner rather than later and react accordingly. In which case, certain portion of the blame will have to be distributed out to Trichet/Merkel et al for backing the plan our gobshites Clowen and Lenny came up with.

    Lenny is saluting BOI news as a sign of optimism in our economy!
    A little song might be appropriate:
    http://bit.ly/XnkhQ

    • Deco

      A lot of Greek names end with the sound “I O U”.

      • I O U

        Who are the Anglo bondholders, Lenny lied about them, they’re on on the hook only for 100M, not the billions Anglo and through Anglo, us taxpayers are on the hook for.

        What are the WMD’s Weapons of Mass Destruction for our economy on Anglo’s books, identities of bondholders, amounts payable?

        Before we begin to negotiate, we need to see the books, examine the facts and see what these facts are hidden away by Clowen/Lenny & Co beneath the smoke and mirrors, their lies and propaganda.

        What are they trying to hide?

  12. ak8

    Not to be a heretic or anything, but wouldn’t periodically cancelling debts encourage defaulting?

    Also, presumably loan terms would consequently fall to <7 years!

  13. BurrenRocks

    Essential background link to understand the current global power shifts. Anyone care to predict what the Irish bubble will do given our ponzi-anglo-gombeen-nama-debt overhang.

    http://www.ted.com/talks/lang/eng/hans_rosling_asia_s_rise_how_and_when.html

  14. Deco

    Finally Hanafin does soemthing useful. In fact she even went so far as to criticize Fingers. Something to do with Fingers sticking two fingers at the taxpayer.

    http://www.independent.ie/national-news/hanafin-tells-fingleton-to-give-83641m-back-and-stop-boasting-2152361.html

    This reminds me of a study carried out into superficial acts of charity. It discovered that kindness is rationed. And that the people who have the least kindness in them, tend to engage in make the biggest PR stunt out of whatever kindness is in them with loud gestures.

    Which is entirely relevant to Fingers. Here is a business leader with his fingers in the pot, and who has been fingering the meal for decades. And then when he is asked to be morally responsible, he sticks two fingers to the rest of us, and tries to insult us into believing that he was giving himself a 1 Million Euro bonus, because at heart it was intended to go to charity afterall. It is up there with the Ditherer telling us that the Manchester Digout “waz fohr me dawtters, reeeelee”. It is alos up there with Bill Bullshit Cullen telling us that he donates his fees for the Dublin Airport Authority to charity. (any chance that he might work for free and do a charity to the travelling public, or the tourism sector).

    • G

      She was on the ‘Week in Politics’ last night justifying water rates in robotic fashion, pointing to the debacle in Galway as a good reason for implementing this appalling policy!

      Her mother also sued Leinster House, according to the Sunday Times she got damages of approximately €65,000 – this from the same Minister who allegedly told parents not to take legal action against schools when their children had ‘accidents’ in the school yard!

    • Its fashionable now as well for tax exiles eg Ireland’s richest man, Dennis O Brien at almost €2bn to associate with a charitable cause, the rich list published yesterday in Sunday Times was noticeable for how tax exiles…

      • Deco

        Correct….in fact it is standard practice for all big name Irish tax diaspora members….throw a few million at some charitable cause….get photo ops…be Mr. Generosity…and then employ a team of accountants to divert hundreds of millions to a low tax jurisdiction.

        But if they can do it, then we can also withhold custom for their business…

  15. ak8

    Do you know what the problem with the Irish economy is…… its completely lopsided and backward. Most people are stubbornly stuck in a third world agrarian mindset; land, farming, construction, fishing…

    The chemical sector which employs approximately 24,000 people directly and a further 24,000 indirectly is responsible for over 50% of all Irish exports (by value) & over €1 billion of our corporate tax revenue.

    Similarly, software employs approximately another 25,000 and is responsible for circa. 13% of exports.

    So just over 3.5% of the workforce account for approx. 65% of our exports by value…..

    Yet, our biggest indigenous companies are mostly either cowboy banks or agrarian-focused food or construction firms. Exceptions being Ryanair, Elan and Tullow (though technically UK based).

    Why does the government continue to push the Irish food and farming industry? Sure they employ a load of people, but come on…. small scale farming is completely unsustainable, and false economy. As a “technology economy” we should be encouraging efficiency not maintaining tradition!!

    We should heed the lessons of histroy……the Irish whiskey industry was once the world leader (circa 1800 we were far far ahead of Scotch), but the whiskey dynasties stuck with traditional production methods over technological advances (ironically made by an Irishman). The Scottish being underdogs decided they had nothing to lose, so they adopted the new technology (replacing batch distillation with continuous) , look at them now……

    • Deco

      Well ak8 – you are right.
      Irish business does not mean business. Or put it another way, Ireland does not mean business.

      The Irish concept of management as shown by Boucher, Fitzer, Fingers, McNama, Swiss Cheese etc… has failed.

      That’s right. The Irish concept of management is a failure. The country’s so called leadership does not measure up to the task. The K-Club is now likely to go for sale. This should be telling us something. Because the K-Club is the playground and the meeting room for Ireland Inc. And it is insolvent.

      The problem is not the emphasis on primary sectors like Agriculture and Fisheries. The problem is that we are so abysmally ineffective when it comes to allocating capital to serve a useful purpose. This applies to both the private and the public sector.

      And this comes down to management, and incompetence in respect of economic management at all levels of the economy.

      At the end of the day, everything comes down to human intellectual capability. And let’s face it, Ireland Inc has been lazy in the intellectual sense. We need to get out of the PIGIS zone and into the Scandinavian zone with respect to our understanding of economics.

      • G

        Was there ever such a thing as an ‘Irish concept of management’?

        • Deco

          Goog point.
          Come to thing of it there was a lot of pretending that the concept existed. But the evidence is scant that it did.

          The most successful Irish company, based on market valuation, if it had stayed on the ISEQ today is Tullow Oil. But Tullow Oil obviously quickly sussed that the rest of the ISEQ was full of companies where AnIB/AIB/BoI/ILP controlled minority stakes and used this to appoint their own cronies to the boards. And they were using other companies as retirement homes for their own careerists. So Tullow Oil got out.

          It is a case of the wrong sort of talent driving out the right sort of talent. In fact it is the story of Ireland for the past several decades. The Gombeen element remains in charge. Those with ability get out to prevent themselves being fleeced.

          • Just had it right in my face today Deco, in case anyone thinks we’re talking theoretical practices here. I can’t name names, yet, but suffice it to say a worthwhile venture has just been shot down by a vested interest “blocker” who has never worked in the private sector, but allegedly is in charge of enterprise.

            And wasted 3 weeks of my time to boot.

            What more can we say. The country is institutionalised with self congratulating mediocre civil servants demanding to see business plans and competencies to be passed onto their professional cronies for analysis.
            Our local postman is all thats needed for that job.
            But I wouldn’t insult him. He’s doing a great job.

          • G

            Interesting you mention that company, see my previous post……….

          • Deco

            Well actually, Furrylugs, I have to be honest here….I was talking from observations of the private sector…which is officially better managed than the public sector. I mean in the private sector, it is assumed that the promotion came as a result of some ability mixed in with cronyism. In the public sector no ability at all is required. Just look at Bertie putting one of his mates in charge of CIE, and another in charge of Dublin Port.

            “I did nawtt appint dem to state bords beecause dey gave me munny…I appointed dem beecause they were me frenz”.

          • Deco

            And by the way….private sector ‘management’ in Ireland is not all that it is cracked up to be. In fact it needs a radical overhaul.

            And the HR function in many Irish private sector organizations is a byword for the “ultimate source of all problems” department. I have talked to people across sectors and they all provide similar critiques of Irish standard HR policy. (namely protect the bosses from any consequence to incompetences, coverup the scandals, pretend to be interested in all sorts of initiatves, and provide statistics to ensure control of the proles).

    • Philip

      Well, I do not see exports as the main employer or wealth generator. We are only some years away from having the same value of exports with 10% of that number employed. It is an issue.

      Internally, we have no domestic economy to speak of other than retail. Our communities do not serve one another. They serve only by making a margin on imported “stuff”. This is the phenomenon of globalism. The idea that we serve one another by enhancing one anothers wealth is not the agenda of capitalism or globalism. In Ireland we are a test lab of the open economy that cannot produce for itself, has totally external dependances and faces obliteration if we decide take on a scintilla of Sinn Feinerism….(and I am not an SF supporter here).

      We are being screwed by our elite as a nation to serve a global agenda on the basis that what is very good for those who are “it” will suffice for the rest of us irrespective of the human outcome. It is unconscious unquestioning of the growth forever nonsense

  16. —- THIS is Ireland! —-

    http://dl.dropbox.com/u/4914840/_DSC7457_pt_web.jpg

    http://dl.dropbox.com/u/4914840/_DSC7447_web.jpg

    The above snapshots were taken yesterday afternoon in County Donegal when I delivered some large format prints to the guest house owner on Arranmore Island, at the same time taking the chance to get away from the news and politics tearing this country apart.

    I watched some basking sharks in the bay, the same spot where I spotted them a year ago. When I made my way down the cliff, very slowly, because I first was loaded with my landscape photography gear, and more important I tried to not come under attack from seabirds nesting there, so I tried to not give them the idea I would pose a thread. Balancing on these spots with weight can become treacherous if you get attacked by larger birds at the same time, and I was very aware about this.

    Last year I held a 50,000 euro camera on loan over the cliff, extending my arm as much as possible, while at the same time using my left hand, armed with another camera to get rid of attacking atlantic seagulls. This dance was probably surreal to any observer, thankfully there were none, otherwise they might just have called an ambulance for worries this crazy guy is might jump the cliff. LOL In deed, I will never ever perform such stunt again, hence this shot from last year became a strictly limited edition. Makes sense, doesn’t it? ;o)

    The weather yesterday was not too bad, apart from the odd shower, pretty windy and nippy conditions, clear skies came in between as well.

    I sat there for nearly three hours, and found my mind resting from the stress of the week and the turmoils that stir up this country.

    The postglacial landscapes here in Donegal are a life lasting love affair for me, and only in Ontario I could imagine to stay for the rest of my life, nourishing my desires to shoot landscapes

    Ontario is very similar to Donegal for many reasons. So I thought, what the Hell am I still doing in this country which is ruined by a small minority of forces at play, and no one seems to care? I put quite some political activism on the table in the past few month, but the results are not worth mentioning.

    Joseph Marie de Maistre once said, ‘Every nation has the government it deserves’ and while I would not think this to be entirely true when we consider states in dictatorships, I would think this to be true for Ireland and other countries in Europe in deed.

    We are choosers and it seems that ireland has made it’s choice to let things go the way they do in the past 2-3 years.

    I observed some atlantic gulls sweeping gracefully on the cliffs upwinds and landing without any efforts in places so small that they barely hold enough ground to allow them to sit.

    The silouhette of a basking shark in the bay moves equally graceful in the churning waters below me.

    I remember my encounter with whale sharks in the Indian ocean, and this longing feeling takes over.

    No one is around here, I have not seen a soul in the past 3 hours, I enjoy this solitude, the winds clear the thoughts and blow cobwebs away from a birthday drink the night before. The air smells salty, I love that.

    This is Ireland, it’s rugged beauty, nature at it’s best I think. Dublin / Kildare street is not Ireland, not in the least, this is just the epitome of power abuse serving their own special interests and hidden agendas.

    Sitting on these cliffs, the wind in my face, no sound of cars, no sound of nervous and of course very important people, jabbering continuously like a flock of geese, I could not give a flying bull about these muppets in Dublin, their arrogant incompetence, and stereotype stubbornness.

    I wish I could transport all of them to this cliff, no, not what you might think now, (grins!) to tell them to shut the fuck up and look, observe, take it in, let this become your world for a few moments, then go back and reconsider what you are doing, YOU GOD DAMN FOOLS!

    Suddenly one of these big sea gulls lands right beside me, less than 2 meters away and looks at me with no fear. This is her territory, I am only guest here, and she knows this without a doubt!

    I know not much about birds, but this was a stunning and powerful example, in it’s prime, shiny feathers, bright white and pitch black. Another gull was calling and the bird took off again.

    This is Ireland!

    Take care folks!

    Best
    Georg

  17. Thermus B. Airgetinin

    The Sunday Times rich list has stated that the personal wealth of the 1.000 richest people in Britian has increased by 30% in the past year. Mittal, the indian born/british citizen, steel magnate has seen his personal “stash” DOUBLE to an incredible… wait for it… £22,500,000,000. Providing that we can rule out a mis-print or it being just some journalists idea of a sick joke, thats £11,250,000,000 in 12 short months… JUST THOUGHT I’D CHEER YOU ALL UP.

  18. SLICKMICK

    How could MGQ serve on a board of auditoes , seeing as she had previously worked as a primary school teacher.Another FFer who in- herired her seat!.Joe Walsh creams 200k THANKS TO his 2 pensions and his sleeping directorship @ BOI!.

    • Deco

      Kind of absurd really. MGQ inherits the family seat. Then she gets a Ministerial Merk. What she does we do not know. But she was mates with Albert when Albert shafted CJH. It might have been the highpoint in her career, but it was done for opportunistic reasons. And Cowen who was one of Albert’s gang of four, becomes Taoiseach. And he cannot appoint a sitting TD as MEP, because his neck is on the line. And other candidates like Eoin Ryan and De Burca have been hammered in EP elections. So he finds MGQ. And she starts parroting on about research, as if she was a researcher for the past three decades. But really she was just another politician. I mean she knows as much about research as any other topic that she knows SFA about. She is doing the politician’s thing. And she is giving Suds Junior an opportunity to follow his family career also. Proving that FF and FG and whatever else you’ve got are really just one big happy family.

      Dude, don’t mess with my ministerial pension.

      The thing is that these people are a kind of an uber-parasite. They are always intended to live off the taxpayer. But whereas your average dosser is doing small scale survival on the back of the system, these shysters, are to use Pee Flynn’s term “a class act altogether”. They are in a really big scale league. And MGQ is by no means the worst offended. In fact the worst is probably the Ditherer, with TD, ministerial, Taoiseach’s pensions. Plus all the funny money that appears from his mates who were throwing around cash amounts for all sorts of reasons.

    • Deco

      By the way, concerning Joe Walsh – I think I remember seeing farmers protesting about him once, carrying placards with the phrase “Joe Walsh is a Sheep” on them.

      I suppose that is exactly the type of person you need representing the citizen at the top table in the BoI. If he was any good BoI would want him removed.

  19. paddyjones

    You can duck and you can dive but you will always have to repay debt. Debt is our main problem in Ireland and the party is continuing, only when the bond maket stays no more will the game be up. I think it is wishfull thinking on Davids part that somehow debt will be forgiven.
    Greece owes 300 billion for 11 million people , Ireland will owe 140 billion ( end 2010 ) for 4 million people.
    The Greeks are doing alot of ducking and diving but for sure they can not avoid their debt, they after all borrowed 300 billion.
    But away from the PIIGS things are getting back to normal , Germany is racing ahead . The markets such as the CAC and DAX are in a bull market.
    It is all about allocation of capital , capital will not be invested in the PIIGS these ecomomies are in reverse and sovereign debt will become a crisis.
    If I had money to invest and I do I invest in the DAX and EURO Stoxx never would I invest in Irish shares again.
    In fact if I could sell my house here I would be off to Germany or Luxemberg. Ireland is not a place for a bright future anymore.

    • Philip

      Reality is that Greece wont and Ireland cannot. As for things getting back to normal outside the PIIGS, it’s merely a bounce. The Government stimuli are still needed. US is still far from settled.

      In Europe I suggest the only way to fix current woes is to extend the EU Commission to all problme countries, employ them at Belgian rates with no local gov. taxes. Pay them in a new funny currency (NeUEuros) and minimise their participation in the real economy. Otherwise, there’ll be outright war on the streets.

      • paddyjones

        You are just ducking and diving Philip , the only solution is to start repaying the debts.
        We have to get back to 3% of GDP by 2014 and after that we need surpluses to start repaying our debt . If when my mortgage becomes due I just borrow more to pay it off I am making matters worse.
        So there will be no debt forgivness for the PIIGS and soon there will be no more borrowing either. Its time to get real.

  20. poyais

    I previously advocated the “Voluntary debt reprofiling” by Uruguay in 2003 as a potential solution to Ireland’s debt problems [1].

    Its interesting to see that Carmen Reinhart (“sovereign debt expert” and author of the book David mentions here [2]) is also advocating the same Uruguayan solution to Greece’s debt problems[3].

    In addition, The Economist [4] is also advocating “Uruguay 2003″ as the preferred solution to Greece’s problems.

    From The Economist article:

    “Conventional wisdom has it that sovereign defaults are always messy and painful. In fact the lesson of such defaults over the past decade or more is that this is not necessarily so.”
    “In 2003 Uruguay restructured all its domestic and external debt, exchanging old bonds at par and at the same coupon rate for new ones but stretching maturity dates by five years. The country returned to
    capital markets a month later. The “haircut”, or loss to bondholders, was small (13.3%, in net present value), as were the amounts restructured
    ($5.4 billion), but it showed that orderly sovereign workouts are possible.”

    I’d like to point out the advantages of stretching debt maturity dates for a country in a currency union by giving an example.

    Say Ireland is due to pay ten billion Euro back in 2011. Instead of paying it back on time we pay it back in 2021, ten years late. Assume an average inflation rate of 3% per year … over ten years that is 30%. So, due to inflation, “2021″ Euros are worth 30% less than “2011″ Euros. We have “devalued” our debt by 30% while still remaining in the Euro.
    We can still claim to have paid back all debt at face
    value — the same way that a country which has devalued its currency can claim to have paid its debt back at face value.

    Indeed the return on investment for the bondholders may still be favourable when compared to other government debt. For example holders of Sterling debt will have lost out due to Sterling’s decline, and holders of US treasury debt are receiving very low rates of interest. There may be the potential to tell investers that the restructured debt will still have received a better real return than either US or UK debt.

    Another innovation that Uruguay came up with was putting in terms and conditions in new bond issues. Essentially they have a “break glass in case of emergency” term where they get some room to modify the terms of the debt in extreme circumstances.
    It seems to me that something like this would benefit the Eurozone. For example, in the case of a crisis (where ‘crisis’ would have to be well defined) Eurozone countries would be able to stretch
    debt repayments by, say, 5 years.

    [1] http://www.davidmcwilliams.ie/2010/04/12/embrace-the-unpredictable
    [comment 48]

    [2] http://www.davidmcwilliams.ie/2010/04/05/anglo-armageddon-is-a-myth

    [3] http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100004699/the-imf-should-impose-default-on-greece-to-end-the-charade/

    [4] http://www.economist.com/world/europe/displaystory.cfm?story_id=15980711

  21. Unraveling the codes of a before Time and applying them to the Power of Now is the secret of Living in a New Time .
    The Rubicon must arrive and be crossed and we all cry Eureka at the other side .Wisdom is a celestial experience we seldom apply because to do so we need to reach deep inside our inner consciousness to lift our awareness .Unfortunately in todays world our minds are weak with poison.Propaganda is one such evil that only darkens our mindsets and condemm us to life in hell.

  22. good u can text me the time you expect to arrive when you are within an hr or so

  23. ok….south court is good for me too

  24. G

    “The laws of capitalism, blind and invisible to the majority, act upon the individual without his thinking about it. He sees only the vastness of a seemingly infinite horizon before him. That is how it is painted by capitalist propagandists, who purport to draw a lesson from the example of Rockefeller – whether or not it is true – about the possibilities of success. The amount of poverty and suffering required for the emergence of a Rockefeller, and the amount of depravity that the accumulation of a fortune of such magnitude entails, are left out of the picture, and it is not always possible to make the people in general see this.”

  25. wills

    David.

    DEBT SLAVERY is a mind blowing topic and the article is a good start.

    Irish sovereignty and Malcolms comments @2 are peeling another layer away on this and exposing the real facts behind the so called credit crunch and Ireland POnzi property bubble and the rest of it.

    It all stems from a form of banking practiced based on the central banking model first introduced in city of London in 1694 after a coup over threw James II.

    The central banking system replicated itself through out the globe and before to long inevitably with trade opening up and industrial revolutions motoring along the world got stuck with this system as the most effective system to keep exchange of goods and services exploding which in of itself is a good thing for everyone.

    The central banking system in many ways is a victim of its own success in that it became a quite brilliant fiduciary factory which worked albeit in a lopsided fashion.

    Now, here we are post modern times and the model of banking is using super dooper technological systems spinning like cotton candy new financial instruments and money is expanding through credit lending unto its own technological innovation as opposed to matching the quantity of good s and services produced.

    The central banking model and the technological advances in financial engineering and greed has unleashed an economy bloated out on steroids and fluttering around with the steroid type debt creation David writes on above and the bonkers artificial realities its spawning.

  26. G

    See this interview on the privatisation of water in Bolivia with the President of Bolivia and Amy Goodman, maybe a copy of the transcript should be sent to Mary Hanafin, the spin doctor wheeled out to justify the unjustifiable

    see 37 minutes in
    http://www.democracynow.org/2010/4/23/bolivian_president_evo_morales_to_president

  27. @ roc 9

    thx for link

    http://bit.ly/aCgqXd

    from which:

    “The bigger the debt hole we dig for ourselves–via bailouts, stimulus, etc.,–the longer our payback period.”

    “More debt, in other words, will only exacerbate the depression.”

    “Note how the pre-existing condition for healthy economic growth is first getting out of debt.”

    “Deficit spending won’t stimulate anything. It will just sow the seeds of an even deeper depression. The
    sooner we get out of debt, the better off we’ll be.”

    Lenny doesn’t believe any of the above, we’ll borrow our way out:

    So, with ECB bailout money wasted on zombie banks and zombie NAMA plus budget busting deficit spending at 14.5% GDP rising to 24% GDP in 2010, deficit debt sky rocketing, either the wise words above are wrong, or we’re partying away on the Titanic, Ireland Inc.

    We’ll see…….

  28. Maire

    Thank you David once again for another wonderful enlightening article. Love it ,Maire.

  29. No point in looking to God David because he has become a stranger in this land.
    The banks have fleeced the third world and now they are coming for the rest of us with their Ponzi business scams and Tommy Cooper style magic accounting systems. This is not an accident because the rich are still getting richer all the time while Joe Soap is being taken to the cleaners. It proves that wealth does not trickle down and that the only thing which does trickle down is coloured brown and is of a high viscosity, depending on how much stout one has consumed the night before.

    The wealth of each nation is being hoovered up into a black hole called the banking system and countries like Ireland can never hope to pay back the ‘debt’. How does a small nation of 4 million people pay off a humongous debt of €150,000,000,000?

    It can’t so it stands to reason that Ireland is owned and controlled by a banking system which has been designed to ensure the permanent slavery of the people. This is why I have only ever taken out one small bank loan in my entire puff. It is a con that only fools would fall for and you know what they say about fools and their money. Just ask Sean Quinn what happens when the ego overrides the brain and makes one believe in his own folly.

    The real problem is the charging of interest on money. Money is only a concept and the model of how it functions could be changed tomorrow if the will was there but no one will even challenge the basic assumption that it is perfectly rational to charge interest on loans.

    Hopefully one day soon a government somewhere will give the middle finger to the banks and start printing its own money. Abe Lincoln would have done so and he warned us about the banks and John F Kennedy was thinking along the same lines but look at how both of them ended up.

    As individuals we have free will and choices. Why load up on debt when you can rent houses cheap as chips and save up and buy a nice used car for a grand or two? What have the banks actually done to ‘earn’ their staggering power and wealth? Nowt. They didn’t even need to break sweat because they knew that human greed and delusional thinking would be their best salesmen!

    We can cut them out of the equation by getting a grip emotionally and turning our backs on materialism for a start. Blaming the government for our personal choices in life is small minded and is what you hear from habitual whiners. If someone is in negative equity for the next 30 years then the only rational thing to do is hand in the keys and go back to living a basic life. Screw the bankers. Simple living makes one humble and more grateful for the things that really matter such as health, love and simple pleasures. There is a lot to be said for what laughingbear was talking about above and at the end of the day all this money talk is really not that important in the grand scheme of things

    • @28 Pauldiv,

      Screwing a nations taxpayers ain’t no small thing, destruction of health, education and social services built up with great effort cast aside by the greed of the few. Steering a country’s economy onto the rocks no small thing either.

      But we do need whistleblowers to get behind the lies and coverup, which is no bad thing either.

      Is Dan Ellsberg link below for some inspiration, a habitual whiner along with those who say no to the propaganda?

      Make your own mind up, without him they may have nuked the gooks. These guys can even put living a basic life at risk. Wait’ll they cut the dole etc!!

      ‘Health, love and simple pleasures? Great ideals put at risk by rising crime and unemployment….

      http://bit.ly/cVYu3G

      • The trick is not to get too sucked in cbweb because it just makes you angry and anger makes you do and say things that might later bring regrets.

        Men like Pilger, Chomsky and Mr. Ellsberg do society a great service and they have been doing sterling work for decades. They are always very close to the truth and they write in a style that is factual and devoid of sensationalism or emotion – just the cold hard truth. Pilger’s essay on what happened in Indonesia in 1965 still sticks in the mind many years after reading it.

        My ideals are not at risk at all I have to say. I fully intend to go on loving not only myself but also my nearest and dearest. I will live with love and empathy in my breast and I have always known that simple pleasures are the best ones.

        • @28 Pauldiv,

          There are many voices in Ireland at the moment who are tired of the subject matter, ‘who don’t do the recession’, as a matter of fact, are doing quite well and just wish all this talk would go away.

          They are able to build a wall around themselves and their next of kin that they regard as well insulated from the clouds growing on the horizon.

          Occasionally they get stirred into action perhaps by a sudden event such as a job loss, e.g news today Eamon Dunphy that Dunphy is to go up against Harney in the next election, sparked by a visit to a hospital he found less than ideal, for a member of his family with a sudden need for services due to a heart condition.

          More taxes, lower wages, higher mortgage interest rates, wasteful public expenditure on NAMA/banks and upside down society with knaves who led us into this still profiting from it, unfortunately for us these are cold hard truths and not just the product of sensationalism and emotionalism.

          My style, if I got one, yep I use Righteous Indignation/Righteous Anger to provoke a response from those who need a little stirring as there appears to be a general lethargy around the subject matter of which we speak.

          It does make me angry bankers/developers supported by the government have laid waste this country’s future with a
          burden of debt that will be felt in depleting quality of educational infrastructure and social services for the forseeable losses of these in the future.

          Propaganda and lies do make me unapologetically indignant especially when they are part of the currency of the media and Pravda RTE:)

          I’m not a materialist. If I castigate anyone by name I do so in the spirit of playing the ball, not the man! We need a little Kipling here:

          Anyways, very much appreciate your Kiplinesque remarks:

          http://bit.ly/bbGYfP

          If
          by Rudyard Kipling

          If you can keep your head when all about you Are losing theirs and blaming it on you;
          If you can trust yourself when all men doubt you,
          But make allowance for their doubting too:
          If you can wait and not be tired by waiting,
          Or, being lied about, don’t deal in lies,
          Or being hated don’t give way to hating,
          And yet don’t look too good, nor talk too wise;

          If you can dream—and not make dreams your master;
          If you can think—and not make thoughts your aim,
          If you can meet with Triumph and Disaster
          And treat those two impostors just the same:.
          If you can bear to hear the truth you’ve spoken
          Twisted by knaves to make a trap for fools,
          Or watch the things you gave your life to, broken,
          And stoop and build’em up with worn-out tools;

          If you can make one heap of all your winnings
          And risk it on one turn of pitch-and-toss,
          And lose, and start again at your beginnings,
          And never breathe a word about your loss:
          If you can force your heart and nerve and sinew
          To serve your turn long after they are gone,
          And so hold on when there is nothing in you
          Except the Will which says to them: “Hold on!”

          If you can talk with crowds and keep your virtue,
          Or walk with Kings—nor lose the common touch,
          If neither foes nor loving friends can hurt you,
          If all men count with you, but none too much:
          If you can fill the unforgiving minute
          With sixty seconds’ worth of distance run,
          Yours is the Earth and everything that’s in it,
          And—which is more—you’ll be a Man, my son!

          I’m not a simple angry man, bit more cooler than that I should think, my son:)

  30. Coffee Exchange –
    It was at the Walls of Vienna that coffee was discovered in Europe having being left behind by the Turks as they fled from the Saracens .The Germanic conquerors were assertive in attaining their success .Coffee as we know it was spread throughout Europe from Germany and became their weapon in diplomacy , power and business .Coffee became a European Currency with control lying in German hands having being reliquished from the Turks.
    In the moments of now we are watching the repeat happening again . Instead of coffee replace it with the Euro .Like all good coffee quality and good aroma is important to sustain its success .The Germans proved that in the Kaffee Haus and from these houses sprung up famous names such as :
    Eduscho
    tSchibo
    Julius Meinl
    Jacobs
    etc

    Some of the above went on to become Banks as in Vienna – Meinl Bank.
    The Germans insist on Quality and Aroma and with the Euro they will want the same .Deutsch Bunker Politiks proliferates now and it seems that Sarkozy is not part of the new regime presently planning a new asault on the rest of euro zone.As the Full Moon reddens and enlarges something new is boiling to be revealed very soon.
    Be ready for the new exchange missile that can penetrate any walled up virus filled Merrion Sq and watch the devasting effects as the Moon wanes back into the darkness at the end of the week.

    • Philip

      my guess is that the real danger to the Euro is not the PIIGS etc and Greece or ireland or Portugal being turfed out. The real danger is if the Germans decide to leave the Euro.

    • @ John Allen 29

      I’ve travelled a fair bit Europe, US, even Africa somewhat, and tasted in many places good coffee, lots of it from espresso machines.

      But I’ve never found out how to replicate a decent cup of coffee I could make for myself, that would even come close to ‘better ones’ I had:-(

      • Here is my version:

        Go to Avaoca handweavers in Bray and get the SUGAR LOAF BLEND full beans, it is just the perfect mix. Use a bigger BIALETTI expresso maschine, the ones you just put on the stove and that make up one mug. Fill with 2 heap teaspoons of fine ground, and 4 small teaspoons of brown sugar.

  31. Thermus B. Airgetinin

    Could this be Ireland’s new “anthem”. The words are so appropriate to our situation. (It’s also beautiful to listen to) enjoy! http://www.youtube.com/watch?v=B6EWitBW_F4

  32. Deco

    Kunster reckons that the entire system of financial promises that have been sustaining lifestles in the Western democracies since the early 1990s has been based on nothing.

    http://kunstler.com/blog/2010/04/a-still-moment.html#more

    If you do a search on that page for Teddy Kennedy you will get what Senator Kennedy was thinking about the whole thing. He basically told relatives that in years to come it would “fall apart”.

    Kunstler’s main critique of American society is that nobody is trying to address the problem, than much of the media seems pre-occuppied with preventing people knowing what is really going on….because that would be bad for our advertising sponsors. Essentially the role of advertising in the media ensures that there will be no objective analysis, and no problem solving strategy – except talking up the prospects of the system and the consumer. And we operate the same system in Ireland.

    • Deco

      Here is a quote
      {
      Teddy “took a long, slow gulp of his vodka and tonic, thought for a moment, and changed tack. ‘I’m glad I’m not going to be around when you guys are my age.’ I asked him why, and he said, ‘Because when you guys are my age, the whole thing is going to fall apart.’ ”
      }

  33. MK1

    Hi David,

    DavidMcW> in terms of overall debt, our position is actually much worse than Greece’s.

    Yes, and No. Yes, if private debt is included, but No, if you are just taking about Government debt. And this is key to the Greek government debt situation and to the euro. Private debt is treated differently than public government debt.

    Greece CAN solve its debt ‘spiral’ problems itself BUT ONLY IF it grabs the sitiuation by the horns and brings in many austerity measures – for example, changing the pension age from 60 to our 65. And also getting rid of the “laziness”, the excess inefficiencies, and making people pay the taxes that they should. That type of austerity. Its not rocket science and it IS doable.

    And if that sounds familiar it should as we need to also implement austerity measures but people are kicking up a fuss here and the Greeks will do the same. No-one wants to reduce their own financial situation. And they will fight kicking and screaming, some more than others.

    The Greek situation is completely solvable within their own remit. Of course, we shouldnt be where we are now in the first place. Greek debt should not be at 100% +, but should be trending towards 60%. That is a part of EMU and the euro after all.

    But hey, lets wait a second. Didnt Belgium join the euro with debt well above 60%, and something near to 110% and it has NEVER got it down anywhere near the 60%? Isnt Germany’s debt also above 60%? Didnt both Germany and France flaunt the 3% deficit pa rule when it suited them (or when they had to).

    Those bad behaviours in the euro project are now coming home to roost in the form of Greece. You reap what you sow, also a biblical lesson. And Germany and France and the other euro-member countries have allowed this to happen. There is nothing wrong with the euro project IF members stuck with the rules. But they haven’t and they haven’t ever – and thats ALL MEMBERS. Greece is getting whipped because it is seen as the whipping boy at this point in time.

    As to Biblical debt ‘forgiveness’ (or write-offs), it does make sense that any society that claims to have principles and fairness and that does not advocate slavery, that credit and debt repayment rules are based at levels that can support those fair societal values.

    Thus for us here in little old Ireland, that would mean regulation that would set acceptable credit rates, that would set the criteria for getting credit, etc, and that would ensure credit-suppliers are ran efficiently for the benefit of society.

    Well, we need to change a lot to get to that point, ie: Major banking reform – so lets LANCE our current farcicial Banking entities. “Lance the boil.”

    MK1

    • Philip

      I love your assertions that go…all is solvable IF.. History has shown us that such “IF”s never come about. The Greeks or the Paddies or the belgians or anyone esle is not for turning. Greece WILL not comply and Irleand simply CANNOT. Ireland simply does not possess the firepower or the vision. What will happen is that the next global event will either make it worse or better. We are flotsam in an open world.

      • MK1

        I dont agree. Of course people and countries DO carry out change, and on multiple levels. These things are possible and within people’s remit of power, it is not asking the impossible.

        Its akin to weaning a child off cake and onto bread. Of course these problems should never happen in the first place, but to err is human! Not to fix problems and to spiral to ‘death’ (or to debt slavery) is very stupid indeed.

        For example, lets take the worst case scenario for Greece or any country in the EU and euro. They dont pay their debts, they continue to live in cloud cuckoo land, they default, they cant get more money, and austerity is forced upon them as they are kicked out of the EU and the euro, and their economy takes a hit for a generation.

        MK1

  34. Philip

    All, this is all a discussion about symptoms. David is discussing symptoms. The real cause is and always was about people’s own sense of security and their tendency to improve it and be open to suggestions to maximise it. When we became an open economy, we became secure with cheap assembly jobs. When these vanished, we becasue secure with construction and owning bricks and mortar. Now that this is gone, we are at last feeling the winds of real change. We have thrown out our clergy and many of our taboos and the rest are about to get a major hammering….like Europe will help us … like we can always have someone to employ us….like we can emmigrate….all vanishing.

    We are a world dominated by increasing specialities and centres of elite experts. Unless your educated and upscalling your skillset, you are in deep trouble. the rest is generally irrelevant. Finances, Governments etc come and go. The Technocrats will just keep growing and dominating. We are handing more and more of our lives to these entities for a poorer and poorer service as they drive margin upwards. Unless you are skills, you will be banished to a low service and ignorant existance. Grim stuff and it’s what happening to many parts of the world where education is not financed or valued.

    • Very well put Philip. Agreed that a sense of personal security is the most important thing and that fear is all around us.

      I recognised the skills problem a few years ago when I worked at Motorola and knew I had to do something. Even 10 years ago the writing was on the wall and based on the track records of these high tech firms in Scotland it was easy to predict the flight of Irish manufacturing jobs overseas. You didn’t need an economics degree to figure out what was pretty obvious.

      Mechanics and Fitters were buying second hand Mercs and loading up on debt and it was amazing to realise that none of these guys stopped for a second to think about the consequences. Some of them were quite arrogant and really believed that the Irish were invincible so I just kept my thoughts to myself.

      After a third bout of redundancy I chose computer programming because it is industry neutral and you don’t need to be a member of any cliques to find work in that field.
      Waiting for high tech employers to appear in the regions is folly and sometimes you just need to look after yourself. It took a few bouts of redundancy for me to get real but better late than never as they say.

      These days you can find people with Masters degrees on every street corner and their education is virtually worthless owing to the competition even for menial jobs. If we self educate ourself with real practical skills then we have a chance because there are always individuals and small businesses who need work done.

      I dislike big companies and now feel that in a nation of small businesses there is plenty of work for people who are tooled up with marketable skills which they can offer at a reasonable price.

  35. —- UNSOLVED DISCREPANCIES —-

    The gap between the news fired upon the public through the Department of Finance and Analysts out in real life becomes greater, every day.

    Here is DOF:

    http://www.irishtimes.com/newspaper/breaking/2010/0427/breaking17.html

    Here is Dr. Gurdgiev:

    http://trueeconomics.blogspot.com/2010/04/economics-26042010-bank-of-ireland.html

    Well…..

    One thing came to my mind last night when I was watching a life performance of George Duke, Bob Willson and Greg Phillinganes, which was funny as Hell.

    http://www.spectrasonics.net/news/2010/artist-videos-george-duke-greg-phillinganes/

    Music always had a function in society, and if you dig deep you will find that this offers interesting material for reflection.

    What came to my mind was Kurt Weill / Bertolt Brecht, ’1927, Rise and Fall of the city Mahagonny’, the opera style play describes the state of the city of Weimar, where under the facade of prosperity a cutthroat enterprise operated, and those in power were no better than a bunch of thugs, the latter running the law.

    .

  36. SLICKMICK

    Re-read Ireland In Crisis 1986 written by the late Ray Crotty.He was castigated for suggesting Ireland stop paying interest on it’s national debt, as with so much else, he was spot on.Greatest Irishman ever?.

    • coldblow

      What do you make of his central thesis that it’s all down to ‘property in land’? Could it be, as he implies, that despite technological advances and the diversification of our economy if you don’t get the land question sorted out then you are doomed to failure? And the way things that’s all we might be left with, the land. How much of FF and FG’s power base is situated in the ‘landed interest’. To what extent is and has national policy been dictated by the same interest (a poster on irisheconomy, Brian P. Woods, has claimed that the answer to that question is “too much”)? Who will still have a secure livelihood here when others have been destroyed (let’s hope it doesn’t come to that)? I’m sure Crotty called for a repudiation of the whole debt, not just the interest, by the way.

  37. Being interested in, strangely enough, smiting and smoting and somesuch Biblical matters, something didn’t sit quite right with this article.

    And then it smote me; it’s Deuteronomy, chapter 15 not Chapter 14.

    Which also contains the little gem, “Then thou shalt take an awl, and thrust it through his ear unto the door, and he shall be thy servant for ever. ”
    For those non-woodworkers among you, an awl is a pretty sharp tool, not dissimilar to a huge needle.

    Spiking some people to a door by the ears has a certain pleasing aspect to it.

    Apologies for being picky David. Or is it Goliath McWilliams?

  38. Deco

    The new Financial Regulator has announced new rules for directors. This is about ten years too late. But the scenario of having bank big bosses running three quarters of the ISEQ between them, is now about to end. Maybe the Regulator was discussing the best way to get rid of the cronyism in the ISEQ.

    http://www.rte.ie/business/2010/0427/financial.html

    From now on company directors will focus on running their companies, and not on shoving themselves into more directorships and more handy earners.

    I hope that there will also be a clear divide made between directorships in public and private sector organizations. We should never again have the likes of Seanie Fitz, Bill Cullen etc.. holding directorships in the semi-state sector.

    If only we could have a Matthew Elderfield type charaster to sort out the quangos, and the cosy directorships in existence there……..

  39. Blackpigsdyke

    FYI – John Corrigan NTMA talking on Bloomberg sa madin.

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=awkUHl5SOTvg

    Don’t panic international investors, all is fine and dandy on L.E Eire.

  40. paddyjones

    I feel this board is becoming very “cultural” there are many poets posting here, these people belong somewhere else this board is supposed to be about economics.
    Our country is going through another potato famine we put all our eggs in one basket ….property. If all the money invested in property had of been invested in companies it would be a different story, but we are where we are.
    Lenihan is playing a dangerous game, it is all just a bluff. He is trying to use accountancy tricks to hide the fact that we owe 140 billion. The Greeks tried this too but were caught out, Ireland borrowed 40 billion for NAMA at 1.5% without any hassel, the Greeks are having terrible trouble borrowing 45 billion.
    I have taken all of my money out of Irish banks, the only exposure I have is a small mortgage, I have invested in the DAX as a hedge that if Ireland or Germany leave the euro I would not be left with punts2.
    A tip for everyone is to open a Rabodirect savings account , it is AAA and guarenteed by the Dutch government. Or you could open a td waterhouse trading account and invest directly in the DAX and EuroStoxx50. It is time to leave the Irish market and move your money elsewhere.

    • I would put a warning onto paddyjones’s statement.

      ETF products are certainly swamping the market for little and less experienced investors.

      I would say that even the DAX is too small for an index based investment, the larger the index the lesser variations.

      Smaller index gambles pose much higher risk and definitely are not for inexperienced investors.

      The larger index gamble is easy to understand for inexperienced investors, and you can read it daily in the papers, if you wish to participate in such gambles.

      • Talk about bets and gambles, I have a bet since last friday with a good friend of mine, an experienced managing director who has his head screwed on.

        The price is a crate of beer, which we eventually might have to steal, LOL, the bet is that I think the Euro will not survive in the next 24 month.

    • liam

      A probably naive question, perhaps pessimistic, but hopefully unnecessary: what happens to the balance my rabodirect.ie account in the event that there is a parting of the ways between Ireland and the Euro? Does it get re-denominated in PuntNuas? Might I not be better off with an account in a different country? (yes this is more difficult than setting up an account in Ireland, but certainly not impossible to accomplish)

      • @Liam

        RaboDirect operates by you transferring your online RaboDirect online account funds denominated in euros into your local bank account.

        Say we changed over to PuntNuas, you’d expect to be paid in your local bank account the going exchange rate for PuntNuas for your RaboDirect euros.

        Protection against the wider implications of currency devaluation like you I’d like to know more about, some riskier than others see paddyjones/laughingbear posts above….

        • Deco

          Punt 2.0 ? Punt Eile.

          With Bertie Ahern’s head(inlcuding all the make up) on the 1 Punt note…so that we can call the new currency something that rhymes with punt…and it will remind us of the man that brought us to bankruptcy…

          • paddyjones

            The ticking time bomb of sovereign debt is about to explode. The PIIGS have borrowed their last euro and now it is time to get real. Germany is now openly questioning the bailout. It is time liquidate any investments and hold euros. We are in for a rocky time.
            Irelands bond rate hit 5% today our interest alone on the debt will be 7 billion this year. It is hard to know where to go to find a safe place right now.
            Lenihan calculated that we need to cut a further 3 billion in 2011 but this could rise dramatically as our lenders no longer will lend to us.
            I am worried about a double dip here , Greece problems are spreading.

          • tony_murphy

            Double dip Paddy

            :-) no it’s just a single dip. All the way to hell. Thanks to the Green Jersey Brigade currently led by Cowen and Lenihan

        • liam

          As I suspected, it would then be converted to PuntNua at the point when the currency was introduced, and at the initial exchange rate. In other words, a rabodirect.ie account will not preserve the value of your savings any more than a Bank of Ireland one will. The only solution then is capital flight.

      • tony_murphy

        I think most of us are naive Liam when it comes to how best to avoid they oncoming defaults/euro exits.

        I would also appreciate advise.

        I remember listening to, I think it was Jim Rodgers some 18months ago. He had gone to South East Asia. He said the west was finished.

        If Germany exits the Euro, the Euro loses lots of value, France would follow germany out i’d guess – or may walk before Germany.

        If Greece and Ireland are asked to leave + rest of the PIGS, then euro strengthens.

        I’m in the UK and get paid in Sterling, but mortgage debts are in Euros. So I guess Ireland and Greece leaving the euro would see my debts shot up. I’m sure the British banks are up to there eyes in Greek loans

  41. @G 40

    from your link:

    “Talks between officials from the IMF and European Union are ongoing. Greece needs to arrange a rescue package quickly as it needs to raise €8.5bn to repay bonds that mature on 19 May. But there are concerns that Germany may be unwilling to support the bailout unless Greece agrees to deep cuts in public spending and structural changes in its economy.

    This morning, Jürgen Koppelin, a deputy leader of the FDP parliamentary group and a member of Angela Merkel’s coalition, said that he opposed the aid package.

    “As things are now, for me it is rather a ‘No’ to aid,” Koppelin told German public radio Deutschlandradio. He argued that it would be better for Greece to temporarily leave the eurozone and rely on its own, devalued currency to build exports and repair its finances.

    The uncertainty over the Greek rescue talks sent shares sharply lower in London today, where the FTSE 100 had lost 70 points to 5684 by midday. Fears that other European countries could suffer similar problems to Greece also weighed on the market. In Athens, bank shares fell by almost 5% when trading began.”

    “To be, or not to be” for the euro, or whether it is a good time to pour good money after bad.

    Koppelin of the FDP above plus the economists in Germany mounting the Supreme Court challenge have a strong argument.

    Plus opposition is mounting in Greece itself to the bailout that comes with deflation and austerity measures:

    http://bit.ly/9Ca2vy

    Wall St is betting against Greece.
    http://bit.ly/a2xSCN

    My bet is Greece will be asked to leave the Euro. This will happen within 4 weeks.

    http://bit.ly/dgmc6i

    “Greece is practically bankrupt,” leading German economist Hans-Werner Sinn told news magazine Der Spiegel, warning any country that comes to Greece’s aid is at risk of getting pulled into the quagmire.

    “We already have a debt quota of 73%,” Sinn said. “We’re on a dodgy path which will now only become dodgier.”

    Greece ain’t been sorted and if they aint, we aint!

  42. Art1980

    Think you’ll all enjoy this read, relates to what Pauldiv was saying earlier;

    The story of the American industrialist and the Mexican fisherman:

    A boat docked in a tiny Mexican village. An American tourist complimented the Mexican fisherman on the quality of his fish and asked how long it took him to catch them.

    “Not very long,” answered the Mexican.

    “Well, then, why didn’t you stay out longer and catch more?” asked the American.

    The Mexican explained that his small catch was sufficient to meet his needs and those of his family.

    The American asked, “But what do you do with the rest of your time?”

    “I sleep late, fish a little, play with my children, and take a siesta with my wife. In the evenings, I go into the village to see my friends, have a few drinks, play the guitar, and sing a few songs…I have a full life.”

    The American interrupted, “I have an MBA from Harvard and I can help you! You should start by fishing longer every day.

    You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat.

    With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers.

    Instead of selling your fish to a middleman, you can negotiate directly with the processing plants and maybe even open your own plant.

    You can then leave this little village and move to Mexico City, Los Angeles, or even New York!

    From there you can direct your huge enterprise.”

    “How long would that take?” asked the Mexican.

    “Twenty, perhaps twenty-five years,” replied the American.

    “And after that?”

    “Afterwards? That’s when it gets really interesting,” answered the American, laughing. “When your business gets really big, you can start selling stocks and make millions!”

    “Millions? Really? And after that?”

    “After that you’ll be able to retire, live in a tiny village near the coast, sleep late, play with your children, catch a few fish, take siestas with your wife, and spend your evenings drinking and enjoying your friends.”

  43. wills

    Posters.

    Here’s how the Dennis the meance bankstering debt creation scam works in USA.

    http://theeconomiccollapseblog.com/

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